CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT ................................................................................. 1-1 1.2 OVERVIEW OF ENERGY C ONSERVATION STANDARD S FOR SINGLE PACKAGE VERTICAL AIR CONDITIONERS AND SINGLE PACKAGE VERTICAL HEAT PUMPS ................................................................................................................. 1-1 1.3 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS ................... 1-2 1.4 STRUCTURE OF THE DOCUMENT ............................................................................ 1-4

LIST OF TABLES

Table 1.2.1: Current Federal Energy Conservation Standards for Single Package Vertical Air Conditioners and Heat Pumps ...................................................................................................... 1-2

1-iCHAPTER 1. INTRODUC TION

1.1 PURPOSE OF THE DOCUM ENT

This technical support document (TSD) is a stand-alone report that provides the technical analyses and results supporting the information p resented in the notice of proposed rulemaking (NOP R ) for single package vertical air conditioners and single package vertical heat pumps (collectively referred to as single package vertical units or SPVU ). This NOPR TSD reports on the activities and analyses conducte d in support of the N OPR.

1.2 OVERVIEW OF ENERGY CONSERVATION STANDARD S FOR SINGLE PACKAGE VERTICAL AIR CONDITIONERS AND SIN GLE PACKAGE VERTICAL HEAT PUMPS

Title III of the Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94- 163, as amended, sets forth a variety of provisions concerning energy efficiency. Part C a of Title III created the E nergy Conservation P rogram for Certain Industrial Equipment, a program covering single package vertical air conditioners (SPVACs) and sin gle package vertical heat pu mps (SPVHPs), the subject s of this rulemaking. (42 U.S.C. 6311-6317) In general, this program addresses the energy efficiency of certain types of commercial and industrial equipment. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labelling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316).

EPCA contains mandatory energy conserv ation standards for commercial heating, air

conditioning, and water- heating equipment, including the single package vertical units that are the subject of this rulemaking. (42 U.S.C. 6313(a)) The Energy Independence and Security Act of 2007 (EISA 2007) ame nded EPCA by prescribing definitions and setting minimum energy conservation standards for SPVACs and SPVHPs (42 U.S.C. 6313(a)(10)(A)). DOE codified the efficiency levels contained in EISA 2007 for SPVU as part of the March 2009 final rule technical amend ment. 74 FR 12058 (March 7, 2009). The current standards are set forth in Table 1.2.1. The efficiency standards for SPVACs and SPVHPs established by EISA 2007 correspond to the levels contained in ASHRAE Standard 90.1-2004, which originated as addendum “d” to ASHRAE Standard 90.1-2001.

a This Part was subsequently redesignated as Part A- 1 for editorial reasons after Part C of Title III of EPCA was repealed by Pub. L. 109

- 58.

1-1Table 1.2.1 : Current Federal Energy Conservation Standards for Single Package Vertical Air Conditioners and Heat Pumps Equipment Class Cooling Capacity (Btu/h) * Efficiency L evel *

Single Package Vertical Air Conditioner <65,000 Btu/h EER = 9.0

Single Package Vertical Air Conditioner ≥65,000 Btu/h and <135,000 Btu/h EER = 8.9

Single Package Vertical Air Conditioner ≥135,000 Btu/h and <240,000 Btu/h EER = 8.6

Single Package Vertical Heat Pump <65,000 Btu/h EER = 9.0 COP = 3.0 Single Package Vertical Heat Pump ≥65,000 Btu/h and <135,000 Btu/h EER = 8.9 COP = 3.0 Single Package Vertical Heat Pump ≥135,000 Btu/h and <240,000 Btu/h EER = 8.6 COP = 2.9 * Btu/h means British thermal units per hour. EER means energy efficiency ratio. COP means coefficient of performance

.

1.3 PROCESS FOR SETTING ENERGY CONSERVATION STANDARDS

EPCA require s that DOE must conduct a rulemaking to consider amended energy conservation standards for a variety of enumerated types of commercial heating, ventilating, and air -conditioning equipment (of which SPVACs and SPVHPs are a subset) each time ASHRAE Standard 90.1 is updated with respect to such equipment. (42 U.S.C. 6313(a)(6)(A)) Such review is to be conducted in accordance with the procedures established for ASHRAE equipment under 42 U.S.C. 6313(a)(6). According to 42 U.S.C. 6313(a)(6)(A), for each type of equipment, EPCA directs that if ASHRAE Standard 90.1 is amended, DOE must publish in the Federal Register an analysis of the energy savings potential of amended energy efficiency standards within 180 days of the amendment of ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(A)(i)) EPCA further directs that DOE must adopt amended standards at the new efficiency level in ASHRAE Standard 90.1, unless clear and convincing evidence supports a determination that adoption of a more-stringent level would produce significant additional energy savings and be technologically feasible and eco nomically justified. (42 U.S.C. 6313(a)(6)(A)(ii)) In addition, DOE notes that pursuant to the EISA 2007 amendments to EPCA, under 42 U.S.C. 6313(a)(6)(C), the agency must periodically review its already-established energy conservation standards for ASHRAE equipment. In December 2012, this provision was further amended by the American Energy Manufacturing Technical Corrections Act (AEMTCA) to clarify that DOE’s periodic review of ASHRAE equipment must occur “[e]very six years.” (42 U.S.C. 6313(a)(6)(C)( i))

AEMTCA also modified EPCA to specify that any amendment to the design requirements with respect to the ASHRAE equipment, would trigger DOE review of the potential energy savings under U.S.C. 6313(a)(6)(A)(i). Additionally, AEMTCA amended

1-2EPCA to req uire that if DOE proposes an amended standard for ASHRAE equipment at levels more stringent than those in ASHRAE Standard 90.1, DOE, in deciding whether a standard is economically justified, must determine , after receiving comments on the proposed standard, whether the benefits of the standard exceed its burdens by considering, to the maximum 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 product in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses of the products likely to result from the standard;

(3) The total projected amount of energy savings likely to result directly from the standard;

(4) Any lessening of the utility or the performance of the products likely to result from the standard;

(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;

(6) The need for national energy conservation; and

(7) Other factors the Secretary considers relevant.

(42 U.S.C. 6313(a )( 6 )(B)( ii ))

EISA 2007 amended EPCA to provide an independent b asis for a one

- time review regarding SPVUs that is not tied to the conditions for initiating review specified by 42 U.S.C. 6313(a)(6)(A) or 42 U.S.C. 6313(a)(6)(C) described previously. Specifically, pursuant to 42 U.S.C. 6313(a)(10)(B), DOE must commence review of the most recently published version of ASHRAE Standard 90.1 with respect to SPVU standards in accordance with the procedures established under 42 U.S.C. 6313(a)(6) no later than 3 years after the enactment of EISA 2007. DOE notes that this provision was not tied to the trigger of ASHRAE publication of an updated version of Standard 90.1 or to a 6-year period from the issuance of the last final rule, which occurred on March 7, 2009 (74 FR 12058) . DOE was simply obligated to commence its review b y a specified date

. Because ASHRAE did not update its efficiency levels for SPVACs and SPVHPs in ASHRAE Standard 90.1-2010, DOE began this rulemaking by analyzing amended standards consistent with the procedures defined under 42 U.S.C. 6313(a)(6)(C). Specifically, pursuant to 42 U.S.C. 6313(a)(6)(C)(i)(II), DOE, must use the procedures established under subparagraph (B) when issuing a NOPR. The statutory provision at 42 U.S.C. 6313(a)(6)(B)(ii), recently amended by AEMTCA, states that in deciding whether a standard is economically justified, DOE must determine , after receiving comments on the proposed standard, whether the benefits of the standard exceed its burdens by considering, to the maximum extent practicable, the following

1-3seven factors, as stated p reviously.

However, before DOE could finalize this NOPR, ASHRAE acted on October 9 , 2013 to adopt ASHRAE Standard 90.1-2013, and this revision did contain amended standard levels for SPVUs, thereby triggering DOE’s statutory obligation under 42 U.S.C. 6313 (a)(6)(A) to promulgate an amended uniform national standard at those levels unless DOE determines that there is clear and convincing evidence supporting the adoption of more- stringent energy conservation standards than the ASHRAE levels. Consequently, DO E prepared an analysis of the energy savings potential of amended standards at the ASHRAE Standard 90.1 levels (as required by 42 U.S.C. 6313(a)(6)(A)(i)) and updated this NOPR and accompanying analyses to reflect appropriate statutory provision, timelines , and compliance dates.

DOE has tentatively concluded that following this rulemaking process will provide “clear and convincing evidence” that for two equipment classes for which the proposed standards are more stringent than those set forth in ASHRAE Standard 90.1-2013 would result in significant additional conservation of energy and would be technologically feasible and economically justified, as mandated by 42 U.S.C. 6313(a)(6). For the other four equipment classes, DOE has tentatively concluded to ad opt the levels set forth in ASHRAE Standard 90.1- 2013.

DOE conducted several analyses in preparation for publishing this NOPR and TSD for the current SPVU rulemaking. A list of the analyses and the corresponding chapter number is presented in the next s ection. A summary of each analysis conducted can be found in Chapter 2 of this TSD.

1.4 STRUCTURE OF THE DOCUMENT

This TSD outlines the analytical approaches used in this rulemaking. The TSD consists of 17 chapters and numerous supporting appendices.

Chapter 1 Introduction: Provides an overview of the appliance and equipment standards program and how it applies to Single Package Vertical Air Conditioners and Single Package Vertical Heat P umps, and outlines the structure of the document.

Chapter 2 Analytica l Framework: Describes the rulemaking process step by step and summarizes the major components of DOE’s analyses.

Chapter 3 Market and Technology Assessment: Characterizes the Single Package Vertical Air Conditioners and Single Package Vertical Heat P umps equipment market and describes the technologies available for increasing equipment efficiency.

Chapter 4 Screening Analysis: Determines which technology options are viable for consideration in the engineering analysis.

Chapter 5 Engineering Analysis: Discusses the methods used for developing the relationship between increased efficiency and increased manufacturer production cost/selling

1-4price.

Chapter 6 Markups Analysis : Discusses the methods used for establishing markups for converting manufacturer prices to customer equipment prices.

Appendix 6A Detailed Data for Equipment Price Markups

Chapter 7 Energy Use Analysis: Discusses the process used for generating energy use estimates of Single Package Vertical Air Conditioners and Single P ackage Vertical Heat Pumps for a variety of equipment classes, climate locations, and efficiency levels.

Appendix 7A Characteristics of Modular Classroom, Modular Office, and Telecommunication Shelter Models

Appendix 7B Typical Meteorological Year Assignments

Chapter 8 Life

- Cycle Cost and Payback Period Analyses: Discusses the economic effects of standards on individual customers and users of the equipment and compares the LCC and PBP of equipment with and without higher efficiency standards.

Appendix 8A User Instructions for the Life- Cycle Cost Analysis Spreadsheet for SPVU Equipment

Appendix 8B Detailed Life -Cycle Cost and Payback Period Analysis Results

Appendix 8C Sensitivity of Life -Cycle Cost and Payback Period Analysis Results to Energy Pric es
Appendix 8D Development of Base Case Efficiency Distributions

Chapter 9 Shipments Analysis: Discusses the methods used for projecting shipments with and without higher efficiency standards.

Chapter 10 National Impact Analysis: Discusses the methods used for projecting national energy savings and national economic impacts based on annual product shipments and estimates of future equipment efficiency distributions in the absence and presence of higher efficiency standards.

Appendix 10A Full

- Fuel

- Cycle Multipliers

Appendix 10B NIA Sensitivity Analysis for Alternative Product Price Trend Scenarios

Chapter 11 Consumer Subgroup Analysis: Discusses the effects of standards on a subgroup of Single Package Vertical Air Conditioners and Single Package Vertica l Heat P umps customers and compares the LCC and PBP of equipment with and without higher efficiency standards for these customers.

Chapter 12 Manufacturer Impact Analysis: Discusses the effects of amended

1-5standards on the finances and profitability of ma nufacturers.

Appendix 12A Government Regulatory Impact Model (GRIM) Overview

Chapter 13 Emissions Impact Analysis: Discusses the effects of standards on air

borne emissions, including the impact of emissions of six pollutants or greenhouse gases : sulfur dioxide (SO 2 ), nitrogen oxides (NOx), carbon dioxide (CO 2 ) , mercury (Hg), methane (CH 4 ), and nitrous oxide (N 2 O)

. Chapter 14 Monetiz ation of Emission Reduction Benefits : Discusses the monetization of reductions in CO 2 and NO X emissions.

Chapter 15 Utility Impact Analysis: Discusses the effects of standards on the installed generation capacity of electric utilities

Chapter 16 Employment Impact Analysis: Discusses the effects of standards on National employment.

Chapter 17 Regulatory Impact Analysis: Discusses the present regulatory actions as well as the impact of non

- regulatory alternatives to setting energy efficiency standards.

Appendix 17A Regulatory Impact Analysis: Supporting Materials

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