Energy Conservation Standards forResidential Refrigerators and FreezersPreliminary Analysis Public MeetingBuilding Technologies ProgramOffice of Energy Efficiency and Renewable EnergyU.S. Department of EnergyDecember 10, 20092To present methodologies and characterize results for analyses todateTo discuss specific issues related to each analysisTo seek input from attendees on methodologies, assumptions anddata sourcesTo describe upcoming analyses and next stepsPurpose of the Public Meeting3Issues for CommentIssue Box: DOE welcomes comments, data, and informationconcerning its preliminary analysis on residentialrefrigeration products. Throughout this presentation,issues that correspond to issues raised in DOE’spublished material from this preliminary analysis areraised for discussion in boxes like this one. Nonetheless,comments are welcome on any part of DOE’s analysis.4234Background and Legal AuthorityPublic Meeting Agenda5Market & Tech; Screening; Engineering2Energy Use; Markup Analysis341Statute and Context5Life-Cycle Cost and Payback Period AnalysisNational Impact Analysis6Preliminary MIA; NOPR Analyses5Previous RulemakingsFinal Rule published November 17, 1989 set performancestandards effective January1, 1993. (54 FR at 47916)Rule correction affecting three product classes published October24, 1990. (55 FR at 42845)Second round final rule published April 28, 1997 for standardseffective July 1, 2001. (62 FR at 23102)Analyses published in October 2005 tosupport priority setting foradditional refrigerator rulemaking.Energy Independence and SecurityAct 2007 (EISA 2007) requirespublication of updated standards byDecember 31, 2010 to takeeffect January 1, 2014.6Stakeholder Participation in the Rulemaking ProcessFederal RegisternoticesFrameworkDocumentPreliminaryAnalysisNOPRFinalRule•Public meetings and oral comments•Written comments on Federal Register notices, TechnicalSupport Documents and Analytical Spreadsheets•Data input from manufacturers and other interested parties.StakeholderparticipationTodayStatute and Context7Preliminary Analysis Rulemaking StageFrameworkDocumentANOPRNOPRFinalRuleNOPRFinalStatute and ContextMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy Use &End Use LoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisPreliminaryManufacturerImpactAnalysisPreliminaryAnalysis8Key Documents Describing the Preliminary ActivitiesExecutive Summary includes:•An overview of the preliminary activities and preliminary technical support document(TSD);•Key results of the analyses; and•Issues on which DOE seeks comment from interested parties.Chapter 2 of the preliminary TSD discusses the analysis approach andincludes:•A review of the analyses conducted andplans for analyses ofsubsequent rulemakingstages; and•A discussion of comments on the analyticalFramework from interested parties andDOE’s responses to those comments.Notice of Public Meeting (NOPM) and availability of the Preliminary TSDincludes:•Details of the public meeting for the Refrigeration Products preliminary activities andanalyses; and•A description of the preliminary analyses,results, and documentation available on thewebsite for interested parties to review.9FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysesFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels10FrameworkDocumentANOPRNOPRFinalRuleNOPRPreliminaryAnalysesAnalyses for Final RuleFinalReviewReviseNOPRAnalysesFinalRuleStatute and Context11The Energy Policy and Conservation Act (EPCA) directs DOE to considerseven factors when setting energy conservation standardsFactorAnalysis1. Economic impact on consumersand manufacturersLife-cycle cost analysisManufacturer impact analysis2. Lifetime operating cost savingsLife-cycle cost analysis3. Total projected energy savingsNational impact analysis4. Impact on utility or performanceScreening analysisEngineering analysis5. Impact of any lessening ofcompetitionManufacturer impact analysis6. Need for national energyconservationNational impact analysis7. Other factors the Secretaryconsiders relevantEnvironmental assessmentUtility impact analysisEmployment impact analysis12Comments from ParticipantsParticipants are invited toprovide summary comments orstatementsParticipants are invited to raiseadditional issues for discussiontodayPreliminary analysis comment period open through January 15,201013234Background and Legal AuthorityPublic Meeting Agenda5Market & Tech; Screening; Engineering2Energy Use; Markup Analysis341Statute and Context5Life-Cycle Cost and Payback Period AnalysisNational Impact Analysis6Preliminary MIA; NOPR Analyses14FrameworkDocumentPreliminaryActivitiesNOPRFinalRuleEffectiveDatePreliminary Activities Flow DiagramScreeningAnalysisEngineeringAnalysisEnergy UseCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups toDetermineProductPriceLife-CycleCost andPaybackPeriodAnalysesMarket &TechnologyAssessmentPreliminaryManufacturerImpact Analysis15Market & Technology Assessment:•To characterize the residential refrigerator, refrigerator-freezer, and freezermarket to determine available product efficiencies, manufacturers, shipmentsby product class, and technologiesavailable for increasing efficiencies.PurposeMarket and Technology Assessment16Market CharacteristicsMarket and Technology AssessmentRefrigerators and Refrigerator-Freezers:•Standard-sized refrigerator-freezers:•Roughly 90% of market held by3 major domestic manufacturers•Shipments peaked at 11 million units in 2005 and 2006•Shipments dropped to just over 9 million units in 2008*•Compact†refrigerators:•Roughly 1⁄4 of market held by1 international manufacturer•Roughly 1⁄4 of market held by5 domestic manufacturers•Remainder split among smaller suppliers•Shipments were close to 2million units in 2006 and 2007*Freezers:•Chest and upright freezers:•85% of market held by 2 North American manufacturers•13% of market held by one manufacturer outside North America•Shipments were around 2 million units in 2007*•Compact†freezers:•500,000 compact freezers were shipped in 2007**Appliance Magazine Data†Compact products have less than 7.75 ft3refrigerated volume and are less than 36 inches in height.17Market and Technology AssessmentTest ProceduresConcurrent test procedure rulemaking:•DOE expects to propose manytest procedure amendments.•Two-step timing of applicability oftest procedure (TP) amendments:•Some amendments to be applicable shortly after TP final rule.•Some amendments to be applicable coincident with new energyconservation standards (ECS).•The ECS preliminary analyseshave been conducted based on DOE’sexpectations regarding the amendments to be promulgated in the TP final rule.Key test procedure changes affecting preliminary analyses:•Temperature changes planned for IEC 62552:•Refrigerator-freezers: 5 ̊F / 45 ̊F compartment temperatureschange to 0 ̊F / 39 ̊F•Refrigerators: 15 ̊F / 45 ̊F compartment temperatureschange to 15 ̊F / 39 ̊F•All-Refrigerators: 38 ̊F compartment temperature changes to 39 ̊F•Volume adjustment factors change for all products•Variable Anti-Sweat Heater Control•Modified volume calculation method•Reinforcement of icemaker requirements, but no icemaking energy in analyses!18Market and Technology AssessmentThe analyses currently do not incorporate icemaking energy use.There is no measurement of icemaking energy in the current testprocedure.None of the comments made during the Framework phase explicitlycalled for measurement of icemaking energy.AHAM began working on a test procedure for measurement oficemaking energy in summer 2009.DOE will be considering these factors in the development of the finalrules for the energy conservation standard and test procedure.19Market and Technology AssessmentRequest for Comment:Icemaking Energy UseIssue 20: Test Procedure Revision to Incorporate Icemaking EnergyUse:DOE requests comments on icemaking energy use:1)What is the expected schedule for finalizing an accurate andrepeatable test procedure?2)What type of energy use metric involving icemaking energyuse should be established?3)What is a fair way of establishing maximum icemakingenergy use as a function of product class and adjustedvolume?4)What technology options exist to reduce icemaking energyuse?20Market and Technology AssessmentProduct Classes: Framework Phase Proposals andCommentsNew classes proposed at the framework workshop:•19: Refrigerator-freezers—automaticdefrost with bottom-mounted freezerwith TTD ice service•20: Chest freezers with automatic defrost•DOE proposes redesignating these product classes 5A and 10A forconsistency with Canadian Standards,as suggested in several comments.Convertible-bottom-drawer refrigerator-freezers:•No proposed new product class at this time.Wine coolers:•These products are not refrigerators andDOE currently has no authority toregulate them.Built-in products•Comments were received supporting separate product classes for built-inproducts.•DOE has conducted preliminary assessment of this issuebut has not yetdetermined approach forthis rulemaking.21Market and Technology AssessmentProduct Classes: Current Developments•Separation of product classes due to expected revised test procedures:•Energy use of refrigerators and refrigerator-freezers should increase, whileenergy use of all-refrigerators should decrease.•Some product classes includeboth refrigerators and all-refrigerators. Likewisesome include both refrigerator-freezers and all-refrigerators.•The all-refrigerators, which have 0.5 ft3of freezer volume or smaller, need tohave separate product classes in order to have meaningful standards.•Clarification of automatic defrost for all-refrigerators:•Manual Defrost: “ . . . defrosting .. . is accomplished bynatural or manualmeans with manual initiationand manual terminationof the over-all defrostoperation”(AHAM HRF-1-1979)•Off-cycle defrost could not be considered manual and hence is automatic.•Combination of product classes due to low shipment volumes and productsimilarity:•Product classes 1 and 2.•Product classes 11 and 12.22Product ClassDefinition1AAll-refrigerators with manual defrost*3AAll-refrigerators with automatic defrost5ARefrigerator-freezers—automatic defrost with bottom-mounted freezer with TTD ice service10AChest freezers with automatic defrost11ACompact all-refrigerators with manual defrost*13ACompact all-refrigerators with automatic defrostMarket and Technology AssessmentProposed Product Classes* Are there any products in this class?DOE has modified changes to product class definitions that were proposedin the Framework:•Rename product classes 19 and 20 asnew product classes 5A and 10A•Establish separate product classes 1A,3A, 11A, and 13A for all-refrigeratorsFreezers23Market and Technology AssessmentRequest for Comment:Product Class DefinitionsIssue 1: Use of the Proposed Designations for Product Classes 5Aand 10A:DOE proposes to re-designate product classes initiallynamed 19 and 20 as 5A and 10A to maintain harmonizationwith Canadian Standards.Issue 2: Establishment of Separate Product Classes for AllRefrigeratorsDOE proposes to establish product classes 1A, 3A, 11A, and13A for all-refrigerators to allow separate standards forthese products.Issue 3:Possible Combination of Product Classes 1 and 2, andProduct Classes 11 and 12DOE is considering combination of these pairs of productclasses.24Market and Technology AssessmentRequest for Comment:Product Class DefinitionsIssue 15: Clarification of the Distinction Between Manual Defrost andAutomatic Defrost for All-Refrigerators:DOE requests comment on the interpretation that off-cycledefrost is a form of automatic defrost for all-refrigerators.25Technology AssessmentTechnology AssessmentDOE identified technologies for each product covered in thisrulemaking from the following sources:•Technical support documentsfrom previous rulemakings;•Literature review;•Product teardowns; and•Input from interested parties.The full list of technologies thatDOE identified can be found inChapter 3, Market and Technology Assessment , of the preliminarytechnical support document.26Screening AnalysisScreening AnalysisPURPOSE: To apply screening criteria established by DOE todetermine which technologies toevaluate and which to screenout.Technologies were screened using the following criteria:•Technological feasibility;•Practicability to manufacture, install and service;•Adverse impacts on product utility or product availability; and•Adverse impacts on health or safety.Chapter 4 of the preliminary TSD includes details on thescreening process.27Technologies Screened InScreening AnalysisDesign OptionPC3PC5PC7PC9PC10PC11PC18Increased Insulation Thickness91 in91 in93/4 in93/4 inVacuum-Insulated Panels9999999Improved Compressor Efficiency9999999Variable-Speed Compressor9999999Increased Evaporator Surface Area999999Increased Condenser Surface Area99999Forced Convection Condenser9Brushless DC Evaporator Fan9999Brushless DC Condenser Fan9999Adaptive Defrost9999Variable Anti-Sweat Heater Control928Screening Analysis: Framework Phase CommentsFramework comments suggested that DOE should consideralternative foam-blowing agents and refrigerants in the analysis.Pending climate change legislation could reduce availability ofHFC’s.Alternative foam-blowing agents•Industry standard HFC-245fa has bestthermal performance of allowedsubstances•CFC compounds already phased out due to ozone depletion issues•Alternative foam-blowing agents could increase energy usage, thus werenot considered as technology optionsAlternative refrigerants•Current industry standard is HFC-134a•R-600a (isobutane) could beused, but is flammable•Current UL standards limit hydrocarbon quantities to under 50 grams, thususe of R-600a was not considered as a technology option.Further details are in the Engineering Analysis and ManufacturerImpact Analysis sections.Screening Analysis29Preliminary Activities Flow DiagramFrameworkDocumentPreliminaryActivitiesNOPRFinalRuleEffectiveDateScreeningAnalysisEngineeringAnalysisEnergy UseCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups toDetermineProductPriceLife-CycleCost andPaybackPeriodAnalysesMarket &TechnologyAssessmentPreliminaryManufacturerImpact Analysis30Downstream Analyses•Life-Cycle Cost andPayback Period•National Impacts•Manufacturer ImpactAnalysisCost – EfficiencyRelationship

Incremental Manufacturing CostEfficiencyEngineering AnalysisCharacterize the relationship between manufacturer cost andenergy efficiency.Purpose of the Engineering Analysis31Engineering AnalysisEngineering Analysis: Methodology32Engineering AnalysisEngineering Analysis: Representative ProductsDOE conducted detailed analysis on productclasses representing more than 90% ofoverall shipments of covered products.*Within each “representative” product class, DOE selected three products fordetailed analysis:•Two units of nearly identical design except for ENERGYSTAR rating for oneof the two; and•A third unit of a different size.*Based on AHAM-aggregated data for market share byproduct class for refrigerators, refrigerator-freezers,and freezers.Analyzed Product Classes33Engineering AnalysisProduct CategoryProduct ClassCapacity(ft3)Standard-SizeRefrigerators andRefrigeratorFreezersProduct Class 3: Refrigerator-freezer—automatic defrostwith top-mounted freezerwithout TTD ice service1621Product Class 5: Refrigerator-freezers—automaticdefrost with bottom-mounted freezer without TTD iceservice18.525Product Class 7: Refrigerator-freezers—automaticdefrost with side-mounted freezer with TTD ice service2226Standard-SizeFreezersProduct Class 9: Upright freezers with automatic defrost1420Product Class 10: Chest freezers andall other freezersexcept compact freezers1520Compact-SizeRefrigerators andRefrigeratorFreezersProduct Class 11: Compact refrigeratorsand refrigeratorfreezers with manual defrost1.74Compact-SizeFreezersProduct Class 18: Compact chest freezers3.47Representative Products: DOE selected three units at two differentcapacities for each representative product class.34Request for Comment:Representative ProductsIssue 6:Variation of Product Characteristics as Compared to theRepresentative Products :DOE conducted detailed analysis on products consideredtypical for the representative product classes. Thisapproach did not provide much information regardingvariation in product design and the resulting variation incosts to achieve different efficiency levels. DOE requestscomment on the variation of refrigeration product designsand the distribution of incremental costs to achieve energyuse reductions.Engineering Analysis35Definition of the baseline efficiency levels is complicated by theexpected modification of the test procedure.•Both measured energy use andadjusted volume will change.Baseline efficiency levels are defined by the current federal energyconservation standards, using the current test procedure.DOE developed baseline efficiency curves for the expected newenergy test procedure.•AHAM provided data showing the changes in energy use and adjustedvolume for certain product classesunder the current and new procedures.•DOE modeled energy under bothprocedures for comparison.•New equations were derived describing baseline product energy use basedon the new test procedures.35Engineering AnalysisEngineering Analysis: Baseline Efficiency Levels36Current equation:Energy use relationship:Adjusted Volume relationship:New equation:New equation constants:36Engineering AnalysisNew Energy Use / Adjusted Volume RelationshipCURTPNEWTPBECESAFBEC×=CURTPNEWTPAVVCAFAV×=BAVABECCURTPCURTP+×=( )BESAFAVAVCAFESAFBVCAFAVAESAFBECNEWTPNEWTPNEWTP×+×⎟⎠⎞⎜⎝⎛×=⎟⎠⎞⎜⎝⎛+××=BESAFBAVCAFESAFANEWNEW×=×⎟⎠⎞⎜⎝⎛=;37Example: Product Class 7•AHAM aggregated data under new test procedure:•Average change to Adjusted Volume = 1.6%•Average change to Energy Use = 14.0%•ESAF = 1.14 and VCAF = 1.016•Current standard:•A = 10.1 and B = 406;•ANEW= 10.1 × 1.14÷1.016 = 11.33 and BNEW= 406 × 1.14 = 462.8•New Baseline Energy Consumption:37Engineering AnalysisNew Energy Use / Adjusted Volume Relationship:4061.10+=AVBECCURTP8.46233.11+=NEWTPNEWTPAVBEC38Request for Comment:Baseline Energy Use / Adjusted Volume RelationshipIssue 4: Approachfor Development of Baseline Energy Use/AdjustedVolume Relationships under the Proposed Test Procedure:DOE has developed energy use — adjusted volumerelationships for baseline products tested under theexpected new test procedure for use as the basis for theenergy conservation standards to be proposed in the NOPRphase of this rulemaking. DOE seeks comment both on theapproach used and the resulting baseline energy useequations.Engineering AnalysisDetails of these calculations and the resulting expected baseline energyuse equations for all product classes can be found in Chapter 5 of thepreliminary TSD.39Slope of Energy Use / Adjusted Volume RelationshipEngineering AnalysisThere are questions about the developed baseline energy useequations for some product classes, particularly PC’s 4 and 5.The existing energy conservation standard curves for theseproduct classes have noticeably lower slope than similar classes.Adjusted Volume (ft3)40DOE analysis supports suspicion that slopes of some ofthe energy use curves may be low.Engineering Analysis•DOE conducted energy analysis for the products analyzed for designs withvarying size (see Chapter 5 of the TSD for details of the analysis).•The analysis shows that the slopes ofthe curves for a number of productclasses may require adjustment.ProductClassCalculated Energy CurveSlope from ERASlope from Proposed BaselineEnergy Use Equation313.310.7512.35.3711.911.399.412.3107.79.71116.412.011A20 to 3510.5184.510.341Request for Comment:Baseline Energy Use / Adjusted Volume RelationshipIssue 5:Modification of the Baseline Energy Use/Adjusted VolumeCurve Slope:DOE invites comment on whether an adjustment to theslopes of the baseline energy use relationships based onthe proposed test procedures is warranted for any of theproduct classes, and by how much. DOE requestsinformation supporting comments that indicate the need forsuch slope changes.Engineering Analysis42Incremental efficiency levels are defined by percentageenergy use less than baseline.In this discussion, efficiency levels based on the currenttest procedure are the sameas efficiency levels based onthe new test procedure.42Engineering AnalysisIncremental Efficiency Levels43Engineering AnalysisEngineering Analysis: Max-Available and Max-TechMax-available efficiency levels identified based on ENERGY STAR and CECdatabases range from 1% below baseline for PC13 to 51% below baseline for PC2.*Max-tech levels were determined usingenergy modeling usingall design optionstechnically applicable for each product class.DOE conducted engineering analysis for efficiency levels up to45% because higherefficiency levels were notexpected to be cost-effective.*This does not include a 53% PC3 all-refrigerator.44Engineering AnalysisEngineering Analysis: Methodology45Engineering AnalysisEngineering Analysis: Energy Model DevelopmentDOE upgraded the EPA Refrigerator Analysis (ERA) program foruse in the engineering analysis•Updated algorithms for heat exchangermodeling based on more recentresearch.•Upgrade to Windows platform.•Internal iteration of heat exchangerperformance and refrigerant mass flow.•Many modifications to improve accuracy and flexibility.DOE used an interim DOS versionof the program for much of therulemaking preliminary analysis.The Windows version,incorporating all of theimprovements, is available on therulemaking website as part of therulemaking analytical tools.46Engineering AnalysisEngineering Analysis: Energy Modeling ProcessDOE acquired energy model input data from the following sources:•Reverse engineering (including physical teardown)•Laboratory energy tests•Manufacturer interviews•Component vendor interviewsDOE used energy modeling to determine the efficiency levelsachievable with selected groups of design optionsCurrentProductEnergyModelsNew TestProcedureBaselineEnergyModelEnergySavingswith SingleDesignOptionsEnergySavingswith Groupsof DesignOptionsCalibrationbased onEnergy Guideand Test DataNewTemperatures,some designchangesDetermine themost costeffectivedesign options47Product Class 5 design with French Doors•Reduction of existing product efficiency to properly represent baselineperformance (most PC5 productsare ENERGY STAR rated)•Adjustment of 18.5 ft3model to add French Doorsnot present in the selectedteardown unit•Adjustment of the 25 ft3Product Class 5A model toremove TTD feature andconvert double-drawer freezer compartment to single-drawerProduct Class 7 design•Adjustment of the 22 ft3Product Class 4 model to add TTD featureFurther details are in section 5.7.4 of the Engineering AnalysisChapter of the preliminary TSD.47Engineering AnalysisEnergy model design changes were made to establishbaseline models with the desired design configurations.48Airside thermal resistance for spine fin evaporatorsThermal resistance of composite vacuum panel / foam wallsERA output adjustment as needed to address situations in whichERA was not configured for the required calculations (thermalresistance change for only selected cabinet walls)Summary CalculationsCost-efficiency curves based on groups of design optionsCost-efficiency curves based on efficiency levels48Engineering AnalysisSupplemental Spreadsheet Calculations49Engineering AnalysisEngineering Analysis: Methodology50Engineering AnalysisCost Model MethodologyRawMaterialsFinishedMaterialsPurchasedPartsPhysicalTeardownBill ofMaterialsAssemblyProcessesManufacturingCostFabricationProcessesBOM developed fromteardownsFabricated parts•Raw material prices - publicsources, manufacturer andsupplier interviews•Fabrication process costs –manufacturer interviews, sitevisits, and internal expertisePurchased parts•Estimate price – supplierinterviews and internal expertiseManufacturer production cost•Total cost of materials, labor,and direct overheadCost model assumptions and details are explained in section5.6 of the preliminary TSD.51Engineering AnalysisEngineering Analysis: Methodology52DOE calculated incremental costs for the design options.Use of more efficient components:•Manufacturing cost difference is the component price difference as compared with theoriginal component, unless additional costs are noted.Overhead and depreciation was added for some design options.•The manufacturing model was used todevelop representative ratios ofOH/depreciation costs to direct material/labor costs for different product groups.Depreciation costs for insulation thickness increases:•Insulation thickness increases would, under a conservative assumption, requiresubstantial or complete product redesign,which may require a new manufacturingplant.•The applicable depreciation costs for differentproduct groups were determined withthe manufacturing cost model.G & A and profit:•Unless otherwise noted, DOE cost-efficiency curves include the manufacturer markupfor G&A and profit, which convertsmanufacturing production cost (MPC) tomanufacturer selling price (MSP).•DOE established a manufacturer markup equal to 26%.Engineering AnalysisIncremental Cost Estimates53Engineering AnalysisEngineering Analysis: Methodology54Cost-Efficiency Curve: Development MethodologyEngineering AnalysisBaseline energy use based on proposed energy test procedure;Design options added from the baseline to the max-tech as apathway for improving energy efficiency;Cost model developed from product teardowns and manufacturerand vendor interviews; incremental costs calculated for eachdesign option or groups of design options;Cost-efficiency curves generated based on energy improvementand costs of design option groups;Cost-efficiency curves converted to be based on efficiency levelsthrough determination of thedesign option groups required toachieve each efficiency level.•Interpolation or full inclusion of incremental design option impacts asappropriate at eachefficiency level•DOE developed curves based onefficiency levels up to 45%.•Costs of the two productsanalyzed for each productclass were averaged ateach efficiency level.DevelopBaselineCalculate CostsDevelop DesignOption PathwayGenerate CostDesign OptionCurvesConvert to CostEfficiencyCurves5555Engineering AnalysisEngineering Analysis Incremental Cost Results:Top-Mount Refrigerator-Freezer (Product Class 3)(16 ft3)ft3ft3ft356Engineering AnalysisEngineering Analysis Incremental Cost Results:Bottom-Mount Refrigerator-Freezer (Product Class 5)ft3ft357Engineering AnalysisEngineering Analysis Incremental Cost Results:Side-Mount Refrigerator-Freezer (Product Class 7)ft3ft358Engineering AnalysisEngineering Analysis Incremental Cost Results:Upright Freezer (Product Class 9)ft3ft359Engineering AnalysisEngineering Analysis Incremental Cost Results:Chest Freezer (Product Class 10)ft3ft360Engineering AnalysisEngineering Analysis Incremental Cost Results:Compact Refrigerator-Freezer (Product Class 11)ft3ft361Engineering AnalysisEngineering Analysis Incremental Cost Results:Compact Chest Freezer (Product Class 18)ft3ft362Cost-Efficiency Curves: DOE Curves vs. AHAM DataEngineering AnalysisAHAM provided aggregated incremental cost data for Product Classes3, 5, 7, 9, and 11.DOE removed the manufacturer markup from its curves for consistentcomparison to AHAM data.The AHAM curves include material, labor, overhead, depreciation andone-time expenses (i.e. R&D, marketing, etc.).In general, there is reasonable agreement between the AHAM and DOEcurves, with a few caveats.Additional details can be found insection 5.9.2 of the preliminary TSD.63Cost-Efficiency Curves: DOE Curves vs. AHAM Data:Product Class 3Engineering AnalysisThe aggregated average costs for a portion of the AHAM responses (represented by the“MIN/MAX” curve) is consistent with DOE results64Cost-Efficiency Curves: DOE Curves vs. AHAM Data:Product Class 5Engineering Analysis65Cost-Efficiency Curves: DOE Curves vs. AHAM Data:Product Class 7Engineering AnalysisThe leveling off of the AHAM curves in the 30%-35% range, especially for the 25 ft3size isexpected to be an anomaly of the reporting and aggregation process.66Cost-Efficiency Curves: DOE Curves vs. AHAM Data:Product Class 9Engineering AnalysisThe DOE costs are lower than the AHAM data, especially at the 20% level,but this discrepancydiminishes at the higher efficiency levels.67Cost-Efficiency Curves: DOE Curves vs. AHAM Data:Product Class 11Engineering AnalysisThese curves exhibit large discrepancy. DOE teardowns suggest that the costdifference at the20% (ENERGY STAR) level should besignificantly lower than $75.68Cost-Efficiency Curves: Vacuum Insulation Panels (VIPs)Engineering AnalysisDOE notes that efficiency levels significantly beyond current ENERGYSTAR levels are possible, but:•This is dependent on the use of VIPs, resulting in significant additionalcost.The LCC analysis shows that some portion of the cost of VIPs is justifiedby the additional efficiency improvement for most product classes.Thus, new standard levels could require much more widespread use ofVIPs.VIPs were not screened out, because this technology is currently used inavailable products—the technology also was not screened out in the1997 rulemaking.However, some consideration of the viability of VIPs for much highermass production levels may be appropriate.69Request for Comment:Cost-Efficiency Curves: Cost of VIPsIssue 14:Maturity of Vacuum Insulation Panels for High VolumeProduction:DOE invites comments on this issue and also requestsinformation that would allow a more rigorous manufacturingassessment to be conducted.Engineering Analysis70DOE conducted in-depth analysis on seven product classesrepresenting more than 90% of product shipments.DOE proposes to extend the rulemaking to the other productclasses after establishing standard levels for the analyzed classes.•Example: use the samerequired percent energy use reduction for PC6 aswas used for PC3.The methodology for establishing the low-volume product classstnadard levels is described in section 2.15 of the preliminary TSD.70Engineering AnalysisLow-Volume Products71Engineering AnalysisRequest for Comment:Low-Volume ProductsIssue 7:Development of Energy Standards for Low-VolumeProducts:DOE seeks comment on its suggested approaches fordeveloping energy standards for low-volume products.72Preliminary Results Regarding Differences in Built-In ProductsDOE received comment during the framework period requestingseparate product classes for built-ins due to increased challengeand costs associated with meeting higher efficiency levels.Based on input from manufacturers, DOE concluded that Built-Insare more likely to use higher-cost components to achieve ENERGYSTAR status, as compared with conventional products.Hence, DOE developed preliminary cost-efficiency curves for someBuilt-In products to more carefully examine this issue.Engineering AnalysisConventionalBuilt-InDesign ChangeCost ImpactDesign ChangeCost ImpactIncrease Compressor EERfrom 5.5 to 6.25$10.50Replace Compressor withVariable-Speed$50.00Add Brushless DC CondenserFan Motor$3.75Add Brushless DC Condenserand Evaporator Fan Motors$3.75 (cond)$3.50 (evap)TOTAL$14.25$57.25Difference$4373Preliminary Results: Bottom-Mount Refrigerator-Freezer, Built-invs. Conventional (Product Class 5)Engineering Analysis74Preliminary Results: Bottom-Mount Refrigerator-Freezer, Built-invs. Conventional (Product Class 7)Engineering Analysis75Request for Comment:Product Class Definitions: Built-in Refrigeration ProductsIssue 16: Analysis of Built-In Products:DOE seeks additional technical and cost information onbuilt-in products that would aid in assessment of whetherthe costs to achieve higher efficiency levels are significantlyhigher with these products.Engineering AnalysisPre-NOPR analysis focus has been on conventional products ofthe high-volume product classes.•DOE has not conducted complete assessment of the costdifferences associated with Built-Ins.DOE has not yet made determination regarding establishment ofseparate product classes for these products and seeks additionalinformation.76As previously mentioned, pendingclimate change legislation couldban the use of HFCs as foam-blowing agents.Current state-of-the-art for minimizing energy use is based on use ofHFC-245fa.Likely alternatives (e.g. cyclopentane) would likely result in lowerinsulation resistivity.DOE conducted preliminary analyses to assess the potential impactto efficiency levels.Analyses were conducted assuming a 10% lower resistivity,which probably overstates the difference.Results were compared to current products based on use ofHFC-245fa foam.76Supplemental Analyses:Cyclopentane Foam-Blowing AgentEngineering Analysis77Comparison of 18.5 ft3Product Class 5 refrigerator-freezer with HFC-245fa foamand product with insulationhaving 10% lower resistivity77Supplemental Analyses: Cyclopentane Foam-Blowing AgentEngineering Analysis

Incremental CostWith HFC-245fa Blowing AgentWith Insulation having 10%lower resistivityNote: Analysis assumesno insulation cost difference.78Request for Comment:Alternative Foam-Blowing AgentsIssue 17: Technical Data for Alternative Foam-Blowing Agents:DOE seeks up to date technical data on the resistivitydifferences and the impact to thermal performance ofalternative refrigerants.Issue 18: Likely Scenarios for Alternative Foam-Blowing Agents:DOE seeks comment on the likely scenarios formanufacturers, assuming that laws such as the currentpending legislation banning HFC’s are passed. Specifically,DOE seeks information regarding the timing of switching toalternative agents.Engineering AnalysisDOE expects cyclopentane to have a resistivity closer to that of HFC245fa than the value used in this analysis.Federal legislation currently pending would phase out HFCs over time.79IssuesOther IssuesDOE invites comments and recommendations from interestedparties on any other aspects relating to the Market and TechnologyAssessment, the Screening Analysis, and the Engineering Analysis.80234Background and Legal AuthorityPublic Meeting Agenda5Market & Tech; Screening; Engineering2Energy Use; Markup Analysis341Statute and Context5Life-Cycle Cost and Payback Period AnalysisNational Impact Analysis6Preliminary MIA; NOPR Analyses81FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleMarket &TechnologyScreeningAnalysisEngineeringAnalysisEnergy Use &End Use LoadCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups forEquipmentPriceDeterminationLife-CycleCost andPaybackPeriod AnalysisPreliminaryManufacturerImpactAnalysisPreliminary Activities Flow Diagram82Purpose•Determine customer prices under a standards scenario based onmanufacturer costs.•Characterize product distribution channels and market segments.•Describe refrigerator and freezer retailer direct costs, expenses, andprofits.Inputs•Firm balance sheets–SEC 10-K reports for 4 large appliance manufacturers from 2002-2005•Average sales tax rates for each Census division and large state•Retailers: U.S. Census BureauBusiness Expenses Surveyfor“Household Appliance Stores”Output•Baseline and incremental markups.Markups to Determine Equipment PricePurpose, Inputs, and OutputMarkups to Determine Equipment Price83Refrigerator and Freezer Distribution ChannelsData from AHAM indicate that an overwhelming majority ofrefrigerators and freezers are sold through retail outlets. DOE is notaware of any other significant distribution channel, and assumedthat all customers purchase appliances from these outlets.Markups to Determine Equipment PriceManufacturerRetailerConsumer84Baseline and Incremental MarkupsMarkupsrelate customer price to cost of goods sold (CGS)Baseline markupsrelate price to cost prior to a change in efficiency•Baseline markups indicate a customerprice that covers all of a retailer’sexpenses plus profit.•Direct labor costs (salaries, payroll, rental and occupancy) are included.Incremental markupsrelate the incremental change in customer priceto the incremental change in CGS beyond baseline•Some distribution costs remainconstant with CGS increases.•Incremental markups cover only expensesthat vary with CGS – in this case,expenses that increase due to anincrease in equipment efficiency.–For example, direct labor costs (salaries, payroll, rental andoccupancy) do not vary withefficiency-induced changes in CGS.•DOE assumes other operating costs and profit will scale proportionally with CGS.Markups to Determine Equipment Price85Markups to Determine Equipment PriceResulting Markup MultipliersRefrigerators and FreezersMarkupBaselineIncrementalManufacturer1.26Retailer1.451.15Distributor--Sales Tax1.069Overall1.951.5586Purpose:•Develop annual energy use data forthe life-cycle cost and paybackperiod analyses to calculateannual operating costs.Method: Standard-Sized Products•Develop household samples from DOE-EIA’s 2005 Residential Energy Consumption Survey(RECS) for the five standard-sized product classes analyzed in detail in the EngineeringAnalysis.–Standard-Sized Refrigeratorsand Refrigerator-Freezers#3: Refrigerator-freezer—auto defrost, top-mounted freezer without TTD service#5: Refrigerator-freezers—auto defrost, bottom-mounted freezer without TTD service#7: Refrigerator-freezers—auto defrost, side-mountedfreezer with TTD service–Standard-sized Freezers#9: Upright freezers, auto defrost#10: Chest freezers and all other freezers except compact freezers•Use RECS data along with Engineering Analysis data to develop annual field energy use on aper-household basis.Method: Compact Products•Use Engineering Analysis datato develop annualenergy use for the two compact productclasses analyzed in detail inthe Engineering Analysis–Compact-sized refrigerators and refrigerator-freezers#11: Compact refrigerators and refrigerator-freezers, manual defrost–Compact-sized freezers#18: Compact chest freezersEnergy Use DeterminationEnergy Use Determination87FECNEW=TECNEWxUAFField EnergyConsumption atNew Standard(kWh/year)UsageAdjustmentFactorStandard-Sized Products: Energy Use Determination ApproachEnergy Use DeterminationUnit Agefrom RECS+Unit Volumefrom RECSFECRECS=Field EnergyConsumption(kWh/year)from RECSNEWTESTRECSTECFECUAF=TECSTD=Test EnergyConsumption(kWh/year)ESAFis the Energy Standard AdjustmentFactor, a multiplicative factor thataccounts for the effect of the newtest procedure’s temperatures on energy consumptionFECNEWis determined for each household within each household sample and corresponding product class.The result is a distribution ofFECNEWfor each standard level for a given household sample and product class.Approach is carried out on a per-household basisfor all households withina RECS household sampleTECNEWTEST=TECSTDxESAFTest EnergyConsumption atNew Standard(kWh/year)ESAF from EngineeringAnalysis88Standard-Sized Products: Usage Adjustment FactorFor households with two refrigerators,DOE split the RECS energy use between thetwo, with the same UAF•UAF adjusted down by a factor of0.7 for second refrigerators assumed to be in thebasement.DOE also adjusted the UAF to account for ENERGY STAR refrigerators; ENERGYSTAR was assigned based on a model usinghousehold income and the vintage ofthe refrigerator.DOE used engineering data to define maximum and minimum plausible UAFs foreach household, and used these to remove outliers.The average UAF for each product class isgreater than 1, indicating that averagefield energy use exceedstest procedure energy use.Factors not accounted for by the test procedure:•Ice making•Degradation over timeEnergy Use Determination89Average, Minimum and Maximum Usage Adjustment FactorsEnergy Use DeterminationProduct ClassMean UAFMin. UAFMax. UAFSample SizeTop-mount refrigeratorfreezer1.230.133.082,231Bottom-mountrefrigerator- freezer1.080.132.892,242Side-by-siderefrigerator-freezer1.440.202.41871Upright freezer1.370.321.97170Chest freezer1.480.342.5624390Energy Use DeterminationExample: Product Class 3 Usage Adjustment Factor DistributionFrequency Chart.000.007.013.020.027066.5133199.52660.1810.8041.4272.0502.67310,000 Trials9,858 DisplayedForecast: UAF (1)91Example: Product Class 7 Usage Adjustment Factor DistributionFrequency Chart.000.005.011.016.0210531061592120.2330.7781.3231.8692.41410,000 Trials9,997 DisplayedForecast: UAF (1)Energy Use Determination92Average Annual Energy Use for Standard-Sized Refrigeration ProductsEnergy Use DeterminationProduct ClassProposed Test(kWh/year)Field(kWh/year)Top-mount refrigeratorfreezer534657Bottom-mountrefrigerator- freezer652699Side-by-siderefrigerator-freezer7561087Upright freezer717980Chest freezer42862393Issues for Public CommentEnergy Use DeterminationIssue 8: Field Energy Use of Standard-Size Refrigeration Products:DOE welcomes comments, data, and information regarding therelationship between field and test energy consumption forcontemporary standard-sized refrigeration products.94Energy use results for compact refrigeration productsRECS and other surveys do not provide energy use data for compact refrigeratorsand freezers.DOE assumed that the field energy use of these products is equal to their testedenergy consumption (equivalent to a UAF = 1).DOE used the California Energy Commission database to build a distribution ofproduct sizes.Energy Use DeterminationProduct ClassProposed Test(kWh/year)Field(kWh/year)Compact refrigerators andrefrigerator-freezers withmanual defrost325325Compact chest freezers31331395Issues for Public CommentEnergy Use DeterminationIssue 9: Field Energy Use of Compact Refrigeration Products:DOE welcomes comments, data, and information regarding therelationship between field and test energy consumption forcompact refrigeration products.96234Background and Legal AuthorityPublic Meeting Agenda5Market & Tech; Screening; Engineering2Energy Use; Markup Analysis341Statute and Context5Life-Cycle Cost And Payback Period AnalysisNational Impact Analysis6Preliminary MIA; NOPR Analyses97FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleNationalImpactAnalysisEnergy UseCharacterizationMarket andTechnologyAssessmentScreeningAnalysisEngineeringAnalysisMarkups toDetermineEquipmentPriceLife-CycleCost andPaybackPeriod AnalysisShipmentsAnalysisPreliminaryManufacturerImpactAnalysisPreliminary Activities Flow Diagram98Purpose•To develop the customer life-cycle cost (LCC) savings and payback period(PBP) for higher efficiency equipment compared to the baseline equipment.Purpose of the Life-Cycle Cost and Payback Period AnalysesLife-Cycle Cost and Payback Period Analysis99Method•LCC equals consumer price plus the sum of operating costs discounted to aparticular base year•Economic evaluation fromthe consumer perspective•Analysis implemented in an Excel®spreadsheet combined with Crystal Ball®•Analysis models the uncertainty and variability of inputs using Monte Carlosimulation and probability distributions–For the residential products, household samples created from 2005Residential EnergyConsumption Survey to characterize thevariability in energyuse and/or energy price•Results are expressed asLCC savings (baseline minus candidate standard level)•Simple Payback Period (PBP, years) is alsocalculated and reported in this analysisFirst Cost(Consumer Price +Installation Cost)OperatingExpensesCombine Changesin CostsLCC ResultsConvert to Present ValueLife-Cycle Cost and Payback Period Analysis100Life-Cycle Cost and Payback Period AnalysisLCC and PBP Analysis Inputs101Total Installed CostsLife-Cycle Cost and Payback Period AnalysisTotal Installed Costs = Retail Price + Installation CostEquipment Retail Price = Manufacturing Costs x Markups•Manufacturing cost vs. efficiency relationships developed in theEngineeringAnalysis•Markups and Sales Taxes developed in theMarkups to Determine EquipmentPriceanalysisInstallation costs represent the labor and materials necessary toinstall the appliance•DOE did not consider or calculate installation costs for refrigeration products•Installation costs do not vary with efficiency102Baseline Equipment PriceDOE used market sales data collectedby The NPD Group, Inc. to developdistributions of baseline prices for each product class.NPD data allowed DOE to determinethe price distribution of non-ENERGYSTAR appliances meeting the criteria for each product class.Life-Cycle Cost and Payback Period Analysis0%2%4%6%8%10%12%14%16% $150 $350 $550 $750 $950 $1,150 $1,350 $1,550 $1,750 $1,950 $2,150 $2,350 $2,550 $2,750 $2,950 $3,150 $3,350 $3,550 $3,750 $3,950 $4,150 $4,350 $4,550 $4,750 $4,950Selling Price

Percent of SalesExample: Baseline retail price for side-by-side refrigerator-freezerswith through-the-door ice service (PC 7)103Life-Cycle Cost and Payback Period AnalysisExamples: Average Customer First Costs$500$550$600$650$700$750$8000.500.600.700.800.901.00Efficiency (Current Standard = 1.0) Average Customer CostUpright Freezers (Product Class 9)Side-by-side Refrigerators (Product Class 7)$1,450$1,500$1,550$1,600$1,650$1,700$1,750$1,800$1,8500.500.600.700.800.901.00Efficiency (Current Standard = 1.0) Average Customer Cost104Electricity Prices•Based on EIA Form 861 Data•Developed for 13 Regions: 9 Census Divisions and 4 Large StatesElectricity PricesLife-Cycle Cost and Payback Period AnalysisGeographic AreaAverage Residential Price2008$/kWhAverage Commercial Price2008$/kWhNew England0.1620.153Middle Atlantic0.1270.111East North Central0.1020.091West North Central0.0880.075South Atlantic0.0990.085East South Central0.0870.086West South Central0.0930.085Mountain0.0970.084Pacific0.0990.094New York State0.1780.169California0.1500.136Texas0.1280.119Florida0.1170.102105Electricity Price ForecastsEnergy price projections to 2030 based on EIA/AEO AmericanRecovery and Reinvestment ActCaseAEO High Growth and Low Growth (AEO2009) cases can be run as a sensitivityElectricity price forecasts to2070: Based on average rate of change from 2020-2030Life-Cycle Cost and Payback Period AnalysisElectricity Price Trends0.80.91.01.11.22000 2005 2010 2015 2020 2025 2030AEO 2009 Reference Res ElecAEO 2009 Reference Com Elec106Standard-Sized Product LifetimeDOE used appliance data collected by RECS and the American Housing Survey(AHS), combined with the shipments history, to estimate refrigeration productlifetime.RECS asks respondents to provide the age of their firstand second refrigerators,as well as freezers, allowing DOE to determine the fraction of appliances shippedwithin a particular period which are still in use.DOE combined the 1990, 1993, 1997, 2001, and 2005 RECS surveys to fit asingle survival function, in the form of a Weibull distribution.Life-Cycle Cost and Payback Period Analysis16.217.40.00.20.40.60.81.01.21.40 5 10 15 20 25 30 35 40 45 50Age (years)

Fraction Surviving107Standard-Sized Product Survival and Retirement FunctionsRefrigerators:0%10%20%30%40%50%60%70%80%90%100%0 5 10 15 20 25 30 35 40 45 50Age% Surviving% Retiring0%10%20%30%40%50%60%70%80%90%100%0 5 10 15 20 25 30 35 40 45 50Age% Surviving% RetiringFreezers:Life-Cycle Cost and Payback Period AnalysisMean Lifetime: 17.4 yearsMedian Lifetime: 16.2 yearsMean Lifetime: 22.3 yearsMedian Lifetime: 21.7 years108Conversion to Second RefrigeratorRefrigerator shipments are driven in partby a customer choice to purchase a newrefrigerator while retaining theirexisting appliance as a second unit.DOE used RECS to develop ofconversion function for primary refrigerators. Thisfunction represents the fraction of operating refrigeratorsof a given age in use assecond refrigerators.0.00.20.40.60.81.00 10 20 30 40 50Age (years)

Fraction converted to 2nd refrigeratorConversion functionLife-Cycle Cost and Payback Period Analysis109Compact Product LifetimeRECS and the Commercial Buildings Energy Survey (CBECS) do not provideenough information to develop a lifetime for compact refrigeration products usingthe methodology developed for standard-sized appliances.DOE used the reported stock of compactrefrigerators from these surveys,combined with the shipments history fromAppliancemagazine, to develop alifetime estimate.A lifetime of 10 years, as estimated byAppliancemagazine, results in a currentstock estimate that far exceeds thereported data from RECS and CBECS.A Weibull distribution with a mean lifetime of5.62 years, combined with theshipments history, fits the current reported stock of compact refrigerators.DOE estimated that the lifetime of a compact freezer hasthe same relation to thelifetime of a compact refrigerator as astandard-size freezer has to a standard-sizerefrigerator. This results ina compact freezer lifetimedistribution with a mean of7.46 years.Life-Cycle Cost and Payback Period Analysis110Issues for Public CommentIssue 11: Lifetime of Compact Refrigeration Products:DOE calibrated the average lifetime of compact refrigerators tomatch the existing stock of compact refrigerators as given bythe RECS and CBECS surveys. The resulting calculated meanlifetime is 5.62 years. It used a simple ratio of lifetimes toestimate the lifetime of compact freezers. DOE invitescomment on its approach for estimating the lifetime forcompact refrigerators and freezers.Life-Cycle Cost and Payback Period Analysis111Discount Rates•Based on the finance cost of raising funds to purchase appliances–Financial cost of any debt incurred to purchase equipment–Opportunity cost of any equity used to purchase equipment•Residential Rates–Weighted-average real rate associated with various household equity (e.g., savings bonds,stocks, CDs) and debt (e.g., credit card, home equity loans) = 4.8%–Primary data source: Federal Reserve Board’sSurvey of Consumer Financesfor the years1989, 1992, 1995, 1998, 2001, 2004, and 2007•Commercial Rates–Calculated from the weighted-average cost of capital to the firm (WACC) to obtain equity anddebt financing–Weighted-average real value = 6.2% CHECKfor purchasers of compact products incommercial applicationsRepair and Maintenance Costs•Assumed no changes with increased efficiency for all productsOther InputsLife-Cycle Cost and Payback Period Analysis112Issue for Public CommentLife-Cycle Cost and Payback Period AnalysisIssue 10: Repair and Maintenance Costs:Because DOE did not find any evidence that repair andmaintenance costs change as refrigeration product efficiencyincreases, it did not include these costs in its analysis. DOEinvites comment on this approach and requests any specificinformation showing the extent to which repair andmaintenance costs change as refrigeration product efficiencyincreases beyond the baseline levels used in DOE’s analysis.113Efficiency Distributions in the Base CaseTo accurately estimate the percentage of consumers that would beaffected by a particular energy conservation standard level, DOE tookinto account the distribution of product efficiencies currently in themarketplace.•Consumers already purchasing products at efficienciesgreater than or equalto a prospective standard levelare not impacted by the standard.DOE conducted its LCC and PBP analyses by considering the fullbreadth of product efficiencies thatconsumers purchase under the basecase (i.e., the case without new energy efficiency standards) to accountfor those consumers who already purchase more efficient products.DOE developed base case efficiency distributions for each of the sevenanalyzed product classes based on data provided by manufacturers.Life-Cycle Cost and Payback Period Analysis114Equipment Assignment in the Base Case (in 2014)Top-Mount (PC 3)Bottom-Mount (PC 5)Side-by-Side (PC 7)LevelEnergy FactorMarket ShareMarket ShareMarket ShareBaseline1.0081%12%25%10.906%0%43%20.850%0%0%30.8013%88%32%40.750%0%0%50.700%0%0%60.650%0%0%70.600%0%0%80.550%0%–Life-Cycle Cost and Payback Period AnalysisStandard-Sized Refrigerator-FreezersStandard-Sized FreezersUpright (PC 9)Chest (PC 10)LevelEnergy FactorMarket ShareMarket ShareBaseline1.0082%85%10.9017%14%20.851%1%30.800%0%40.750%2%50.700%0%60.650%0%70.600%0%80.550%0%115Equipment Assignment in the Base Case (in 2014)Compact Refrigerators (PC 11)Compact Freezers (PC 18)LevelEnergy FactorMarket ShareMarket ShareBaseline1.0097%95%10.900%5%20.850%0%30.801%0%40.752%0%50.700%0%60.650%0%70.600%0%80.550%0%Life-Cycle Cost and Payback Period AnalysisCompact Refrigeration Products116Life Cycle Cost ResultsExample: Standard-Sized Side-by-Side Refrigerator-Freezerswith Through-the-door Ice Service (Product Class 7)Life-Cycle Cost and Payback Period Analysis-300-200-10001002003004005006007008001234567Efficiency Level

Life-cycle Cost Savings($)MeanMedian117LCC and PBP ResultsExample: Standard-Sized Side-by-Side Refrigerator-Freezerswith Through-the-door Ice Service (Product Class 7)05101520251234567Efficiency Level

Payback Period(yr )MeanMedianLife-Cycle Cost and Payback Period Analysis118LCC Effect of Field vs. Test Energy ConsumptionUpright Freezers: Mean UAF = 1.37Side-by-side Refrigerators: Mean UAF = 1.43$1,250$1,500$1,750$2,000$2,2500.500.600.700.800.901.00Efficiency (Current Standard = 1.0) Average Customer CostWith UAFNormalized UAF$2,300$2,400$2,500$2,600$2,700$2,800$2,9000.500.600.700.800.901.00Efficiency (Current Standard = 1.0) Average Customer CostWith UAFNormalized UAFLife-Cycle Cost and Payback Period Analysis119Other IssuesIssuesDOE invites comments and recommendations from interestedparties on any other aspects related to the Life-Cycle Cost Analysis.120234Background and Legal AuthorityPublic Meeting Agenda5Market & Tech; Screening; Engineering2Energy Use; Markup Analysis341Statute and Context5Life-Cycle Cost and Payback Period AnalysisNational Impact Analysis6Preliminary MIA; NOPR Analyses121FrameworkDocumentPreliminaryAnalysisNOPRFinalRuleNationalImpactAnalysisEnergy UseCharacterizationMarket andTechnologyAssessmentScreeningAnalysisEngineeringAnalysisMarkups toDetermineEquipmentPriceLife-CycleCost andPaybackPeriod AnalysisShipmentsAnalysisPreliminaryManufacturerImpactAnalysisPreliminary Activities Flow Diagram122PurposeShipments Analysis•To estimate refrigerator andfreezer shipments over time.•To estimate the disaggregation of shipments into product classes, and howthis changes over time.National Impact Analysis•To estimate the change in efficiency distributions over time.•To estimate the National Energy Savings (NES) from refrigerator and freezerefficiency standards at different levels.•To estimate the national economic impact on the nation (or the Net PresentValue (NPV)) from refrigerator and freezer efficiency standards at differentlevels.National Impact Analysis123National Impact Analysis ProcessNational Impact AnalysisShipmentsModelNationalEnergySavingsNationalEconomicImpactsLCCAnalysisResults andOther InputsNationalEnergy Savings(Quads)NationalNet Present Value(2008 US $, billion)National energy savings calculated for period from 2014-2044 (30 years)NPV calculated for products shipped over the period from 2014-2044124Appliance StockApplianceLifetimeReplacementShipmentsCombinedShipmentsNew BuildingConstructionNew BuildingApplianceSaturationNewConstructionShipmentsExistingBuilding Stockw/o ApplianceRate of Purchase(Calibration Variable)Shipments toExist Bldg Stockw/o ApplianceHistoricalShipmentsShipmentsDifference(For Std-Size and Compact Freezers)TotalShipmentsSecondAppliance Rate(Calibration Variable)Shipments ofAdditional Unitsto Existing Homes(For Std.-Size Refrigerators)Adjust Shipmentsto NewConstruction(For Compact Refrigerators)Shares toLodging andOther Comm’l(Calibration Variable)Product ClassMarket SharesTotalShipmentsby ClassShipments ModelShipments Analysis125Product Class Market Shares: Standard-Size Refrigerator-FreezersDOE fit RECS and AHAM side-by-side and bottom-freezer market share witha model based on growing share for these classes among homeowners.The model approaches a limit of approximately 46.5% share for side- andbottom-mount classes by the end of the analysis period.Shipments Analysis20.00%25.00%30.00%35.00%40.00%45.00%50.00%1985 1995 2005 2015 2025 2035 2045Year

Side- and Bottom-freez er Market ShareForecast market shareAHAM Shipments ShareRECS Side-freezerLimiting fraction126Issue for Public CommentIssue 13: Forecasted Market Shares of Top-Mount vs. Side/BottomMount Refrigerator-Freezers:This model was based on the historical consumer preferencesof homeowners as a whole, as well as high-incomehomeowners, the historical market share differences betweenrental and owner-occupied households, and historical marketshares of top-, side- and bottom-mount products in totalshipments. DOE seeks comment on its approach.Shipments Analysis127Shipments Model InputsShipments AnalysisInputData Source/DescriptionReplacementsAppliance LifetimeFrom Life-Cycle Cost AnalysisNew Construction ShipmentsResidential ConsumersForecasted New HousingU.S. DOE-EIA,2009 Annual Energy Outlook,New Housing CompletionsNew Housing SaturationsU.S. DOE-EIA,1990, 1993, 1997, 2001, 2005 Residential EnergyConsumption SurveyCommercial ConsumersForecasted New ConstructionU.S. DOE-EIA,2009 Annual Energy Outlook,New Lodging and OtherCommercial CompletionsNew Building SaturationsU.S. DOE-EIA,1999, 2003 Commercial Buildings Energy ConsumptionSurvey;American Lodging Association,1998, 2003, 2008 Lodging SurveyHistorical ShipmentsAll Refrigeration ProductsAHAM Data Submittal, AHAM Fact Book,AppliancemagazineShipments by Product ClassAll Refrigeration ProductsAHAM Data SubmittalStandard-Size Refrigerator-FreezersAHAM Data Submittal; U.S. DOE-EIA1990, 1993, 1997, 2001, 2005Residential Energy Consumption Survey128Example: Standard-Size Refrigerator-FreezerBase Case Shipments ForecastShipments AnalysisTo calibrate Shipments Model, units areconverted from primary to secondaryrefrigerator at the rate determined in the lifetime analysisShipments forecasted to increase as shipments are tied to new homeconstruction and more homes have multiple units0.05.010.015.020.025.0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

MillionsConversionNewconstructionReplacementsModeledShipmentsHistoricalShipments129Purchase Price and Operating Cost ImpactsShipments AnalysisShipments impacts due to purchase price and operating cost changesare accounted for when forecasting standards case shipmentsShipments Model usedRelative Price(RP) elasticity to estimate theimpacts from purchase price (PP) and the present value of operatingcost (PVOC) changesPurchase price effects dominate but mitigated by household incomeBased on historical shipments, retail price, efficiency, and income datafor home appliances,RPelasticity = -0.34•10% increase inRPresults in a 3.4% drop in shipments•Consumers become less sensitive toinitial changes in purchase price–Based on economic literature,RPelasticity drops 65% in ten yearsIncomePVOCPPRP+=1300.05.010.015.020.025.0199020002010202020302040

MillionsBaseCSL6CSL80.00.51.01.52.02.53.03.54.04.5 1 9 9 0 1 9 9 5 2 0 0 0 2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0 2 0 2 5 2 0 3 0 2 0 3 5 2 0 4 0

MillionsCSL5CSL7CSL8Base0.01.02.03.04.05.06.07.0 1990 19 9 3 19 96

1 9 99 2002 2005 20 0 8 20 1 1 20 14 2017 2020 20 2 3 20 26 2 0 29 2 0 32 2035 20 3 8 20 4 1

MiliionsCSL6CSL7CSL8Base0.000.100.200.300.400.500.600.700.800.90 19 90 1993 199 6 1 999 200 2 200 5 2008 201 1 2 014 201 7 20 20 202 3 202 6 2029 203 2 20 35 2038 204 1

MillionsBaseCSL3CSL5CSL8Standards Case Shipments ResultsShipments AnalysisStandard-Size Refrigerator-FreezersStandard-Size FreezersCompact RefrigeratorsCompact Freezers131InputsNational Impact AnalysisTotal Customer Cost•Average per unit values as a function of efficiencylevel taken from LCC analysisRepair and Maintenance Costs•No increase in repair and maintenance costs with efficiencyAnnual Energy Use•Average per unit values as a function of efficiencylevel taken from LCC analysisBase-Case and Standards-Case Forecasted Efficiencies•Base-Case efficiencies 2007-2014: Based on base case efficiency distributions from LCC analysis•Standards-Case efficiencies 2014:Based on “Roll-up” scenario•Forecasted efficiencies: Increase in efficiency from 2014 to2021 due to Energy Star programEnergy Prices•Average prices taken from LCC analysis•Future energy prices adjusted according to trend forecasted by the American Recovery andReinvestment Act case from the2009 Annual Energy OutlookElectricity Site-to-Source Conversion Factors•Conversion factors based onmarginal heat rates fromNEMS corresponding to2008 Annual EnergyOutlook•Factors vary annually and account for generation, distribution, and transmission lossesDiscount Rate•7% and 3% real from OMB’s Regulatory Analysis Guideline A-4Present Year•Future expenses are discounted to the year 2009132Efficiency Distribution Forecast: Base CaseDOE developed forecasts of the efficiency distributions for each product class based onhistorical efficiency trends driven, in part, bythe ENERGY STAR program.ENERGY STAR market share grew between 2001 and 2007. ENERGY STAR criteria werechanged for several product classesin 2008, which DOEforecasts will drive market share shiftsbefore 2014. DOE forecasts that the ENERGY STARmarket shares in 2014will be equal to theENERGY STAR market shares in 2007.In the absence of new standards, DOE forecasts that theENERGY STAR program wouldincrease the stringency of itscriteria in 2014, andthat ENERGY STAR market share in 2021would again equal ENERGY STAR market share in2007 and 2014. The efficiency distribution isthen fixed from 2021 to 2043.Example: Side-by-side Refrigerator-freezers (Product Class 7)National Impact AnalysisEnergy Use Factor2007201420211.025.0%25.0%25.0%0.9043.0%43.0%43.0%0.8530.3%0.0%0.0%0.801.7%32.0%0.0%0.750.0%0.0%32.0%133Efficiency Distribution Forecast: Standards CasesIn the case with new standards, DOE developed a “roll-up plus market shift”model.At the introduction of new standardsin 2014, DOE forecasts a “roll-up” ofmarket share into the new minimum efficiency level. That is, all the marketshare at or below the level of the new standard is “rolled up” into the level ofthe standard.Over the 7 years from 2014 to 2021, DOE forecasts that the market share in anew ENERGY STAR level (set at 20% less energy use than the new standard)will grow linearly to reach the same market share as displayed in 2007 andforecast for 2014.Efficiency distributions are fixed from 2021 to 2043.National Impact Analysis134Base-Case and Standards-Case Forecasted EfficienciesExample: Side-by-Side Refrigerator-Freezers (PC 7)LevelEFMarket SharesBase-CaseStandards Case1234567Baseline1.0025%-------10.9043%68%------20.850%0%68%-----30.8032%32%32%100%----40.750%0%0%0%100%---50.700%0%0%0%0%100%--60.650%0%0%0%0%0%100%-70.600%0%0%0%0%0%0%100%SWEF (EF)0.8930.8680.8340.8000.7500.7000.6500.600National Impact AnalysisLevelEFMarket SharesBase-CaseStandards Case1234567Baseline1.0025%-------10.9043%68%------20.850%0%68%-----30.800%0%0%68%----40.7532%32%32%0%68%---50.700%0%0%32%0%68%--60.650%0%0%0%32%0%68%-70.600%0%0%0%0%32%32%100%SWEF (EF)0.8770.8520.8180.7680.7180.6680.6340.6002014:2021 and later:135Issue for Public CommentIssue 12: Efficiency Distribution Forecasts:To accurately estimate the share of consumers that would beaffected by a standard at a particular efficiency level, DOE’sLCC and PBP analyses considered the projected distributionof product efficiencies that consumers would purchase in thebase case and standards cases. DOE’s projection takes intoaccount growth in market share of ENERGY STAR refrigerationproducts in the coming years. DOE invites comment on theapproach used to forecast market shares of the consideredefficiency levels.National Impact Analysis136Example Annual Savings and Cost ResultsStandard-Sized Top-Mount Refrigerator-FreezersProduct Class 3Efficiency Level 3 (20%)National Impact Analysis-0.500.511.522.52010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070Year

Billions of 2008 DollarsOperating Cost SavingsIncremental Product CostNet Savings137Example National Energy Savings and Net Present Value ResultsEfficiencyLevelTop-Mount Std-SizeRefrigerator-FreezersStd. Size Upright FreezersNES(quads)NPV at 3%(billions of$2008)NPV at 7%(billions of$2008)NES(quads)NPV at 3%(billions of$2008)NPV at 7%(billions of$2008)0.901.1013.395.080.344.521.590.851.6920.167.600.557.212.530.802.3526.579.790.759.923.480.753.0131.0811.010.9612.234.230.703.6533.8611.351.1514.284.860.654.2034.2610.571.3415.825.250.604.7832.788.751.5116.625.290.555.2831.537.181.6316.544.98National Impact Analysis138Other IssuesIssuesDOE invites comments and recommendations from interestedparties on any other aspects related to the National Impact Analysis.139234Background and Legal AuthorityPublic Meeting Agenda5Market & Tech; Screening; Engineering2Energy Use; Markup Analysis341Statute and Context5Life-Cycle Cost and Payback Period AnalysisNational Impact Analysis6Preliminary MIA; NOPR Analyses140Preliminary Activities Flow DiagramFrameworkDocumentPreliminaryActivitiesNOPRFinalRuleEffectiveDateScreeningAnalysisEngineeringAnalysisEnergy UseCharacterizationShipmentsAnalysisNationalImpactAnalysisMarkups toDetermineProductPriceLife-CycleCost andPaybackPeriodAnalysesMarket &TechnologyAssessmentPreliminaryManufacturerImpact Analysis141DOE conducted on-site and telephone interviews withmanufacturers of residential refrigeration equipment.Topics included:•Engineering analysis overview, methodology, and results;•Key Issues (as defined by manufacturer);•Current market conditions (shipments, market share, product mix,profitability);•Manufacturer sub-group analysis;•Product utility and innovation (performance vs. efficiency, design options);•Potential impacts of amended energy conservation standards (esp.conversion costs); and•Cumulative regulatory burdens (state, federal, international).Preliminary Manufacturer Impact Analysis (MIA) OverviewPreliminary Manufacturer Impact Analysis142DOE interviewed manufacturers representing most of the U.S.market for residential refrigeration products.At least 90 percent of thestandard-size product market.At least 80 percent ofthe overall market.Residential Refrigeration Products MIAManufacturerSub-GroupAnalysisProductUtility andInnovationImpacts ofEfficiencyStandardsCurrentMarketConditionsKeyIssuesCumulativeRegulatoryBurdenPreliminary Manufacturer Impact Analysis143Increased Conversion Costs:•Significant changes to required baseline efficiency levels will inducesignificantly higher conversion coststhan moderate changesto efficiency.•Significant changes to required baseline efficiency levels will have to be metwith wall thickness increases rather than just component swaps.Impact to U.S. Production and Jobs•Standards requiring investment in new plants will likely lower production andmanufacturing jobs within the U.S.•Manufacturers would build new plants elsewhere to take advantage of lowerlabor costs.Residential Refrigeration Products Key IssuesPreliminary Manufacturer Impact Analysis144Cumulative Regulatory Burden:•Pending climate change legislation willlikely limit the amount of greenhousegases (GHG’s) allowed within refrigeration products and in the production ofrefrigeration products.•Limits on GHG’s would require manufacturers to convert to alternativerefrigerants and foam-blowing agents.•Many of the most viable alternative refrigerants are hydrocarbons, whichwould require significant capital investment in order to meet productionsafety standards.•Changing energy efficiency standardsin Canada and consumer safetyregulations in Europe presentadditional regulatory burdens tomanufacturers of refrigeration products.Impact to Product Utility:•Product utility could be lost if new efficiency standards require increases inwall thickness since storage volumewould decrease while floor arearemains the same.•Other features such as glass doors andmultiple temperature zones withincompartments increase energy consumption and may have to be removedin order to meet new efficiencystandards, decreasing product utility.Residential Refrigeration Products Key IssuesPreliminary Manufacturer Impact Analysis145Other IssuesDOE welcomes comments and recommendations frominterested parties on any aspects related to the PreliminaryManufacturer Impact Analysis.Preliminary Manufacturer Impact Analysis146RegulatoryImpactAnalysisEnvironmentalAssessmentFrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)EmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisNOPRPreliminaryAnalysisFinalRuleStatute and ContextTrialStandardLevels147FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels148Revise Preliminary AnalysisAnalysisActionEngineering AnalysisConsider commentsRevise using latest dataLife-Cycle Cost andPayback PeriodAnalysesConsider commentsRevise using latest dataConduct LCC sub-group analysisNational ImpactsAnalysisConsider commentsRevise using latest dataRevise Preliminary Analysis149FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels150Life-Cycle Cost Subgroup AnalysisPurpose•Evaluate impacts on any identifiable groups or customers who may bedisproportionately affected by any national energy efficiency standard level.Method•Analyze the LCC and payback periods (PBPs) for those customers that fallinto any identifiable groups. LCC spreadsheet model allows for differentinputs to represent particular groups.•Possible subgroups include low-income households and small businesses.Output•Customer subgroup life-cycle costs and payback periods.•Identification of subgroups particularly affected by a new standard.LCC Subgroup Analysis151Purchase Price ImpactsDOE will be especially sensitive to increases in the purchase price of theequipment due to new standards, to avoid negative impacts onidentifiable population groups that may not be able to afford significantincreases in equipment price.LCC Subgroup Analysis152FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels153Purpose:•To develop a list of potential amended standard levels from whichimpacts are weighed and a proposed standard level is selected.–Each trial standard level consists of a set of efficiency levels coveringall product classes, and may vary between product classes.–NOPR analyses assess impacts for trial standard levels (notefficiency levels for each product class).Method:•Trial standard levels are assembled from the product classes andefficiency levels identified in the preliminary analyses.–Trial standard levels cover a range of efficiencies and can include:Most energy efficient level (max-tech);Efficiency level with the lowest life-cycle cost;Efficiency level with a payback period of three years or less;Efficiency levels with noteworthy technologies; andEfficiency levels that fill in large gaps.Trial Standard LevelsSelection of Trial Standard Levels154Request for Comment:Criteria for the Selection of Trial Standard LevelsIssuesDOE requests feedback on the criteria it should use forbasing the selection of Trial Standard Levels.A critical part of the NOPR analysis on which DOE is seeking earlyguidance is the criteria used in selecting trial standard levels.Trial standard levels are created from combinations of efficiencylevels at the product class level.155FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels156Manufacturer Impact AnalysisManufacturer Impact AnalysisPurpose•Assess the impacts of standards on refrigerator and freezermanufacturers.•Identify and estimate impacts on manufacturer sub-groups that may bemore severely impacted than the industry as a whole.•Examine the impact of cumulative regulatory burdens on the industry.Method•Analyze industry cash flow and net present value through use of theGovernment Regulatory Impact Model (GRIM).•Interview manufacturers to refine inputs to the GRIM, develop sub-groupanalyses, and address qualitative issues.Output•Manufacturer sub-group net present value impacts.•Other sub-group net present value impacts.•Other impacts.157IndustryprofileDevelopstraw-manGRIMDevelopinterviewguideInterviews& industrywide /subgroupanalysesAssess directemployment,competition,cumulativeburdenFinalizeMIA resultsfor NOPRPhase 2Manufacturer Impact Analysis (MIA) ProcessManufacturer Impact AnalysisPhase 3The MIA process consists of three phases:Phase 1158The MIA is both concurrent and coordinated with activitiesthroughout the rulemaking process.Phase IIndustry ProfilePhase IIIManufacturer InterviewsRevised Industry Cash FlowManufacturer Subgroup AnalysisQualitative AssessmentPhase II“Strawman” GRIMManufacturer Impact AnalysisScreening AnalysisScreening AnalysisEngineering AnalysisEngineering AnalysisLCC AnalysisLCC AnalysisNational EnergySavings AnalysisNational EnergySavings AnalysisConsumer SubgroupConsumer SubgroupUtility ImpactsUtility ImpactsEnvironmental ImpactsEnvironmental ImpactsOther Rulemaking AnalysesIndirect EmploymentImpactsIndirect EmploymentImpactsManufacturer Impact Analysis159Phase I: Industry ProfileManufacturer Impact Analysis•Collect financial and market information:•Industry reports;•Company annual reports and websites;•Trade journals;•U.S. Census Bureau;•SEC 10-K form filings;•Information from the preliminary activities preceding the NOPR:manufacturer production costs, markups; and manufacturerselling prices, shipments.160Manufacturer PricesShipmentsManufacturing CostsFinancial InformationCash Flow Impacts,Changes in Industry NPVGRIMPhase II: Develop Straw-man GRIM•The Government Regulatory Impact Model (GRIM) is an industrycash flow analysis that estimates the change in industry valuedue to the introduction of new efficiency standards.Manufacturer Impact Analysis161Phase II: Develop Interview GuideManufacturer Impact AnalysisA critical aspect of the MIA involves interviews with manufacturers.An interview guide is sent to manufacturers in preparation for PhaseIII.Interview topics will include:Engineering analysis;Shipments model;Cost structure and financialparameters;Conversion costs (capitalexpenditures, tooling, R&D,testing);Impact of other regulations /cumulative burden;Direct employment impacts;Import / Export issues;Consolidation / competitiveimpacts;Replacement parts orrefurbishments;Impact of the standard’seffective date; andOther topics important tomanufacturers162Phase III: Manufacturer InterviewsManufacturer Impact AnalysisExpected timeframe.Time and personnel commitment for manufacturers (industry-wideGRIM, GRIM assumptions, subgroup analysis discussion).Confidentiality agreements.163Phase III: Manufacturer Subgroup AnalysisManufacturer Impact AnalysisThe subgroup analysis is a more focused version of the industrywide analysis.•Work with subgroup representatives to tailor a GRIM incorporatingunique financial characteristics.•Consider and focus on issues of importance to the subgroup,including employment, capacity utilization and cumulative burden.•Review draft findings with subgroup members during development.164FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels165Purpose•Investigate the effects on electric utilities from reduced energyconsumption and reduced peak load demand due to new energyconservation standards.Method•Uses national energy savings results.•Uses the Energy Information Administration’s National Energy ModelingSystem (NEMS) tailored for DOE’s Building Technologies Program(NEMS-BT).Output•Change in electricity sales and price by region.•Change in the mix of electricity generation.•Change in new capacity construction.Utility Impact AnalysisUtility Impact Analysis166FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels167Purpose•Report net jobs created or eliminatednationally as a consequence of newenergy conservation standards.Method•Uses the ImSET (Impact of Sector Energy Technologies) model for theevaluation of indirect employment impacts.•Changes in equipment and energy expenditures are developed in theNational Energy Savings Analysis.•Direct employment impacts are developed in the Manufacturer ImpactAnalysis.Output•Change in the commercial and energy sector employment as aconsequence of new energy conservation standards.Employment Impact AnalysisEmployment Impact Analysis168FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels169Purpose•Report environmental impacts as a consequence of new energyconservation standards, including changes in power plant emissions.Method•Energy savings results taken from the National Energy Savings Analysis.•Energy Information Administration’s National Energy Modeling System(NEMS) provides power-plant emissions.Output•Estimate of national emission reductions of sulfur dioxide (SO2), oxidesof nitrogen (NOx), carbon dioxide (CO2) and mercury (Hg).Environmental AssessmentEnvironmental Assessment170Issue for Public CommentIssue 19: Valuing Air-Borne Emission Reductions:DOE plans on monetizing the emission reductions due tostandards consistent with methods used in recent DOEstandards rulemakings pertaining to refrigerated beveragevending machines and commercial clothes washers. Forexample, in the case of CO2, DOE used values ranging from $5to $55 per metric ton of CO2to value the emission savings dueto standards. DOE invites comments on the approaches formonetizing the emission savings due to energy conservationstandards.Environmental Assessment171FrameworkDocumentANOPRNOPRFinalRuleAnalyses for Notice of Proposed Rulemaking (NOPR)NOPRPreliminaryAnalysisFinalRuleStatute and ContextRegulatoryImpactAnalysisEnvironmentalAssessmentEmploymentImpactAnalysisUtilityImpactAnalysisLife-CycleCostSubgroupAnalysisManufacturerImpactAnalysisRevisePreliminaryAnalysisTrialStandardLevels172Purpose•Investigate the national impacts due of non-regulatory alternativescompared with mandatory energy conservation standards.•The non-regulatory alternativesthat may be considered include:–No new regulatory action; early replacement; prescriptive standards; customertax credits; manufacturer tax credits; customer rebates; voluntary efficiencytargets; bulk government procurement.Method•NES spreadsheet model is modified to consider scenarios. These include:energy prices and escalation factors; implicit market discount rates;customer purchase price, operating cost, and income elasticities; andequipment stock data.Output•National Energy Savings and Net Present Value of the non-regulatoryalternatives.•Impact of non-regulatory alternativeson purchase price and use of energyefficient equipment.Regulatory Impact AnalysisRegulatory Impact Analysis173DOE seeks to encourage development of consensus proposals fornew standards because standards with such broad-based support arelikely to balance effectively the economic, energy, and environmentalinterests affected by standards.Any recommendation must satisfy the seven statutory criteriaprovided by EPCA for determining whether an energy conservationstandard is technologically feasible and economically justified, andwill result in significant energy savings.Any consensus recommendation should also include information thatDOE can use to assess the seven statutory criteria that determinewhether the benefits of the standard exceed its burdens to thegreatest extent practicable.ClosingConsensus Recommendations174FactorAnalysis1. Economic impact on consumers andmanufacturersLife-cycle cost analysisManufacturer impacts analysis2. Lifetime operating cost savingsLife-cycle cost analysis3. Total projected energy savingsNational impact analysis4. Impact on utility or performanceScreening analysisEngineering analysis5. Impact of any lessening ofcompetitionManufacturer impacts analysis6. Need for national energyconservationNational impact analysis7. Other factors the Secretaryconsiders relevantEnvironmental assessmentUtility impact analysisEmployment impact analysisClosingThe Energy Policy and Conservation Act (EPCA) directs DOE toconsider seven factors when setting energy conservation standards175Final Comments and QuestionsDOE requests comments and invites questions frominterested parties regarding the Department of Energy’sResidential Refrigeration Products Rulemaking.176How to Submit Comments...Public Meeting– oral comments will be captured in the transcript andbecome part of the public record.Written comments– Preliminary comment period open until Jan. 15, 2010Reference docket #: EERE-2008-BT-STD-0012 and/or RIN #: 1904-AB79Email: appliance.rulemaking@ee.doe.govMail: Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding TechnologiesProgram, Mail stop EE-2JPreliminary Analysisfor Residential Refrigerators and FreezersEERE-2008-BT-STD-00121000 Independence Avenue, SWWashington DC, 20585-0121Courier: Ms. Brenda Edwards-JonesU.S. Department of EnergyBuilding Technologies Program, 1J-0181000 Independence Avenue, SWWashington DC, 20585-0121