[6450-01-P]
 

DEPARTMENT OF ENERGY 

10 CFR Part 430 

[Docket Number EE–2008–BT–STD–0012] 

RIN: 1904–AB79 

Energy Conservation Program: Energy Conservation Standards for Residential 

Refrigerators, Refrigerator-Freezers, and Freezers 

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

ACTION: Final rule. 

SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes energy 

conservation standards for various consumer products and commercial and industrial 

equipment, including refrigerators, refrigerator-freezers, and freezers. EPCA also requires 

the U.S. Department of Energy (DOE) to determine if more stringent, amended standards 

for these products are technologically feasible and economically justified, and would save 

a significant amount of energy. In this final rule, DOE is adopting more stringent energy 

conservation standards for refrigerators, refrigerator-freezers, and freezers. It has 

determined that the amended energy conservation standards for these products would 

result in the significant conservation of energy and are technologically feasible and 

economically justified. 

1
 

DATES: The effective date of this rule is [INSERT DATE 60 DAYS AFTER 

PUBLICATION DATE]. Compliance with the amended standards established for 

refrigerators, refrigerator-freezers, and freezers in today’s final rule is [INSERT DATE 3 

YEARS AFTER PUBLICATION DATE]. 

ADDRESSES: For access to the docket to read background documents, the technical 

support document, transcripts of the public meetings in this proceeding, or comments 

received, visit the U.S. Department of Energy, Resource Room of the Building 

Technologies Program, 950 L’Enfant Plaza, SW., 6th Floor, Washington, DC 20024, 

(202) 586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal 

holidays. Please call Ms. Brenda Edwards at the above telephone number for additional 

information regarding visiting the Resource Room. You may also obtain copies of certain 

previous rulemaking documents in this proceeding (i.e., framework document, notice of 

public meeting and announcement of a preliminary technical support document (TSD), 

notice of proposed rulemaking), draft analyses, public meeting materials, and related test 

procedure documents from the Office of Energy Efficiency and Renewable Energy’s 

website at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/refrigerators_free 

zers.html. 

FOR FURTHER INFORMATION CONTACT: 

2
 
 

Lucas Adin, 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, 202-287-1317, e-mail: Lucas.Adin@ee.doe.gov or 

Michael Kido, U.S. Department of Energy, Office of the General Counsel, GC-71, 1000 

Independence Avenue, SW., Washington, DC, 20585-0121, (202) 586-9507, e-mail: 

Michael.Kido@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Final Rule and Its Benefits 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. History of Standards Rulemaking for Refrigerators, Refrigerator-Freezers, and 

Freezers 

III. General Discussion 

A. Test Procedures 

1. Test Procedure Rulemaking Schedule 

2. Adjustment of the Energy Standards for the New Test Procedure 

a. Products with Variable Anti-Sweat Heater Control 

b. Products with Multiple Defrost Cycle Types 

c. Amendments to Capture Precooling Energy Use 

d. Test Procedures for Special Compartments 

3. Standby and Off Mode Energy Use 

B. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible Levels 

C. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

D. 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 

3
 
e. Impact of Any Lessening of Competition 

f. Need for National Energy Conservation 

g. Other Factors 

2. Rebuttable Presumption 

IV. Methodology and Discussion 

A. Market and Technology Assessment 

1. Exclusion of Wine Coolers from This Rulemaking 

2. Product Classes 

a. General Discussion Regarding Added Product Classes 

b. Possible Combination of Product Class 2 with 1, and Class 12 with 11 

c. All-Refrigerators and Basic Refrigerators 

d. Built-In Refrigeration Products 

e. Modification of the Definition for Compact Products 

f. Icemaking 

B. Screening Analysis 

1. Discussion of Comments 

a. Compressors 

b. Alternative Refrigerants 

c. Alternative Foam-Blowing Agents 

d. Vacuum-Insulated Panels 

2. Technologies Considered 

C. Engineering Analysis 

1. Discussion of Comments 

2. Adjustment of the Baseline Energy Use Equations 

D. Markups to Determine Product Cost 

E. Energy Use Analysis 

F. Life-Cycle Cost and Payback Period Analyses 

1. Product 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 Amended Standards 

10. Base Case Efficiency Distribution 

11. Inputs to Payback Period Analysis 

12. Rebuttable-Presumption Payback Period 

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

Analysis 

1. Shipments 

2. Forecasted Efficiency in the Base Case and Standards Cases 

3. Installed Cost per Unit 

4. Site-to-Source Energy Conversion 

5. Discount Rates 

4
 
6. Benefits from Effects of Standards on Energy Prices 

H. Consumer Subgroup Analysis 

I. Manufacturer Impact Analysis 

1. Comments from Interested Parties 

2. GRIM Key Inputs 

a. Product and Capital Conversion Costs 

b. Markup Scenarios 

3. Manufacturer Interviews 

J. Employment Impact Analysis 

K. Utility Impact Analysis 

L. Environmental Assessment 

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. Discussion of Other Comments 

A. Demand Response 

B. Energy Standard Round-off 

C. Trial Standard Levels and Proposed Standards 

1. Efficiency Levels 

2. Maximum Energy Use Equations 

VI. Analytical Results 

A. Trial Standard Levels 

B. Economic Justification and Energy Savings 

1. Economic Impacts on Individual Consumers 

a. Life-Cycle Cost and Payback Period 

b. Consumer Subgroup Analysis 

c. Rebuttable Presumption Payback 

2. Economic Impacts on Manufacturers 

a. Cash-Flow Analysis Results 

b. Impacts on Employment 

c. Impacts on Manufacturing Capacity 

d. Impacts on Sub-Group(s) of Manufacturers 

e. Cumulative Regulatory Burden 

3. National Impact Analysis 

a. Significance of Energy Savings 

b. Net Present Value of Consumer Costs and Benefits 

c. Indirect Impacts on Employment 

4. Impact on Utility or Performance of Products 

5. Impact of Any Lessening of Competition 

6. Need of the Nation to Conserve Energy 

7. Other Factors 

C. Conclusion 

1. Standard-Size Refrigerator-Freezers 

5
 
2. Standard-Size Freezers 

3. Compact Refrigeration Products 

4. Built-In Refrigeration Products 

5. Summary of Benefits and Costs (Annualized) of Amended Standards 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 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 

M. Congressional Notification 

VIII. Approval of the Office of the Secretary 

I. Summary of the Final Rule and Its Benefits 

The Energy Policy and Conservation Act (42 U.S.C. 6291, et seq.; EPCA or the 

Act), as amended, provides that any new or amended energy conservation standard DOE 

prescribes for certain consumer products, such as residential refrigerators, refrigeratorfreezers, and freezers (collectively referred to in this document as “refrigeration 

products”), shall be designed to “achieve the maximum improvement in energy efficiency 

. . . which the Secretary determines is technologically feasible and economically 

justified.” (42 U.S.C. 6295(o)(2)(A)) The new or amended standard must result in the 

significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with these 

and other statutory provisions discussed in this notice, DOE is adopting amended energy 

conservation standards for refrigeration products. The standards in today’s final rule, 

6
 
 

 

which are the maximum allowable energy use expressed as a function of the calculated 

adjusted volume of a given product, are shown in Table I.1. These standards apply to all 

products listed in Table I.1 and manufactured in, or imported into, the United States 

starting in 2014. 

Table I.1. Refrigeration Product Energy Conservation Standards (Effective Starting 

2014) 

Product Class 

Equations for Maximum Energy 

Use (kWh/yr) 

based on AV (ft3) based on av (L) 

1. Refrigerator-freezers and refrigerators other than allrefrigerators with manual defrost. 7.99AV + 225.0 0.282av + 225.0 

1A. All-refrigerators—manual defrost. 6.79AV + 193.6 0.240av + 193.6 

2. Refrigerator-freezers—partial automatic defrost 7.99AV + 225.0 0.282av + 225.0 

3. Refrigerator-freezers—automatic defrost with top-mounted 

freezer without an automatic icemaker. 8.07AV + 233.7 0.285av + 233.7 

3-BI. Built-in refrigerator-freezer—automatic defrost with 

top-mounted freezer without an automatic icemaker. 9.15AV + 264.9 0.323av + 264.9 

3I. Refrigerator-freezers—automatic defrost with topmounted freezer with an automatic icemaker without throughthe-door ice service. 

8.07AV + 317.7 0.285av + 317.7 

3I-BI. Built-in refrigerator-freezers—automatic defrost with 

top-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

9.15AV + 348.9 0.323av + 348.9 

3A. All-refrigerators—automatic defrost. 7.07AV + 201.6 0.250av + 201.6 

3A-BI. Built-in All-refrigerators—automatic defrost. 8.02AV + 228.5 0.283av + 228.5 

4. Refrigerator-freezers—automatic defrost with sidemounted freezer without an automatic icemaker. 8.51AV + 297.8 0.301av + 297.8 

4-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer without an automatic icemaker. 10.22AV + 357.4 0.361av + 357.4 

4I. Refrigerator-freezers—automatic defrost with sidemounted freezer with an automatic icemaker without throughthe-door ice service. 

8.51AV + 381.8 0.301av + 381.8 

4I-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

10.22AV + 441.4 0.361av + 441.4 

5. Refrigerator-freezers—automatic defrost with bottommounted freezer without an automatic icemaker. 8.85AV + 317.0 0.312av + 317.0 

5-BI. Built-In Refrigerator-freezers—automatic defrost with 

bottom-mounted freezer without an automatic icemaker. 9.40AV + 336.9 0.332av + 336.9 

5I. Refrigerator-freezers—automatic defrost with bottommounted freezer with an automatic icemaker without throughthe-door ice service. 

8.85AV + 401.0 0.312av + 401.0 

5I-BI. Built-In Refrigerator-freezers—automatic defrost with 

bottom-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

9.40AV + 420.9 0.332av + 420.9 

7
 
 

5A. Refrigerator-freezer—automatic defrost with bottommounted freezer with through-the-door ice service. 9.25AV + 475.4 0.327av + 475.4 

5A-BI. Built-in refrigerator-freezer—automatic defrost with 

bottom-mounted freezer with through-the-door ice service. 9.83AV + 499.9 0.347av + 499.9 

6. Refrigerator-freezers—automatic defrost with top-mounted 

freezer with through-the-door ice service. 8.40AV + 385.4 0.297av + 385.4 

7. Refrigerator-freezers—automatic defrost with sidemounted freezer with through-the-door ice service. 8.54AV + 432.8 0.302av + 432.8 

7-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer with through-the-door ice service. 10.25AV + 502.6 0.362av + 502.6 

8. Upright freezers with manual defrost. 5.57AV + 193.7 0.197av + 193.7 

9. Upright freezers with automatic defrost without an 

automatic icemaker. 8.62AV + 228.3 0.305av + 228.3 

9I. Upright freezers with automatic defrost with an automatic 

icemaker. 8.62AV + 312.3 0.305av + 312.3 

9-BI. Built-In Upright freezers with automatic defrost without 

an automatic icemaker. 9.86AV + 260.9 0.348av + 260.9 

9I-BI. Built-in upright freezers with automatic defrost with an 

automatic icemaker. 9.86AV + 344.9 0.348av + 344.9 

10. Chest freezers and all other freezers except compact 

freezers. 7.29AV + 107.8 0.257av + 107.8 

10A. Chest freezers with automatic defrost. 10.24AV + 148.1 0.362av + 148.1 

11. Compact refrigerator-freezers and refrigerators other than 

all-refrigerators with manual defrost. 9.03AV + 252.3 0.319av + 252.3 

11A.Compact all-refrigerators—manual defrost. 7.84AV + 219.1 0.277av + 219.1 

12. Compact refrigerator-freezers—partial automatic defrost 5.91AV + 335.8 0.209av + 335.8 

13. Compact refrigerator-freezers—automatic defrost with 

top-mounted freezer. 11.80AV + 339.2 0.417av + 339.2 

13I. Compact refrigerator-freezers—automatic defrost with 

top-mounted freezer with an automatic icemaker. 11.80AV + 423.2 0.417av + 423.2 

13A. Compact all-refrigerators—automatic defrost. 9.17AV + 259.3 0.324av + 259.3 

14. Compact refrigerator-freezers—automatic defrost with 

side-mounted freezer. 6.82AV + 456.9 0.241av + 456.9 

14I. Compact refrigerator-freezers—automatic defrost with 

side-mounted freezer with an automatic icemaker. 6.82AV + 540.9 0.241av + 540.9 

15. Compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer. 11.80AV + 339.2 0.417av + 339.2 

15I. Compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer with an automatic icemaker. 11.80AV + 423.2 0.417av + 423.2 

16. Compact upright freezers with manual defrost. 8.65AV + 225.7 0.306av + 225.7 

17. Compact upright freezers with automatic defrost. 10.17AV + 351.9 0.359av + 351.9 

18. Compact chest freezers. 9.25AV + 136.8 0.327av + 136.8 

AV= adjusted volume in cubic feet; av = adjusted volume in liters 

DOE’s analyses indicate that the amended standards would save a significant 

amount of energy–an estimated 4.84 quads of cumulative energy over 30 years (2014 

8
 
 

through 2043). This amount is equivalent to three times the total energy used annually for 

refrigeration products in U.S. homes. 

The cumulative national net present value (NPV) of total consumer costs and 

savings of the amended standards for products shipped in 2014–2043, in 2009$, ranges 

from $6.4 to $10.4 billion (at a 7-percent discount rate) to $28.1 to $36.1 billion (at a 3­

percent discount rate).1 The NPV is the estimated total value of future operating-cost 

savings during the analysis period, minus the estimated increased product costs, 

discounted to 2010. 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 (2010 

to 2043). Using a real discount rate of 7.2 percent, DOE estimates that INPV for 

manufacturers of all refrigeration products in the base case is $3.731 billion in 2009$. By 

adopting the amended standards, DOE expects that manufacturers may lose 15 to 24 

percent of their INPV, or approximately $0.573 to $0.887 billion. Using a 7-percent 

discount rate, the NPV of consumer costs and savings from today’s amended standards 

would amount to 4 to 16 times the total estimated industry losses. Using a 3-percent 

discount rate, the NPV would amount to 26 to 60 times the total estimated industry 

losses. 

The projected economic impacts of the amended standards on individual 

consumers are generally positive. For example, the estimated average life-cycle cost 

(LCC) savings are $44 for top-mount refrigerator-freezers, $22 for bottom-mount 

1

 DOE uses discount rates of 7 and 3 percent based on guidance from the Office of Management and 

Budget. See section IV.G for further information. 

9
 
 

 

refrigerator-freezers, $57 for side-by-side refrigerator-freezers, $195 for upright freezers, 

$69 for chest freezers, $14 for compact refrigerators, $12 for compact freezers, and from 

$2 to $71 for built-in refrigeration products, depending on the product class.2 

In addition, the amended standards are projected to have significant 

environmental benefits. The energy saved is in the form of electricity and DOE expects 

the energy savings from the amended standards to eliminate the need for approximately 

4.8 gigawatts (GW) of generating capacity by 2043. The savings would result in 

cumulative greenhouse gas emission reductions of 344 million metric tons (Mt)3 of 

carbon dioxide (CO2) in 2014–2043. During this period, the amended standards would 

result in emissions reductions4 of 277,000 short tons (tons) of nitrogen oxides (NOX) and 

1.45 tons of mercury (Hg). 

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 a 

recent interagency process. The derivation of the SCC values is discussed in section 

IV.M. DOE estimates the present monetary value of the CO2 emissions reduction is 

between $2.8 and $27.5 billion, expressed in 2009$ and discounted to 2010. DOE also 

2

 The LCC is the total consumer expense over the life of a product, consisting of purchase and installation 

costs plus operating costs (expenses for energy use, maintenance and repair). To compute the operating 

costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the 

product. The sources and methods used to derive purchase, installation and operating costs are described in 

section IV.F of this notice. 

3

 A metric ton is equivalent to 1.1 short tons. Results for NOX and Hg are given in short tons. 4

 DOE calculates emissions reductions relative to the most recent version of the Annual Energy Outlook 

(AEO) Reference case forecast. This forecast accounts for regulatory emissions reductions through 2008, 

including the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), but not the Clean Air 

Mercury Rule (CAMR, 70 FR 28606 (May 18, 2005)). Subsequent regulations, including the proposed 

CAIR replacement rule, the Clean Air Transport Rule (75 FR 45210 (Aug. 2, 2010)), do not appear in the 

forecast. DOE notes that a new CAIR rule has recently been finalized. See 

http://www.epa.gov/crossstaterule/ 

10
 
 

 

estimates that the present monetary value of the NOX emissions reduction, expressed in 

2009$ and discounted to 2010, is between $35 and $360 million at a 7-percent discount 

rate, and between $87 and $890 million at a 3-percent discount rate.5 

Table I.2 summarizes the national economic costs and benefits expected to result 

from today’s standards for refrigeration products. 

5

 The range of values at each discount rate reflects use of low and high estimates of the benefits of avoiding 

one ton of NOX emissions. With respect to mercury, DOE is aware of multiple agency efforts to determine 

the appropriate range of values used in evaluating the potential economic benefits of reduced Hg emissions. 

DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions 

before it once again monetizes Hg in its rulemakings. 

11
 
 

 

 

 

 

 

Table I.2. Summary of National Economic Benefits and Costs of Refrigeration 

Product Energy Conservation Standards 

Category Present Value 

Billion 2009$ 

Discount 

Rate 

Benefits 

Operating Cost Savings 

21.7 7% 

55.4 3% 

CO2 Reduction Monetized Value 

(at $4.9/t)* 2.8 5% 

CO2 Reduction Monetized Value 

(at $22.1/t)* 9.0 3% 

CO2 Reduction Monetized Value 

(at $36.3/t)* 13.5 2.5% 

CO2 Reduction Monetized Value 

(at $67.1/t)* 27.5 3% 

NOX Reduction Monetized Value 

(at $447/ton)* 

0.035 7% 

0.087 3% 

NOX Reduction Monetized Value 

(at $4,591/ton)* 

0.36 7% 

0.89 3% 

Total Benefits† 

30.9 7% 

64.9 3% 

Costs 

Incremental Installed Costs 11.3 to 15.3 7% 

19.3 to 27.3 3% 

Net Benefits 

Including CO2 and NOX† 15.6 to 19.5 7% 

37.5 to 45.5 3% 

* The CO2 values represent global monetized values of the SCC in 2010 under several scenarios. The 

values of $4.9, $22.1, and $36.3 per metric ton (t) are the averages of SCC distributions calculated using 

5%, 3%, and 2.5% discount rates, respectively. The value of $67.1/t represents the 95th percentile of the 

SCC distribution calculated using a 3% discount rate. 

** The range of results for incremental product costs reflects the range of product price forecasts discussed 

in section IV.G.3. 

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount 

rate, and the average of the low and high NOX values used in DOE’s analysis. 

The benefits and costs of today’s standards, for products sold in 2014-2043, can 

also be expressed in terms of annualized values. The annualized monetary values are the 

12
 
 

 

 

 

 

 

sum of (1) the annualized national economic value, expressed in 2009$, of the benefits 

from operating products that meet the amended standards (consisting primarily of 

operating cost savings from using less energy, minus increases in equipment purchase 

and installation costs, which is another way of representing consumer NPV), and (2) the 

annualized monetary value of the benefits of emission reductions, including CO2 

emission reductions.6 

Although adding the value of consumer savings to the values of emission 

reductions provides a valuable 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 SCC are performed with different 

methods that use different time frames for analysis. The national operating cost savings is 

measured for the lifetime of refrigeration products shipped in 2014–2043. The SCC 

values, on the other hand, reflect the present value of future climate-related impacts 

resulting from the emission of one ton of carbon dioxide in each year. These impacts 

continue well beyond 2100. 

6

 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 2010, 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. This payment 

includes benefits to consumers which accrue after 2043 from the refrigerators purchased from 2014 to 

2043. Costs incurred by manufacturers, some of which may be incurred prior to 2014 in preparation for the 

rule, are not directly included, but are indirectly included as part of incremental equipment costs. The 

extent of these costs and benefits depends on the projected price trends of refrigerators since consumer 

demand of refrigerators is a function of refrigerator prices. 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. 

13
 
Estimates of annualized benefits and costs of today’s standards are shown in 

Table I.3. The results under the primary estimate, expressed in 2009$, are as follows. 

Using a 7-percent discount rate and the SCC series having a value of $22.1/ton in 2010, 

the cost of the standards in today’s rule is $1,167 to $1,569 million per year in increased 

equipment costs, while the annualized benefits are $2,275 million per year in reduced 

equipment operating costs, $515 million in CO2 reductions, and $21 million in reduced 

NOX emissions. In this case, the net benefit amounts to $1,241 to $1,643 million per year. 

Using a 3-percent discount rate and the SCC series having a value of $22.1/ton in 2010, 

the cost of the standards in today’s rule is $1,081 to $1,526 million per year in increased 

equipment costs, while the benefits are $3,160 million per year in reduced operating 

costs, $515 million in CO2 reductions, and $28 million in reduced NOX emissions. In this 

case, the net benefit amounts to $2,176 to $2,622 million per year. 

14
 
 

 

 

Table I.3. Annualized Benefits and Costs of Amended Standards for Refrigeration 

Products Shipped in 2014-2043* 

Discount Rate 

Primary 

Estimate* 

Low Net 

Benefits 

Estimate* 

High Net 

Benefits 

Estimate* 

Monetized (million 2009$/year) 

Benefits 

Operating Cost Savings 

7% 2275 1996 2560 

3% 3160 2720 3596 

CO2 Reduction at $4.9/t** 5% 162 162 162 

CO2 Reduction at $22.1/t** 3% 515 515 515 

CO2 Reduction at $36.3/t** 2.5% 772 772 772 

CO2 Reduction at $67.1/t** 3% 1567 1567 1567 

NOX Reduction at 

$2,519/ton** 

7% 21 21 21 

3% 28 28 28 

Total (Operating Cost 

Savings, CO2 Reduction and 

NOx Reduction)† 

7% plus CO2 

range 

2457 to 3863 2178 to 3584 2742 to 4148 

7% 2810 2531 3095 

3% 3703 3263 4139 

3% plus CO2 

range 

3350 to 4755 2910 to 4315 3786 to 5192 

Costs 

Incremental Product Costs 

7% 1167 to 1569 1480 1232 

3% 1081 to 1526 1430 1147 

Net Benefits 

Total† 

7% plus CO2 

range 

888 to 2696 698 to 2103 1511 to 2916 

7% 1241 to 1643 1051 1863 

3% 2176 to 2622 1832 2993 

3% plus CO2 

range 

1823 to 3674 1479 to 2885 2640 to 4045 

15
 
 

 

 

 

*This table presents the annualized costs and benefits associated with refrigerators shipped between 2014 

and 2043. These results include benefits to consumers which accrue after 2043 from the refrigerators 

purchased from 2014 to 2043. Costs incurred by manufacturers, some of which may be incurred prior to 

2014 in preparation for the rule, are not directly included, but are indirectly included as part of incremental 

equipment costs. The extent of these costs and benefits depends on the projected price trends of 

refrigerators since consumer demand of refrigerators is a function of refrigerator prices. The extent of the 

costs and benefits will depend on the projected price trends of refrigerators, as the consumer demand for 

refrigerators is a function of refrigerator prices. The Primary, Low Benefits, and High Benefits Estimates 

utilize forecasts of energy prices and housing starts from the AEO2010 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 different techniques used to derive projected price trends for each estimate are 

explained in section IV.G.3. In the Primary estimate, the range of results for incremental product costs 

reflects the range of projected price trends. 

** The CO2 values represent global monetized values (in 2009$) of the SCC in 2010 under several 

scenarios. The values of $4.9, $22.1, and $36.3 per metric ton are the averages of SCC distributions 

calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $67.1/t represents the 95th 

percentile of the SCC distribution calculated using a 3% discount rate. The value for NOX (in 2009$) is the 

average of the low and high values used in DOE’s analysis. 

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount 

rate, which is $22.1/t in 2010 (in 2009$). In the rows labeled as “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 concluded that the standards in today’s rule represent the maximum 

improvement in energy efficiency that is both technologically feasible and economically 

justified, and would result in the significant conservation of energy. DOE further notes 

that products achieving these standard levels are already commercially available for at 

least some, if not most, product classes covered by today’s ruling. Based on the analyses 

described above, DOE found the benefits of today’s standards to the Nation (energy 

savings, positive NPV of consumer benefits, consumer LCC savings, and emission 

reductions) outweigh the burdens (loss of INPV for manufacturers and LCC increases for 

some consumers). 

16
 
 

II. Introduction 

The following section briefly discusses the statutory authority underlying today’s 

final rule as well as some of the relevant historical background related to the 

establishment of standards for refrigeration products. 

A. Authority 

Title III of EPCA sets forth a variety of provisions designed to improve energy 

efficiency. Part A of title III (42 U.S.C. 6291-6309) provides for the Energy Conservation 

Program for Consumer Products Other than Automobiles.7

 EPCA covers consumer 

products and certain commercial equipment (referred to collectively hereafter as “covered 

products”), including the types of refrigeration products that are the subject of this 

rulemaking. (42 U.S.C. 6292(a)(1)) EPCA prescribed energy conservation standards for 

these products (42 U.S.C. 6295(b)(1)-(2)), and directed DOE to conduct three cycles of 

rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(b)(3)(A)(i), 

(b)(3)(B)-(C), and (b)(4)) As explained in further detail in section II.B, this rulemaking 

satisfies the third round of amendments under 42 U.S.C. 6295(b). (DOE notes that under 

42 U.S.C. 6295(m), the agency must periodically review its already established energy 

conservation standards for a covered product. Under this requirement, the next review 

that DOE would need to conduct would occur six years from the issuance of a final rule 

establishing or amending a standard for a covered product.) 

7

 This part was titled Part B in EPCA, but was subsequently codified as Part A in the U.S. Code for 

editorial reasons. 

17
 
Under the Act, DOE’s energy conservation program for covered products consists 

essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy 

conservation standards, and (4) certification and enforcement procedures. The Federal 

Trade Commission (FTC) is generally responsible for labeling issues for consumer 

products, and DOE implements the remainder of the program. Section 323 of the Act 

(codified at 42 U.S.C. 6293) authorizes DOE, subject to certain criteria and conditions, to 

develop test procedures to measure the energy efficiency, energy use, or estimated annual 

operating cost of each covered product. Manufacturers of covered products must use the 

prescribed DOE test procedure as the basis for certifying to DOE that their products 

comply with the applicable energy conservation standards adopted under EPCA and 

when making representations to the public regarding the energy use or efficiency of those 

products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use these test procedures 

to determine whether the products comply with standards adopted under EPCA. Id. The 

test procedures for refrigeration products currently appear at title 10, Code of Federal 

Regulations (CFR), part 430, subpart B, appendices A1 and B1, respectively. (These 

procedures have recently been amended and recodified as part of new Appendices A and 

B, which will, pending further comment from interested parties, be required to be used 

when certifying compliance with the standards detailed in today’s final rule. See 75 FR 

78810 (December 16, 2010). 

EPCA prescribes specific criteria for DOE to consider when amending standards 

for covered products. As indicated above, any amended standard for a covered product 

must be designed to achieve the maximum improvement in energy efficiency that is 

18
 
technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) EPCA 

precludes DOE from adopting any standard that would not result in the significant 

conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not prescribe a 

standard for certain products, including refrigeration products, (1) if no test procedure has 

been established for that product, or (2) if DOE determines by rule that the amended 

standard is not technologically feasible or economically justified. (42 U.S.C. 

6295(o)(3)(A)-(B)) The Act also provides that, in deciding whether an amended standard 

is economically justified, DOE must determine whether the benefits of the standard 

exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must do so after receiving 

comments on the proposed standard, and by considering, to the greatest extent 

practicable, the following seven factors: 

1. The economic impact of the standard on manufacturers and consumers of the 

products subject to the standard; 

2. The savings in operating costs throughout the estimated average life of the 

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

charges, or maintenance expenses for the covered products that are likely to result from 

the imposition of the standard; 

3. The total projected amount of energy savings likely to result directly from the 

imposition of the standard; 

4. Any lessening of the utility or the performance of the covered products likely to 

result from the imposition of the standard; 

19
 
 

 

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 conservation; and 

7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(I)–(VII)) 

EPCA also contains what is known as an “anti-backsliding” provision, which 

prevents DOE from prescribing any amended standard that either increases the maximum 

allowable energy use or decreases the minimum required energy efficiency of a covered 

product. (42 U.S.C. 6295(o)(1)) Also, DOE may not prescribe a 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) with performance characteristics, 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, EPCA 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 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. 

See 42 U.S.C. 6295(o)(2)(B)(iii).8 

8

 In this context, the presumption provides a legal finding that the criteria under 42 U.S.C. 6295(o)(2) have 

been met if the specified level of savings within the first year occur. To ensure that it has fully examined 

20
 
 

Additionally, 42 U.S.C. 6295(q)(1) specifies the requirements for setting classes 

of a covered product. In such cases, DOE may specify a different standard level than that 

which applies generally to such type or class of products “for any group of covered 

products which have the same function or intended use” if one of two conditions is met: 

(A) the specific group of products for which a class category would apply consume a 

different kind of energy from that consumed by other covered products within such type 

(or class); or (B) that specific group of products has a capacity or other performancerelated feature which other products within such type (or class) do not have and such 

feature justifies a higher or lower standard” than applies or will apply to the other 

products within that type or class. Id. In determining whether a performance-related 

feature justifies a different standard for a group of products, DOE must “consider such 

factors as the utility to the consumer of such a feature” and other factors DOE deems 

appropriate. Id. Any rule prescribing such a standard must include an explanation of the 

basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2)) 

Federal energy conservation requirements generally supersede State laws or 

regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 

6297(a)–(c)) DOE can, however, grant waivers of Federal preemption for particular State 

laws or regulations in accordance with the procedures and other provisions of section 

327(d) of the Act. (42 U.S.C. 6297(d)) 

the potential costs and benefits of a given level, DOE routinely conducts a full analysis of the potential 

standards it considers. 

21 
Section 310(3) of the Energy Independence and Security Act of 2007 (EISA 

2007; Pub. L. 110-140 (codified at 42 U.S.C. 6295(gg))) amended EPCA to require that 

energy conservation standards address standby mode and off mode energy use. 

Specifically, when DOE adopts a standard for a covered product after July 1, 2010, it 

must, if justified by the criteria for adoption of standards in section 325(o) of EPCA (42 

U.S.C. 6295(o)), incorporate standby mode and off mode energy use into the standard, if 

feasible, or adopt a separate standard for such energy use for that product. (42 U.S.C. 

6295(gg)(3)(A)-(B)) DOE’s current (and recently amended) test procedures and current 

standards for refrigeration products address standby and off mode energy use, as do the 

amended standards adopted in this final rule. Standby and off mode energy use is 

measured by the test procedures and integrated into the energy use metric, thus separate 

metrics for these quantities are not needed. 

DOE has also reviewed this regulation pursuant to Executive Order 13563 (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 

22
 
 

(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 

final rule is consistent with these principles, including that, to the extent permitted by 

law, agencies adopt a regulation only upon a reasoned determination that its benefits 

justify its costs and select, in choosing among alternative regulatory approaches, those 

approaches that maximize net benefits. 

Given the range of inputs and parameters analyzed in this rulemaking, there may 

be multiple standards that would maximize annualized net benefits.9

 For some product 

classes, depending on different assumptions, the standard that maximized annualized net 

benefits could fall within a range of TSLs. Five different TSLs were considered for each 

9

The maximum annualized net benefits included monetized emissions savings. 

23
 
product class grouping with high and low values for the maximum annualized net 

benefits estimated for each TSL. For standard-size refrigerator-freezers, the TSL with 

maximum annualized net benefits with the highest value was TSL 3, although certain 

values for maximum annualized net benefits fell within the ranges estimated for TSL 1 to 

TSL 3. For standard-size freezers, the maximum annualized net benefits fell within the 

calculated ranges for TSL 3 to TSL 4. However, DOE noted that even using the low end 

of this range, efficiency levels are significantly higher than the most efficient products 

already available on the market (see Section VI.C.2). Therefore, DOE selected TSL 2, 

which DOE also notes corresponds to the recommended level in the Joint Comments. For 

compact refrigeration products, the maximum annualized net benefits fell within the 

calculated ranges for TSL 1 to TSL 3, and DOE selected TSL 2. With respect to compact 

refrigeration products, DOE estimates an approximately 10 percent increase in total 

installation costs as a result of the standard. Because DOE was unable to estimate the 

income subgroup LCC effects due to lack of data, the agency believes choosing a TSL on 

the lower end of the range of estimated cost impacts (i.e., TSL 2) would provide a more 

conservative approach to minimize any potentially negative consumer welfare impacts on 

lower income consumers. For built-in refrigeration products, the TSL with maximum 

annualized net benefits was TSL 2, and DOE selected TSL 2. Therefore, consistent with 

EO 13563, the energy efficiency standards adopted herein by DOE achieves maximum 

net benefits 

24
 
B. Background 

The following discussion provides some background information describing the 

events leading up to today’s final rule. 

1. Current Standards 

In a final rule published on April 28, 1997 (1997 Final Rule), DOE prescribed 

energy conservation standards for refrigeration products manufactured on or after July 1, 

2001. 62 FR 23102. This 1997 rule set the energy conservation standards that are 

currently in place and completed the second round of rulemaking to amend the standards 

for refrigeration products required under 42 U.S.C. 6295(b)(3)(B)-(C). The current 

standards consist of separate equations for each product class. Each equation provides a 

means to calculate the maximum levels of energy use permitted under the regulations. 

These levels vary based on the storage volume of the refrigeration product and on the 

particular characteristics and features included in a given product (i.e., based on product 

class). 10 CFR 430.32(a). The current standards are set forth in Table II.1. DOE notes 

that the standard levels denoted in the additional product classes listed as 5A and 10A 

were established by the Office of Hearings and Appeals (OHA) through that Office’s 

exception relief process, and are applicable to basic models of those types if their 

manufacturer has applied for and been granted exception relief for them by OHA. 

Table II.1: Federal Energy Efficiency Standards for Refrigerators, RefrigeratorFreezers, and Freezers 

Energy Standard 

Equations for 

Maximum Energy
 

Product Class Use (kWh/yr) 

25
 
Made Effective 

by the 1997 

Final Rule 

1. Refrigerators and refrigerator-freezers with manual defrost. 8.82AV+248.4 

0.31av+248.4 

2. Refrigerator-freezers—partial automatic defrost. 8.82AV+248.4 

0.31av+248.4 

3. Refrigerator-freezers—automatic defrost with top-mounted freezer 

without through-the-door ice service and all-refrigerator—automatic 

defrost. 

9.80AV+276.0 

0.35av+276.0 

4. Refrigerator-freezers—automatic defrost with side-mounted freezer 

without through-the-door ice service. 

4.91AV+507.5 

0.17av+507.5 

5. Refrigerator-freezers—automatic defrost with bottom-mounted 

freezer without through-the-door ice service. 

4.60AV+459.0 

0.16av+459.0 

6. Refrigerator-freezers—automatic defrost with top-mounted freezer 

with through-the-door ice service. 

10.20AV+356.0 

0.36av+356.0 

7. Refrigerator-freezers—automatic defrost with side-mounted freezer 

with through-the-door ice service. 

10.10AV+406.0 

0.36av+406.0 

8. Upright freezers with manual defrost. 7.55AV+258.3 

0.27av+258.3 

9. Upright freezers with automatic defrost. 12.43AV+326.1 

0.44av+326.1 

10. Chest freezers and all other freezers except compact freezers. 9.88AV+143.7 

0.35av+143.7 

11. Compact refrigerators and refrigerator-freezers with manual defrost. 10.70AV+299.0 

0.38av+299.0 

12. Compact refrigerator-freezer—partial automatic defrost. 7.00AV+398.0 

0.25av+398.0 

13. Compact refrigerator-freezers—automatic defrost with top-mounted 

freezer and compact all-refrigerator—automatic defrost. 

12.70AV+355.0 

0.45av+355.0 

14. Compact refrigerator-freezers—automatic defrost with side-mounted 

freezer. 

7.60AV+501.0 

0.27av+501.0 

15. Compact refrigerator-freezers—automatic defrost with bottommounted freezer. 13.10AV+367.0 

0.46av+367.0 

16. Compact upright freezers with manual defrost. 9.78AV+250.8 

0.35av+250.8 

17. Compact upright freezers with automatic defrost. 11.40AV+391.0 

0.40av+391.0 

18. Compact chest freezers. 10.45AV+152.0 

0.37av+152.0 

Product Class 

Made Effective 

Through OHA 

Exception Relief 

5A. Refrigerator-freezer—automatic defrost with bottom-mounted freezer 

with through-the-door ice service. 

5.0AV+539.0 

0.18av+539.0 

10A. Chest freezers with automatic defrost. 14.76AV+211.5 

0.52av+211.5 

AV: Adjusted Volume in ft3; av: Adjusted Volume in liters (L) 

26
 
 

2. History of Standards Rulemaking for Refrigerators, Refrigerator-Freezers, and 

Freezers 

The amendments made to EPCA by the National Appliance Energy Conservation 

Act of 1987 (NAECA; Pub. L. 100-12) included mandatory energy conservation 

standards for refrigeration products and requirements that DOE conduct two cycles of 

rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(b)(1), (2), 

(3)(A)(i), and (3)(B)-(C)) DOE completed the first of these rulemaking cycles in 1989 

and 1990 by adopting amended performance standards for all refrigeration products 

manufactured on or after January 1, 1993. 54 FR 47916 (November 17, 1989); 55 FR 

42845 (October 24, 1990). As indicated above, DOE completed a second rulemaking 

cycle to amend the standards for refrigeration products by issuing a final rule in 1997, 

which adopted the current standards for these products. 62 FR 23102 (April 28, 1997). 

In 2005, DOE granted a petition, submitted by a coalition of state governments, 

utility companies, consumer and low-income advocacy groups, and environmental and 

energy efficiency organizations, requesting a rulemaking to amend the standards for 

residential refrigerator-freezers.10 DOE then conducted limited analyses to examine the 

technological and economic feasibility of amended standards at the ENERGY STAR 

levels that were in effect for 2005 for the two most popular product classes of 

refrigerator-freezers. These analyses not only identified potential energy savings, benefits 

and burdens from such standards, but also assessed other issues related to them. Most 

recently, DOE has undertaken this rulemaking to satisfy the statutory requirement that 

10 The petition, submitted June 1, 2004, can be viewed at 

http://www.standardsasap.org/documents/rfdoe.pdf (last accessed August 18, 2010) and is in the docket as 

item No. 117. 

27
 
DOE publish a final rule to determine whether to amend the standards for refrigeration 

products manufactured in 2014. (42 U.S.C. 6295(b)(4)) The limited 2005 analyses served 

as background for the more extensive analysis conducted for this rulemaking. 

DOE initiated this rulemaking by making available on its website a framework 

document for refrigeration products, a PDF copy of which is available at 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/refrigerator_ 

freezer_framework.pdf). DOE also published a notice announcing the availability of the 

framework document and a public meeting to discuss the document. It also requested 

public comment on the document. 73 FR 54089 (September 18, 2008). The framework 

document described the procedural and analytical approaches that DOE anticipated using 

to evaluate energy conservation standards for refrigeration products and identified 

various issues to resolve during the rulemaking. 

On September 29, 2008, DOE held the framework document public meeting and 

discussed the issues detailed in the framework document. DOE also described the 

analyses that it planned to conduct during the rulemaking. Through the public meeting, 

DOE sought feedback from interested parties on these subjects and provided information 

regarding the rulemaking process that DOE would follow. Interested parties discussed the 

following major issues at the public meeting: test procedure revisions; product classes; 

technology options; approaches to the engineering, life-cycle cost, and payback period 

analyses; efficiency levels analyzed in the engineering analysis; and the approach for 

estimating typical energy consumption. At the meeting, and during the related comment 

28
 
period, DOE received many comments that helped it identify and resolve issues involved 

in this rulemaking. 

DOE then gathered additional information and performed preliminary analyses 

for the purpose of developing potential amended energy conservation standards for 

refrigeration products. This process culminated in DOE’s public announcement of the 

preliminary analysis public meeting. 74 FR 58915 (November 16, 2009) (the November 

2009 notice) At that meeting, which was held on December 10, 2009, DOE discussed the 

following matters: the product classes DOE analyzed; the analytical framework, models, 

and tools that DOE was using to evaluate standards; the results of the preliminary 

analyses performed by DOE; and potential standard levels that DOE could consider. 

DOE also invited written and verbal comments on these subjects and announced the 

availability on its website of a preliminary technical support document (preliminary TSD) 

it had prepared to inform interested parties and enable them to provide comments. Id. 

(The preliminary TSD is available at 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/ref_frz_pren 

opr_prelim_tsd.pdf) DOE also sought views concerning other relevant issues that 

participants believed would affect energy conservation standards for refrigeration 

products, or that merited addressing in the Notice of Proposed Rulemaking (NOPR). Id. 

at 58917-18. 

The preliminary TSD provided an overview of the activities DOE undertook in 

developing potential standards for refrigeration products, and discussed the comments 

29
 
 

DOE received in response to the framework document. It also described the analytical 

framework that DOE used, including a description of the methodology, the analytical 

tools, and the relationships among the various analyses that are part of the rulemaking. 

The preliminary TSD presented and described in detail each analysis DOE had performed 

up to that point, including descriptions of inputs, sources, methodologies, and results. 

These analyses included a market and technology assessment, a screening analysis, an 

engineering analysis, an energy use analysis, a markups analysis, a life-cycle cost 

analysis, a payback period (PBP) analysis, a shipments analysis, a national impact 

analysis, and a preliminary manufacturer impact analysis. See the NOPR for an overview 

of these assessments and analyses. 75 FR 59470, 59477 (September 27, 2010). 

At the preliminary analysis meeting, DOE presented the methodologies and 

results of the analyses set forth in the preliminary TSD. Major topics discussed at the 

meeting included test procedure revisions, product classes (including wine coolers, allrefrigerators,11 and built-in refrigeration products), the use of alternative foam blowing 

agents and refrigerants, engineering analysis tools, the use of vacuum insulated panels 

(VIPs), mark-ups, field energy consumption, life-cycle cost inputs, efficiency distribution 

forecasts, and trial standard level selection criteria. DOE also discussed plans for 

conducting the NOPR analyses. Comment received in response to the November 2009 

notice, helped shape DOE’s resolution of the issues raised in the preliminary analysis 

meeting. 

11 An “all-refrigerator” is defined as “an electric refrigerator which does not include a compartment for the 

freezing and long time storage of food at temperatures below 32 °F (0.0 °C). It may include a compartment 

of 0.50 cubic feet capacity (14.2 liters) or less for the freezing and storage of ice.” (10 CFR part 430, 

subpart B, appendix A1, section 1.4). 

30
 
 

In response to the preliminary analysis, DOE also received a comment submitted 

jointly by groups representing manufacturers (Association of Home Appliance 

Manufacturers, Whirlpool, General Electric Company (GE), Electrolux, LG Electronics, 

BSH, Alliance Laundry, Viking Range, Sub Zero-Wolf, Friedrich A/C, U-Line, 

Samsung, Sharp Electronics, Miele, Heat Controller, AGA Marvel, Brown Stove, Haier, 

Fagor America, Airwell Group, Arcelik, Fisher & Paykel, Scotsman Ice, Indesit, 

Kuppersbusch, Kelon, DeLonghi); energy and environmental advocates (American 

Council for an Energy Efficient Economy, Appliance Standards Awareness Project, 

Natural Resources Defense Council, Alliance to Save Energy, Alliance for Water 

Efficiency, Northwest Power and Conservation Council, Northeast Energy Efficiency 

Partnerships); and consumer groups (Consumer Federation of America, National 

Consumer Law Center). This collective set of comments, which DOE refers to in this 

notice as the “Joint Comments,”12 recommended specific energy conservation standards 

for refrigeration products that, in the commenters’ view, would satisfy the requirements 

under EPCA. According to this submission, negotiations between these various groups 

commenced in the spring of 2010, resulting in a finalized agreement with recommended 

standards on July 30, 2010. (Joint Comments, No. 52 at p. 8) Those recommended 

standards were reported in percentages of energy use reductions and in annual energy use 

based on the test procedure then in place but after DOE had published its NOPR 

proposing to amend that procedure. (Id. See also 75 FR 29824 (May 27, 2010)) DOE 

neither organized nor was a member of the group but made its contractors available to 

12 DOE Docket No. EERE-2008-BT-STD-0012, Comment 49. DOE considered the Joint Comments to 

supersede earlier comments by the listed parties regarding issues subsequently discussed in the Joint 

Comments. 

31
 
perform data processing. Consistent with its legal obligations when developing an energy 

conservation standard, DOE provided the public with the opportunity to comment on the 

proposed levels that DOE considered adopting for refrigeration products in the NOPR, 

which mirror those recommended in the Joint Comments. 

DOE published the NOPR on September 27, 2010. 75 FR 59470. The NOPR and 

its accompanying NOPR TSD described the analyses that DOE conducted after the 

preliminary analyses, including revisions of analyses to address stakeholder comments. 

The additional analyses performed during the NOPR phase included the consumer 

subgroup analysis, manufacturer impact analysis, employment impact analysis, utility 

impact analysis, environmental analysis, and regulatory impact analysis. The NOPR 

discussed all of the NOPR analyses in depth, including the revision of analyses initially 

conducted in the preliminary analysis phase. (see 75 FR at 59485-59530 (September 27, 

2010)) DOE held a public meeting to discuss the NOPR on October 14, 2010. At the 

meeting, DOE presented its analyses and raised issues for comment. The issues discussed 

at the meeting included the measurement changes associated with the new test procedures 

under consideration, product classes, product class definitions, status of specific 

technologies (e.g. high-efficiency compressors, VIPs, and isobutane refrigerant), maxtech levels, energy use equation slope changes, adjustments to the methodology for field 

energy use estimates, maintenance costs, efficiency distributions, energy standard roundoff, impacts on small manufacturers, setting built-in standards at levels determined to 

have negative consumer impacts, and DOE’s treatment of emissions reductions. DOE 

considered comments received at the public meeting and during the NOPR comment 

32
 
 

 

 

 

period in finalizing the standards. 

As discussed in greater detail in section IV.F.1 below, after publishing the NOPR, 

DOE more carefully examined trends in product prices and the possible impact of such 

trends on its analyses. On February 22, 2011, DOE published a notice of data availability 

(NODA) that discussed the approach it was considering to use in its forecasts of product 

prices. 76 FR 9696. DOE requested comments on the information provided in the NODA, 

and several stakeholders responded, including some that had not commented on the 

NOPR. 

Table II.2 below lists the stakeholders that provided comments on the NOPR and 

the NODA. 

Table II.2 Stakeholders Providing Comments on the NOPR and NODA 

Name Acronym Type* NOPR Oral 

Comments 

Written 

Comments 

Air-Conditioning, Heating, and 

Refrigeration Institute 

AHRI IR NODA 

American Council for an Energy 

Efficient Economy 

ACEEE EA NODA 

American Gas Association AGA UA NODA 

American Public Power Association APPA UA NOPR 

Appliance Standards Awareness 

Project (ASAP) 

ASAP EA  NODA 

Appliance Standards Awareness 

Project (ASAP) and Others13 

Joint Advocates’ 

Comment (JAC) 

EA, 

CA 

NOPR 

Association of Home Appliance 

Manufacturers 

AHAM IR  NOPR, 

NODA 

California Investor-Owned Utilities IOUs U NOPR, 

NODA 

13 Appliance Standards Awareness Project (ASAP), Alliance to Save Energy (ASE), American Council for 

an Energy-Efficient Economy (ACEEE), Consumer Federation of America (CFA), National Consumer 

Law Center (NCLC), Natural Resources Defense Council (NRDC), Northeast Energy Efficiency 

Partnerships (NEEP), and Northwest Energy Efficiency Alliance (NEEA). 

33 
 

 

 

 

Consumer Federation of America CFA CA NODA 

Earthjustice Earthjustice EA  NOPR 

Edison Electric Institute EEI UA NOPR, 

NODA 

Electrolux Home Products Electrolux M 

General Electric Consumer and 

Industrial 

GE M  NOPR 

Ingersoll Rand Residential Solutions Ingersoll Rand M NODA 

National Consumer Law Center NCLC CA NODA 

Natural Resources Defense 

Council 

NRDC EA NODA 

Northeast Energy Efficiency 

Partnerships 

NEEP EA NODA 

Northwest Energy Efficiency 

Alliance 

NEEA EA NODA 

Northwest Power and Conservation 

Council 

NPCC UA 

People’s Republic of China 

WTO/TBT National Notification & 

Enquiry Center 

PRC FG NOPR 

Portland General Electric Company PGEC U NOPR 

Sacramento Municipal Utility 

District 

SMUD U NOPR 

Southern Company SC U NOPR, 

NODA 

Sub Zero-Wolf, Inc. Sub Zero M NOPR 

Traulsen Traulsen M NODA 

Whirlpool Corporation Whirlpool M  NOPR 

*IR: Industry Representative; M: Manufacturer; EA: Efficiency/Environmental 

Advocate; CA: Consumer Advocate; CS: Component Supplier: TE: Technical Expert: I: 

Individual; U: Utility; UA: Utility Advocate; FG: Foreign Government Agency 

DOE notes that comments from the PRC indicated that it received notice of the 

September 27th NOPR on October 27, 2010, which permitted the Chinese government 

less than 60 days to provide comment on the proposed regulation. In DOE’s view, the 

publication of the September 2010 proposal, along with its immediate availability on the 

Government Printing Office’s website (http://www.gpoaccess.gov), provided any 

interested party with the specified 60 days of comment period. In future, however, to 

accommodate the PRC’s concerns, and to the extent feasible, DOE may examine possible 

34
 
 

steps to ensure the availability of its proposals to interested foreign parties. 

III. General Discussion 

The following section discusses various technical aspects related to this 

rulemaking. In particular, it addresses aspects involving the test procedures for 

refrigeration products, the technological feasibility of potential standards to assign to 

these products, and the potential energy savings and economic justification for 

prescribing the amended standards for refrigeration products. 

A. Test Procedures 

As noted above, DOE’s current test procedures for refrigeration products appear 

at 10 CFR part 430, subpart B, appendices A1 (for refrigerators and refrigerator-freezers) 

and B1 (for freezers). DOE recently published a notice containing both the test procedure 

final rule (affecting products manufactured prior to 2014) and an interim final rule (for 

products manufactured starting in 2014). The final/interim final rule notice amended 

Appendices A1 and B1 (which affect pre-2014 products) and created new Appendices A 

and B (which affect products starting in 2014). Appendix A applies to refrigerators and 

refrigerator-freezers covered by today’s amended standards (i.e., those manufactured or 

or after the 2014 compliance date prescribed by today’s rule) and Appendix B applies to 

freezers covered by today’s amended standards. 75 FR 78810 (December 16, 2010) (this 

notice contains both the final and interim final rules that detail the test procedures for 

refrigeration products). The new Appendices A and B share many of the same revisions 

and additions made in Appendices A1 and B1, but also include additional revisions not 

35
 
made in Appendices A1 and B1. See id. at 78817-78818 DOE notes, however, that 

because the new Appendices A and B were issued as an interim final rule, these 

additional amendments may be subject to possible adjustment based on comments that 

DOE receives. DOE had previously provided commenters with 60 days within which to 

provide additional feedback regarding the interim final rule. Id. at 78810. DOE may 

reopen this comment period for a limited period of time after the publication of today’s 

standards final rule. 

EPCA requires DOE to consider during a test procedure rulemaking whether test 

procedure amendments alter the measured energy use of products, and, if so, to amend 

the energy standards. (42 U.S.C. 6293(e)(1)-(2)) In this case, DOE simultaneously 

considered the impacts of any measured energy changes within the context of the 

standards rulemaking required by statute. Section III.A.2 discusses the adjustment of the 

final energy conservation standard with respect to any test procedure changes. The 

approach used to implement this adjustment is also discussed in the Section IV.C.2 

below. 

1. Test Procedure Rulemaking Schedule 

The NOPR analysis documents were published, and the NOPR public meeting 

was held, prior to publication of the final rule describing the amended test procedure on 

which the analysis was based. The test procedure final/interim final rule was issued and 

DOE made copies available to all interested parties prior to the end of the energy 

conservation standard NOPR comment period. 

36
 
 

AHAM and GE both commented that, despite DOE’s May 2010 publication of its 

proposed test procedure, it is difficult to prepare comments on an energy standard when 

the final test procedure is not yet known. (AHAM, Public Meeting Transcript, No. 67 at 

p. 18; GE, Public Meeting Transcript, No. 67 at p. 37) AHAM clarified that 

determination of the impact on energy use measurement of the test procedure changes 

cannot be done without having a final test procedure (AHAM, Public Meeting Transcript, 

No. 67 at p. 13-14, 35) In written comments, AHAM argued that because the test 

procedure final/interim final rule was not issued until November 24, 2010, manufacturers 

did not have a sufficient opportunity to test products to evaluate the impacts of the final 

test procedure changes—as a result, AHAM claimed it was not able to comment on the 

proposed energy standard equations (AHAM, No. 73 at pp. 1-2)14 GE commented that the 

industry wanted to know the final test procedure before starting test work to determine 

whether the energy standard adjustments implemented by DOE in the NOPR sufficiently 

represent all of the test procedure changes. (GE, Public Meeting Transcript, No. 67 at p. 

46-47) AHAM also asked whether any rulemaking process options allowed under EPCA 

could be considered to give the industry more time to assess the test procedure impacts. 

(AHAM, Public Meeting Transcript, No. 67 at p. 37-38) 

DOE notes that the test procedure NOPR was published May 27, 2010, roughly 

two months prior to the completion of negotiations conducted by industry and advocates 

in creating the standards recommended in their joint comments. 75 FR 29824 (May 27, 

2010). In developing those consensus standards, the industry and other stakeholders had 

14 The rule was issued on November 23, 2010, not November 24 as indicated in AHAM’s comments. 

37
 
knowledge of DOE’s test procedure proposals and ample time to consider adjustments to 

the negotiated standards to address the proposals for today’s final rule. DOE also notes 

that stakeholders have had several months since the publication of the test procedure 

NOPR to quantify the impacts of the proposed test procedure amendments. DOE again 

asked stakeholders at the energy conservation standard NOPR public meeting for 

information that would help quantify these impacts. None was provided and participants 

gave no indication that they had performed any such testing. In the absence of such 

information, DOE has developed its own information to finalize the energy conservation 

standards, as described in section III.A.2. 

DOE notes that under EPCA, an amended or new energy conservation standard 

may not be prescribed unless a test procedure for the regulated product has been 

prescribed. See 42 U.S.C. 6295(o)(3). DOE has met this requirement. 

In response to AHAM’s request regarding additional time to evaluate the test 

procedure impacts, DOE has issued the test procedure amendments affecting products 

starting in 2014 as an interim final rule. This approach resulted in providing interested 

parties with an additional 60 days to comment on the interim final rule’s amendments. 75 

FR at 78810 (December 16, 2010). Additionally, as already indicated, DOE plans to 

provide interested parties with additional time to comment on the interim final rule. 

Notice of that limited reopening of the comment period will be provided in the Federal 

Register. 

38
 
 

2. Adjustment of the Energy Standards for the New Test Procedure 

As described above, DOE amended its test procedures for refrigeration products. 

These amendments will impact the measured energy use. DOE’s amended standard levels 

incorporated adjustments (called a “crosswalk”) to reflect these changes in energy use 

measurements. DOE described the crosswalk process in its September 2010 NOPR. See 

75 FR at 59502-59505 (September 27, 2010). In short, DOE applied the crosswalk to the 

baseline (current energy standard) equations, thus developing baseline energy use 

equations using the new test procedure. DOE applied the percentage energy use 

reductions representing the new energy standards to these baseline equations to determine 

the new energy standards. The NOPR also indicated that DOE tentatively concluded that 

the only test procedure changes that would be likely to impact measured energy use are 

those associated with compartment temperatures and the volume measurement method. 

75 FR at 59505 (September 27, 2010). The term “NOPR crosswalk” refers to this set of 

energy standard adjustments addressing these two test procedure changes. 

Commenters addressed both (a) the NOPR crosswalk addressing test procedure 

changes in compartment temperatures and volume measurements and (b) the additional 

test procedure changes that could affect energy use measurements. The NOPR public 

meeting was held on October 14, 2010, before the publication of the test procedure 

final/interim final rule. Hence, stakeholder comments from the meeting addressed the 

proposed test procedure, rather than the final one that DOE ultimately adopted. 

39
 
Whirlpool indicated that it could not comment on the proposed standard levels 

prior to publication of the test procedure and comprehensive testing to determine the 

impact of the test procedure changes. (Whirlpool, No. 74 at p. 7) GE echoed this 

comment, indicating that it is essential to have the final test procedure to allow evaluation 

of the impacts of the test procedure changes in order to be able to comment effectively on 

the proposed standard levels. (GE, No. 76 at p. 1) AHAM commented that the NOPR 

crosswalk is partly theoretical since it uses extrapolation and analysis to determine 

adjustments for some product classes. (AHAM, Public Meeting Transcript, No. 67 at p. 

17) AHAM also commented that it “is critical” to do testing to determine the impact of 

the test procedure changes, and that the industry was not provided sufficient time 

between issuance of the final/interim final rule and the end of the comment period to 

conduct such testing. (AHAM, 73 at p. 2) 

The IOUs supported DOE’s approach for adjustment of the energy standards to 

address test procedure changes. In light of the limited time available to complete the 

rulemaking, the IOUs commented that DOE’s approach was appropriate in spite of 

comments by parties at the public meeting calling for additional testing to perform a 

crosswalk. (IOUs, No. 77 at p. 2) 

DOE notes that the NOPR crosswalk was based primarily on data provided by 

AHAM—which DOE described in detail in its TSD. See chapter 5, “Engineering 

Analysis”, section 5.4.2. Because AHAM did not initially provide data for all product 

classes, DOE conducted additional analysis and developed estimates to supplement the 

40
 
gaps present in AHAM’s data. These additional steps helped DOE to establish 

appropriate crosswalks for the remaining product classes. DOE first presented this 

process in its preliminary TSD, which DOE posted on its website in November 2009. 

Stakeholders have had more than twelve months to comment on the crosswalks for these 

remaining product classes, but have not done so. 

Numerous commenters identified other test procedure changes that they believed 

would affect the measured energy use of refrigeration products and offered their views on 

how to address them in a final crosswalk. AHAM first indicated that the NOPR 

crosswalk does not represent all of the measurement impacts of the test procedure 

modifications. (AHAM, Public Meeting Transcript, No. 67 at p. 16; AHAM, No. 73 at p. 

2) It asserted that there are many test procedure changes and that some of these changes, 

other than those changes affecting compartment temperature and volume calculation, can 

impact measured energy use. (AHAM asserted that the impact of these changes cannot be 

determined as a sum of the impacts of the individual changes, but did not provide data 

illustrating this assertion, nor did AHAM explain why an additive approach is not 

reasonable. (Id. at p. 35-36)) To this end, AHAM identified four specific proposed test 

procedure changes that it believed would impact measured energy use: (1) test procedures 

addressing products with variable anti-sweat heater control, (2) use of the highest energy 

use position for special compartments, (3) modification of the long-time-defrost test 

procedure to capture precooling energy use, and (4) test procedures addressing products 

with multiple defrost cycle types. (Id. at 42-43) DOE notes that AHAM identified these 

same four additional test procedure changes in its comments on the test procedure 

41
 
 

 

rulemaking NOPR (AHAM, Test Procedure for Residential Refrigerators, RefrigeratorFreezers, and Freezers, Docket Number EERE-2009-BT-TP-0003, No. 16 at p. 3) In its 

written comments, AHAM indicated that the final test procedure that DOE developed for 

products with variable anti-sweat heater control does not alter measured energy use, since 

DOE adopted the procedure provided in waivers already granted to companies who 

manufacture products with such features. (AHAM, No. 73 at p. 3) 

Whirlpool asserted that applying the highest energy usage setting for special 

compartments, including procedures designed to capture precooling energy and to 

address products that use multiple defrost cycles, will alter measured energy use. 

(Whirlpool, No. 74 at p. 7) 

The IOUs agreed that there were additional test procedure changes that could alter 

measured energy use that had not been considered in establishing the proposed standards, 

including test procedures for products with variable anti-sweat heater control, new 

procedures to capture precooling energy use, and new procedures for special 

compartments. The IOUs recommended that the energy standards should be adjusted to 

account for these test procedure changes. They noted that if the measured impacts of 

these test procedure changes have not been determined through testing, DOE should 

estimate their impact and direction of the impact (positive or negative). They added that 

if these impacts are small or applicable to only a small portion of the market, DOE should 

not adjust the baseline energy use equations15 to avoid the risk of backsliding on the 

15 The baseline energy use equations represent energy use for baseline products (i.e. products which are 

minimally compliant using the current test procedure) when tested using the new test procedure. 

42
 
standard levels. (IOUs, No. 77 at p. 2) The IOUs indicated that they did not have any 

additional data regarding the impacts of the test procedure changes. (Id.) 

GE generally noted the importance of conducting tests to evaluate the impacts of 

the test procedure changes. It also expressed concerns that a number of the test procedure 

changes may have significant measurement impacts. GE did not, however, specifically 

identify these test procedure changes. (GE, Public Meeting Transcript, No. 67 at pp. 36­

37) Whirlpool commented that the test procedures addressing products with variable 

anti-sweat heater controls represent a significant test burden (in some cases, an additional 

week of test time) and could impact the measured energy use of a given product. 

(Whirlpool, Public Meeting Transcript, No. 67 at pp. 44-45) Whirlpool further identified 

electric heaters and/or fans in special compartments that may be used to prevent freezing 

in such compartments as a factor in the potential energy use measurement impact of the 

test procedure amendments for special compartments. (Id.) 

When asked by DOE whether there are any manufacturer data that quantify the 

impacts of the cited additional test procedure amendments, AHAM indicated that they 

did not have such data. Instead, AHAM cited DOE’s own statement from the 

refrigeration product test procedure rulemaking public meeting presentation discussing 

the NOPR that the amendments to capture defrost precooling energy use would increase 

energy use 2 percent for one tested product (AHAM, Public Meeting Transcript, No. 67 

at pp. 44, 45-46, 43) AHAM further stressed the importance of evaluating the entire 

modified test procedure rather than investigating the potential impacts from individual 

43
 
changes, because the measurement impacts of the changes may not be additive. (Id. at pp. 

26-27) However, AHAM did not provide data illustrating or supporting this assertion, 

nor did AHAM explain why an additive approach is not reasonable. 

Stakeholders also commented on the approach used to apply the projected energy 

measurement impacts to the energy conservation standards. When asked by DOE during 

the public meeting if the crosswalk should apply to the population average of the 

minimally compliant products, AHAM agreed, indicating that the Joint Agreement used 

the words “average” and “minimally compliant”, but that the crosswalk should also be 

based on evaluating low-volume and high-volume products to properly reflect capacity 

impacts. (AHAM, Public Meeting Transcript, No. 67 at pp. 33-34) ASAP also agreed that 

the crosswalk should apply to the “average”. (ASAP, Public Meeting Transcript, No. 67 

at p. 34) DOE agrees that a shipment-weighted average approach for applying the energy 

use measurement impacts of test procedure changes is appropriate and is consistent with 

the requirements of EPCA. (42 U.S.C. 6293(e)(2)) Consistent with this approach, and 

the requirements of 42 U.S.C. 6293(e)(2), DOE applied a shipment-weighted approach, 

which provides the best indication across all shipped products of the magnitude of the 

impact. 

AHAM also commented that anti-backsliding considerations would not apply 

because the changes in test procedures and energy standards will take effect 

simultaneously. (AHAM, Public Meeting Transcript, No. 67 at p. 41) DOE notes that 

amending a test procedure without an accompanying energy standard rulemaking that 

44
 
increases stringency may result in an increase in the maximum allowable energy use for 

some products. Such a change would not be allowed if the anti-backsliding provisions of 

EPCA (42 U.S.C. 6295(o)(1)) applied to any particular product rather than to the average 

for the product class population. However, such considerations do not apply in this case, 

as indicated by AHAM, because the test procedure and energy standard changes will 

occur simultaneously. 

DOE notes that it has received no new information from stakeholders quantifying 

the changes in measured energy use associated with any of the test procedure changes. 

Hence, DOE adjusted its standards using the data discussed above that AHAM provided 

during the preliminary analysis phase, as well as supplemental data and analysis (e.g. 

testing DOE conducted during the rulemaking) that DOE developed on its own. 

a. Products with Variable Anti-Sweat Heater Control 

DOE amended its test procedures to require the use of the procedure currently 

being used by manufacturers under waivers that DOE granted. This procedure, along with 

a change to assure the consistency of compartment temperatures during testing, will be 

required to establish compliance with the 2014 standards for variable anti-sweat heater 

control-equipped products. The change involves the description of the conditions that 

apply to the anti-sweat heater wattages used in the calculation of the anti-sweat heater 

adjustment factor: the wattages will apply to a 0  ̊F freezer compartment temperature and 

a 39  ̊F fresh food compartment temperature, rather than the 5  ̊F and 45  ̊F, respectively, 

used in the waivers. 75 FR at 78828-78830 (December 16, 2010). DOE considers that the 

45
 
adjustments made to the energy conservation standards to account for compartment 

temperature changes also apply to the adjustment factor for anti-sweat heaters operating 

with variable control. Hence, no additional energy standard adjustment is needed to 

address this test procedure amendment. 

b. Products with Multiple Defrost Cycle Types 

DOE amended the test procedure to address products with multiple defrost cycle 

types. Id. at 78836-78838. As explained in the test procedure final rule, the previous 

procedure could not ensure that the entire defrost energy used for such products would be 

sufficiently captured. DOE received one test procedure waiver petition for such products, 

from Samsung, requesting waiver of the current test procedure of Appendix A1 for 

products manufactured before 2014. 76 FR 16760 (March 25, 2011). The waiver petition 

requests use of the same test procedure to address multiple defrost cycle types that was 

set forth in the test procedure interim final rule for Appendix A. Samsung did not provide 

information regarding the change in measured energy use associated with the modified 

test procedure. Furthermore, they indicated that the current energy efficiency standards 

are adequate, and they did not request adjustment of the standards for the products that 

are the subject of the waiver petition. Id. at p. 16763. DOE is unaware of any other 

manufacturer who employs this type of design. Accordingly, DOE is unaware of any 

impact on the measured energy use of these multiple defrost cycle products associated 

with this test procedure amendment. 

46
 
c. Amendments to Capture Precooling Energy Use 

DOE amended the test procedure for products with long-time or variable defrost 

to capture precooling and partial recovery energy use. Id. at 78832-78836. Testing 

performed during the engineering phase of this rulemaking indicates that capturing 

precooling energy use would yield an impact of roughly two percent of the total 

measured energy use. Additionally, the impact of capturing the energy from full 

temperature recovery (i.e. extending the test period until the compartment temperatures 

have recovered to their steady-state levels) for products exhibiting partial recovery may 

comprise another 0.5 percent of total measured energy use for those products that do not 

achieve a full temperature recovery within the test period prescribed by the current test 

procedure. Of the nine refrigerator-freezers tested during the engineering analysis phase, 

two of these units incorporated precooling. These units fell into current product classes 5 

(refrigerator-freezers—automatic defrost with bottom-mounted freezer without throughthe-door ice service) and 7 (refrigerator-freezers—automatic defrost with side-mounted 

freezer with through-the-door ice service). DOE is unaware of any significant percentage 

of products that currently do not fully recover temperature within the time period allotted 

by the current test procedure. DOE has adjusted the energy standard levels for these and 

related product classes using the observed measurement impact for capturing precooling 

energy use and applying that measured impact consistently with the frequency with 

which this feature has been observed in this group of tested products. The adjustment 

details are described in detail in section IV.C.2 below. 

47
 
d. Test Procedures for Special Compartments 

DOE amended the test procedures to require that products with special 

compartments using the addition of heat (“heat addition”) as a form of temperature 

control be tested twice. The energy use measurement of such products will be an average 

of measurements made with the special compartment temperature controls set in the 

warmest position for the first test and in the coldest position for the second test. Id. at 

78825-78826. Of the eleven refrigerator-freezers purchased for reverse engineering 

analysis performed during the engineering analysis phase, two had special compartments 

with separate temperature control. Neither of these products used heat addition for 

controlling special compartment temperatures. In examining features of refrigeration 

products on manufacturer websites, DOE found that the prevalence of special 

compartments in standard-size refrigerator-freezers comprised 20 percent of the models 

examined. Id. at 78823. Because of the limited nature of these data, DOE conducted 

further study of products that employ heat addition. 

DOE identified thirteen basic models that have heated special compartments. In 

this assessment, DOE concluded that special compartments use heaters for temperature 

control if the high end of their controllable temperature range is significantly higher than 

typical fresh food compartment temperatures. DOE considered typical fresh food 

compartment temperature to be the default settings set at the factory. These default 

settings are in the 37  ̊F to 39  ̊F range. (see, e.g., GE Bottom Freezer Refrigerators, No. 

78 at p. 4; LG Owner’s Manual LFX28978**, No. 79 at p. 23) The controllable 

temperature range of heated special compartments typically reaches temperatures of up to 

48
 
41  ̊F or 42  ̊F. By comparison, special compartments that rely on cooling air to manage 

temperatures do not exceed the typical fresh food compartment temperature range. (See, 

e.g., GE Bottom Freezer Refrigerators, No. 78 at p. 18; Use and Care Guide Electrolux 

242046401, No. 80 at p. 18) The thirteen products identified include products from 

current products classes 5 (refrigerator-freezers—automatic defrost with bottom-mounted 

freezer without through-the-door ice service), 5A (refrigerator-freezer—automatic defrost 

with bottom-mounted freezer with through-the-door ice service), and 7 (refrigeratorfreezers—automatic defrost with side-mounted freezer with through-the-door ice 

service). (Heated Special Compartments Web Pages, No. 81) 

DOE does not have information on shipment weighting for these products. As a 

proxy for shipment weighting, DOE instead determined the percentage of available 

products represented by the identified products with heated special compartments for 

each of the represented product classes. To do this, DOE considered the number of 

available products listed in the California Energy Commission (CEC) database, adjusted 

to account for out-of-date product listings. The details of this approach are described in 

the TSD in chapter 5, section 5.4.2.6. The calculated percentages of products having 

heated special compartments are 10.6 percent for current product class 5A, 1.5 percent 

for current product class 5, and 0.7 percent for current product class 7. DOE used these 

percentages to adjust the standards for these product classes. The determination of the 

adjustment is discussed in greater depth in section IV.C.2 below. 

49
 
DOE initially conducted analysis, described below in section IV.C.2, to estimate 

what the projected impact from the relevant test procedures would be on the measured 

energy use for a product with a heated special compartment. Initial estimates indicated 

that the change would increase measured energy use by 5.9 percent for this type of 

product. DOE also conducted testing for two of the thirteen products that were identified 

as having heated special compartments. These tests compared the measured energy use 

not including icemaking energy use when tested using the interim final test procedures 

set forth in the new Appendix A with a modified test procedure in which the heated 

special compartment is tested only in its coldest setting. For both of these tests, the 

Appendix A requirement to average measurements representing the coldest and warmest 

setting of the compartment resulted in higher energy use. The impacts were 6.5 percent 

for one product and 1.7 percent for the other — the average impact determined for these 

tests was 4.1 percent, which is somewhat lower than the estimated 5.9 percent impact. 

After reviewing these results, DOE determined that, because the test data 

represent only two products, the uncertainty associated with the average of the measured 

impacts is fairly high. As a result, DOE concluded that the more conservative approach of 

basing its adjustment of the energy standard on the calculation rather than the limited 

testing data is appropriate to ensure that the final standard is not overly aggressive. 

Taking such an approach is consistent in this instance with EPCA’s prohibition to make 

subsequent adjustments that would increase the permitted energy usage (or reduce the 

energy efficiency) of a regulated product. See 42 U.S.C. 6295(o)(1). Accordingly, as 

50
 
described in greater detail in section IV.C.2, the results of the more conserevative 

calculation were used to adjust the energy standard. 

3. Standby and Off Mode Energy Use 

DOE notes that EPCA, as amended by EISA 2007, requires DOE to amend its test 

procedures for all covered products, including those for refrigeration products, to include 

a measurement for standby mode and off mode energy consumption, except where 

current test procedures fully address such energy consumption. (42 U.S.C. 6295(gg)(2)) 

As indicated above, DOE’s test procedures for refrigeration products, both the previous 

and recently amended versions, already fully address standby and off mode energy use. 

Whirlpool agreed with this assessment. (Whirlpool, No. 74 at p. 7) No commenters 

challenged this assessment. Because the test procedures address standby and off mode 

energy use, the energy conservation standards, which are based on the test procedures, 

also address this energy use. 

B. Technological Feasibility 

1. General 

In each standards rulemaking, DOE conducts a screening analysis based on 

information gathered on all current technology options and prototype designs that have 

the potential to improve product or equipment efficiency. To conduct the analysis, DOE 

typically develops a list of design options for consideration in consultation with 

manufacturers, design engineers, and other interested parties. DOE then determines 

51
 
which of these options are technologically feasible. DOE considers a design option to be 

technologically feasible if it is currently in use by the relevant industry or if a working 

prototype exists. See 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i) 

(providing that “[t]echnologies incorporated in commercially available products or in 

working prototypes will be considered technologically feasible.”) 

Once DOE has determined that particular design options are technologically 

feasible, it evaluates each one using 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)). Section IV.B of this notice discusses the results of the 

screening analysis for refrigeration products, namely, the designs DOE considered, those 

it screened out, and those that are the basis for the trial standard levels (TSLs) in this 

rulemaking. For further details on the screening analysis for this rulemaking, see chapter 

4, Screening Analysis, of the NOPR TSD. 

2. Maximum Technologically Feasible Levels 

When DOE proposes to adopt (or not adopt) an amended standard for a type or 

class of covered product, it must “determine the maximum improvement in energy 

efficiency or maximum reduction in energy use that is technologically feasible” for such 

product. (42 U.S.C. 6295(p)(1)) Accordingly, DOE determined the maximum 

technologically feasible (“max-tech”) reductions in energy use for refrigeration products 

in the engineering analysis. 

52
 
As described in the preliminary TSD, DOE conducted a full analysis of a set of 

product classes that comprise a large percentage of product shipments in the market 

today. DOE’s approach for extending amended standard levels established for these 

product classes to the non-analyzed product classes is described in chapter 2, Analytical 

Framework, of the preliminary TSD, in section 2.15. Similarly, this section of today’s 

rule reports the max-tech efficiency levels for the fully analyzed product classes, which 

include Classes 3 (refrigerator-freezer—automatic defrost with top-mounted freezer 

without through-the-door ice service), 5 (refrigerator-freezers—automatic defrost with 

bottom-mounted freezer without through-the-door ice service), 7 (refrigerator-freezers— 

automatic defrost with side-mounted freezer with through-the-door ice service), 9 

(upright freezers with automatic defrost), 10 (chest freezers), 11 (compact refrigerators 

and refrigerator-freezers with manual defrost), 18 (compact chest freezers), 3A-BI (builtin all-refrigerators—automatic defrost), 5-BI (built-in Refrigerator-freezers—automatic 

defrost with bottom-mounted freezer without through-the-door ice service), 7-BI (built-in 

Refrigerator-freezers—automatic defrost with side-mounted freezer with through-thedoor ice service, and 9-BI (built-in upright freezers with automatic defrost). DOE 

considers the max-tech levels for these products classes to be representative of the maxtech levels of similar product classes. For example, product class 7 can be considered to 

represent product class 4 (refrigerator-freezers—automatic defrost with side-mounted 

freezer without through-the-door ice service) because they are both side-mount 

refrigerator-freezers, the only difference being the through-the-door ice feature of product 

class 7. 

53
 
 

 

 

In determining the max-tech efficiency levels of the directly analyzed product 

classes, DOE used the amended test procedures that would apply once manufacturers are 

required to meet the new standard. The efficiency levels are defined as reductions in that 

portion of the energy use not associated with icemaking. As described in section III.A, 

above, the energy use associated with icemaking under the amended test procedure is a 

fixed quantity not correlated with an efficiency level. Separating this fixed quantity of 

energy use from the established efficiency level allows a more direct comparison of 

products, irrespective of whether a given product is equipped with an automatic 

icemaker. This approach also allows DOE to compare the efficiency levels based on the 

amended test procedure (i.e., projections of possible energy use reductions) against the 

energy use based on the existing test procedure and current standard.16 

DOE used the full set of design options considered applicable to these directly 

analyzed product classes to determine their max-tech efficiency levels. (See chapter 5 of 

the NOPR TSD, section 5.4.4.) Table III.1 lists the max-tech levels that DOE determined 

for this rulemaking. The table also presents the max-tech levels that are commercially 

available. The max-tech levels differ from those presented in the preliminary TSD and 

are generally lower (i.e., the percent energy use reductions are lower for the NOPR 

analysis, thus, the max-tech energy use is higher). The reduction in the max-tech 

efficiency levels is due to the revisions DOE implemented in the NOPR engineering 

16 In other words, a product with energy usage that is a certain percentage below the current energy 

standard should remain the same percentage below the baseline energy use under the proposed test 

procedure after subtracting icemaking energy use. Hence, the max-tech levels expressed as a percentage of 

energy use reduction should be the same for both sets of test procedures. 

54
 
 

analysis to address new information obtained during this phase of the rulemaking (see the 

discussion of changes made to the engineering analysis in the NOPR, Table IV.10. 75 FR 

59470, 59501-59502 (September 27, 2010)). DOE obtained the new information through 

NOPR phase interviews with manufacturers. 

Table III.1 Max-Tech Efficiency Levels for the Refrigeration Products Rulemaking 

Product 

Class 

Description Efficiency Level (Percent 

Energy Use Reduction) 

DOE 

Analysis 

Max Tech 

Commercially 

Available 

Standard-Size Refrigerator-Freezers 

3 Refrigerator-freezers—automatic defrost with 

top-mounted freezer without through-the-door 

ice service 

36% 30% 

5 Refrigerator-freezers—automatic defrost with 

bottom-mounted freezer without through-thedoor ice service 

36% 33% 

7 Refrigerator-freezers—automatic defrost with 

side-mounted freezer with through-the-door 

ice service 

33% 32% 

Standard-Size Freezers 

9 Upright freezers with automatic defrost 44% 27% 

10 Chest freezers and all other freezers except 

compact freezers 

41% 16% 

Compact Products 

11 Compact refrigerators and refrigerator-freezers 

with manual defrost 

59% 27% 

18 Compact chest freezers 42% 23% 

Built-In Products 

3A-BI Built-In All-refrigerators—automatic defrost 28% 31% 

5-BI Built-In Refrigerator-freezers—automatic 

defrost with bottom-mounted freezer without 

through-the-door ice service 

27% 27% 

7-BI Built-In Refrigerator-freezers—automatic 

defrost with side-mounted freezer with 

through-the-door ice service 

22% 21% 

9-BI Built-In Upright freezers with automatic 

defrost 

27% 27% 

55
 
The max-tech efficiency levels identified for commercially available products are, 

in most cases, different from the max-tech levels shown in Table III.1. The levels in 

Table III.1 are significantly higher than the commercially available max-tech levels for 

product classes 9 (upright freezers with automatic defrost), 10 (chest freezers), 11 

(compact refrigerators and refrigerator-freezers with manual defrost), and 18 (compact 

chest freezers). DOE determined that higher max-tech levels for these products were 

possible because available products generally do not use all of the energy efficient design 

options considered in the DOE max-tech analyses. Prototypes with the DOE max-tech 

levels have not been identified, but the design options are all used in commercially 

available products. 

DOE determined the max-tech levels using a program initially developed by the 

Environmental Protection Agency (EPA) called the Efficient Refrigerator Analysis 

program (known simply as the ERA) to conduct energy modeling. DOE conducted this 

energy modeling for specific products examined during the engineering analysis. DOE 

created energy models for the existing products and adjusted these models to represent 

modified designs using the screened-in design options. The max-tech levels represent the 

most efficient design option combinations applicable for the analyzed products. This 

process is described in Chapter 5 of the NOPR TSD. See NOPR TSD, sections 5.4.4 and 

5.7. DOE considered different sets of design options for each product class, as indicated 

in Table III.2. 

56
 
 

 

 

 

 

 

 

 

 

 

 

Table III.2 Design Options Considered for Max Tech 

Product 

Class 

Design Option 

BLDC* FanMotorsHeatExchangerImprovementThickerWallsVacuumInsulation Panels (VIPs) VariableSpeedCompressorAdaptiveDefrostVariableAnti-sweatHeaterControlIsobutaneRefrigerant 

3     

5      

7      

9      

10    

11     

18    

3A-BI    

5-BI     

7-BI      

9-BI     

*Brushless-Direct-Current 

DOE requested comments on its max-tech efficiency levels and on the evaluated 

groups of design options DOE’s analyses indicated would be necessary to employ to 

achieve these levels. 75 FR at 59484 (September 27, 2010). Sub Zero commented that 

DOE’s analysis leading to the max-tech feasible levels is reasonable. (Sub Zero, No. 69 

at p. 1) Sub Zero also commented that many of the design options still available to 

improve the efficiency of freestanding products have already been used in built-in 

products that are available on the market. 

Whirlpool commented that some of the design option combinations may not be 

practical, that the resulting efficiency gains may not be additive, and that the 

combinations may not be cost-effective. Whirlpool also commented that it does not 

believe that DOE has met the obligation to demonstrate the technical and economic 

57
 
 

feasibility of these combinations. (Whirlpool, No. 74 at p. 1). Whirlpool did not identify 

the specific combinations that it believed to be impractical. Accordingly, DOE has not 

adjusted its max-tech analysis. DOE adds that max-tech efficiency levels are not required 

to be cost-effective levels, but that DOE is required by EPCA to determine the maximum 

improvement that is technologically feasible, and to explain why the standard is not set at 

this level, if it is not. (42 U.S.C. 6295(p)(1)) 

C. Energy Savings 

1. Determination of Savings 

DOE used its National Impact Analysis (NIA) spreadsheet model to estimate the 

energy savings from amended standards for the refrigeration products covered by this 

rulemaking.17 For each TSL, DOE forecasted energy savings beginning in 2014, the year 

that manufacturers would be required to comply with amended standards, and ending in 

2043. DOE quantified the energy savings attributable to each TSL as the difference in 

energy consumption between the standards case and the base case. The base case 

represents the forecast of energy consumption in the absence of amended mandatory 

efficiency standards and considers market demand for more-efficient products. 

The NIA spreadsheet model calculates the electricity savings in “site energy” 

expressed in kilowatt-hours (kWh). Site energy is the energy directly consumed by 

refrigeration products at the locations where they are used. DOE reports national energy 

savings on an annual basis in terms of the aggregated source (primary) energy savings, 

which is the savings in the energy that is used to generate and transmit the site energy. 

17 The NIA spreadsheet model is described in section IV.G of this rule. 

58
 
(See TSD chapter 10.) To convert site energy to source energy, DOE derived annual 

conversion factors from the model used to prepare the Energy Information 

Administration’s (EIA) Annual Energy Outlook 2010 (AEO2010). 

2. Significance of Savings 

As noted above, DOE must adopt a standard for a covered product that results in 

“significant” energy savings. 42 U.S.C. 6295(o)(3)(B). While the term “significant” is not 

defined in the Act, the U.S. Court of Appeals, in Natural Resources Defense Council v. 

Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended 

“significant” energy savings in this context to be savings that were not “genuinely 

trivial.” The energy savings for all of the TSLs considered in this rulemaking are 

nontrivial, and, therefore, DOE considers them “significant” within the meaning of 

section 325 of EPCA. 

D. Economic Justification 

1. Specific Criteria 

As noted in section II.A, EPCA provides seven factors for DOE to consider when 

evaluating whether a potential energy conservation standard is economically justified. (42 

U.S.C. 6295(o)(2)(B)(i)) The following sections discuss how DOE has addressed each of 

those seven factors in this rulemaking. 

a. Economic Impact on Manufacturers and Consumers 

As required by EPCA, DOE considered the economic impact of potential 

59
 
standards on consumers and manufacturers. (42 U.S.C. 6295(o)(2)(B)(i)(I)) For 

consumers, DOE measured the economic impact as the change in installed cost and lifecycle operating costs (i.e., the change in LCC). (See section IV.F, section VI.B.1 and 

chapter 8 of the final rule TSD.) DOE investigated the impacts on manufacturers through 

the manufacturer impact analysis (MIA). (See section IV.I and section VI.B.2 of today’s 

final rule, and chapter 12 of the final rule TSD accompanying this rule.) The economic 

impact on consumers and manufacturers is discussed in detail in the NOPR. See 75 FR at 

59484-59485, 59512-59516, 59519-59526, 59532-59537, and 59537-59549 (September 

27, 2010). 

For individual consumers, measures of economic impact include the changes in 

life-cycle cost (LCC) and payback period (PBP) associated with new or amended 

standards. The LCC, which is separately specified in EPCA as one of the seven factors to 

be considered in determining the economic justification for a new or amended standard, 

42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the following section. For consumers in 

the aggregate, DOE also calculates the national net present value of the economic impacts 

on consumers over the forecast period used in a particular rulemaking. 

b. Life-Cycle Costs 

The LCC is the sum of the purchase price of a product (including its installation) 

and the operating expense (including energy and maintenance and repair expenditures) 

discounted over the lifetime of the product. The LCC savings for the considered 

efficiency levels are calculated relative to a base case that reflects likely trends in the 

60
 
absence of amended standards. The LCC analysis requires a variety of inputs, such as 

product prices, product energy consumption, energy prices, maintenance and repair costs, 

product lifetime, and consumer discount rates. DOE assumed in its analysis that 

consumers will purchase the products affected by this rule in 2014. 

To account for uncertainty and variability in specific inputs, such as product 

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 the average LCC savings associated with a particular standard 

level. Aside from identifying ranges of impacts, DOE evaluates the LCC impacts of 

potential standards on identifiable subgroups of consumers that may be 

disproportionately affected by a national standard, such as low-income people or the 

elderly. 

c. Energy Savings 

While the significant conservation of energy is a separate statutory requirement 

for imposing an energy conservation standard, in determining the economic justification 

of a standard, DOE must consider the total projected energy savings that are expected to 

result directly from the standard. 42 U.S.C. 6295(o)(2)(B)(i)(III). DOE uses the NIA 

spreadsheet results in its consideration of total projected energy savings. 

61
 
d. Lessening of Utility or Performance of Products 

In establishing product classes, and in evaluating design options and the impact of 

potential standard levels, DOE sought to develop standards for refrigeration products that 

would not lessen the utility or performance of these products. None of the TSLs 

presented in today’s final rule would substantially reduce the utility or performance of the 

products under consideration in the rulemaking. However, the cost premium for features 

that increase energy use, such as multiple drawers, may increase, thus shifting their 

availability to higher-priced products. 42 U.S.C. 6295(o)(2)(B)(i)(IV). 

e. Impact of Any Lessening of Competition 

EPCA requires DOE to consider any lessening of competition that is likely to 

result from setting new or amended standards for a covered product. Consistent with its 

obligations under EPCA, DOE sought the views of the United States Department of 

Justice (DOJ). DOE asked DOJ to provide a written determination of the impact, if any, 

of any lessening of competition likely to result from the amended standards, together with 

an analysis of the nature and extent of such impact. 42 U.S.C. 6295(o)(2)(B)(i)(V) and 

(B)(ii). 

To assist DOJ in making such a determination, DOE provided DOJ with copies of 

both the NOPR and NOPR TSD for review. DOJ did not provide DOE with comments on 

this rulemaking. Accordingly, DOE concludes that today’s final rule would not be likely 

to lead to a lessening of competition. 

62
 
f. Need for National Energy Conservation 

Certain benefits of the amended standards are likely to be reflected in 

improvements to the security and reliability of the Nation’s energy system. Reductions in 

the demand for electricity may also 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. 

Energy savings from the amended standards are also likely to result in 

environmental benefits in the form of reduced emissions of air pollutants and greenhouse 

gases associated with energy production. DOE reported the environmental effects from 

the amended standards for refrigeration products, and from each TSL it considered, in the 

environmental assessment contained in chapter 15 in the NOPR TSD. DOE also reported 

estimates of the economic value of emissions reductions resulting from the considered 

TSLs. 

g. Other Factors 

EPCA allows the Secretary of Energy, in determining whether a standard is 

economically justified, to consider any other factors that the Secretary deems to be 

relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) In developing this final rule, DOE also 

considered the comments of the stakeholders, including those raised in the Joint 

Comments, which DOE believes sets forth a statement by interested persons that are 

fairly representative of relevant points of view (including representatives of 

manufacturers of covered products, States, and efficiency advocates) and contains 

63
 
 

recommendations with respect to an energy conservation standard that are in accordance 

with 42 U.S.C. 6295(o). 

2. Rebuttable Presumption 

As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable 

presumption that an energy conservation standard is economically justified if the 

additional cost to the consumer of a product that meets the standard is less than three 

times the value of the first-year of energy savings resulting from the standard, as 

calculated under the applicable DOE test procedure. DOE’s LCC and PBP analyses 

generate values used to calculate the payback period for consumers of potential amended 

energy conservation standards. These analyses include, but are not limited to, the 3-year 

payback period contemplated under the rebuttable presumption test. However, DOE 

routinely conducts an 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 definitively 

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 and chapter 8 

of the final rule TSD. 

IV. Methodology and Discussion 

DOE used two spreadsheet tools to estimate the impact of today’s amended 

standards. The first spreadsheet calculates LCCs and payback periods of new energy 

64
 
 

 

conservation standards. The second one provides shipments forecasts, and then calculates 

national energy savings and net present value impacts of new energy conservation 

standards. DOE also assessed manufacturer impacts, largely through use of the 

Government Regulatory Impact Model (GRIM). The two spreadsheets are available 

online at the rulemaking website: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/refrigerators_free 

zers.html . 

Additionally, DOE estimated the impacts on utilities and the environment 

stemming from energy efficiency standards for refrigeration products. DOE used a 

version of EIA’s National Energy Modeling System (NEMS) for the utility and 

environmental analyses. The NEMS model simulates the energy sector of the U.S. 

economy. EIA uses NEMS to prepare its Annual Energy Outlook, a widely known 

energy forecast for the United States. The version of NEMS used for appliance standards 

analysis is called NEMS-BT18, and is based on the AEO version with minor 

modifications.19 The NEMS-BT offers a sophisticated picture of the effect of standards 

because it accounts for the interactions between the various energy supply and demand 

sectors and the economy as a whole. 

18 BT stands for DOE’s Building Technologies Program. 

19 The EIA allows the use of the name “NEMS” to describe only an AEO version of the model without any 

modification to code or data. Because the present analysis entails some minor code modifications and runs 

the model under various policy scenarios that deviate from AEO assumptions, the name “NEMS-BT” refers 

to the model as used here. For more information on NEMS, refer to The National Energy Modeling 

System: An Overview, DOE/EIA–0581 (98) (Feb.1998), available at: 

http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf. 

65
 
A. Market and Technology Assessment 

When initiating 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. The subjects addressed in the market and technology 

assessment for this rulemaking include product classes and manufacturers; quantities, and 

types of products sold and offered for sale; retail market trends; regulatory and nonregulatory programs; and technologies or design options that could improve the energy 

efficiency of the product(s) under examination. See chapter 3, Market and Technology 

Assessment, of the TSD for further discussion of the market and technology assessment. 

Discussion presented in this section of today’s notice primarily addresses the 

scope of coverage of refrigeration products, the product class structure, and product class 

definitions. These issues were discussed during the NOPR public meeting. In response to 

comments raised during that meeting and from written comments, DOE has modified the 

product class structure, as discussed in section IV.A.2, below. 

1. Exclusion of Wine Coolers from This Rulemaking 

The NOPR explained that wine coolers are not covered products under the 

definition for electric refrigerator, and hence, are not covered by this rulemaking. 75 FR 

at 59486 (September 27, 2010). DOE explained that it would consider initiating a future 

rulemaking to establish coverage and energy standards for these products. Id. Whirlpool 

commented that it agrees that wine coolers do not meet the definition of electric 

66
 
refrigerator, but that DOE should reconsider its decision not to include these products in 

this rulemaking. (Whirlpool, No. 74 at p. 8) GE commented that DOE should regulate 

these products and should consider the proper mechanism for doing so. (GE, No. 76 at p. 

2) In light of the timetable prescribed by EPCA, insufficient time and resources are 

available for DOE to conduct the necessary analyses for these products within the context 

of the current rulemaking. In response to the preliminary analysis, the California Investor 

Owned Utilities agreed with DOE’s initial decision not to include wine coolers in this 

rulemaking, indicating that they operate at temperatures outside the range defined for 

refrigerators, and that they have been covered by California’s energy standards since 

2002. (IOUs, No. 39 at p. 12) The IOUs submitted no new comments on this topic in 

response to the NOPR. Sub Zero indicated in the preliminary analysis public meeting that 

the California energy standard for these products has become a de-facto national 

standard. (Preliminary Analysis Public Meeting Transcript, No. 30 at pp. 108-109). As 

previously indicated, DOE will revisit the coverage of these products in the future. 

2. Product Classes 

In evaluating and establishing energy conservation standards, DOE generally 

divides covered products into classes by the type of energy used, or by capacity or other 

performance-related feature that justifies a different standard for those products. (See 42 

U.S.C. 6295(q)). In deciding whether a feature justifies a different standard, DOE must 

consider factors such as the utility of the feature to users. (Id.) DOE normally establishes 

different energy conservation standards for different product classes based on these 

criteria. DOE’s regulations currently set forth 18 product classes for refrigerators, 

67
 
 

refrigerator-freezers, and freezers.20 These classes are based on the following 

characteristics: type of unit (refrigerator, refrigerator-freezer, or freezer), size of the 

cabinet (standard or compact), type of defrost system (manual, partial, or automatic), 

presence or absence of through-the-door (TTD) ice service, and placement of the fresh 

food and freezer compartments for refrigerator-freezers (top, side, bottom). 

DOE has created 24 new product classes to account for the increasingly wider 

number of variants of products. Six new product classes were discussed and proposed in 

the preliminary analysis phase, and an additional 13 were proposed in the NOPR. 75 FR 

at 59486-59487 (September 27, 2010). Table IV.1 presents the product classes 

established in this rulemaking, including both current and new classes. DOE changed the 

designation of some of the current product classes to address the division of these product 

classes. The subsections below provide additional details and discussion of comments 

relating to the product classes that have been added. 

Table IV.1 Product Classes for Refrigeration Products 

No. Product Class 

Classes Currently Listed in the CFR 

1 Refrigerators and refrigerator-freezers with manual defrost 

2 Refrigerator-freezers—partial automatic defrost 

3 Refrigerator-freezers—automatic defrost with top-mounted freezer without an automatic 

icemaker 

4 Refrigerator-freezers—automatic defrost with side-mounted freezer without an automatic 

icemaker 

5 Refrigerator-freezers—automatic defrost with bottom-mounted freezer without an automatic 

icemaker 

6 Refrigerator-freezers—automatic defrost with top-mounted freezer with through-the-door 

ice service 

20 Title 10—Energy, Chapter II—Department of Energy, Part 430—Energy Conservation Program for 

Consumer Products, Subpart A—General Provisions, Section 430.32—Energy and Water Conservation 

Standards and Effective Dates. 

68 
 

No. Product Class 

7 Refrigerator-freezers—automatic defrost with side-mounted freezer with through-the-door 

ice service 

8 Upright freezers with manual defrost 

9 Upright freezers with automatic defrost without an automatic icemaker 

10 Chest freezers with manual defrost and all other freezers except compact freezers 

11 Compact refrigerators and refrigerator-freezers with manual defrost 

12 Compact refrigerator-freezers—partial automatic defrost 

13 Compact refrigerator-freezers—automatic defrost with top-mounted freezer 

14 Compact refrigerator-freezers—automatic defrost with side-mounted freezer 

15 Compact refrigerator-freezers—automatic defrost with bottom-mounted freezer 

16 Compact upright freezers with manual defrost 

17 Compact upright freezers with automatic defrost 

18 Compact chest freezers 

Product Classes Introduced in the Preliminary TSD 

1A All-refrigerators—manual defrost 

3A All-refrigerators—automatic defrost 

5A Refrigerator-freezers—automatic defrost with bottom-mounted freezer with through-thedoor ice service 

10A Chest freezers with automatic defrost 

11A Compact all-refrigerators—manual defrost 

13A Compact all-refrigerators—automatic defrost 

Additional Product Classes Proposed in the NOPR 

3-BI Built-in refrigerator-freezer—automatic defrost with top-mounted freezer without an 

automatic icemaker 

3I Refrigerator-freezers—automatic defrost with top-mounted freezer with an automatic 

icemaker without through-the-door ice service 

3I-BI Built-in refrigerator-freezers—automatic defrost with top-mounted freezer with an 

automatic icemaker without through-the-door ice service 

3A-BI Built-in all-refrigerators—automatic defrost 

4I Refrigerator-freezers—automatic defrost with side-mounted freezer with an automatic 

icemaker without through-the-door ice service 

4-BI Built-in refrigerator-freezers—automatic defrost with side-mounted freezer without an 

automatic icemaker 

4I-BI Built-in refrigerator-freezers—automatic defrost with side-mounted freezer with an 

automatic icemaker without through-the-door ice service 

5I Refrigerator-freezers—automatic defrost with bottom-mounted freezer with an automatic 

icemaker without through-the-door ice service 

5-BI Built-in refrigerator-freezers—automatic defrost with bottom-mounted freezer without an 

automatic icemaker 

5I-BI Built-in refrigerator-freezers—automatic defrost with bottom-mounted freezer with an 

automatic icemaker without through-the-door ice service 

5A-BI Built-in refrigerator-freezer—automatic defrost with bottom-mounted freezer with throughthe-door ice service 

7-BI Built-in refrigerator-freezers—automatic defrost with side-mounted freezer with through69
 
No. Product Class 

the-door ice service 

9-BI Built-in upright freezers with automatic defrost without an automatic icemaker 

Additional Product Classes 

9I Upright freezers with automatic defrost with an automatic icemaker 

9I-BI Built-in upright freezers with automatic defrost with an automatic icemaker 

13I Compact refrigerator-freezers—automatic defrost with top-mounted freezer with an 

automatic icemaker 

14I Compact refrigerator-freezers—automatic defrost with side-mounted freezer with an 

automatic icemaker 

15I Compact refrigerator-freezers—automatic defrost with bottom-mounted freezer with an 

automatic icemaker 

a. General Discussion Regarding Added Product Classes 

DOE introduced six new product classes in the preliminary TSD. Two of these, 

product class 5A, “automatic defrost refrigerator-freezers with bottom-mounted freezer 

with through-the-door ice service,” and product class 10A, “chest freezers with automatic 

defrost,” were identified in the framework document as product classes 19 and 20. DOE 

modified the designation of these product classes in order to maintain consistency with 

the product class designations adopted by Canada and ease the overall burden on 

manufacturers in ascertaining which standards to apply to these products. Id. at 59487­

59488. AHAM supported adding the new product classes 5A and 10A. (AHAM, No. 73 

at p. 6) 

Four additional product classes introduced in the preliminary TSD are allrefrigerators. As described in the NOPR, the new test procedure has led DOE to establish 

separate product classes for these products. Id. at 59488. 

70
 
The NOPR also proposed 13 additional new product classes. These classes are 

based on the incorporation of icemaking energy use into the test procedure and address 

the different consumer utility and energy use characteristics of built-in products. Id. at 

59489-59493. 

EPCA provides that separate product classes be based on either (A) consumption 

of a different kind of energy from that consumed by other covered products within such 

type (or class); or (B) a capacity or other performance-related feature which other 

products within such type (or class) do not have, where such feature justifies a higher or 

lower standard from that which applies to other products within such type (or class). (42 

U.S.C. 6295(q)). The second of these criteria applies to all of the new product classes in 

this rulemaking. DOE detailed the reasons for this approach in the NOPR. Id. at 59487­

59493. DOE received no comments challenging this approach. 

DOE also requested comment on whether any additional product classes should 

be established as built-in or automatic icemaker variants of products to address the range 

of commercially available products. Sub Zero recommended including additional product 

classes 9I and 9I-BI, freestanding and built-in versions of upright freezers with automatic 

defrost equipped with an automatic icemaker. The company asserted that such products 

currently are being sold (Sub Zero, No. 69 at p. 3) DOE’s research confirms the existence 

of these two product classes (Upright Freezers with Automatic Icemakers, No. 86). 

71
 
AHAM and Whirlpool recommended including product classes 9I, 9I-BI, 13I, 

14I, and 15I as variants of proposed products without through-the-door ice service that 

may have automatic icemakers. (AHAM, No. 73 at pp. 6-7; Whirlpool, No. 74 at pp. 1-2, 

3) AHAM also recommended including product class 9A, described as “upright freezers 

with automatic defrost with an automatic icemaker with through-the-door ice service”. 

(AHAM, No. 73 at pp. 6-7) DOE has adopted product classes 9I, 9I-BI, 13I, 14I, and 15I. 

DOE’s research identified at least one existing compact bottom-freezer product with an 

automatic icemaker (product class 15I, Compact Products with Automatic Icemakers, No. 

85 at p. 3). DOE was not able to positively identify any compact side-mount products 

with automatic icemakers (product class 14I), nor any compact top-mount products 

(product class 13I), but did identify one existing product whose product class is not 

clearly indicated in the manufacturer’s literature that is either a 13I or 14I product. 

(Compact Products with Automatic Icemakers, No. 85 at p. 1) 

The standard levels for these classes are equal to the standards of their 

counterparts without an icemaker plus the addition of 84 kWh to help account for the 

energy consumed by the automatic icemaker. However, the suggested product class 9A is 

not a variant of any of the proposed product classes. Instead, it constitutes a new class 

that DOE had not considered within the context of this rulemaking. Accordingly, DOE is 

declining to incorporate this particular class as part of the final rule. 

Lastly, Whirlpool asserted that the negotiated agreement intended to combine 

product classes 13 and 15, and Whirlpool likewise appeared to recommend combining 

72
 
product classes 13I and 15I, by grouping them together in its comments. (Whirlpool, No. 

74 at p. 2) Whirlpool offered no support for this view and no other comments indicated 

that these product classes should be combined. Hence, DOE is maintaining separate 

classes for Classes 13, 15, 13I, and 15I. 

b. Possible Combination of Product Class 2 with 1, and Class 12 with 11 

DOE also indicated in the NOPR that it did not propose the combination of two 

pairs of product classes that had been discussed in the preliminary TSD -- specifically, a 

potential combination of product classes 1 (refrigerators and refrigerator-freezers with 

manual defrost) and 2 (refrigerator-freezers—partial automatic defrost) and, separately, a 

potential combination of product classes 11 (compact refrigerators and refrigeratorfreezers with manual defrost) and 12 (compact refrigerator-freezers—partial automatic 

defrost). DOE requested comment on its proposal not to combine these pairs of product 

classes. Id. at 59493. AHAM and NPCC agreed with this proposal. (AHAM, Public 

Meeting Transcript, No. 67 at p. 52; AHAM, No. 73 at p. 6; NPCC, Public Meeting 

Transcript, No. 67 at p. 52) Whirlpool presented a table suggesting that they were 

opposed to keeping product classes 1 and 2 separated. (Whirlpool, No. 74 at p. 2), but 

noted that it had nothing substantive to add on this matter because it does not 

manufacture these products. (Whirlpool, No. 74 at p. 3) In light of these comments, 

which generally favored DOE’s proposed approach, DOE is not combining these product 

class pairs. 

73
 
c. All-Refrigerators and Basic Refrigerators 

All-refrigerators are refrigerators that do not have a compartment for the freezing 

and long-term storage of food below 32  ̊F, but which may have a compartment not larger 

than 0.5 cubic foot in size for freezing and storage of ice. (10 CFR part 430, subpart B, 

appendix A1, section 1.2) The definition for refrigerator appears in 10 CFR 430.2 and it 

includes both all-refrigerators and refrigerators that are not all-refrigerators. This latter 

category of refrigerator, which does include a compartment for the storage of food below 

32  ̊F, is given the name “basic refrigerator” in both AHAM standards HRF-1-1979 and 

HRF-1-2008. Appendix A1 and Appendix A, respectively, both reference these 

industry-developed definitions. 

AHAM supported establishing separate product classes for all-refrigerators, 

indicating that these new product classes were supported in the negotiated agreement 

described in the Joint Comments. (AHAM, No. 73 at p. 4) However, AHAM indicated 

that the product classes for refrigerators that are not all-refrigerators should be renamed 

using “basic refrigerator” to ensure that they exclude all-refrigerators. (Id.) Whirlpool 

supported this view. (Whirlpool, No. 74 at p. 2) 

DOE agrees with AHAM that clarifying the product class names for certain 

classes will improve overall clarity. DOE notes that this change affects product classes 1 

(refrigerators and refrigerator-freezers with manual defrost) and 11 (compact refrigerators 

and refrigerator-freezers with manual defrost). (These are the product class names as 

proposed—and currently used in the CFR.) DOE has also considered whether to rely on 

74
 
referencing the definition sections of HRF-1-1979 and HRF-1-2008, as described above, 

to provide the definition for basic refrigerator. The definitions for basic refrigerator are 

the same in these standards and they read as follows: 

3.1.1 Basic Refrigerator A refrigerator which includes a low temperature 

compartment for the freezing and storage of ice and intended for short-term 

storage of food at temperatures below 32°F (0°C) and normally above 8°F (­

13.3°C). It is characterized by a refrigerated surface(s) that partially encloses the 

low temperature compartment and cools the fresh food compartment by natural 

convection. It frequently has a partition (called the chiller or drip tray) which 

when removed or adjusted exposes an additional area of the refrigerated surface to 

the fresh food compartment. 

HRF-1-1979, HRF-1-2008, section 3.1.1. 

DOE notes two concerns regarding this definition of basic refrigerator. 

First, the definition does not define a lower size limit for the low temperature 

compartment, nor does it specify a temperature range for it. The clause “short-term 

storage of food at temperatures below 32  ̊F” does not distinguish the temperature range 

of such a compartment from the compartment of an all-refrigerator that is “for freezing 

and storage of ice”, since freezing and storage of ice also requires temperatures less than 

32  ̊F. As a result, it is not clear whether a product with a low temperature compartment 

capable of reaching temperatures less than 32  ̊F and above 8  ̊F and a size no greater than 

0.5 cubic foot is an all-refrigerator or a basic refrigerator under the AHAM definition. 

75
 
Second, characterizing the basic refrigerator by describing the low-temperature 

compartment’s sides and how they transfer cooling air to the fresh food compartment 

could exclude some types of refrigerators from AHAM’s basic refrigerator definition. For 

instance, a product that uses a fan to provide forced convection transfer of cooling air to 

the fresh food compartment from the refrigerated surfaces enclosing the low-temperature 

compartment would not fit the definition. If the product class were renamed using “basic 

refrigerators”, such products that do not fit the basic refrigerator definition would not be 

included within the product class. A manufacturer could claim such a product is not 

covered, assuming it does not meet the requirements of the all-refrigerator definition 

either. 

To resolve these issues, DOE has decided to clarify the product class names for 

product classes 1 and 11, indicating that these product classes do not include allrefrigerators. The new names for these product classes are “1. Refrigerator-freezers and 

refrigerators other than all-refrigerators with manual defrost” and “11. Compact 

refrigerator-freezers and refrigerators other than all-refrigerators with manual defrost.” 

DOE has taken this approach rather than using the term “basic refrigerator” and 

modifying its definition, thus allowing the existing definition for basic refrigerator to 

retain its current meaning. 

AHAM provided in its written comments a table (Table A) showing the suggested 

changes to all of the product class names. A similar table appears in Whirlpool’s 

76
 
comments. In addition to the suggested name changes for product classes 1 and 11, 

AHAM and Whirlpool included the following suggestions. 

 Inclusion of basic refrigerators in product class 3. 

 Correction of the proposed name for product class 11A. 

 Insertion of an “s” to pluralize “all-refrigerators” in the product class 13 name. 

(AHAM, No. 73 at p. 5; Whirlpool, No. 74 at p. 2) 

DOE notes that basic refrigerators have not previously been part of product class 

3 (they instead have been part of product class 1), which makes the incorporation of this 

suggestion inappropriate. DOE notes that product class 3 denotes "Refrigerator-freezersautomatic defrost with top-mounted freezer without an automatic icemaker". Basic 

refrigerators do not belong in this product class because they are not refrigerator-freezers. 

For this reason, DOE is declining to adopt this suggestion and will retain its proposed 

name for this class --“refrigerator-freezers—automatic defrost with top-mounted freezer 

without an automatic icemaker” as proposed. However, DOE agrees with the other two 

suggestions and has implemented them in this final rule. 

d. Built-In Refrigeration Products 

DOE requested comment on its proposal to establish separate product classes for 

built-in products. 75 FR at 59492 (September 27, 2010). AHAM, Sub Zero, and 

Whirlpool agreed with this proposal. (AHAM, No. 73 at p. 3; Sub Zero, No. 69 at p. 2; 

Whirlpool, No. 74 at p. 3) DOE received no comments opposing the creation of built-in 

product classes. 

77
 
DOE proposed to define built-in products as any refrigerator, refrigerator-freezer 

or freezer with 7.75 cubic feet or greater total volume and 24 inches or less depth, 

excluding handles and custom front panels. Such a product would also be designed to be 

encased on the sides and rear by cabinetry, securely fastened to adjacent cabinetry, walls 

or floor, and have sides that are not fully finished and not designed to be visible after 

installation. See 75 FR at 59492 (September 27, 2010). 

AHAM and NPCC noted that the proposed definition differed from the definition 

developed as part of the consensus agreement and asked why it was different. (AHAM, 

Public Meeting Transcript, No. 67 at pp. 54-55; AHAM, No. 73 at pp. 3-4; NPCC, Public 

Meeting Transcript, No. 67 at pp. 53, 55) Sub Zero commented that the definition 

developed during the negotiations should be adopted. (Sub Zero, No. 69 at p. 3) 

Whirlpool also supported this view. (Whirlpool, No. 74 at p. 3) AHAM recommended 

that DOE adopt the consensus agreement definition. AHAM also pointed out that the 

most important difference between the consensus agreement definition and DOE’s 

proposed definition is the specification in the consensus definition of what is not part of 

the 24-inch depth limit -- specifically, the doors, panels, and/or handles. AHAM 

indicated that these components may extend beyond 24 inches in many built-in products. 

In AHAM’s view, DOE’s proposed definition would not account for such situations. 

(AHAM, No. 73 at p. 4) The JAC also commented that the proposed definition was not 

the same as the definition of the negotiated agreement, and suggested that DOE adopt this 

definition with any minor changes that DOE deems necessary. (JAC, No. 75 at p. 2) 

78
 
The negotiated agreement presented to DOE included the following definition for 

built-in products: 

Definition of ’Built-in’ product class – refrigerators, freezers and refrigerators 

with freezer units that are 7.75 cubic feet or greater in total volume and 24 inches or less 

cabinet depth not including doors, handles and custom front panels; are designed to be 

totally encased by cabinetry or panels attached during installation; are designed to accept 

a custom front panel or equipped with an integral factory–finished face; are designed to 

be securely fastened to adjacent cabinetry, walls or floor; and have sides which are not 

fully finished and are not intended to be visible after installation. 

(Joint Comments, No. 52 at p. 30) 

The substantive differences between this definition and the definition DOE 

proposed in its NOPR are as follows. 

	 The 24-inch depth allowed by the Joint Comments definition does not include the 

door depth. Technically, this removes the depth of the door edge and the gasket, a 

difference expected to be typically about 2 inches. 

	 The Joint Comments mention being “totally encased” by cabinetry or panels, 

while the proposed definition mentions being encased on the sides and rear by 

cabinetry. DOE did not propose to use the term “totally encased” as suggested in 

AHAM’s preliminary analysis comment because the door is not always encased. 

79
 
75 FR at 59492 (September 27, 2010). The Joint Comments added “panels” to 

apply to the cabinetry that may encase the product. 

 The Joint Comments provide that the “panels [are] attached during installation” 

(emphasis added). 

	 The Joint Comments include the clause, “are designed to accept a custom front 

panel or equipped with an integral factory-finished face” whereas the proposed 

definition did not include this clause. 

	 The Joint Comments indicate that the sides “are not intended to be visible after 

installation”, while the proposed definition uses “not designed to be”. 

DOE was aware when proposing the definition that, although establishing a depth 

limitation is entirely consistent with built-in designs and their use, the exact dimension 

that would be appropriate for this limit would be subject to further refinement from 

stakeholder discussion and comment. DOE considers the slightly less restrictive 

definition of the Joint Comments to embody the consideration and consensus of 

interested parties regarding the appropriate dimension, and will for this reason adopt the 

suggested change to the depth limitation. 

Regarding the use of the term “totally encased”, DOE recognizes the limitation of 

its initially proposed approach and that the term does not necessarily mean fully 

encapsulated to the extent that absolutely no surface of the delivered product is visible 

after installation. Hence, DOE has reverted to the use of “totally encased” to indicate 

encased on all surfaces but the door, which clearly needs to be accessible to consumers 

80
 
for the product to function properly. DOE also agrees to the addition of the term “panels” 

that may also serve to encase the product, such as in the case where a product is installed 

at the end of a row of cabinets and one of the sides is covered with a panel. Further, DOE 

agrees with the inclusion of the words “attached during installation” in reference to 

panels, since this clause clearly distinguishes a built-in product from a freestanding 

product, for which there would be no attachment of panels during delivery and 

installation. 

DOE is not convinced, however, that the clause “are designed to accept a custom 

front panel or equipped with an integral factory-finished face” helps distinguish built-in 

products from freestanding products, since freestanding products generally come with an 

integral factory-finished face that is part of the door assembly. Based on the language 

used in the Joint Comments definition, as well as the existence of built-in products that 

are not designed to accept custom front panels, DOE suspects that the purpose of 

including this clause is to ensure that built-in products that do not accept custom front 

panels are not excluded from the definition. Many built-in products have doors with a 

stainless steel finish (see, e.g., 

http://products.geappliances.com/ApplProducts/Dispatcher?REQUEST=SPECPAGE&S 

KU=ZISP480DXSS&SITEID=MON2&TABID=2). Such products are not designed to 

accept custom front panels, but otherwise have the same distinguishing design features of 

built-in products that do accept custom front panels. DOE has decided to use language to 

clarify that such products are not excluded from the built-in category. 

81
 
Additionally, DOE believes that the definition proposed by the Joint Commenters 

in their negotiated agreement needs to be altered to mitigate the risk of manufacturers 

applying the built-in definition to a free-standing product. To address this risk, DOE is 

requiring that a built-in product be one that is designed, intended, and marketed 

exclusively in a manner that would be consistent with how a built-in product would be 

installed for consumer use. Factors that DOE would likely consider relevant in this 

context could include whether the product is sold in an unfinished state and how the 

product is advertised. DOE believes that by specifying these additional conditions, the 

definition clearly requires that a manufacturer take affirmative steps establishing the 

built-in nature of its products. In effect, DOE has taken the “intended” language 

presented in the negotiated agreement’s proposal and clarified this concept by specifying 

the conditions that must be met for a particular model to be considered a built-in product. 

Because of the problems that both DOE and the industry have faced with respect 

to the actions taken by certain manufacturers, DOE believes that it needs to take a 

stronger approach than that proposed in the negotiated agreement with respect to the 

delineation of these products. Adopting this stronger approach helps establish a clear 

distinction between built-in and free-standing products. Such a distinction is necessary in 

light of the considerably higher energy consumption of these built-in products, a fact that 

DOE views with some concern. Should DOE receive reports that manufacturers are 

misapplying this definition or otherwise abusing it, DOE will avail itself of all other 

options at its disposal to correct that situation and may re-examine this definition to 

assess whether additional modifications are required. 

82
 
Accordingly, based on the above considerations, the final definition for built-in 

products will read as follows: 

Built-in refrigerator/refrigerator-freezer/freezer means any refrigerator, 

refrigerator-freezer or freezer with 7.75 cubic feet or greater total volume and 24 inches 

or less depth not including doors, handles, and custom front panels; with sides which are 

not finished and not designed to be visible after installation; and that is designed, 

intended, and marketed exclusively (1) to be installed totally encased by cabinetry or 

panels that are attached during installation, (2) to be securely fastened to adjacent 

cabinetry, walls or floor, and (3) to either be equipped with an integral factory-finished 

face or accept a custom front panel. 

e. Modification of the Definition for Compact Products 

DOE proposed to eliminate the 36-inch height restriction in the definition for 

compact products. DOE underscored two reasons for this change. First, DOE noted that 

an increased height level provides no energy efficiency benefit. Second, DOE explained 

that the reason for this 36-inch height restriction, which applies to undercounter products, 

is not appropriate for the majority of compact products that are not undercounter 

products. DOE requested comment on this proposal. 75 FR at 59493-59494 (September 

27, 2010). 

83
 
 

ASAP and AHAM both indicated that the consensus agreement did not eliminate 

the 36-inch height limitation for compact products. (ASAP, Public Meeting Transcript, 

No. 67 at pp. 57-58; AHAM, Public Meeting Transcript, No. 67 at p. 58; AHAM, No. 73 

at p. 6) (DOE notes that the consensus agreement is silent on this definition. (See, 

generally, Joint Comments, No. 52)) Whirlpool commented that the current 36-inch 

limitation should be retained to maintain consistency with the consumer’s view of 

compact, and prevent “gaming”, i.e. circumvention. (Whirlpool, No. 74 at p. 3). The JAC 

agreed, noting that this limit helps to distinguish compact products from standard-size 

products and prevents the weakening of standards in other countries where products taller 

than 36” but within the 7.75 cubic foot volume limit are more prevalent. (JAC, No. 75 at 

p. 2) 

Whirlpool’s comments do not indicate how removing the 36-inch limitation could 

lead to circumvention. The new test procedure includes a modified volume calculation 

method that was specifically developed to limit circumvention associated with false 

volume claims. 75 FR at 78839-78840 (December 16, 2010). Further, given the 

importance of volume as an attribute important to consumers,21 DOE does not believe 

that consumers will consider tall, but low-volume, products to be standard-size. None of 

the commenters took issue with any of the analysis or any of the reasons that DOE 

presented in the NOPR to support the decision to propose eliminating the height 

restriction. DOE notes that the impact of U.S. standards in other countries, while an 

21 See, for example the discussion of the important of product volume in the 1995 TSD supporting the 

rulemaking to establish the 2001 energy conservation standard, in the discussion regarding increasing 

insulation thickness in Section 3, page 3-6. 

84
 
important concern, are factors beyond the scope of DOE’s authority to control. Hence, 

DOE is eliminating the height restriction as proposed. 

f. Icemaking 

DOE requested comments on its proposal to establish product classes for products 

with automatic icemakers, including its proposed approach to account for icemakers in 

the product class structure. 75 FR at 59489 (September 27, 2010). Sub Zero expressed 

support for AHAM’s intent to work cooperatively with DOE to develop a robust 

repeatable laboratory-based test procedure to measure automatic icemaking energy use. 

Sub Zero also encouraged DOE to conduct field surveys to provide information on 

consumer use of ice by icemaker type (automatic or manual), product class, 

demographics, time of year, etc. This information, when combined with the laboratory 

test and accompanying results, would allow determination of the actual energy used by 

consumers to make ice. (Sub Zero, No. 69 at p. 2) Sub Zero did not object to DOE’s 

proposed product class structure to address icemaking. (Id.) DOE received no comments 

objecting to DOE’s proposed product class structure to integrate icemaking energy use. 

AHAM supported the approach proposed by DOE to integrate automatic 

icemaking into the product class structure. However, AHAM suggested that some 

additional product classes, not specifically proposed by DOE, have been sold with 

automatic icemakers. (AHAM, No. 73 at pp. 5-6) These added product classes were 

previously discussed in section IV.A.2.a above. 

85
 
AHAM also commented that products equipped with the option to install an 

automatic icemaker (“kitable models”) should be considered to be products with 

icemakers, explaining that this approach is consistent with the test procedure and that 

lack of clarity on this point would create confusion among manufacturers. (AHAM, No. 

73 at p. 6) 

DOE disagrees that AHAM’s suggested approach with respect to the treatment of 

“kitable models” would be consistent with the test procedure. If such a product is 

installed in a residence without the icemaker installed, it will not use the additional 

energy use allocated for automatic icemaking, which is set at 84 kWh in the test 

procedure. The added energy associated with manual icemaking is likely to be 

significantly less, as indicated by initial test results conducted by the National Institute 

for Standards and Technology (NIST). These initial results suggest that the energy use 

associated with the mechanisms that are used to eject ice in automatic icemakers is 

significantly greater than the energy use associated with the thermal load of freezing the 

ice. (NIST, Test Procedure for Residential Refrigerators, Refrigerator-Freezers, and 

Freezers, Docket Number EERE-2009-BT-TP-0003, Public Meeting Transcript, No. 10 

at pp. 157-158) DOE agrees that some understanding of the energy use associated with 

manual icemaking should be developed to allow more accurate reporting of the energy 

use of products that do not have automatic icemakers but have freezers that allow for the 

freezing and storage of ice. However, prior to the development of a manual icemaking 

factor to account for this energy usage, better consistency with the test procedure will be 

maintained by certifying kitable models as two separate models (i.e. with an automatic 

86
 
icemaker and without an automatic icemaker), since a consumer may purchase either 

version. 

B. Screening Analysis 

DOE uses the following four screening criteria to determine which design options 

are suitable for further consideration in a standards rulemaking: 

1. Technological feasibility. DOE will consider technologies incorporated in 

commercially available products or in working prototypes to be technologically feasible. 

2. Practicability to manufacture, install, and service. If mass production and 

reliable installation and servicing of a technology in commercially available products 

could be achieved on the scale necessary to serve the relevant market at the time the 

standard comes into effect, DOE would consider that technology practicable to 

manufacture, install, and service. 

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

that a technology would significantly impact in an adverse way the utility of the product 

for significant subgroups of consumers or would result in the unavailability of any 

covered product type with performance characteristics (including reliability), features, 

sizes, capacities, and volumes that are substantially the same as products generally 

available in the United States at the time, it will not consider this technology further. 

87
 
 

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

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

further. 

10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b) 

In the framework document22 and accompanying public workshop held on 

September 29, 2008, DOE identified the energy efficient technologies under 

consideration for the rulemaking analyses. These technologies are listed below in Table 

IV.2. Please see chapter 3 of the TSD for detailed descriptions of these technology 

options. 

22 Available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/refrigerator_freezer_framewor 

k.pdf 

88
 
 

Table IV.2 Technologies DOE Considered for Residential Refrigeration Products 

Insulation Expansion Valve 

Improved resistivity of insulation Improved expansion valves 

Increased insulation thickness Cycling Losses 

VIPs Fluid control or solenoid valve 

 Gas-filled panels Defrost System 

Gasket and Door Design Reduced energy for automatic defrost 

Improved gaskets Adaptive defrost 

Double door gaskets Condenser hot gas 

Improved door face frame Control System 

Reduced heat load for TTD feature Temperature control 

Anti-Sweat Heater Air-distribution control 

Condenser hot gas Other Technologies 

Electric heater sizing Alternative refrigerants 

Electric heater controls Component location 

Compressor Alternative Refrigeration Cycles 

Improved compressor efficiency Lorenz-Meutzner cycle 

Variable-speed compressors Dual-loop system 

Linear compressors Two-stage system 

Evaporator Control valve system 

Increased surface area Ejector refrigerator 

Improved heat exchange Tandem system 

Condenser Alternative Refrigeration Systems 

Increased surface area Stirling cycle 

Improved heat exchange Thermoelectric 

Force convection condenser Thermoacoustic 

Fans and Fan Motor 

Evaporator fan and fan motor improvements 

Condenser fan and fan motor improvements 

DOE requested, but did not receive, any comments at either the framework 

workshop or during the framework comment period that identified additional 

technologies that DOE should consider. Likewise, DOE received no comments 

recommending additional technologies during the preliminary analysis or NOPR public 

meetings or comment periods. 

As described in chapter 4 of the TSD, Screening Analysis, DOE screened out 

several of the technologies listed in Table IV.2 from consideration in this rulemaking 

based on one or more of the screening criteria described above. A summary of the 

89
 
 

 

 

 

 

 

 

 

 

 

screening analysis identifying technologies that were screened out and the EPCA criteria 

used for the screening is presented in Table IV.3. The checkmarks in the table indicate 

which screening criteria were used to screen out the listed technologies. For greater detail 

regarding the screening analysis, see chapter 4 of the TSD. 

Table IV.3 Summary of Screening Analysis 

EPCA Criteria for Screening 

Excluded Technology 

Option 

Technological 

Feasibility 

Practicability to 

Manufacture, 

Install, and 

service 

Adverse 

Impacts on 

Product 

Utility 

Adverse 

Impacts on 

Health and 

Safety 

Improved Insulation 

Resistivity 



Gas-Filled Panels  

Improved Gaskets, 

Double Gaskets, 

Improved Door Frame 

 

Linear Compressors 

Improved Evaporator 

Heat Exchange 

 

Improved Condenser 

Heat Exchange 

 

Component Location   

Lorenz-Meutzner 

Cycle 

 

Two-Stage System  

Control Valve System 

and Tandem System 

 

Ejector Refrigerator  

Stirling Cycle  

Thermoelectric  

Thermoacoustic  

In addition to this screening, DOE did not analyze a number of technologies in the 

engineering analysis because they were judged unsuitable for improving the measured 

energy use of refrigeration products for one or more of the following reasons: 

90
 
 technology already used in baseline products and incapable of generating 

additional energy efficiency or reducing energy consumption; 

 technology does not reduce energy use; or 

 insufficient data available demonstrating benefit of the technology. 

The technologies not analyzed for these reasons include Improved Expansion 

Valves, Off-Cycle Valves, Reduced Energy for Automatic Defrost, Condenser Hot Gas 

Defrost, Reduced Heat Load for TTD Feature, Warm Liquid or Hot Gas Refrigerant 

Anti-Sweat Heating, Electric Anti-Sweat Heater Sizing, Electronic Temperature Control, 

Air Distribution Control, Fan Blade Improvements, and Dual Loop System. Chapter 4 of 

the NOPR TSD discusses in greater detail the reasons for not analyzing these 

technologies. 

1. Discussion of Comments 

DOE discussed several screening issues in the NOPR. These issues are 

summarized, along with comments responding to the NOPR, in the sections below. 

a. Compressors 

DOE explained in the NOPR that the proprietary status of a technology is not a 

screening criterion. 75 FR at 59495 (September 27, 2010). However, DOE pointed out 

that selected technologies may be screened out if their proprietary status constrains their 

supply, and that DOE must consider “the impact of any lessening of competition . . . that 

is likely to result from the imposition of the standard” (42 U.S.C. 6295(o)(2)(B)(i)(V)). 

91
 
DOE indicated in the NOPR that it considered potential supply issues of high-efficiency 

single-speed and variable speed compressors, but concluded that the compressor 

performance levels analyzed would not likely be subject to significant supply constraints 

that would merit omitting the consideration of this particular design option. DOE 

requested comment on this position. Id. 

Sub Zero commented that, as a smaller manufacturer, it may have more difficulty 

obtaining high-efficiency and variable speed compressors as compressor vendors ramp up 

to meet refrigeration product manufacturer demands in 2014. In its view, because of the 

proposed increased stringency of the standards, larger companies will demand many 

more of these compressors than they are currently using. (Sub Zero, No. 69 at p. 3) While 

it is difficult to predict the events that will occur up to the 2014 transition, DOE notes that 

it reached its tentative conclusion based on its NOPR phase investigation that indicated 

the compressor industry has been working to develop high efficiency and variable speed 

compressors for the residential refrigeration market for many years. (See, e.g., 

http://www.panasonic.com/industrial/includes/pdf/invertercompressorsimprovingefficiency.pdf, a discussion of Panasonic’s development of variable speed 

compressors, including initial introduction of variable speed compressors in refrigerators 

in 1996.) These efforts led DOE to believe that the refrigeration industry has had 

sufficient lead time to prepare for the possible increased demands for higher efficiency 

and variable speed compressors. Although the submitted comments reiterated the 

concerns of certain stakeholders, none contained information that would help justify 

92
 
altering the analysis DOE conducted regarding the projected supply of compressors 

available to manufacturers. 

Whirlpool concurred with DOE’s findings that availability of high-efficiency and 

variable-speed compressors will expand to meet demand, but indicated that prices might 

increase. (Whirlpool, No. 74 at p. 3) Whirlpool did not, however, provide any specific 

information about compressor prices that would allow DOE to accurately revise its 

analysis to address this comment. Accordingly, the analysis was not altered in this 

respect. 

b. Alternative Refrigerants 

Most refrigeration products sold in the U.S. currently use HFC-134a refrigerant, a 

hydrofluorocarbon (HFC) with a high global warming potential (GWP). 

The NOPR described comments from several stakeholders made in response to 

the preliminary analysis. These comments indicated that the DOE analysis should 

acknowledge the widespread acceptance of hydrocarbon refrigerants in other parts of the 

world and the growing interest in their use in the U.S. Id. at 59496. The NOPR cited the 

ongoing consideration of these refrigerants for use in residential refrigerators, particularly 

isobutane, in Underwriters Laboratories’ (UL’s) ongoing revision of UL Standard 250, 

“Household Refrigerators and Freezers” (UL 250), and in the EPA’s proposed rule (see 

75 FR 25799 (May 10, 2010)) to add this refrigerant to its list of allowed substances 

under the Significant New Alternatives Policy (SNAP) program. DOE explained in the 

93
 
NOPR that the EPA proposal calls for a total charge limit of 57 g of isobutane. Id. at 

25803 (May 10, 2010). Neither effort has been finalized at the time of the preparation of 

this notice.. 

The NOPR explained that DOE’s consideration of isobutane refrigerant was based 

on the 57 g limit proposed by the EPA, and that this limit was sufficient to allow 

consideration of the use of isobutane refrigerant only for compact refrigerators, based on 

the refrigerant charge amounts of the reverse-engineered products. The preliminary 

analyses for compact refrigerators, which did not include isobutane refrigerant as a 

design option, were adjusted during the NOPR phase to include this design option. DOE 

acknowledged in the NOPR that multiple sealed systems could potentially be used in 

larger products without exceeding the charge limit per sealed system, but that it rejected 

this approach due to the potential reduction of consumer utility associated with the extra 

space that the additional sealed system would require. 75 FR at 59496-7 (September 27, 

2010). DOE notes that the EPA’s SNAP proposal did not clearly specify whether the 57 

gram limit was intended to apply to each sealed system or each appliance. 75 FR at 

25803 (May 10, 2010). 

DOE requested comment on its approach in considering isobutane only for 

compact refrigerators. 

Whirlpool commented that many compact and full-size refrigerators using 

hydrocarbon refrigerants are sold all over the world, but that the safety threshold in the 

U.S. is higher than many other countries. Whirlpool noted the possible tradeoffs of 

94
 
venting versus capturing and transporting flammable refrigerants—venting such 

refrigerants must be done with caution, but it alleviates the need for transport of 

flammable refrigerants, which may represent even greater risk, since many pounds of 

refrigerant captured from many products would be transported (as opposed to ounces that 

are in each individual product), and the duration of transport is much greater than the 

duration of the venting procedure. Capture and transport, however, avoid release of the 

refrigerant, thus limiting the small global warming impact of these refrigerants and 

avoiding concerns associated with volatile organic compound releases. Whirlpool 

suggested that DOE contact the Consumer Product Safety Commission and/or UL 

regarding the safety aspects related to the use of these refrigerants. (Whirlpool, No. 74 at 

p. 4) DOE’s assessment of the use of isobutane did not extend to determination of the 

servicing approach. DOE notes that Section 608 of the Clean Air Act generally prohibits 

any person in the course of maintaining an appliance to knowingly vent refrigerants from 

that appliance. See generally, 42 U.S.C. 7671g. EPA regulations at 40 CFR part 82, 

subpart F, further clarify this prohibition and permit only de minimis releases where good 

faith attempts to recycle or recover refrigerants are made. 

GE criticized DOE’s approach. First, GE indicated that the UL standard and the 

EPA proposal are based on charge limits per sealed system, not per product, and that 

DOE did not fully consider the potential to use dual system designs to implement a 

switch to isobutane refrigerant. Second, GE commented that the lack of information 

regarding refrigeration product technologies using isobutane refrigerant stems to a large 

extent from the fact that this refrigerant currently is not allowed for use in these products. 

95
 
GE asserted that when the EPA SNAP approval is finalized, much more information will 

become available as products are commercialized. (GE, Public Meeting Transcript, No. 

67 at pp. 60-61) In written comments, GE highlighted recent activities related to the 

introduction of isobutane products, including the EPA SNAP rulemaking and GE’s own 

plans to start selling an isobutane product. It also mentioned that manufacturers will have 

to redesign products to use this new refrigerant, thus reiterating its view that assessing 

current products does not provide a complete picture of the potential use of isobutane. 

(GE, No. 76 at p. 2) 

Sub Zero commented that some studies show that isobutane, when limited to a 

charge of 57 to 60 grams, is suitable for products up to 18 cubic feet in volume. Further, 

using multiple separate refrigeration systems, each limited to 57 to 60 grams, would 

allow the use of isobutane in many full-size products. Sub Zero also highlighted the 

current uncertainty about potential future regulation of HFC refrigerants and blowing 

agents, and suggested that the industry could potentially be compelled to use alternative 

substances by 2014, which would require significant additional capital investment. The 

company requested that DOE recognize in this rulemaking the possible impacts of new 

requirements for refrigerants and blowing agents on system efficiency and insulating 

performance when setting the standards. (Sub Zero, No. 69 at p. 4) 

AHAM cited three issues with DOE’s treatment of isobutane in the NOPR: 

 There is a pending EPA Significant New Alternatives Policy (SNAP) decision 

that would approve hydrocarbons for household use and is expected to lead to 

96
 
sale of full-size refrigeration products in the U.S. that use isobutane 

refrigerant. 

 DOE’s review of the suitability of isobutane was based on review of existing 

products rather than future products. 

	 DOE concluded that the UL limit of 50 grams would apply to the entire 

product rather than to each refrigeration system of a product, thus overlooking 

the possibility that multiple systems could be used to produce full-size 

products using isobutane. 

(AHAM, No. 73 at pp. 7-8) 

In response, DOE agrees that a dual-system design would be an available option 

that could, depending on the SNAP rulemaking, permit manufacturers to use isobutane 

refrigerant within the limits of the UL standard and the anticipated EPA rule. DOE also 

acknowledges increased manufacturer interest in this approach, as exemplified by GE’s 

stated intention to introduce such products as soon as the EPA rule is final (see, for 

example, GE’s announcement for such a product as reported by Appliance Magazine on 

October 6, 2010, 

http://www.appliancemagazine.com/news.php?article=1434814&zone=0&first=1, GE 

Designs Isobutane Fridge for Smaller Dwellings, No. 82 at p. 1). DOE explained in the 

NOPR that consideration of the potential negative consumer utility impact of reduced 

internal volume was a key reason for not adopting isobutane refrigerant as a design 

option for the larger product classes. 75 FR at 59497 (September 27, 2010). Other 

considerations included the lack of information regarding (1) the possible emergence of 

97
 
new heat exchanger designs that would alleviate the need to consider dual system 

approaches and (2) the performance characteristics of low-charge designs using existing 

heater exchanger technology. As a result, although isobutane products may become 

available in the near future, considering the switch to isobutane refrigerant as a design 

option to reduce energy use could not be considered in the analysis, because of the 

consumer value concerns and the insufficient information regarding the energy savings 

characteristics and the costs of these potential new designs. 

Moreover, DOE notes that because the parameters of whatever limits that EPA or 

UL may consider are not yet final, DOE is declining to speculate what these final limits 

might be. Without further information regarding the elements described above, DOE 

cannot ascertain the overall costs and benefits that could be reasonably ascribed to an 

isobutane refrigerant-based design. Accordingly, in evaluating the standards set by 

today’s final rule, DOE is continuing to retain the basic approach laid out in its NOPR 

and related analyses. 

c. Alternative Foam-Blowing Agents 

DOE discussed in the NOPR the potential that legislation or newly enacted rules 

may restrict the use of HFC blowing agents in the future. DOE indicated that it was 

prepared to address this issue by evaluating the efficiency improvement and trial standard 

levels for products using alternative foam insulation materials, if such legislation or rules 

banning HFCs should be enacted or otherwise become effective. 75 FR at 59497 

(September 27, 2010). As mentioned above, Sub Zero commented that DOE should 

98
 
recognize the potential impacts of restriction on HFC blowing agent usage in this 

rulemaking. (Sub Zero, No. 69 at p. 4) DOE recognizes that such restrictions may occur 

sometime in the future. However, as DOE explained in the NOPR, DOE believes that 

basing energy conservation standards on the uncertain prospect of passage of specific 

legislation would be speculative. Such restrictions have not emerged within the 

timeframe of the preparation of this final rule. Hence, DOE has not adjusted its analysis 

to account for this possibility. 

d. Vacuum-Insulated Panels 

The NOPR discussed DOE’s assessment of the potential issues regarding VIP 

supply, longevity, durability, and quality that stakeholders raised during the preliminary 

analysis comment period. DOE concluded that potential issues surrounding this 

technology do not rise to a level justifying that it be screened out. DOE requested 

comment on this tentative conclusion in the NOPR. 75 FR at 59497-59500 (September 

27, 2010). Sub Zero commented on this topic, reiterating concerns regarding availability, 

quality, and potential impact on warranty costs associated with the expected increase in 

VIP usage. (Sub Zero, No. 69 at p. 4) Whirlpool commented in a similar fashion, 

indicating that VIPs are not appropriate for improving efficiency in all situations, are 

subject to damage during shipment from the supplier and during installation, and 

expressing concern about the ability of VIP suppliers and the industry to ramp up demand 

sufficiently. However, the comments provided no new information or arguments that 

would impact DOE’s conclusions regarding the viability of VIPs. Hence, DOE’s final 

analysis continues to include VIPs as a design option. 

99
 
 

2. Technologies Considered 

DOE has concluded that: (1) all of the efficiency levels discussed in today’s final 

rule are technologically feasible; (2) products at these efficiency levels could be 

manufactured, installed, and serviced on a scale needed to serve the relevant markets; (3) 

these efficiency levels would not force manufacturers to use technologies that would 

adversely affect product utility or availability; and (4) these efficiency levels would not 

adversely affect consumer health or safety. Thus, the efficiency levels that DOE analyzed 

and is discussing in this notice are all achievable using ”screened in” technology options 

identified through the screening analysis. The technologies DOE considered for each 

group of products are shown in Table IV.4. 

Table IV.4 Technologies Considered by DOE for Residential Refrigeration 

Products, by Product Group 

Design Option 

Standard-Size 

RefrigeratorFreezers 

StandardSize 

Freezers 

Compact 

Refrigerators 

Compact 

Freezers 

Increased Insulation 

Thickness 



(see Note 1) 

 

Isobutane Refrigerant 

VIPs    

Improved Compressor 

Efficiency 

   

Variable-Speed 

Compressor 

   

Increased Evaporator 

Surface Area 

   

Increased Condenser 

Surface Area 

   

100
 
 

 

 

 

 

Forced Convection 

Condenser 



Brushless DC Evaporator 

Fan 

 

Brushless DC Condenser 

Fan 

 

Adaptive Defrost  

Variable Anti-Sweat 

Heater Control 



Note 1: Increased Insulation Thickness was not considered for built-in standard-size 

freezers. 

C. Engineering Analysis 

The engineering analysis uses cost-efficiency relationships to show the 

manufacturing cost increases associated with achieving increased efficiency. 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 that will 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 on costs for parts 

and material, labor, shipping/packaging, and investment for models that operate at 

particular efficiency levels. 

DOE conducted the engineering analysis for this rulemaking using a combined 

efficiency level/design option/reverse engineering approach. DOE defined efficiency 

101
 
levels using percentages representing energy use reductions. The reductions were defined 

to apply to energy use (not including icemaking energy use) measured using the new test 

procedure. DOE’s premise that efficiency levels expressed as a percentage of energy use 

lower than that of baseline products are equivalent when calculated based on both the 

current test procedure and the new test procedure (without icemaking energy use) 

allowed DOE to compare information developed from different sources. However, 

DOE’s analysis is based on the efficiency improvements associated with groups of design 

options. DOE developed estimates for efficiency improvements for design options 

through energy use modeling analysis conducted for selected reverse-engineered 

products. The energy models were first established based on the existing product designs 

and the models were subsequently adjusted to reflect application of the groups of design 

options considered for analysis. DOE based some of the design option information on 

data gained through reverse-engineering analysis, but also used other sources, such as 

component vendor inquiries and discussions with manufacturers as appropriate. Details 

of the engineering analysis are provided in the NOPR TSD chapter 5. 

In the NOPR, DOE addressed preliminary analysis comments regarding the 

engineering analysis. DOE explained the selection of product classes for detailed 

analysis, adjustment of the analyses based on new information collected in preparation of 

the NOPR, development of the baseline energy use equations representing baseline 

product energy use using the new energy test procedure (less automatic icemaking energy 

use), the approach used to adjust the slopes of some of these equations, the range of 

efficiency levels considered, treatment of design options in the analyses, development of 

102
 
cost-efficiency curves, and the development of standards for low-volume product classes. 

75 FR at 59500-59508 (September 27, 2010). 

1. Discussion of Comments 

DOE requested comments and information on the following topics in the NOPR: 

1) The approach used to adjust the slopes of the baseline energy use equations of 

some product classes. Id. at 59505. 

2) The treatment of design options in the engineering analysis. Id. at 59507. 

3) Information that would help improve the ERA energy use model used for the 

engineering analysis. Id. at 59507. 

Whirlpool commented that analyzing design options is an appropriate means of 

assessing technological capability, but that DOE should establish minimum efficiency 

standards without specifying particular design options to use. In its view, this approach 

would permit manufacturers the freedom to develop products in a fashion which they 

believe best meets the needs of consumers. (Whirlpool, No. 74 at p. 5) DOE notes that 

the standards are expressed in terms of maximum energy use and do not specify the use 

of particular design options in satisfying these standards. 

DOE received no additional comments on these topics. Consequently, in the 

absence of any other comments, DOE has not adjusted its engineering analysis for the 

final rule. 

103
 
2. Adjustment of the Baseline Energy Use Equations 

Comments addressing adjustment of the standard to account for test procedure 

changes (the “crosswalk”) are discussed in section III.A.2 above. As part of the 

engineering analysis, DOE adjusted the energy standard equations to address the 

modifications to the test procedures. DOE initially made such adjustments during the 

preliminary analysis based on consideration of the anticipated compartment temperature 

and volume calculation method changes. DOE used an approach to account for the test 

procedure changes that involved developing energy use equations representing baseline 

products based on testing under the new test procedures. Baseline products are those that 

are minimally compliant under the current energy standard when tested using the current 

test procedure. The initial baseline energy use equations are presented in the preliminary 

TSD in Chapter 5, “Engineering Analysis” in section 5.4.2. The efficiency levels 

examined in this rulemaking are represented as percentages of energy use reductions 

from the energy use of baseline products. Hence, the efficiency levels expressed in terms 

of the new test procedures are equal to these same percentage reductions applied to the 

baseline energy use equations. 

Based on the comments responding to the preliminary analysis, as well as the 

additional information DOE obtained during the NOPR phase, DOE adjusted the baseline 

energy use equations for three product classes. These changes corrected the low slope of 

the maximum energy use equation of the current energy standards for product classes 4 

(refrigerator-freezers—automatic defrost with side-mounted freezer without through-thedoor ice service), 5 (refrigerator-freezers—automatic defrost with bottom-mounted 

104
 
freezer without through-the-door ice service), and 5A (refrigerator-freezer—automatic 

defrost with bottom-mounted freezer with through-the-door ice service). See the NOPR 

TSD, Chapter 5, section 5.4.2.4. The NOPR-phase adjusted baseline energy use equations 

are presented in the NOPR TSD in Chapter 5, in section 5.4.2. 

Stakeholder comments recommending further adjustment to the baseline energy 

use equations to address test procedure changes are discussed in section III.A.2 above. 

These comments addressed both (1) extrapolating the analysis to product classes for 

which DOE did not have relevant test data for the crosswalk associated with 

compartment temperature changes and volume calculation method changes, and (2) 

measurement changes, including other test procedure changes that were not captured in 

the NOPR crosswalk. As discussed in section III.A.2, DOE has made adjustments to 

account for two of these additional test procedure changes -- those changes that capture 

precooling energy use and that address the testing for products with heater-based 

temperature control for special compartments. The analysis to implement these changes is 

discussed below. 

Special Compartments with Heater-Based Control 

During the NOPR public meeting, DOE requested information regarding heaterbased control systems used to control the temperatures of special compartments. DOE 

sought this information to help it better understand and evaluate the energy use impact of 

these features and the manner in which the new (then proposed) test procedure may 

change the measured energy use of products having such compartments. DOE received 

105
 
no information. In the absence of any information, DOE developed an analysis to help 

represent the energy use of these compartments, including the change in measured energy 

use associated with the new test procedure. The calculated energy use impact was 

multiplied by the percentages of products that are believed to have such features in each 

of the applicable product classes to develop average impacts associated with the test 

procedure amendments. The determination of the prevalence of products with these 

features is discussed in section III.A.2.d above. 

The analysis describing the change in energy use for a product with a heated 

special compartment is described in the TSD in Chapter 5, “Engineering Analysis”, 

(Section 5.4.2.6). DOE conducted this analysis for a baseline-efficiency refrigeratorfreezer with automatic defrost and a bottom-mounted freezer with a total capacity of 25­

cubic feet. The baseline energy use for this product is 733 kWh per year, excluding 

icemaking energy use. This value was calculated using the baseline energy use equation 

for product class 5 as presented in Table 5.4.12 of the NOPR TSD. The special 

compartment was assumed to be located at the bottom of the fresh food compartment and 

to be 20 inches deep, 32 inches wide, and 4 inches high. (These dimensions were based 

on one of the reverse engineered products evaluated by DOE during the engineering 

analysis. This product had a special compartment (without heater-based control) at the 

bottom of the fresh food compartment of roughly the selected dimensions.) 

The analysis determined the energy use for the product when tested both with the 

special compartment set for its coldest temperature and with the compartment set at its 

106
 
warmest temperature (selected as 28  ̊F and 42  ̊F, respectively, consistent with the widest 

range identified for special compartment temperature control for the product (see Use and 

Care Guide Electrolux 242046401, No. 80 at p. 18)), with the fresh food and freezer 

compartments operating at 39  ̊F and 0  ̊F, respectively. The influences on the 

compartment temperature that DOE considered in the analysis include (1) the 39  ̊F fresh 

food compartment air surrounding the top, sides, back, and front of this special 

compartment, transferring heat through the 3/16-inch plastic compartment wall, and the 

air film thermal resistances outside and inside the special compartment, (2) the air near 

the top of the freezer compartment, at an average temperature of -5  ̊F (at 0  ̊F when the 

compressor is not operating, and at -10  ̊F when the compressor is operating and the 

evaporator discharge air blows forward along the underside of the mullion, and assuming 

a 50 percent compressor run time), transferring heat from the special compartment 

through the special compartment’s bottom surface, the 1.5-inch thick mullion, and 

through four air films surrounding the compartment bottom and the mullion, (3) -10  ̊F 

evaporator discharge air diverted to the special compartment, if needed to maintain a low 

temperature, and (4) electric resistive heating, if needed to maintain a high temperature. 

At the 28  ̊F setting for the special compartment, a small amount of evaporator discharge 

air (less than 1 cubic foot per minute) is needed to maintain the compartment 

temperature, while a heater input of 5.8 W is needed to maintain the 42  ̊F setting. DOE 

calculated the additional system energy use associated with removing the 5.8 W of heat 

input by assuming that the system efficiency is 5 Btu/h-W, which represents a system 

with a compressor with an Energy Efficiency Ratio (EER) rating of 5.5 and some 

additional evaporator and condenser fan power input. As described in the TSD, Chapter 

107
 
5, section 5.84, standard-size baseline refrigerator-freezers typically use compressors 

with an EER in the range 5.0 to 5.5. DOE used the high end of this range for the estimate, 

recognizing that a shipment-weighted average EER would also include higher-efficiency 

compressors. 

The calculated energy use impact of the test procedure change (measurement with 

the special compartment set at its coldest temperature, as is done under the current test 

procedure, as compared with an average of tests with the special compartment setting in 

the coldest position for one test and in the warmest position for the second test) is 43 

kWh, a 5.9 percent energy use increase. As discussed above in section III.A.2, DOE has 

conducted testing for two products that have heated special compartments. The average 

measured impact of the test procedure change for these productss was 4.1 percent, 

suggesting that the calculated 5.9 percent impact is conservative. DOE chose to use the 

more conservative 5.9 percent impact in adjusting the energy conservation standards due 

to the uncertainty associated with the small data sample and the EPCA requirements 

prohibiting upward adjustment of maximum allowable energy use after such a standard 

has been set. See 42 U.S.C. 6295(o)(1). 

As discussed in section III.A.2, DOE assumed that this energy use impact applies 

to the percentage of products of applicable product classes which currently have such 

features. Hence, applying the calculated measurement impact to the product model 

percentages of 10.6 percent (determination of this value was discussed in section III.A.2) 

for current product class 5A (refrigerator-freezer—automatic defrost with bottom108
 
 

mounted freezer with through-the-door ice service), 1.5 percent for current product class 

5 (refrigerator-freezers—automatic defrost with bottom-mounted freezer without 

through-the-door ice service), and 0.7 percent for current product class 7 (refrigeratorfreezers—automatic defrost with side-mounted freezer with through-the-door ice service) 

results in average impacts for these product classes equal to 0.62 percent for product class 

5A, 0.088 percent for product class 5, and 0.041 percent for product class 7. 

Precooling 

DOE conducted energy tests of nine standard-size refrigerator-freezers during the 

engineering analysis. Two of these products exhibited precooling. The increase in 

measured energy use for these products when using the modified approach that includes 

precooling energy use was 2.3 percent for one product and 1.7 percent for the other. (See 

docket documents Precooling Product 1 and Precooling Product 2, Nos. 82.1 and 82. 2). 

DOE has adopted an average impact of 2 percent based on these measurements. DOE 

calculated the shipment-weighted average energy use impact of precooling using this 

value and the observed frequency of precooling as follows: 2% × (2/9) = 0.44%. DOE 

applied this adjustment to all standard-size refrigerator-freezers with automatic defrost. 

Combined Impact 

To combine the impact of the two test procedure adjustments, DOE multiplied the 

factors representing their impact. For example, for product class 5A: 1. 0062 × 1.0044 = 

1. 0106.23 This approach addresses the need to consider the compounding of the impact 

23 Note that multiplying a number by 1.000062 is equivalent to increasing it by 0.62%. Hence, the 1.0062 

factor represents the adjustment to the energy use equation associated with the 0. 62% increase to account 

109
 
 

inherent in multiple influences, similar to the compounding of interest in finance. DOE 

used similar calculations for other product classes for which one or both of the testprocedure-based adjustments to the standard apply. These adjustments are reflected in the 

table showing the final baseline energy use equations in the TSD, Chapter 5, Table 

5.4.14. The final energy standards are based on applying the percentage energy use 

reductions to these adjusted baseline energy use equations. 

D. Markups to Determine Product Cost 

The markups analysis develops appropriate markups in the distribution chain to 

convert the manufacturer cost estimates derived in the engineering analysis to consumer 

prices. DOE determined the distribution channels for refrigeration products and the 

markups associated with the main parties in the distribution chain, manufacturers and 

retailers. DOE developed an average manufacturer markup by examining the annual 

Securities and Exchange Commission (SEC) 10-K reports filed by four publicly-traded 

manufacturers primarily engaged in appliance manufacturing and whose combined 

product range includes residential refrigeration products. For retailers, DOE developed 

separate markups for baseline products (baseline markups) and for the incremental cost of 

more-efficient products (incremental markups). Incremental markups are coefficients that 

relate the change in the manufacturer sales price of higher-efficiency models to the 

change in the retailer sales price. 

for the heated special compartment shipment-weighted average measurement change for product class 5A. 

Similarly, the 1.0044 factor represents the 0.44% adjustment for the precooling shipment-weighted average 

measurement change. The resulting factor, 1.0106, means that the energy use equation is increased 1.06%. 

110 
In response to comments that were received on the preliminary analysis, DOE 

extensively reviewed its incremental markup approach in the NOPR. Among the tasks 

DOE performed included assembling and analyzing relevant data from other retail 

sectors. DOE found that empirical evidence is lacking with respect to appliance retailer 

markup practices when a product increases in cost (due to increased efficiency or other 

factors). DOE understands that real-world retailer markup practices vary depending on 

market conditions and on the magnitude of the change in cost of goods sold (CGS) 

associated with an increase in appliance efficiency. 

Given this uncertainty with respect to actual markup practices in appliance 

retailing, DOE uses an approach that reflects two key concepts. First, changes in the 

efficiency of the appliances sold are not expected to increase economic profits. Thus, 

DOE calculates markups/gross margins to allow cost recovery for retailers (including 

changes in the cost of capital) without changes in company profits. Second, efficiency 

improvements only impact some distribution costs. DOE sets markups to cover only the 

variable costs expected to change with efficiency. 

DOE’s separation of operating expenses into fixed and variable components to 

estimate an incremental markup follows from the above concepts. DOE defines fixed 

expenses as including labor and occupancy expenses because these costs are not likely to 

increase as a result of a rise in CGS due to amended efficiency standards. All other 

expenses, as well as the net profit, are assumed to vary in proportion to the change in 

CGS. DOE acknowledges that its allocation of expenses into fixed and variable 

111
 
categories is based largely on limited information and sought additional information from 

interested parties to help refine its allocation approach during the NOPR phase. DOE’s 

method results in an outcome in which retailers are assumed to cover their costs while 

maintaining their profit margins when the CGS of appliances changes. 

As part of its review, DOE developed a new breakdown into fixed and variable 

components using the latest expense data provided by the U.S. Census for Electronics 

and Appliance Stores, which cover 2002. The newly-derived incremental markup, which 

would be applied to an incremental change in CGS, is 1.17, which is slightly higher than 

the value of 1.15 that DOE used in the preliminary analysis. DOE requested information 

regarding the likely retailer responses to incremental changes in the CGS of appliances 

associated with the proposed standards. Whirlpool stated that it would not expect retailers 

to accept reduced margins as a result of higher costing, more efficient products, and 

asserted that most major retailers are publicly traded companies whose stockholders 

demand consistent (or increasing) margins (Whirlpool, No. 74 at p. 5) No information or 

other comments were received addressing this issue. Given the lack of quantitative 

information, DOE has decided to continue to apply an incremental markup to the 

incremental MSP of products with higher efficiency than the baseline products. Chapter 6 

of the final rule TSD provides a description of both the method and its current 

application. 

112
 
 

E. Energy Use Analysis 

DOE’s analysis of the energy use of refrigeration products estimated the annual 

energy use of products in the field that would meet the considered efficiency levels, i.e., 

as they are actually used by consumers. The energy use analysis provides the basis for 

other analyses DOE performs, particularly assessments of the energy-savings and the 

savings in consumer operating costs that could result from DOE’s adoption of amended 

standard levels. In contrast to the DOE test procedure, which provides standardized 

results that can serve as the basis for comparing the performance of different appliances 

used under the same conditions, the energy use analysis seeks to capture the range of 

operating conditions for refrigeration products in U.S. homes. 

To determine the field energy use of products that would meet possible amended 

standard levels, DOE used data from the Energy Information Administration (EIA)’s 

2005 Residential Energy Consumption Survey (RECS), which was the most recent such 

survey available at the time of DOE’s analysis.24 RECS is a national sample survey of 

housing units that collects statistical information on the consumption of, and expenditures 

for, energy in housing units along with data on energy-related characteristics of the 

housing units and occupants. RECS provides sufficient information to establish the type 

(product class) of refrigeration product used in each household, and also provides an 

estimate of the household’s energy consumption attributable to “refrigerators” or 

“freezers”. As a result, DOE was able to develop household samples for the 

representative product classes for standard-size units. DOE did not use RECS for 

compact refrigerators and freezers because a large fraction of these products are used 

24 For information on RECS, see http://www.eia.doe.gov/emeu/recs/. 

113
 
outside the residential sector. Instead, it based the energy use for these products on the 

DOE test procedure. 

DOE believes that, in general, using RECS data in the estimation of field energy 

use of refrigeration products is valid. However, it acknowledges that the approach used in 

the preliminary analysis has limits. To compensate for these limits, DOE developed a 

new approach for the NOPR to estimate energy use of refrigeration products in U.S. 

homes. This approach involved collecting field-metered electricity use data for residential 

refrigeration products. Details of this approach and the engineering assumptions that 

DOE used to estimate energy use of refrigeration products in U.S. homes were described 

in chapter 7 of the NOPR TSD. DOE sought comment on its approach for developing 

energy use estimates using field-metered data. 75 FR at 59512 (September 27, 2010). 

Commenting on the NOPR TSD, AHAM stated that DOE should rely on the test 

procedure, rather than RECS data, for determining energy use, but offered no reason or 

data. (AHAM, Public Meeting Transcript, No. 67 at p, 78). 

As discussed in section IV.E of the NOPR (75 FR at 59510 (September 27, 

2010)), test procedures must be reasonably designed to produce test results which 

measure energy efficiency, energy use or estimated annual operating cost of a covered 

product during a representative average use cycle or period of use. (42 U.S.C. 

6293(b)(3)) Relying solely on a representative average use cycle or period of use does not 

provide an accurate measure of the possible energy savings since this approach 

inadequately evaluates the economic impact of the standard on consumers and the 

114
 
 

savings in operating costs throughout the estimated life of the product—two factors under 

EPCA that DOE must consider when promulgating an amended energy conservation 

standard. Further, the approach suggested by AHAM would not account for the 

variability stemming from household differences or be consistent with the above-cited 

guidance contained in 10 CFR part 430, subpart C, appendix A. In contrast, the approach 

that DOE has used in residential product rulemakings for over a decade, and continues to 

apply here, accounts for all of these factors. 

Sub Zero and AHAM also indicated that more comprehensive field data be 

collected, including data on ice usage and icemaker energy consumption, for use in future 

rulemakings (Sub Zero, No. 69 at pp. 4-5; AHAM, No. 73 at p. 8). DOE has retained the 

approach detailed in the NOPR for the final rule. In future rulemakings, DOE may 

evaluate the appropriateness of collecting additional field data as suggested by these 

commenters. 

In order to make the 2005 RECS sample more representative of current 

refrigeration products, DOE made two modifications for the NOPR analysis. First, DOE 

modified the RECS weights for top- vs. bottom-mount refrigerators in order to reflect 

current information on the relationship between income and refrigerator door style (i.e., 

top- or bottom-mount) provided by AHAM in 2010. Second, DOE examined recent data 

from three sources25 to scale the average interior volume of standard-size refrigerator25 California Energy Commission, Appliances Database—Refrigeration, 1998-2009. 

<www.energy.ca.gov/appliances/database/excel_based_files/Refrigeration/> (Last accessed April 25, 

2009); The NPD Group, Inc., The NPD Group/NPD Houseworld – POS, Refrigerators, January – 

115
 
 

freezers from the 2005 RECS data. DOE requested comments on the weighting of the 

RECS sample using income relationships and volume scaling. 

Whirlpool supported efforts to re-weight the RECS data to better reflect income 

and volume; however, it reiterated its previously stated reservations regarding the 

outdated nature of RECS. (Whirlpool, No. 74 at p. 5) AHAM did not view the weighting 

of the RECS sample as having meaningfully contributed to the proposed levels, and as a 

result, did not comment on these approaches. Instead, it emphasized that the lack of 

comment on its part did not signify agreement with the approaches. (AHAM, No. 73 at p. 

8) 

Given the value of continuing to apply the RECS-based approach, the analysis 

modifications to address the limits of the RECS data, and the analysis DOE performed 

using updated data from AHAM and other sources, DOE believes that this approach 

sufficiently accounts for the full range of estimated energy savings experienced by 

households. Accordingly, DOE has retained its above-described approach for the final 

rule. However, DOE did revise its usage adjustment factor (UAF) formulas, which raised 

the average UAF by 6 to 14 percent, depending on the product class. The revision is 

described in chapter 7 of the final rule TSD. 

December 2008, 2007-2008, Port Washington, NY; and Association of Home Appliance Manufacturers, 

data from 2005-2008, memoranda dated January 19, 2009 and March 26, 2010, Washington, D.C. 

116 
F. Life-Cycle Cost and Payback Period Analyses 

DOE conducted LCC and PBP analyses to evaluate the economic impacts on 

individual consumers of potential energy conservation standards for refrigeration 

products. The LCC is the total consumer expense over the life of a product, consisting of 

purchase and installation costs plus operating costs (expenses for energy use, 

maintenance and repair). To compute 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 

the estimated amount of time (in years) it takes consumers to recover the increased 

purchase cost (including installation) of a more efficient product through lower operating 

costs. DOE calculates the PBP by dividing the change in purchase cost (normally higher) 

due to a more stringent standard by the change in average annual operating cost 

(normally lower) that results from the standard. 

For any given efficiency level, DOE measures the PBP and the change in LCC 

relative to an estimate of the base-case appliance efficiency levels. The base-case 

estimate reflects the market in the absence of amended energy conservation standards, 

including the market for products that exceed the current energy conservation standards. 

For each considered efficiency level in each product class, DOE calculated the 

LCC and PBP for a nationally representative set of housing units. For both the NOPR and 

final rule analyses, DOE developed household samples from the 2005 RECS. For each 

sampled household, DOE determined the energy consumption for the refrigeration 

product and the electricity price. By developing a representative sample of households, 

117
 
the analysis captured the variability in energy consumption and energy prices associated 

with the use of residential refrigeration products. 

Inputs to the calculation of total installed cost include the cost of the product— 

which includes manufacturer selling prices, retailer markups, and sales taxes—and 

installation costs. Inputs to the calculation of operating costs include annual energy 

consumption, energy prices and price projections, repair and maintenance costs, product 

lifetimes, discount rates, and the year that amended standards take effect. DOE 

determined the operating costs for each sampled household using that household’s unique 

energy consumption and the household’s energy price. DOE created 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 product 

lifetime, discount rates, and sales taxes. 

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 and 

household samples. The model calculated the LCC and PBP for products at each 

efficiency level for 10,000 housing units per simulation run. Details of the spreadsheet 

model, and of all the inputs to the LCC and PBP analyses, are contained in the final rule 

TSD chapter 8 and its appendices. 

118
 
Table IV.5 summarizes the approach and data DOE used to derive inputs to the 

LCC and PBP calculations. The table provides the data and approach DOE used for the 

NOPR TSD, as well as the changes made for today’s final rule. The subsections that 

follow discuss the initial inputs and the changes DOE made to them. Unless otherwise 

specified, DOE received no comments on these inputs. 

119
 
 

Table IV.5 Summary of Inputs and Key Assumptions in the LCC and PBP 

Analysis* 

Inputs NOPR Changes for the Final Rule 

Installed Costs 

Product Cost Derived by multiplying 

manufacturer cost by manufacturer 

and retailer markups and sales tax, 

as appropriate. 

Applied a price trend to estimate 

equipment prices in 2014. 

Operating Costs 

Annual Energy Use Based on a multiple linear 

regression of field-metered energy 

use data, adjusted using a UAF 

function based on 2005 RECS 

household characteristics. 

Revised UAF function, raising 

average UAF values by 6 to 14 

percent, depending on product 

class. 

Energy Prices Electricity: Based on EIA’s Form 

861 data for 2007. 

Variability: Regional energy prices 

determined for 13 regions. 

No change. 

Energy Price Trends Forecasted using Annual Energy 

Outlook 2010 (AEO2010). 

No change. 

Repair and 

Maintenance Costs 

Used repair cost estimation method 

that estimates the rate of failure for 

selected components along with the 

incremental cost of repair or 

replacement compared to the 

baseline product. 

No change. 

Present Value of Operating Cost Savings 

Product Lifetime Estimated using survey results from 

RECS (1990, 1993, 1997, 2001, 

2005) and the U.S. Census 

American Housing Survey (2005, 

2007), along with historic data on 

appliance shipments. 

Variability: characterized using 

Weibull probability distributions. 

No change. 

Discount Rates Approach involves identifying all 

possible debt or asset classes that 

might be used to purchase the 

considered appliances, or might be 

affected indirectly. Primary data 

source was the Federal Reserve 

Board’s SCF** for 1989, 1992, 

1995, 1998, 2001, 2004 and 2007. 

No change. 

Compliance Date of 

New Standard 

2014. No change. 

* References for the data sources mentioned in this table are provided in the sections following the table or 

in chapter 8 of the TSD. 

** Survey of Consumer Finances.
 

120 
 

 

1. Product Cost 

To calculate consumer product costs, DOE multiplied the manufacturer selling 

prices developed in the engineering analysis by the supply-chain markups described in 

section IV.E (along with sales taxes). DOE used different retail markups for baseline 

products and higher-efficiency products because DOE applies an incremental markup to 

the MSP increase associated with higher-efficiency products. 

In the NOPR analysis, DOE assumed that the manufacturer selling prices and 

retail prices of products meeting various efficiency levels remain fixed, in real terms, 

after 2010 (the year for which the engineering analysis estimated costs) and throughout 

the analysis period. Subsequently, examination of historical price data for various 

appliances and equipment indicates that the assumption of constant real prices and costs 

may, in many cases, over-estimate long-term appliance and equipment price trends. 

Economic literature and historical data suggest that the real costs of these products may 

in fact trend downward over time, partially because of “learning” or “experience”.26 

In light of the historical data and DOE’s aim to improve the accuracy and 

robustness of its analyses, on February 22, 2011, DOE published a notice that discussed 

the approach it was considering to use to incorporate experience in its forecasts of 

product prices. 76 FR 9696. DOE requested public comment on the potential inclusion of 

this approach for its future rulemaking activities, as well as on the merits of adopting this 

26 A draft paper, “Using the Experience Curve Approach for Appliance Price Forecasting,” posted on the 

DOE web site at http://www.eere.energy.gov/buildings/appliance_standards, provides a summary of the 

data and literature currently available to DOE that is relevant to price forecasts for selected appliances and 

equipment. 

121
 
 

approach within the context of its ongoing rulemaking to set standards for refrigeration 

products. 

DOE received a number of comments on the merits of incorporating experience in 

its forecasts of product prices. Support for the inclusion of experience in appliance 

standards rulemakings was expressed by NEEP, NCLC, ACEEE, ASAP, NRDC, CFA, 

NEEA, and the IOUs.27 (NEEP, No. 107 at p. 2; NCLC, No. 100 at pp. 1-2; ACEEE, No. 

109 at p. 1; ASAP, No. 108 at p. 1; NRDC, No. 104 at p. 2; CFA, No. 105 at p. 2; NEEA, 

No. 101 at p. 4; IOUs, No. 111 and 112 at p. 1) The IOUs, ASAP, NRDC, and CFA 

specifically noted that incorporation of an experience curve would align with other 

analyses that contribute to analysis of appliance standards, such as the approach used in 

NEMS. (IOUs, No. 111 and 112 at p.1; ASAP, No. 108 at p.2; NRDC, No. 104 at p.4; 

CFA, No. 105 at p.4) ASAP and NRDC included as part of their comments an appendix 

that found that the model described in the NODA offers appropriate methodology. 

(ASAP, No. 108 at p. 10; NRDC, No. 104 at p. 5) 

DOE also received a number of comments expressing opposition to, or concern 

with, the proposed incorporation of experience into forecasts of product prices. (AHAM, 

No. 113 at p. 1; AHRI, No. 106 at p. 2; EEI, No. 102 at pp. 2-5; SC, No. 110 at p. 1) The 

American Gas Association (AGA) criticized the use of experience curves, stating that the 

current approach offers better opportunities to transparently assess costs. (AGA, No. 115 

at p. 2) Traulsen, a manufacturer of commercial refrigerators, contended that a price 

27 Pacific Gas and Electric Company, Southern California Gas Company, and San Diego Gas and Electric 

submitted a joint letter, while Southern California Edison submitted an identical letter; comments from 

these letters are referred to as made by IOUs. 

122
 
decrease for technology over time only holds true if market forces prevail. (Traulsen, No. 

99 at p. 3) 

The comments that expressed opposition or reservation regarding application of 

the experience curve approach cited several factors. Ingersoll Rand noted that the 

experience curve is at best a heuristic model, and it urged more extensive examination of 

several points related to experience curves. (Ingersoll Rand, No. 103 at p. 2) AHAM and 

AHRI noted that experience curves apply only to specific products or companies and 

should not be inflated to industry wide cases. (AHAM, No. 113 at p. 53-54; AHRI, No. 

106 at p. 2) AGA noted that experience curves could be useful for some DOE regulated 

products at the early stages of development and commercialization, but would not be 

relevant to a wide range of equipment with mature designs and markets, including space 

heating and water heating. (AGA, No. 115 at p. 2) Similarly, AHAM stated that the 

experience curve came from early-stage industries, and at current cost reduction rates is 

not reliable enough to apply in mature industries with large cumulative production. 

(AHAM, No. 113 at p. 54) AHRI and SC noted that past performance does not 

necessarily indicate future performance, as past trends may have reached a plateau. 

(AHRI, No. 106 at pp. 2-3; SC, No. 110 at p. 2) DOE’s proposed approach used 

experience curves that reflect broad industry-wide changes resulting from many factors. 

The historical data over lengthy periods (not only early-stage industries) suggest that 

experience curves are mathematically applicable to mature products as well as newer 

products. The historic decline in inflation-adjusted PPI of household appliances has 

slowed since 2000, but there is no evidence of a plateau. 

123
 
AHAM and AHRI opposed DOE’s analysis using prices, when experience or 

experience curves are actually based on cost. (AHAM, No. 113 at p.55; AHRI, No. 106 at 

p.3) Ingersoll Rand stated that while variable manufacturing costs may assume an 

experience curve, fixed costs and retail price do not. (Ingersoll Rand, No. 103 at p.2) EEI 

stated that the primary cause of experience is outsourcing, so the domestic Producer Price 

Index (PPI) should not be used when a significant fraction of manufacturers are overseas. 

(EEI, No. 102 at pp. 3-5) In response, DOE acknowledges that the literature generally 

approaches these effects through the costs of production and that the price of the relevant 

good will not reflect learning as directly as the costs. This is because the price is a 

reflection of market conditions. Nevertheless, DOE notes that experience curves can be 

based on either cost or price, and that the historical data in the case of refrigerators show 

that real price declines occurred well before outsourcing became a significant factor in 

manufacturing. DOE does not attempt to forecast the impact of future outsourcing of 

production in its forecasts of appliance manufacturing costs. 

SC noted that the PPI incorporates a performance correction so it would not 

reflect a true price change. (SC, No. 110 at p.4) EEI stated that refrigerators and freezers 

have undergone significant changes over the years in terms of types and features and 

DOE did not explain how they accounted for this. (EEI, No. 102 at p.2-3) Ingersoll Rand 

stated that product performance has changed dramatically over many years, and therefore 

it is unclear what the PPI is actually measuring. (Ingersoll Rand, No. 103 at p.4) In 

response, DOE notes that the PPI includes a quality adjustment, which attempts to factor 

124
 
 

out physical changes in the product that affect the price.28 For that reason, the PPI is a 

better measure of the trends in prices than actual wholesale prices would be without 

quality adjustment. 

DOE also received several comments related to forecasting error and the time 

period of the data used. Ingersoll Rand urged consideration of the expanding uncertainty 

band as the forecast period expands, and AHAM also noted that error in forecasts 

increases with time. (Ingersoll Rand, No. 103 at p. 1; AHAM, No. 113 at pp. 59-62) EEI 

stated that for refrigerators, the starting period used by DOE corresponds to a unique, 

post-war boom. (EEI, No. 102 at p.2) SC stated that the choice of time period for PPI 

changes results. (SC, No. 110 at p. 4) In response to these comments, DOE conducted a 

sensitivity analysis that considers different time periods for estimating product price 

trends. DOE also notes that potentially growing forecast error is diminished by the 

discounting used in DOE’s analysis. 

AHRI and Ingersoll Rand expressed concern related to products that use 

significant quantities of commodities, as these prices have been volatile and cannot be 

predicted. (AHRI, No. 106 at p.3; Ingersoll Rand, No. 103 at pp. 5-6) DOE will rely on 

historical data to determine whether commodity price volatility is a concern when 

estimating experience curves for specific products. 

28 See the Bureau of Labor Statistics’ Handbook of Methods (Chapter 14: Producer Prices). 

http://www.bls.gov/opub/hom/homch14.htm 

125
 
Some of the parties generally supporting DOE’s proposed approach to 

incorporating experience into price forecasting for appliance standards requested specific 

changes to the proposed approach. ACEEE, NEEA, ASAP, NRDC, and the IOUs 

expressed concern with the proposal to assume no experience curve in cases with limited 

or no data; instead they recommended using scenarios or running sensitivity analyses to 

examine a range of experience rates. (ACEEE, No. 109 at p.1; NEEA, No. 101 at p.5; 

ASAP, No. 108 at p.3; NRDC, No. 104. at p.5; IOUs, No. 111 and 112 at p.2) EEI 

expressed agreement with the IOUs with respect to running sensitivity analyses. (EEI 

Supplemental Comments, No. 116 at p. 2) ASAP and NRDC also requested that, where 

possible, DOE should attempt to analyze the more efficient models of certain products 

separately from the baseline models. (ASAP, No. 108 at p.27; NRDC, No. 104 at p.31) 

Similarly, the IOUs suggested that separate experience coefficients should be used for the 

base case and the standards case. (IOUs, No. 111 and 112 at p.2) In cases with limited or 

no data, DOE is considering using data at a higher level of aggregation to estimate future 

product prices. DOE’s approach in future rulemakings will be based on available data. At 

this time DOE is not aware of data sufficient to separately analyze baseline models and 

efficient models. 

In conclusion, DOE evaluated the concerns expressed about its proposed 

approach for incorporating experience in its forecasts of product prices and determined 

that retaining an assumption-based approach of a constant real price trend was not 

consistent with the historical data for the products covered in this rule. In its stead, DOE 

developed a range of potential price trends that was consistent with the available data. 

126
 
For the default price trend for this final rule, DOE estimated an experience rate for 

residential refrigerators and freezers based on an analysis of long-term historical data. 

DOE derived a refrigerator/freezer price index from 1947 to 2010 by creating a hybrid 

index that changed proportional to PPI data for the period when PPI data were available, 

and changed proportional to the relevant CPI data for the period where CPI data were 

available. DOE then divided the results by the GDP deflator for the relevant year to 

produce an inflation-adjusted index. This proxy for historic price data was then regressed 

on the quantity of refrigerators and freezers produced: a corresponding series for total 

shipments of refrigerators and freezers. 

To calculate an experience rate, a least-squares power-law fit was performed on 

the refrigerator/freezer price index versus cumulative shipments. DOE then derived an 

index, with 2010 equal to 1, to forecast prices (using PPI and CPI data as proxies) in 

2014, the compliance date for amended energy conservation standards in the LCC and 

PBP analysis, and for the NIA, for each subsequent year through 2043. The index value 

in each year is a function of the experience rate and the cumulative production through 

that year. Projected shipments were obtained from the base case projections made for the 

NIA (see section IV.G.1 of this notice). The average annual rate of price decline in the 

default case is 1.87 percent. DOE applied the same index value to forecast prices for each 

group of refrigeration products at each considered efficiency level. 

DOE notes that experience rates may decrease over time since returns from 

experience about a single technology may diminish over time. As part of its sensitivity 

127
 
analysis, DOE included models that derive an experience rate based on different time 

periods, which may reflect such a “flattening” of the experience curve across time, as 

well as a model with an explicit term that incorporates “flattening.” DOE notes that 

learning rates may decrease over time since returns from learning about a single 

technology may diminish over time. These fits usually incorporate the decrease in 

learning through a variable representing time. DOE includes in the suite of modeling 

results for learning in this analysis models that do and do not reflect such a “flattening” of 

learning across time; however, the models near the middle range of estimates in their 

analysis do reflect this effect. DOE will continue to explore the basis and the 

appropriateness of incorporating for compounding changing learning effects for future 

rulemaking analyses. 

For the NIA, DOE also analyzed two sensitivity cases that use a price trend based 

on an exponential in time extrapolation of refrigeration equipment PPI data. Because 

cumulative shipments for refrigerators can be fit to an exponential function of time for 

long time periods, the experience curve formulation and an exponential in time 

extrapolation of PPI data provide mathematically very similar price trend forecasts in 

many cases. In addition to the default price trend, the NIA considered a high price decline 

case and a low price decline case. See section IV.G.3 for further discussion 

In recognition of the uncertainty regarding estimation of the future product price 

trends, DOE will continue to review the relevant literature and seek to continually 

improve and refine its methodology through research, enhancements to its models and by 

128
 
seeking public input. DOE will also work to ensure the robustness of its data sets as a 

means to ensure the reliability of its projections. 

For further information on the method and data sources used to develop price 

trends for residential refrigeration products, see appendix 8E of the final rule TSD. 

2. Installation Cost 

 Installation cost includes labor, overhead, and any miscellaneous materials and 

parts needed to install the equipment. DOE did not include an installation cost for 

refrigeration products because it understands that this cost would be the same at all of the 

considered efficiency levels. 

3. Annual Energy Consumption 

For each sampled household, DOE determined the energy consumption for a 

refrigeration product at different efficiency levels using the approach described above in 

section IV.E. 

4. Energy Prices 

DOE derived average energy prices for 13 geographic areas consisting of the nine 

U.S. Census divisions, with four large States (New York, Florida, Texas, and California) 

treated separately. For Census divisions containing one of these large States, DOE 

calculated the regional average excluding the data for the large State. 

129
 
 

DOE estimated average residential electricity prices for each of the 13 geographic 

areas based on data from EIA Form 861, “Annual Electric Power Industry Database.” 

DOE calculated an average annual regional residential electricity price by: (1) estimating 

an average residential price for each utility (by dividing the residential revenues by 

residential sales); and (2) weighting each utility by the number of residential consumers 

served in that region (based on EIA Form 861). DOE calculated average commercial 

electricity prices in a similar manner. For both the NOPR and final rule analyses, DOE 

used EIA data for 2007. 

5. Energy Price Projections 

To estimate energy prices in future years for the NOPR, DOE multiplied the 

above average regional electricity prices by the forecast of annual average residential 

electricity price changes in the Reference Case using AEO2010, which has an end year of 

2035.29 To estimate the electricity price trend after 2035, DOE used the average annual 

rate of change in prices from 2020 to 2035. DOE used the same energy price forecasts for 

the final rule. 

6. Maintenance and Repair Costs 

Repair costs are associated with repairing or replacing components that have 

failed in the appliance, whereas maintenance costs are associated with maintaining the 

operation of the equipment. For the NOPR, DOE developed a repair cost estimation 

method that estimates the rate of failure for selected components (compressor, 

evaporator, condenser, evaporator fan, condenser fan, electronics and automatic 

29 U.S. Energy Information Administration. Annual Energy Outlook 2010. Washington, DC. April 2010. 

130
 
icemaker). The estimated average annual repair cost for a given efficiency level can be 

expressed as the product of two elements: the average rate of repair of a component 

(expressed as an annual probability of failure) times the incremental cost of repair or 

replacement compared to the baseline product. DOE requested comment on its approach 

used for estimating repair costs. 75 FR at 59514 (September 27, 2010). 

Sub Zero commented that VIPs could add repair and/or replacement costs that 

have not been adequately evaluated or estimated (Sub Zero, No. 69 at p. 5). However, 

they did not provide estimates that would allow DOE to modify its approach. 

Whirlpool supported DOE’s approach to estimate repair costs for more efficient 

refrigerators and freezers. However, it pointed out that the data shown in Table IV.14 of 

the NOPR did not appear to be consistent with the logic expressed in section IV.F.6 of 

the NOPR. It added that the use of commercial refrigeration failure rates, may lead to 

inaccuracies (Whirlpool, No. 74 at pp. 5-6). 

With regard to the alleged inconsistency between Table IV.14 of the NOPR (75 

FR at 59514 (September 27, 2010)) and the accompanying discussion, DOE has checked 

the accuracy of the table and notes that the table indicated only incremental repair costs, 

not total repair costs, which add between $7.66 and $21.90 depending on standard-size 

refrigerator-freezer product class. DOE also acknowledges the potential inaccuracy of 

using commercial failure rate data, but notes that (a) no other data were available, and (b) 

these data were scaled downward so that the total failure rate (sum of all component 

131
 
 

failure rates) was equal to observed rates for residential refrigeration products as reported 

in Consumer Reports (see chapter 8 of TSD). 

Accordingly, DOE retained the approach for the final rule. Details of this 

approach can be found in chapter 8 of the final rule TSD. 

7. Product Lifetime 

Because the basis for lifetime estimates in the literature for refrigeration products 

is uncertain, DOE used other data sources to estimate the distribution of standard-size 

refrigerator and freezer lifetimes in the field for both the NOPR and today’s final rule. By 

combining survey results from various years of RECS and the U.S. Census’s American 

Housing Survey30 with the known history of appliance shipments, DOE estimated the 

fraction of appliances of a given age still in operation. The survival function, which DOE 

assumed has the form of a cumulative Weibull distribution, provides an average and 

median appliance lifetime. 

For compact refrigerators, DOE estimated an average lifetime of 5.6 years in the 

NOPR using data on shipments and the stock-in-place (i.e., the number of units in use). 

DOE found that, given the data on historic shipments of compact refrigerators, using a 

longer lifetime would result in an equipment stock that is far larger than the stock given 

by 2005 RECS and EIA’s 2003 Commercial Building Energy Consumption Survey. See 

30 U.S. Census Bureau, American Housing Survey. Available at: 

http://www.census.gov/hhes/www/housing/ahs/ahs.html 

132
 
chapter 8 of the final rule TSD for further details on the method and sources DOE used to 

develop product lifetimes for this final rule. 

8. Discount Rates 

To establish discount rates for the LCC analysis, DOE identified all debt or asset 

classes that might be used to purchase refrigeration products, including household assets 

that might be affected indirectly. DOE used data from the Federal Reserve Board’s 

“Survey of Consumer Finances” (SCF) for 1989, 1992, 1995, 1998, 2001, 2004, and 

2007 to estimate the average percentages of the various debt and equity classes in the 

average U.S. household portfolios. DOE used SCF data and other sources to develop 

distributions of interest or return rates associated with each type of equity and debt. The 

average rate across all types of household debt and equity, weighted by the shares of each 

class, is 5.1 percent. While this value corresponds to the average discount rate, DOE 

assigned each sample household a specific discount rate drawn from the distributions. 

DOE derived the discount rate for commercial-sector compact refrigeration 

products from the cost of capital of publicly-traded firms in the sectors that purchase 

those products (including lodging and other commercial sectors). The firms typically 

finance equipment purchases through debt and/or equity capital. DOE estimated the cost 

of the firms’ capital as the weighted average of the cost of equity financing and the cost 

of debt financing for recent years for which data were available (2001 through 2008). The 

estimated average discount rate for companies that purchase compact refrigeration 

products is 6.2 percent. 

133
 
See chapter 8 in the final rule TSD for further details on the development of 

discount rates for refrigeration products. 

9. Compliance Date of Amended Standards 

In the context of EPCA, the compliance date is the future date when parties 

subject to the requirements of a new standard must begin to comply with that standard. 

As described in DOE’s semi-annual implementation report for energy conservation 

standards activities submitted to Congress, a final rule for the refrigeration products that 

are the subject of this rulemaking is scheduled for completion. Compliance with amended 

standards for refrigeration products promulgated by DOE is required in 2014. DOE 

calculated the LCC and PBP for refrigeration products as if consumers would purchase 

new products in the year compliance with the standard is required. 

10. Base Case Efficiency Distribution 

To accurately estimate the share of consumers that would be affected by a 

standard at a particular efficiency level, DOE’s LCC analysis considered 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 

of efficiencies as a base-case efficiency distribution. DOE developed base-case efficiency 

distributions for each of the seven representative product classes. These distributions 

were developed from industry-supplied data for the year 2007 and were comprised of 

product efficiencies ranging from existing baseline levels (i.e., meeting existing energy 

134
 
conservation standards) to levels meeting and exceeding ENERGY STAR levels. DOE 

then projected these distributions to the year that today’s standards would become 

effective (2014). 

DOE modified its approach for estimating base-case efficiency distributions for 

the NOPR analysis for certain product classes. DOE believes that, because the current 

ENERGY STAR efficiency level is higher than it was prior to the requirements 

established in 2008, the growth in market share may be slower than before due to the 

reduction in sales generally associated with higher cost, more efficient products. For the 

NOPR, DOE adopted a projected market share of ENERGY STAR models in 2014 

(under current requirements) that is equal to the average of ENERGY STAR market 

shares in 2007 (the last year under the old requirements) and 2008 (when current 

requirements took effect). With this approach, the ENERGY STAR market shares for 

product class 3 (refrigerator-freezer—automatic defrost with top-mounted freezer without 

through-the-door ice service) and product class 5 (refrigerator-freezers—automatic 

defrost with bottom-mounted freezer without through-the-door ice service) are projected 

to grow more slowly between 2008 and 2014 than they had under the old requirements 

before 2008. ENERGY STAR products reach a market share in 2014 of 8 percent for 

product class 3 and 68 percent for bottom-mount refrigerator-freezers. 

DOE requested comment on its approach for estimating base case efficiency 

distributions. 75 FR at 59515 (September 27, 2010). Whirlpool stated it had no comment 

on the approach (Whirlpool, No. 74 at p. 6), and no other comments were received. In 

135
 
light of the absence of any comments on its approach, DOE maintained the same 

approach for the final rule as it used in the NOPR for all of the product classes. For 

further information on DOE’s estimate of base-case efficiency distributions, see chapter 8 

of the final rule TSD. 

11. Inputs to Payback Period Analysis 

The payback period is the amount of time 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 are expressed 

in years. Payback periods that exceed the life of the product indicate that the increased 

total installed cost is not recovered in reduced operating expenses. 

The inputs to the PBP calculation are the total installed cost of the equipment to 

the customer for each efficiency level and the average annual operating expenditures for 

each efficiency level. The PBP calculation uses the same inputs as the LCC analysis, 

except that discount rates are not needed. 

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 complying with an energy conservation standard level 

will be less than three times the value of the energy (and, as applicable, water) savings 

136
 
during the first year that the consumer will receive 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 amended standard would be 

required. 

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

The national impact analysis (NIA) assesses the national energy savings (NES) 

and the national net present value (NPV) of total consumer costs and savings that would 

be expected to result from new or amended standards at specific efficiency levels. 

(“Consumer” in this context refers to consumers of the product being regulated.) DOE 

calculates the NES and NPV based on projections of annual appliance shipments, along 

with the annual energy consumption and total installed cost data from the energy use and 

LCC analyses. For the present analysis, DOE forecasted the energy savings, operating 

cost savings, product costs, and NPV of consumer benefits for products sold from 2014 

through 2043. 

DOE evaluates the impacts of new and amended standards by comparing basecase projections with standards-case projections. The base-case projections characterize 

energy use and consumer costs for each product class in the absence of new or amended 

energy conservation standards. DOE compares these projections with projections 

137
 
 

 

characterizing the market for each product class if DOE adopted new or amended 

standards at specific energy efficiency levels (i.e., the TSLs or standards cases) for that 

class. For the base case forecast, DOE considers historical trends in efficiency and 

various forces that are likely to affect the mix of efficiencies over time. For the standards 

cases, DOE also considers how a given standard would likely affect the market shares of 

efficiencies greater than the standard. 

To make the analysis more accessible and transparent to all interested parties, 

DOE uses an MS Excel spreadsheet model to calculate the energy savings and the 

national consumer costs and savings from each TSL.31 The TSD and other documentation 

that DOE provides during the rulemaking help explain the models and how to use them, 

and interested parties can review DOE’s analyses by changing various input quantities 

within the spreadsheet. The NIA spreadsheet model uses typical values as inputs (as 

opposed to probability distributions). 

For the current analysis, the NIA used projections of energy prices and housing 

starts from the AEO2010 Reference case. In addition, DOE analyzed scenarios that used 

inputs from the AEO2010 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 housing starts, which result in higher and lower appliance 

shipments to new homes. NIA results based on these cases are presented in appendix 10­

A of the final rule TSD. 

31 MS Excel is the most widely used spreadsheet calculation tool in the United States and there is general 

familiarity with its basic features. Thus, DOE’s use of MS Excel as the basis for the spreadsheet models 

provides interested parties with access to the models within a familiar context. 

138
 
Table IV.6 summarizes the inputs and key assumptions DOE used for the NIA 

analysis contained in the overall NOPR analysis and the changes to the analyses for the 

final rule. Discussion of these inputs and changes follows the table. See chapter 10 of the 

final rule TSD for further details. 

Table IV.6 Approach and Data Used for National Energy Savings and Consumer 

Net Present Value Analyses 

Inputs NOPR Changes for the Final Rule 

Shipments Annual shipments from shipments 

model, using 2008 data to estimate the 

ratio of bottom-mount share to sideby-side share. 

No change. 

Compliance Date 

of Standard 

2014. No change. 

Base-Case 

Forecasted 

Efficiencies 

Used a “roll-up + ENERGY STAR” 

scenario to establish the distribution of 

efficiencies. 

No change. 

Standards-Case 

Forecasted 

Efficiencies

 Used a “roll-up + ENERGY STAR” 

scenario to establish the distribution of 

efficiencies. 

No change. 

Annual Energy 

Consumption per 

Unit 

Annual weighted-average values as a 

function of SWEUF.* 

No change. 

Total Installed 

Cost per Unit 

Annual weighted-average values as a 

function of SWEUF.* 

Applied a price trend to estimate 

future product prices. 

Energy Cost per 

Unit 

Annual weighted-average values as a 

function of the annual energy 

consumption per unit and energy 

prices. 

No change. 

Repair and 

Maintenance Cost 

per Unit 

Annual values as a function of 

efficiency level. 

No change. 

Escalation of 

Energy Prices 

AEO2010 forecasts (to 2035) and 

extrapolation through 2043. 

No change. 

Energy Site-toSource Conversion 

Factor 

Varies yearly and is generated by 

DOE/EIA’s NEMS 

No change. 

Discount Rate Three and seven percent real. No change. 

Present Year Future expenses are discounted to 

2010. 

No change. 

139
 
*Shipments-Weighted Energy Use Factor 

1. Shipments 

Forecasts of product shipments are needed to calculate the national impacts of 

standards on energy use, NPV, and future manufacturer cash flows. DOE develops 

shipment forecasts based on an analysis of key market drivers for each considered 

product. In DOE’s shipments model, product shipments are driven by new construction, 

stock replacements, and other types of purchases. The shipments models take an 

accounting approach, tracking market shares of each product 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 inservice 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. 

In projecting shipments for refrigeration products, DOE accounted for 

installations in new homes and replacement of failed equipment. In addition, for 

standard-size refrigerator-freezers, DOE estimated purchases driven by the conversion of 

a first refrigerator to a second refrigerator. It also estimated purchases by existing 

household consumers who enter the market as new owners for standard-size freezers. 

In conducting the analysis for today’s rule, DOE examined the historical trends in 

the market shares of different refrigerator-freezer configurations to disaggregate the total 

140
 
shipments of refrigerator-freezers into the three considered refrigerator-freezer product 

categories (top-mount, bottom-mount and side-by-side configurations). The market share 

of side-by-side refrigerator-freezer models has grown significantly during the past two 

decades. Bottom-freezer models historically had a small market share, but that share has 

also grown in recent years. However, because DOE had insufficient data to forecast longterm growth of this product class, it made the assumption, based on past sales trends, that 

consumer behavior related to bottom-mount models in the future would mirror behavior 

regarding side-by-side models. DOE developed a model to forecast the combined bottommount and side-by-side market shares throughout the 30-year forecast period (beginning 

in 2014), and assumed that the ratio of bottom-mount share to side-by-side share would 

remain constant at the 2008 level (the last year for which DOE had disaggregated data). 

To estimate the effects on product shipments from increases in product price 

projected to accompany amended standards at higher efficiency levels, DOE applied a 

price elasticity parameter. It estimated this parameter with a regression analysis that used 

purchase price and efficiency data specific to residential refrigerators, clothes washers, 

and dishwashers over the period 1980–2002. The estimated “relative price elasticity” 

incorporates the impacts from purchase price, operating cost, and household income, and 

it also declines over time. DOE estimated shipments in each standards case using the 

relative price elasticity along with the change in the relative price between a standards 

case and the base case. For details on the shipments analysis, see chapter 9 of the final 

rule TSD. 

141
 
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 case (without new or amended standards) and each of the standards cases. Section 

IV.X described how DOE developed a base-case energy efficiency distribution (which 

yields a shipment-weighted average efficiency) for each of the considered product classes 

for the first year of the forecast period. Based on recent trends, DOE assumed no 

improvement of energy efficiency in the base case and held the base-case energy 

efficiency distribution constant throughout the forecast period. 

To estimate efficiency trends in the standards cases, DOE used a “roll-up” 

scenario in its standards rulemakings. 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. 

For the NOPR, DOE refined its forecast for the base case and each of the 

standards cases using information obtained from ENERGY STAR program staff. To 

project the efficiency distributions after 2014 for the base case, DOE first considered the 

potential for changes to the ENERGY STAR qualification levels. DOE assumed that, in 

the absence of a new standard, the ENERGY STAR program would re-examine and 

possibly revise its qualification levels regardless of the market share in 2014. When 

setting a minimum product efficiency level to qualify for ENERGY STAR, one important 

metric is that the average payback period compared to the current standard level should 

142
 
 

not exceed five years. Using the payback period calculation described in section IV.F, 

DOE applied this criterion to all product classes to evaluate the extent to which the 

current ENERGY STAR efficiency levels would be increased in the future. 

DOE then estimated the market shares for ENERGY STAR products in 2021 

based on past experience in the market for these products. Rather than make long-term 

projections based on limited information, DOE assumed there would be no further 

change in market shares between 2021 and the end of the forecast period. DOE 

recognizes that some change in shares is likely to occur in reality. However, since DOE 

used the same assumption in the standards cases, the accuracy of the assumption makes 

no difference to the analysis of energy savings. 

For the standards cases (also referred to as candidate standard levels, or CSLs), 

DOE used the same approach as for the base case and assumed that in the case of 

amended standards, the ENERGY STAR program would re-evaluate its qualifying levels 

for all product classes using the five-year payback period criterion. For each CSL, DOE 

identified the maximum efficiency level with a payback period of five years or less. If 

that level was below the current ENERGY STAR level, DOE maintained the current 

ENERGY STAR level. At higher CSLs, there is no efficiency level above the standard 

level with a payback period of less than 5 years. DOE assumed that the ENERGY STAR 

program would be suspended with standards at higher CSLs on a product-class specific 

basis. This result is projected to occur for all product classes at CSL 3 and above; for 

product classes 9 (upright freezers with automatic defrost) and 10 (chest freezers and all 

143
 
other freezers except compact freezers), it occurs at lower CSLs. The market share 

estimates for ENERGY STAR products in 2021 and beyond were based on a similar 

approach as for the base case. 

DOE requested comment on its approach for forecasting base case and standards 

case efficiency distributions. 75 FR at 59518 (September 27, 2010). Whirlpool stated it 

had no comment on the approach (Whirlpool, No. 74 at p. 6), and no other comments 

were received. As a result, DOE retained its approach for the final rule. For further 

details about the forecasted efficiency distributions, see chapter 10 of the final rule TSD. 

3. Installed Cost per Unit 

In the NOPR analysis, DOE followed its past practice and assumed that the 

manufacturer costs and retail prices of products meeting various efficiency levels remain 

fixed, in real terms, after 2008 (the year for which the engineering analysis estimated 

costs) and throughout the period of the analysis. As discussed in section IV.F.1, for the 

final rule DOE used a price trend based on an experience curve derived using historical 

data on shipments and refrigeration equipment PPI. DOE applied the same price trend to 

forecast prices for each group of refrigeration products at each considered efficiency 

level. The average projected annual rate of price decline in the default case is 1.87 

percent. 

For the NIA, DOE also analyzed two cases that use a price trend based on an 

exponential in time extrapolation of refrigeration equipment PPI data. DOE selected a 

144
 
 

high projected price trend decline case and a low projected price trend decline case from 

among a number of price trends that it analyzed (see appendix 8E of the final rule TSD). 

The high projected price trend decline case is based on the upper end of the 95 percent 

confidence interval for an exponential fit to the PPI series in 1991-2010 divided by the 

relevant GDP deflator data from those years. The low projected price trend decline case 

is based on the lower end of the 95 percent confidence interval for an exponential fit to 

the PPI series in 1976-2010 before dividing it by the relevant GDP deflator data from 

those years. The annual rate of projected price trend decline is 3.12 percent in the high 

projected price trend decline case and 1.14 percent in the low projected price trend 

decline case. 

4. Site-to-Source Energy Conversion 

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. 

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 

145
 
sources (i.e., 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. 

For the NOPR and today’s final rule, DOE updated its annual site-to-source 

conversion factors based on the version of NEMS that corresponds to AEO2010, which 

provides energy forecasts through 2035. For 2036-2043, DOE used conversion factors 

that remain constant at the 2035 values. 

In response to a request from DOE’s Office of Energy Efficiency and Renewable 

Energy (EERE), the National Academy of Sciences (NAS), appointed a committee on 

“Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 

Standards” to conduct a study required by section 1802 of the Energy Policy Act of 2005 

(Pub. L. No. 109-58 (August 8, 2005)). The fundamental task before the committee was 

to evaluate the methodology used for setting energy efficiency standards and to comment 

on whether site (point-of-use) or source (full-fuel-cycle) measures of energy savings 

would better support rulemaking efforts to achieve energy conservation goals. The NAS 

committee defined full-fuel-cycle energy consumption as including, in addition to site 

energy use, the following: energy consumed in the extraction, processing, and transport 

of primary fuels such as coal, oil, and natural gas; energy losses in thermal combustion in 

146
 
 

 

power generation plants; and energy losses in transmission and distribution to homes and 

commercial buildings.32 

In evaluating the merits of using point-of-use and full-fuel-cycle measures, the 

NAS committee noted that DOE uses what the committee referred to as “extended site” 

energy consumption to assess the impact of energy use on the economy, energy security, 

and environmental quality. The extended site measure of energy consumption includes 

the energy consumed during the generation, transmission, and distribution of electricity 

but, unlike the full-fuel-cycle measure, does not include the energy consumed in 

extracting, processing, and transporting primary fuels. A majority of the NAS committee 

concluded that extended site energy consumption understates the total energy consumed 

to make an appliance operational at the site. As a result, the NAS committee 

recommended that DOE consider shifting its analytical approach over time to use a fullfuel-cycle measure of energy consumption when assessing national and environmental 

impacts, especially with respect to the calculation of greenhouse gas emissions. The NAS 

committee also recommended that DOE provide more comprehensive information to the 

public through labels and other means, such as an enhanced website. For those appliances 

that use multiple fuels (e.g., water heaters), the NAS committee indicated that measuring 

full-fuel-cycle energy consumption would provide a more complete picture of energy 

consumed and permit comparisons across many different appliances, as well as an 

improved assessment of impacts. 

32 The National Academies, Board on Energy and Environmental Systems, Letter to Dr. John Mizroch, 

Acting Assistant Secretary, U.S. DOE, Office of EERE from James W. Dally, Chair, Committee on Pointof-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards, May 15, 2009. 

147
 
In response to the NAS recommendations, DOE issued, on August 20, 2010, (75 

FR 51423), a Notice of Proposed Policy proposing to incorporate a full-fuel cycle 

analysis into the methods it uses to estimate the likely impacts of energy conservation 

standards on energy use and emissions. Specifically, DOE proposed to use full-fuel-cycle 

(FFC) measures of energy and greenhouse gas (GHG) emissions, rather than the primary 

(extended site) energy measurement it currently uses. Additionally, DOE proposed to 

work collaboratively with the Federal Trade Commission (FTC) to make FFC energy and 

GHG emissions data available to the public to enable consumers to make cross-class 

comparisons. On October 7, 2010, DOE held an informal public meeting to discuss and 

receive comments on its planned approach. The materials related to this proposed policy 

are available at: 

http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EERE-2010-BTNOA-0028. Following the close of the public comment period, DOE intends to develop a 

final policy statement on these subjects and then take steps to begin implementing that 

policy in rulemakings and other activities that are undertaken during 2011. 

5. Discount Rates 

The inputs for determining the NPV of the total costs and benefits experienced by 

consumers of the considered appliances are: (1) total annual installed cost, (2) total 

annual savings in operating costs, 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 in the forecast period. 

148
 
 

DOE multiplies the net savings in future years by a discount factor to determine 

their present value. For today’s final rule, DOE estimated the NPV of appliance 

consumer benefits using both a 3-percent and a 7-percent real discount rate. 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.33 The 

discount rates for the determination of NPV are in contrast to the discount rates used in 

the LCC analysis, which are designed to reflect a consumer’s perspective. The 7-percent 

real value is an estimate of the average before-tax rate of return to private capital in the 

U.S. economy. The 3-percent real value represents the “societal rate of time preference,” 

which is the rate at which society discounts future consumption flows to their present 

value. 

6. Benefits from Effects of Standards on Energy Prices 

A decrease in electricity consumption associated with amended standards for 

refrigeration products 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 analysis 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 

associated with amended standards for refrigeration products. In response, the Northeast 

33 OMB Circular A-4 (Sept. 17, 2003), section E, “Identifying and Measuring Benefits and Costs. Available 

at: http://www.whitehouse.gov/omb/memoranda/m03-21.html. 

149
 
Energy Efficiency Partnerships urged DOE to quantify electricity demand reductions 

achieved by these updated standards in financial terms. (NEEP, No. 41 at p. 1) 

For the NOPR and today’s final 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 

of the actors involved in the supply of electricity, particularly power plant providers and 

fuel suppliers. Because there is uncertainty about the extent to which the benefits for 

electricity users from reduced electricity prices would be a transfer from actors involved 

in electricity supply to electricity consumers, DOE has concluded that, at present, 

because of this uncertainty, it should not give a heavy weight to this factor in its 

consideration of the economic justification of new or amended standards. DOE is 

continuing 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 consumers, 

DOE evaluates the impact on identifiable sub-groups of consumers that may be 

disproportionately affected by a national standard. DOE evaluates impacts on particular 

sub-groups of consumers primarily by analyzing the LCC impacts and PBP for those 

150
 
particular consumers from alternative standard levels. For both the NOPR and today’s 

final rule, DOE analyzed the impacts of the considered standard levels on low-income 

consumers and senior citizens. DOE did not estimate the impacts for compact 

refrigeration products because the household sample sizes were not large enough to yield 

meaningful results. For further details on DOE’s consumer sub-group analysis, see 

Chapter 11 in the final rule TSD. 

I. Manufacturer Impact Analysis 

DOE conducted the MIA to estimate the financial impact of amended energy 

conservation standards on manufacturers of residential refrigeration products, and to 

assess the impacts of such standards on employment and manufacturing capacity. 

The MIA is both a quantitative and qualitative analysis. The quantitative part of 

the MIA relies on the Government Regulatory Impact Model (GRIM), an industry cashflow model customized for the residential refrigeration products covered in this 

rulemaking. The key MIA output is industry net present value (INPV). DOE used the 

GRIM to calculate cash flows using standard accounting principles and to compare 

changes in INPV between a base case and various TSLs (the standards cases). The 

difference in INPV between the base and standards cases represents the financial impact 

of the amended standard on manufacturers. Different sets of assumptions (scenarios) 

produce different results. DOE reports the MIA impacts of amended energy conservation 

standards by grouping together the impacts on manufacturers of certain product classes. 

DOE presents the industry impacts by the major product types (i.e., standard size 

151
 
refrigerator-freezers, standard size freezers, compact refrigerators and freezers, and builtin refrigeration products). These product groupings represent markets that are served by 

the same manufacturers. By segmenting the results into these product types, DOE is able 

to discuss how these subgroups of manufacturers will be impacted by amended energy 

conservation standards. 

The qualitative part of the MIA addresses factors such as product characteristics, 

characteristics of particular firms, and market trends. The qualitative discussion also 

includes an assessment of the impacts of standards on subgroups of manufacturers. DOE 

outlined its complete methodology for the MIA in the NOPR. 75 FR at 59519-59526 

(September 27, 2010). The complete MIA is presented in chapter 12 of the NOPR and 

final rule TSD. 

1. Comments from Interested Parties 

DOE received a number of comments from interested parties in response to the 

NOPR. Sub Zero commented that while it is not a small business, it is a small refrigerator 

manufacturer compared to its competition. It argued that its smaller size places it at a 

disadvantage compared to larger competitors with respect to the supply chain for 

compressors, which could cause Sub Zero to experience supply disruptions that would 

seriously impact their business and ability to compete. (Sub Zero, No. 69 at p. 3) Sub 

Zero added that its cost and distribution structures are different from the majority of the 

industry, and its small scale results in higher costs per unit production, including 

engineering related expenses. (Sub Zero, No. 69 at p. 2) Sub Zero commented that the 

152
 
new standards on smaller manufacturers in any segment of the appliance industry 

introduce costs and personnel requirements that represent a larger percentage of resources 

than those required by larger competitors. (Sub Zero, No. 69 at p. 3) Whirlpool simply 

stated that it was not a small business and offered no comment on the proposal’s impact 

on small manufacturers. (Whirlpool, No. 74 at p 6) 

DOE agrees that a smaller manufacturer could face all of the additional challenges 

raised by Sub Zero relative to a larger competitor. DOE also notes that while many larger 

refrigerator manufacturers also produce built-in units and could experience some benefits 

in the built-in market from their overall scale, built-in production volumes for any 

manufacturer are likely to be much lower for built-in products than free-standing 

products. While a smaller manufacturer could face all the challenges listed by Sub Zero, 

DOE believes that the separate analysis and presentation of results for built-in products 

adequately addresses Sub Zero’s concerns about the potential impacts on built-in 

manufacturers. DOE continues to believe that presenting the built-in analysis results 

separately from other categories is the most appropriate way to analyze the lower 

production volumes and different cost structure for built-in manufacturing. 

In the NOPR, DOE investigated whether small business manufacturers should be 

analyzed as a manufacturer subgroup. 75 FR at 59520, 59548 (September 27, 2010). As 

part of this effort, DOE identified one company that manufactures products covered by 

this rulemaking and qualifies as a small business under the applicable Small Business 

153
 
 

 

Administration (SBA) definition.34 DOE did not analyze a separate subgroup of small 

business manufacturers in the NOPR because it determined this rulemaking would not 

have a significant economic impact on a substantial number of small entities. Id. at 

59571-59572. DOE requested comment on this determination and sought any information 

concerning small businesses that could be impacted by this rulemaking as well as the 

nature and extent of those potential impacts of the proposed energy conservation 

standards on small residential refrigeration product manufacturers. Id. at 59572 and 

59575. DOE received no information regarding these issues. DOE received comments 

from Whirlpool and Sub Zero that supported its initial classification of the number of 

small business manufacturers of residential refrigeration products. (Whirlpool No. 74, at 

p.6; Sub Zero, No. 69 at p. 3) Therefore, the final rule continues to refrain from treating 

small business manufacturers as a manufacturer subgroup but also maintains the separate 

analysis and presentation of results for built-in products. 

Sub Zero also commented that the proposed standards would have implications 

for their company. At the proposed built-in standard levels, it asserted that the company 

will be pressed to meet the necessary efficiency levels, remain a viable business, and 

achieve profitability. Sub Zero also argued that the new standards could also impact the 

number of products that meet high visibility programs such as ENERGY STAR and 

indicated that these challenges are in addition to attempting to recover from a difficult 

business environment. Sub Zero added that different regulations in other areas of the 

world, notably Canada and Europe, that involve more than energy and are not 

34 See http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf for a list of 

SBA size standards. 

154
 
 

harmonized with U.S. requirements, pose significant challenges and noted that this 

regulatory burden is the biggest challenge for the future. (Sub Zero, No. 69 at p. 3) Sub 

Zero agreed that DOE’s analysis presented in the NOPR confirms that new standards will 

impact built-in designs more stringently than conventional free-standing products to meet 

any given efficiency level. Sub Zero stated it was also concerned that built-ins be 

separated as distinct product classes with different efficiency levels from conventional 

product classes, in order to continue to offer consumers the utility they desire at 

reasonable added costs. (Sub Zero, No. 69 at p. 1-2) 

DOE agrees that manufacturers such as Sub Zero face challenges. For example, 

because Sub Zero holds a large market share of the premium, built-in market, DOE 

expects that a significant portion of the $65 million in product conversion costs and $55 

million in capital conversion costs calculated for built-in product classes will be borne by 

Sub Zero. However, DOE believes that the INPV impacts calculated in the MIA analyze 

the potential impacts on built-in manufacturers due to amended energy conservation 

standards. This adjustment, along with providing separate product classes for built-in 

products to help preserve the utility that these products offer, will help mitigate the 

potential adverse financial impact that would result from this rule. 

DOE also received a number of comments about possible refrigerant and blowing 

agent changes. Whirlpool, GE, and AHAM all noted possible changes to the regulatory 

landscape for the refrigerants available in residential refrigeration products. (Whirlpool, 

No. 74 at p. 4; GE, No. 76 at p. 2; AHAM, No. 73 at pp. 7-8) Sub Zero also highlighted 

155
 
the current uncertainty about potential future regulation of HFC refrigerants and blowing 

agents. It suggested that the industry could potentially be faced with enforced conversion 

to other substances by 2014, which would require significant additional capital 

investment. (Sub Zero, No. 69 at p. 4) 

These comments are addressed above in section IV.B.1. Because these comments 

also relate to the cumulative regulatory burden, DOE reiterates that it concluded 

isobutane products may soon become available. However, DOE did not consider the 

switch to isobutane refrigerant as a design option to reduce energy use because sufficient 

information regarding the energy savings characteristics and the costs of the new designs 

was not available. DOE did not consider the possible capital investment needed by 

conversions to other substances by 2014 because DOE believes that basing energy 

conservation standards on the uncertain prospect of pending regulations or legislation 

would be speculative. 

2. GRIM Key Inputs 

The GRIM inputs are data characterizing the industry cost structure, investments, 

shipments, and markups. DOE updates the MIA to reflect changes in the outputs of two 

other key DOE analyses that feed into the GRIM: the engineering analysis and the NIA. 

For the final rule, DOE did not receive any relevant comments that would necessitate 

such changes to the engineering analysis. Similarly, DOE did not receive comments from 

interested parties that would change assumptions or shipments in the NIA. DOE did not 

request specific comment on the inputs to the MIA in the NOPR and is maintaining the 

same methodology for the final rule. 

156
 
For the final rule, DOE incorporated trends in prices over time into the analysis. 

These prices trends in every year also impact the MIA results. DOE used the same price 

trends in the NIA from the base year of the analysis through the end of the analysis 

period. DOE also assumed that manufacturer product costs (MPCs) and MSPs were 

similarly impacted by the price trends in both the base case and standards cases. See 

section IV.F.1 for a description of how DOE implemented price trends into the analysis. 

The other major GRIM assumptions and inputs that are not part of the engineering 

analysis or NIA are outlined below. 

a. Product and Capital Conversion Costs 

Amended energy conservation standards will cause manufacturers to incur onetime conversion costs to bring their production facilities and product designs into 

compliance. For the MIA, DOE classified these one-time conversion costs into two major 

groups: (1) product conversion costs and (2) capital conversion costs. Product conversion 

costs are one-time investments in research, development, testing, marketing, and other 

non-capitalized costs focused on making product designs comply with the amended 

energy conservation standard. Capital conversion costs are one-time investments in 

property, plant, and equipment to adapt or change existing production facilities so that 

new product designs can be fabricated and assembled. 

DOE based its estimates of the product conversion costs that would be required to 

meet each TSL on information obtained from manufacturer interviews, the design 

157
 
 

pathways analyzed in the engineering analysis, and market information about the number 

of platform and product families for each manufacturer. DOE based its capital conversion 

cost estimates on manufacturer interviews and assumptions from the engineering 

analysis. 75 FR at 59521 (September 27, 2010). DOE’s estimates of the product and 

capital conversion costs for all of the refrigeration products addressed in this rulemaking 

can be found in section VI.B.2, of today’s final rule and in chapter 12 of the final rule 

TSD. 

b. Markup Scenarios 

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 amended energy conservation standards: (1) a flat 

markup scenario, and (2) a preservation of operation profit scenario. These scenarios lead 

to different markup values, which, when applied to the inputted MPCs, result in varying 

revenue and cash flow impacts. 

The flat markup scenario assumes that the cost of goods sold for each product is 

marked up by a flat percentage to cover standard SG&A expenses, R&D expenses, and 

profit. This scenario represents the upper bound of industry profitability in the standards 

case because manufacturers are able to fully pass through to their customers the 

additional costs due to compliance with applicable standards. DOE also modeled the 

preservation of operating profit markup scenario. In this scenario, the manufacturer 

markups are lowered such that, in the standards case, manufacturers are only able to 

158
 
maintain the base-case total operating profit in absolute dollars, despite higher product 

costs and investment. DOE implemented this scenario in GRIM by lowering the 

manufacturer markups at each TSL to yield approximately the same earnings before 

interest and taxes in the standards case in the year after the compliance date of the 

amended standards as in the base case. This scenario represents the lower bound of 

industry profitability following amended energy conservation standards because higher 

MPCs and the investments required to comply with the amended energy conservation 

standard do not yield additional operating profit. 75 FR at 59522 (September 27, 2010). 

3. Manufacturer Interviews 

DOE interviewed manufacturers representing more than 95 percent of standardsize refrigerator-freezer sales, approximately 95 percent of standard-size freezer sales, 

about 75 percent of compact refrigerator and freezer sales, and more than 95 percent of 

built-in refrigeration products. These interviews were in addition to those DOE conducted 

as part of the engineering analysis. DOE outlined the key issues in the rulemaking for 

manufacturers in the NOPR. 75 FR at 59524-59526 (September 27, 2010). 

J. Employment Impact Analysis 

DOE considers employment impacts in the domestic economy as one factor in 

selecting an amended standard. Employment impacts consist of direct and indirect 

impacts. Direct employment impacts are any changes in the number of employees of 

manufacturers of the appliance products that are the subject of this rulemaking, their 

suppliers, and related service firms. Indirect employment impacts are changes in national 

159
 
 

employment that occur due to the shift in expenditures and capital investment caused by 

the purchase and operation of more-efficient appliances. The MIA addresses the direct 

employment impacts that concern manufacturers of refrigeration products. The 

employment impact analysis addresses the indirect employment impacts. 

Indirect employment impacts from standards consist of the net jobs created or 

eliminated in the national economy, other than in the manufacturing sector being 

regulated, due to: (1) reduced spending by end users on energy; (2) reduced spending on 

new energy supplies by the utility industry; (3) increased spending on new products to 

which the new standards apply; and (4) the effects of those three factors throughout the 

economy. DOE expects the net monetary savings from standards to be redirected to other 

forms of economic activity. DOE also expects these shifts in spending and economic 

activity to affect the demand for labor in the short term, as explained below. 

One method for assessing the possible effects on the demand for labor of such 

shifts in economic activity is to compare sectoral employment statistics developed by the 

Labor Department’s Bureau of Labor Statistics (BLS).35 The BLS regularly publishes its 

estimates of the number of jobs per million dollars of economic activity in different 

sectors of the economy, as well as the jobs created elsewhere in the economy by this 

same economic activity. Data from BLS indicate that expenditures in the utility sector 

generally create fewer jobs (both directly and indirectly) than expenditures in other 

35 Data on industry employment, hours, labor compensation, value of production, and the implicit price 

deflator for output for these industries are available upon request by calling the Division of Industry 

Productivity Studies (202-691-5618) or by sending a request by e-mail to dipsweb@bls.gov. Available at: 

http://www.bls.gov/news.release/prin1.nr0.htm. 

160
 
 

 

 

sectors of the economy. There are many reasons for these differences, including wage 

differences and the fact that the utility sector is more capital intensive and less labor 

intensive than other sectors.36 

Energy conservation standards have the effect of reducing consumer utility bills. 

Because reduced consumer expenditures for energy likely lead to increased expenditures 

in other sectors of the economy, the general effect of efficiency standards is to shift 

economic activity from a less labor-intensive sector (i.e., the utility sector) to more laborintensive sectors (e.g., the retail and service sectors). Thus, based on the BLS data alone, 

DOE believes net national employment will increase due to shifts in economic activity 

resulting from amended standards for refrigeration products. 

For the standards considered in today’s final rule, DOE estimated indirect national 

employment impacts using an input/output model of the U.S. economy called Impact of 

Sector Energy Technologies (ImSET). ImSET is a spreadsheet model of the U.S. 

economy that focuses on 187 sectors most relevant to industrial, commercial, and 

residential building energy use.37 ImSET is a special purpose version of the “U.S. 

Benchmark National Input-Output” (I–O) model, which has been designed to estimate the 

national employment and income effects of energy-saving technologies. The ImSET 

software includes a computer-based I–O model with structural coefficients to characterize 

economic flows among the 187 sectors. ImSET’s national economic I–O structure is 

36 See Bureau of Economic Analysis, Regional Multipliers: A User Handbook for the Regional InputOutput Modeling System (RIMS II). Washington, DC. U.S. Department of Commerce, 1992. 37 J. M. Roop, M. J. Scott, and R. W. Schultz, ImSET 3.1: Impact of Sector Energy Technologies, PNNL18412, Pacific Northwest National Laboratory, 2009. Available at: 

http://www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf 

161
 
based on a 2002 U.S. benchmark table, specially aggregated to the 187 sectors. DOE 

estimated changes in expenditures using the NIA spreadsheet. Using ImSET, DOE then 

estimated the net national, indirect employment impacts by sector of potential amended 

efficiency standards for refrigeration products. 

For more details on the employment impact analysis, see the final rule TSD, 

chapter 13. 

K. Utility Impact Analysis 

The utility impact analysis estimates several important effects on the utility 

industry that would result from the adoption of new or amended standards. For both the 

NOPR final rule analyses, 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 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 

AEO2010 Reference case. In other words, the estimated impacts of an amended standard 

are the differences between values forecasted by NEMS–BT and the values in the 

AEO2010 Reference case. 

As part of the utility impact analysis, DOE used NEMS-BT to assess the impacts 

on electricity	prices	of	the	reduced	need	for	new	electric	power	plants	and	

infrastructure	projected	to	result	from	the	considered	standards.	In	NEMS‐BT,	

162
 
changes	in	power	generation	infrastructure	affect	utility	revenue	requirements,	

which	in	turn	affect	electricity	prices.	DOE	estimated	the	change	in	electricity	prices	

projected	to result	over	time	from	each	TSL.

Chapter 14 of the final rule TSD presents more information on the utility impact 

analysis. 

L. Environmental Assessment 

Pursuant to the National Environmental Policy Act and the requirements of 42 

U.S.C. 6295(o)(2)(B)(i)(VI), DOE has prepared an environmental assessment (EA) of the 

impacts of the standards for refrigeration products in today’s final rule, which it has 

included as chapter 15 of the TSD. DOE found that the environmental effects associated 

with the standards for refrigeration products were not significant. Therefore, DOE is 

issuing a Finding of No Significant Impact (FONSI), pursuant to NEPA, the regulations 

of the Council on Environmental Quality (40 CFR parts 1500–1508), and DOE’s 

regulations for compliance with NEPA (10 CFR part 1021). The FONSI is available in 

the docket for this rulemaking. 

In the EA, DOE estimated the reduction in power sector emissions of CO2, NOX, 

and Hg using the NEMS–BT computer model. In the EA, NEMS–BT is run similarly to 

the AEO NEMS, except that refrigeration product energy use is reduced by the amount of 

energy saved (by fuel type) due to each TSL. The inputs of national energy savings come 

from the NIA spreadsheet model, while the output is the forecasted physical emissions. 

The net benefit of each TSL in today’s final rule is the difference between the forecasted 

163
 
 

emissions estimated by NEMS–BT at each TSL and the AEO 2010 Reference Case. 

NEMS–BT tracks CO2 emissions using a detailed module that provides results with broad 

coverage of all sectors and inclusion of interactive effects. 

DOE has determined that SO2 emissions from affected fossil fuel fired 

combustion devices (also known as Electric Generating Units (EGUs)) are subject to 

nationwide and regional emissions cap and trading programs that create uncertainty about 

the standards’ impact on SO2 emissions. Title IV of the Clean Air Act, 42 U.S.C. 7401­

7671q, sets an annual emissions cap on SO2 for affected EGUs in the 48 contiguous states 

and the District of Columbia (D.C.). SO2 emissions from 28 eastern states and D.C. are 

also limited under the Clean Air Interstate Rule (CAIR, 70 F.R. 25162 (May 12, 2005)), 

which created an allowance-based trading program. Although CAIR has been remanded 

to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), 

see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008), it remains in effect 

temporarily, consistent with the D.C. Circuit’s earlier opinion in North Carolina v. EPA, 

531 F.3d 896 (D.C. Cir. 2008). On August 2, 2010, EPA issued the Transport Rule 

proposal, a replacement for CAIR, which would limit emissions from EGUs in 32 states, 

and may allow some amount of interstate trading. 75 FR 45210. EPA issued the final 

transport rule, entitled the Cross-State Air Pollution Rule, on July 6, 2011.38 See 

http://www.epa.gov/crossstaterule/. 

38 DOE notes that future iterations of the NEMS-BT model will incorporate any changes necessitated by 

issuance of the Cross-State Air Pollution Rule. 

164
 
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 imposition of an efficiency standard could be used to 

permit offsetting increases in SO2 emissions by any regulated EGU. However, if the 

standard resulted in a permanent increase in the quantity of unused emissions allowances, 

there would be an overall reduction in SO2 emissions from the standards. While there 

remains some uncertainty about the ultimate effects of efficiency standards on SO2 

emissions covered by the existing cap and trade system, the NEMS-BT modeling system 

that DOE uses to forecast emissions reductions currently indicates that no physical 

reductions in power sector emissions would occur for SO2. Because the Transport Rule 

has not been finalized, there is no way to predict the effect of this rulemaking on SO2 

emissions after the Transport Rule goes into effect. 

A cap on NOX emissions, affecting electric generating units in the CAIR region, 

means that standards on refrigeration products may have little or no physical effect on 

NOX emissions in the 28 eastern States and the District of Columbia covered by CAIR. 

Again, as noted above, because the Transport Rule has not been finalized, there is no way 

to predict the effect of this rulemaking on NOx emissions after the Transport Rule goes 

into effect. 

165
 
Today’s standards would, however, reduce NOX emissions in those 22 States not 

affected by the CAIR. As a result, DOE used NEMS–BT to forecast emission reductions 

from the standards that are considered in today’s final rule. 

Similar to emissions of SO2 and NOX, future emissions of Hg would have been 

subject to emissions caps. In May 2005, EPA issued the Clean Air Mercury Rule 

(CAMR). 70 FR 28606 (May 18, 2005). CAMR would have permanently capped 

emissions of mercury for new and existing coal-fired power plants in all States by 2010. 

However, on February 8, 2008, the D.C. Circuit issued a decision in New Jersey v. 

Environmental Protection Agency, in which it vacated CAMR. 517 F.3d 574 (D.C. Cir. 

2008). EPA has decided to develop emissions standards for power plants under the Clean 

Air Act (Section 112), consistent with the D.C. Circuit’s opinion on CAMR. See 

http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf. Pending EPA's 

forthcoming revisions to the rule, DOE is excluding CAMR from its Environmental 

Analysis. In the absence of CAMR, a DOE standard would likely reduce Hg emissions 

and DOE plans to use NEMS-BT to estimate these emission reductions. However, DOE 

continues to review the impact of rules that reduce energy consumption on Hg emissions, 

and may revise its assessment of Hg emission reductions in future rulemakings. 

M. Monetizing Carbon Dioxide and Other Emissions Impacts 

As part of the development of this final 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 

166
 
 

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 benefits estimates considered. 

For today’s final rule, DOE is relying on a set of values for the social cost of 

carbon (SCC) that were developed by an interagency process. A summary of the basis for 

these new values is provided below, and a more detailed description of the methodologies 

used is provided in appendix 16-A of the final rule TSD. 

1. Social Cost of Carbon 

Under 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. 

167
 
 

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 

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 social cost of 

carbon are provided in dollars per metric ton of carbon dioxide. 

When attempting to assess the incremental economic impacts of carbon dioxide 

emissions, the analyst faces a number of serious challenges. A recent report from the 

National Research Council39 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 

39 National Research Council. Hidden Costs of Energy: Unpriced Consequences of Energy Production and 

Use. National Academies Press: Washington, DC. 2009. 

168
 
 

monetize the harms associated with climate change will raise serious questions of 

science, economics, and ethics and should be viewed as provisional. 

Despite the serious limits of both quantification and monetization, SCC estimates 

can be useful in estimating the social benefits of reducing carbon dioxide emissions. 

Consistent with the directive quoted above, the purpose of the SCC estimates presented 

here is to make it possible for agencies to incorporate the social benefits from reducing 

carbon dioxide emissions into cost-benefit analyses of regulatory actions that have small, 

or “marginal,” impacts on cumulative global 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. DOE does not attempt to answer that question here. 

169
 
 

At the time of the preparation of the notice, the most recent interagency estimates 

of the potential global benefits resulting from reduced CO2 emissions in 2010, expressed 

in 2009$, were $4.9, $22.1, $36.3, and $67.1 per metric ton avoided. For emission 

reductions that occur in later years, these values grow in real terms over time. 

Additionally, the interagency group determined that a range of values from 7 percent to 

23 percent should be used to adjust the global SCC to calculate domestic effects,40 

although preference is given to consideration of the global benefits of reducing CO2 

emissions. 

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. Specifically, the interagency group has set a 

preliminary goal of revisiting the SCC values within two years or at such time as 

substantially updated models become available, and to continue to support research in 

this area. 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 

To date, economic analyses for Federal regulations have used a wide range of 

values to estimate the benefits associated with reducing carbon dioxide emissions. In the 

final model year 2011 CAFE rule, the Department of Transportation (DOT) used both a 

40 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. 

170
 
 

“domestic” SCC value of $2 per ton of CO2 and a “global” SCC value of $33 per ton of 

CO2 for 2007 emission reductions (in 2007 dollars), increasing both values at 2.4 percent 

per year.

41 See Average Fuel Economy Standards Passenger Cars and Light Trucks 

Model Year 2011, 74 FR 14196 (March 30, 2009); Final Environmental Impact Statement 

Corporate Average Fuel Economy Standards, Passenger Cars and Light Trucks, Model 

Years 2011-2015 at 3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy). 

It also included a sensitivity analysis at $80 per ton of CO2. 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. 

A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per ton 

of CO2 (in 2006 dollars) for 2011 emission reductions (with a range of $0-$14 for 

sensitivity analysis), also increasing at 2.4 percent per year. See Average Fuel Economy 

Standards, Passenger Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 

(May 2, 2008); 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). A regulation for packaged terminal 

air conditioners and packaged terminal heat pumps finalized by DOE in October of 2008 

used a domestic SCC range of $0 to $20 per ton CO2 for 2007 emission reductions (in 

2007 dollars). 73 FR 58772, 58814 (Oct. 7, 2008) In addition, EPA’s 2008 Advance 

Notice of Proposed Rulemaking for Greenhouse Gases identified what it described as 

“very preliminary” SCC estimates subject to revision. See Regulating Greenhouse Gas 

41 Values per ton of CO2 given in this section refer to metric tons. 

171
 
Emissions Under the Clean Air Act, 73 FR 44354 (July 30, 2008). EPA’s global mean 

values were $68 and $40 per ton CO2 for discount rates of approximately 2 percent and 3 

percent, respectively (in 2006 dollars for 2007 emissions). 

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 dollars) of $55, $33, $19, $10, and $5 per ton of CO2. 

These interim values represent 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 and were offered for 

public comment in connection with proposed rules, including the joint EPA-DOT fuel 

economy and CO2 tailpipe emission proposed rules. See CAFE Rule for Passenger Cars 

and Light Trucks Draft EIS and Final EIS, cited above. 

172
 
 

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 considered for this amended rule. 

Specifically, the group considered public comments and further explored the technical 

literature in relevant fields. 

The interagency group relied on three integrated assessment models (IAMs) 

commonly used to estimate the SCC: the FUND, DICE, and PAGE models.42 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. 

42 The models are described in appendix 16-A of the final rule TSD. 

173
 
 

The interagency group selected four SCC values for use in regulatory analyses. 

Three values are based on the average SCC from the three IAMs, at discount rates of 2.5, 

3, and 5 percent. The fourth value, which represents the 95th percentile SCC estimate 

across all three models at a 3 percent discount rate, is included to represent higher-thanexpected impacts from temperature change further out in the tails of the SCC distribution. 

For emissions (or emission reductions) that occur in later years, the SCC values grow in 

real terms over time, as depicted in Table IV.7. 

Table IV.7 SCC Values from Interagency Process, 2010 – 2050 (2007 dollars per 

metric ton) 

Discount Rate 

5% 

Avg 

3% 2.5% 

Avg Avg 

3% 

95th 

2010 

2015 

2020 

2025 

2030 

2035 

2040 

2045 

2050 

4.7 

5.7 

6.8 

8.2 

9.7 

11.2 

12.7 

14.2 

15.7 

21.4 

23.8 

26.3 

29.6 

32.8 

36.0 

39.2 

42.1 

44.9 

35.1 

38.4 

41.7 

45.9 

50.0 

54.2 

58.4 

61.7 

65.0 

64.9 

72.8 

80.7 

90.4 

100.0 

109.7 

119.3 

127.8 

136.2 

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 

174
 
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 agencies participating in the interagency 

process to estimate the SCC. 

The U.S. Government intends to periodically review and reconsider estimates of 

the SCC used for cost-benefit analyses to reflect increasing knowledge of the science and 

economics of climate impacts, as well as improvements in modeling. In this context, 

statements recognizing the limitations of the analysis and calling for further research take 

on exceptional significance. The interagency group offers the new SCC values with all 

due humility about the uncertainties embedded in them and with a sincere promise to 

continue work to improve them. 

In summary, in considering the potential global benefits resulting from reduced 

CO2 emissions, DOE used the most recent values identified by the interagency process, 

adjusted to 2009$ using the GDP price deflator values for 2008 and 2009. For each of the 

four cases specified, the values used for emissions in 2010 were $4.9, $22.1, $36.3, and 

$67.1 per metric ton avoided (values expressed in 2009$). To monetize the CO2 

emissions reductions expected to result from amended standards for refrigeration 

products in 2014–2043, DOE used the values identified in Table A1 of the “Social Cost 

of Carbon for Regulatory Impact Analysis Under Executive Order 12866,” which is 

175
 
 

 

reprinted in appendix 15-A of the final rule TSD, appropriately escalated to 2009$.43 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 TSLs it considered. As noted above, new or amended energy conservation standards 

would reduce NOX emissions in those 22 States that are 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 environmental damage estimates from the 

literature. Available estimates suggest a very wide range of monetary values, ranging 

from $370 per ton to $3,800 per ton of NOX from stationary sources, measured in 2001$ 

(equivalent to a range of $447 to $4,591 per ton in 2009$).44 In accordance with OMB 

guidance, DOE conducted two calculations of the monetary benefits derived using each 

of the economic values used for NOX, one using a real discount rate of 3 percent and 

another using a real discount rate of 7 percent. 45 

DOE is aware of multiple agency efforts to determine the appropriate range of 

values used in evaluating the potential economic benefits of reduced Hg emissions. DOE 

43 Table A1 presents SCC values through 2050. For DOE’s calculation, it derived values after 2050 using
 

the 3-percent per year escalation rate used by the interagency group. 

44 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. 

45 OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
 

176
 
has decided to await further guidance regarding consistent valuation and reporting of Hg 

emissions before it once again monetizes Hg in its rulemakings. 

V. Discussion of Other Comments 

The following section discusses comments received by DOE related to other 

issues. In general, these issues involved subjects that generally fell outside of the 

framework described in detail above. 

A. Demand Response 

This section discusses comments received regarding demand response or smart 

grid controls. These are controls that can react to signals from utilities or other external 

organizations and alter the product’s operation. This capability might be used to allow 

utilities to reduce energy use during peak demand hours by reducing the power input of 

many connected appliances. 

DOE received comments on this topic during the preliminary analysis phase from 

LG, the U.S. Navy, and the IOUs. (LG, No. 44 at p. 5; USN, No. 35 at p. 2; IOUs, No. 39 

at p. 13). DOE explained in the NOPR that it did not consider a demand response feature, 

in part because of the uncertainty of overall benefits and the limitations of the legal 

framework under which DOE would be able to pursue such a design requirement 

approach. 75 FR at 59530 (September 27, 2010). 

AHAM disagreed with DOE’s conclusion that demand response would not 

contribute significantly to energy use. (AHAM, No. 73 at p. 9) However, AHAM’s 

177
 
comments did not provide any information quantifying the potential energy savings 

associated with implementation of demand response in refrigeration products. The 

highlighted conclusions of the Electric Power Research Institute study cited by AHAM 

do not even explicitly indicate that refrigeration product demand response contributed to 

energy savings. (Id.) AHAM further indicates that demand response applied to appliances 

including refrigeration products would help to enable use of renewable energy sources. 

(AHAM, No. 73 at pp. 9-10) 

DOE notes that this rulemaking involves the amending of an energy conservation 

standard for refrigeration products. The term “energy conservation standard” is defined 

as either a performance standard that prescribes a minimum level of energy efficiency or 

maximum amount of energy use or a design standard for certain specified products. As 

DOE stated previously, creating a design standard as an energy conservation standard is 

limited to specific enumerated consumer products under 42 U.S.C. 6291(6). See 75 FR at 

59530 (September 27, 2010). Since setting a demand response feature requirement 

would be the same as setting a design standard, DOE must look to those products for 

which it has the authority to set design standards. As DOE also pointed out, refrigeration 

products are not within this list. Commenters made no effort to challenge the validity of 

this view, citing instead to policy-related initiatives that highlighted the potential benefits 

associated with smart grid approaches. While the issues cited by commenters are clearly 

important issues, they do not obviate the requirement that DOE act within the boundaries 

178
 
 

 

of its authority within the context of this rulemaking. Accordingly, DOE did not 

incorporate a demand response feature requirement as part of today’s final rule.46 

B. Energy Standard Round-off 

The NOPR discussed the adoption of a round-off when reporting energy test 

results. This approach, explained in greater detail in the test procedure NOPR, would 

require manufacturers to report the measured energy consumption to the nearest 

kWh/year based on consideration of achievable measurement accuracy. 75 FR at 29849 

(May 27, 2010). The energy standard NOPR explained that similar round-off was 

necessary to avoid meaningless indications of non-compliance. DOE also requested 

comment on the implementation of energy standard round-off. 75 FR at 59570 

(September 27, 2010). 

AHAM supported using a round-off when calculating the energy standard using 

the energy standard equations for refrigeration products. (AHAM, Public Meeting 

Transcript, No. 67 at p. 94; AHAM, No. 73 at p. 10) Whirlpool concurred with this 

approach. (Whirlpool, No. 74 at p. 6) No commenter objected to the round-off approach. 

DOE has implemented the energy use round-off approach as part of the test 

procedure final rule. As a result, manufacturers must follow this approach when reporting 

the energy consumption of its refrigeration products. The test procedure rule includes a 

46 The inclusion of a demand response feature within these products would also require considerable 

analysis for which DOE has no data. 

179
 
round-off for the calculation of the energy standard when using the appropriate energy 

standard equations. See 75 FR at 78831-78832 (December 16, 2010). 

C. Trial Standard Levels and Proposed Standards 

1. Efficiency Levels 

Many stakeholders supported DOE’s selection of efficiency levels that mirrored 

the levels of the negotiated agreement. (AHAM, No. 73 at p. 1; IOUs, No. 77 at p. 1; 

PGEC, No. 68 at p. 1; JAC, No. 75 at p. 1) Sub Zero supported the selection of efficiency 

levels for built-ins that mirrored the negotiated agreement while indicating that the 

analyses suggest that less stringent levels would also have been appropriate. (Sub Zero, 

No. 69 at p. 5) Whirlpool supported the selection of efficiency levels for built-in 

products, subject to DOE’s adoption of the built-in product definition developed for the 

consensus agreement. (Whirlpool, No. 74 at p. 6) 

However, concerns about the negotiated levels for numerous products were 

expressed by other stakeholders, primarily utilities and organizations representing 

utilities. EEI and APPA expressed concern about the standard levels chosen for bottommount refrigerator-freezers, built-in bottom-mount refrigerator-freezers, and compact 

refrigerators and did not endorse the standard levels chosen for top-mount refrigeratorfreezers, side-by-side refrigerator-freezers, built-in all-refrigerators, built-in side-by-side 

refrigerators, and built-in upright freezers. (EEI, No. 71 at pp. 3-4; APPA, No. 72 at pp. 

2-3) SC expressed concern about selection of any standard levels above the levels of 

reasonable life cycle costs . (SC, No. 70 at p. 2) These concerns are based on (1) the 

180
 
percentage of consumers determined to experience life cycle cost benefits being uncertain 

or too high, and (2) the implication that DOE used the social cost of carbon dioxide 

emissions combined with consumer economics to justify the chosen standard levels. 

(EEI, No. 71 at p. 2; APPA, No. 72 at pp. 1-2; SC, No. 70 at p. 2) Moreover, SC argued 

that replacement of an older refrigerator with one meeting the current 2001 standard 

would save 23 times more energy. (SC, No. 70 at p. 2) 

Responding to the concern about the percentage of consumers determined to 

experience a net life cycle cost, DOE must consider a range of factors in setting 

efficiency levels (see section II.A), and for almost all product classes, the net savings per 

consumer is positive. 

Regarding the implication that DOE used the societal cost of carbon dioxide 

emissions to help justify the chosen standard levels, DOE did not, in fact, combine the 

societal cost of carbon with consumer economics in any of its calculations, but rather 

considered the positive benefit of reducing the societal cost of carbon, as part of a general 

assessment of environmental benefits, in making its final determination. Environmental 

benefits are an important rationale for national energy conservation, especially because 

the energy prices paid by consumers do not include some of the environmental costs 

associated with their use of energy. Energy savings from energy conservation standards 

often result in environmental benefits in the form of reduced emissions of air pollutants 

and greenhouse gases associated with energy production. DOE analyzed the 

environmental effects from the amended standards for refrigeration products, and from 

181
 
each TSL it considered, in the environmental assessment, which is described in section 

IV.L of this notice and in chapter 15 of the TSD. As a companion to the quantitative 

analysis in the environmental assessment, DOE also estimated a range of the economic 

value of emissions reductions resulting from the considered TSLs, as described in section 

IV.M of this notice. 

With respect to the replacement of old refrigerators in lieu of a more stringent 

standard, this case was considered as an alternative regulatory policy in chapter 16 of the 

TSD. DOE found that the impact of such a policy would be, in all cases, much less 

effective than a new standard. 

The PRC commented that the maximum energy use of the proposed standards was 

lower than the current ENERGY STAR levels for product classes 8, 9, 10, 10A, and 13A, 

suggested that the current ENERGY STAR levels reflect current advanced technologies 

and achieve the purpose of “protection of the environment and consumers”, and 

recommended that the maximum allowable energy use be no lower than the current 

ENERGY STAR levels. (PRC, No. 87 at p. 3) In response, DOE first notes that 

ENERGY STAR is a voluntary program. As such, manufacturers do not need to meet 

these levels unless they wish to produce ENERGY STAR-qualified products. Second, 

DOE is required by EPCA to consider all feasible technology levels, regardless of 

whether they represent less energy use than current ENERGY STAR levels, and to set a 

standard at the most efficient and feasible level that is economically justified. (42 U.S.C. 

6295(o)(2)(A)) Accordingly, the non-mandatory nature of ENERGY STAR, coupled 

182
 
with the mandatory nature of EPCA’s statutory requirement to promulgate new standards 

cut in favor of today’s action. 

The PRC also commented that the standard levels proposed for product classes 

5A, 6, 7, and 7-BI were not very stringent, being very close to their current standard 

levels expressed in kWh/year, even though the ENERGY STAR efficiency level has been 

set at a level representing 20 percent less energy consumption. The PRC provided an 

example of a product class 7 product with 500 liter adjusted volume, for which the 

proposed energy standard is 581.1 kWh/year, while the current standard is only slightly 

higher at 283.7 kWh/year. (PRC, No. 87 at p. 4) DOE believes that the PRC’s 283.7 

kWh/year value is in error and should have been 583.7 kWh/year. DOE notes that these 

values cannot be directly compared, because the new energy standard is based on the new 

test procedure, for which both measured energy use and the calculated adjusted volume 

are altered. 

SMUD made two comments regarding the selection of standard levels. First, 

SMUD noted that DOE indicated that it was considering either increasing or decreasing 

the stringency of the proposed levels based on stakeholder comments. It recommended 

that DOE not consider any decreased stringency. (SMUD, No. 88 at pp. 1, 2) DOE has 

not altered the standards from those proposed in the NOPR. Second, SMUD noted that 

the NOPR stated that products of the efficiency levels of the proposed standards are 

already commercially available for some, if not most, of the product classes. (See 75 FR 

at 59474 (September 27, 2010)) SMUD recommended moving the standards to efficiency 

183
 
levels more stringent than those of commercially available products, since these higher 

levels should be viable. (Id. at p. 2) As described above, DOE is required by EPCA to 

consider all feasible technology levels and that it must set the standard at the most 

efficient of these feasible levels that is economically justified. (42 U.S.C. 6295(o)(2)(A)) 

The commercial availability of products at a specific efficiency level, alone, is not 

sufficient justification for setting the standard at a more stringent efficiency level, since 

the more stringent level may not be economically justified. 

2. Maximum Energy Use Equations 

Several stakeholders indicated that they could not comment on the specific values 

represented by the maximum energy use equations because they did not have sufficient 

time after the issuance of the test procedure final/interim final rule to conduct tests to 

evaluate the equation levels. (AHAM, No. 73 at pp. 1-2 ; Whirlpool, No. 74 at p. ; GE, 

No. 76 at pp. 1-2) This is discussed in greater detail in section III.A.2. 

VI. Analytical Results 

The following section addresses the results from DOE’s analyses with respect to 

potential energy efficiency standards for the various product classes examined as part of 

this rulemaking. Issues discussed include the trial standard levels examined by DOE, the 

projected impacts of each of these levels if adopted as energy efficiency standards for 

refrigeration products, and the standards levels that DOE is adopting in today’s final rule. 

Additional details regarding the analyses conducted by the agency are contained in the 

publicly available TSD supporting this rulemaking. 

184
 
A. Trial Standard Levels 

DOE analyzed the benefits and burdens of a number of TSLs for the refrigeration 

products that are the subject of today’s final rule. A description of each TSL DOE 

analyzed is provided below. DOE attempted to limit the number of TSLs considered for 

today’s final rule by excluding efficiency levels that do not exhibit significantly different 

economic and/or engineering characteristics from the efficiency levels already selected as 

a TSL. While DOE only presents the results for those efficiency levels in TSL 

combinations in today’s final rule, DOE presents the results for all efficiency levels that it 

analyzed in the final rule TSD. 

Table VI.1 presents the TSLs and the corresponding product class efficiencies for 

standard-size refrigerator-freezers. TSL 1 consists of those efficiency levels that meet 

current ENERGY STAR criteria. TSL 2 consists of incrementally higher efficiency levels 

than the preceding TSL. TSL 3 consists of the highest efficiency levels for which the 

consumer NPV is positive, using a 7-percent discount rate, as well as the levels 

recommended in the Joint Comments. TSL 4 consists of those efficiency levels that yield 

energy use 30 percent below the baseline products, as well as the highest efficiency levels 

for which the consumer NPV is positive, using a 3-percent discount rate. TSL 5 consists 

of the max-tech efficiency levels. 

185
 
 

 

Table VI.1 Trial Standard Levels for Standard-Size Refrigerator-Freezers 

Trial 

Standard 

Level 

Top-Mount 

Refrigerator-Freezers 

and All-Refrigerators 

Bottom-Mount 

Refrigerator-Freezers 

Side-by-Side 

Refrigerator-Freezers 

Product classes 1, 1A, 2, 

3, 3A, 3I and 6 

Product classes 5, 5A, 

and 5I 

Product classes 4, 4I, 

and 7 

Efficiency Level (% less than baseline energy use) 

1 3 (20) 3 (20) 3 (20) 

2 3(20) 3 (20) 4 (25) 

3 4 (25)* 3 (20) 4 (25) 

4 5 (30) 5 (30) 5 (30) 

5 6 (36) 6 (36) 6 (33) 

* Level for product classes 1, 1A, and 2 is 20%. 

Table VI.2 presents the TSLs and the corresponding product class efficiencies for 

standard-size freezers. TSL 1 consists of those efficiency levels that yield energy use 20 

percent below the baseline products. TSL 2 consists of the levels recommended in the 

Joint Comments. TSL 3 consists of incrementally higher efficiency levels than the 

preceding TSL. TSL 4 consists of incrementally higher efficiency levels than the 

preceding TSL. TSL 5 consists of the max-tech efficiency levels, which are also the 

highest efficiency levels for which the consumer NPV is positive, using both a 3-percent 

and a 7-percent discount rate. 

186
 
 

Table VI.2 Trial Standard Levels for Standard-Size Freezers 

Trial Standard 

Level 

Upright Freezers Chest Freezers 

Product classes 

9 and 9I Product class 8 

Product classes 

10 and 10A 

Efficiency Level (% less than baseline energy use) 

1 3 (20) 3 (20) 3 (20) 

2 5 (30) 4 (25) 4 (25)* 

3 6 (35) 5 (30) 5 (30) 

4 7 (40) 6 (35) 6 (35) 

5 8 (44) 7 (41) 7 (41) 

* Level for product class 10A is 30%. 

Table VI.3 presents the TSLs and the corresponding product class efficiencies for 

compact refrigeration products. TSL 1 consists of efficiency levels that meet current 

ENERGY STAR criteria for some compact refrigerators (product classes 11, 11A, and 

12), and efficiency levels that are 10 percent below the baseline energy use for other 

compact refrigerators (product classes 13, 13I, 13A, 14, 14I, 15 and 15I) and compact 

freezers (product classes 16, 17, and 18). TSL 2 consists of the levels recommended in 

the Joint Comments. TSL 3 consists of incrementally higher efficiency levels than the 

previous TSL. TSL 4 consists of the highest efficiency levels for which the consumer 

NPV is positive, using both a 3-percent and a 7-percent discount rate. TSL 5 consists of 

the max-tech efficiency levels. 

187
 
 

Table VI.3 Trial Standard Levels for Compact Refrigeration Products 

Trial Standard 

Level 

Compact Refrigerators and 

Refrigerator-Freezers 

Compact Freezers 

Product classes 

11, 11A, 12 

Product classes 

13, 13I, 13A, 14, 

14I, 15, 15I 

Product classes 

16, 17, 18 

Efficiency Level (% less than baseline energy use) 

1 3 (20) 1 (10) 1 (10) 

2 4 (25) 2 (15)* 1 (10) 

3 5 (30) 2 (15) 2 (15) 

4 7 (40) 4 (25) 4 (25) 

5 10 (59) 7 (42) 7 (42) 

* Level for product class 13A is 25 percent, and for product classes 14 and 14I, is 20 percent. 

Table VI.4 presents the TSLs and the corresponding product class efficiencies for 

built-in refrigeration products. TSL 1 consists of the efficiency levels that are 10 percent 

better than the current standard. TSL 2 consists of the highest efficiency levels for which 

the consumer NPV is positive, using both a 3-percent and a 7-percent discount rate. TSL 

3 consists of the levels recommended in the Joint Comments. TSL 4 consists of 

incrementally higher efficiency levels than TSL 3. TSL 5 consists of the max-tech 

efficiency levels. 

188
 
Table VI.4 Trial Standard Levels for Built-in Refrigeration Products 

Trial Standard 

Level 

Built-in 

Top-Mount 

RefrigeratorFreezers and 

AllRefrigerators 

Built-in BottomMount 

RefrigeratorFreezers Built-in Side-bySide RefrigeratorFreezers Built-in 

Upright 

Freezers 

Product classes 

3-BI, 3I-BI, and 

3A-BI 

Product classes 

5-BI, 5I-BI, and 

5A-BI 

Product classes 

4-BI, 4I-BI and 

7-BI 

Product classes 

9-BI and 9I-BI 

Efficiency Level (% less than baseline energy use) 

1 1 (10) 1 (10) 1 (10) 1 (10) 

2 2 (15) 2 (15) 1 (10) 3 (20) 

3 3 (20) 2 (15) 3 (20) 4 (25) 

4 4 (25) 4 (25) 3 (20) 4 (25) 

5 5 (29) 5 (27) 4 (22) 5 (27) 

B. Economic Justification and Energy Savings 

1. Economic Impacts on Individual Consumers 

a. Life-Cycle Cost and Payback Period 

Consumers affected by new or amended standards usually experience higher 

purchase prices and lower operating costs. DOE evaluates these impacts on individual 

consumers by calculating changes in LCC and the PBP associated with potential standard 

levels. Using the approach described in section IV.F, DOE calculated the LCC impacts 

and PBPs for the efficiency levels considered in this rulemaking. For each representative 

product class, DOE’s analysis provided several outputs for each TSL, which are reported 

in Table VI.5 through Table VI.15. Each table includes the average total LCC and the 

average LCC savings, as well as the fraction of product consumers for which the LCC 

will either decrease (net benefit), increase (net cost), or exhibit no change (no impact) 

relative to the product purchased in the base case. The last output in the tables is the 

189
 
 

 

 

 

 

median PBP for the consumer purchasing a design that complies with a given TSL. The 

results for each TSL are relative to the energy efficiency distribution in the base case (no 

amended standards). DOE based the LCC and PBP analyses on energy consumption 

under conditions of actual product use, whereas it based the rebuttable presumption PBPs 

on energy consumption under conditions prescribed by the DOE test procedure, as 

required by EPCA. (42 U.S.C. 6295(o)(2)(B)(iii)) 

Table VI.5 Product Class 3, Top-Mount Refrigerator-Freezers: LCC and PBP 

Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $491 $787 $1,278 

1 (10) $501 $730 $1,231 $46 0.28% 21.9% 77.8% 2.3 

2 (15) $508 $701 $1,209 $69 0.60% 17.6% 81.8% 2.6 

1, 2 3 (20) $564 $671 $1,235 $44 34.0% 8.31% 57.7% 8.0 

3 4 (25) $602 $634 $1,236 $42 45.7% 0.0% 54.3% 9.5 

4 5 (30) $686 $598 $1,284 -$6 65.1% 0.0% 34.9% 13.3 

5 6 (36) $806 $560 $1,365 -$87 79.7% 0.0% 20.3% 17.8 

Table VI.6 Product Class 5, Bottom-Mount Refrigerator-Freezers: LCC and PBP 

Results 

Trial 

Efficiency 

Level 

(% less than 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Discounted Average 

% of Households that 

Experience 

Median 

Standard 

Level 

baseline 

energy use) 

Installed 

Cost 

Operating 

Cost LCC 

Savings 

2009$ 

Net 

Cost 

No 

Impact 

Net 

Benefit 

190
 
 

 

 

 

 

 

 

 

 

 

Baseline $858 $970 $1,828

 1 (10) $860 $961 $1,820 $9 0.02% 86.9% 13.1% 2.1

 2 (15) $861 $956 $1,817 $14 0.05% 86.9% 13.1% 2.3 

1, 2,3 3 (20) $867 $943 $1,809 $22 2.53% 67.8% 29.7% 4.2

 4 (25) $926 $901 $1,827 $5 67.9% 0.03% 32.0% 14.9 

4 5 (30) $1,023 $862 $1,885 -$53 82.8% 0.03% 17.2% 21.0 

5 6 (36) $1,157 $810 $1,968 -$136 89.0% 0.00% 11.1% 24.7 

Table VI.7 Product Class 7, Side-by-Side Refrigerator-Freezers with Through-theDoor Ice Service: LCC and PBP Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $1,040 $1,252 $2,292 

 1 (10) $1,043 $1,228 $2,271 $22 0.00% 78.1% 21.9% 1.3

 2 (15) $1,048 $1,202 $2,249 $44 0.06% 51.7% 48.3% 2.1 

1 3 (20) $1,064 $1,167 $2,232 $62 4.27% 36.9% 58.8% 4.0 

2, 3 4 (25) $1,123 $1,114 $2,237 $57 41.5% 0.00% 58.6% 9.2 

4 5 (30) $1,251 $1,061 $2,312 -$18 69.7% 0.00% 30.3% 15.6 

5 6 (33) $1,351 $1,026 $2,377 -$83 79.5% 0.00% 20.5% 19.1 

Table VI.8 Product Class 9, Upright Freezers: LCC and PBP Results 

Efficiency Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Trial 

Level 

(% less than Discounted Average 

% of Households that 

Experience 

Median 

Standard 

Level 

baseline 

energy use) 

Installed 

Cost 

Operating 

Cost LCC 

Savings 

2009$ 

Net 

Cost 

No 

Impact 

Net 

Benefit

 Baseline $505 $1,098 $1,603

 1 (10) $516 $1,015 $1,530 $73 0.25% 19.9% 79.9% 1.9 

2 (15) $535 $964 $1,499 $105 5.02% 1.67% 93.3% 3.6 

191
 
 

 

 

 

 

 

 

 

1 3 (20) $552 $912 $1,464 $140 6.03% 0.59% 93.4% 4.0 

4 (25) $578 $859 $1,437 $166 9.58% 0.41% 90.0% 4.9 

2 5 (30) $602 $806 $1,408 $195 11.5% 0.22% 88.2% 5.3 

3 6 (35) $656 $758 $1,414 $189 21.9% 0.00% 78.1% 7.1 

4 7 (40) $731 $711 $1,442 $161 34.6% 0.00% 65.4% 9.3 

5 8 (44) $898 $673 $1,570 $33 59.7% 0.00% 40.3% 14.7 

Table VI.9 Product Class 10, Chest Freezer: LCC and PBP Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $367 $623 $990

 1 (10) $373 $573 $947 $43 0.20% 16.2% 83.6% 2.0

 2 (15) $383 $544 $927 $63 3.01% 1.18% 95.8% 3.2 

1 3 (20) $393 $515 $908 $82 5.14% 0.22% 94.6% 3.9 

2 4 (25) $436 $485 $921 $69 27.3% 0.22% 72.5% 8.1 

3 5 (30) $456 $455 $911 $79 29.1% 0.22% 70.6% 8.5 

4 6 (35) $510 $433 $943 $47 48.7% 0.00% 51.4% 12.1 

5 7 (41) $620 $395 $1,015 -$25 69.1% 0.00% 31.0% 17.8 

Table VI.10 Product Class 11, Compact Refrigerators: LCC and PBP Results 

Efficiency Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Trial 

Level 

(% less than Discounted Average 

% of Households that 

Experience 

Median 

Standard 

Level 

baseline 

energy use) 

Installed 

Cost 

Operating 

Cost LCC 

Savings 

2009$ 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $131 $167 $298

 1 (10) $137 $151 $287 $11 9.01% 1.60% 89.4% 1.8

 2 (15) $141 $143 $284 $14 13.6% 1.39% 85.0% 2.1 

1 3 (20) $146 $135 $281 $17 19.7% 1.39% 79.0% 2.5 

192
 
 

 

 

 

 

 

 

 

 

 

 

2 4 (25) $157 $127 $284 $14 36.8% 1.00% 62.3% 3.5 

3 5 (30) $166 $119 $285 $13 43.4% 0.92% 55.6% 3.9

 6 (35) $192 $112 $304 -$6 71.3% 0.00% 28.7% 6.0 

4 7 (40) $199 $104 $303 -$5 69.8% 0.00% 30.2% 5.8

 8 (45) $230 $97 $327 -$29 83.5% 0.00% 16.5% 7.7

 9 (50) $247 $89 $336 -$38 85.4% 0.00% 14.6% 8.0 

5 10 (59) $308 $75 $383 -$85 92.2% 0.00% 7.85% 10.4 

Table VI.11 Product Class 18, Compact Freezers: LCC and PBP Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $182 $200 $382 

1,2 1 (10) $189 $182 $370 $12 7.98% 4.66% 87.4% 2.2

 3 2 (15) $201 $172 $373 $9 33.9% 0.00% 66.1% 4.2

 3 (20) $242 $163 $404 -$22 87.4% 0.00% 12.6% 9.8 

4 4 (25) $252 $153 $405 -$23 84.5% 0.00% 15.5% 9.1

 5 (30) $282 $146 $428 -$46 92.4% 0.00% 7.6% 11.4

 6 (35) $289 $137 $426 -$44 89.6% 0.00% 10.4% 10.4 

5 7 (42) $360 $124 $484 -$102 96.7% 0.00% 3.3% 14.4 

Table VI.12 Product Class 3A-BI, Built-In All-Refrigerators: LCC and PBP Results 

Efficiency Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Trial 

Level 

(% less than Discounted Average 

% of Households that 

Experience 

Median 

Standard 

Level 

baseline 

energy use) 

Installed 

Cost 

Operating 

Cost LCC 

Savings 

2009$ 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $4,316 $828 $5,144 

1 1 (10) $4,323 $769 $5,091 $52 0.02% 22.6% 77.4% 1.4 

193
 
 

 

 

 

 

 

 

 

 

 

 

 

2 2 (15) $4,334 $739 $5,073 $71 0.94% 18.4% 80.7% 2.6 

3 3 (20) $4,452 $703 $5,155 -$11 61.5% 9.10% 29.4% 13.7 

4 4 (25) $4,625 $670 $5,295 -$151 91.0% 0.00% 9.02% 25.5 

5 5 (29) $4,756 $646 $5,402 -$258 95.0% 0.00% 5.01% 31.4 

Table VI.13 Product Class 5-BI, Built-In Bottom-Mount Refrigerator-Freezers: 

LCC and PBP Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $4,968 $960 $5,928 

1 1 (10) $4,972 $951 $5,923 $8 0.60% 87.1% 12.3% 3.8 

2,3 2 (15) $4,982 $957 $5,939 $2 7.03% 87.0% 5.94% 11.1

 3 (20) $5,013 $943 $5,955 -$14 27.4% 67.5% 5.09% 22.3 

4 4 (25) $5,168 $911 $6,079 -$138 98.0% 0.00% 2.03% 52.8 

5 5 (27) $5,257 $891 $6,148 -$207 98.5% 0.00% 1.50% 52.2 

Table VI.14 Product Class 7-BI, Built-In Side-by-Side Refrigerator-Freezers with 

Through-the-Door Ice Service: LCC and PBP Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $7,134 $1,494 $8,628 

1,2 1 (10) $7,147 $1,476 $8,623 $10 5.77% 78.5% 15.7% 7.5

 2 (15) $7,188 $1,459 $8,647 -$9 36.4% 52.4% 11.2% 17.6 

3,4 3 (20) $7,307 $1,423 $8,729 -$91 58.5% 37.2% 4.28% 31.0 

5 4 (22) $7,414 $1,405 $8,820 -$182 97.6% 0.00% 2.40% 50.4 

194
 
 

 

 

 

 

Table VI.15 Product Class 9-BI, Built-In Upright Freezers: LCC and PBP Results 

Trial 

Standard 

Level 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Life-Cycle Cost 2009$ Life-Cycle Cost Savings 

Payback 

Period 

(years) 

Installed 

Cost 

Discounted 

Operating 

Cost LCC 

Average 

Savings 

2009$ 

% of Households that 

Experience 

Median 

Net 

Cost 

No 

Impact 

Net 

Benefit 

Baseline $3,928 $1,071 $4,999 

1 1 (10) $3,943 $990 $4,933 $66 1.53% 19.9% 78.6% 2.9

 2 (15) $3,956 $942 $4,898 $101 3.99% 1.70% 94.3% 3.6 

2 3 (20) $4,042 $898 $4,940 $59 42.9% 0.57% 56.5% 10.7 

3,4 4 (25) $4,176 $847 $5,023 -$23 68.8% 0.49% 30.7% 17.8 

5 5 (27) $4,278 $822 $5,100 -$101 79.8% 0.27% 20.0% 22.6 

b. Consumer Subgroup Analysis 

As described in section IV.H, DOE determined the impact of the considered TSLs 

on low-income households and senior-only households. DOE did not estimate impacts for 

compact refrigeration products because the household sample sizes were not large 

enough to yield meaningful results. 

Table VI.16 through Table VI.18 compare the average LCC savings at each 

efficiency level for the two consumer subgroups with the average LCC savings for the 

entire sample for each representative product class. In general, the average LCC savings 

for low-income households and senior-only households at the considered efficiency 

levels are not substantially different from the average for all households. Chapter 11 of 

the final rule TSD presents the complete LCC and PBP results for the two subgroups. 

195
 
 

 

 

 

 

 

 

 

 

Table VI.16 Standard-Size Refrigerator-Freezers: Comparison of Average LCC 

Savings for Consumer Subgroups and All Households 

Efficiency 

Level 

(% less 

than 

baseline 

energy use) 

Top-Mount 

Refrigerator-Freezers 

Bottom-Mount 

Refrigerator-Freezers 

Side-by-Side 

Refrigerator-Freezers 

Product class 3 Product class 5 Product class 7 

Senior 

LowIncome All Senior LowIncome All Senior LowIncome All 

1 (10) $43 $49 $46 $9 $10 $9 $22 $23 $22 

2 (15) $64 $73 $69 $13 $15 $14 $42 $46 $44 

3 (20) $36 $48 $43 $21 $24 $22 $59 $64 $62 

4 (25) $31 $47 $41 -$1 $6 $5 $48 $56 $57 

5 (30) -$20 $0 -$7 -$63 -$52 -$54 -$31 -$23 -$18 

6 (36/36/33) -$105 -$81 -$89 -$151 -$136 -$137 -$100 -$91 -$85 

Table VI.17 Standard-Size Freezers: Comparison of Average LCC Savings for 

Consumer Subgroups and All Households 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Upright Freezers Chest Freezers 

Product class 9 Product class 10 

Senior 

LowIncome All Senior LowIncome All 

1 (10) $69 $69 $73 $45 $42 $43 

2 (15) $98 $98 $105 $66 $61 $63 

3 (20) $130 $129 $139 $86 $79 $82 

4 (25) $153 $153 $166 $74 $65 $68 

5 (30) $179 $179 $195 $85 $75 $79 

6 (35) $170 $170 $189 $54 $42 $47 

7 (40/41) $139 $139 $160 -$18 -$32 -$26 

196
 
 

 

 

 

 

 

8 (44) $8 $8 $32 

Table VI.18 Built-In Refrigeration Products: Comparison of Average LCC Savings 

for Consumer Subgroups and All Households 

Efficiency 

Level 

(% less than 

baseline 

energy use) 

Built-in All 

Refrigerators 

Built-in Bottom-Mount 

Refrigerator-Freezers 

Built-in Side-by-Side 

Refrigerator-Freezers Built-in Upright Freezers 

Product class 3A-BI Product class 5-BI 

Product class 

7-BI 

Product class 

9-BI 

Senior 

LowIncome All Senior LowIncome All Senior LowIncome All Senior LowIncome All 

1 (10) $48 $54 $52 $7 $8 $8 $8 $9 $10 $61 $61 $66 

2 (15) $65 $74 $71 $0 $2 $2 -$15 -$14 -$9 $93 $92 $101 

3 (20) -$25 -$14 -$12 -$19 -$17 -$15 -$107 -$109 -$92 $47 $46 $58 

4 

(25/25/22/25) -$170 -$155 -$152 -$148 -$141 -$139 -$199 -$201 -$183 -$39 -$41 -$24 

5 

(29/27/-/27) -$280 -$263 -$260 -$219 -$210 -$208 -$119 -$121 -$102 

c. Rebuttable Presumption Payback 

As discussed in section III.D.2, EPCA provides a rebuttable presumption that an 

energy conservation standard is economically justified if the increased purchase cost for a 

product that meets the standard is less than three times the value of the first-year energy 

savings resulting from the standard. In calculating a rebuttable presumption payback 

period for the considered standard levels, DOE used discrete values rather than 

distributions for input values, and, as required by EPCA, based the energy use calculation 

on the DOE test procedures for refrigeration products. As a result, DOE calculated a 

single rebuttable presumption payback value, and not a distribution of payback periods, 

for each efficiency level. Table VI.19 through Table VI.22 present the average rebuttable 

presumption payback periods for those efficiency levels where the increased purchase 

197
 
 

 

cost for a product that meets a standard at that level is less than three times the value of 

the first-year energy savings resulting from the standard. 

Table VI.19 Standard-Size Refrigerator-Freezers: Efficiency Levels With 

Rebuttable Payback Period Less Than Three Years 

Product Class 3: 

Top-Mount RefrigeratorFreezer 

Product Class 5: 

Bottom-Mount RefrigeratorFreezer 

Product Class 7: 

Side-by-Side Refrigerator-Freezer 

with TTD* 

Efficiency Level 

(% less than 

baseline energy use) 

PBP 

years 

Efficiency Level 

(% less than baseline 

energy use) 

PBP 

years 

Efficiency Level 

(% less than baseline 

energy use) 

PBP 

years 

1 (10) 2.4 1 (10) 2.1 1 (10) 1.4 

2 (15) 2.6 2 (15) 2.4 2 (15) 1.7

 3 (20) 2.9 

* Through-the-door ice service 

Table VI.20 Standard-Size Freezers: Efficiency Levels With Rebuttable Payback 

Period Less Than Three Years 

Product Class 9: 

Upright Freezer 

Product Class 10: 

Chest Freezer 

Efficiency Level 

(% less than baseline 

energy use) 

PBP 

years 

Efficiency Level 

(% less than baseline 

energy use) 

PBP 

years 

1 (10) 1.9 1 (10) 1.8

 2 (15) 2.7 

Table VI.21 Compact Refrigeration Products: Efficiency Levels With Rebuttable 

Payback Period Less Than Three Years 

Product Class 11: 

Compact Refrigerator 

Product Class 18: 

Compact Freezer 

Efficiency Level 

(% less than baseline energy 

use) 

PBP 

years 

Efficiency Level 

(% less than baseline energy 

use) 

PBP 

years 

1 (10) 1.8 1 (10) 2.0 

2 (15) 2.1 

3 (20) 2.7 

198
 
 

 

Table VI.22 Built-In Refrigeration Products: Efficiency Levels With Rebuttable 

Payback Period Less Than Three Years 

Product Class 3A-BI: 

Built-in AllRefrigerator 

Product Class 5-BI: 

Built-In Bottom-Mount 

Refrigerator-Freezer 

Product Class 7-BI: 

Built-In Side-by-Side 

Refrigerator-Freezer with 

TTD* 

Product Class 9-BI: 

Built-In Upright 

Freezer 

Efficiency 

Level 

(% less 

than 

baseline 

energy 

use) 

PBP 

years 

Efficiency 

Level 

(% less 

than 

baseline 

energy 

use) 

PBP 

years 

Efficiency 

Level 

(% less 

than 

baseline 

energy 

use) 

PBP 

years 

Efficiency 

Level 

(% less 

than 

baseline 

energy 

use) 

PBP 

years 

1 (10) 1.5 1 (10) 1 (10) 1 (10) 2.7 

2 (15) 2.6 

* Through-the-door ice service 

While DOE examined the rebuttable-presumption criterion, it considered whether 

the standard levels considered for today’s rule are economically justified through a more 

detailed analysis of the economic impacts of these levels pursuant to 42 U.S.C. 

6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE to definitively 

evaluate the economic justification for a potential standard level (thereby supporting or 

rebutting the results of any preliminary determination of economic justification). 

2. Economic Impacts on Manufacturers 

The NOPR MIA used changes in INPV to compare the financial impacts of 

different TSLs on manufacturers. 75 FR at 59537-59546 (September 27, 2010) 

(describing the MIA used by DOE in its analysis). DOE presented the industry impacts 

by the major product types (i.e., standard size refrigerator-freezers, standard size freezers, 

compact refrigerators and freezers, and built-in refrigeration products). DOE used the 

199
 
GRIM to compare the INPV of the base case (no new energy conservation standards) to 

that of each TSL for each product grouping. The INPV is the sum of all net cash flows 

discounted by the industry’s cost of capital (discount rate). The difference in INPV 

between the base case and the standards case is an estimate of the economic impacts that 

implementing that standard level would have on the entire industry. For today’s final 

rule, DOE continues to use the methodology presented in the NOPR (75 FR at 59519­

59526 (September 27, 2010)) and in section IV.I. The major methodology change DOE 

made for the final rule was incorporating long term product price trends into the analysis. 

Since the price trend for residential refrigeration products declines over the analysis 

period, the base case industry value is lower for all product groupings. Thus, 

incorporating price trends in the MIA increases the impacts on INPV due to standards. 

a. Cash-Flow Analysis Results 

The tables below depict the financial impacts on manufacturers (represented by 

changes in INPV) and the conversion costs DOE estimates manufacturers would incur at 

each TSL. DOE shows four sets of results, corresponding to the four sets of TSLs 

considered in this rulemaking. Each set of TSLs reflects the impacts on manufacturers of 

a certain group of product classes. 

Each set of results below shows two tables of INPV impacts: the first table 

reflects the lower (less severe) bound of impacts and the second represents the upper 

bound. To evaluate this range of cash-flow impacts on the residential refrigeration 

products industry, DOE modeled two different scenarios using different markup 

200
 
assumptions. These assumptions correspond to the bounds of a range of market responses 

that DOE anticipates could occur in the standards case (i.e. where amended energy 

conservation standards apply). Each scenario results in a unique set of cash flows and 

corresponding industry value at each TSL. 

To assess the lower (less severe) end of the range of potential impacts, DOE 

modeled the flat markup scenario. The flat markup scenario assumes that in the standards 

case manufacturers would be able to pass the higher production costs required for more 

efficient products on to their customers. Specifically, the industry would be able to 

maintain its average base-case gross margin, as a percentage of revenue, despite higher 

product costs. In general, the larger the product price increases, the less likely 

manufacturers are able to achieve the cash flow from operations calculated in this 

scenario because manufacturers would be less likely to be able to fully recoup these costs 

through larger price increases. 

Through its discussions with manufacturers, DOE found that overall profit is 

driven more by the bundling of product features, such as stainless steel exteriors, ice 

dispensers, and digital displays, than by energy efficiency characteristics. In other words, 

more efficient products command higher prices, but these prices are driven by the many 

other features that are also bundled with increased efficiency. However, the overall profit 

margin percentage does not vary widely even if the dollar profit per unit increases for 

products with these additional features. Manufacturers are skeptical that customers would 

accept higher prices for increased energy efficiency because it does not command higher 

201
 
 

margins in the current market. Under such a scenario, it follows that the large retailers 

that compose the relatively concentrated customer base of the industry would not accept 

manufacturers fully passing through the additional cost of improved efficiency because 

consumers would be wary of higher prices without additional features. Therefore, to 

assess the higher (more severe) end of the range of potential impacts, DOE modeled the 

preservation of operating profit markup scenario in which higher energy conservation 

standards result in lower manufacturer markups. This scenario models manufacturers’ 

concerns that the higher costs of more efficient technology would harm profitability if the 

full cost increases cannot be passed on. The scenario represents the upper end of the 

range of potential impacts on manufacturers because higher production costs erode profit 

margins and result in lower cash flows from operations. 

DOE used the main NIA shipment scenario for both the lower- and higher-bound 

MIA scenarios that were used to characterize the potential INPV impacts. The shipment 

forecast is an important driver of the INPV results below. The main NIA shipment 

scenario includes a price elasticity effect, meaning higher prices in the standards case 

result in lower shipments. Lower shipments also reduce industry revenue, and, in turn, 

INPV. 

i. Cash-Flow Analysis Results for Standard-Size Refrigerator-Freezers 

As part of its cash-flow analysis for standard-size refrigerator-freezers, DOE 

applied two different scenarios to project the impacts on manufacturers from standards at 

the various TSLs that DOE considered. The following tables provide those projected 

impacts under the flat-markup and preservation of operating profit markup scenarios. 

202
 
 

 

 

 

Table VI.23. Manufacturer Impact Analysis for Standard-Size RefrigeratorFreezers – Flat Markup Scenario 

Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 2,670.1 2,552.2 2,450.9 2,325.1 1,885.1 1,627.9 

Change in 

INPV 

(2009$ 

millions) (117.8) (219.2) (345.0) (784.9) (1,042.2) 

(%) -4.4% -8.2% -12.9% -29.4% -39.0% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 153 197 229 348 406 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 229 393 620 1,405 2,013 

Total 

Conversion 

Costs 

(2009$ 

millions) - 382 590 848 1,753 2,419 

Table VI.24. Manufacturer Impact Analysis for Standard-Size RefrigeratorFreezers – Preservation of Operating Profit Markup Scenario

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 2,670.1 2,417.5 2,274.2 2,089.4 1,360.8 828.6 

Change in 

INPV 

(2009$ 

millions) (252.6) (395.9) (580.7) (1,309.3) (1,841.5) 

(%) -9.5% -14.8% -21.7% -49.0% -69.0% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 153 197 229 348 406 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 229 393 620 1,405 2,013 

Total 

Conversion 

Costs 

(2009$ 

millions) - 382 590 848 1,753 2,419 

TSL 1 represents the current ENERGY STAR level for standard-size refrigeratorfreezers or a 20-percent reduction in measured energy consumption over the current 

203 
energy conservation standards for the analyzed standard-size top-mount product class 3, a 

20-perecent reduction for the analyzed standard-size bottom-mount product class 5, and a 

20-percent reduction for the analyzed standard-size side-by-side product class 7. At TSL 

1, DOE estimates impacts on INPV to range from -$117.8 million to -$252.6 million, or a 

change in INPV of -4.4 percent to -9.5 percent. At this TSL, industry free cash flow is 

estimated to decrease by approximately 71.8 percent to $51.5 million, compared to the 

base-case value of $182.8 million in the year leading up to the amended energy 

conservation standards. 

The INPV impacts at TSL 1 are relatively minor, in part because the vast majority 

of manufacturers produce ENERGY STAR units in significant volumes, particularly for 

product classes 5 and 7. Approximately 42 percent of product class 7 shipments and 47 

percent of product class 5 shipments currently meet this TSL. By contrast, the vast 

majority of product class 3 shipments are baseline units. Additionally, most of the design 

options DOE analyzed at this TSL are one-for-one component swaps, including more 

efficient compressors and brushless DC condenser and evaporator fan motors, which 

require only modest changes to the manufacturing process at TSL 1. As such, DOE 

estimated total product conversion costs of $153 million and capital conversion costs of 

$229 million. 

While substantial on a nominal basis, the total conversion costs are relatively low 

compared to the industry value of $2.7 billion. The total conversion costs at TSL 1 are 

mostly driven by the design options that manufacturers could use to improve the 

204
 
efficiency of the smaller-sized units of the product classes analyzed. For example, the 

analyzed design options for the 22-cubic foot product class 7 unit included a VIP in the 

freezer door, while the 26-cubic foot product class 7 unit only analyzed less costly 

component swaps. VIP implementation would require significant capital and product 

conversion costs because additional production steps are required to hold and bind each 

panel in its location before the product is foamed. Each additional step requires more 

equipment to lengthen production lines and, because of lower throughput, more 

production lines for each manufacturer to maintain similar shipment volumes. Some 

manufacturers have experience with VIPs, but DOE expects substantial engineering and 

testing resources would be required for their use in new platforms and/or at higher 

production volumes. 

Similarly, the 16-cubic foot product class 3 unit uses a variable speed compressor 

as a design option. While not a capital intensive solution, variable speed compressors 

would require substantial engineering time to integrate the complex component, 

especially if electronic control systems would also be required. Because these changes 

are more complex than the other analyzed design options, more than three-quarters of the 

conversion costs for TSL 1 are attributable to the use of the VIPs and variable speed 

compressors in the smaller-volume product class 7 and product class 3 units, respectively. 

The flat markup scenario shows slightly negative impacts at TSL 1, indicating 

that the outlays for conversion costs marginally outweigh any additional profit earned on 

incrementally higher variable costs. On a shipment-weighted basis, the average MPC for 

205
 
standard-size refrigerator-freezers increases by 10 percent at TSL 1 after standards. These 

small component cost changes are not significant enough to fully recoup these 

investments even if manufacturers earn additional profit on these costs, as the flat markup 

scenario assumes. Hence, there is a slight negative impact, even in the upper-bound 

scenario, at TSL 1. 

The efficiency requirements for product class 3 and product class 5 refrigeratorfreezers are the same at TSL 2 as TSL 1. However, the efficiency requirements for 

product class 7 increase to a 25-percent reduction in measured energy consumption from 

current energy conservation standards. DOE estimates the INPV impacts at TSL 2 range 

from -$219.2 million to -$395.9 million, or a change in INPV of -8.2 percent to -14.8 

percent. At this TSL, the industry cash flow is estimated to decrease by approximately 

113.9 percent to -$25.4 million, compared to the base-case value of $182.8 million in the 

year leading up to the amended energy conservation standard. 

The additional impacts at TSL 2 relative to TSL 1 result from the further 

improvements manufacturers must make to product class 7 refrigerator-freezers to 

achieve a 25-percent energy reduction, as very few shipments of product class 7 currently 

exceed the ENERGY STAR level. Specifically, for the 22-cubic foot products, the design 

options DOE analyzed include a variable speed compressor and a VIP in the freezer 

cabinet, instead of the door as in TSL 1. For the 26-cubic foot product class 7 unit, the 

design options analyzed include a VIP in the freezer door in addition to additional 

component swaps and the component swaps needed to meet TSL 1. Total conversion 

206
 
costs increase by $208 million compared to TSL 1, which is largely driven by the initial 

use of VIPs in the 26-cubic foot product class 7 unit. Besides these specific changes to 

side-by-side units, at TSL 2 most production lines of standard-size refrigerator-freezers 

do not use VIPs or other very costly components, which mitigates some of the disruption 

to current facilities. Consequently, the INPV impacts, while greater than at TSL 1, are 

still relatively moderate compared to the value of the industry as a whole. 

At TSL 2, the INPV in the flat markup is lower than at TSL 1, which means the 

additional conversion costs to add more VIPs leaves manufacturers worse off even if they 

can earn additional profit on these costly components. In the preservation of operating 

profit markup scenario, the industry earns no additional profit on this greater investment, 

lowering cash flow from operations in the standards case and resulting in greater INPV 

impacts. 

The efficiency requirements for product class 5 and product class 7 refrigeratorfreezers are the same at TSL 3 as TSL 2. However, the efficiency requirements for 

product class 3 increase to a 25-percent reduction in measured energy consumption from 

current energy conservation standards. TSL 3 represents a 25-percent reduction in 

measured energy consumption over the current energy conservation standards for both 

product class 3 and product class 7. In addition, TSL 3 represents a 20-percent reduction 

in measured energy consumption for product classes 1, 1A, and 2. DOE estimates the 

INPV impacts at TSL 3 to range from -$345.0 million to -$580.7 million, or a change in 

INPV of -12.9 percent to -21.7 percent. At this TSL, the industry cash flow is estimated 

207
 
to decrease by approximately 168.0 percent to -$124.3 million, compared to the base-case 

value of $182.8 million in the year leading up to the standards. 

The additional negative impacts on industry cash flow result from the changes to 

product class 3 refrigerator-freezers to reach a 25-percent reduction in energy use (sideby-side products met this efficiency level at TSL 2). Specifically, the design options DOE 

analyzed at TSL 3 for 16-cubic foot top-mount refrigerator-freezers included the use of 

VIPs for the first time (in the freezer cabinet), in addition to the component swaps 

discussed above. In total, DOE estimates product conversion costs of $229 million and 

capital conversion costs of $620 million at TSL 3. The high cost to purchase new 

production equipment and the large engineering effort to manufacture new platforms for 

these smaller-sized product class 3 units drive the vast majority of this additional $258 

million in conversion costs that DOE estimates manufacturers would incur at TSL 3. 

Because the smaller size top-mounted units account for a large percentage of total 

shipments, the production equipment necessary to implement new platforms for these 

products is costly. 

While production of units meeting TSL 3 is fairly limited, several manufacturers 

have introduced products that meet these efficiency levels in response to Federal 

production tax credits. This experience mitigates some of the product conversion costs by 

giving manufacturers some experience with the newer technologies. However, the more 

severe impacts at TSL 3, relative to TSL 2, are due to the incremental outlays for 

conversion costs to make the changes described above. In particular, any experience with 

208
 
VIPs on some products does not lower the substantial capital conversion necessary to 

purchase production equipment necessary to manufacture products that are substantially 

different from existing products. 

As mentioned above, the preservation of operating profit markup scenario 

assumes no additional profit is earned on the higher production costs. This assumption 

lowers profit margins as a percentage of revenue and leads to worse impacts on INPV. In 

the flat markup scenario, the impact of the investments is mitigated by the assumption 

that manufacturers can earn a similar profit margin as a percentage of revenues on their 

higher variable costs. At TSL 3, MPCs increase by an average of 16 percent after 

standards, leading to additional per-unit profit in this scenario. However, the magnitude 

of the conversion investments still leads to negative INPV impacts even if additional 

profit is earned on the incremental manufacturing costs. The lower industry shipments 

driven by the relative price elasticity assumption account for approximately $45 million 

of the impact in the flat markup scenario. 

TSL 4 represents a 30-percent reduction in measured energy consumption over 

the current energy conservation standards for product class 3, product class 5, and 

product class 7. DOE estimates the INPV impacts at TSL 4 to range from -$784.9 million 

to -$1,309.3 million, or a change in INPV of -29.4 percent to -49.0 percent. At this TSL, 

the industry cash flow is estimated to decrease by approximately a factor of 3.6 to ­

$469.3 million, compared to the base-case value of $182.8 million in the year leading up 

to the amended energy conservation standards. 

209
 
 

At TSL 4, significant changes to the manufacturing process are necessary for all 

refrigerator-freezers. A 30-percent reduction in energy consumption is the maximumefficiency top-mounted products available on the market;47 the maximum available sideby-side and bottom-mount only slightly exceed a 30-percent reduction. The design 

options DOE analyzed for all standard-size products—with the exception of the 25-cubic 

foot product class 5 unit—use multiple VIPs in the fresh food compartment, freezer 

doors, and cabinets to reach the 30-percent efficiency level. The design options also 

include the use of variable speed compressors for all units analyzed except the 21-cubic 

foot product class 3 unit. These product changes substantially increase the variable costs 

across nearly all platforms at this TSL. 

While products that meet the efficiency requirements of TSL 4 are not in 

widespread production, several manufacturers produce units at these efficiencies due to 

tax credit incentives. However, at TSL 4, most manufacturers expect to completely 

redesign existing production lines if the amended energy conservation standards were set 

at levels that necessitated these changes across most or all of their products. 

Manufacturers would need to purchase injection molding equipment, cabinet bending 

equipment, and other equipment for interior tooling as they would need to create new 

molds for these production lines. These changes drive DOE’s estimate of the large 

product and capital conversion costs at TSL 4 ($348 million and $1,405 million, 

respectively). The significant incremental investment relative to TSL 3 results, in large 

47 Throughout the document, the terms “max available” or “max-tech available” are intended to mean the 

maximum efficiency level of available products. 

210
 
part, from the design option of adding VIPs to the 21-cubic foot analyzed product class 3 

unit. This top-mounted refrigerator-freezer represents a substantial portion of the market 

and manufacturers would have to completely redesign these platforms. 

As a result of the large investment necessary to meet this TSL, some 

manufacturers could move production to lower-labor-costs countries to achieve cost 

savings for labor expenditures. (More information on employment impacts is provided in 

section IV.B.1.b.) In addition to the large capital conversion costs, the shipment-weighted 

average MPC increases by approximately 36 percent at TSL 4 after standards compared 

to the base case. However, the magnitude of the conversion costs at TSL 4 are so large 

that even if manufacturers can reap additional profit from these higher product costs (as 

in the flat markup scenario), they would still be substantially impacted, as shown by the 

negative INPV results in the flat markup scenario. Additionally, the 36-percent increase 

in MPC drives shipments lower due to the price elasticity. Lower industry volume from 

the decline in shipments accounts for a change in industry value of approximately 16 

percent in the flat markup scenario. The large, negative impact on INPV is even greater 

under the preservation of operating profit markup scenario due to the inability to pass on 

the higher costs of expensive design options such as variable speed compressors and 

VIPs. 

TSL 5 represents max tech for all standard-size refrigerator-freezers. The maxtech level corresponds to reductions in measured energy consumption compared to the 

current energy conservation standards for product class 3 (36 percent), product class 5 

211
 
(36 percent), and product class 7 (33 percent), respectively. DOE estimates the INPV 

impacts at TSL 5 to range from -$1,042.2 million to -$1,841.5 million, or a change in 

INPV of -39.0 percent to -69.0 percent. At this TSL, the industry cash flow is estimated 

to decrease by a factor of approximately 5.0 to -$727.5 million, compared to the basecase value of $182.8 million in the year leading up to the amended energy conservation 

standards. 

No products that meet TSL 5 are currently offered on the U.S. market. At TSL 5, 

the changes required to meet this TSL are similar to those at TSL 4, as complete 

redesigns of all platforms would be required. TSL 5 requires much more extensive use of 

VIPs, however. The higher conversion costs at TSL 5 are primarily due to the use of VIPs 

in additional locations in the door, cabinet and freezer, whereas at TSL 4 some of the 

analyzed design options of the larger-sized units included limited or no VIP use. This 

level would require manufacturers to further lengthen assembly lines and even modify or 

move their facilities outside of the United States. These factors drive the projected $2,419 

million conversion cost estimate at this TSL. As with TSL 4, at TSL 5 some 

manufacturers could elect to move production out of the U.S. to offset some of the 

additional product costs. At TSL 5, DOE estimates MPCs increase by approximately 58 

percent after standards compared to the base case. Similar to TSL 4, this substantially 

reduces shipments due to the price elasticity effect and exacerbates the industry impacts 

in both markup scenarios. 

212
 
 

As with other TSLs, the impact on INPV is mitigated under the flat markup 

scenario because manufacturers are able to fully pass on the large increase in MPC to 

consumers, thereby increasing manufacturers’ gross profit in absolute terms. However, 

even assuming manufacturers could earn the same gross margin percentage per unit on 

those higher costs, the capital and product conversion costs cause negative INPV impacts, 

as shown by the 39 percent decline in INPV in the flat markup scenario. This large 

impact even in the lower bound scenario demonstrates that the large conversion costs to 

redesign all existing platforms results in substantial harm. The result is predicted even if 

manufacturers earn a historical margin on these additional costs. Due to the extremely 

large cost increases at the max-tech level, it is less likely at TSL 5 than at other examined 

levels that manufacturers could fully pass through the increase in production costs. If 

margins are impacted, TSL 5 would result in a substantial INPV loss under this scenario. 

ii. Cash-Flow Analysis Results for Standard-Size Freezers 

213
 
 

 

 

 

 

As part of its cash-flow analysis for standard-size freezers, DOE applied two 

different scenarios to project the impacts on manufacturers from standards at the various 

TSLs that DOE considered. The following tables provide those projected impacts under 

the flat-markup and preservation of operating profit markup scenarios. 

Table VI.25. Manufacturer Impact Analysis for Standard-Size Freezers – Flat 

Markup Scenario

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 337.8 308.0 214.1 225.3 252.4 192.7 

Change in 

INPV 

(2009$ 

millions) (29.8) (123.7) (112.5) (85.4) (145.0) 

(%) -8.8% -36.6% -33.3% -25.3% -42.9% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 22 51 55 63 70 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 50 175 182 183 320 

Total 

Conversion 

Costs 

(2009$ 

millions) - 72 226 237 247 390 

Table VI.26. Manufacturer Impact Analysis for Standard-Size Freezers – 

Preservation of Operating Profit Markup Scenario

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 337.8 287.7 167.3 159.6 155.3 39.0 

Change in 

INPV 

(2009$ 

millions) (50.0) (170.5) (178.1) (182.4) (298.8) 

(%) -14.8% -50.5% -52.7% -54.0% -88.5% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 22 51 55 63 70 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 50 175 182 183 320 

Total 

Conversion 

Costs 

(2009$ 

millions) - 72 226 237 247 390 

214
 
TSL 1 represents a 20-percent reduction in measured energy use over the current 

energy conservation standards for the analyzed standard-size upright freezer product class 

9 and a 20-percent reduction for the analyzed standard-size chest freezer product class 10. 

DOE estimates the INPV impacts at TSL 1 to range from -$29.8 million to -$50.0 

million, or a change in INPV of -8.8 percent to -14.8 percent. At this TSL, the industry 

cash flow is estimated to decrease by approximately 111.2 percent to -$2.6 million, 

compared to the base-case value of $23.2 million in the year leading up to the amended 

energy conservation standards. 

While products meeting TSL 1 are currently produced only in limited volumes, 

the changes in the manufacturing process would not require completely new platforms to 

meet the energy requirements at this TSL. For most standard-size freezer platforms, the 

design options DOE analyzed include the use of brushless direct current (DC) evaporator 

fan motors and compressors with higher EERs. However, the design options to meet this 

efficiency level also include increasing door insulation thickness for all analyzed 

products except the 20-cubic foot product class 10 unit. Increasing door insulation 

thickness drives the majority of the conversion cost outlay DOE estimates manufacturers 

would incur at TSL 1. To increase door insulation thickness, manufacturers would need 

to purchase new tooling for their door assemblies. DOE estimates that these changes 

would result in product conversion costs of $22 million and capital conversion costs of 

$50 million at TSL 1. However, the conversion costs are somewhat mitigated at TSL 1 

because the design options analyzed would not change the production equipment for the 

cabinet. 

215
 
At TSL 1, variable costs increase by approximately 10 percent after standards 

relative to base case MPCs. The flat markup scenario shows less severe impacts because 

it assumes manufacturers can pass on these substantially higher product costs and 

maintain gross margin percentages. Additionally, the reduction in shipments due to the 

price elasticity has only a marginally negative effect at this TSL. The relatively large 

conversion costs decrease industry value under both markup scenarios and account for a 

substantial portion of the INPV impacts. This is especially the case if manufacturers are 

unable to earn any additional profit on the higher production costs (the preservation of 

operating profit scenario). 

TSL 2 represents a reduction in measured energy consumption over the current 

standards of 30 percent for product class 9 and 25 percent for product class 10. TSL 2 

also represents reductions for the other product classes as well -- product class 8 (upright 

freezers with manual defrost, 25 percent) and product class 10A (chest freezers with 

automatic defrost, 30 percent). DOE estimates the INPV impacts at TSL 2 to range from ­

$123.7 million to -$170.5 million, or a change in INPV of -36.6 percent to -50.5 percent. 

At this TSL, the industry cash flow is estimated to decrease by approximately a factor of 

3.6 to -$60.0 million, compared to the base-case value of $23.2 million in the year 

leading up to the amended energy conservation standards. 

The vast majority of the standard-size freezer market does not currently meet the 

efficiency requirements at TSL 2. DOE’s design options assume that, in addition to the 

216
 
component swaps noted above, manufacturers would increase the insulation thickness of 

both the door and cabinet. As a result, product redesigns are expected across most 

platforms, which could substantially disrupt current manufacturing processes. These 

changes account for the majority of DOE’s estimates for total product conversion costs of 

$51 million and capital conversion costs of $175 million, an increase over TSL 1 of $29 

million and $125 million, respectively. The magnitude of the investments, relative to the 

industry value, results in severe INPV impacts. Even if manufacturers are able to pass on 

the estimated 24-percent increase in product costs onto their customers after standards, 

the large product and capital conversion costs resulting from increased insulation 

thickness decrease INPV. If manufacturers are not able to pass on these costs, as shown 

by the preservation of operating profit scenario, INPV impacts are projected to be severe. 

TSL 3 represents a 35-percent reduction in measured energy use over the current 

energy conservation standards for product class 9 and a 30-percent reduction for product 

class 10. DOE estimates the INPV impacts at TSL 3 to range from -$112.5 million to ­

$178.1 million, or a change in INPV of -33.3 percent to -52.7 percent. At this TSL, the 

industry cash flow is estimated to decrease by a factor of approximately 3.7 to -$63.8 

million, compared to the base-case value of $23.2 million in the year leading up to the 

amended energy conservation standards. 

The efficiency requirements at TSL 3 are more stringent than the max available 

products in the market for product class 9 and product class 10. The impacts at TSL 3 are 

similar to those at TSL 2 because the design options analyzed by DOE already required 

217
 
platform redesigns at TSL 2. However, the additional design options analyzed at TSL 3 

also include a variable speed compressor in the 14-cubic foot product class 9 unit and 

VIPs in the bottom wall of the 20-cubic foot product class 10 unit. These design options 

substantially increase the variable costs associated with these products but do not greatly 

change the product and capital conversion costs. DOE estimates that under TSL 3, the 

average MPC of a standard-size freezer is roughly 34 percent higher after standards than 

in the base case, leading to a 9-percent drop in shipments from the price elasticity 

assumption for 2014 alone. 

The impacts at TSL 3 under the flat markup scenario become less severe than at 

TSL 2 because the scenario assumes manufacturers can fully pass on the added cost to 

consumers, while investments do not significantly increase from TSL 2 to TSL 3. 

However, under the preservation of operating profit markup scenario, manufacturers do 

not receive any extra profit on units of higher cost, resulting in worse INPV impacts at 

TSL 3 than at TSL 2. 

TSL 4 represents a 40-percent reduction in measured energy use over the current 

energy conservation standards for product class 9 and a 35-percent reduction for product 

class 10. DOE estimates the INPV impacts at TSL 4 to range from -$85.4 million to ­

$182.4 million, or a change in INPV of -25.3 percent to -54.0 percent. At this TSL, the 

industry cash flow is estimated to decrease by a factor of approximately 3.9 to -$66.5 

million, compared to the base-case value of $23.2 million in the year leading up to the 

amended energy conservation standards. 

218
 
At TSL 4, the design options DOE analyzed include the addition of a variable 

speed compressor for the 20-cubic foot product class 9 unit, the 15-cubic foot product 

class 10 unit, and the 20-cubic foot product class 10 unit. For the 14-cubic foot product 

class 9 unit, the design options analyzed were even thicker wall cabinet insulation and the 

implementation of VIPs. 

The relative impacts at TSL 4 are also caused by the incremental MPCs compared 

to the conversion costs to implement these design options. Outlays for conversion costs 

increase only slightly at TSL 4 (by 4 percent, compared to TSL 3) while variable costs 

increase substantially (by approximately 52 percent after standards compared to the 

baseline) due to the addition of variable speed compressors and VIPs. Because 

manufacturers earn incrementally more profit on each unit at TSL 4 compared to TSL 3 

in the flat markup scenario—without substantial changes to conversion costs—further 

declines in industry value, though still substantial, are mitigated in this scenario. 

However, manufacturers expressed skepticism that such large cost increases could be 

passed on. This view is reflected by the severely negative results in the preservation of 

operating profit scenario. 

TSL 5 represents max tech for the standard-size freezer product classes. This TSL 

reflects a 44-percent reduction in measured energy use for product class 9 and a 41­

percent reduction for product class 10. DOE estimates the INPV impacts at TSL 5 to 

range from -$145.0 million to -$298.8 million, or a change in INPV of -42.9 percent to ­

219
 
88.5 percent. At this TSL, the industry cash flow is estimated to decrease by a factor of 

approximately 6.3 to -$122.8 million, compared to the base-case value of $23.2 million in 

the year leading up to the amended energy conservation standards. 

To achieve the max-tech level at TSL 5, DOE analyzed design options that 

include the widespread implementation of multiple VIPs on all standard-size freezers, in 

addition to the use of more efficient components and thicker insulation already necessary 

to achieve the efficiency requirements at TSL 4. DOE estimated that TSL 5 would 

require product and capital conversion costs of $70 million and $320 million, 

respectively. These large conversion costs result from the changes associated with 

multiple VIP implementation and wall thickness increases. In addition, DOE estimates 

that product costs would almost double base-case MPCs after standards, driven by the use 

of variable speed compressors and VIPs in the doors and cabinet of all product lines. As a 

result, INPV decreases substantially from TSL 4 to TSL 5. 

iii. Cash-Flow Analysis Results for Compact Refrigeration Products 

220
 
 

 

As part of its cash-flow analysis for compact refrigeration products, DOE applied 

two different scenarios to project the impacts on manufacturers from standards at the 

various TSLs that DOE considered. The following tables provide those projected 

impacts under the flat-markup and preservation of operating profit markup scenarios. 

Table VI.27. Manufacturer Impact Analysis for Compact Refrigeration Products – 

Flat Markup Scenario 

Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 169.4 152.8 133.3 106.5 127.9 14.5 

Change in 

INPV 

(2009$ 

millions) (16.6) (36.2) (62.9) (41.5) (154.9) 

(%) -9.8% -21.4% -37.1% -24.5% -91.4% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 15 35 41 48 67 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 24 46 76 71 220 

Total 

Conversion 

Costs 

(2009$ 

millions) - 39 80 118 119 287 

221
 
 

 

Table VI.28. Manufacturer Impact Analysis for Compact Refrigeration Products – 

Preservation of Operating Profit Markup Scenario

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 169.4 141.6 110.8 80.1 76.6 (73.2) 

Change in 

INPV 

(2009$ 

millions) (27.8) (58.7) (89.3) (92.8) (242.6) 

(%) -16.4% -34.6% -52.7% -54.8% -143.2% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 15 35 41 48 67 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 24 46 76 71 220 

Total 

Conversion 

Costs 

(2009$ 

millions) - 39 80 118 119 287 

TSL 1 represents a 20-percent reduction in measured energy use over the current 

energy conservation standards for compact refrigerators and refrigerator-freezers (product 

class 11) and a 10-percent reduction for compact freezers (product class 18) analyzed by 

DOE. DOE estimates the INPV impacts at TSL 1 to range from -$16.6 million to -$27.8 

million, or a change in INPV of -9.8 percent to -16.4 percent. At this TSL, industry cash 

flow is estimated to decrease by approximately 125.1 percent to -$2.7 million, compared 

to the base-case value of $10.7 million in the year leading up to the amended energy 

conservation standards. A small percentage of product class 18 shipments currently meet 

this TSL, but most product class 11 shipments are baseline units. 

The design options analyzed by DOE at TSL 1 assumed that more significant 

changes in the manufacturing process would be required for product class 11, while 

product class 18 would only require increased compressor efficiency. For product class 

11, DOE analyzed several design options that represent component changes, such as a 

222
 
more efficient compressor and increased heat exchanger area, which do not have a 

significant impact on consumer prices or conversion costs. However, DOE also analyzed 

increasing door insulation thickness for product class 11, which drives the bulk of the 

estimated $15 million and $24 million outlays for product conversion and capital 

conversion costs, respectively. As described for standard-size refrigerator-freezers and 

standard-size freezers, increasing insulation thickness requires manufacturers to invest in 

injection molding equipment and other equipment for interior tooling to manufacture 

products with different door dimensions. The overall impacts at TSL 1 are relatively 

moderate because the conversion costs are still small compared to the industry value of 

$169.4 million. 

The higher production costs at TSL 1 do not have a substantial impact on INPV at 

TSL 1. The MPC of compact refrigeration products on a shipment-weighted basis 

increases 11 percent over the base case at TSL 1 after standards. The combined INPV 

impacts are greater under the preservation of operating profit scenario since 

manufacturers cannot pass on any of the added cost to consumers under that scenario, 

resulting in lower cash flows from operations. However, because production costs do not 

greatly increase at TSL 1, the impacts on INPV are relatively low under this scenario as 

well. 

TSL 2 represents a 25-percent reduction in measured energy use over the current 

energy conservation standards for product class 11 and a 10-percent reduction for product 

class 18. TSL 2 also represents a 15-percent reduction in measured energy consumption 

223
 
for the analyzed product classes 13, 13I, 15, and 15I, and a 20-percent reduction for the 

unanalyzed product classes 14 and 14I. DOE estimates the INPV impacts at TSL 2 to 

range from -$36.2 million to -$58.7 million, or a change in INPV of -21.4 percent to ­

34.6 percent. At this TSL, the industry cash flow is estimated to decrease by 

approximately 254.9 percent to -$16.6 million, compared to the base-case value of $10.7 

million in the year leading up to the amended energy conservation standards. 

At TSL 2, further changes are required for product class 11. In addition to 

component swaps, the design options analyzed by DOE include thicker cabinet 

insulation. As discussed for TSL 1, increasing insulation thickness significantly impacts 

product and capital conversion costs, but much more so when adding insulation to the 

cabinet (as opposed to the door). To increase the insulation thickness of the cabinet, 

manufacturers must replace virtually all stamping equipment, which greatly increases the 

capital conversion costs. Additionally, DOE analyzed the use of isobutane refrigerant as a 

design option for the 4-cubic foot product class 11 unit. At TSL 2, a substantial portion of 

the investment to reach TSL 2 would likely be for training service technicians to handle 

this volatile refrigerant. As a result of thicker cabinet insulation and conversion to 

isobutane, product conversion and capital conversion costs roughly double at TSL 2 (to 

$35 million for product conversion costs and $46 million for capital conversion costs). 

The shipment-weighted MPC increased 22 percent at TSL 2 after standards compared to 

baseline costs, which also contributed to the more severe impacts projected under the 

preservation of operation profit scenario if manufacturers do not earn additional profit on 

these higher costs. 

224
 
TSL 3 represents a 30-percent reduction in measured energy consumption over 

the current energy conservation standards for product class 11 and a 15-percent reduction 

for product class 18. DOE estimates the INPV impacts at TSL 3 to range from -$62.9 

million to -$89.3 million, or a change in INPV of --37.1 percent to -52.7 percent. At this 

TSL, the industry cash flow is estimated to decrease by a factor of approximately 3.9 to ­

$30.6 million, compared to the base-case value of $10.7 million in the year leading up to 

the amended energy conservation standards. 

At TSL 3, the design options analyzed for both product class 18 units include 

thicker door insulation, which further increases the capital conversion costs over TSL 1 

and TSL 2, where this was not analyzed as a design option. The additional impacts at 

TSL 3 are also due to more stringent requirements for product class 11. A 30-percent 

reduction for product class 11 is greater than the most efficient units on the market today. 

For both analyzed sizes of product class 11, DOE analyzed the design option of thicker 

insulation in the cabinet for both units analyzed. The net effect is a large increase in 

conversion costs due to the much higher cost of the equipment necessary to manufacture 

the cabinet. At TSL 3, DOE estimated total product conversion costs of $41 million and 

capital conversion costs of $76 million, a 46 percent total increase in conversion costs 

over TSL 2. The effect of the design changes at TSL 3 on shipment-weighted unit cost is 

a 27-percent increase over the average baseline MPC after standards. The magnitude of 

the investments relative to the industry value leads to significant impacts, although they 

225
 
 

are moderated somewhat in the flat markup because manufacturers earn additional profit 

on the investments. 

TSL 4 represents a 40-percent reduction in measured energy use over the current 

energy conservation standards for product class 11 and a 25-percent reduction for product 

class 18. DOE estimates the INPV impacts at TSL 4 to range from -$41.5 million to ­

$92.8 million, or a change in INPV of -24.5 percent to -54.8 percent. At this TSL, the 

industry cash flow is estimated to decrease by a factor of approximately 3.9 to -$30.5 

million, compared to the base-case value of $10.7 million in the year leading up to the 

amended energy conservation standards. 

The design options analyzed at TSL 4 would also severely disrupt current 

manufacturing processes. For the 1.7-cubic foot product class 11 unit, DOE analyzed a 

variable speed compressor and isobutane refrigerant as design options. For the 4-cubic 

foot product class 11 unit and the 7-cubic foot product class 18 unit, DOE analyzed 

thicker insulation in the cabinets. For 3.4-cubic foot product class 18 unit, DOE analyzed 

both an increase to cabinet insulation thickness and VIPs in the bottom wall as design 

options. Although increasing insulation thickness, converting to isobutane, and 

implementing VIPs all would necessitate large conversion costs, capital conversion costs 

decrease slightly from TSL 3 to TSL 4 because of the removal of all previous design 

options in the 1.7-cubic foot unit. In other words, the design options analyzed for this unit 

cause less substantial changes to existing production equipment, but would also require a 

large investment by manufacturers to train service technicians to deal with the refrigerant. 

226
 
Because this task would require a large outlay for product conversion costs, total 

conversion costs are roughly the same at TSL 3 and TSL 4. Adding a variable speed 

compressor in the smaller product class 11 unit analyzed also has a substantial impact on 

unit price because of its high component cost. At TSL 4, the shipment-weighted MPC is 

60-percent higher than the baseline MPC after standards. These cost increases are 

projected to cause a 16-percent decrease in shipments at TSL 4 in 2014 alone. Over time, 

this decline significantly contributes to the negative impacts on INPV in both markup 

scenarios. 

The large conversion costs and higher prices leading to lower shipments cause a 

decrease in INPV from TSL 3 to TSL 4 under the preservation of operating profit markup 

scenario (since this scenario assumes higher production costs are not passed on to 

consumers). However, under the flat markup scenario, manufacturers are able to earn 

additional profit on the new high-cost components such as variable speed compressors, 

resulting in an increase in INPV from TSL 3 to TSL 4. 

TSL 5 represents max tech for both product classes 11 and 18. The max-tech level 

corresponds to a 59-percent and 42-percent reduction in measured energy use for product 

class 11 and product class 18, respectively. DOE estimates the INPV impacts at TSL 5 to 

range from -$154.9 million to -$242.6 million, or a change in INPV of -91.4 percent to ­

143.2 percent. At this TSL, the industry cash flow is estimated to decrease approximately 

ten-fold to -$97.6 million, compared to the base-case value of $10.7 million in the year 

leading up to the amended energy conservation standards. 

227
 
The design options DOE analyzed include the use of VIPs for all analyzed 

product class 11 and 18 units to reach max-tech efficiency levels. Additionally, the 

design options analyzed for some products also included other costly changes. For the 

1.7-cubic foot product class 11 unit, the design options analyzed included multiple VIPs, 

a larger heat exchanger, and thicker insulation. The design options analyzed for the 4­

cubic foot product class 11 unit also included a variable speed compressor and thicker 

insulation. For product class 18, DOE assumed that manufacturers would remove the 

design options necessary to meet TSLs 1 through 4 and add a variable speed compressor 

and thicker insulation for both analyzed products. These significant changes greatly 

increase the investment required to manufacture standards-compliant products. DOE 

estimated that product conversion costs would be $67 million at TSL 5, an increase of 

almost 40 percent over TSL 4. DOE also estimated that capital conversion costs would be 

$220 million, a more than three-fold increase over TSL 4. This drastic increase in 

conversion costs demonstrates the significant investments required by implementing 

widespread use of VIPs and increasing wall thickness. 

At TSL 5, the shipment-weighted MPC increases by over 150 percent over the 

baseline after standards due to the high material costs of VIPs and variable speed 

compressors. These large jumps cause shipments to decrease by 42 percent due to the 

price elasticity in 2014 alone. As a result of lower industry shipments and extremely high 

conversion costs, INPV decreases substantially from TSL 4 to TSL 5 and becomes 

228
 
 

 

negative under the preservation of operating profit scenario, which indicates the industry 

loses more than its base-case value in the standards case under this scenario. 

iv. Cash-Flow Analysis Results for Built-In Refrigeration Products 

As part of its cash-flow analysis for built-in refrigeration products, DOE applied 

two different scenarios to project the impacts on manufacturers from standards at the 

various TSLs that DOE considered. The following tables provide those projected 

impacts under the flat-markup and preservation of operating profit markup scenarios. 

Table VI.29. Manufacturer Impact Analysis for Built-In Refrigeration Products – 

Flat Markup Scenario 

Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 554.1 502.2 499.0 486.1 471.2 464.2 

Change in 

INPV 

(2009$ 

millions) (51.9) (55.1) (68.0) (82.9) (89.9) 

(%) -9.4% -9.9% -12.3% -15.0% -16.2% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 41 51 65 75 87 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 40 38 55 74 84 

Total 

Conversion 

Costs 

(2009$ 

millions) - 81 89 119 149 171 

229
 
 

 

Table VI.30. Manufacturer Impact Analysis for Built-In Refrigeration Products – 

Preservation of Operating Profit Markup Scenario

 Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 

INPV (2009$ 

millions) 554.1 501.5 497.6 477.0 456.5 442.0 

Change in 

INPV 

(2009$ 

millions) (52.6) (56.5) (77.2) (97.6) (112.1) 

(%) -9.5% -10.2% -13.9% -17.6% -20.2% 

Product 

Conversion 

Costs 

(2009$ 

millions) - 41 51 65 75 87 

Capital 

Conversion 

Costs 

(2009$ 

millions) - 40 38 55 74 84 

Total 

Conversion 

Costs 

(2009$ 

millions) - 81 89 119 149 171 

TSL 1 represents a 10-percent reduction in measured energy use over the current 

energy conservation standards for the analyzed built-in all-refrigerator product class 3ABI, the analyzed built-in bottom-mount product class 5-BI, the analyzed built-in side-byside product class 7-BI, and for the analyzed built-in freezer product class 9-BI. DOE 

estimates the INPV impacts at TSL 1 to range from -$51.9 million to -$52.6 million, or a 

change in INPV of -9.4 percent to -9.5 percent. At this TSL, the industry cash flow is 

estimated to decrease by approximately 70.7 percent to $11.0 million, compared to the 

base-case value of $37.5 million in the year leading up to the amended energy 

conservation standards. 

At TSL 1, the design options that DOE analyzed result in moderate changes in the 

manufacturing process for built-in refrigeration products. For product classes 3A-BI and 

9-BI, the design options that DOE analyzed to reach TSL 1 included the use of more 

efficient components that do not require significant changes to the manufacturing 

230
 
process. However, for product class 5-BI and product class 7-BI, the design options DOE 

analyzed also include the use of VIPs in the freezer door. While these components add to 

the overall costs of production, the added costs represent a small percentage of the total 

cost of a built-in refrigeration product. These cost deltas are low compared to the overall 

cost of the products and result in small impacts even if no additional profit is earned on 

the incremental MPCs. The estimated product conversion costs for all built-in 

refrigeration products at TSL 1 are $41 million and the estimated capital conversion costs 

are $40 million. The implementation of VIPs represents a substantial part of the 

conversion costs, but several built-in refrigeration manufacturers have products that use 

similar technology, which helps to mitigate some of the product conversion costs that 

would be required to design products from the ground up. 

TSL 2 represents a 15-percent reduction in measured energy use for product class 

3A-BI and product class 5-BI. For product classes 7-BI and 9-BI, TSL 2 represents a 

reduction of 10 percent and 20 percent, respectively. DOE estimates the INPV impacts at 

TSL 2 to range from -$55.1 million to -$56.5 million, or a change in INPV of -9.9 

percent to -10.2 percent. At this TSL, the industry cash flow is estimated to decrease by 

approximately 75.2 percent to $9.3 million, compared to the base-case value of $37.5 

million in the year leading up to the amended energy conservation standards. 

The efficiency requirements for product class 7-BI refrigerator-freezers do not 

change from TSL 1 to TSL 2, but the efficiency requirements for all other analyzed builtin product classes increase. The design options that DOE analyzes at TSL 2 for product 

231
 
classes 3A-BI and 7-BI still only include component swaps to reach a 15-percent 

efficiency improvement. Product class 5-BI uses a variable speed compressor in the 

freezer with a brushless DC condenser fan motor, but no longer use the VIPs used to 

reach TSL 1. The design options analyzed for product class 9-BI include a brushless DC 

evaporator and condenser fan motor, a larger condenser, a variable speed compressor, 

and a VIP in the upper door. Because product class 5-BI no longer uses VIPs and fewer 

changes to existing products are necessary, the overall impact is a slight decrease in 

capital conversion costs from $40 million at TSL 1 to $38 million at TSL 2. Product 

conversion costs increase to $51 million at TSL 2 because additional engineering time 

would be required to implement the additional component changes. However, because 

the complexity of the changes to the products and production facilities are similar at TSL 

1 and TSL 2, there is only a small decrease in INPV from TSL 1 to TSL 2. 

TSL 3 represents a 20-percent reduction in measured energy use for product class 

3A-BI and product class 7-BI. For product classes 5-BI and 9-BI, TSL 3 represents a 

reduction of 15 percent and 25 percent, respectively. DOE estimates the INPV impacts at 

TSL 3 to range from -$68.0 million to -$77.2 million, or a change in INPV of -12.3 

percent to -13.9 percent. At this TSL, the industry cash flow is estimated to decrease by 

approximately 102.9 percent to -$1.1 million, compared to the base-case value of $37.5 

million in the year leading up to the amended energy conservation standards. 

The efficiency requirements for product class 5-BI do not change from TSL 2 to 

TSL 3. However, the design options for all other built-in refrigeration products at TSL 3 

232
 
include the implementation of VIPs. The widespread implementation of VIPs increases 

product and capital conversion costs, which are estimated to be $65 million and $55 

million at TSL 3, respectively. Substantial changes to existing production facilities would 

be required to manufacture products that meet the required efficiencies at TSL 3. Most of 

the capital conversion costs involve purchasing new production equipment and would 

result in high stranded assets. The extensive changes that manufacturers would be 

required to make to existing facilities and the projected erosion of profitability if the 

additional production cost of implementing VIPs does not yield additional profit result in 

a projected decrease in INPV from TSL 3 to TSL 4. However, the industry value is high 

relative to the required capital conversion costs and the cost of the additional VIP panels 

is relatively small compared to the overall cost of the products, which helps to mitigate 

some of the negative impacts caused by these changes. 

TSL 4 represents a 25-percent reduction in measured energy use over the current 

energy conservation standards for the following product classes: 3A-BI, 5-BI, and 9-BI. 

For product class 7-BI, TSL 4 represents a 20-percent reduction in measured energy use 

from current energy conservation standards. DOE estimates the INPV impacts at TSL 4 

to range from -$82.9 million to -$97.6 million, or a change in INPV of -15.0 percent to ­

17.6 percent. At this TSL, the industry cash flow is estimated to decrease by 

approximately 130.3 percent to -$11.4 million, compared to the base-case value of $37.5 

million in the year leading up to the amended energy conservation standards. 

233
 
The efficiency requirements for product class 7-BI do not change from TSL 3 to 

TSL 4. The design options for the other built-in refrigeration products all include the 

addition of more VIPs to reach TSL 4. The design options analyzed for product classes 

3A-BI and 5-BI also include using a variable speed compressor. The complexity of 

implementing multiple component swaps and the additional production equipment 

necessary to use additional VIPs increases both the product and capital conversion costs. 

These costs are estimated to be $75 million and $74 million at TSL 4, respectively, and 

result in a decrease in INPV from TSL 3 to TSL 4. 

TSL 5 represents max tech for the four built-in product classes. This TSL 

represents a reduction in measured energy use of 29 percent, 27 percent, 22 percent, and 

27 percent, respectively, for product classes 3A-BI, 5-BI, 7-BI, and 9-BI. DOE estimates 

the INPV impacts at TSL 5 to range from -$89.9 million to -$112.1 million, or a change 

in INPV of -16.2 percent to -20.2 percent. At this TSL, the industry cash flow is 

estimated to decrease by approximately 149.5 percent to -$18.6 million, compared to the 

base-case value of $37.5 million in the year leading up to the amended energy 

conservation standards. 

The design options analyzed by DOE include the widespread use of VIPs to 

achieve the max-tech efficiency levels at TSL 5. Additionally, product class 3A-BI uses 

multiple variable speed compressors. Since the implementation of VIPs is both research 

and capital intensive, product and capital conversion costs increase to $87 million and 

$84 million, respectively. The complexity of implementing multiple component swaps 

234
 
and the additional production equipment necessary to use additional VIPs increases both 

the product and capital costs. 

b. Impacts on Employment 

DOE quantitatively assessed the impacts of potential amended energy 

conservation standards on employment. DOE used the GRIM to estimate the domestic 

labor expenditures and number of domestic production workers in the base case and at 

each TSL from 2010 to 2043. DOE used statistical data from the most recent U.S. Census 

Bureau’s 2007 Economic Census, 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 involved with the 

manufacture 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. 

In each GRIM, DOE used the labor content of each product and the 

manufacturing production costs from the engineering analysis to estimate the annual 

labor expenditures in the residential refrigeration product industry. DOE used Census 

data and interviews with manufacturers to estimate the portion of the total labor 

expenditures that is attributable to U.S. (i.e., domestic) labor. 

The production worker estimates in this section only cover workers up to the linesupervisor level who are directly involved in fabricating and assembling a product within 

an Original Equipment Manufacturer (OEM) facility. Workers performing services that 

235
 
are closely associated with production operations, such as material handing with a 

forklift, are also included as production labor. DOE’s estimates only account for 

production workers who manufacture the specific products covered by this rulemaking. 

For example, a worker on a wine cooler line would not be included with the estimate of 

the number of residential refrigeration workers. 

The employment impacts shown in Table VI.31 through Table VI.33 represent the 

potential production employment that could result following amended energy 

conservation standards. The upper end of the results in these tables estimates the 

maximum change in the number of production workers after amended energy 

conservation standards must be met. The upper end of the results assumes manufacturers 

would continue to produce the same scope of covered products in the same production 

facilities. The upper end of the range also assumes that domestic production does not 

shift to lower-labor-cost countries. Because there is a real risk of manufacturers 

evaluating sourcing decisions in response to amended energy conservation standards, the 

lower end of the range of employment results in Table VI.31 through Table VI.33 

includes the estimated total number of U.S. production workers in the industry who could 

lose their jobs if all existing production were moved outside of the U.S. While the results 

present a range of employment impacts following the compliance date of amended 

energy conservation standards, the discussion below also includes a qualitative discussion 

of the likelihood of negative employment impacts at the various TSLs. Finally, the 

employment impacts shown are independent of the employment impacts from the broader 

236
 
 

 

 

U.S. economy, which are documented in chapter 13, Employment Impact Analysis, of the 

final rule TSD. 

i. Standard-Size Refrigerator-Freezer Employment Impacts 

Using the GRIM, DOE estimates that, in the absence of amended energy 

conservation standards, there would be 7,351 domestic production workers involved in 

manufacturing standard-size refrigerator-freezers in 2014. Using 2007 Census Bureau 

data and interviews with manufacturers, DOE estimates that approximately 42 percent of 

standard-size refrigerator-freezers sold in the United States are manufactured 

domestically. Table VI.31 shows the range of the impacts of potential amended energy 

conservation standards on U.S. production workers in the standard-size refrigeratorfreezer market. 

Table VI.31. Potential Changes in the Total Number of Domestic Standard-Size 

Refrigerator-Freezer Production Workers in 2014 

Trial Standard Level 

Base Case 1 2 3 4 5 

Total Number of Domestic 

Production Workers in 2014 

(without changes in 

production locations) 

7,351 7,164 7,127 7,172 7,109 6,981 

Potential Changes in 

Domestic Production 

Workers in 2014* 

- (187) -

(7,351) 

(224) ­

(7,351) 

(179) ­

(7,351) 

(242) ­

(7,351) 

(307) ­

(7,351) 

*DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative 

numbers. 

All examined TSLs show relatively minor impacts on domestic employment 

levels at the lower end of the range. Most of the design options used in the engineering 

analysis involve the swapping of components in baseline units with more efficient parts 

237
 
for top-mounted, side-by-side, and bottom-mounted refrigerator-freezers. These 

component swaps for these design options add primarily material costs and do not greatly 

impact the labor content of the baseline products. The relatively small decreases in 

domestic production employment for the lower end of the range of the employment 

impacts arise from higher product prices lowering shipments the year the standard 

becomes effective. At these higher TSLs, the effects of lower shipments more than offset 

the additional product labor that is required to manufacture products that use VIP panels. 

During interviews, manufacturers indicated that their domestic employment levels 

could be impacted under two scenarios: (1) the widespread adoption of VIPs or (2) 

significant capital conversion costs that would force them to consider non-domestic 

manufacturing locations once the compliance date for the amended energy conservation 

standards arrive. The widespread adoption of VIPs would increase the labor content of 

today’s products. The labor content of products with VIPs increases because of the extra 

handling steps that would be required to ensure that VIPs are not damaged during 

production. Because of the competitive nature of the industry, manufacturers believed the 

extra labor costs could force them to move their remaining domestic production to lower 

labor cost countries to take advantage of the cheaper labor they offer. 

Manufacturers also indicated that large conversion costs would likely force them 

to consider investing in lower-labor-cost countries. For most product categories, there is a 

range of efficiency levels that can be met with relatively low-cost components (as 

analyzed in the engineering analysis). Beyond these levels, manufacturers would need to 

238
 
 

 

decide to follow the MPC design options analyzed in the engineering analysis for each 

product category. Manufacturers indicated the analyzed design options that use multiple 

VIPs would involve significant capital conversion costs and add very large material costs 

to their products that would likely result in the relocation of their production facilities 

abroad. However, manufacturers indicated they would face even larger capital conversion 

costs at lower efficiencies if they redesigned their products with thicker walls. While not 

analyzed as a design option for standard-size refrigerator-freezers, increasing wall 

thickness would likely result in moving domestic production outside of the U.S. at lower 

efficiency levels. 

ii. Standard-Size Freezer Employment Impacts 

Using the GRIM, DOE estimates that, in the absence of amended energy 

conservation standards, there would be 1,643 standard-size freezer production workers in 

the U.S. in 2014. Using the 2007 Census data and interviews with manufacturers, DOE 

estimates that approximately 80 percent of standard-size freezers sold in the United States 

are manufactured domestically. Table VI.32 shows the impacts of amended energy 

conservation standards on U.S. production workers in the standard-size freezer market. 

Table VI.32 Potential Changes in the Total Number of Domestic Standard-Size 

Freezer Production Workers in 2014 

Trial Standard Level 

Base Case 1 2 3 4 5 

Total Number of 

Domestic Production 

Workers in 2014 

(without changes in 

production locations) 

1,643 1,597 1,537 1,497 1,410 1,303 

Potential Changes in 

Domestic Production - (46) -(1,643) 

(106) -

(1,643) 

(146) -

(1,643) 

(233) -

(1,643) 

(340) -

(1,643) 

239
 
 

Workers in 2014* 

*DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative 

numbers. 

Similar to standard-size refrigerator-freezers, there are relatively small decreases 

in employment at the lower end of the range of employment impacts. These slight 

declines are caused by higher prices that drive lower shipments once manufacturers must 

meet the amended energy conservation standard. Standard-size freezer manufacturers 

also indicated that domestic production could be shifted abroad with any efficiency level 

that required large capital conversion costs. At TSL 1, DOE does not expect substantial 

changes to domestic employment in the standard-size freezer market if manufacturers use 

the design options listed in the engineering analysis to reach the efficiency requirements 

at this TSL. 

However, at TSL 2 through TSL 5, manufacturers indicated that there could be 

domestic employment impacts depending on the design pathway used to reach the 

required efficiencies. At TSL 2 and above, the engineering analysis assumes that 

manufacturers would have to change wall thicknesses to reach the required efficiencies. 

Manufacturers indicated that because these products are typically low-end, they would 

likely follow the design pathways in the engineering analysis and increase the wall 

insulation thickness to reach higher efficiencies in order to avoid having to pass large 

price increases on to consumers. While this approach would result in extremely large 

conversion costs and would be more likely lead to manufacturers moving production 

abroad, manufacturers believed this strategy would help to maintain sales volumes. 

240
 
 

 

 

iii. Compact Refrigeration Product Employment Impacts 

DOE’s research suggests that a limited percentage of compact refrigerators and 

refrigerator-freezers are made domestically (see Table VI.33). The overwhelming 

majority of products are imported. Manufacturers with domestic manufacturing facilities 

tend to source or import their compact products. The small employment numbers are 

mostly from remaining domestic production of compact chest freezers. As a result, 

amended energy conservation standards for compact refrigerators or refrigerator-freezers 

are unlikely to noticeably alter domestic employment levels. 

Table VI.33 Potential Changes in the Total Number of Domestic Compact 

Refrigeration Product Production Workers in 2014 

Trial Standard Level 

Base 

Case 1 2 3 4 5 

Total Number of 

Domestic Production 

Workers in 2014 (without 

changes in production 

locations) 

27 26 26 25 24 40 

Potential Changes in 

Domestic Production 

Workers in 2014* 

- (1) -

(27) 

(1) -

(27) 

(2) -

(27) 

(3) -

(27) 13 - (27) 

*DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative 

numbers. 

iv. Built-In Refrigeration Product Employment Impacts 

Using the GRIM, DOE estimates that, in the absence of amended energy 

conservation standards, there would be 1,139 U.S. works manufacturing built-in 

refrigeration products in 2014. Using the 2007 Census data and interviews with 

manufacturers, DOE estimates that approximately 94 percent of the built-in refrigeration 

products sold in the United States are manufactured domestically. Table VI.34 shows the 

241
 
 

 

 

impacts of amended energy conservation standards on U.S. production workers in the 

built-in refrigeration market. 

Table VI.34 Potential Changes in the Total Number of Built-In Refrigeration 

Product Production Workers in 2014 

Trial Standard Level 

Base 

Case 1 2 3 4 5 

Total Number of 

Domestic Production 

Workers in 2014 (without 

changes in production 

locations) 

1,139 1,139 1,138 1,145 1,148 1,171 

Potential Changes in 

Domestic Production 

Workers in 2014* 

- 0 ­

(1,139) 

(1) -

(1,139) 

6 -

(1,139 

9 -

(1,139) 

32 ­

(1,139) 

*DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative 

numbers. 

Employment in the built-in refrigeration market follows a pattern similar to that 

seen in the market for standard-size refrigerator-freezers and standard-size freezers at 

lower TSLs. At TSL 1 and TSL 2, higher prices result in fewer shipments, and a 

consequent reduction in labor expenditures that more than offsets the additional labor 

required to manufacture products with VIPs. However, at TSL 3 and above, the use of 

additional VIPs in built-in refrigeration products requires enough additional labor to 

cause a slight increase in the number of domestic production workers. Because built-in 

products are high-end products with far fewer shipments, it is less likely that 

manufacturers would choose to move all production facilities in response to amended 

energy conservation standards. The higher margins and profit earned in this market also 

make it more likely that manufacturers could earn a return on the investments required to 

reach the amended energy conservation standards and invest in existing facilities rather 

than move production abroad. 

242
 
c. Impacts on Manufacturing Capacity 

Manufacturers indicated that design changes involving thicker walls or multiple 

VIP panels would require substantial changes to their current manufacturing process. 

While these technologies would require the purchase of millions of dollars of production 

equipment, most manufacturers indicated they would likely be able to make even these 

substantial changes in between the announcement of the final rule and compliance date of 

an amended energy conservation standard. Manufacturers have had experience with the 

design options involving VIPs (even if not at the scale that would be required if the 

higher efficiency levels were adopted) and thickening walls. In addition, the design 

changes and investments analyzed at the levels required by the amended energy 

conservation standards for most product classes are more similar in magnitude to the 

introduction of a new product line – rather than complete redesigning of all products. 

Therefore, a larger capacity concern of manufacturers is the ability of their suppliers, 

particularly manufacturers of VIPs and more efficient compressors, to ramp up 

production in time to meet the amended energy conservation standard. 

d. Impacts on Sub-Group(s) of Manufacturers 

For this rulemaking, DOE used the results of the industry characterization to 

identify any subgroups of refrigerator manufacturers that exhibit similar characteristics 

different from the industry as a whole. The only such subgroup DOE identified was builtin manufacturers. DOE is establishing separate product classes for built-in products and 

is presenting separate analytical results for those products classes. Therefore, the MIA 

243
 
results DOE presents for those product classes already allow DOE to examine the MIA 

impacts on these manufacturers. Section VI.B.2 presents a more detailed discussion of 

the results for built-in product classes. 

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. In addition 

to energy conservation standards, other regulations can significantly affect 

manufacturers’ financial health. Multiple regulations affecting the same manufacturer can 

strain profits 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 efficiency. 

During previous stages of this rulemaking DOE identified a number of 

requirements with which manufacturers of these refrigeration products must comply and 

which take effect within three years of the anticipated effective date of the amended 

standards. DOE discusses these and other requirements, and includes the full details of 

the cumulative regulatory burden, in chapter 12 of the final rule’s TSD. In chapter 12, 

DOE shows that many of the same products produced by residential refrigeration product 

244
 
manufacturers are also regulated by DOE and have a compliance date within 3 years of 

the compliance date of this rulemaking. 

3. National Impact Analysis 

a. Significance of Energy Savings 

To estimate the national energy savings attributable to potential standards for 

refrigeration products, DOE compared the energy consumption of these products under 

the base case to their anticipated energy consumption under each TSL. Table VI-35 

through Table VI-38 present DOE’s forecasts of the national energy savings for each 

TSL, which were calculated using the approach described in section IV.G. Chapter 10 of 

the final rule TSD presents tables that also show the magnitude of the energy savings if 

the savings are discounted at rates of seven and three percent. Discounted energy savings 

represent a policy perspective in which energy savings realized farther in the future are 

less significant than energy savings realized in the nearer term. 

Table VI.35 Standard-Size Refrigerator-Freezers: Cumulative National Energy 

Savings in Quads 

Trial Standard 

Level 

Top-Mount 

Refrigerator-Freezers and 

All-Refrigerators 

Bottom-Mount 

Refrigerator-Freezers 

Side-by-Side 

Refrigerator-Freezers 

Product classes 1, 1A, 2, 3, 

3A, 3I and 6 

Product classes 5, 5A, and 

5I 

Product classes 4, 4I, 

and 7 

1 1.73 0.10 0.58 

2 1.73 0.10 0.95 

3 2.22 0.10 0.95 

4 2.67 0.48 1.30 

5 3.11 0.70 1.50 

245
 
 

 

 

 

 

Table VI.36 Standard-Size Freezers: Cumulative National Energy Savings in Quads 

Trial Standard 

Level 

Upright Freezers Chest Freezers 

Product classes 8, 9 and 9I Product classes 10 and 

10A 

1 0.49 0.31 

2 0.75 0.38 

3 0.87 0.46 

4 0.98 0.53 

5 1.01 0.60 

Table VI.37 Compact Refrigeration Products: Cumulative National Energy Savings 

in Quads 

Trial Standard Compact Refrigerators Compact Freezers 

Level Product classes 11, 11A, 12, 13, 

13I, 13A, 14, 14I, 15 and 15I Product classes 16, 17, 18 

1 0.28 0.03 

2 0.35 0.03 

3 0.39 0.04 

4 0.48 0.07 

5 0.51 0.09 

Table VI.38 Built-In Refrigeration Products: Cumulative National Energy Savings 

in Quads 

Trial Standard 

Level Built-in All 

Refrigerators 

Built-in BottomMount 

RefrigeratorFreezers 

Built-in Side-bySide RefrigeratorFreezers 

Built-in Upright 

Freezers 

 Product class 

3A-BI 

Product classes 

5-BI and 5I-BI 

Product classes 

4-BI, 4I-BI and 

7-BI 

Product classes 

9-BI and 9I-BI 

1 0.00 0.00 0.01 0.00 

2 0.01 0.00 0.01 0.01 

3 0.01 0.00 0.03 0.01 

4 0.01 0.02 0.03 0.01 

5 0.01 0.02 0.04 0.02 

246
 
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 standard levels for refrigeration products. 

In accordance with the OMB’s 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 as well as corporate capital. DOE used this discount rate to 

approximate the opportunity cost of capital in the private sector, since a recent OMB 

analysis has found the average rate of return on capital to be near this rate. See 

http://www.whitehouse.gov/omb/circulars_a004_a-4/. In addition, DOE used the 3­

percent rate to capture the potential effects of standards on private consumption (e.g., 

through higher prices for products and the purchase of reduced amounts of energy). 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 VI-39 through Table VI-46 show the default consumer NPV results for 

each TSL DOE considered for refrigeration products, using both a 7-percent and a 3­

percent discount rate. In each case, the impacts cover the lifetime of products purchased 

in 2014-2043. See chapter 10 of the final rule TSD for more detailed NPV results. 

247
 
Table VI.39 Cumulative Net Present Value of Consumer Benefits for Standard-Size 

Refrigerator-Freezers, 3-Percent Discount Rate 

Trial Standard 

Level 

Top-Mount 

Refrigerator-Freezers 

and All-Refrigerators 

Bottom-Mount 

Refrigerator-Freezers 

Side-by-Side 

Refrigerator-Freezers 

Product classes 1, 1A, 2, 

3, 3A, 3I and 6 

Product classes 5, 5A, and 

5I 

Product classes 4, 4I, and 

7 

billion 2009 dollars 

1 11.45 0.94 5.43 

2 11.45 0.94 6.34 

3 12.91 0.94 6.34 

4 9.11 (0.47) 3.52 

5 1.87 (2.52) 0.83 

Table VI.40 Cumulative Net Present Value of Consumer Benefits for Standard-Size 

Refrigerator-Freezers, 7-Percent Discount Rate 

Trial Standard 

Level 

Top-Mount 

Refrigerator-Freezers 

and All-Refrigerators 

Bottom-Mount 

Refrigerator-Freezers 

Side-by-Side 

Refrigerator-Freezers 

Product classes 1, 1A, 2, 

3, 3A, 3I and 6 

Product classes 5, 5A, and 

5I 

Product classes 4, 4I, and 

7 

billion 2009 dollars 

1 2.99 0.34 1.88 

2 2.99 0.34 1.67 

3 2.81 0.34 1.67 

4 (0.31) (1.17) (0.60) 

5 (5.28) (2.74) (2.53) 

248
 
Table VI.41 Cumulative Net Present Value of Consumer Benefits for Standard-Size 

Freezers, 3-Percent Discount Rate 

Trial Standard 

Level 

Upright Freezers Chest Freezers 

Product classes 8, 9 and 9I Product classes 10 and 10A 

billion 2009 dollars 

1 5.03 3.25 

2 7.37 3.33 

3 7.69 3.94 

4 7.51 3.52 

5 5.17 2.42 

Table VI.42 Cumulative Net Present Value of Consumer Benefits for Standard-Size 

Freezers, 7-Percent Discount Rate 

Trial Standard Upright Freezers Chest Freezers 

Level Product classes 8, 9 and 9I Product classes 10 and 10A 

billion 2009 dollars 

1 1.70 1.11 

2 2.38 0.96 

3 2.30 1.12 

4 1.96 0.75 

5 0.56 (0.04) 

Table VI.43 Cumulative Net Present Value of Consumer Benefits for Compact 

Refrigeration Products, 3-Percent Discount Rate 

Trial Standard 

Level 

Compact Refrigerators Compact Freezers 

Product classes 11, 11A, 12, 13, 

13I, 13A, 14, 14I, 15 and 15I Product classes 16, 17, 18 

billion 2009 dollars 

1 1.61 0.20 

2 1.42 0.20 

3 1.62 0.21 

4 0.81 (0.01) 

5 (1.86) (0.48) 

249
 
Table VI.44 Cumulative Net Present Value of Consumer Benefits for Compact 

Refrigeration Products, 7-Percent Discount Rate 

Trial Standard 

Level 

Compact Refrigerators Compact Freezers 

Product classes 11, 11A, 12, 13, 

13I, 13A, 14, 14I, 15 and 15I Product classes 16, 17, 18 

billion 2009 dollars 

1 0.67 0.09 

2 0.51 0.09 

3 0.59 0.08 

4 0.08 (0.07) 

5 (1.44) (0.36) 

Table VI.45 Cumulative Net Present Value of Consumer Benefits for Built-In 

Refrigeration Products, 3-Percent Discount Rate 

Trial Standard 

Level 

Built-in All 

Refrigerators 

Built-in BottomMount 

RefrigeratorFreezers 

Built-in Side-bySide RefrigeratorFreezers 

Built-in Upright 

Freezers 

Product class 

3A-BI 

Product classes 

5-BI and 5I-BI 

Product classes 

4-BI, 4I-BI and 

7-BI 

Product classes 

9-BI and 9I-BI 

billion 2009 dollars 

1 0.04 0.02 0.06 0.05 

2 0.05 0.01 0.06 0.07 

3 0.02 0.01 (0.17) 0.05 

4 (0.04) (0.20) (0.17) 0.05 

5 (0.08) (0.31) (0.43) 0.02 

250
 
Table VI.46 Cumulative Net Present Value of Consumer Benefits for Built-In 

Refrigeration Products, 7-Percent Discount Rate 

Trial Standard 

Level 

Built-in All 

Refrigerators 

Built-in BottomMount 

RefrigeratorFreezers 

Built-in Side-bySide RefrigeratorFreezers 

Built-in Upright 

Freezers 

Product class 

3A-BI 

Product classes 

5-BI and 5I-BI 

Product classes 

4-BI, 4I-BI and 

7-BI 

Product classes 

9-BI and 9I-BI 

billion 2009 dollars 

1 0.01 0.01 0.02 0.02 

2 0.02 0.00 0.02 0.02 

3 0.00 0.00 (0.16) 0.00 

4 (0.04) (0.14) (0.16) 0.00 

5 (0.07) (0.21) (0.32) (0.02) 

The NPV results presented above are based on a product price trend that reflects 

the default price trend. As discussed in section IV.G.3, DOE investigated the impact of 

different price trends on the NPV for the considered TSLs. DOE selected a high price 

decline case and a low price decline case from among a number of price trends that it 

analyzed. Table VI.47 through Table VI.54 provide the annualized NPV of consumer 

benefits at 7-percent and 3-percent discount rates, combined with the annualized present 

value of monetized benefits from CO2 and NOX emissions reductions, for each of the 

considered TSLs for the default price trend and the two sensitivity cases. (DOE’s method 

for annualization is described in section VI.C.5 of this notice. Section VI.B.6 provides a 

complete description and summary of the monetized benefits from CO2 and NOX 

emissions reductions.) For details on the combined NPV results, see appendix 10-C of 

the final rule TSD. 

251
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table VI.47 Standard-size Refrigerator-Freezers: Annualized Net Present Value of 

Consumer Benefits (7-percent Discount Rate) and Annualized Present Value of 

Monetized Benefits from CO2 and NOX Emissions Reductions* for Products 

Shipped in 2014-2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 0.825 0.902 0.726 

2 0.845 0.948 0.715 

3 0.881 1.017 0.708 

4 0.288 0.593 (0.100) 

5 (0.507) (0.029) (1.114) 

Parentheses indicate negative (-) values. 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 7-percent discount rate. 

Table VI.48 Standard-size Refrigerator-Freezers: Annualized Net Present Value of 

Consumer Benefits (3-percent Discount Rate) and Annualized Present Value of 

Monetized Benefits from CO2 and NOX Emissions Reductions* for Products 

Shipped in 2014-2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 1.302 1.389 1.195 

2 1.397 1.513 1.255 

3 1.537 1.691 1.349 

4 1.213 1.560 0.791 

5 0.626 1.171 (0.036) 

Parentheses indicate negative (-) values. 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 3-percent discount rate. 

Table VI.49 Standard-size Freezers: Annualized Net Present Value of Consumer 

Benefits (7-percent Discount Rate) and Annualized Present Value of Monetized 

Benefits from CO2 and NOX Emissions Reductions* for Products Shipped in 2014-

2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

252
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Billion 2009$ 

1 0.387 0.398 0.372 

2 0.482 0.508 0.448 

3 0.513 0.550 0.465 

4 0.459 0.516 0.387 

5 0.239 0.333 0.118 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 7-percent discount rate. 

Table VI.50 Standard-size Freezers: Annualized Net Present Value of Consumer 

Benefits (3-percent Discount Rate) and Annualized Present Value of Monetized 

Benefits from CO2 and NOX Emissions Reductions* for Products Shipped in 2014-

2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 0.566 0.579 0.551 

2 0.745 0.775 0.708 

3 0.822 0.865 0.770 

4 0.808 0.873 0.729 

5 0.623 0.730 0.492 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 3-percent discount rate. 

Table VI.51 Compact Refrigeration Products: Annualized Net Present Value of 

Consumer Benefits (7-percent Discount Rate) and Annualized Present Value of 

Monetized Benefits from CO2 and NOX Emissions Reductions* for Products 

Shipped in 2014-2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 0.105 0.112 0.096 

2 0.094 0.107 0.077 

3 0.106 0.122 0.086 

4 0.045 0.077 0.006 

5 (0.142) (0.083) (0.216) 

Parentheses indicate negative (-) values. 

253
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 7-percent discount rate. 

Table VI.52 Compact Refrigeration Products: Annualized Net Present Value of 

Consumer Benefits (3-percent Discount Rate) and Annualized Present Value of 

Monetized Benefits from CO2 and NOX Emissions Reductions* for Products 

Shipped in 2014-2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 0.129 0.137 0.119 

2 0.124 0.139 0.105 

3 0.141 0.159 0.119 

4 0.091 0.127 0.047 

5 (0.085) (0.018) (0.166) 

Parentheses indicate negative (-) values. 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 3-percent discount rate. 

Table VI.53 Built-in Refrigeration Products: Annualized Net Present Value of 

Consumer Benefits (7-percent Discount Rate) and Annualized Present Value of 

Monetized Benefits from CO2 and NOX Emissions Reductions* for Products 

Shipped in 2014-2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 0.008 0.009 0.008 

2 0.009 0.010 0.008 

3 (0.011) (0.005) (0.018) 

4 (0.028) (0.019) (0.040) 

5 (0.056) (0.043) (0.074) 

Parentheses indicate negative (-) values. 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 7-percent discount rate. 

254
 
 

 

 

 

 

 

 

 

 

Table VI.54 Built-in Refrigeration Products: Annualized Net Present Value of Consumer 

Benefits (3-percent Discount Rate) and Annualized Present Value of Monetized Benefits 

from CO2 and NOX Emissions Reductions* for Products Shipped in 2014-2043 

Trial 

Standard 

Level 

Medium Price 

Decline (Default) High Price Decline Low Price Decline 

 Billion 2009$ 

1 0.012 0.013 0.012 

2 0.015 0.016 0.014 

3 0.002 0.008 (0.006) 

4 (0.013) (0.002) (0.025) 

5 (0.036) (0.021) (0.056) 

Parentheses indicate negative (-) values. 

* The economic benefits from reduced CO2 emissions were calculated using a SCC value of $22.1/metric 

ton in 2010 (in 2009$) for CO2, increasing at 3% per year, and a discount rate of 3%. The economic 

benefits from reduced NOX emissions were calculated using a value of $2,519/ton (in 2009$), which is the 

average of the low and high values used in DOE’s analysis, and a 3-percent discount rate. 

c. Indirect Impacts on Employment 

DOE develops estimates of the indirect employment impacts of potential 

standards on the economy in general. As discussed above, DOE expects amended energy 

conservation standards for refrigeration products to reduce energy bills for consumers 

and the resulting net savings to be redirected to other forms of economic activity. These 

expected shifts in spending and economic activity could affect the demand for labor. As 

described in section IV.J, above, to estimate these effects, DOE used an input/output 

model of the U.S. economy. Table VI.55 presents the estimated net indirect employment 

impacts in 2020 and 2043 for the TSLs that DOE considered in this rulemaking. Chapter 

13 of the final rule TSD presents more detailed results. 

Table VI.55 Net Increase in Jobs from Indirect Employment Effects Under 

Refrigeration Product TSLs 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

thousands 

Standard-Size Refrigerator-Freezers

 2020 2.35 2.34 2.33 -0.06 -3.18 

255
 
 

 

 

 

 2043 16.24 18.45 21.33 26.31 28.85 

Standard-Size Freezers

 2020 0.93 1.06 1.06 0.82 -0.05 

2043 5.18 7.24 8.38 9.19 9.12 

Compact Refrigeration Products 

2020 0.51 0.52 0.60 0.50 -0.04 

2043 1.44 1.64 1.88 2.02 1.53 

Built-In Refrigeration Products

 2020 0.02 0.02 -0.05 -0.11 -0.21 

2043 0.14 0.19 0.29 0.31 -0.30 

The input/output model suggests that today’s amended standards are likely to 

increase the net demand for labor in the economy. However, the model suggests that the 

projected gains are very small relative to total national employment (currently 

approximately 120 million). Moreover, neither the BLS data nor the input/output model 

DOE uses includes the quality or wage level of the jobs. Therefore, because the analysis 

indicates an increased demand for labor would likely result from the amended energy 

conservation standards in this rulemaking, DOE has concluded that the amended 

standards are likely to produce employment benefits sufficient to offset fully any adverse 

impacts on employment in the manufacturing industry for the refrigeration products that 

are the subject of this rulemaking. 

4. Impact on Utility or Performance of Products 

As presented in section III.D.1.d of this notice, DOE concluded that none of the 

TSLs considered in this notice would substantially reduce the utility or performance of 

the products under consideration in this rulemaking. However, the availability of features 

that increase energy use, such as multiple drawers, might shift to higher-price products 

256
because the cost premium for implementing such features will likely increase. 

Manufacturers currently offer refrigeration products that meet or exceed the amended 

standards for most of the product classes. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) 

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 an amended 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 (B)(ii)) 

To assist the Attorney General in making such determination, DOE has provided 

DOJ with copies of this final rule and the TSD for review. As indicated earlier, DOE did 

not receive comments from DOJ. Accordingly, DOE does not believe that there is likely 

to be any lessening of competition as a result of today’s final rule. 

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. As a measure of this reduced demand, Table VI-56 presents the estimated 

reduction in generating capacity in 2043 for the TSLs that DOE considered in this 

rulemaking. 

257
 
Table VI.56 Reduction in Electric Generating Capacity in 2043 Under Refrigeration 

Product TSLs 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Gigawatts 

Standard-Size Refrigerator-Freezers 2.62 3.03 3.56 4.86 5.82 

Standard-Size Freezers 0.83 0.83 1.40 1.59 1.71 

Compact Refrigeration Products 0.273 0.335 0.386 0.480 0.511 

Built-In Refrigeration Products 0.021 0.031 0.062 0.077 0.092 

DOE used NEMS-BT to assess the impacts on electricity prices of the reduced 

need for new electric power plants and infrastructure projected to result from standards. 

The projected impacts on prices, and their value to electricity consumers, are presented in 

chapter 14 and chapter 10, respectively, of the final rule TSD. Although the aggregate 

benefits for all electricity users are potentially large, there may be negative effects on the 

actors involved in electricity supply. Because there is uncertainty about the extent to 

which the calculated impacts from reduced electricity prices would be a transfer from the 

actors involved in electricity supply to electricity consumers, DOE has concluded that, at 

present, it should not assign a heavy weight to this factor in considering the economic 

justification of standards on refrigeration products. 

Energy savings from amended standards for refrigeration products could also 

produce environmental benefits in the form of reduced emissions of air pollutants and 

greenhouse gases associated with electricity production. Table VI.57 provides DOE’s 

estimate of cumulative CO2, NOX, and Hg emissions reductions projected to result from 

258
 
the TSLs considered in this rulemaking. DOE reports annual CO2, NOX, and Hg 

emissions reductions for each TSL in chapter 15 of the final rule TSD. 

As discussed in section IV.M, DOE did not report SO2 emissions reductions from 

power plants because there is uncertainty about the effect of energy conservation 

standards on the overall level of SO2 emissions in the United States due to SO2 emissions 

caps. DOE also 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 CAIR. 

Table VI.57 Summary of Emissions Reduction Estimated for Refrigeration Product 

TSLs (cumulative for 2014 through 2043) 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Standard-Size Refrigerator-Freezers 

CO2 (Mt)

 NOX (1000 tons) 

Hg (tons) 

175 

141 

0.79 

202 

162 

0.91 

238 

191 

1.07 

323 

260 

1.45 

386 

310 

1.73 

Standard-Size Freezers

 CO2 (Mt)

 NOX (1000 tons) 

Hg (tons) 

54 

43 

0.24 

77 

62 

0.34 

91 

73 

0.41 

103 

83 

0.47 

110 

89 

0.50 

Compact Refrigeration Products 

CO2 (Mt)

 NOX (1000 tons) 

Hg (tons) 

20 

16 

0.10 

24 

20 

0.12 

28 

23 

0.15 

35 

29 

0.19 

39 

32 

0.21 

Built-In Refrigeration Products 

CO2 (Mt)

 NOX (1000 tons) 

Hg (tons) 

1.41 

1.14 

0.01 

2.05 

1.65 

0.01 

4.10 

3.30 

0.02 

5.09 

4.09 

0.02 

6.09 

4.90 

0.03 

As part the analysis for this final rule, 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, DOE used values for the SCC developed 

259 
by an interagency process. The four values for CO2 emissions reductions resulting from 

that process (expressed in 2009$) are $4.9/ton (the average value from a distribution that 

uses a 5-percent discount rate), $22.1/ton (the average value from a distribution that uses 

a 3-percent discount rate), $36.3/ton (the average value from a distribution that uses a 

2.5-percent discount rate), and $67.1/ton (the 95th-percentile value from a distribution 

that uses a 3-percent discount rate). These values correspond to the value of emission 

reductions in 2010; the values for later years are higher due to increasing damages as the 

magnitude of climate change increases. 

Table VI-58 through Table VI-61 present the global values of CO2 emissions 

reductions at each TSL. For each of the four cases, DOE calculated a present value of the 

stream of annual values using the same discount rate as was used in the studies upon 

which the dollar-per-ton values are based. DOE calculated domestic values as a range 

from 7 percent to 23 percent of the global values, and these results are presented in Table 

VI-62 through Table VI-65. 

260
 
 

 

 

 

 

Table VI.58 Standard-Size Refrigerator-Freezers: Estimates of Global Present 

Value of CO2 Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$ 

5% discount 

rate, 

average* 

3% discount 

rate, 

average* 

2.5% discount 

rate, average* 

3% discount 

rate, 95th 

percentile* 

1 1.45 4.60 6.90 14.0 

2 1.67 5.31 7.96 16.16 

3 1.96 6.24 9.36 19.00 

4 2.68 8.51 12.76 25.90 

5 3.20 10.18 15.26 30.98 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time. 

Table VI.59 Standard-Size Freezers: Estimates of Global Present Value of CO2 

Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$ 

5% discount 

rate, 

average* 

3% discount 

rate, 

average* 

2.5% discount 

rate, average* 

3% discount 

rate, 95th 

percentile* 

1 0.48 1.51 2.25 4.58 

2 0.69 2.16 3.24 6.59 

3 0.81 2.55 3.81 7.76 

4 0.92 2.89 4.32 8.80 

5 0.98 3.09 4.62 9.41 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time. 

261
 
 

 

 

 

 

Table VI.60 Compact Refrigeration Products: Estimates of Global Present Value of 

CO2 Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$ 

5% discount 

rate, 

average* 

3% discount 

rate, 

average* 

2.5% discount 

rate, average* 

3% discount 

rate, 95th 

percentile* 

1 0.12 0.41 0.63 1.26 

2 0.15 0.51 0.77 1.54 

3 0.18 0.59 0.89 1.79 

4 0.22 0.74 1.12 2.25 

5 0.24 0.81 1.23 2.47 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time. 

Table VI.61 Built-In Refrigeration Products: Estimates of Global Present Value of 

CO2 Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$ 

5% discount 

rate, 

average* 

3% discount 

rate, 

average* 

2.5% discount 

rate, average* 

3% discount 

rate, 95th 

percentile* 

1 0.012 0.038 0.057 0.12 

2 0.017 0.055 0.083 0.17 

3 0.035 0.11 0.17 0.34 

4 0.043 0.014 0.20 0.41 

5 0.051 0.16 0.24 0.50 

* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time. 

262
 
 

 

 

 

Table VI.62 Standard-Size Refrigerator-Freezers: Estimates of Domestic Present 

Value of CO2 Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$* 

5% discount 

rate, average** 

3% discount 

rate, average** 

2.5% discount 

rate, average** 

3% discount rate, 

95th percentile** 

1 0.10 to 0.33 0.32 to 1.06 0.48 to 1.59 0.98 to 3.22 

2 0.12 to 0.38 0.37 to 1.22 0.56 to 1.83 1.13 to 3.72 

3 0.14 to 0.45 0.44 to 1.44 0.66 to 2.15 1.33 to 4.37 

4 0.19 to 0.62 0.60 to 1.96 0.89 to 2.93 1.81 to 5.96 

5 0.22 to 0.74 0.71 to 2.34 1.07 to 3.51 2.17 to 7.13 

* Domestic values are presented as a range between 7% and 23% of the global values.
 

** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time.
 

Table VI.63 Standard-Size Freezers: Estimates of Domestic Present Value of CO2 

Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$* 

5% discount 

rate, average** 

3% discount 

rate, average** 

2.5% discount 

rate, average** 

3% discount rate, 

95th percentile** 

1 0.033 to 0.11 0.11 to 0.35 0.16 to 0.52 0.32 to 1.05 

2 0.048 to 0.16 0.15 to 0.50 0.23 to 0.74 0.46 to 1.51 

3 0.057 to 0.19 0.057 to 0.19 0.057 to 0.19 0.057 to 0.19 

4 0.064 to 0.21 0.20 to 0.67 0.30 to 0.99 0.62 to 2.02 

5 0.069 to 0.23 0.22 to 0.71 0.32 to 1.06 0.069 to 0.23 

* Domestic values are presented as a range between 7% and 23% of the global values.
 

** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time.
 

263
 
 

 

 

 

Table VI.64 Compact Refrigeration Products: Estimates of Domestic Present Value 

of CO2 Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$* 

5% discount 

rate, average** 

3% discount 

rate, average** 

2.5% discount 

rate, average** 

3% discount rate, 

95th percentile** 

1 0.0087 to 0.029 0.029 to 0.095 0.044 to 0.14 0.09 to 0.29 

2 0.011 to 0.035 0.035 to 0.12 0.054 to 0.18 0.11 to 0.36 

3 0.012 to 0.041 0.041 to 0.14 0.062 to 0.21 0.13 to 0.41 

4 0.016 to 0.051 0.052 to 0.17 0.078 to 0.26 0.16 to 0.52 

5 0.017 to 0.056 0.057 to 0.19 0.086 to 0.28 0.17 to 0.57 

* Domestic values are presented as a range between 7% and 23% of the global values.
 

** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time.
 

Table VI.65 Built-In Refrigeration Products: Estimates of Domestic Present Value 

of CO2 Emissions Reduction Under Trial Standard Levels 

TSL 

Billion 2009$* 

5% discount 

rate, average** 

3% discount 

rate, average** 

2.5% discount 

rate, average** 

3% discount rate, 

95th percentile** 

1 0.00083 to 

0.0027 0.0026 to 0.0087 0.0040 to 0.013 0.0081 to 0.026 

2 0.0012 to 0.0040 0.0039 to 0.013 0.0058 to 0.019 0.012 to 0.039 

3 0.0024 to 0.0080 0.0077 to 0.025 0.012 to 0.038 0.023 to 0.077 

4 0.0030 to 0.010 0.010 to 0.031 0.014 to 0.047 0.029 to 0.10 

5 0.0036 to 0.012 0.011 to 0.037 0.017 to 0.056 0.035 to 0.11 

* Domestic values are presented as a range between 7% and 23% of the global values.
 

** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or 

drawn from a different part of the distribution. Values presented in the table incorporate the escalation of 

the SCC over time.
 

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 rulemaking on reducing CO2 emissions is subject to change. DOE, together 

with other Federal agencies, will continue to review various methodologies for estimating 

264
 
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 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 final rule 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 emissions reductions anticipated to result from amended 

standards for refrigeration products. The dollar-per-ton values that DOE used are 

discussed in section IV.M. Table VI.66 presents the cumulative present values for each 

TSL calculated using seven-percent and three-percent discount rates. 

Table VI.66 Estimates of Present Value of NOX Emissions Reduction Under 

Refrigeration Product Trial Standard Levels 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Billion 2009$ 

Standard-Size 

Refrigerator-Freezers 

 7% discount rate 

 3% discount rate 

0.018 to 0.18 

0.044 to 0.45 

0.020 to 0.21 

0.051 to 0.52 

0.024 to 0.25 

0.060 to 0.62 

0.033 to 0.34 

0.082 to 0.84 

0.039 to 0.40 

0.097 to 1.00 

Standard-Size Freezers

 7% discount rate 

 3% discount rate 

0.0055 to 0.056 

0.014 to 0.15 

0.008 to 0.081 

0.020 to 0.21 

0.009 to 0.095 

0.024 to 0.25 

0.011 to 0.107 

0.027 to 0.28 

0.011 to 0.12 

0.029 to 0.30 

Compact Refrigeration 

Products 

 7% discount rate 

 3% discount rate 

0.002 to 0.021 

0.004 to 0.044 

0.003 to 0.026 

0.005 to 0.054 

0.003 to 0.030 

0.006 to 0.063 

0.004 to 0.038 

0.008 to 0.079 

0.004 to 0.042 

0.009 to 0.088 

Built-In Refrigeration 

Products 

 7% discount rate 

 3% discount rate 

0.000 to 0.002 

0.000 to 0.004 

0.001 to 0.002 

0.001 to 0.005 

0.000 to 0.004 

0.001 to 0.018 

0.001 to 0.005 

0.001 to 0.013 

0.001 to 0.006 

0.002 to 0.016 

265
 
 

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 rulemaking. Table VI.67 shows an example of the calculation of the 

combined NPV including benefits from emissions reductions for the case of TSL 3 for 

standard-size refrigerator-freezers. Table VI.68 and Table VI.69 present the NPV values 

that would result if DOE were to add 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 seven-percent and three-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 

presented in section IV.M. 

266
 
 

 

 

 

 

 

 

Table VI.67 Adding Net Present Value of Consumer Savings to Present Value of 

Monetized Benefits from CO2 and NOX Emissions Reductions at TSL 3 for 

Standard-Size Refrigerator-Freezers 

Category Present Value 

Billion 2009$ 

Discount 

Rate 

Benefits 

Operating Cost Savings 14.65 7% 

37.41 3% 

CO2 Reduction Monetized Value 

(at $4.9/t)* 1.96 5% 

CO2 Reduction Monetized Value 

(at $22.1/t)* 6.24 3% 

CO2 Reduction Monetized Value 

(at $36.3/t)* 9.36 2.5% 

CO2 Reduction Monetized Value 

(at $67.1/t)* 19.0 3% 

NOX Reduction Monetized Value 

(at $2,519/ton)* 

0.136 7% 

0.338 3% 

Total Monetary Benefits ** 

21.02 7% 

43.99 3% 

Costs 

Total Incremental Installed Costs 9.83 7% 

17.22 3% 

Net Benefits 

Including CO2 and NOX** 11.19 7% 

26.77 3% 

* These values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several 

scenarios. The values of $4.9, $22.1, and $36.3 per metric ton (t) are the averages of SCC distributions 

calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $67.1/t represents the 95th 

percentile of the SCC distribution calculated using a 3% discount rate. See section IV.M for details. The 

value for NOX (in 2009$) is the average of the low and high values used in DOE’s analysis. 

** Total Monetary Benefits for both the 3% and 7% cases utilize the central estimate of social cost of CO2 

emissions calculated at a 3% discount rate, which is equal to $22.1/t in 2010 (in 2009$). 

267
 
 

 

 

Table VI.68 Adding Net Present Value of Consumer Savings (at 7% Discount Rate) 

to Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions at 

Trial Standard Levels for Refrigeration Products 

TSL 

Consumer NPV at 7% Discount Rate added with: 

SCC Value of 

$4.9/metric ton 

CO2* and Low 

Value for 

NOX** 

billion 2009$ 

SCC Value of 

$22.1/metric ton 

CO2* and Medium 

Value for NOX** 

billion 2009$ 

SCC Value of 

$36.3/metric ton 

CO2* and Medium 

Value for NOX** 

billion 2009$ 

SCC Value of 

$67.1/metric ton 

CO2* and High 

Value for NOX** 

Billion 2009$ 

1 10.92 15.53 18.81 29.06 

2 11.55 17.20 21.22 33.77 

3 11.75 18.42 23.17 37.99 

4 4.20 12.83 18.97 38.14 

5 (7.93) 2.08 9.20 31.45 

* These label values represent the global SCC of CO2 in 2010, in 2009$. Their present values have been 

calculated with scenario-consistent discount rates. See section IV.M for a discussion of the derivation of 

these values. 

** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per 

ton of NOX emissions. High Value corresponds to $4,591 per ton of NOX emissions. 

Table VI.69 Adding Net Present Value of Consumer Savings (at 3% Discount Rate) 

to Present Value of Monetized Benefits from CO2 and NOX Emissions Reductions at 

Trial Standard Levels for Refrigeration Products 

TSL 

Consumer NPV at 3% Discount Rate added with: 

SCC Value of 

$4.9/metric ton 

CO2* and Low 

Value for 

NOX** 

billion 2009$ 

SCC Value of 

$22.1/metric ton 

CO2* and Medium 

Value for NOX** 

billion 2009$ 

SCC Value of 

$36.31/metric ton 

CO2* and Medium 

Value for NOX** 

billion 2009$ 

SCC Value of 

$67.1/metric ton 

CO2* and High 

Value for NOX** 

Billion 2009$ 

1 30.20 34.99 38.27 48.69 

2 33.85 39.71 43.73 56.50 

3 36.64 43.57 48.31 63.39 

4 27.59 36.56 42.69 62.19 

5 9.25 19.65 26.76 49.39 

* These label values represent the global SCC of CO2 in 2010, in 2009$. Their present values have been 

calculated with scenario-consistent discount rates. See section IV.M for a discussion of the derivation of 

these values. 

** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per 

ton of NOX emissions. High Value corresponds to $4,591 per ton of NOX emissions. 

268
 
Although adding the value of consumer savings to the values of emission 

reductions provides a valuable 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 quite different time frames for analysis. The national operating 

cost savings is measured for the lifetime of refrigeration products shipped in 2014–2043. 

The SCC values, on the other hand, reflect the present value of future climate-related 

impacts resulting from the emission of one ton of carbon dioxide in each year. These 

impacts continue well beyond 2100. 

7. Other Factors 

The Secretary, in determining whether a standard is economically justified, may 

consider any other factors that he deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI))) 

DOE is aware of pending legislation that proposes to phase out substances with 

significant GWP and that HFCs are included in the list of substances to be phased out. 

DOE recognizes the significance that such legislation would have to the refrigeration 

products industry and the impact it would have on the ability of manufacturers to meet 

energy conservation standards. Given the uncertainty regarding such legislation, 

however, DOE did not factor the impact of potential HFC limitations in developing the 

standard levels presented in today’s final rule. 

269
 
DOE has also considered the Joint Comments submitted to DOE containing the 

various recommended standard levels for refrigeration products. DOE recognizes the 

value of consensus agreements submitted by parties in accordance with 42 U.S.C. 

6295(p)(4) and has weighed the value of such consensus in establishing the standards set 

forth in today’s final rule. 

C. Conclusion 

When prescribing new or amended standards, the standard that DOE adopts for 

any type (or class) of covered product shall be designed to achieve the maximum 

improvement in energy efficiency that the Secretary determines is technologically 

feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining whether a 

standard is economically justified, the Secretary must determine whether the benefits of 

the standard exceed its burdens to the greatest extent practicable, in light of the seven 

statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended 

standard must also “result in significant conservation of energy.” (42 U.S.C. 

6295(o)(3)(B)) 

For today’s final rule, DOE considered the impacts of standards at each trial 

standard level, beginning with the maximum technologically feasible level, to determine 

whether that level was economically justified. Where the max-tech level was not 

justified, DOE then considered the next most efficient level and undertook the same 

evaluation until it reached the most efficient level that is both technologically feasible 

and economically justified and saves a significant amount of energy. 

270
 
For ease of presentation, DOE separately discusses the benefits and/or burdens of 

each trial standard level for standard-size refrigerator-freezers, standard-size freezers, 

compact refrigeration products, and built-in refrigeration products. Tables that present a 

summary of the results of DOE’s quantitative analysis for each TSL have been provided 

to aid the reader as DOE discusses the benefits and/or burdens of each trial standard 

level. 

In addition to the quantitative results presented in the tables, DOE also considers 

other burdens and benefits that affect economic justification. These include the impacts 

on identifiable subgroups of consumers, such as low-income households and seniors, who 

may be disproportionately affected by a national standard. Section VI.B.1.b presents the 

estimated impacts of each TSL for these subgroups. 

DOE notes that the proposed standards set forth in the Joint Comments were also 

carefully considered by the agency. These suggested standards, along with the comments 

from all interested parties and the agency’s analytical work developed in preparation of 

today’s final rule, were considered during the development of the standards being 

adopted today. 

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 

271
 
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 benefits, (3) a lack of 

sufficient savings to warrant delaying or altering purchases (e.g. an inefficient ventilation 

fan in a new building or the delayed replacement of a water pump), (4) excessive focus 

on the short term, in the form of inconsistent weighting 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 vs. home buyer). Other literature indicates 

that with less than perfect foresight and a high degree of uncertainty about the future, 

consumers may trade off these types of investments at a higher than expected rate 

between current consumption and uncertain future energy cost savings. 

In DOE’s current regulatory analysis, potential changes in the benefits and costs 

of a regulation due to changes in consumer purchase decisions are included in two ways. 

First, if consumers forego a purchase of a product in the standards case, this decreases 

sales for product manufacturers, and the cost to manufacturers is included in the MIA. 

Second, DOE accounts for energy savings attributable only to products actually used by 

consumers in the standards case; if a regulatory option decreases the number of products 

used by consumers, this decreases the potential energy savings from an energy 

conservation standard. DOE provides detailed estimates of shipments and changes in the 

272
 
 

volume of product purchases in chapter 9 of the final rule TSD. However, DOE’s current 

analysis does not explicitly control for heterogeneity in consumer preferences, 

preferences across subcategories of products or specific features, or consumer price 

sensitivity variation according to household income. 

While DOE is not prepared at present to provide a fuller 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.48 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. 

1. Standard-Size Refrigerator-Freezers 

Table VI-70 presents a summary of the quantitative impacts estimated for each 

TSL for standard-size refrigerator-freezers. The efficiency levels contained in each TSL 

are described in section VI.A. The range of results for NPV of consumer benefits reflects 

the range of product price forecasts discussed in section IV.G.3. 

48 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 

273
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table VI.70 Summary of Results for Standard-Size Refrigerator-Freezers 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

National Energy Savings (quads) 2.41 2.78 3.27 4.45 5.30 

NPV of Consumer Benefits (2009$ billion) 

3% discount rate 15.96 to 

19.35 

16.26 to 

20.76 

16.92 to 

22.88 

4.800 to 

18.20 

(11.4) to 

9.67 

7% discount rate 4.272 to 

5.940 

3.764 to 

5.973 

3.173 to 

6.104 

(5.756) to 

0.804 

(16.30) to 

(6.03) 

Industry Impacts 

Industry NPV (2009$ million) (117.8) to 

(252.6) 

(219.2) to 

(395.9) 

(345.0) to 

(580.7) 

(784.9) to 

(1,309.3) 

(1,042.2) to 

(1,841.5) 

Industry NPV (% change) (4.4) to (9.5) (8.2) to 

(14.8) 

(12.9) to 

(21.7) 

(29.4) to 

(49.0) 

(39.0) to 

(69.0) 

Cumulative Emissions Reduction 

CO2 (Mt) 175 202 238 323 386 

NOX (1000 tons) 141 162 191 260 310 

Hg (tons) 0.79 0.91 1.07 1.45 1.73 

Value of Cumulative Emissions Reduction

 CO2 (2009$ billion)* 1.45 to 14.0 1.67 to 16.2 1.96 to 19.0 2.68 to 25.9 3.20 to 31.0 

NOX – 3% discount rate (2009$ 

billion) 

0.044 to 

0.45 

0.051 to 

0.52 

0.060 to 

0.62 

0.082 to 

0.84 

0.097 to 

1.00 

NOX – 7% discount rate (2009$ 

billion) 

0.018 to 

0.18 

0.020 to 

0.21 

0.024 to 

0.25 

0.033 to 

0.34 

0.039 to 

0.40 

Mean LCC Savings** (2009$)

 Top-Mount Refrigerator-Freezers 44 44 42 (6) (87) 

 Bottom-Mount Refrigerator-Freezers 22 22 22 (53) (136) 

 Side-by-Side Refrigerator-Freezers 62 57 57 (18) (83) 

Median PBP (years) 

 Top-Mount Refrigerator-Freezers 8.0 8.0 9.5 13.3 17.8 

 Bottom-Mount Refrigerator-Freezers 4.2 4.2 4.2 21.0 24.7 

 Side-by-Side Refrigerator-Freezers 4.0 9.2 9.2 15.6 19.1 

Distribution of Consumer LCC Impacts

 Top-Mount Refrigerator-Freezers 

Net Cost (%) 34 34 46 65 80 

No Impact (%) 8.3 8.3 0.0 0.0 0.0 

Net Benefit (%) 58 58 54 35 20

 Bottom-Mount Refrigerator-Freezers 

Net Cost (%) 2.5 2.5 2.5 83 89 

No Impact (%) 68 68 68 0.0 0.0 

Net Benefit (%) 30 30 30 17 11

 Side-by-Side Refrigerator-Freezers 

Net Cost (%) 4.3 42 42 70 80 

No Impact (%) 37 0.0 0.0 0.0 0.0 

Net Benefit (%) 59 59 59 30 21 

Generation Capacity Reduction (GW)

† 2.62 3.03 3.56 4.86 5.82 

Employment Impacts 

Total Potential Changes in Domestic 

Production Workers in 2014 (thousands) 

(0.19) to 

(7.35) 

(0.22) to 

(7.35) 

(0.18) to 

(7.35) 

(0.24) to 

(7.35) 

(0.37) to 

(7.35) 

Indirect Domestic Jobs (thousands) † 16.24 18.45 21.33 26.31 28.85 

274
 
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Parentheses indicate negative (-) values. 

* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
 

emissions. 

** For LCCs, a negative value means an increase in LCC by the amount indicated.

† Changes in 2043. 

DOE first considered TSL 5, which represents the max-tech efficiency levels. 

TSL 5 would save 5.30 quads of energy, an amount DOE considers significant. Under 

TSL 5, the NPV of consumer benefit would be -$6.03 billion to -$16.3 billion, using a 

discount rate of 7 percent, and -$11.4 to $9.67 billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 5 are 386 Mt of CO2, 310,000 tons 

of NOX, and 1.73 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 5 ranges from $3.20 billion to $30.98 billion. Total 

generating capacity in 2043 is estimated to decrease by 5.82 GW under TSL 5. 

At TSL 5, the average LCC impact is a cost (LCC increase) of $87 for top-mount 

refrigerator-freezers, a cost of $136 for bottom-mount refrigerator-freezers, and a cost of 

$83 for side-by-side refrigerator-freezers. The median payback period is 17.8 years for 

top-mount refrigerator-freezers, 24.7 years for bottom-mount refrigerator-freezers, and 

19.1 years for side-by-side refrigerator-freezers. The fraction of consumers experiencing 

an LCC benefit is 20 percent for top-mount refrigerator-freezers, 11 percent for bottommount refrigerator-freezers, and 21 percent for side-by-side refrigerator-freezers. The 

fraction of consumers experiencing an LCC cost is 80 percent for top-mount refrigerator275
 
freezers, 89 percent for bottom-mount refrigerator-freezers, and 80 percent for side-byside refrigerator-freezers. 

At TSL 5, the projected change in INPV ranges from a decrease of $1,042.2 

million to a decrease of $1,841.5 million. At TSL 5, DOE recognizes the risk of very 

large negative impacts if manufacturers’ expectations concerning reduced profit margins 

are realized. If the high end of the range of impacts is reached as DOE expects, TSL 5 

could result in a net loss of 69.0 percent in INPV to standard-size refrigerator-freezer 

manufacturers. 

The Secretary has concluded that at TSL 5 for standard-size refrigerator-freezers, 

the benefits of energy savings, generating capacity reductions, emission reductions, and 

the estimated monetary value of the CO2 emissions reductions would be outweighed by 

the negative NPV of consumer benefits, the economic burden on a significant fraction of 

consumers due to the large increases in product cost, and the capital conversion costs and 

profit margin impacts that could result in a very large reduction in INPV for 

manufacturers. Consequently, the Secretary has concluded that TSL 5 is not 

economically justified. 

DOE then considered TSL 4. TSL 4 would save 4.45 quads of energy, an amount 

DOE considers significant. Under TSL 4, the NPV of consumer benefit would be -$5.76 

billion to $0.80 billion, using a discount rate of 7 percent, and $4.80 billion to $18.2 

billion, using a discount rate of 3 percent. 

276
 
The cumulative emissions reductions at TSL 4 are 323 Mt of CO2, 260,000 tons 

of NOX, and 1.45 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 4 ranges from $2.68 billion to $25.9 billion. Total generating 

capacity in 2043 is estimated to decrease by 4.86 GW under TSL 4. 

At TSL 4, DOE projects that the average LCC impact is a cost (LCC increase) of 

$6 for top-mount refrigerator-freezers, a cost of $53 for bottom-mount refrigeratorfreezers, and a cost of $18 for side-by-side refrigerator-freezers. The median payback 

period is 13.3 years for top-mount refrigerator-freezers, 21.0 years for bottom-mount 

refrigerator-freezers, and 15.6 years for side-by-side refrigerator-freezers. The fraction of 

consumers experiencing an LCC benefit is 35 percent for top-mount refrigerator-freezers, 

17 percent for bottom-mount refrigerator-freezers, and 30 percent for side-by-side 

refrigerator-freezers. The fraction of consumers experiencing an LCC cost is 65 percent 

for top-mount refrigerator-freezers, 83 percent for bottom-mount refrigerator-freezers, 

and 70 percent for side-by-side refrigerator-freezers. 

At TSL 4, the projected change in INPV ranges from a decrease of $784.9 million 

to a decrease of $1,309.3 million. DOE recognizes the risk of large negative impacts if 

manufacturers’ expectations concerning reduced profit margins are realized. If the high 

end of the range of impacts is reached as DOE expects, TSL 4 could result in a net loss of 

49.0 percent in INPV to standard-size refrigerator-freezer manufacturers. 

277
 
The Secretary has concluded that at TSL 4 for standard-size refrigerator-freezers, 

the benefits of energy savings, positive NPV of consumer benefits at 3-percent discount 

rate, generating capacity reductions, and emission reductions and the estimated monetary 

value of the CO2 emissions reductions would be outweighed by the negative NPV of 

consumer benefits at 7-percent discount rate, the economic burden on a significant 

fraction of consumers due to the large increases in product cost, and the capital 

conversion costs and profit margin impacts that could result in a substantial reduction in 

INPV for the manufacturers. Consequently, the Secretary has concluded that TSL 4 is not 

economically justified. 

DOE then considered TSL 3. TSL 3 would save 3.27 quads of energy, an amount 

DOE considers significant. Under TSL 3, the NPV of consumer benefit would be $3.17 

billion to $6.10 billion, using a discount rate of 7 percent, and $16.9 billion to $22.9 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 3 are 238 Mt of CO2, 191,000 tons 

of NOX, and 1.07 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 3 ranges from $1.96 billion to $19.0 billion. Total generating 

capacity in 2043 is estimated to decrease by 3.56 GW under TSL 3. 

At TSL 3, the average LCC impact is a gain (consumer savings) of $42 for topmount refrigerator-freezers, a gain of $22 for bottom-mount refrigerator-freezers, and a 

gain of $57 for side-by-side refrigerator-freezers. The median payback period is 9.5 years 

278
 
for top-mount refrigerator-freezers, 4.2 years for bottom-mount refrigerator-freezers, and 

9.2 years for side-by-side refrigerator-freezers. The fraction of consumers experiencing 

an LCC benefit is 54 percent for top-mount refrigerator-freezers, 30 percent for bottommount refrigerator-freezers, and 59 percent for side-by-side refrigerator-freezers. The 

fraction of consumers experiencing an LCC cost is 46 percent for top-mount refrigeratorfreezers, 2.5 percent for bottom-mount refrigerator-freezers, and 42 percent for side-byside refrigerator-freezers. 

At TSL 3, the projected change in INPV ranges from a decrease of $345.0 million 

to a decrease of $580.7 million. DOE recognizes the risk of negative impacts if 

manufacturers’ expectations concerning reduced profit margins are realized. If the high 

end of the range of impacts is reached as DOE expects, TSL 3 could result in a net loss of 

21.7 percent in INPV to standard-size refrigerator-freezer manufacturers. 

The Secretary has concluded that at TSL 3 for standard-size refrigerator-freezers, 

the benefits of energy savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, and the estimated monetary value of the CO2 emissions 

reductions outweigh the economic burden on a significant fraction of consumers due to 

the increases in product cost, and the capital conversion costs and profit margin impacts 

that could result in a reduction in INPV for the manufacturers. In addition to the 

aforementioned benefits of the amended standards, DOE notes that the efficiency levels 

in TSL 3 correspond to the recommended levels presented in the Joint Comments and, as 

279
 
 

 

stated previously, DOE recognizes the value of consensus agreements submitted in 

accordance with 42 U.S.C. 6295(p)(4). 

After considering the analysis, comments responding to the September 2010 

NOPR, and the benefits and burdens of TSL 3, the Secretary has concluded that this trial 

standard level will offer the maximum improvement in efficiency that is technologically 

feasible and economically justified, and will result in the significant conservation of 

energy. Therefore, DOE is adopting TSL 3 for standard-size refrigerator-freezers. The 

amended energy conservation standards for standard-size refrigerator-freezers, expressed 

as equations for maximum energy use, are shown in Table VI.71. 

Table VI.71 Amended Standards for Standard-Size Refrigerators and RefrigeratorFreezers 

Product Class 

Equations for Maximum Energy 

Use (kWh/yr) 

based on AV (ft3) based on av (L) 

1. Refrigerator-freezers and refrigerators other than allrefrigerators with manual defrost. 

7.99AV + 225.0 0.282av + 225.0 

1A. All-refrigerators—manual defrost. 6.79AV + 193.6 0.240av + 193.6 

2. Refrigerator-freezers—partial automatic defrost 7.99AV + 225.0 0.282av + 225.0 

3. Refrigerator-freezers—automatic defrost with topmounted freezer without an automatic icemaker. 

8.07AV + 233.7 0.285av + 233.7 

3I. Refrigerator-freezers—automatic defrost with topmounted freezer with an automatic icemaker without 

through-the-door ice service. 

8.07AV + 317.7 0.285av + 317.7 

3A. All-refrigerators—automatic defrost. 7.07AV + 201.6 0.250av + 201.6 

4. Refrigerator-freezers—automatic defrost with sidemounted freezer without an automatic icemaker. 

8.51AV + 297.8 0.301av + 297.8 

4I. Refrigerator-freezers—automatic defrost with sidemounted freezer with an automatic icemaker without 

through-the-door ice service. 

8.51AV + 381.8 0.301av + 381.8 

5. Refrigerator-freezers—automatic defrost with bottommounted freezer without an automatic icemaker. 

8.85AV + 317.0 0.312av + 317.0 

5I. Refrigerator-freezers—automatic defrost with bottommounted freezer with an automatic icemaker without 

through-the-door ice service. 

8.85AV + 401.0 0.312av + 401.0 

5A. Refrigerator-freezer—automatic defrost with bottommounted freezer with through-the-door ice service. 

9.25AV + 475.4 0.327av + 475.4 

280
 
 

 

 

 

6. Refrigerator-freezers—automatic defrost with topmounted freezer with through-the-door ice service. 

8.40AV + 385.4 0.297av + 385.4 

7. Refrigerator-freezers—automatic defrost with side- 8.54AV + 432.8 0.302av + 432.8 

mounted freezer with through-the-door ice service. 

AV= adjusted volume in cubic feet; av = adjusted volume in liters 

2. Standard-Size Freezers

 Table VI.72 presents a summary of the quantitative impacts estimated for each 

TSL for standard-size freezers. The efficiency levels contained in each TSL are described 

in section VI.A. The range of results for NPV of consumer benefits reflects the range of 

product price forecasts discussed in section IV.G.3. 

Table VI.72 Summary of Results for Standard-Size Freezers 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

National Energy Savings 

(quads) 0.79 1.14 1.34 1.52 1.62 

NPV of Consumer Benefits (2009$ billion) 

3% discount rate 8.00 to 

8.50 

10.1 to 

11.2 

10.7 to 

12.4 

9.66 to 

12.2 

5.32 to 

9.46 

7% discount rate 2.67 to 

2.92 

3.02 to 

3.59 

2.96 to 

3.77 

2.03 to 

3.25 

(0.63) to 

1.41 

Industry Impacts 

Industry NPV (2009$ million) (29.8) to 

(50.0) 

(123.7) to 

(170.5) 

(112.5) to 

(178.1) 

(85.4) to 

(182.4) 

(145.0) to 

(298.8) 

Industry NPV (% change) (8.8) to 

(14.8) 

(36.6) to 

(50.5) (33.3) to (52.7) (25.3) to (54.0) (42.9) to (88.5) 

Cumulative Emissions Reduction 

CO2 (Mt) 54 77 91 103 110 

NOX (1000 tons) 43 62 73 83 89 

Hg (tons) 0.24 0.34 0.41 0.47 0.50 

Value of Cumulative Emissions Reduction 

CO2 (2009$ billion)* 0.48 to 

4.58 

0.69 to 

6.59 0.81 to 7.76 0.92 to 8.80 0.98 to 9.41 

NOX – 3% discount rate 

(2009$ billion) 

0.014 to 

0.15 

0.020 to 

0.21 0.024 to 0.25 0.027 to 0.28 0.029 to 0.30 

NOX – 7% discount rate 

(2009$ billion) 

0.006 to 

0.056 

0.008 to 

0.081 0.009 to 0.095 0.011 to 0.107 0.011 to 0.115 

Mean LCC Savings** (2009$) 

Upright Freezers 140 195 189 161 33 

Chest Freezers 82 69 79 47 (25) 

Median PBP (years) 

Upright Freezers 4.0 5.3 7.1 9.3 14.7 

281
 
 

 

 

 

 

Chest Freezers 3.9 8.1 8.5 12.1 17.8 

Distribution of Consumer LCC Impacts 

Upright Freezers 

Net Cost (%) 6.0 12 22 35 60 

No Impact (%) 0.6 0.2 0.0 0.0 0.0 

Net Benefit (%) 93 88 78 65 40 

Chest Freezers 

Net Cost (%) 5 27 29 49 69 

No Impact (%) 0.2 0.2 0.2 0.0 0.0 

Net Benefit (%) 95 73 71 51 31 

Generation Capacity 

Reduction (GW)

† 0.83 0.83 1.40 1.59 1.71 

Employment Impacts 

Total Potential Changes in 

Domestic Production Workers 

in 2014 (thousands) 

(0.05) to 

(1.64) 

(0.11) to 

(1.64) 

(0.15) to 

(1.64) 

(0.23) to 

(1.64) 

(0.34) to 

(1.64) 

Indirect Domestic Jobs 

(thousands) † 5.18 7.24 8.38 9.19 9.12 

Parentheses indicate negative (-) values. 

Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
 

emissions. 

** For LCCs, a negative value means an increase in LCC by the amount indicated.

† Changes in 2043. 

DOE first considered TSL 5, which represents the max-tech efficiency levels. 

TSL 5 would save 1.62 quads of energy, an amount DOE considers significant. Under 

TSL 5, the NPV of consumer benefit would be -$0.63 billion to $1.41 billion, using a 

discount rate of 7 percent, and $5.32 billion to $9.46 billion, using a discount rate of 3 

percent. 

The cumulative emissions reductions at TSL 5 are 110 Mt of CO2, 89,000 tons of 

NOX, and 0.50 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 5 ranges from $0.98 billion to $9.41 billion. Total generating 

capacity in 2043 is estimated to decrease by 1.71 GW under TSL 5. 

282
 
At TSL 5, the average LCC impact is a gain (LCC decrease) of $33 for upright 

freezers, and a cost of $25 for chest freezers. The median payback period is 14.7 years for 

upright freezers and 17.8 years for chest freezers. The fraction of consumers experiencing 

an LCC benefit is 40 percent for upright freezers and 31 percent for chest freezers. The 

fraction of consumers experiencing an LCC cost is 60 percent for upright freezers and 69 

percent for chest freezers. 

At TSL 5, the projected change in INPV ranges from a decrease of $145.0 million 

to a decrease of $298.8 million. DOE recognizes the risk of very large negative impacts if 

manufacturers’ expectations concerning reduced profit margins are realized. Standards at 

TSL 5 would require efficiency levels that are far higher than the most efficient products 

currently available on the market. Manufacturing products to meet standards at TSL 5 

would require large investments in product redesign and conversion of facilities. Because 

standard-size freezers are currently low-cost, low-margin products, there is a limited 

ability to pass on to consumers the required conversion costs and added product costs 

associated with efficiency-improving technologies for freezers. If the high end of the 

range of impacts is reached as DOE expects, TSL 5 could result in a net loss of 88.5 

percent in INPV to standard-size freezer manufacturers. 

The Secretary has concluded that at TSL 5 for standard-size freezers, the benefits 

of energy savings, positive NPV of consumer benefits, generating capacity reductions, 

emission reductions, and the estimated monetary value of the CO2 emissions reductions 

would be outweighed by the economic burden on a significant fraction of consumers due 

283
 
to the large increases in product cost, and the capital conversion costs and profit margin 

impacts that could result in a very large reduction in INPV for manufacturers. 

Consequently, the Secretary has concluded that TSL 5 is not economically justified. 

DOE then considered TSL 4. TSL 4 would save 1.52 quads of energy, an amount 

DOE considers significant. Under TSL 4, the NPV of consumer benefit would be $2.03 

billion to $3.25 billion, using a discount rate of 7 percent, and $9.66 billion to $12.2 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 4 are 103 Mt of CO2, 83,000 tons of 

NOX, and 0.47 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 4 ranges from $0.92 billion to $8.80 billion. Total generating 

capacity in 2043 is estimated to decrease by 1.59 GW under TSL 4. 

At TSL 4, the average LCC impact is a gain (consumer savings) of $161 for 

upright freezers and a gain of $47 for chest freezers. The median payback period is 9.3 

years for upright freezers and 12.1 years for chest freezers. The fraction of consumers 

experiencing an LCC benefit is 65 percent for upright freezers and 51 percent for chest 

freezers. The fraction of consumers experiencing an LCC cost is 35 percent for upright 

freezers and 49 percent for chest freezers. 

At TSL 4, the projected change in INPV ranges from a decrease of $85.4 million 

to a decrease of $182.4 million. DOE recognizes the risk of very large negative impacts if 

284
 
manufacturers’ expectations concerning reduced profit margins are realized. Standards at 

TSL 4 would require efficiency levels that are substantially higher than the most efficient 

products currently available on the market. Manufacturing products to meet standards at 

TSL 4 would require large investments in product redesign and conversion of facilities. 

Because standard-size freezers are currently low-cost, low-margin products, there is a 

limited ability to pass on to consumers the required conversion costs and added product 

costs associated with efficiency-improving technologies for freezers. If the high end of 

the range of impacts is reached as DOE expects, TSL 4 could result in a net loss of 54.0 

percent in INPV to standard-size freezer manufacturers. 

The Secretary has concluded that at TSL 4 for standard-size freezers, the benefits 

of energy savings, positive NPV of consumer benefits, generating capacity reductions, 

emission reductions, the estimated monetary value of the cumulative CO2 emissions 

reductions, and the economic benefit on a significant fraction of upright freezer 

consumers would be outweighed by the economic burden on a significant fraction of 

chest freezer consumers due to the increase in product cost, and the large capital 

conversion costs and margin impacts that could result in a large reduction in INPV for 

manufacturers. 

DOE then considered TSL 3. TSL 3 would save 1.34 quads of energy, an amount 

DOE considers significant. Under TSL 3, the NPV of consumer benefit would be $2.96 

billion to $3.77 billion, using a discount rate of 7 percent, and $10.7 billion to $12.4 

billion, using a discount rate of 3 percent. 

285
 
The cumulative emissions reductions at TSL 3 are 91 Mt of CO2, 73,000 tons of 

NOX, and 0.41 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 3 ranges from $0.81 billion to $7.76 billion. Total generating 

capacity in 2043 is estimated to decrease by 1.40 GW under TSL 3. 

At TSL 3, the average LCC impact is a gain (consumer savings) of $189 for 

upright freezers and a gain of $79 for chest freezers. The median payback period is 7.1 

years for upright freezers and 8.5 years for chest freezers. The fraction of consumers 

experiencing an LCC benefit is 78 percent for upright freezers and 71 percent for chest 

freezers. The fraction of consumers experiencing an LCC cost is 22 percent for upright 

freezers and 29 percent for chest freezers. 

At TSL 3, the projected change in INPV ranges from a decrease of $112.5 million 

to a decrease of $178.1 million. DOE recognizes the risk of very large negative impacts if 

manufacturers’ expectations concerning reduced profit margins are realized. Standards at 

TSL 3 would require efficiency levels that are substantially higher than the most efficient 

products currently available on the market. Similar to the case of TSL 4, manufacturing 

products to meet standards at TSL 3 would require large investments in product redesign 

and conversion of facilities. Because standard-size freezers are currently low-cost, lowmargin products, there is a limited ability to pass on to consumers the required 

conversion costs and added product costs associated with more energy efficient 

technologies for freezers. If the high end of the range of impacts is reached, as DOE 

286
 
expects, TSL 3 could result in a net loss of 52.7 percent in INPV to standard-size freezer 

manufacturers. 

DOE notes that TSL 3 is not at the level recommended in the consensus 

agreement. DOE also notes that the TSL 3 efficiency levels are significantly higher than 

the maximum-efficiency products on the market: from 8% higher for product class 9 

(upright freezers with automatic defrost) to 15% higher for product class 10 (chest 

freezers). Hence, DOE believes that there may be other factors, including additional 

burdens, that the parties to that agreement may have considered that are not reflected in 

DOE’s analysis. Given this possibility, the strong support expressed by commenters in 

favor of the consensus agreement levels, and the lack of product on the market that is 

close to meeting the requirements of this level, DOE is declining to adopt TSL 3 as part 

of today’s final rule. It may, however, reconsider this level as part of a future review of 

the standards set by today’s rulemaking as part of the agency’s required review under 42 

U.S.C. 6295(m). 

Accordingly, the Secretary has concluded that at TSL 3 for standard-size freezers, 

the benefits of energy savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, the estimated monetary value of the cumulative CO2 

emissions reductions, and the economic benefit for a significant fraction of freezer 

consumers would be outweighed by the large capital conversion costs and profit margin 

impacts and other burdens that manufacturers would bear in order to produce freezers 

287
 
that meet efficiency requirements substantially more stringent than what products on the 

market presently can satisfy. 

DOE then considered TSL 2. TSL 2 would save 1.14 quads of energy, an amount 

DOE considers significant. Under TSL 2, the NPV of consumer benefit would be $3.02 

billion to $3.59 billion, using a discount rate of 7 percent, and $10.1 billion to $11.2 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 2 are 77 Mt of CO2, 62,000 tons of 

NOX, and 0.34 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 2 ranges from $0.69 billion to $6.59 billion. Total generating 

capacity in 2043 is estimated to decrease by 0.83 GW under TSL 2. 

At TSL 2, the average LCC impact is a gain (consumer savings) of $195 for 

upright freezers and a gain of $69 for chest freezers. The median payback period is 5.3 

years for upright freezers and 8.1 years for chest freezers. The fraction of consumers 

experiencing an LCC benefit is 88 percent for upright freezers and 73 percent for chest 

freezers. The fraction of consumers experiencing an LCC cost is 12 percent for upright 

freezers and 27 percent for chest freezers. 

DOE estimated the projected change in INPV ranges from a decrease of $123.7 

million to a decrease of $170.5 million. At TSL 2, DOE recognizes the risk of negative 

impacts if manufacturers’ expectations concerning reduced profit margins are realized. 

288
 
Standards at TSL 2 would pose many of the same issues as discussed above for TSL3, 

but the projected negative impacts are somewhat less. If the high end of the range of 

impacts is reached as DOE expects, TSL 2 could result in a net loss of 50.5 percent in 

INPV to standard-size freezer manufacturers. 

The Secretary has concluded that at TSL 2 for standard-size freezers, the benefits 

of energy savings, positive NPV of consumer benefits, generating capacity reductions, 

emission reductions, the estimated monetary value of the cumulative CO2 emissions 

reductions, and the economic benefit for a significant fraction of freezer consumers 

would outweigh the capital conversion costs and profit margin impacts that could result 

in a reduction in INPV for the manufacturers. In addition to the aforementioned benefits, 

DOE notes that the efficiency levels in TSL 2 correspond to the recommended levels in 

the Joint Comments and, as stated previously, DOE recognizes the value of consensus 

agreements submitted in accordance with 42 U.S.C. 6295(p)(4). 

After considering the analysis, comments responding to the September 2010 

NOPR, and the benefits and burdens of TSL 2, the Secretary has concluded that this trial 

standard level will offer the maximum improvement in efficiency that is technologically 

feasible and economically justified, and will result in the significant conservation of 

energy. Therefore, DOE today is adopting TSL 2 for standard-size freezers. The amended 

energy conservation standards for standard-size freezers, expressed as equations for 

maximum energy use, are shown in Table VI.73. 

289
 
 

Table VI.73 Amended Standards for Standard-Size Freezers 

Product Class 

Equations for Maximum Energy 

Use (kWh/yr) 

based on AV (ft3) based on av (L) 

8. Upright freezers with manual defrost. 5.57AV + 193.7 0.197av + 193.7 

9. Upright freezers with automatic defrost without an automatic 

icemaker. 8.62AV + 228.3 0.305av + 228.3 

9I. Upright freezers with automatic defrost with an automatic 

icemaker. 

8.62AV + 312.3 0.305av + 312.3 

10. Chest freezers and all other freezers except compact 

freezers. 7.29AV + 107.8 0.257av + 107.8 

10A. Chest freezers with automatic defrost. 10.24AV + 148.1 0.362av + 148.1 

AV= adjusted volume in cubic feet; av = adjusted volume in liters 

3. Compact Refrigeration Products 

Table VI.74 presents a summary of the quantitative impacts estimated for each 

TSL for compact refrigeration products. The efficiency levels contained in each TSL are 

described in section VI.A. The range of results for NPV of consumer benefits reflects the 

range of product price forecasts discussed in section IV.G.3. 

290
 
 

 

 

 

 

 

 

 

 

 

Table VI.74 Summary of Results for Compact Refrigeration Products 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

National Energy Savings (quads) 0.30 0.37 0.43 0.54 0.59 

NPV of Consumer Benefits (2009$ billion) 

3% discount rate 1.64 to 

1.95 

1.29 to 

1.89 

1.45 to 

2.15 

0.046 to 

1.43 

(3.75) to 

(1.17) 

7% discount rate 0.675 to 

0.821 

0.439 to 

0.724 

0.482 to 

0.819 

(0.363) to 

0.304 

(2.51) to 

(1.25) 

Industry Impacts 

Compact Refrigeration Products 

Industry NPV (2009$ 

million) 

(16.6) to 

(27.8) 

(36.2) to 

(58.7) (62.9) to (89.3) (41.5) to (92.8) 

(154.9) to 

(242.6) 

Industry NPV (% 

change) 

(9.8) to 

(16.4) 

(21.4) to 

(34.6) (37.1) to (52.7) (24.5) to (54.8) 

(91.4) to 

(143.2) 

Cumulative Emissions Reduction 

CO2 (Mt) 20 24 28 35 39 

NOX (1000 tons) 16 20 23 29 31 

Hg (tons) 0.10 0.12 0.15 0.19 0.21 

Value of Cumulative Emissions Reduction

 CO2 (2009$ billion)* 0.12 to 

1.26 

0.15 to 

1.54 0.18 to 1.79 0.22 to 2.25 0.24 to 2.47 

NOX – 3% discount rate (2009$ 

billion) 

0.004 to 

0.044 

0.005 to 

0.054 0.006 to 0.063 0.008 to 0.079 0.009 to 0.088 

NOX – 7% discount rate (2009$ 

billion) 

0.002 to 

0.021 

0.003 to 

0.026 0.003 to 0.030 0.004 to 0.038 0.004 to 0.042 

Mean LCC Savings** (2009$) 

Compact Refrigerators 17 14 13 (5) (85) 

Compact Freezers 12 12 9 (23) (102) 

Median PBP (years) 

Compact Refrigerators 2.5 3.5 3.9 5.8 10.4 

Compact Freezers 2.2 2.2 4.2 9.1 14.4 

Distribution of Consumer LCC Impacts 

Compact Refrigerators 

Net Cost (%) 20 37 44 70 92 

No Impact (%) 1.4 1.0 0.9 0.0 0.0 

Net Benefit (%) 79 62 56 30 7.9 

Compact Freezers 

Net Cost (%) 8 8 34 85 97 

No Impact (%) 5 5 0.0 0.0 0.0 

Net Benefit (%) 87 87 66 16 3.3 

Generation Capacity Reduction 

(GW)

† 

0.27 0.34 0.39 0.48 0.51 

Employment Impacts 

Total Potential Changes in 

Domestic Production Workers in 

2014 (thousands) 

(0.00) to 

(0.03) 

(0.00) to 

(0.03) 

(0.00) to 

(0.03) 

(0.00) to 

(0.03) 

(0.01) to 

(0.03)

 Indirect Domestic Jobs 

(thousands) † 1.44 1.64 1.88 2.02 1.53 

Parentheses indicate negative (-) values. 

* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 

291 
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

emissions. 

** For LCCs, a negative value means an increase in LCC by the amount indicated.

† Changes in 2043. 

DOE first considered TSL 5, which represents the max-tech efficiency levels. 

TSL 5 would save 0.59 quads of energy, an amount DOE considers significant. Under 

TSL 5, the NPV of consumer benefit would be -$2.51 billion to -$1.25 billion, using a 

discount rate of 7 percent, and -$3.75 billion to -$1.17 billion, using a discount rate of 3 

percent. 

The cumulative emissions reductions at TSL 5 are 39 Mt of CO2, 31,000 tons of 

NOX, and 0.21 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 5 ranges from $0.24 billion to $2.47 billion. Total generating 

capacity in 2043 is estimated to decrease by 0.51 GW under TSL 5. 

At TSL 5, the average LCC impact is a cost (LCC increase) of $85 for compact 

refrigerators and a cost of $102 for compact freezers. The median payback period is 10.4 

years for compact refrigerators and 14.4 years for compact freezers. The fraction of 

consumers experiencing an LCC benefit is 7.9 percent for compact refrigerators and 3.3 

percent for compact freezers. The fraction of consumers experiencing an LCC cost is 92 

percent for compact refrigerators and 97 percent for compact freezers. 

At TSL 5, the projected change in INPV ranges from a decrease of $154.9 million 

to a decrease of $242.6 million. DOE recognizes the risk of very large negative impacts if 

manufacturers’ expectations concerning reduced profit margins are realized. 

292
 
Manufacturing products to meet standards at TSL 5 would require large investments in 

product redesign and conversion of facilities. Because compact refrigeration products are 

currently low-cost, low-margin products, there is a limited ability to pass on to consumers 

the required conversion costs and added product costs associated with efficiencyimproving technologies. If the high end of the range of impacts is reached as DOE 

expects, TSL 5 could result in a net loss of 143.2 percent in INPV to compact 

refrigeration product manufacturers. 

The Secretary has concluded that at TSL 5 for compact refrigeration products, the 

benefits of energy savings, generating capacity reductions, emission reductions, and the 

estimated monetary value of the CO2 emissions reductions would be outweighed by the 

negative NPV of consumer benefits, the economic burden on a significant fraction of 

consumers due to the increases in product cost, the capital conversion costs and profit 

margin impacts that could result in a large reduction in INPV for manufacturers. 

Consequently, the Secretary has concluded that TSL 5 is not economically justified. 

DOE then considered TSL 4. TSL 4 would save 0.54 quads of energy, an amount 

DOE considers significant. Under TSL 4, the NPV of consumer benefit would be -$0.363 

billion to $0.304 billion, using a discount rate of 7 percent, and $0.46 billion to $1.43 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 4 are 35 Mt of CO2, 29,000 tons of 

NOX, and 0.19 tons of Hg. The estimated monetary value of the cumulative CO2 

293
 
emissions reductions at TSL 4 ranges from $0.22 billion to $2.25 billion. Total generating 

capacity in 2043 is estimated to decrease by 0.48 GW under TSL 4. 

At TSL 4, the average LCC impact is a cost (LCC increase) of $5 for compact 

refrigerators and a cost of $23 for compact freezers. The median payback period is 5.8 

years for compact refrigerators and 9.1 years for compact freezers. The fraction of 

consumers experiencing an LCC benefit is 30 percent for compact refrigerators and 16 

percent for compact freezers. The fraction of consumers experiencing an LCC cost is 70 

percent for compact refrigerators and 85 percent for compact freezers. 

At TSL 4, the projected change in INPV ranges from a decrease of $41.5 million 

to a decrease of $92.8 million. DOE recognizes the risk of very large negative impacts if 

manufacturers’ expectations about reduced profit margins are realized. Manufacturing 

products to meet standards at TSL 4 would require large investments in product redesign 

and conversion of facilities. Because compact refrigeration products are currently lowcost, low-margin products, there is a limited ability to pass on to consumers the required 

conversion costs and added product costs associated with efficiency-improving 

technologies. If the high end of the range of impacts is reached as DOE expects, TSL 4 

could result in a net loss of 54.8 percent in INPV to compact refrigeration product 

manufacturers. 

The Secretary has concluded that at TSL 4 for compact refrigeration products, the 

benefits of energy savings, generating capacity reductions, emission reductions, and the 

294
 
estimated monetary value of the CO2 emissions reductions would be outweighed by the 

negative NPV of consumer benefits, the economic burden on a significant fraction of 

consumers due to the increases in product costs, and the capital conversion costs and 

profit margin impacts that could result in a large reduction in INPV for manufacturers. 

Consequently, the Secretary has concluded that TSL 4 is not economically justified. 

DOE then considered TSL 3. TSL 3 would save 0.43 quads of energy, an amount 

DOE considers significant. Under TSL 3, the NPV of consumer benefit would be $0.482 

billion to $0.819 billion, using a discount rate of 7 percent, and $1.45 to $2.15 billion, 

using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 3 are 28 Mt of CO2, 23,000 tons of 

NOX, and 0.15 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 3 ranges from $0.18 billion to $1.79 billion. Total generating 

capacity in 2043 is estimated to decrease by 0.39 GW under TSL 3. 

At TSL 3, the average LCC impact is a gain (consumer savings) of $13 for 

compact refrigerators and a gain of $9 for compact freezers. The median payback period 

is 3.9 years for compact refrigerators and 4.2 years for compact freezers. The fraction of 

consumers experiencing an LCC benefit is 56 percent for compact refrigerators and 66 

percent for compact freezers. The fraction of consumers experiencing an LCC cost is 44 

percent for compact refrigerators and 34 percent for compact freezers. 

295
 
At TSL 3, the projected change in INPV ranges from a decrease of $62.9 million 

to a decrease of $89.3 million. DOE recognizes the risk of large negative impacts if 

manufacturers’ expectations about reduced profit margins are realized. Manufacturing 

products to meet standards at TSL 3 would require large investments in product redesign 

and conversion of facilities. Because compact refrigeration products are currently lowcost, low-margin products, there is a limited ability to pass on to consumers the required 

conversion costs and added product costs associated with efficiency-improving 

technologies. If the high end of the range of impacts is reached as DOE expects, TSL 3 

could result in a net loss of 52.7 percent in INPV to compact refrigeration product 

manufacturers. 

 The Secretary has concluded that at TSL 3 for compact refrigeration products, the 

benefits of energy savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, and the estimated monetary value of the cumulative CO2 

emissions reductions would be outweighed by the economic burden on a significant 

fraction of consumers due to the increases in product costs, and by the capital conversion 

costs and profit margin impacts that could result in a large reduction in INPV for 

manufacturers. Consequently, the Secretary has concluded that TSL 3 is not 

economically justified. 

DOE then considered TSL 2. TSL 2 would save 0.37 quads of energy, an amount 

DOE considers significant. Under TSL 2, the NPV of consumer benefit would be $0.439 

296
 
billion to $0.724 billion, using a discount rate of 7 percent, and $1.29 billion to $1.89 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 2 are 24 Mt of CO2, 20,000 tons of 

NOX, and 0.12 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 2 ranges from $0.15 billion to $1.54 billion. Total generating 

capacity in 2043 is estimated to decrease by 0.34 GW under TSL 2. 

At TSL 2, the average LCC impact is a gain (consumer savings) of $14 for 

compact refrigerators and a gain of $12 for compact freezers. The median payback period 

is 3.5 years for compact refrigerators and 2.2 years for compact freezers. The fraction of 

consumers experiencing an LCC benefit is 62 percent for compact refrigerators and 87 

percent for compact freezers. The fraction of consumers experiencing an LCC cost is 37 

percent for compact refrigerators and 8 percent for compact freezers. 

At TSL 2, the projected change in INPV ranges from a decrease of $36.2 million 

to a decrease of $58.7 million. DOE recognizes the risk of negative impacts if 

manufacturers’ expectations about reduced profit margins are realized. Manufacturing 

products to meet standards at TSL 2 would require investments in product redesign and 

conversion of facilities. Because compact refrigeration products are currently low-cost, 

low-margin products, there is a limited ability to pass on to consumers the required 

conversion costs and added product costs associated with efficiency-improving 

technologies. If the high end of the range of impacts is reached as DOE expects, TSL 2 

297
 
could result in a net loss of 34.6 percent in INPV to compact refrigeration product 

manufacturers. 

The Secretary has concluded that at TSL 2 for compact refrigeration products, the 

benefits of energy savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, the estimated monetary value of the cumulative CO2 

emissions reductions, and the economic benefit to a significant fraction of consumers 

would outweigh the capital conversion costs that could result in a reduction in INPV for 

manufacturers. In addition to the aforementioned benefits of the amended standards, 

DOE notes that the efficiency levels in TSL 2 correspond to the recommended levels in 

the Joint Comments 

AHAM and ASAP both commented that the proposed standard energy efficiency 

equation for product class 15 (compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer) was inconsistent with the consensus agreement, which had 

recommended that both product class 15 and product class 13 (compact refrigeratorfreezers—automatic defrost with top-mounted freezer) should have identical standards. 

(ASAP, Public Meeting Transcript, No. 67 at p. 91; AHAM, Public Meeting Transcript, 

No. 67 at p. 92) DOE agrees that the standards of these two product classes should be the 

same, based on the similarities between these classes. Commenters favored this approach 

and none offered any information suggesting an alternative approach. As stated 

previously, DOE recognizes the value of consensus agreements submitted in accordance 

with 42 U.S.C. 6295(p)(4). 

298
 
After considering the analysis, comments responding to the September 2010 

NOPR, and the benefits and burdens of TSL 2, the Secretary has concluded that this trial 

standard level will offer the maximum improvement in efficiency that is technologically 

feasible and economically justified, and will result in the significant conservation of 

energy. Therefore, DOE today is adopting TSL 2 for compact refrigeration products. The 

amended energy conservation standards for compact refrigeration products, expressed as 

equations for maximum energy use, are shown in Table VI-75. 

Table VI.75 Amended Standards for Compact Refrigeration Products 

Product Class 

Equations for Maximum 

Energy Use (kWh/yr) 

based on AV (ft3) based on av (L) 

11. Compact refrigerators and refrigerator-freezers with manual 

defrost. 9.03AV + 252.3 0.319av + 252.3 

11A. Compact all-refrigerators—manual defrost. 7.84AV + 219.1 0.277av + 219.1 

12. Compact refrigerator-freezers—partial automatic defrost 5.91AV + 335.8 0.209av + 335.8 

13. Compact refrigerator-freezers—automatic defrost with topmounted freezer. 11.80AV + 339.2 0.417av + 339.2 

13I. Compact refrigerator-freezers—automatic defrost with topmounted freezer with an automatic icemaker. 

11.80AV + 423.2 0.417av + 423.2 

13A. Compact all-refrigerators—automatic defrost. 9.17AV + 259.3 0.324av + 259.3 

14. Compact refrigerator-freezers—automatic defrost with sidemounted freezer. 6.82AV + 456.9 0.241av + 456.9 

14I. Compact refrigerator-freezers—automatic defrost with 

side-mounted freezer with an automatic icemaker. 

6.82AV + 540.9 0.241av + 540.9 

15. Compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer. 11.80AV + 339.2 0.417av + 339.2 

15I. Compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer with an automatic icemaker. 

11.80AV + 423.2 0.417av + 423.2 

16. Compact upright freezers with manual defrost. 8.65AV + 225.7 0.306av + 225.7 

17. Compact upright freezers with automatic defrost. 10.17AV + 351.9 0.359av + 351.9 

18. Compact chest freezers. 9.25AV + 136.8 0.327av + 136.8 

AV= adjusted volume in cubic feet; av = adjusted volume in liters 

299
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Built-In Refrigeration Products 

Table V-76 presents a summary of the quantitative impacts estimated for each 

TSL for built-in refrigeration products. The efficiency levels contained in each TSL are 

described in section VI.A. The range of results for NPV of consumer benefits reflects the 

range of product price forecasts discussed in section IV.G.3. 

Table VI.76 Summary of Results for Built-in Refrigeration Products 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

National Energy Savings (quads) 0.02 0.03 0.058 0.071 0.085 

NPV of Consumer Benefits (2009$ billion) 

3% discount rate 0.166 to 

0.184 

0.183 to 

0.226 

(0.228) to 

0.029 

(0.580) to 

(0.185) 

(1.14) to 

(0.531) 

7% discount rate 0.053 to 

0.062 

0.045 to 

0.066 

(0.237) to 

(0.111) 

(0.455) to 

(0.261) 

(0.791) to 

(0.495) 

Industry Impacts 

Industry NPV (2009$ million) (51.9) to 

(52.6) 

(55.1) to 

(56.5) 

(68.0) to 

(77.2) 

(82.9) to 

(97.6) 

(89.9) to 

(112.1) 

Industry NPV (% change) (9.4) to 

(9.5) 

(9.9) to 

(10.2) 

(12.3) to 

(13.9) 

(15.0) to 

(17.6) 

(16.2) to 

(20.2) 

Cumulative Emissions Reduction 

CO2 (Mt) 1.41 2.05 4.1 5.09 6.09 

NOX (1000 tons) 1.14 1.65 3.3 4.09 4.9 

Hg (tons) 0.01 0.01 0.02 0.02 0.03 

Value of Cumulative Emissions Reduction 

CO2 (2009$ billion)* 0.012 to 

0.12 

0.017 to 

0.17 

0.035 to 

0.34 

0.043 to 0.41 0.051 to 

0.50 

NOX – 3% discount rate (2009$ 

billion) 

0.000 to 

0.004 

0.001 to 

0.005 

0.001 to 

0.011 

0.001 to 

0.013 

0.002 to 

0.016 

NOX – 7% discount rate (2009$ 

billion) 

0.000 to 

0.002 

0.000 to 

0.002 

0.000 to 

0.004 

0.001 to 

0.005 

0.001 to 

0.006 

Mean LCC Savings** (2009$) 

Built-in All-Refrigerators 52 71 (11) (151) (258) 

Built-in Bottom-Mount 

Refrigerator-Freezers 8 2 2 (138) (207) 

Built-in Side-by-Side 

Refrigerator-Freezers 10 10 (91) (91) (182) 

Built-in Upright Freezers 66 59 (23) (23) (101) 

Median PBP (years) 

Built-in All-Refrigerators 1.4 2.6 13.7 25.5 31.4 

Built-in Bottom-Mount 

Refrigerator-Freezers 3.8 11.1 11.1 52.8 52.2 

Built-in Side-by-Side 

Refrigerator-Freezers 7.5 7.5 31.0 31.0 50.4 

Built-in Upright Freezers 2.9 10.7 17.8 17.8 22.6 

300
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Distribution of Consumer LCC Impacts 

Built-in All-Refrigerators 

Net Cost (%) 0.0 0.9 62 91 95 

No Impact (%) 23 18. 9.1 0.0 0.0 

Net Benefit (%) 77. 81 29 9.0 5.0 

Built-in Bottom-Mount 

Refrigerator-Freezers 

Net Cost (%) 0.6 7.0 7.0 98 99 

No Impact (%) 87 87 87 0.0 0.0 

Net Benefit (%) 12 5.9 5.9 2.0 1.5 

Built-in Side-by-Side 

Refrigerator-Freezers 

Net Cost (%) 5.8 5.8 59 59 98 

No Impact (%) 79 79 37 37 0.0 

Net Benefit (%) 16 16 4.3 4.3 2.4 

Built-in Upright Freezers 

Net Cost (%) 1.5 43 69 69 80 

No Impact (%) 20 0.6 0.5 0.5 0.3 

Net Benefit (%) 79 57 31 31 20 

Generation Capacity Reduction 

(GW)

† 0.02 0.03 0.06 0.08 0.09 

Employment Impacts 

Total Potential Changes in 

Domestic Production Workers in 

2014 (thousands) 

0.00 to 

(1.14) 

(0.00) to 

(1.14) 

0.01 to 

(1.14) 

0.01 to 

(1.14) 

0.03 to (1.14) 

Indirect Domestic Jobs 

(thousands) † 0.14 0.19 0.29 0.31 0.30 

Parentheses indicate negative (-) values. 

Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced
 

CO2 emissions. 

** For LCCs, a negative value means an increase in LCC by the amount indicated.

† Changes in 2043. 

DOE first considered TSL 5, which represents the max-tech efficiency levels. 

TSL 5 would save 0.085 quads of energy, an amount DOE considers significant. Under 

TSL 5, the NPV of consumer benefit would be -$0.791 billion to -$0.495 billion, using a 

discount rate of 7 percent, and -$1.14 billion to -$0.531 billion, using a discount rate of 3 

percent. 

301
 
The cumulative emissions reductions at TSL 5 are 6.09 Mt of CO2, 4,900 tons of 

NOX, and 0.03 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 5 ranges from $0.051 billion to $0.50 billion. Total 

generating capacity in 2043 is estimated to decrease by 0.09 GW under TSL 5. 

At TSL 5, the average LCC impact is a cost (LCC increase) of $258 for built-in 

all-refrigerators, a cost of $207 for built-in bottom-mount refrigerator-freezers, a cost of 

$182 for built-in side-by-side refrigerator-freezers, and a cost of $101 for built-in upright 

freezers. The median payback period is 31.4 years for built-in all-refrigerators, 52.2 years 

for built-in bottom-mount refrigerator-freezers, 50.4 years for built-in side-by-side 

refrigerator-freezers, and 22.6 years for built-in upright freezers. The fraction of 

consumers experiencing an LCC benefit is 5 percent for built-in all-refrigerators, 1.5 

percent for built-in bottom-mount refrigerator-freezers, 2.4 percent for built-in side-byside refrigerator-freezers, and 20 percent for built-in upright freezers. The fraction of 

consumers experiencing an LCC cost is 95 percent for built-in all-refrigerators, 99 

percent for built-in bottom-mount refrigerator-freezers, 98 percent for built-in side-byside refrigerator-freezers, and 80 percent for built-in upright freezers. 

At TSL 5, the projected change in INPV ranges from a decrease of $89.9 million 

to a decrease of $112.1 million. If the high end of the range of impacts is reached as DOE 

expects, TSL 5 could result in a net loss of 20.2 percent in INPV to built-in refrigeration 

product manufacturers. 

302
 
The Secretary has concluded that at TSL 5 for built-in refrigeration products, the 

benefits of energy savings, generating capacity reductions, emission reductions, and the 

estimated monetary value of the CO2 emissions reductions would be outweighed by the 

negative NPV of consumer benefits, the economic burden on a significant fraction of 

consumers due to the large increases in product cost, and the capital conversion costs and 

profit margin impacts that could result in a reduction in INPV for the manufacturers. 

Consequently, the Secretary has concluded that TSL 5 is not economically justified. 

DOE then considered TSL 4. TSL 4 would save 0.071 quads of energy, an 

amount DOE considers significant. Under TSL 4, the NPV of consumer benefit would be 

-$0.455 billion to -$0.261 billion, using a discount rate of 7 percent, and -$0.580 billion 

to -$0.185 billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 4 are 5.09 Mt of CO2, 4,090 tons of 

NOX, and 0.02 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reductions at TSL 4 ranges from $0.043 billion to $0.41 billion. Total 

generating capacity in 2043 is estimated to decrease by 0.08 GW under TSL 4. 

At TSL 4, DOE projects that the average LCC impact is a cost (LCC increase) of 

$151 for built-in all-refrigerators, a cost of $138 for built-in bottom-mount refrigeratorfreezers, a cost of $91 for built-in side-by-side refrigerator-freezers, and a cost of $23 for 

built-in upright freezers. The median payback period is 25.5 years for built-in allrefrigerators, 52.8 years for built-in bottom-mount refrigerator-freezers, 31.0 years for 

303
 
built-in side-by-side refrigerator-freezers, and 17.8 years for built-in upright freezers. The 

fraction of consumers experiencing an LCC benefit is 9 percent for built-in allrefrigerators, 2 percent for built-in bottom-mount refrigerator-freezers, 4.3 percent for 

built-in side-by-side refrigerator-freezers, and 31 percent for built-in upright freezers. The 

fraction of consumers experiencing an LCC cost is 91 percent for built-in allrefrigerators, 98 percent for built-in bottom-mount refrigerator-freezers, 59 percent for 

built-in side-by-side refrigerator-freezers, and 69 percent for built-in upright freezers. 

At TSL 4, the projected change in INPV ranges from a decrease of $82.9 million 

to a decrease of $97.6 million. If the high end of the range of impacts is reached as DOE 

expects, TSL 4 could result in a net loss of 17.6 percent in INPV to built-in refrigeration 

product manufacturers. 

The Secretary has concluded that at TSL 4 for built-in refrigeration products, the 

benefits of energy savings, generating capacity reductions, emission reductions, and the 

estimated monetary value of the CO2 emissions reductions would be outweighed by the 

negative NPV of consumer benefits, the economic burden on a significant fraction of 

consumers due to the increases in product cost, and the capital conversion costs and profit 

margin impacts that could result in a reduction in INPV for the manufacturers. 

Consequently, the Secretary has concluded that TSL 4 is not economically justified. 

DOE then considered TSL 3. TSL 3 would save 0.058 quads of energy, an 

amount DOE considers significant. Under TSL 3, the NPV of consumer benefit would be 

304
 
-$0.237 billion to -$0.111 billion, using a discount rate of 7 percent, and -$0.228 billion 

to $0.029 billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 3 are 4.1 Mt of CO2, 3,300 tons of 

NOX, and 0.02 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reduction at TSL 3 ranges from $0.035 billion to $0.34 billion. Total 

generating capacity in 2043 is estimated to decrease by 0.06 GW under TSL 3. 

At TSL 3, the average LCC impact is a cost (LCC increase) of $11 for built-in allrefrigerators, a gain of $2 for built-in bottom-mount refrigerator-freezers, a cost of $91 

for built-in side-by-side refrigerator-freezers, and a cost of $23 for built-in upright 

freezers. The median payback period is 13.7 years for built-in all-refrigerators, 11.1 years 

for built-in bottom-mount refrigerator-freezers, 31.0 years for built-in side-by-side 

refrigerator-freezers, and 17.8 years for built-in upright freezers. The fraction of 

consumers experiencing an LCC benefit is 29 percent for built-in all-refrigerators, 5.9 

percent for built-in bottom-mount refrigerator-freezers, 4.3 percent for built-in side-byside refrigerator-freezers, and 31 percent for built-in upright freezers. The fraction of 

consumers experiencing an LCC cost is 62 percent for built-in all-refrigerators, 7 percent 

for built-in bottom-mount refrigerator-freezers, 59 percent for built-in side-by-side 

refrigerator-freezers, and 69 percent for built-in upright freezers. 

At TSL 3, the projected change in INPV ranges from a decrease of $68.0 million 

to a decrease of $77.2 million. If the high end of the range of impacts is reached as DOE 

305
 
expects, TSL 3 could result in a net loss of 13.9 percent in INPV to built-in refrigeration 

product manufacturers. 

The Secretary has concluded that at TSL 3 for built-in refrigeration products, the 

benefits of energy savings, generating capacity reductions, emission reductions, and the 

estimated monetary value of the CO2 emissions reductions would be outweighed by the 

negative NPV of of consumer benefits, the slight economic burden on a significant 

fraction of consumers due to the increases in product cost, and the capital conversion 

costs and profit margin impacts that could result in a reduction in INPV for the 

manufacturers. Consequently, the Secretary has concluded that TSL 3 is not 

economically justified. 

DOE then considered TSL 2. TSL 2 would save 0.03 quads of energy, an amount 

DOE considers significant. Under TSL 2, the NPV of consumer benefit would be $0.045 

billion to $0.066 billion, using a discount rate of 7 percent, and $0.183 billion to $0.226 

billion, using a discount rate of 3 percent. 

The cumulative emissions reductions at TSL 2 are 2.05 Mt of CO2, 1,650 tons of 

NOX, and 0.01 tons of Hg. The estimated monetary value of the cumulative CO2 

emissions reduction at TSL 2 ranges from $0.017 billion to $0.17 billion. Total 

generating capacity in 2043 is estimated to decrease by 0.03 GW under TSL 2. 

306
 
At TSL 2, the average LCC impact is a gain (LCC decrease) of $71 for built-in 

all-refrigerators, a gain of $2 for built-in bottom-mount refrigerator-freezers, a gain of 

$10 for built-in side-by-side refrigerator-freezers, and a gain of $59 for built-in upright 

freezers. The median payback period is 2.6 years for built-in all-refrigerators, 11.1 years 

for built-in bottom-mount refrigerator-freezers, 7.5 years for built-in side-by-side 

refrigerator-freezers, and 10.7 years for built-in upright freezers. The fraction of 

consumers experiencing an LCC benefit is 81 percent for built-in all-refrigerators, 5.9 

percent for built-in bottom-mount refrigerator-freezers, 16 percent for built-in side-byside refrigerator-freezers, and 57 percent for built-in upright freezers. The fraction of 

consumers experiencing an LCC cost is 0.9 percent for built-in all-refrigerators, 7 percent 

for built-in bottom-mount refrigerator-freezers, 5.8 percent for built-in side-by-side 

refrigerator-freezers, and 43 percent for built-in upright freezers. 

At TSL 2, the projected change in INPV ranges from a decrease of $55.1 million 

to a decrease of $56.5 million. If the high end of the range of impacts is reached as DOE 

expects, TSL 2 could result in a net loss of 10.2 percent in INPV to built-in refrigeration 

product manufacturers. 

The Secretary has concluded that at TSL 2 for built-in refrigeration products, the 

benefits of energy savings, positive NPV of consumer benefits, generating capacity 

reductions, emission reductions, and the estimated monetary value of the CO2 emissions 

reductions would outweigh the slight economic burden on a small fraction of consumers 

307
 
due to the increases in product cost, and the capital conversion costs and profit margin 

impacts that could result in a reduction in INPV for the manufacturers. 

After considering the analysis, comments responding to the September 2010 

NOPR, and the benefits and burdens of TSL 2, the Secretary has concluded that this trial 

standard level will offer the maximum improvement in efficiency that is technologically 

feasible and economically justified, and will result in significant conservation of energy. 

Therefore, DOE today is adopting TSL 2 for built-in refrigeration products. The amended 

energy conservation standards for built-in refrigeration products, expressed as equations 

for maximum energy use, are shown in Table VI.77. 

Table VI.77 Amended Standards for Built-In Refrigeration Products 

Product Class 

Equations for Maximum 

Energy Use (kWh/yr) 

based on AV (ft3) based on av (L) 

3-BI. Built-in refrigerator-freezer—automatic defrost with topmounted freezer without an automatic icemaker. 9.15AV + 264.9 0.323av + 264.9 

3I-BI. Built-in refrigerator-freezers—automatic defrost with 

top-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

9.15AV + 348.9 0.323av + 348.9 

3A-BI. Built-in All-refrigerators—automatic defrost. 8.02AV + 228.5 0.283av + 228.5 

4-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer without an automatic icemaker. 10.22AV + 357.4 0.361av + 357.4 

4I-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

10.22AV + 441.4 0.361av + 441.4 

5-BI. Built-In Refrigerator-freezers—automatic defrost with 

bottom-mounted freezer without an automatic icemaker. 9.40AV + 336.9 0.332av + 336.9 

5I-BI. Built-In Refrigerator-freezers—automatic defrost with 

bottom-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

9.40AV + 420.9 0.332av + 420.9 

5A-BI. Built-in refrigerator-freezer—automatic defrost with 

bottom-mounted freezer with through-the-door ice service. 9.83AV + 499.9 0.347av + 499.9 

7-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer with through-the-door ice service. 10.25AV + 502.6 0.362av + 502.6 

9-BI. Built-In Upright freezers with automatic defrost without 9.86AV + 260.9 0.348av + 260.9 

308
 
 

an automatic icemaker. 

9I-BI. Built-in upright freezers with automatic defrost with an 

automatic icemaker. 9.86AV + 344.9 0.348av + 344.9 

AV= adjusted volume in cubic feet; av = adjusted volume in liters 

5. Summary of Benefits and Costs (Annualized) of Amended Standards 

The benefits and costs of today’s amended standards can also be expressed in 

terms of annualized values. The annualized monetary values are the sum of (1) the 

annualized national economic value, expressed in 2009$, of the benefits from operating 

products that meet the amended standards (consisting primarily of operating cost savings 

from using less energy, minus increases in equipment purchase costs, which is another 

way of representing consumer NPV), and (2) the monetary value of the benefits of 

emission reductions, including CO2 emission reductions.49 The value of the CO2 

reductions (i.e. SCC) is calculated using a range of values per metric ton of CO2 

developed by a recent interagency process. The monetary costs and benefits of 

cumulative emissions reductions are reported in 2009$ to permit comparisons with the 

other costs and benefits in the same dollar units. 

Although combining the values of operating savings and CO2 reductions provides 

a useful perspective, two issues should be considered. First, the national operating 

49 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 2010, 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.2. 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. 

309
 
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 SCC are performed with different methods that 

use quite different time frames for analysis. The national operating cost savings is 

measured for the lifetime of refrigeration products shipped in 2014–2043. The SCC 

values, on the other hand, reflect the present value of future climate-related impacts 

resulting from the emission of one ton of carbon dioxide in each year. These impacts 

continue well beyond 2100. 

Estimates of annualized values are shown in Table VI.78. The results under the 

primary estimate are as follows. Using a 7-percent discount rate and the SCC series 

having a value of $22.1/ton in 2010 (in 2009$), the cost of the standards in today’s rule is 

$1,167 to $1,569 million per year in increased equipment costs, while the annualized 

benefits are $2,275 million per year in reduced equipment operating costs, $515 million 

in CO2 reductions, and $21 million in reduced NOX emissions. In this case, the net 

benefit amounts to $1,241 to $1,643 million per year. Using a 3-percent discount rate and 

the SCC series having a value of $22.1/ton in 2010, the cost of the standards in today’s 

rule is $1,081 to $1,526 million per year in increased equipment costs, while the benefits 

are $3,160 million per year in reduced operating costs, $515 million in CO2 reductions, 

and $28 million in reduced NOX emissions. In this case, the net benefit amounts to 

$2,176 to $2,622 million per year. 

310
 
 

 

 

Table V-78 Annualized Benefits and Costs of Amended Standards for Refrigeration 

Products Sold in 2014-2043 

Discount Rate 

Primary 

Estimate* 

Low Net 

Benefits 

Estimate* 

High Net 

Benefits 

Estimate* 

Monetized (million 2009$/year) 

Benefits 

Operating Cost Savings 

7% 2275 1996 2560 

3% 3160 2720 3596 

CO2 Reduction at $4.9/t** 5% 162 162 162 

CO2 Reduction at $22.1/t** 3% 515 515 515 

CO2 Reduction at $36.3/t** 2.5% 772 772 772 

CO2 Reduction at $67.1/t** 3% 1567 1567 1567 

NOX Reduction at 

$2,519/ton** 

7% 21 21 21 

3% 28 28 28 

Total† 

7% plus CO2 

range 

2457 to 3863 2178 to 3584 2742 to 4148 

7% 2810 2531 3095 

3% 3703 3263 4139 

3% plus CO2 

range 

3350 to 4755 2910 to 4315 3786 to 5192 

Costs 

Incremental Product Costs 

7% 1167 to 1569 1480 1232 

3% 1081 to 1526 1430 1147 

Net Benefits/Costs 

Total† 

7% plus CO2 

range 

888 to 2696 698 to 2103 1511 to 2916 

7% 1241 to 1643 1051 1863 

3% 2176 to 2622 1832 2993 

3% plus CO2 

range 

1823 to 3674 1479 to 2885 2640 to 4045 

* The Primary, Low Benefits, and High Benefits Estimates utilize forecasts of energy prices and housing 

starts from the AEO2010 Reference case, Low Economic Growth case, and High Economic Growth case, 

respectively. In addition, incremental product costs reflect a medium decline rate for product prices in the 

Primary Estimate, a low decline rate for product prices in the Low Benefits Estimate, and a high decline 

rate for product prices in the High Benefits Estimate. In the Primary estimate, the range of results for 

incremental product costs reflects the range of product price forecasts. 

311
 
 

 

 

** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under 

several scenarios. The values of $4.9, $22.1, and $36.3 per metric ton (t) are the averages of SCC 

distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $67.1/t 

represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The value for 

NOX (in 2009$) is the average of the low and high values used in DOE’s analysis 

† Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount 

rate, which is $22.1/t in 2010 (in 2009$). In the rows labeled as “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. 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 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 home appliance 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 

refrigeration products that are not captured by the users of such products. These 

benefits include externalities related to environmental protection and energy 

security that are not reflected in energy prices, such as reduced emissions of 

greenhouse gases. 

312
 
 

 

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 draft 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. They are available for public review in 

the Resource Room of DOE’s Building Technologies Program, 950 L’Enfant Plaza, SW., 

Suite 600, Washington, DC 20024, (202) 586-2945, between 9:00 a.m. and 4:00 p.m., 

Monday through Friday, except Federal holidays. 

DOE has also reviewed this 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 

313
 
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. 

We emphasize 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.” 

DOE emphasizes that Executive Order 13563 calls for “periodic review of 

existing significant regulations,” with close reference to empirical evidence. Moreover, 

with respect to energy conservation standards, EPCA mandates that DOE reveiew its 

regulations, “not later than 6 years after issuance of any final rule establishing or 

amending an energy efficiency standard. As part of the retrospective review, DOE will 

review its data on refrigerator prices and costs and, as part of that review, will consider 

tracking additional data on retail refrigerator prices and costs for the product classes 

314
 
 

identified in the rule as a means of comparing actual refrigerator prices and costs to 

prices and costs forecasted as a result of the standards imposed by today’s and any future 

rule. Such a review will likely be a part of the periodic review of energy efficiency 

standards for refrigerators called for under Executive Order 13563. DOE’s plan for 

conducting periodic reveiew, which will be updated regularly, should be consulted for 

further information. See: http://energy.gov/gc/report-appliance-regulation-violation/exparte-communications/restrospective-regulatory-review 

For the reasons stated in the preamble, DOE believes that today’s final rule is 

consistent with these principles, including that, to the extent permitted by law, agencies 

adopt a regulation only upon a reasoned determination that its benefits justify its costs 

and select, in choosing among alternative regulatory approaches, those approaches that 

maximize net benefits. 

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, and a final regulatory flexibility analysis (FRFA) for any such rule that 

an agency adopts as a final rule, unless the agency certifies that the rule, if promulgated, 

315
 
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 website 

(www.gc.doe.gov ). 

For manufacturers of residential refrigerators, refrigerator-freezers, 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, 30850 (May 15, 2000), as amended 

at 65 FR 53533, 53545 (September 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 . 

Residential refrigeration product manufacturing is classified under NAICS 335222, 

“Household Refrigerator and Home Freezer Manufacturing.” The SBA sets a threshold of 

1,000 employees or less for an entity to be considered as a small business for this 

category. 

316
 
DOE reviewed its September 2010 NOPR under the provisions of the Regulatory 

Flexibility Act and the procedure and policies published on February 19, 2003. In the 

NOPR, DOE certified that the standards for residential refrigeration products set forth in 

the proposed rule, if promulgated, would not have a significant economic impact on a 

substantial number of small entities. DOE made this determination because only one 

small business manufacturer would potentially be impacted by the proposed energy 

conservation standards, and that manufacturer represents a small percentage of covered 

products and is a leader in a niche market. 75 FR at 59571-59572 (September 27, 2010). 

DOE also sought comment on the impacts of the proposed amended energy 

conservation standards on small business manufacturers of residential refrigeration 

products. DOE received no comments on the certification or its additional requests for 

comment on small business impacts in response to the NOPR. Thus, DOE reaffirms the 

certification and has not prepared a FRFA for this final rule. 

C. Review Under the Paperwork Reduction Act 

Manufacturers of refrigeration products must certify to DOE that those products 

comply with any applicable energy conservation standard. In certifying compliance, 

manufacturers must test their refrigeration products according to the DOE test procedure 

for refrigeration products, including any amendments adopted for that test procedure. 

DOE has proposed regulations for the certification and recordkeeping requirements for 

all covered consumer products and commercial equipment, including refrigeration 

products (i.e. refrigerators, refrigerator-freezers, and freezers). 75 FR 56796 (Sept. 16, 

317
 
2010). The information collection requirement for the certification and recordkeeping is 

subject to review and approval by OMB under the Paperwork Reduction Act (PRA). 

DOE received OMB approval for collecting certification, compliance, and enforcement 

information for all covered products and covered equipment on February 3, 2011 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. Send comments regarding this burden estimate or any other aspect of this 

collection of information, including suggestions for reducing this burden, to Office of the 

Chief Information Officer, Records Management Division, IM-23, Paperwork Reduction 

Project (1910-1400), U.S. Department of Energy, 1000 Independence Ave SW, 

Washington, DC 20585-1290; and to the Office of Management and Budget (OMB), 

OIRA, Paperwork Reduction Project (1910-1400), Washington, DC 20503. 

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 an environmental assessment (EA) of the impacts of the 

amended rule pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 

318
 
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 final EA has 

been included as chapter 15 of the final rule TSD. Before issuing this final rule for 

refrigeration products, DOE considered public comments. A finding of no significant 

impact (FONSI) accompanies the final EA. 

E. Review Under Executive Order 13132 

Executive Order 13132, "Federalism," 64 FR 43255 (August 10, 1999) imposes 

certain requirements on 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 final rule. States can petition DOE for 

319
 
exemption from such preemption to the extent, and based on criteria, set forth in EPCA. 

(42 U.S.C. 6297) 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 (February 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 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 final rule meets the relevant standards of Executive 

Order 12988. 

320
 
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. Pub. L. No. 104-4, sec. 201 (codified at 2 

U.S.C. 1531). For an amended 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 “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; also available at 

http://www.gc.doe.gov. 

Although today’s final rule does not contain a Federal intergovernmental 

mandate, it may impose expenditures of $100 million or more on the private sector. 

Specifically, the final rule will likely result in a final rule that could impose expenditures 

of $100 million or more. Such expenditures may include (1) investment in research and 

development and in capital expenditures by refrigeration product manufacturers in the 

321
 
years between the final rule and the compliance date for the new standard, and (2) 

incremental additional expenditures by consumers to purchase higher-efficiency 

refrigeration products, starting in 2014. 

Section 202 of UMRA authorizes an agency to respond to the content 

requirements of UMRA in any other statement or analysis that accompanies the final 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 notice of final rulemaking and the “Regulatory Impact 

Analysis” section of the TSD for this final 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 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. 6295(h) and (o), 6313(e), and 6316(a), today’s final rule would establish 

energy conservation standards for residential refrigeration products 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 

322
 
alternatives considered by DOE is presented in the “Regulatory Impact Analysis” section 

of the TSD for today’s final 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 (March 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 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 (February 

22, 2002), and DOE’s guidelines were published at 67 FR 62446 (October 7, 2002). DOE 

323
 
has reviewed today’s final rule 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 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 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 concluded that today’s regulatory action, which sets forth energy 

conservation standards for refrigeration products, is not a significant energy action 

because the amended 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 final rule. 

324
 
L. Review Under the Information Quality Bulletin for Peer Review 

On December 16, 2004, OMB, in consultation with the Office of Science and 

Technology (OSTP), issued its Final Information Quality Bulletin for Peer Review (the 

Bulletin). 70 FR 2664 (January 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 and/or projects. The 

“Energy Conservation Standards Rulemaking Peer Review Report” dated February 2007 

325
 
 

 

has been disseminated and is available at the following Web site: 

http://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html. 

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the 

issuance of today’s final rule prior to the effective date set forth at the outset of this 

notice. The report will state that it has been determined that the rule is a “major rule” as 

defined by 5 U.S.C. 804(2). DOE will also submit the supporting analyses to the 

Comptroller General in the U.S. Government Accountability Office (GAO) and make 

them available to each House of Congress. 

326
 

For the reasons set forth in the preamble, DOE amends chapter II, subchapter D, of title 

10 of the Code of Federal Regulations, as set forth below: 

PART 430 - ENERGY CONSERVATION PROGRAM FOR CONSUMER 

PRODUCTS 

1. The authority citation for Part 430 continues to read as follows: 

Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note. 

2. In §430.2, add the definition for “Built-in refrigerator/refrigerator-freezer/freezer,” in 

alphabetical order, and revise the definition for “Compact refrigerator/refrigeratorfreezer/freezer” to read as follows: 

§430.2 Definitions. 

* * * * * 

Built-in refrigerator/refrigerator-freezer/freezer means any refrigerator, 

refrigerator-freezer or freezer with 7.75 cubic feet or greater total volume and 24 inches 

or less depth not including doors, handles, and custom front panels; with sides which are 

not finished and not designed to be visible after installation; and that is designed, 

intended, and marketed exclusively (1) to be installed totally encased by cabinetry or 

panels that are attached during installation, (2) to be securely fastened to adjacent 

cabinetry, walls or floor, and (3) to either be equipped with an integral factory-finished 

face or accept a custom front panel. 

328
 
* * * * * 

Compact refrigerator/refrigerator-freezer/freezer means any refrigerator, 

refrigerator-freezer or freezer with total volume less than 7.75 cubic foot (220 liters) 

(rated volume as determined in appendices A1 and B1 of subpart B of this part before 

appendices A and B become mandatory and as determined in appendices A and B of this 

subpart once appendices A and B become mandatory (see the notes at the beginning of 

appendices A and B)). 

* * * * * 

3. In §430.32 revise paragraph (a) to read as follows: 

§430.32 Energy and water conservation standards and their effective dates. 

* * * 

(a) Refrigerators/refrigerator-freezers/freezers. These standards do not apply to 

refrigerators and refrigerator-freezers with total refrigerated volume exceeding 39 cubic 

feet (1104 liters) or freezers with total refrigerated volume exceeding 30 cubic feet (850 

liters). The energy standards as determined by the equations of the following table(s) 

shall be rounded off to the nearest kWh per year. If the equation calculation is halfway 

between the nearest two kWh per year values, the standard shall be rounded up to the 

higher of these values. 

The following standards remain in effect from July 1, 2001 until [INSERT DATE 3 

YEARS AFTER PUBLICATION DATE]: 

Product Class 

Energy Standard 

Equations for 

Maximum Energy 

Use (kWh/yr) 

1. Refrigerators and refrigerator-freezers with manual defrost. 8.82AV+248.4 

0.31av+248.4 

2. Refrigerator-freezers—partial automatic defrost. 8.82AV+248.4 

329
 
0.31av+248.4 

3. Refrigerator-freezers—automatic defrost with top-mounted freezer 

without through-the-door ice service and all-refrigerator—automatic 

defrost. 

9.80AV+276.0 

0.35av+276.0 

4. Refrigerator-freezers—automatic defrost with side-mounted freezer 

without through-the-door ice service. 

4.91AV+507.5 

0.17av+507.5 

5. Refrigerator-freezers—automatic defrost with bottom-mounted freezer 

without through-the-door ice service. 

4.60AV+459.0 

0.16av+459.0 

6. Refrigerator-freezers—automatic defrost with top-mounted freezer with 

through-the-door ice service. 

10.20AV+356.0 

0.36av+356.0 

7. Refrigerator-freezers—automatic defrost with side-mounted freezer with 

through-the-door ice service. 

10.10AV+406.0 

0.36av+406.0 

8. Upright freezers with manual defrost. 7.55AV+258.3 

0.27av+258.3 

9. Upright freezers with automatic defrost. 12.43AV+326.1 

0.44av+326.1 

10. Chest freezers and all other freezers except compact freezers. 9.88AV+143.7 

0.35av+143.7 

11. Compact refrigerators and refrigerator-freezers with manual defrost. 10.70AV+299.0 

0.38av+299.0 

12. Compact refrigerator-freezer—partial automatic defrost. 7.00AV+398.0 

0.25av+398.0 

13. Compact refrigerator-freezers—automatic defrost with top-mounted 

freezer and compact all-refrigerator—automatic defrost. 

12.70AV+355.0 

0.45av+355.0 

14. Compact refrigerator-freezers—automatic defrost with side-mounted 

freezer. 

7.60AV+501.0 

0.27av+501.0 

15. Compact refrigerator-freezers—automatic defrost with bottom-mounted 

freezer. 

13.10AV+367.0 

0.46av+367.0 

16. Compact upright freezers with manual defrost. 9.78AV+250.8 

0.35av+250.8 

17. Compact upright freezers with automatic defrost. 11.40AV+391.0 

0.40av+391.0 

18. Compact chest freezers. 10.45AV+152.0 

0.37av+152.0 

AV: Adjusted Volume in ft3; av: Adjusted Volume in liters (L) 

330
 
 

 

 

The following standards apply to products manufactured starting on [INSERT DATE 3 

YEARS AFTER PUBLICATION DATE]: 

Product Class 

Equations for Maximum Energy 

Use (kWh/yr) 

based on AV (ft3) based on av (L) 

1. Refrigerator-freezers and refrigerators other than allrefrigerators with manual defrost. 7.99AV + 225.0 0.282av + 225.0 

1A. All-refrigerators—manual defrost. 6.79AV + 193.6 0.240av + 193.6 

2. Refrigerator-freezers—partial automatic defrost 7.99AV + 225.0 0.282av + 225.0 

3. Refrigerator-freezers—automatic defrost with topmounted freezer without an automatic icemaker. 8.07AV + 233.7 0.285av + 233.7 

3-BI. Built-in refrigerator-freezer—automatic defrost with 

top-mounted freezer without an automatic icemaker. 9.15AV + 264.9 0.323av + 264.9 

3I. Refrigerator-freezers—automatic defrost with topmounted freezer with an automatic icemaker without 

through-the-door ice service. 

8.07AV + 317.7 0.285av + 317.7 

3I-BI. Built-in refrigerator-freezers—automatic defrost with 

top-mounted freezer with an automatic icemaker without 

through-the-door ice service. 

9.15AV + 348.9 0.323av + 348.9 

3A. All-refrigerators—automatic defrost. 7.07AV + 201.6 0.250av + 201.6 

3A-BI. Built-in All-refrigerators—automatic defrost. 8.02AV + 228.5 0.283av + 228.5 

4. Refrigerator-freezers—automatic defrost with sidemounted freezer without an automatic icemaker. 8.51AV + 297.8 0.301av + 297.8 

4-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer without an automatic icemaker. 10.22AV + 357.4 0.361av + 357.4 

4I. Refrigerator-freezers—automatic defrost with sidemounted freezer with an automatic icemaker without 

through-the-door ice service. 

8.51AV + 381.8 0.301av + 381.8 

4I-BI. Built-In Refrigerator-freezers—automatic defrost 

with side-mounted freezer with an automatic icemaker 

without through-the-door ice service. 

10.22AV + 441.4 0.361av + 441.4 

5. Refrigerator-freezers—automatic defrost with bottommounted freezer without an automatic icemaker. 8.85AV + 317.0 0.312av + 317.0 

5-BI. Built-In Refrigerator-freezers—automatic defrost with 

bottom-mounted freezer without an automatic icemaker. 9.40AV + 336.9 0.332av + 336.9 

5I. Refrigerator-freezers—automatic defrost with bottommounted freezer with an automatic icemaker without 

through-the-door ice service. 

8.85AV + 401.0 0.312av + 401.0 

5I-BI. Built-In Refrigerator-freezers—automatic defrost 

with bottom-mounted freezer with an automatic icemaker 

without through-the-door ice service. 

9.40AV + 420.9 0.332av + 420.9 

5A. Refrigerator-freezer—automatic defrost with bottommounted freezer with through-the-door ice service. 9.25AV + 475.4 0.327av + 475.4 

5A-BI. Built-in refrigerator-freezer—automatic defrost with 

bottom-mounted freezer with through-the-door ice service. 9.83AV + 499.9 0.347av + 499.9 

6. Refrigerator-freezers—automatic defrost with topmounted freezer with through-the-door ice service. 8.40AV + 385.4 0.297av + 385.4 

7. Refrigerator-freezers—automatic defrost with sidemounted freezer with through-the-door ice service. 8.54AV + 432.8 0.302av + 432.8 

7-BI. Built-In Refrigerator-freezers—automatic defrost with 

side-mounted freezer with through-the-door ice service. 10.25AV + 502.6 0.362av + 502.6 

8. Upright freezers with manual defrost. 5.57AV + 193.7 0.197av + 193.7 

331
 
 

9. Upright freezers with automatic defrost without an 

automatic icemaker. 8.62AV + 228.3 0.305av + 228.3 

9I. Upright freezers with automatic defrost with an 

automatic icemaker. 8.62AV + 312.3 0.305av + 312.3 

9-BI. Built-In Upright freezers with automatic defrost 

without an automatic icemaker. 9.86AV + 260.9 0.348av + 260.9 

9I-BI. Built-in upright freezers with automatic defrost with 

an automatic icemaker. 9.86AV + 344.9 0.348av + 344.9 

10. Chest freezers and all other freezers except compact 

freezers. 7.29AV + 107.8 0.257av + 107.8 

10A. Chest freezers with automatic defrost. 10.24AV + 148.1 0.362av + 148.1 

11. Compact refrigerator-freezers and refrigerators other 

than all-refrigerators with manual defrost. 9.03AV + 252.3 0.319av + 252.3 

11A.Compact all-refrigerators—manual defrost. 7.84AV + 219.1 0.277av + 219.1 

12. Compact refrigerator-freezers—partial automatic defrost 5.91AV + 335.8 0.209av + 335.8 

13. Compact refrigerator-freezers—automatic defrost with 

top-mounted freezer. 11.80AV + 339.2 0.417av + 339.2 

13I. Compact refrigerator-freezers—automatic defrost with 

top-mounted freezer with an automatic icemaker. 11.80AV + 423.2 0.417av + 423.2 

13A. Compact all-refrigerators—automatic defrost. 9.17AV + 259.3 0.324av + 259.3 

14. Compact refrigerator-freezers—automatic defrost with 

side-mounted freezer. 6.82AV + 456.9 0.241av + 456.9 

14I. Compact refrigerator-freezers—automatic defrost with 

side-mounted freezer with an automatic icemaker. 6.82AV + 540.9 0.241av + 540.9 

15. Compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer. 11.80AV + 339.2 0.417av + 339.2 

15I. Compact refrigerator-freezers—automatic defrost with 

bottom-mounted freezer with an automatic icemaker. 11.80AV + 423.2 0.417av + 423.2 

16. Compact upright freezers with manual defrost. 8.65AV + 225.7 0.306av + 225.7 

17. Compact upright freezers with automatic defrost. 10.17AV + 351.9 0.359av + 351.9 

18. Compact chest freezers. 9.25AV + 136.8 0.327av + 136.8 

AV=Total adjusted volume, expressed in ft3

, as determined in appendices A and B of subpart B of 

this part. 

av=Total adjusted volume, expressed in Liters. 

* * * * * 

332