Vol. 78 Wednesday, 

No. 176 September 11, 2013 

Part III 

Department of Energy 

10 CFR Part 431 

Energy Conservation Program: Energy Conservation Standards for 

Commercial Refrigeration Equipment; Proposed Rule 

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55890 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket No. EERE–2010–BT–STD–0003] 

RIN 1904–AC19 

Energy Conservation Program: Energy 

Conservation Standards for 

Commercial Refrigeration Equipment 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notice of proposed rulemaking 

and public meeting. 

SUMMARY: The Energy Policy and 

Conservation Act of 1975 (EPCA), as 

amended, prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including commercial refrigeration 

equipment (CRE). EPCA also requires 

the U.S. Department of Energy (DOE) to 

determine whether more-stringent, 

amended standards would be 

technologically feasible and 

economically justified, and would save 

a significant amount of energy. In this 

notice, DOE proposes amended energy 

conservation standards for commercial 

refrigeration equipment. The notice also 

announces a public meeting to receive 

comment on these proposed standards 

and associated analyses and results. 

DATES: DOE will hold a public meeting 

on Thursday, October 3, 2013, from 9 

a.m. to 4 p.m., in Washington, DC. The 

meeting will also be broadcast as a 

webinar. See section VII, ‘‘Public 

Participation,’’ for webinar registration 

information, participant instructions, 

and information about the capabilities 

available to webinar participants. 

DOE will accept comments, data, and 

information regarding this notice of 

proposed rulemaking (NOPR) before and 

after the public meeting, but no later 

than November 12, 2013. See section 

VII, ‘‘Public Participation,’’ for details. 

ADDRESSES: The public meeting will be 

held at the U.S. Department of Energy, 

Forrestal Building, Room 8E–089, 1000 

Independence Avenue SW., 

Washington, DC 20585. To attend, 

please notify Ms. Brenda Edwards at 

(202) 586–2945. Persons can attend the 

public meeting via webinar. For more 

information, refer to section VII, Public 

Participation. 

Any comments submitted must 

identify the NOPR for Energy 

Conservation Standards for Commercial 

Refrigeration Equipment and provide 

docket number EERE–2010–BT–STD– 

0003 and/or regulatory information 

number (RIN) 1904–AC19. Comments 

may be submitted using any of the 

following methods: 

1. Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions for submitting comments. 

2. Email: CRE-2010-STD-0003@

ee.doe.gov. Include the docket number 

and/or RIN in the subject line of the 

message. 

3. Mail: Ms. Brenda Edwards, U.S. 

Department of Energy, Building 

Technologies Program, Mailstop EE–2J, 

1000 Independence Avenue SW., 

Washington, DC 20585–0121. If 

possible, please submit all items on a 

CD. It is not necessary to include 

printed copies. 

4. Hand Delivery/Courier: Ms. Brenda 

Edwards, U.S. Department of Energy, 

Building Technologies Program, 950 

L’Enfant Plaza SW., Suite 600, 

Washington, DC 20024. Telephone: 

(202) 586–2945. If possible, please 

submit all items on a CD, in which case 

it is not necessary to include printed 

copies. 

Written comments regarding the 

burden-hour estimates or other aspects 

of the collection-of-information 

requirements contained in this proposed 

rule may be submitted to Office of 

Energy Efficiency and Renewable 

Energy through the methods listed 

above and by email to Chad_S_

Whiteman@omb.eop.gov. 

For detailed instructions on 

submitting comments and additional 

information on the rulemaking process, 

see section VII of this document 

(‘‘Public Participation’’). 

Docket: The docket, which includes 

Federal Register notices, public meeting 

attendee lists and transcripts, 

comments, and other supporting 

documents/materials, is available for 

review at regulations.gov. All 

documents in the docket are listed in 

the regulations.gov index. However, 

some documents listed in the index, 

such as those containing information 

that is exempt from public disclosure, 

may not be publicly available. 

A link to the docket Web page can be 

found at: http://www.regulations.gov/

#!docketDetail;D=EERE-2010-BT-STD0003. This Web page will contain a link 

to the docket for this notice on the 

regulations.gov site. The regulations.gov 

Web page will contain simple 

instructions on how to access all 

documents, including public comments, 

in the docket. See section VII for further 

information on how to submit 

comments through 

www.regulations.gov. 

For further information on how to 

submit a comment, review other public 

comments and the docket, or participate 

in the public meeting, contact Ms. 

Brenda Edwards at (202) 586–2945 or by 

email: Brenda.Edwards@ee.doe.gov. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Charles Llenza, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, EE–2J, 1000 

Independence Avenue SW., 

Washington, DC 20585–0121. 

Telephone: (202) 586–2192. Email: 

commercial_refrigeration_equipment@

EE.Doe.Gov. 

Ms. Jennifer Tiedeman, U.S. 

Department of Energy, Office of the 

General Counsel, GC–71, 1000 

Independence Avenue SW., 

Washington, DC 20585–0121. 

Telephone: (202) 287–6111. Email: 

Jennifer.Tiedeman@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of the Proposed Rule 

A. Benefits and Costs to Customers 

B. Impact on Manufacturers 

C. National Benefits 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. History of Standards Rulemaking for 

Commercial Refrigeration Equipment 

III. General Discussion 

A. Test Procedures and Normalization 

Metrics 

1. Test Procedures 

2. Normalization Metrics 

B. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

C. Energy Savings 

1. Determination of Savings 

2. Significance of Savings 

D. Economic Justification 

1. Specific Criteria 

a. Economic Impact on Manufacturers and 

Commercial Customers 

b. Life-Cycle Costs 

c. Energy Savings 

d. Lessening of Utility or Performance of 

Equipment 

e. Impact of Any Lessening of Competition 

f. Need of the Nation To Conserve Energy 

g. Other Factors 

2. Rebuttable Presumption 

IV. Methodology and Discussion of 

Comments 

A. General Rulemaking Issues 

1. Statutory Authority 

2. January 2009 Final Rule Equipment 

3. Normalization Metrics 

4. Treatment of Blast Chillers, Thawing 

Cabinets, Prep Tables, Salad Bars, and 

Buffet Tables 

5. Dedicated Remote Condensing Units 

6. Small Units 

7. Consideration of Impact of Amended 

Standards 

8. CO2 Cascade Systems 

9. Coverage of Existing Cases Undergoing 

Refurbishments or Retrofits 

10. Components Shipped as After-Market 

Additions 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55891 

1For editorial reasons, upon codification in the 

U.S. Code, Part C was re-designated Part A–1. 

2All references to EPCA in this document refer 

to the statute as amended by the American Energy 

Manufacturing Technical Corrections Act 

(AEMTCA), Public Law 112–210 (Dec. 18, 2012). 

11. Definition of Hybrid Equipment 

12. Coverage of Commercial Refrigeration 

Equipment With Drawers 

B. Test Procedures 

C. Market and Technology Assessment 

1. Equipment Classes 

a. Equipment Classification 

b. Application Temperature Equipment 

c. Open Cases 

d. Service Over Counter Equipment 

2. Technology Assessment 

a. Technologies Applicable to All 

Equipment 

b. Technologies Relevant Only to 

Equipment With Doors 

c. Technologies Applicable Only to 

Equipment Without Doors 

d. Self-Contained Equipment Technologies 

D. Screening Analysis 

E. Engineering Analysis 

1. Representative Equipment for Analysis 

a. Representative Unit Selection 

b. Baseline Models 

2. Design Options 

3. Refrigerants 

4. Cost Assessment Methodology 

a. Teardown Analysis 

b. Cost Model 

c. Manufacturer Production Cost 

d. Cost-Efficiency Relationship 

e. Manufacturer Markup 

f. Shipping Costs 

g. Manufacturer Interviews 

5. Energy Consumption Model 

a. Energy Consumption Model Results 

b. Anti-Sweat Heater Power 

c. Evaporator Fan Motor Power 

d. Condenser Energy Consumption 

e. Evaporator Coil Design 

F. Markups Analysis 

1. Baseline and Incremental Markups 

2. Distribution Channel Market Shares 

G. Energy Use Analysis 

H. Life-Cycle Cost Analysis 

1. Effect of Current Standards 

2. Equipment Cost 

3. Installation, Maintenance, and Repair 

Costs 

a. Maintenance and Repair Costs by 

Efficiency Level 

b. Maintenance and Repair Cost 

Annualization 

c. Maintenance Cost Estimates 

d. Refrigerant Costs 

e. Repair Costs 

4. Annual Energy Consumption 

5. Energy Prices 

6. Energy Price Projections 

7. Equipment Lifetime 

8. Discount Rates 

9. Compliance Date of Standards 

10. Base-Case and Standards-Case 

Efficiency Distributions 

11. Inputs to Payback Period Analysis 

12. Rebuttable-Presumption Payback 

Period 

I. National Impact Analysis—National 

Energy Savings and Net Present Value 

1. Shipments 

a. VOP.RC.L Shipments 

b. Shipments by End User Type 

c. Shipments Forecasts 

2. Forecasted Efficiency in the Base Case 

and Standards Cases 

3. National Energy Savings 

4. Net Present Value of Customer Benefit 

5. Benefits From Effects of Amended 

Standards on Energy Prices 

J. Customer Subgroup Analysis 

K. Manufacturer Impact Analysis 

1. Overview 

2. Government Regulatory Impact Model 

a. Government Regulatory Impact Model 

Key Inputs 

b. Government Regulatory Impact Model 

Scenarios 

3. Discussion of Comments 

a. Testing and Certification 

b. Cumulative Regulatory Burden 

c. Small Manufacturers 

d. Manufacturer Markup 

4. Manufacturer Interviews 

a. Enforcement 

b. Certification and Compliance Costs 

c. Disproportionate Impact on Small 

Businesses 

d. Potential Loss of Product Utility and 

Decrease in Food Safety 

L. Employment Impact Analysis 

M. Utility Impact Analysis 

N. Emissions Analysis 

O. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

1. Social Cost of Carbon 

a. Monetizing Carbon Dioxide Emissions 

b. Social Cost of Carbon Values Used in 

Past Regulatory Analyses 

c. Current Approach and Key Assumptions 

2. Valuation of Other Emissions 

Reductions 

P. Regulatory Impact Analysis 

V. Analytical Results 

A. Trial Standard Levels 

1. Trial Standard Level Formulation 

Process and Criteria 

2. Trial Standard Level Equations 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Customers 

a. Life-Cycle Cost and Payback Period 

b. Life-Cycle Cost Subgroup Analysis 

2. Economic Impacts on Manufacturers 

a. Industry Cash-Flow Analysis Results 

b. Impacts on Direct Employment 

c. Impacts on Manufacturing Capacity 

d. Impacts on Subgroups of Manufacturers 

e. Cumulative Regulatory Burden 

3. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

b. Net Present Value of Customer Costs and 

Benefits 

c. Employment Impacts 

4. Impact on Utility or Performance of 

Equipment 

5. Impact of Any Lessening of Competition 

6. Need of the Nation To Conserve Energy 

7. Other Factors 

C. Proposed Standard 

VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866 

and 13563 

B. Review Under the Regulatory Flexibility 

Act 

1. Description and Estimated Number of 

Small Entities Regulated 

2. Description and Estimate of Compliance 

Requirements 

3. Duplication, Overlap, and Conflict With 

Other Rules and Regulations 

4. Significant Alternatives to the Rule 

C. Review Under the Paperwork Reduction 

Act 

D. Review Under the National 

Environmental Policy Act of 1969 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under Executive Order 12630 

J. Review Under the Treasury and General 

Government Appropriations Act, 2001 

K. Review Under Executive Order 13211 

L. Review Under the Information Quality 

Bulletin for Peer Review 

VII. Public Participation 

A. Attendance at the Public Meeting 

B. Procedure for Submitting Prepared 

General Statements for Distribution 

C. Conduct of the Public Meeting 

D. Submission of Comments 

E. Issues on Which DOE Seeks Comment 

1. Primary and Secondary Equipment 

Classes 

2. Design Option and Core Case Costs 

3. Offset Factors 

4. Extension of Standards 

5. Types of Refrigerant Analyzed 

6. Distribution Channel Market Shares and 

Markups 

7. Market Shares of Efficiency Levels 

8. Maintenance and Repair Costs at Higher 

Efficiency Levels 

9. Impact of Amended Standards on Future 

Shipments 

10. Small Businesses 

VIII. Approval of the Office of the Secretary 

I. Summary of the Proposed Rule 

Title III, Part C of the Energy Policy 

and Conservation Act of 1975 (EPCA), 

Public Law 94–163 (42 U.S.C. 6311– 

6317, as codified), added by Public Law 

95–619, Title IV, section 441(a), 

established the Energy Conservation 

Program for Certain Industrial 

Equipment, a program covering certain 

industrial equipment, which includes 

the commercial refrigeration equipment 

that is the focus of this notice.1 2 EPCA 

specifies that any new or amended 

energy conservation standard that DOE 

prescribes for the equipment covered 

shall be designed to achieve the 

maximum improvement in energy 

efficiency that the Secretary of Energy 

(Secretary) determines is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A) and 6316(e)(1)) 

Furthermore, EPCA mandates that the 

new or amended standard must result in 

significant conservation of energy. (42 

U.S.C. 6295(o)(3)(B) and 6316(e)(1)) In 

accordance with these and other 

statutory criteria discussed in this 

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55892 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

3Life-cycle cost (LCC) of commercial refrigeration 

equipment is the cost to customers of owning and 

operating the equipment over the entire life of the 

equipment. Life-cycle cost savings are the 

reductions in the life-cycle costs due to amended 

energy conservation standards when compared to 

the life-cycle costs of the equipment in the absence 

of amended energy conservation standards. Further 

discussion of the LCC analysis can be found in 

Chapter 8 of the TSD. 

4Payback period (PBP) refers to the amount of 

time (in years) it takes customers to recover the 

increased installed cost of equipment associated 

with new or amended standards through savings in 

operating costs. Further discussion of the PBP can 

be found in Chapter 8 of the TSD. 

5This is the rate used to discount future cash 

flows in the Manufacturer Impact Analysis. A 

discount rate of 10% was calculated based on SEC 

filings and feedback from manufacturer interviews 

about the current cost of capital in the industry. For 

more information, refer to Chapter 12 of the NOPR 

TSD. 

notice, DOE proposes to adopt amended 

energy conservation standards for 

commercial refrigeration equipment. 

The proposed standards, which consist 

of maximum daily energy consumption 

(MDEC) values as a function of either 

refrigerated volume or total display area 

(TDA), are shown in Table I.1. DOE 

proposes that the standards proposed in 

this NOPR, if adopted, would apply to 

all equipment listed in Table I.1 that is 

manufactured in, or imported into, the 

United States on or after 3 years 

following the publication date of the 

final rule. (42 U.S.C. 6313(c)(6)(C)) For 

the NOPR analysis, DOE assumed a 

publication date in 2014 for this final 

rule and a compliance date in 2017 for 

the amended standards established by 

the final rule. 

TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT

[Assumes compliance beginning in 2017] 

Equipment class * Proposed standard 

level ** †

VCT.RC.L ................. 0.43 × TDA + 2.03 

VOP.RC.M ................ 0.61 × TDA + 3.03 

SVO.RC.M ................ 0.63 × TDA + 2.41 

HZO.RC.L ................. 0.57 × TDA + 6.88 

HZO.RC.M ................ 0.35 × TDA + 2.88 

VCT.RC.M ................ 0.08 × TDA + 0.72 

VOP.RC.L ................. 2.11 × TDA + 6.36 

SOC.RC.M ................ 0.39 × TDA + 0.08 

VOP.SC.M ................ 1.51 × TDA + 4.09 

SVO.SC.M ................ 1.5 × TDA + 3.99 

HZO.SC.L ................. 1.92 × TDA + 7.08 

HZO.SC.M ................ 0.75 × TDA + 5.44 

HCT.SC.I .................. 0.49 × TDA + 0.37 

VCT.SC.I .................. 0.52 × TDA + 2.56 

VCS.SC.I .................. 0.35 × V + 0.81 

VCT.SC.M ................ 0.04 × V + 1.07 

VCT.SC.L ................. 0.22 × V + 1.21 

VCS.SC.M ................ 0.03 × V + 0.53 

VCS.SC.L ................. 0.13 × V + 0.43 

HCT.SC.M ................ 0.02 × V + 0.51 

HCT.SC.L ................. 0.11 × V + 0.6 

HCS.SC.M ................ 0.02 × V + 0.37 

HCS.SC.L ................. 0.12 × V + 0.42 

PD.SC.M ................... 0.03 × V + 0.83 

SOC.SC.M ................ 0.32 × TDA + 0.53 

VOP.RC.I .................. 2.68 × TDA + 8.08 

SVO.RC.L ................. 2.11 × TDA + 6.36 

SVO.RC.I .................. 2.68 × TDA + 8.08 

HZO.RC.I .................. 0.72 × TDA + 8.74 

VOP.SC.L ................. 3.79 × TDA + 10.26 

VOP.SC.I .................. 4.81 × TDA + 13.03 

SVO.SC.L ................. 3.77 × TDA + 10.01 

SVO.SC.I .................. 4.79 × TDA + 12.72 

HZO.SC.I .................. 2.44 × TDA + 9.0 

SOC.RC.L ................. 0.83 × TDA + 0.18 

SOC.RC.I .................. 0.97 × TDA + 0.21 

SOC.SC.I .................. 1.35 × TDA + 0.29 

VCT.RC.I .................. 0.51 × TDA + 2.37 

HCT.RC.M ................ 0.14 × TDA + 0.11 

HCT.RC.L ................. 0.3 × TDA + 0.23 

HCT.RC.I .................. 0.35 × TDA + 0.27 

VCS.RC.M ................ 0.1 × V + 0.24 

VCS.RC.L ................. 0.21 × V + 0.5 

TABLE I.1—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT—Continued 

[Assumes compliance beginning in 2017] 

Equipment class * Proposed standard 

level ** †

VCS.RC.I .................. 0.25 × V + 0.58 

HCS.SC.I .................. 0.35 × V + 0.81 

HCS.RC.M ................ 0.1 × V + 0.24 

HCS.RC.L ................. 0.21 × V + 0.5 

HCS.RC.I .................. 0.25 × V + 0.58 

SOC.SC.L ................. 0.67 × TDA + 1.12 

* Equipment class designations consist of a 

combination (in sequential order separated by 

periods) of: (1) an equipment family code 

(VOP = vertical open, SVO = semivertical 

open, HZO = horizontal open, VCT = vertical 

transparent doors, VCS = vertical solid doors, 

HCT = horizontal transparent doors, HCS = 

horizontal solid doors, SOC = service over 

counter, or PD = pull-down); (2) an operating 

mode code (RC = remote condensing or SC = 

self-contained); and (3) a rating temperature 

code (M = medium temperature (38±2 °F), L = 

low temperature (0±2 °F), or I = ice-cream 

temperature (¥15±2 °F)). For example, 

‘‘VOP.RC.M’’ refers to the ‘‘vertical open, remote condensing, medium temperature’’ 

equipment class. See discussion in chapter 3 

of the NOPR technical support document 

(TSD) for a more detailed explanation of the 

equipment class terminology. 

** ‘‘TDA’’ is the total display area of the 

case, as measured in the Air-Conditioning, 

Heating, and Refrigeration Institute (AHRI) 

Standard 1200–2010, appendix D. † ‘‘V’’ is the volume of the case, as measured in American National Standards Institute 

(ANSI)/Association of Home Appliance Manufacturers (AHAM) Standard HRF–1–2004. 

A. Benefits and Costs to Customers 

Table I.2 presents DOE’s evaluation of 

the economic impacts of the proposed 

standards on customers of commercial 

refrigeration equipment, as measured by 

the average life-cycle cost (LCC) 

savings 3 and the median payback 

period (PBP).4 The average LCC savings 

are positive for all equipment classes 

under the standard proposed by DOE in 

this notice. At TSL 4, the percentage of 

customers who experience net benefits 

or no impacts ranges from 59 to 100 

percent, and customers experiencing a 

net cost range from 0 to 41 percent. 

Chapter 11 presents the LCC subgroup 

analysis on groups of customers that 

may be disproportionately affected by 

the proposed standard. 

TABLE I.2—IMPACTS OF PROPOSED

STANDARDS ON CUSTOMERS OF

COMMERCIAL REFRIGERATION

EQUIPMENT

Equipment 

class * 

Average 

LCC 

savings 

2012$ 

Median PBP 

years 

VOP.RC.M ........ $1,493.72 3.91 

VOP.RC.L ......... 1,129.51 2.22 

VOP.SC.M ........ 691.27 4.39 

VCT.RC.M ........ 1,108.13 2.70 

VCT.RC.L ......... 797.91 1.64 

VCT.SC.M ......... 641.05 2.54 

VCT.SC.L .......... 1,342.84 0.96 

VCT.SC.I ........... 431.88 1.97 

VCS.SC.M ........ 131.80 1.75 

VCS.SC.L ......... 220.83 1.15 

VCS.SC.I .......... 152.69 2.42 

SVO.RC.M ........ 1,008.46 4.50 

SVO.SC.M ........ 491.99 4.75 

SOC.RC.M ........ 494.51 4.41 

HZO.RC.M ** ..... 0.00 NA 

HZO.RC.L ** ...... 0.00 NA 

HZO.SC.M ........ 28.78 6.40 

HZO.SC.L ** ...... 0.00 NA 

HCT.SC.M ........ 253.60 3.08 

HCT.SC.L ......... 368.92 1.47 

HCT.SC.I .......... 42.48 4.28 

HCS.SC.M ........ 8.68 4.28 

HCS.SC.L ......... 80.72 2.57 

PD.SC.M ........... 310.43 2.27 

SOC.SC.M ........ 739.75 2.99 

* Values have been shown only for primary 

equipment classes, which are equipment 

classes that have significant volume of shipments and, therefore, were directly analyzed. 

See chapter 5 of the NOPR TSD, Engineering 

Analysis, for a detailed discussion of primary 

and secondary equipment classes. 

** For equipment classes HZO.RC.M, 

HZO.RC.L, and HZO.SC.L, no efficiency levels 

above the baseline were found to be economically justifiable. Therefore, the proposed 

standards for these equipment classes are the 

same as the current standards. As a result, 

LCC savings for these equipment classes are 

shown as zero. The PBP values are indeterminate and are shown as ‘‘NA.’’ 

B. Impact on Manufacturers 

The industry net present value (INPV) 

is the sum of the discounted cash flows 

to the industry from the base year (2013) 

through the end of the analysis period 

(2046). Using a real discount rate of 10 

percent,5 DOE estimates that the INPV 

for manufacturers of commercial 

refrigeration equipment is $1,162.0 

million in 2012$. Under the proposed 

standards, DOE expects the industry net 

present value to decrease by 3.95 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55893 

6Total U.S. commercial sector energy (source 

energy) used for refrigeration in 2010 was 1.21 

quads. Source: U.S. Department of Energy—Office 

of Energy Efficiency and Renewable Energy. 

Buildings Energy Data Book, Table 3.1.4, 2010 

Commercial Energy End-Use Splits, by Fuel Type 

(Quadrillion Btu). 2012. (Last accessed April 23, 

2013.) http://buildingsdatabook.eren.doe.gov/

TableView.aspx?table=3.1.4. 

7A metric ton is equivalent to 1.1 U.S. short tons. 

Results for NOX and Hg are presented in short tons. 

8 DOE calculated emissions reductions relative to 

the Annual Energy Outlook (AEO) 2013 Reference 

case, which generally represents current legislation 

and environmental regulations for which 

implementing regulations were available as of 

December 31, 2012. 

9 DOE also estimated CO2 and CO2 equivalent 

(CO2eq) emissions that occur through 2030 (CO2eq 

includes greenhouse gases such as CH4 and N2O). 

The estimated emissions reductions through 2030 

are 16 million metric tons CO2, 1,687 thousand tons 

CO2eq for CH4, and 72.27 thousand tons CO2eq for 

N2O. 

10 DOE is currently investigating valuation of 

avoided Hg and SO2 emissions. 

percent to 7.97 percent. Total industry 

conversion costs are expected to total 

$87.5 million. 

C. National Benefits 

DOE’s analyses indicate that the 

proposed standards would save a 

significant amount of energy. The 

lifetime savings for commercial 

refrigeration equipment purchased in 

the 30-year period that begins in the 

year of the compliance with amended 

standards (2017–2046) amount to 1.001 

quadrillion British thermal units 

(quads). The average annual energy 

savings over the life of commercial 

refrigeration equipment purchased in 

2017 through 2046 is 0.04 quads.6

The cumulative national net present 

value (NPV) of total customer costs and 

savings of the proposed standards for 

commercial refrigeration equipment in 

2012$ ranges from $1.606 billion (at a 7- 

percent discount rate) to $4.067 billion 

(at a 3-percent discount rate). This NPV 

expresses the estimated total value to 

customers of future operating cost 

savings minus the estimated increased 

installed costs for equipment purchased 

in 2017–2046, discounted to 2013. 

The proposed standards are expected 

to have significant environmental 

benefits. The energy savings would 

result in cumulative greenhouse gas 

(GHG) emission reductions of 54.88 

million metric tons (MMt) 7 of carbon 

dioxide (CO2), 265.9 thousand tons of 

methane, 1.1 thousand tons of nitrous 

oxide, 70.1 thousand tons of sulfur 

dioxide (SO2), 81.1 thousand tons of 

NOX and 0.1 tons of mercury (Hg).8 9

The value of the CO2 reductions is 

calculated using a range of values per 

metric ton of CO2 (otherwise known as 

the Social Cost of Carbon, or SCC) 

developed by a recent Federal 

interagency process. The derivation of 

the SCC values is discussed in section 

IV.O. DOE estimates that the net present 

monetary value of the CO2 emissions 

reduction would be between $0.31 and 

$4.55 billion. DOE also estimates the 

present monetary value of the NOX

emissions reduction would be between 

$8.8 and $90.7 million at a 7-percent 

discount rate, and between $19.1 and 

$196.2 million at a 3-percent discount 

rate.10

Table I.3 summarizes the national 

economic costs and benefits expected to 

result from the proposed standards for 

commercial refrigeration equipment. 

TABLE I.3—SUMMARY OF NATIONAL ECONOMIC BENEFITS AND COSTS OF PROPOSED COMMERCIAL REFRIGERATION

EQUIPMENT ENERGY CONSERVATION STANDARDS

Category Present value 

million 2012$ 

Discount rate 

(percent) 

Benefits 

Operating Cost Savings ................................................................................................................................... 2,695 7 

6,034 3 

CO2 Reduction Monetized Value (at $12.9/Metric Ton) * ................................................................................ 308 5 

CO2 Reduction Monetized Value (at $40.8/Metric Ton) * ................................................................................ 1,504 3 

CO2 Reduction Monetized Value (at $62.2/Metric Ton) * ................................................................................ 2,452 2.5 

CO2 Reduction Monetized Value (at $117.0/Metric Ton) * .............................................................................. 4,552 3 

NOX Reduction Monetized Value (at $2639/Ton) ** ........................................................................................ 50 7 

108 3 

Total Benefits † ................................................................................................................................................. 4,249 7 

7,646 3 

Costs 

Incremental Installed Costs ............................................................................................................................. 1,089 7 

1,967 3 

Net Benefits 

Including CO2 and NOX Reduction Monetized Value ..................................................................................... 3,160 7 

5,679 3 

* The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC 

from the integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature change further out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate an escalation factor. 

** The value represents the average of the low and high NOX values used in DOE’s analysis. †Total Benefits for both the 3% and 7% cases are derived using the CO2 reduction monetized value series corresponding to average SCC with 

3-percent discount rate. 

The benefits and costs of today’s 

proposed standards, for commercial 

refrigeration equipment sold in 2017– 

2046, can also be expressed in terms of 

annualized values. The annualized 

monetary values are the sum of (1) the 

annualized national economic value of 

the benefits from the customer operation 

of equipment that meets the proposed 

standards (consisting primarily of 

operating cost savings from using less 

energy, minus increases in equipment 

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55894 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

11 DOE used a two-step calculation process to 

convert the time-series of costs and benefits into 

annualized values. First, DOE calculated a present 

value in 2013, the year used for discounting the 

NPV of total consumer costs and savings, for the 

time-series of costs and benefits using discount 

rates of 3 and 7 percent for all costs and benefits 

except for the value of CO2 reductions. For the 

latter, DOE used a range of discount rates, as shown 

in Table I.4. From the present value, DOE then 

calculated the fixed annual payment over a 30-year 

period (2017 through 2046) that yields the same 

present value. The fixed annual payment is the 

annualized value. Although DOE calculated 

annualized values, this does not imply that the 

time-series of cost and benefits from which the 

annualized values were determined is a steady 

stream of payments. 

installed cost, which is another way of 

representing customer NPV); and (2) the 

annualized monetary value of the 

benefits of emission reductions, 

including CO2 emission reductions.11

Although combining the values of 

operating savings and CO2 emission 

reductions provides a useful 

perspective, two issues should be 

considered. First, the national operating 

savings are domestic U.S. customer 

monetary savings that occur as a result 

of market transactions, while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and CO2 savings 

are performed with different methods 

that use different time frames for 

analysis. The national operating cost 

savings is measured over the lifetimes of 

commercial refrigeration equipment 

shipped in 2017–2046. The SCC values, 

on the other hand, reflect the present 

value of some future climate-related 

impacts resulting from the emission of 

1 ton of CO2 in each year. These impacts 

continue well beyond 2100. 

Table I.4 shows the annualized 

benefits and costs of the proposed 

standards. The results of the primary 

estimate are as follows. Table I.4 shows 

the primary, low net benefits, and high 

net benefits scenarios. The primary 

estimate is the estimate in which the 

operating cost savings were calculated 

using the Annual Energy Outlook 2013 

(AEO2013) Reference Case forecast of 

future electricity prices. The other two 

estimates, low net benefits estimate and 

high net benefits estimate, are based on 

the low and high electricity price 

scenarios from the AEO2013 forecast. At 

a 7-percent discount rate for benefits 

and costs, the cost in the primary 

estimate of the standards proposed in 

today’s notice is $82 million per year in 

increased equipment costs. The 

annualized benefits are $203 million per 

year in reduced equipment operating 

costs, $75 million in CO2 reductions 

(note that DOE used a 3-percent 

discount rate, along with the 

corresponding SCC series that uses a 3- 

percent discount rate, to calculate the 

monetized value of CO2 emissions 

reductions), and $3.75 million in 

reduced NOX emissions. In this case, the 

annualized net benefit amounts to $199 

million. At a 3-percent discount rate for 

all benefits and costs, the cost in the 

primary estimate of the amended 

standards proposed in today’s notice is 

$97 million per year in increased 

equipment costs. The benefits are $299 

million per year in reduced operating 

costs, $75 million in CO2 reductions, 

and $5.33 million in reduced NOX

emissions. In this case, the net benefit 

amounts to $281 million per year. 

DOE also calculated the low net 

benefits and high net benefits estimates 

by calculating the operating cost savings 

and incremental installed costs at the 

AEO2013 low economic growth case 

and high economic growth case 

scenarios, respectively. These scenarios 

do not change the monetized emissions 

reductions values. The net benefits and 

costs for low and high net benefits 

estimates were calculated in the same 

manner as the primary estimate by using 

the corresponding values of operating 

cost savings and incremental installed 

costs. 

TABLE I.4—ANNUALIZED BENEFITS AND COSTS OF PROPOSED STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT

Discount rate 

(percent) 

Primary 

estimate * 

million 2012$ 

Low net benefits 

estimate * 

million 2012$ 

High net benefits 

estimate * 

million 2012$ 

Benefits 

Operating Cost Savings ................................................................... 7 203 197 212 

3 299 288 314 

CO2 Reduction Monetized Value (at $12.9/Metric Ton) ** .............. 5 19 19 19 

CO2 Reduction Monetized Value (at $40.8/Metric Ton) ** .............. 3 75 75 75 

CO2 Reduction Monetized Value (at $62.2/Metric Ton) ** .............. 2.5 114 114 114 

CO2 Reduction Monetized Value (at $117.0/Metric Ton) ** ............ 3 225 225 225 

NOX Reduction Monetized Value (at $2,639/Ton) ** ....................... 7 3.75 3.75 3.75 

3 5.33 5.33 5.33 

Total Benefits (Operating Cost Savings, CO2 Reduction and NOX

Reduction) † .................................................................................. 7 281 275 290 

3 379 368 394 

Costs 

Total Incremental Installed Costs .................................................... 7 82 84 80 

3 97 100 95 

Net Benefits Less Costs 

Total Benefits Less Incremental Costs ............................................ 7 199 191 210 

3 281 268 299 

* This table presents the annualized costs and benefits associated with equipment shipped in 2017–2046. These results include benefits to 

consumers which accrue after 2046 from the products purchased in 2017–2046. The primary, low, and high estimates utilize forecasts of energy 

prices from the AEO2013 Reference Case, Low Economic Growth Case, and High Economic Growth Case, respectively. In addition, incremental 

equipment costs reflect a medium decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected equipment price trends in the Low Benefits Estimate, and a high decline rate for projected equipment price trends in the High Benefits Estimate. The 

methods used to derive projected price trends are explained in Appendix 10B. 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55895 

12For editorial reasons, upon codification in the 

U.S. Code, Part C was re-designated Part A–1. 

13All references to EPCA in this document refer 

to the statute as amended through the American 

Energy Manufacturing Technical Corrections Act 

(AEMTCA), Public Law 112–210 (Dec. 18, 2012). 

** The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on the average SCC 

from the three integrated assessment models, at discount rates of 2.5, 3, and 5 percent. The fourth set, which represents the 95th percentile 

SCC estimate across all three models at a 3-percent discount rate, is included to represent higher-than-expected impacts from temperature 

change further out in the tails of the SCC distribution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate 

an escalation factor. The value for NOX is the average of the low and high values used in DOE’s analysis. †Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount 

rate. In the rows labeled ‘‘7% plus CO2 range’’ and ‘‘3% plus CO2 range,’’ the operating cost and NOX benefits are calculated using the labeled 

discount rate, and those values are added to the full range of CO2 values. 

DOE has tentatively concluded that 

the proposed standards meet the 

requirements found in EPCA by 

representing maximum improvement in 

energy efficiency that is technologically 

feasible and economically justified, and 

would result in significant conservation 

of energy. (42 U.S.C. 6295 (o), 6316(e)) 

DOE further notes that technologies 

used to achieve these standard levels are 

already commercially available for the 

equipment classes covered by today’s 

proposal. Based on the analyses 

described above, DOE has tentatively 

concluded that the benefits of the 

proposed standards to the Nation 

(energy savings, positive NPV of 

customer benefits, customer LCC 

savings, and emission reductions) 

would outweigh the burdens (loss of 

INPV for manufacturers and LCC 

increases for some customers). 

DOE also considered more-stringent 

and less-stringent energy use levels as 

trial standard levels (TSLs), and is still 

considering them in this rulemaking. 

However, DOE has tentatively 

concluded that the potential burdens of 

the more-stringent energy use levels 

would outweigh the projected benefits. 

Based on consideration of the public 

comments DOE receives in response to 

this notice and related information 

collected and analyzed during the 

course of this rulemaking effort, DOE 

may adopt energy use levels presented 

in this notice that are either higher or 

lower than the proposed standards, or 

some combination of level(s) that 

incorporate the proposed standards in 

part. 

II. Introduction 

The following section briefly 

discusses the statutory authority 

underlying today’s proposal, as well as 

some of the relevant historical 

background related to the establishment 

of standards for commercial 

refrigeration equipment. 

A. Authority 

Title III, Part C of EPCA, Public Law 

94–163 (42 U.S.C. 6311–6317, as 

codified), added by Public Law 95–619, 

Title IV, section 441(a), established the 

Energy Conservation Program for 

Certain Industrial Equipment, a program 

covering certain industrial equipment, 

which includes the commercial 

refrigeration equipment that is the focus 

of this notice.12 13 EPCA prescribes 

energy conservation standards for 

commercial refrigeration equipment (42 

U.S.C. 6313(c)(2)–(4)), and directs DOE 

to conduct rulemakings to establish new 

and amended standards for commercial 

refrigeration equipment. (42 U.S.C. 

6313(c)(4)–(6)) (DOE notes that under 42 

U.S.C. 6295(m) and 6316(e)(1) the 

agency must periodically review its 

already established energy conservation 

standards for covered equipment. Under 

this requirement, the next review that 

DOE would need to conduct must occur 

no later than 6 years from the issuance 

of a final rule establishing or amending 

a standard for covered equipment.) 

Pursuant to EPCA, DOE’s energy 

conservation program for covered 

equipment generally consists of four 

parts: (1) Testing; (2) labeling; (3) the 

establishment of Federal energy 

conservation standards; and (4) 

certification and enforcement 

procedures. For commercial 

refrigeration equipment, DOE is 

responsible for the entirety of this 

program. Subject to certain criteria and 

conditions, DOE is required to develop 

test procedures to measure the energy 

efficiency, energy use, or estimated 

annual operating cost of each type or 

class of covered equipment. (42 U.S.C. 

6314) Manufacturers of covered 

equipment must use the prescribed DOE 

test procedure as the basis for certifying 

to DOE that their equipment complies 

with the applicable energy conservation 

standards adopted under EPCA and 

when making representations to the 

public regarding the energy use or 

efficiency of that equipment. (42 U.S.C. 

6315(b), 6295(s), and 6316(e)(1)) 

Similarly, DOE must use these test 

procedures to determine whether that 

equipment complies with standards 

adopted pursuant to EPCA. The DOE 

test procedure for commercial 

refrigeration equipment currently 

appears at title 10 of the Code of Federal 

Regulations (CFR) part 431, subpart C. 

DOE must follow specific statutory 

criteria for prescribing amended 

standards for covered equipment. As 

indicated above, any amended standard 

for covered equipment must be designed 

to achieve the maximum improvement 

in energy efficiency that is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A) and 6316(e)(1)) 

Furthermore, DOE may not adopt any 

standard that would not result in the 

significant conservation of energy. (42 

U.S.C. 6295(o)(3) and 6316(e)(1)) DOE 

also may not prescribe a standard: (1) 

For certain equipment, including 

commercial refrigeration equipment, if 

no test procedure has been established 

for the product; or (2) if DOE determines 

by rule that the proposed standard is not 

technologically feasible or economically 

justified. (42 U.S.C. 6295(o)(3)(A)–(B) 

and 6316(e)(1)) In deciding whether a 

proposed standard is economically 

justified, DOE must determine whether 

the benefits of the standard exceed its 

burdens. (42 U.S.C. 6295(o)(2)(B)(i) and 

6316(e)(1)) DOE must make this 

determination after receiving comments 

on the proposed standard, and by 

considering, to the greatest extent 

practicable, the following seven factors: 

1. The economic impact of the 

standard on manufacturers and 

consumers of the equipment subject to 

the standard; 

2. The savings in operating costs 

throughout the estimated average life of 

the covered equipment in the type (or 

class) compared to any increase in the 

price, initial charges, or maintenance 

expenses for the covered equipment that 

are likely to result from the imposition 

of the standard; 

3. The total projected amount of 

energy, or as applicable, water, savings 

likely to result directly from the 

imposition of the standard; 

4. Any lessening of the utility or the 

performance of the covered equipment 

likely to result from the imposition of 

the standard; 

5. The impact of any lessening of 

competition, as determined in writing 

by the U.S. Attorney General (Attorney 

General), that is likely to result from the 

imposition of the standard; 

6. The need for national energy and 

water conservation; and 

7. Other factors the Secretary 

considers relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII) and 

6316(e)(1)) 

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55896 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

EPCA, as codified, also contains what 

is known as an ‘‘anti-backsliding’’ 

provision, which prevents the Secretary 

from prescribing any amended standard 

that either increases the maximum 

allowable energy use or decreases the 

minimum required energy efficiency of 

covered equipment. (42 U.S.C. 

6295(o)(1) and 6316(e)(1)) Also, the 

Secretary may not prescribe an amended 

or new standard if interested persons 

have established by a preponderance of 

the evidence that the standard is likely 

to result in the unavailability in the 

United States of any covered product 

type (or class) of performance 

characteristics (including reliability), 

features, sizes, capacities, and volumes 

that are substantially the same as those 

generally available in the United States. 

(42 U.S.C. 6295(o)(4) and 6316(e)(1)) 

Further, EPCA, as codified, 

establishes a rebuttable presumption 

that a standard is economically justified 

if the Secretary finds that the additional 

cost to the consumer of purchasing a 

product complying with an energy 

conservation standard level will be less 

than three times the value of the energy 

savings during the first year that the 

consumer will receive as a result of the 

standard, as calculated under the 

applicable test procedure. (See 42 U.S.C. 

6295(o)(2)(B)(iii) and 6316(e)(1)) Section 

III.D.2 presents additional discussion 

about the rebuttable presumption 

payback period. 

Additionally, 42 U.S.C. 6295(q)(1) and 

6316(e)(1) specify requirements when 

promulgating a standard for a type or 

class of covered equipment that has two 

or more subcategories that may justify 

different standard levels. DOE must 

specify a different standard level than 

that which applies generally to such 

type or class of equipment for any group 

of covered products that has the same 

function or intended use if DOE 

determines that products within such 

group (A) consume a different kind of 

energy from that consumed by other 

covered equipment within such type (or 

class); or (B) have a capacity or other 

performance-related feature that other 

equipment within such type (or class) 

do not have and such feature justifies a 

higher or lower standard. (42 U.S.C. 

6295(q)(1) and 6316(e)(1)) In 

determining whether a performancerelated feature justifies a different 

standard for a group of equipment, DOE 

must consider such factors as the utility 

to the consumer of the feature and other 

factors DOE deems appropriate. Id. Any 

rule prescribing such a standard must 

include an explanation of the basis on 

which such higher or lower level was 

established. (42 U.S.C. 6295(q)(2) and 

6316(e)(1)) 

Federal energy conservation 

requirements generally supersede State 

laws or regulations concerning energy 

conservation testing, labeling, and 

standards. (42 U.S.C. 6297(a)–(c) and 

6316(e)) 

B. Background 

1. Current Standards 

The current energy conservation 

standards for commercial refrigeration 

equipment were established by two 

different legislative actions and one 

DOE final rule. EPCA, as amended by 

the Energy Policy Act of 2005 (EPACT 

2005), established standards for selfcontained commercial refrigerators and 

freezer with solid or transparent doors, 

self-contained commercial refrigeratorfreezers with solid doors, and selfcontained commercial refrigerators 

designed for pull-down applications. 

(42 U.S.C. 6313(c)(2)–(3)) On January 9, 

2009, DOE published a final rule 

(January 2009 final rule) prescribing 

standards for commercial refrigeration 

equipment. 74 FR 1092. Specifically, 

this final rule completed the first 

standards rulemaking for commercial 

refrigeration equipment by establishing 

standards for equipment types specified 

in 42 U.S.C. 6313(c)(5), and for which 

EPCA did not prescribe standards in 42 

U.S.C. 6313(c)(2)–(3). These types 

consisted of commercial ice-cream 

freezers; self-contained commercial 

refrigerators, commercial freezers, and 

commercial refrigerator-freezers without 

doors; and remote condensing 

commercial refrigerators, commercial 

freezers, and commercial refrigeratorfreezers. More recently, the American 

Energy Manufacturing Technical 

Corrections Act (AEMTCA), Public Law 

112–210 (Dec. 18, 2012), amended 

section 342(c) of EPCA to establish a 

new standard for self-contained service 

over counter medium temperature 

commercial refrigerators (this class is 

known as SOC.SC.M per DOE’s 

equipment class nomenclature). (42 

U.S.C. 6313(c)(4)) As a result, DOE’s 

current energy conservation standards 

for commercial refrigeration equipment 

include the following: standards 

established by EPCA for commercial 

refrigeration equipment manufactured 

on or after January 1, 2010; standards 

established in the January 2009 final 

rule for commercial refrigeration 

equipment manufactured on or after 

January 1, 2012; and standards 

established by AEMTCA for SOC.SC.M 

equipment manufactured on or after 

January 1, 2012. 

Table II.1 and Table II.2 present 

DOE’s current energy conservation 

standards for commercial refrigeration 

equipment set by EPCA and the January 

2009 final rule, respectively. The 

AEMTCA standard for SOC.SC.M 

equipment manufactured on or after 

January 1, 2012 is prescribed as 0.6 × 

TDA + 1.0. (42 U.S.C. 6313(c)(4)). 

TABLE II.1—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS PRESCRIBED BY EPCA—COMPLIANCE REQUIRED

BEGINNING ON JANUARY 1, 2010 

Category Maximum daily energy consumption 

kWh/day * 

Refrigerators with solid doors .............................................................................................................. 0.10 V ** + 2.04. 

Refrigerators with transparent doors ................................................................................................... 0.12 V + 3.34. 

Freezers with solid doors .................................................................................................................... 0.40 V + 1.38. 

Freezers with transparent doors .......................................................................................................... 0.75 V + 4.10. 

Refrigerators/freezers with solid doors ................................................................................................ the greater of 0.27 AV† ¥0.71 or 0.70. 

Self-contained refrigerators with transparent doors designed for pull-down temperature applications.0.126V + 3.51. 

* kilowatt-hours per day. 

** Where ‘‘V’’ means the chilled or frozen compartment volume in cubic feet as defined in the Association of Home Appliance Manufacturers 

Standard HRF–1–1979. 10 CFR 431.66. †Where ‘‘AV’’ means that adjusted volume in cubic feet measured in accordance with the Association of Home Appliance Manufacturers 

Standard HRF–1–1979. 10 CFR 431.66 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55897 

14EPCA defines the term ‘‘holding temperature 

application’’ as a use of commercial refrigeration 

equipment other than a pull-down temperature 

application, except a blast chiller or freezer. (42 

U.S.C. 6311(9)(B)) 

15EPCA defines the term ‘‘pull-down temperature 

application’’ as a commercial refrigerator with 

doors that, when fully loaded with 12 ounce 

beverage cans at 90 °F, can cool those beverages to 

an average stable temperature of 38 °F in 12 hours 

or less. (42 U.S.C. 6311(9)(D)) 

16Baseline units consist of units possessing 

features and levels of efficiency consistent with the 

least-efficient equipment currently available and 

widely sold on the market. 

TABLE II.2—COMMERCIAL REFRIGERATION EQUIPMENT STANDARDS ESTABLISHED IN THE JANUARY 2009 

FINAL RULE—COMPLIANCE REQUIRED BEGINNING ON JANUARY 1, 

2012 

Equipment class * Standard level ** †

kWh/day 

VOP.RC.M ................ 0.82 × TDA + 4.07 

SVO.RC.M ................ 0.83 × TDA + 3.18 

HZO.RC.M ................ 0.35 × TDA + 2.88 

VOP.RC.L ................. 2.27 × TDA + 6.85 

HZO.RC.L ................. 0.57 × TDA + 6.88 

VCT.RC.M ................ 0.22 × TDA + 1.95 

VCT.RC.L ................. 0.56 × TDA + 2.61 

SOC.RC.M ................ 0.51 × TDA + 0.11 

VOP.SC.M ................ 1.74 × TDA + 4.71 

SVO.SC.M ................ 1.73 × TDA + 4.59 

HZO.SC.M ................ 0.77 × TDA + 5.55 

HZO.SC.L ................. 1.92 × TDA + 7.08 

VCT.SC.I .................. 0.67 × TDA + 3.29 

VCS.SC.I .................. 0.38 × V + 0.88 

HCT.SC.I .................. 0.56 × TDA + 0.43 

SVO.RC.L ................. 2.27 × TDA + 6.85 

VOP.RC.I .................. 2.89 × TDA + 8.7 

SVO.RC.I .................. 2.89 × TDA + 8.7 

HZO.RC.I .................. 0.72 × TDA + 8.74 

VCT.RC.I .................. 0.66 × TDA + 3.05 

HCT.RC.M ................ 0.16 × TDA + 0.13 

HCT.RC.L ................. 0.34 × TDA + 0.26 

HCT.RC.I .................. 0.4 × TDA + 0.31 

VCS.RC.M ................ 0.11 × V + 0.26 

VCS.RC.L ................. 0.23 × V + 0.54 

VCS.RC.I .................. 0.27 × V + 0.63 

HCS.RC.M ................ 0.11 × V + 0.26 

HCS.RC.L ................. 0.23 × V + 0.54 

HCS.RC.I .................. 0.27 × V + 0.63 

SOC.RC.L ................. 1.08 × TDA + 0.22 

SOC.RC.I .................. 1.26 × TDA + 0.26 

VOP.SC.L ................. 4.37 × TDA + 11.82 

VOP.SC.I .................. 5.55 × TDA + 15.02 

SVO.SC.L ................. 4.34 × TDA + 11.51 

SVO.SC.I .................. 5.52 × TDA + 14.63 

HZO.SC.I .................. 2.44 × TDA + 9. 

SOC.SC.I .................. 1.76 × TDA + 0.36 

HCS.SC.I .................. 0.38 × V + 0.88 

* Equipment class designations consist of a 

combination (in sequential order separated by 

periods) of: (1) an equipment family code 

(VOP = vertical open, SVO = semivertical 

open, HZO = horizontal open, VCT = vertical 

transparent doors, VCS = vertical solid doors, 

HCT = horizontal transparent doors, HCS = 

horizontal solid doors, or SOC = service over 

counter); (2) an operating mode code (RC = 

remote condensing or SC = self-contained); 

and (3) a rating temperature code (M = medium temperature (38 °F), L = low temperature 

(0 °F), or I = ice-cream temperature (-15 °F)). 

For example, ‘‘VOP.RC.M’’ refers to the 

‘‘vertical open, remote condensing, medium 

temperature’’ equipment class. 

** TDA is the total display area of the case, 

as measured in ANSI/Air-Conditioning and Refrigeration Institute (ARI) Standard 1200–2006, 

appendix D. †V is the volume of the case, as measured 

in AHAM Standard HRF–1–2004. 

2. History of Standards Rulemaking for 

Commercial Refrigeration Equipment 

EPCA, as amended by EPACT 2005, 

prescribes energy conservation 

standards for certain self-contained 

commercial refrigeration equipment 

designed for holding temperatures 14

(i.e., commercial refrigerators, freezers, 

and refrigerator-freezers with 

transparent and solid doors designed for 

holding temperature applications) and 

self-contained commercial refrigerators 

with transparent doors designed for 

pull-down temperature applications.15

Compliance with these standards was 

required as of January 1, 2010. (42 

U.S.C. 6313(c)(2)–(3)) DOE published a 

technical amendment final rule on 

October 18, 2005 codifying these 

standards into subpart C of part 431 

under title 10 of the Code of Federal 

Regulations (CFR). 70 FR 60407. 

In addition, EPCA requires DOE to set 

standards for additional commercial 

refrigeration equipment that is not 

covered by 42 U.S.C. 6313(c)(2)–(3), 

namely commercial ice-cream freezers; 

self-contained commercial refrigerators, 

freezers, and refrigerator-freezers 

without doors; and remote condensing 

commercial refrigerators, freezers, and 

refrigerator-freezers. (42 U.S.C. 

6313(c)(5)) DOE published a final rule 

establishing these standards on January 

9, 2009 (74 FR 1092), and manufacturers 

must comply with these standards 

starting on January 1, 2012. (42 U.S.C. 

6313(c)(5)(A)) 

EPCA requires DOE to conduct a 

subsequent rulemaking to determine 

whether to amend the standards 

established under 42 U.S.C. 6313(c), 

which includes both the standards 

prescribed by EPACT 2005 and those 

prescribed by DOE in the January 2009 

final rule. (42 U.S.C. 6313(c)(6)) If DOE 

decides as part of this ongoing 

rulemaking to amend the current 

standards, DOE must publish a final 

rule establishing any such amended 

standards by January 1, 2013. Id. 

To satisfy this requirement, DOE 

initiated the current rulemaking on 

April 30, 2010 by publishing on its Web 

site its ‘‘Rulemaking Framework for 

Commercial Refrigeration Equipment.’’ 

(The Framework document is available 

at: www1.eere.energy.gov/buildings/

appliance_standards/commercial/pdfs/

cre_framework_04-30-10.pdf.) DOE also 

published a notice in the Federal 

Register announcing the availability of 

the Framework document, as well as a 

public meeting to discuss the document. 

The notice also solicited comment on 

the matters raised in the document. 75 

FR 24824 (May 6, 2010). The 

Framework document described the 

procedural and analytical approaches 

that DOE anticipated using to evaluate 

energy conservation standards for 

commercial refrigeration equipment, 

and identified various issues to be 

resolved in the rulemaking. 

DOE held the Framework public 

meeting on May 18, 2010, at which it: 

(1) Presented the contents of the 

Framework document; (2) described the 

analyses it planned to conduct during 

the rulemaking; (3) sought comments 

from interested parties on these 

subjects; and (4) in general, sought to 

inform interested parties about, and 

facilitate their involvement in, the 

rulemaking. Major issues discussed at 

the public meeting included: (1) the 

scope of coverage for the rulemaking; (2) 

potential updates to the test procedure 

and appropriate test metrics (being 

addressed in a concurrent rulemaking); 

(3) manufacturer and market 

information, including distribution 

channels; (4) equipment classes, 

baseline units,16 and design options to 

improve efficiency; (5) life-cycle costs to 

customer, including installation, 

maintenance, and repair costs; and (6) 

any customer subgroups DOE should 

consider. At the meeting and during the 

comment period on the Framework 

document, DOE received many 

comments that helped it identify and 

resolve issues pertaining to commercial 

refrigeration equipment relevant to this 

rulemaking. These are discussed in 

subsequent sections of this notice. 

DOE then gathered additional 

information and performed preliminary 

analyses to help review energy 

conservation standards for this 

equipment. This process culminated in 

DOE’s notice of another public meeting 

to discuss and receive comments 

regarding the tools and methods DOE 

used in performing its preliminary 

analysis, as well as the analyses results. 

76 FR 17573 (March 30, 2011) (the 

March 2011 notice). DOE also invited 

written comments on these subjects and 

announced the availability on its Web 

site of a preliminary analysis technical 

support document (preliminary analysis 

TSD). Id. (The preliminary analysis TSD 

is available at: www.regulations.gov/

#!documentDetail;D=EERE-2010-BTSTD-0003-0030.) Finally, DOE sought 

comments concerning other relevant 

issues that could affect amended energy 

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conservation standards for commercial 

refrigeration equipment, or that DOE 

should address in this NOPR. 76 FR 

17575 (March 30, 2011). 

The preliminary analysis TSD 

provided an overview of DOE’s review 

of the standards for commercial 

refrigeration equipment, discussed the 

comments DOE received in response to 

the Framework document, and 

addressed issues including the scope of 

coverage of the rulemaking. The 

document also described the analytical 

framework that DOE used (and 

continues to use) in considering 

amended standards for commercial 

refrigeration equipment, including a 

description of the methodology, the 

analytical tools, and the relationships 

between the various analyses that are 

part of this rulemaking. Additionally, 

the preliminary analysis TSD presented 

in detail each analysis that DOE had 

performed for this equipment up to that 

point, including descriptions of inputs, 

sources, methodologies, and results. 

These analyses were as follows: 

• A market and technology 

assessment addressed the scope of this 

rulemaking, identified existing and 

potential new equipment classes for 

commercial refrigeration equipment, 

characterized the markets for this 

equipment, and reviewed techniques 

and approaches for improving its 

efficiency; 

• A screening analysis reviewed 

technology options to improve the 

efficiency of commercial refrigeration 

equipment, and weighed these options 

against DOE’s four prescribed screening 

criteria; 

• An engineering analysis estimated 

the manufacturer selling prices (MSPs) 

associated with more energy efficient 

commercial refrigeration equipment; 

• An energy use analysis estimated 

the annual energy use of commercial 

refrigeration equipment; 

• A markups analysis converted 

estimated MSPs derived from the 

engineering analysis to customer 

purchase prices; 

• A life-cycle cost analysis calculated, 

for individual customers, the 

discounted savings in operating costs 

throughout the estimated average life of 

commercial refrigeration equipment, 

compared to any increase in installed 

costs likely to result directly from the 

imposition of a given standard; 

• A payback period analysis 

estimated the amount of time it would 

take customers to recover the higher 

purchase price of more energy efficient 

equipment through lower operating 

costs; 

• A shipments analysis estimated 

shipments of commercial refrigeration 

equipment over the time period 

examined in the analysis; 

• A national impact analysis (NIA) 

assessed the national energy savings 

(NES), and the national NPV of total 

customer costs and savings, expected to 

result from specific, potential energy 

conservation standards for commercial 

refrigeration equipment; and 

• A preliminary manufacturer impact 

analysis (MIA) took the initial steps in 

evaluating the potential effects on 

manufacturers of amended efficiency 

standards. 

The public meeting announced in the 

March 2011 notice took place on April 

19, 2011 (April 2011 preliminary 

analysis public meeting). At the April 

2011 preliminary analysis public 

meeting, DOE presented the 

methodologies and results of the 

analyses set forth in the preliminary 

analysis TSD. Interested parties 

provided comments on the following 

issues: (1) Equipment classes; (2) 

technology options; (3) energy 

modeling; (4) installation, maintenance, 

and repair costs; (5) markups and 

distributions chains; (6) commercial 

refrigeration equipment shipments; and 

(7) test procedures. The comments 

received since publication of the March 

2011 notice, including those received at 

the April 2011 preliminary analysis 

public meeting, have contributed to 

DOE’s proposed resolution of the issues 

in this rulemaking as they pertain to 

commercial refrigeration equipment. 

This NOPR responds to the issues raised 

by the commenters. 

In December 2012, AEMTCA 

established new standards for 

SOC.SC.M equipment with a 

compliance date of January 1, 2012. (42 

U.S.C. 6313(c)(4)) The SOC.SC.M 

equipment had previously been 

classified under the category selfcontained commercial refrigerators with 

transparent doors for which standards 

were established by EPACT 2005. (42 

U.S.C. 6313(c)(2)) The standard 

established by AEMTCA for SOC.SC.M 

equipment reduces the stringency of the 

standard applicable to this equipment. 

AEMTCA also directs DOE to 

determine, within three years of 

enactment of the new SOC.SC.M 

standard, whether this standard should 

be amended. (42 U.S.C. 6313(c)(4)(B)(i)) 

If DOE determines that the standard 

should be amended, then DOE must 

issue a final rule establishing an 

amended standard within this same 

three-year period. (42 U.S.C. 

6313(c)(4)(B)(ii)) 

III. General Discussion 

A. Test Procedures and Normalization 

Metrics 

1. Test Procedures 

On December 8, 2006, DOE published 

a final rule in which it adopted 

American National Standards Institute 

(ANSI)/Air-Conditioning and 

Refrigeration Institute (ARI) Standard 

1200–2006, ‘‘Performance Rating of 

Commercial Refrigerated Display 

Merchandisers and Storage Cabinets,’’ 

as the DOE test procedure for this 

equipment. 71 FR 71340, 71369–70. 

ANSI/ARI Standard 1200–2006 requires 

performance tests to be conducted 

according to the American Society of 

Heating, Refrigerating, and AirConditioning Engineers (ASHRAE) 

Standard 72–2005, ‘‘Method of Testing 

Commercial Refrigerators and Freezers.’’ 

The standard also contains rating 

temperature specifications of 38 °F (±2 

°F) for commercial refrigerators and 

refrigerator compartments, 0 °F (±2 °F) 

for commercial freezers and freezer 

compartments, and ¥5 °F (±2 °F) for 

commercial ice-cream freezers. During 

the 2006 test procedure rulemaking, 

DOE determined that testing at a ¥15 °F 

(±2 °F) rating temperature was more 

representative of the actual energy 

consumption of commercial freezers 

specifically designed for ice-cream 

application. 71 FR 71357 (Dec. 8, 2006). 

Therefore, in the test procedure final 

rule, DOE adopted a ¥15 °F (±2 °F) 

rating temperature for commercial icecream freezers, rather than the ¥5 °F 

(±2 °F) prescribed in the ANSI/ARI 

Standard 1200–2006. In addition, DOE 

adopted ANSI/Association of Home 

Appliance Manufacturers (AHAM) 

Standard HRF–1–2004, ‘‘Energy, 

Performance, and Capacity of 

Household Refrigerators, RefrigeratorFreezers, and Freezers,’’ for determining 

compartment volumes for this 

equipment. 71 FR 71369–70 (Dec. 8, 

2006). 

On February 21, 2012, DOE published 

a test procedure final rule (2012 test 

procedure final rule) in which it 

adopted several amendments to the DOE 

test procedure. This included an 

amendment to incorporate by reference 

ANSI/Air-Conditioning, Heating, and 

Refrigeration Institute (AHRI) Standard 

1200–2010, ‘‘Performance Rating of 

Commercial Refrigerated Display 

Merchandisers and Storage Cabinets,’’ 

as the DOE test procedure for this 

equipment. 77 FR 10292, 10314 (Feb. 

21, 2012). The 2012 test procedure final 

rule also included an amendment to 

incorporate by reference the updated 

ANSI/AHAM Standard HRF–1–2008, 

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17Night curtains are devices made of an 

insulating material, typically insulated aluminum 

fabric, designed to be pulled down over the open 

front of the case to decrease infiltration and heat 

transfer into the case when the merchandizing 

establishment is closed. 

‘‘Energy, Performance, and Capacity of 

Household Refrigerators, RefrigeratorFreezers, and Freezers,’’ for determining 

compartment volumes for this 

equipment. 

In addition, the 2012 test procedure 

final rule included several amendments 

designed to address certain energy 

efficiency features that were not 

accounted for by the previous DOE test 

procedure, including provisions for 

measuring the impact of night 

curtains 17 and lighting occupancy 

sensors and scheduled controls. 77 FR 

10296–98 (Feb. 21, 2012). In the 2012 

test procedure final rule, DOE also 

adopted amendments to allow testing of 

commercial refrigeration equipment at 

temperatures other than one of the three 

rating temperatures previously specified 

in the test procedure. Specifically, the 

2012 test procedure final rule allows 

testing of commercial refrigeration 

equipment at its lowest application 

product temperature, for equipment that 

cannot be tested at the prescribed rating 

temperature. The 2012 test procedure 

final rule also allows manufacturers to 

test and certify equipment at the morestringent temperatures and ambient 

conditions required by NSF for food 

safety testing. 77 FR 10305 (Feb. 21, 

2012). (The NSF was founded in 1944 

as the National Sanitation Foundation, 

and is now referred to simply as NSF.) 

The test procedure amendments 

established in the 2012 test procedure 

final rule are required to be used in 

conjunction with any amended 

standards promulgated as a result of this 

energy conservation standard 

rulemaking. As such, use of the 

amended test procedure to show 

compliance with DOE energy 

conservation standards or make 

representations with respect to energy 

consumption of commercial 

refrigeration equipment is required on 

the compliance date of any revised 

energy conservation standards 

established as part of this rulemaking. 

77 FR 10308 (Feb. 21, 2012). 

DOE has initiated a test procedure 

rulemaking for commercial refrigeration 

equipment to address many issues 

raised by stakeholders since the 

publication of the 2012 test procedure 

final rule. This rulemaking will address 

the following issues: 

• A number of new definitions 

related to commercial refrigeration 

equipment, 

• A description of the proper 

configuration and use of energy 

management systems, 

• Clarifications on the use of 

calculation methods, appropriate 

reporting requirements, and 

determination of the lowest application 

product temperature, 

• Incorporation of Interpretations 1 

through 5 to AHRI 1200–2010, and 

• Updates and clarifications regarding 

the compliance dates of test procedure 

amendments adopted in the 2012 test 

procedure final rule by reorganizing the 

test procedure in two different 

appendices. 

The issues that will be addressed in 

the test procedure rulemaking are 

consistent with the analysis in this 

NOPR. 

2. Normalization Metrics 

Both the January 2009 final rule and 

EPACT 2005 contain energy 

conservation standards for respective 

covered types of commercial 

refrigeration equipment, expressed in 

the form of equations developed as a 

function of unit size. This use of 

normalization metrics allows for a 

single standard-level equation 

developed for an equipment class to 

apply to a broad range of equipment 

sizes offered within that class by 

manufacturers. In the aforementioned 

commercial refrigeration equipment 

standards, the two normalization 

metrics used are refrigerated 

compartment volume, as determined 

using AHAM HRF–1–2004, and TDA, as 

determined using ANSI/ARI 1200–2006. 

In particular, the EPACT 2005 standards 

utilize volume as the normalization 

metric for all equipment types, with the 

exception of refrigerator-freezers with 

solid doors, for which it specifies 

adjusted volume. (42 U.S.C. 6313(c)(2)) 

The January 2009 final rule, meanwhile, 

utilized TDA as the normalization 

metric for all equipment with display 

capacity while specifying volume as the 

metric for solid-door (VCS and HCS) 

equipment. 74 FR 1093 (Jan. 9, 2009). 

At the May 2010 Framework public 

meeting, interested parties raised 

several questions regarding the potential 

normalization metrics that could be 

used in amended standards. DOE also 

received stakeholder feedback 

pertaining to this issue following the 

publication of the Framework 

document. In the preliminary analysis, 

DOE suggested that it would consider 

retaining the normalization metrics in 

this rulemaking for the respective 

classes to which they were applied in 

EPCA (42 U.S.C. 6313(c)(2)–(3)) and the 

January 2009 final rule. 74 FR 1093 (Jan. 

9, 2009). In chapter 2 of the preliminary 

analysis TSD, DOE presented its 

rationale for the continued use of TDA 

for equipment with display areas 

addressed in the January 2009 final rule 

and the continued use of volume as the 

metric for solid-door remote condensing 

equipment and ice-cream freezers, as 

well as for the equipment covered by 

EPACT 2005 standards. DOE did not 

receive any information or data while 

conducting the NOPR analyses that 

would alter this position, and thus DOE 

proposes continued use of the existing 

normalization metrics in today’s notice. 

B. Technological Feasibility 

1. General 

In each standards rulemaking, DOE 

conducts a screening analysis, which is 

based on information that the 

Department has gathered on all current 

technology options and prototype 

designs that could improve the 

efficiency of the products or equipment 

that are the subject of the rulemaking. 

As the first step in such analysis, DOE 

develops a list of design options for 

consideration, in consultation with 

manufacturers, design engineers, and 

other interested parties. DOE then 

determines which of these options for 

improving efficiency are technologically 

feasible. DOE considers a design option 

to be technologically feasible if it is 

used by the relevant industry or if a 

working prototype has been developed. 

Technologies incorporated in 

commercially available equipment or in 

working prototypes will be considered 

technologically feasible. 10 CFR 430, 

subpart C, appendix A, section 4(a)(4)(i) 

Although DOE considers technologies 

that are proprietary, it will not consider 

efficiency levels that can only be 

reached through the use of proprietary 

technologies (i.e., a unique pathway), 

which could allow a single 

manufacturer to monopolize the market. 

Once DOE has determined that 

particular design options are 

technologically feasible, it further 

evaluates each of these design options 

in light of the following additional 

screening criteria: (1) Practicability to 

manufacture, install, or service; (2) 

adverse impacts on product utility or 

availability; and (3) adverse impacts on 

health or safety. 10 CFR part 430, 

subpart C, appendix A, section 

4(a)(4)(ii)–(iv) Chapter 4 of the NOPR 

TSD discusses the results of the 

screening analyses for commercial 

refrigeration equipment. Specifically, it 

presents the designs DOE considered, 

those it screened out, and those that are 

the bases for the TSLs considered in this 

rulemaking. 

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18 In the past, DOE presented energy savings 

results for only the 30-year period that begins in the 

year of compliance. In the calculation of economic 

impacts, however, DOE considered operating cost 

savings measured over the entire lifetime of 

products purchased during the 30-year period. DOE 

has chosen to modify its presentation of national 

energy savings to be consistent with the approach 

used for its national economic analysis. 

2. Maximum Technologically Feasible 

Levels 

When DOE proposes to adopt (or not 

adopt) an amended or new energy 

conservation standard for a type or class 

of covered equipment such as 

commercial refrigeration equipment, it 

determines the maximum improvement 

in energy efficiency that is 

technologically feasible for such 

equipment. (See 42 U.S.C. 6295(p)(1) 

and 6316(e)(1)) Accordingly, in the 

preliminary analysis, DOE determined 

the maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for commercial refrigeration 

equipment in the engineering analysis 

using the design parameters that passed 

the screening analysis. 

As indicated previously, whether 

efficiency levels exist or can be 

achieved in commonly used equipment 

is not relevant to whether they are 

considered max-tech levels. DOE 

considers technologies to be 

technologically feasible if they are 

incorporated in any currently available 

equipment or working prototypes. 

Hence, a max-tech level results from the 

combination of design options predicted 

to result in the highest efficiency level 

possible for an equipment class, with 

such design options consisting of 

technologies already incorporated in 

commercial equipment or working 

prototypes. DOE notes that it 

reevaluated the efficiency levels, 

including the max-tech levels, when it 

updated its results for this NOPR. See 

chapter 5 of the NOPR TSD for the 

results of the analyses, and a list of 

technologies included in max-tech 

equipment. Table III.1 shows the maxtech levels determined in the 

engineering analysis for commercial 

refrigeration equipment. 

TABLE III.1—‘‘MAX-TECH’’ LEVELS FOR

COMMERCIAL REFRIGERATION

EQUIPMENT PRIMARY CLASSES

Equipment class ‘‘Max-Tech’’ level 

kWh/day 

VCT.RC.L .................. 0.41 × TDA + 1.93 

VOP.RC.M ................ 0.6 × TDA + 2.99 

SVO.RC.M ................ 0.62 × TDA + 2.38 

HZO.RC.L ................. 0.55 × TDA + 6.7 

HZO.RC.M ................ 0.34 × TDA + 2.83 

VCT.RC.M ................. 0.07 × TDA + 0.66 

VOP.RC.L ................. 2.07 × TDA + 6.26 

SOC.RC.M ................ 0.39 × TDA + 0.08 

VOP.SC.M ................. 1.5 × TDA + 4.06 

SVO.SC.M ................. 1.5 × TDA + 3.97 

HZO.SC.L .................. 1.91 × TDA + 7.03 

HZO.SC.M ................. 0.74 × TDA + 5.35 

HCT.SC.I ................... 0.36 × TDA + 0.28 

VCT.SC.I ................... 0.5 × TDA + 2.44 

VCS.SC.I ................... 0.33 × V + 0.76 

VCT.SC.M ................. 0.03 × V + 0.97 

TABLE III.1—‘‘MAX-TECH’’ LEVELS FOR

COMMERCIAL REFRIGERATION

EQUIPMENT PRIMARY CLASSES— 

Continued 

Equipment class ‘‘Max-Tech’’ level 

kWh/day 

VCT.SC.L .................. 0.21 × V + 1.16 

VCS.SC.M ................. 0.02 × V + 0.41 

VCS.SC.L .................. 0.11 × V + 0.38 

HCT.SC.M ................. 0.01 × V + 0.38 

HCT.SC.L .................. 0.08 × V + 0.45 

HCS.SC.M ................. 0.01 × V + 0.18 

HCS.SC.L .................. 0.07 × V + 0.24 

PD.SC.M ................... 0.03 × V + 0.72 

SOC.SC.M ................ 0.32 × TDA + 0.53 

C. Energy Savings 

1. Determination of Savings 

For each TSL, DOE projected energy 

savings from the products that are the 

subjects of this rulemaking, purchased 

during the 30-year period that begins in 

the year of compliance with amended 

standards (2017–2046). The savings are 

measured over the entire lifetime of 

products purchased in the 30-year 

period.18 DOE used the NIA model to 

estimate the NES for equipment 

purchased over the period 2017–2046. 

The model forecasts total energy use 

over the analysis period for each 

representative equipment class at 

efficiency levels set by each of the five 

considered TSLs. DOE then compares 

the energy use at each TSL to the basecase energy use to obtain the NES. The 

NIA model is described in section IV.I 

of this notice and in chapter 10 of the 

NOPR TSD. 

DOE used its national impact analysis 

(NIA) spreadsheet model to estimate 

energy savings from amended standards 

for the products that are the subject of 

this rulemaking. The NIA spreadsheet 

model (described in section IV.I of this 

notice) calculates energy savings in site 

energy, which is the energy directly 

consumed by products at the locations 

where they are used. For electricity, 

DOE reports national energy savings in 

terms of the savings in the energy that 

is used to generate and transmit the site 

electricity. To calculate this quantity, 

DOE derives annual conversion factors 

from the model used to prepare the 

Energy Information Administration’s 

(EIA) Annual Energy Outlook (AEO). 

DOE has begun to also estimate fullfuel-cycle (FFC) energy savings. 76 FR 

51282 (Aug. 18, 2011), as amended at 77 

FR 49701 (August 17, 2012). The FFC 

metric includes the energy consumed in 

extracting, processing, and transporting 

primary fuels, and thus presents a more 

complete picture of the impacts of 

energy efficiency standards. DOE’s 

approach is based on calculation of an 

FFC multiplier for each of the energy 

types used by covered products. 

2. Significance of Savings 

EPCA prohibits DOE from adopting a 

standard that would not result in 

significant additional energy savings. 

(42 U.S.C. 6295(o)(3)(B),(v) and 

6316(e)(1)) While the term ‘‘significant’’ 

is not defined in EPCA, the U.S. Court 

of Appeals for the District of Columbia 

in Natural Resources Defense Council v. 

Herrington, 768 F.2d 1355, 1373 (D.C. 

Cir. 1985), indicated that Congress 

intended significant energy savings to 

be savings that were not ‘‘genuinely 

trivial.’’ The estimated energy savings in 

the 30-year analysis period for the TSLs 

considered in this rulemaking range 

from 0.236 to 1.278 quads (see section 

V.B.2 for additional details); therefore, 

DOE considers them significant within 

the meaning of section 325 of the Act. 

D. Economic Justification 

1. Specific Criteria 

As discussed in section II.A, EPCA 

provides seven factors to be evaluated in 

determining whether a potential energy 

conservation standard is economically 

justified. (42 U.S.C. 6295(o)(2)(B)(i) and 

6316(e)(1)) The following sections 

generally discuss how DOE is 

addressing each of those seven factors in 

this rulemaking. For further details and 

the results of DOE’s analyses pertaining 

to economic justification, see sections 

IV and V of today’s notice. 

a. Economic Impact on Manufacturers 

and Commercial Customers 

In determining the impacts of a 

potential new or amended energy 

conservation standard on 

manufacturers, DOE first determines its 

quantitative impacts using an annual 

cash flow approach. This includes both 

a short-term assessment (based on the 

cost and capital requirements associated 

with new or amended standards during 

the period between the announcement 

of a regulation and the compliance date 

of the regulation) and a long-term 

assessment (based on the costs and 

marginal impacts over the 30-year 

analysis period). The impacts analyzed 

include INPV (which values the 

industry based on expected future cash 

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flows), cash flows by year, changes in 

revenue and income, and other 

measures of impact, as appropriate. 

Second, DOE analyzes and reports the 

potential impacts on different types of 

manufacturers, paying particular 

attention to impacts on small 

manufacturers. Third, DOE considers 

the impact of new or amended 

standards on domestic manufacturer 

employment and manufacturing 

capacity, as well as the potential for 

new or amended standards to result in 

plant closures and loss of capital 

investment. Finally, DOE takes into 

account cumulative impacts of other 

DOE regulations and non-DOE 

regulatory requirements on 

manufacturers. 

For individual customers, measures of 

economic impact include the changes in 

LCC and the PBP associated with new 

or amended standards. The LCC, which 

is also separately specified as one of the 

seven factors to be considered in 

determining the economic justification 

for a new or amended standard (42 

U.S.C. 6295(o)(2)(B)(i)(II), and 

6316(e)(1)), is discussed in the following 

section. For customers in the aggregate, 

DOE also calculates the NPV from a 

national perspective of the economic 

impacts on customers over the analysis 

period used in a particular rulemaking. 

For a description of the methodology 

used for assessing the economic impact 

on customers, see sections IV.H and 

IV.I; for results, see sections V.B.1 and 

V.B.2 of this notice. Additionally, 

chapters 8 and 10 and the associated 

appendices of the NOPR TSD contain a 

detailed description of the methodology 

and discussion of the results. For a 

description of the methodology used to 

assess the economic impact on 

manufacturers, see section IV.K; for 

results, see section V.B.2 of this notice. 

Additionally, chapter 13 of the NOPR 

TSD contains a detailed description of 

the methodology and discussion of the 

results. 

b. Life-Cycle Costs 

The LCC is the sum of the purchase 

price of equipment (including the cost 

of its installation) and the operating 

costs (including energy and 

maintenance and repair costs) 

discounted over the lifetime of the 

equipment. The LCC savings for the 

considered efficiency levels are 

calculated relative to a base-case 

scenario, which reflects likely trends in 

the absence of new or amended 

standards. DOE carried out the LCC 

analysis for this rulemaking by 

analyzing the LCC impacts on those 

customers who purchase the equipment 

in the year in which compliance with 

the new standard is required. To 

account for uncertainty and variability 

in specific inputs, such as equipment 

lifetime and discount rate, DOE uses a 

range of values, each with its own 

probability of selection. In addition to 

identifying distribution of customer 

impacts, DOE evaluates the LCC impacts 

of potential standards on identifiable 

subgroups of customers who may be 

disproportionately affected by a new 

national standard. For the results of 

DOE’s analyses related to the LCC, see 

section V.B.1 of this notice and chapter 

8 of the NOPR TSD; for LCC impacts on 

identifiable subgroups, see section V.B.1 

of this notice and chapter 11 of the 

NOPR TSD. 

c. Energy Savings 

While significant conservation of 

energy is a statutory requirement for 

imposing an energy conservation 

standard, EPCA also requires DOE, in 

determining the economic justification 

of a standard, to consider the total 

projected energy savings that are 

expected to result directly from the 

standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) 

and 6316(e)(1)) DOE uses NIA 

spreadsheet results in its consideration 

of total projected savings. For the results 

of DOE’s analyses related to the 

potential energy savings, see section 

VI.B.3 of this notice and chapter 10 of 

the NOPR TSD. 

d. Lessening of Utility or Performance of 

Equipment 

In establishing classes of equipment, 

and in evaluating design options and 

the impact of potential standard levels, 

DOE seeks to develop standards that 

would not lessen the utility or 

performance of the equipment under 

consideration. None of the TSLs 

presented in today’s NOPR would 

reduce the utility or performance of the 

equipment considered in the 

rulemaking. (42 U.S.C. 

6295(o)(2)(B)(i)(IV) and 6316(e)(1)) 

During the screening analysis, DOE 

eliminated from consideration any 

technology that would adversely impact 

customer utility. For the results of 

DOE’s analyses related to the potential 

impact of amended standards on 

equipment utility and performance, see 

section IV.D of this notice and chapter 

4 of the NOPR TSD. 

e. Impact of Any Lessening of 

Competition 

EPCA directs DOE to consider the 

impact of any lessening of competition, 

as determined in writing by the 

Attorney General, that is likely to result 

from the imposition of a standard. (42 

U.S.C. 6295(o)(2)(B)(i)(V) Specifically, it 

directs the Attorney General to 

determine in writing the impact, if any, 

of any lessening of competition likely to 

result from a proposed standard and to 

transmit such determination to the 

Secretary, not later than 60 days after 

the publication of a proposed rule, 

together with an analysis of the nature 

and extent of such impact. (42 U.S.C. 

6295(o)(2)B(ii) and 6316(e)(1)) For the 

results of DOE’s analysis related to 

lessening of competition, see section 

V.B.5 of this notice. 

f. Need of the Nation To Conserve 

Energy 

Another factor that DOE must 

consider in determining whether a new 

or amended standard is economically 

justified is the need for national energy 

and water conservation. (42 U.S.C. 

6295(o)(2)(B)(i)(VI) and 6316(e)(1)) The 

energy savings from new or amended 

standards are likely to provide 

improvements to the security and 

reliability of the Nation’s energy system. 

Reductions in the demand for electricity 

may also result in reduced costs for 

maintaining the reliability of the 

Nation’s electricity system. DOE 

conducts a utility impact analysis to 

estimate how new or amended 

standards may affect the Nation’s 

needed power generation capacity. 

Energy savings from amended 

standards for commercial refrigeration 

equipment are also likely to result in 

environmental benefits in the form of 

reduced emissions of air pollutants and 

GHGs associated with energy 

production (i.e., from power plants). For 

a discussion of the results of the 

analyses relating to the potential 

environmental benefits of the amended 

standards, see sections IV.N, IV.O and 

V.B.6 of this notice. DOE reports the 

expected environmental effects from the 

proposed standards, as well as from 

each TSL it considered for commercial 

refrigeration equipment, in the 

emissions analysis contained in chapter 

13 of the NOPR TSD. DOE also reports 

estimates of the economic value of 

emissions reductions resulting from the 

considered TSLs in chapter 14 of the 

NOPR TSD. 

g. Other Factors 

EPCA allows the Secretary, in 

determining whether a new or amended 

standard is economically justified, to 

consider any other factors that the 

Secretary deems to be relevant. (42 

U.S.C. 6295(o)(2)(B)(i)(VII) and 

6316(e)(1)) In developing the TSLs set 

forth in this notice, DOE has also 

considered the comments submitted by 

interested parties. For the results of 

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55902 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

19U.S. Department of Energy—Office of Energy 

Efficiency and Renewable Energy. Preliminary 

Technical Support Document (TSD): Energy 

Conservation Program for Certain Commercial and 

Industrial Equipment: Commercial Refrigeration 

Equipment. Chapter 2. Analytical Framework, 

Comments from Interested Parties, and DOE 

Responses. March 2011. Washington, DC 

www.regulations.gov/#!documentDetail;D=EERE2010-BT-STD-0003-0030. 

20A notation in this form provides a reference for 

information that is in the docket of DOE’s 

rulemaking to develop energy conservation 

standards for commercial refrigeration equipment 

(Docket No. EERE–2010–BT–STD–0003), which is 

maintained at www.regulations.gov. This notation 

indicates that the statement preceding the reference 

is document number 35 in the docket for the 

commercial refrigeration equipment energy 

conservation standards rulemaking, and appears at 

pages 4–5 of that document. 

DOE’s analyses related to other factors, 

see section V.B.7 of this notice. 

2. Rebuttable Presumption 

As set forth in 42 U.S.C. 

6295(o)(2)(B)(iii) and 6316(e)(1), EPCA 

provides for a rebuttable presumption 

that an energy conservation standard is 

economically justified if the additional 

cost to the customer of equipment that 

meets the new or amended standard 

level is less than three times the value 

of the first-year energy (and, as 

applicable, water) savings resulting from 

the standard, as calculated under the 

applicable DOE test procedure. DOE’s 

LCC and PBP analyses generate values 

that calculate the PBP for customers of 

potential new and amended energy 

conservation standards. These analyses 

include, but are not limited to, the 3- 

year PBP contemplated under the 

rebuttable presumption test. However, 

DOE routinely conducts a full economic 

analysis that considers the full range of 

impacts to the customer, manufacturer, 

Nation, and environment, as required 

under 42 U.S.C. 6295(o)(2)(B)(i) and 

6316(e)(1). The results of these analyses 

serve as the basis for DOE to evaluate 

the economic justification for a potential 

standard level definitively (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). The rebuttable 

presumption payback calculation is 

discussed in section IV.H.12 of this 

notice and chapter 8 of the NOPR TSD. 

IV. Methodology and Discussion of 

Comments 

A. General Rulemaking Issues 

During the April 2011 preliminary 

analysis public meeting and in 

subsequent written comments, 

stakeholders provided input regarding 

general issues pertinent to the 

rulemaking, such as issues of scope of 

coverage and DOE’s authority in setting 

standards. These issues are discussed in 

this section. 

1. Statutory Authority 

In the preliminary analysis, DOE 

stated its position that EPCA prevents 

the setting of both energy performance 

standards and prescriptive design 

requirements (see chapter 2 of the 

preliminary analysis TSD 19). DOE also 

stated its intent to amend the energy 

performance standards for commercial 

refrigeration equipment, and not to set 

prescriptive design requirements at this 

time (see chapter 2 of the preliminary 

analysis TSD). In a written comment, 

Earthjustice opined that DOE misread 

EPCA in suggesting that DOE does not 

have authority to establish design 

requirements for commercial 

refrigeration equipment. More 

specifically, Earthjustice asserted that 

DOE’s interpretation of 42 U.S.C. 

6311(18) ignores that EPCA uses the 

plural form in compelling this 

rulemaking to amend energy 

conservation ‘‘standards.’’ Further, 

Earthjustice stated, even if DOE were 

only authorized to promulgate a single 

standard or single design requirement in 

any one rulemaking, nothing in EPCA 

indicates that prior establishment of 

performance standards would foreclose 

the issuance of design requirements in 

a subsequent rulemaking, provided that 

those design requirements achieved the 

maximum technologically feasible and 

economically justified energy savings. 

(Earthjustice, No. 35 at pp. 4–5) 20

EPCA defines the phrase ‘‘energy 

conservation standard’’ as a 

performance standard that prescribes a 

minimum level of energy efficiency or a 

maximum quantity of energy use for a 

product or as a design requirement for 

a product. (42 U.S.C. 6311(18)(A)–(B)) 

Therefore, based on a clear reading of 

EPCA, DOE must use either a 

performance standard or a design 

(prescriptive) requirement in 

prescribing energy conservation 

standards. It has been DOE’s 

longstanding interpretation that the 

term ‘‘standard’’ means either a 

performance standard or a design 

requirement, and that the plural term 

‘‘standards’’ refers to the setting of a 

collective group of standards across all 

covered equipment or product classes. 

Thus, it is not DOE’s interpretation of 

EPCA that the statute’s use of the plural 

term ‘‘standards,’’ in referring to a 

collective group of equipment classes, 

grants DOE the authority to set both 

prescriptive and performance standards 

for a given class within that group. In 

the case of commercial refrigeration 

equipment, all of the equipment that is 

the subject of this rulemaking is 

currently covered either by a statutorily 

mandated performance standard or by a 

performance standard set by DOE in the 

January 2009 final rule. (42 U.S.C. 

6313(c)(1)–(4)); 74 FR 1093 (Jan. 9, 

2009). In this rulemaking, DOE is 

considering amendments to these 

performance standards for commercial 

refrigeration equipment, and is therefore 

not considering design requirements at 

this time. 

2. January 2009 Final Rule Equipment 

At the April 2011 preliminary 

analysis public meeting, AHRI stated 

that in 2005 when the legislation that 

was to become EPACT 2005 was 

drafted, the drafters’ intent was not for 

DOE to start a rulemaking on remote 

cases in 2010. According to AHRI, the 

drafters’ intent was that DOE start the 

rulemaking on self-contained units. 

AHRI pointed out that manufacturers 

would have to redesign products (those 

covered by the 2009 DOE final rule) 

twice in a 4-year period, first to meet the 

2009 DOE standards in 2012, and then 

again to meet the 2013 standards in 

2016. AHRI asked DOE to take that into 

account, a situation AHRI described as 

unprecedented. (AHRI, Public Meeting 

Transcript, No. 31 at pp. 204–05) AHRI 

elaborated on this situation in its 

written comment, expressing its belief 

that it is illogical that DOE decided to 

analyze equipment types for which 

standards exist, but with which 

manufacturers are not yet required to 

comply. AHRI stated that the intent of 

Congress was never to require DOE to 

start a rulemaking on this equipment, 

and questioned how DOE could 

possibly assess whether amended 

standards are appropriate before the 

January 2009 final rule standards reach 

the stage where manufacturers must 

comply. AHRI urged DOE to focus on 

self-contained refrigerators and freezers 

with doors in this rulemaking. (AHRI, 

No. 43 at pp. 1–2) 

Similarly, Zero Zone expressed 

disappointment with the fact that the 

current rulemaking was initiated before 

the standards compliance date of 

January 1, 2012 specified in the January 

2009 final rule. Zero Zone went on to 

state that waiting until after this 

compliance date to initiate a rulemaking 

would have allowed DOE to determine 

the accuracy of its models and the 

impacts on industry. (Zero Zone, No. 37 

at p. 1) 

The EPACT 2005 amendments to 

EPCA require DOE to conduct a 

rulemaking to determine whether to 

amend the standards for commercial 

refrigeration equipment established 

under 42 U.S.C. 6313(c), which covers 

both the standards prescribed by EPACT 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55903 

21 In most supermarket and large food retail 

settings, multiple display cases from a manufacturer 

are attached together into a single continuous 

lineup without internal partitions; these are referred 

to as ‘‘continuous cases.’’ 

22Rack condensing systems utilize a ‘‘rack’’ of 

multiple compressors and a condenser that serves 

to deliver liquid refrigerant to a number of different 

pieces of equipment served by the single rack. For 

example, most supermarkets have one or more 

compressor racks to serve their display cases, walkin coolers and freezers, and other equipment. 

2005 and the standards set by DOE in 

the January 2009 final rule. (42 U.S.C. 

6313(c)(6)) If DOE determines that these 

standards should be amended, DOE 

must publish a final rule establishing 

such amended standards by January 1, 

2013. Id. Regarding AHRI’s comment, 

DOE is thus compelled by statute to 

conduct this rulemaking with a scope of 

coverage including the equipment 

specified in both EPACT 2005 and in 

the January 2009 final rule. In response 

to Zero Zone’s comments concerning 

the burden imposed by amended 

standards, DOE has considered 

manufacturer impacts in the MIA, as 

required by 42 U.S.C. 6295(o)(2)(B)(i)(I) 

and 6316(e)(1). DOE has also used its 

manufacturer interviews as a forum to 

discuss and receive feedback on the 

inputs to and accuracy of its models. 

3. Normalization Metrics 

In chapter 2 of the preliminary 

analysis TSD, DOE stated its proposal to 

retain the current normalization metrics 

for all equipment classes and requested 

comment from interested parties. 

Traulsen agreed with DOE’s tentative 

plan to use cabinet volume as the 

normalization metric for ‘‘appropriate’’ 

equipment, but noted that there are 

other (unspecified) design factors that 

need to be considered. (Traulsen, No. 45 

at p. 2) Zero Zone stated that evaluation 

of the normalization metrics should take 

place after the January 2009 final rule 

compliance date. (Zero Zone, No. 37 at 

p. 4) 

During the NOPR analyses, DOE took 

into account stakeholder input when 

reviewing normalization metrics for 

covered equipment. DOE agrees with 

Traulsen that volume is the appropriate 

normalization metric for most selfcontained equipment classes. With 

respect to the comment by Zero Zone, 

the timing of this proceeding made it 

difficult for significant amounts of data 

on sales and other factors to be acquired 

after the January 2009 final rule 

compliance date of January 1, 2012. 

DOE took into account information 

regarding the size and composition of 

the commercial refrigeration equipment 

market obtained through manufacturer 

interviews, market research 

publications, and other sources during 

the NOPR stage. 

4. Treatment of Blast Chillers, Thawing 

Cabinets, Prep Tables, Salad Bars, and 

Buffet Tables 

In its written comment, Traulsen 

expressed concern that DOE may 

inadvertently include equipment such 

as prep tables, blast chillers, and 

thawing cabinets in standards it 

develops. (Traulsen, No. 45 at p. 1) 

During the ongoing rulemaking, DOE 

also received several inquiries from 

interested parties regarding the 

coverage, under current or amended 

energy conservation standards, of salad 

bars, buffet tables, and other refrigerated 

holding and serving equipment. 

EPCA, in its definition of 

‘‘commercial refrigerator, freezer, and 

refrigerator-freezer,’’ states that such 

equipment must display or store 

merchandise or other perishable 

materials horizontally, vertically, or 

semi-vertically, and must be designed 

for pull-down temperature applications 

or holding temperature applications, 

among other factors. (42 U.S.C. 

6311(9)(A)) Moreover, 42 U.S.C. 6311(9) 

defines ‘‘holding temperature 

application’’ as specifically omitting 

blast chillers or freezers, and specifies 

that ‘‘pull-down temperature 

application’’ refers solely to equipment 

designed to cool 12 ounce beverage cans 

from 90 to 38 °F in 12 hours or less. 

Thus, blast chillers and thawing 

cabinets do not meet the relevant 

statutory definition, and will not be 

addressed in this rulemaking. 

With regard to prep tables with open 

bins or trays, salad bars, and buffet 

tables, DOE does not currently have 

energy conservation standards that 

cover this equipment. DOE notes that 

some of this equipment is designed for 

the temporary placement of food during 

preparation or service, rather than 

storage or retailing, and may operate 

very differently from the commercial 

refrigeration equipment considered in 

this rulemaking. Moreover, DOE’s 

current test procedure does not include 

provisions for testing this type of 

equipment. For example, some types of 

foodservice equipment (such as salad 

bars, buffet tables, and prep tables) do 

not have doors, drawers, or openings 

typical of conventional commercial 

refrigeration equipment. While DOE has 

the authority to set standards for other 

types of commercial refrigeration 

equipment (42 U.S.C. 6313(c)(5)(B)), this 

rulemaking is not currently considering 

standards for equipment types other 

than those covered by DOE’s existing 

standards. 10 CFR 431.66 

5. Dedicated Remote Condensing Units 

Several stakeholders inquired 

whether equipment consisting of a 

refrigerated case served by a single, 

dedicated remote condensing unit that 

serves only that unit would be covered 

under DOE’s proposed standards. True 

Manufacturing (True) stated that smaller 

units are more likely to have such a 

condensing unit, and that continuous 

cases 21 are almost exclusively rack 

condensing systems 22 due to the energy 

savings gained in the long term by 

rejecting heat outside of the building. 

(True, Public Meeting Transcript, No. 31 

at pp. 268–69) Southern Store Fixtures 

stated that it is very difficult for the 

company to predict whether a given 

case that it builds will ultimately be 

connected to an individual condensing 

unit or to a compressor rack. (Southern 

Store Fixtures, Public Meeting 

Transcript, No. 31 at p. 268) Zero Zone 

commented that 20 to 40 percent of the 

units it sells are served by dedicated 

condensing units, and that the 

remainder are served by racks, noting 

that businesses such as convenience 

stores and dollar stores use dedicated 

condensing units in the interest of 

simplicity. (Zero Zone, Public Meeting 

Transcript, No. 31 at p. 269) In its 

written comment, Earthjustice 

referenced Zero Zone’s statement that 

20 to 40 percent of remote condensing 

commercial refrigeration equipment is 

served by dedicated remote condensing 

units, and stated that because there is a 

significant market share for such 

equipment, DOE should explore 

standards that address the performance 

of such units. (Earthjustice, No. 35 at p. 

4) 

DOE understands that some 

stakeholders are concerned that 

shipments of equipment utilizing 

dedicated remote condensing units may 

comprise a nontrivial portion of the 

market. However, the DOE test 

procedure does not contain a 

methodology for testing such 

condensing units. DOE anticipates 

working with the industry in the future 

to develop testing methodologies that 

can be used in future commercial 

refrigeration equipment rulemakings. 

For this current rulemaking, display 

cases connected to dedicated remote 

condensers will be treated like any other 

piece of remote condensing equipment 

under the DOE test procedure, with the 

energy of the remote condensing unit 

calculated as specified in AHRI 1200 

and added to the measured energy 

consumption of the display case. As 

there is no industry-accepted method of 

test for dedicated remote condensers, 

DOE proposes to continue to treat 

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55904 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

23 ‘‘Title 24’’ refers to Title 24, part 6 of the 

California Code of Regulations, and includes 

California’s energy efficiency standards for 

residential and nonresidential buildings. This is 

available at: www.energy.ca.gov/title24/. 

24A cascade system is a type of secondary-loop 

refrigeration cycle that uses a higher-temperature 

refrigerant to condense the secondary refrigerant, in 

this case carbon dioxide, which is then used to cool 

the refrigerated space. 

equipment utilizing this condensing 

unit configuration in the same manner 

as all other display cases connected to 

remote condensers. 

Also, as Southern Store Fixtures 

noted, it is often difficult or impossible 

for the display case manufacturer to 

know ahead of time whether a given 

case will be attached to a dedicated 

remote condensing unit or a remote 

condensing rack by an end user. In some 

cases, the dedicated condensing unit is 

produced by a separate manufacturer 

and purchased independently. As Zero 

Zone stated, the majority of remote 

condensing cases are still sold to be 

connected to a remote condensing rack 

system that serves multiple pieces of 

equipment. Thus, DOE believes that 

comparing remote condensing cases 

based on the calculated performance of 

a typical remote condensing rack, in the 

manner prescribed by AHRI 1200, is a 

consistent way to compare performance 

of remote condensing display cases. 

In chapter 2 of the preliminary 

analysis TSD, DOE discussed the 

potential of addressing coverage of 

remote condensers in a separate future 

rulemaking. DOE believes that, should 

any such action take place in the future, 

such a proceeding would be the 

appropriate venue in which to 

investigate dedicated remote 

condensers. 

6. Small Units 

Traulsen stated that it believes that 

smaller units are effectively prohibited 

under current DOE regulations, and that 

it recognizes that legislative change is 

the proper avenue for resolution of this 

issue. (Traulsen, No. 45 at p. 5) 

DOE understands manufacturer 

concerns regarding the performance of 

small units, and took steps to account 

for them in its analyses. In its 

engineering analysis, DOE selected 

specifications for units that it found to 

be representative of typical, high sales 

volume models for each of the 

equipment classes directly analyzed. 

These selections were based on market 

and industry research, and the 

representative unit specifications were 

presented to manufacturers for their 

feedback and input during manufacturer 

interviews. The representative units 

were then used as one analysis point in 

developing the standard-level equations 

for their respective classes. DOE also 

developed ‘‘offset factors’’ that form the 

second analysis point used in 

developing the linear equations that 

represent the equipment standards. The 

purpose of the offset factor is to account 

for energy consumption end effects 

inherent in equipment of all sizes so 

that certain groups of units, including 

small units, would not be disadvantaged 

by the standard-level equations. To 

understand how the offset accounts for 

size effects, consider the energy 

consumption of a single lighting 

fixture—a feature common to all sizes of 

VCT display cases. The development of 

offset factors resulted in energy 

allowances at zero case volume or TDA, 

thus preventing even the smallest cases 

from being disadvantaged by the 

standards. The procedure that DOE used 

to develop the offset factors implicitly 

assumes that small units are relatively 

less efficient than larger units, 

particularly in the case of the smallestsized equipment. Therefore, DOE 

believes that its analysis adequately 

accounts for smaller units. A detailed 

discussion of offset factors can be found 

in chapter 5 of the NOPR TSD. 

7. Consideration of Impact of Amended 

Standards 

Traulsen stated that there are many 

niches of commercial refrigeration 

equipment that are essential to 

manufacturers and customers, and that 

setting overly aggressive standards may 

lead to inadvertent equipment design 

obsolescence. Traulsen thus urged DOE 

to take a conservative approach when 

setting mandatory standards. (Traulsen, 

No. 45 at p. 1) 

DOE performed an MIA, as required 

by 42 U.S.C. 6295(o)(2)(B)(i)(I) and 

6316(e)(1), in which it assessed both the 

qualitative issues of concern to 

manufacturers and the quantitative 

potential impacts to the commercial 

refrigeration equipment industry. These 

impacts were weighed and taken into 

consideration during the selection of the 

proposed standard level in an effort to 

minimize adverse impacts on the 

industry. DOE also notes it considers 

the design configurations offered in the 

commercial refrigeration equipment 

market in its analysis and selection of 

equipment classes. As required by 

EPCA, DOE does not set standards that 

eliminate equipment designs that 

deliver unique utility or features for 

consumers. (42 U.S.C. 6295(o)(4) and 

6316(e)(1)) 

8. CO2 Cascade Systems 

Hussmann stated that, in California, 

Title 24 23 allows the use of CO2 cascade 

systems,24 and that compliance with 

both Title 24 and amended DOE 

standards could make development of a 

CO2 cascade system difficult. 

(Hussmann, Public Meeting Transcript, 

No. 31 at p. 153) True stated that there 

is no DOE test procedure for cascade 

systems, and that there has been no 

consideration of cascade systems in the 

standards-setting process. (True, Public 

Meeting Transcript, No. 31 at p. 154) 

DOE agrees with True that secondary 

coolant systems, including CO2 cascade 

systems, are not being addressed in this 

rulemaking, partially due to the lack of 

an industry-accepted method of test for 

this type of equipment. DOE articulated 

its rationale in the preliminary analysis 

TSD chapter 2 and maintains the 

position in this notice. 

9. Coverage of Existing Cases 

Undergoing Refurbishments or Retrofits 

During the NOPR analysis period, 

DOE received a stakeholder inquiry as 

to whether the Department’s energy 

conservation standards apply only to 

new equipment manufactured or 

imported after the compliance date, or 

to existing equipment undergoing 

retrofits and refurbishments as well. 

DOE wishes to clarify that energy 

conservation standards apply only to 

new equipment, and not to previously 

installed equipment undergoing retrofits 

or refurbishments. As DOE stated in its 

Certification, Compliance and 

Enforcement final rule published on 

March 7, 2011, manufacturers and 

private labelers must certify to DOE that 

any covered equipment meets the 

applicable standard before distributing 

that equipment into U.S. commerce. 

DOE’s authority covers newly 

manufactured equipment and does not 

extend to rebuilt and refurbished 

equipment. 76 FR 12422, 12426 and 

12437 (March 7, 2011). 

10. Components Shipped as AfterMarket Additions 

DOE has received inquiries regarding 

open commercial refrigerated display 

cases that may be shipped with doors to 

be installed in the field. Stakeholders 

have sought guidance on whether 

equipment that is produced and 

shipped in this manner would be 

subject to the standards applicable to an 

open case or subject to the standards 

applicable to a closed case. 

DOE’s response to the issue of 

components shipped as after-market 

additions will be addressed in the ongoing test procedure rulemaking. 

11. Definition of Hybrid Equipment 

During the NOPR analysis period, 

DOE received a comment regarding the 

definition of hybrid equipment. 

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25An air curtain is a continuously moving stream 

of air, driven by fans, which exits on one side of 

the opening in an open refrigerated case and reenters on the other side via an intake grille. The 

function of the air curtain is to cover the opening 

in the case with this sheet of air, which minimizes 

the infiltration of warmer ambient air into the 

refrigerated space. 

Specifically, the stakeholder inquired 

about the proper definition of 

commercial hybrid refrigerator-freezer 

and the applicable standards. 

DOE’s response to the issue of hybrid 

equipment will be addressed in the ongoing test procedure rulemaking. 

12. Coverage of Commercial 

Refrigeration Equipment With Drawers 

DOE has received several comments 

from interested parties regarding the 

coverage of commercial refrigeration 

equipment units with drawers. 

Specifically, interested parties inquired 

if commercial refrigeration equipment 

units with drawers were covered under 

the existing and proposed energy 

conservation standards for commercial 

refrigeration equipment and, so, (1) 

which equipment families they belong 

to; and (2) what the test procedure 

requirements are for these units. 

DOE’s response to the issue of 

commercial refrigeration equipment 

with drawers will be addressed in the 

on-going test procedure rulemaking. 

B. Test Procedures 

DOE received several comments that 

pertain only to the test procedure 

rulemaking. DOE responded to these 

and similar comments in the 2012 test 

procedure final rule. 77 FR 10298, 

10300, and 10307 (Feb. 21, 2012). 

Specifically, DOE received comments 

from multiple interested parties that 

many cases are installed with remote 

lighting controls that are operated at the 

aisle or store level (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at pp. 190–91, 194; Zero Zone, Public 

Meeting Transcript, No. 31 at p. 196; 

California Investor Owned Utilities, No. 

42 at p. 4) and, according to the 

Northwest Energy Efficiency Alliance 

(NEEA), that cases wired uniquely to 

receive a remote energy management 

system should receive credit in the DOE 

test procedure. (NEEA, Public Meeting 

Transcript, No. 31 at p. 195) DOE also 

received comments from interested 

parties that an accepted test method for 

secondary coolant systems, especially 

those with two-phase flow, had not been 

developed and validated. (True, Public 

Meeting Transcript, No. 31 at pp. 162– 

64; Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 164– 

65; AHRI, Public Meeting Transcript, 

No. 31 at pp. 165–66) Because these 

comments pertain only to the test 

procedure for commercial refrigeration 

equipment and not the potential 

standards or analysis discussed in this 

rulemaking, DOE addressed these 

comments in the 2012 test procedure 

final rule and has not addressed them 

further here. 

NEEA stated that DOE’s efforts to 

conduct a robust standards analysis are 

hindered by DOE’s failure to resolve 

some test procedure issues and the fact 

that test procedure limitations have 

resulted in the removal of some 

technologies from consideration. Among 

these issues, according to NEEA, are the 

inability of the test procedure to 

measure savings from anti-sweat heater 

controls and the screening out of 

variable-speed and variable-capacity 

components based on the perceived 

limitations of the test procedure. (NEEA, 

No. 36 at p. 1) 

DOE recognizes stakeholders’ desire 

that the DOE test procedure better 

measure the performance of variablespeed and variable-capacity devices. 

However, in the 2012 test procedure 

final rule, DOE stated that testing of 

part-load technologies would 

significantly increase the burden on 

manufacturers to test and certify 

equipment and is not justified given the 

minimal efficiency gains achieved by 

this equipment. 77 FR 10308 (Feb. 21, 

2012). As such, DOE maintained that 

the fluctuations in refrigeration load 

experienced by equipment undergoing 

the DOE test procedure are sufficiently 

representative of average use, and that 

the establishment of additional test 

requirements would impose an undue 

burden on manufacturers. When 

evaluating amended energy 

conservation standards, DOE bases its 

engineering analysis on the energy 

efficiency of a unit as tested by the DOE 

test procedure. DOE has assessed the 

potential energy savings associated with 

technologies as tested under the test 

procedure established in DOE’s 2012 

test procedure final rule and considered 

technologies based on the factors 

prescribed by EPCA. (42 U.S.C. 

6295(o)(2)(B)(i) and 6316(e)(1)) 

C. Market and Technology Assessment 

When beginning an energy 

conservation standards rulemaking, 

DOE develops information that provides 

an overall picture of the market for the 

equipment concerned, including the 

purpose of the equipment, the industry 

structure, and market characteristics. 

This activity includes both quantitative 

and qualitative assessments based 

primarily on publicly available 

information (e.g., manufacturer 

specification sheets, industry 

publications) and data submitted by 

manufacturers, trade associations, and 

other stakeholders. The subjects 

addressed in the market and technology 

assessment for this rulemaking include: 

(1) Quantities and types of equipment 

sold and offered for sale; (2) retail 

market trends; (3) equipment covered by 

the rulemaking; (4) equipment classes; 

(5) manufacturers; (6) regulatory 

requirements and non-regulatory 

programs (such as rebate programs and 

tax credits); and (7) technologies that 

could improve the energy efficiency of 

the equipment under examination. DOE 

researched manufacturers of commercial 

refrigeration equipment and made a 

particular effort to identify and 

characterize small business 

manufacturers. See chapter 3 of the 

NOPR TSD for further discussion of the 

market and technology assessment. 

1. Equipment Classes 

In evaluating and establishing energy 

conservation standards, DOE generally 

divides covered equipment into classes 

by the type of energy used, or by 

capacity or other performance-related 

feature that justifies a different standard 

for equipment having such a feature. (42 

U.S.C. 6295(q) and 6316(e)(1)) In 

deciding whether a feature justifies a 

different standard, DOE must consider 

factors such as the utility of the feature 

to users. Id. DOE normally establishes 

different energy conservation standards 

for different equipment classes based on 

these criteria. 

Commercial refrigeration equipment 

can be divided into various equipment 

classes categorized by specific physical 

and design characteristics. These 

characteristics impact equipment 

efficiency, determine the kind of 

merchandise that the equipment can be 

used to display, and affect how the 

customer can access that merchandise. 

Key physical and design characteristics 

of commercial refrigeration equipment 

are the operating temperature, the 

presence or absence of doors (i.e., closed 

cases or open cases), the type of doors 

used (transparent or solid), the angle of 

the door or air curtain 25 (horizontal, 

semivertical, or vertical), and the type of 

condensing unit (remote condensing or 

self-contained). The following list 

shows the key characteristics of 

commercial refrigeration equipment that 

DOE developed as part of the January 

2009 final rule (74 FR 1099–1100 (Jan. 

9, 2009)), and used during the 

Framework and preliminary analysis for 

this rulemaking: 

1. Operating Temperature 

• Medium temperature (38 °F, 

refrigerators) 

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26Application temperature equipment is 

equipment that is designed to operate at 

temperatures distinctly different from the DOE 

rating temperatures of 38 °F, 0 °F, and ¥15 °F. 

Examples include wine chillers and candy cases, 

which operate in the range of 45 to 60 °F. 

• Low temperature (0 °F, freezers) 

• Ice-cream temperature (¥15 °F, icecream freezers) 

2. Door Type 

• Equipment with transparent doors 

• Equipment with solid doors 

• Equipment without doors 

3. Orientation (air-curtain or door angle) 

• Horizontal 

• Semivertical 

• Vertical 

4. Type of Condensing Unit 

• Remote condensing 

• Self-contained 

Additionally, because EPCA 

specifically sets a separate standard for 

refrigerators with a self-contained 

condensing unit designed for pull-down 

temperature applications and 

transparent doors, DOE plans to create 

a separate equipment class for this 

equipment. (42 U.S.C. 6313(c)(3)) DOE 

included this equipment in the form of 

a separate family with a single class 

(PD.SC.M) for the preliminary analysis. 

A total of 49 equipment classes were 

created, and these are listed in chapter 

3 of the NOPR TSD using the 

nomenclature developed in the January 

2009 final rule. 74 FR 1100 (Jan. 9, 

2009). 

During the April 2011 preliminary 

analysis public meeting and in 

subsequent written comments, a number 

of stakeholders addressed issues related 

to proposed equipment classes and the 

inclusion of certain types of equipment 

in the analysis. These topics are 

discussed in this section. 

a. Equipment Classification 

Several stakeholders commented on 

the general equipment classification 

structure used by DOE in the 

preliminary analysis. Traulsen stated 

that, with respect to the currently 

defined classes of equipment, there are 

subcategories DOE failed to specify, 

including upright units (1-, 2-, and 3- 

section; reach-in; pass-through; roll-in; 

and roll-through) and undercounter 

units (categorized by length in inches). 

(Traulsen, No. 45 at p. 1) On the other 

hand, Zero Zone approved of DOE’s 

proposed equipment classes, as 

presented in the preliminary analysis 

TSD. (Zero Zone, No. 37 at p. 4) AHRI 

stated that the equipment class 

nomenclature developed by DOE in the 

January 2009 final rule was appropriate. 

(AHRI, No. 43 at p. 2) 

In response to Traulsen’s comment, 

DOE recognizes that there are 

subcategories of equipment within 

certain equipment families and classes, 

each with varying geometries. However, 

DOE believes that the equipment classes 

it has developed and modeled are broad 

enough to account for the variety of 

equipment incorporated within each of 

them, including the unit types described 

in Traulsen’s comment. In performing 

its engineering analysis, DOE selected 

representative unit sizes and feature sets 

for modeling so as to best represent a 

typical unit for each given class. 

Regarding the comments from Zero 

Zone and AHRI, DOE has retained the 

equipment classes and nomenclature 

adopted in the January 2009 final rule 

(74 FR 1100 (Jan. 9, 2009)) and used in 

the Framework document and 

preliminary analysis for this NOPR. 

b. Application Temperature Equipment 

DOE received feedback on the subject 

of application temperature equipment 26

at the April 2011 preliminary analysis 

public meeting and in written 

comments. NEEA stated that the 

difference between DOE rating 

temperatures and application 

temperatures can be significant, and 

commented that allowing manufacturers 

to demonstrate that equipment meets a 

standard defined by rating temperature 

by testing at (presumably higher) 

application temperatures would equate 

to a very lenient standard for such 

equipment. (NEEA, Public Meeting 

Transcript, No. 31 at pp. 26–27) NEEA 

added that, for such equipment, the 

difference between ambient conditions 

and internal conditions would be much 

lower than for equipment maintaining a 

temperature of 38 °F, and that daily 

energy use for this equipment would be 

lower as well. Thus, while NEEA agreed 

that cabinets should be tested at the 

lowest temperature they can achieve, 

NEEA stated that, if the standard for 

such cabinets is set equal to the level of 

energy use of cabinets designed to hold 

38 °F, that equipment may be much less 

efficient than what could be costeffectively possible were separate 

standards set for the equipment. (NEEA, 

No. 36 at p. 2) NEEA further asked why 

DOE was not proposing to set separate 

standards for application temperature 

equipment. (NEEA, Public Meeting 

Transcript, No. 31 at pp. 26–27) NEEA 

stated that, while DOE has dismissed 

concerns regarding application 

temperature equipment because it is 

roughly 2 percent of the market, NEEA 

has heard from manufacturers that it is 

a growing market segment and added 

that 2 percent is, in its opinion, a 

nontrivial portion of the market. (NEEA, 

No. 36 at pp. 1–2) 

Moreover, NEEA asserted that DOE 

failed to acknowledge the differences 

between high-temperature equipment 

(e.g., floral cases) and ice storage 

cabinets, and suggested two new 

equipment classes for these products: 

One for equipment with cabinet 

temperature greater than 40 °F and one 

for ice storage cabinets that can operate 

outdoors and are designed to hold 

temperatures between 20 and 30 °F. 

(NEEA, No. 36 at p. 2; NEEA, Public 

Meeting Transcript, No. 31 at pp. 26–27) 

NEEA further opined that ice storage 

cabinets in particular are often used in 

environments not well represented by 

the test procedure conditions, namely 

outdoor environments. NEEA added 

that to allow the test procedure to not 

represent the operating conditions of 

this equipment would violate 42 U.S.C. 

6295(2). (NEEA, No. 36 at pp. 1–2) 

True stated that, during the test 

procedure public meeting, interested 

parties suggested that the lowest 

application temperature should include 

ice storage and be in the mid-twenties. 

(True, Public Meeting Transcript, No. 31 

at p. 177) Traulsen commented that it 

did not have an issue with testing 

equipment at internal temperatures that 

are higher than the rating temperatures, 

such as 50 °F or 10 °F. However, 

Traulsen expressed concern regarding 

equipment that is designed to run at 

internal temperatures that are lower 

than the rating temperature, or ambient 

temperatures that are higher than the 

test ambient temperature. Specifically, 

Traulsen stated that this equipment 

inherently uses more energy at the 

design conditions (often very high 

ambient temperatures and relative 

humidities) and may also use more 

energy at the designated rating 

conditions (the temperature and relative 

humidity values specified by ASHRAE 

72–2005) as well. Traulsen provided the 

examples of a piece of equipment 

designed to hold ice cream at ¥40 °F 

and a unit designed for 105 °F ambient 

conditions. (Traulsen, No. 45 at p. 2) 

In the 2012 test procedure final rule, 

DOE adopted provisions that allow for 

the testing of commercial refrigeration 

equipment that cannot operate at its 

prescribed rating temperature at the 

‘‘lowest application product 

temperature.’’ DOE defined ‘‘lowest 

application product temperature’’ as 

‘‘the integrated average temperature 

closest to the specified rating 

temperature for a given piece of 

equipment achievable and repeatable, 

such that the integrated average 

temperature of a given unit is within 

±2 °F of the reported lowest application 

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27Fricke, B.A., and B.R. Becker. Comparison of 

Vertical Display Cases: Energy and Productivity 

Impacts of Glass Doors Versus Open Vertical 

Display Cases. December 2009. American Society of 

Heating, Refrigerating and Air-Conditioning 

Engineers, Atlanta, GA. Report No. RP–1402. 

http://rp.ashrae.biz/researchproject.php?rp_id=580 

product temperature for that basic 

model.’’ DOE also applied this provision 

to all refrigerators, freezers, and icecream freezers. 77 FR 10302 (Feb. 21, 

2012). 

DOE maintains that units tested at the 

lowest application product temperature 

will still be required to meet the 

applicable energy conservation standard 

based on their equipment class. The 

required standard level will not change 

based on the different internal 

temperature at which a particular unit is 

tested. While DOE understands that this 

requirement makes it easier for a small 

number of units (that cannot be tested 

at the prescribed rating temperatures) to 

meet the current standards, DOE does 

not believe that establishing separate 

equipment categories for these niche 

types of equipment would be justified 

because the energy savings achievable 

with such standards would be relatively 

small. In response to NEEA’s suggestion 

that ice chests designed to operate 

outdoors be tested at alternate ambient 

conditions, DOE notes that its test 

procedure prescribes only one ambient 

condition. DOE believes this ambient 

condition is adequately representative 

of the operating conditions for the 

majority of commercial refrigeration 

equipment. Additionally, DOE has seen 

no evidence that a unit designed to 

perform at stricter conditions than the 

DOE test procedure (i.e., higher ambient 

temperature and/or humidity) would 

have difficulty meeting a standard at the 

conditions prescribed in the test 

procedure. 

In response to NEEA’s assertion that 

application temperature equipment is a 

growing commercial refrigeration 

equipment market segment, DOE has no 

data to substantiate the assertion. DOE 

has not collected shipments data 

indicating that such a trend exists, nor 

have manufacturer interviews indicated 

that this is the case. Application 

temperature equipment represents a 

niche equipment market, and this 

equipment has been in existence for a 

long time (e.g., candy cases, wine cases, 

floral cases). DOE has no evidence 

indicating that this market segment will 

grow disproportionately to other 

equipment types. 

DOE also agrees with Traulsen that 

testing these units at a higher integrated 

average temperature does not 

necessarily mean that the unit will use 

less energy. The variability in energy 

use and the impact of variation in 

integrated average temperature will vary 

based on case type, geometry, and 

configuration. This variation would 

make setting a consistent standard for 

high-temperature or intermediatetemperature equipment impractical, 

because any value chosen would not be 

representative of all cases. 

c. Open Cases 

At the April 2011 preliminary 

analysis public meeting and in written 

comments, numerous stakeholders 

revisited the issue of DOE’s proposed 

decision to retain separate standards for 

open and closed cases. Earthjustice first 

raised the issue, inquiring about the 

evidence behind DOE’s assertion that 

open cases provide distinct utility with 

respect to features such as unobstructed 

view and access to product, as well as 

simplified stocking, cleaning, and 

maintenance. Earthjustice continued by 

stating that it wished to renew its 

request that DOE continue grouping 

open and doored cases together, adding 

that any determination of utility is 

required to be based on substantial 

evidence. (Earthjustice, Public Meeting 

Transcript, No. 31 at pp. 23, 25) AHRI 

responded that the distinction between 

the two types of cases was made in the 

language of EPACT 2005, which was 

developed through negotiations among 

AHRI and other parties, including 

advocacy groups. (AHRI, Public Meeting 

Transcript, No. 31 at pp. 24–25) 

Southern Store Fixtures added that open 

and doored cases are two distinct types 

of equipment with different 

applications, and that they cannot be 

combined into a single category. 

Southern Store Fixtures also stated that 

substantial analysis and evidence would 

have to be provided in order to show 

that there would be no product loss or 

sales loss as a result of moving from 

open to doored cases. (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at pp. 28–29) 

In further discussion at the public 

meeting, Earthjustice stated that it had 

submitted to DOE a study conducted by 

ASHRAE,27 as well as a Swedish study, 

to support Earthjustice’s assertion that 

product sales are unaffected by the 

presence of door on cases. (Earthjustice, 

Public Meeting Transcript, No. 31 at p. 

29) However, Southern Store Fixtures 

stated that it would dispute the 

ASHRAE study regarding open cases, 

and that it would articulate its argument 

later. (Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 29–30) 

Additionally, the Swedish study was 

retracted from submission due to 

copyright issues. 

Stakeholders also provided comments 

regarding the subject of metrics of 

utility. Pacific Gas and Electric (PG&E) 

stated that, in its opinion, sales would 

be the most obvious metric, along with 

the ability to keep product at the desired 

temperature. However, PG&E asked that 

DOE elaborate on how it would quantify 

what constitutes utility. (PG&E, Public 

Meeting Transcript, No. 31 at pp. 30–31) 

The California Investor Owned Utilities 

(CA IOUs) included a similar request in 

its written comment, asking that DOE 

clarify what it specifically considers as 

criteria to justify unique utility. CA 

IOUs also asked that DOE continue to 

assess options that would enable open 

cases to consume amounts of energy 

similar to those used by equivalent 

closed cases. (CA IOUs, No. 42 at p. 5) 

Zero Zone, continuing on the subject of 

utility, stated that, in its opinion, there 

may have been utility differences 

between open and doored cases at one 

time, but since that time it believed the 

market had changed and this difference 

no longer exists. As a result, Zero Zone 

supported the comments suggesting that 

DOE combine the open and doored 

display case classes. (Zero Zone, Public 

Meeting Transcript, No. 31 at p. 32) 

The Appliance Standards Awareness 

Project (ASAP), while not commenting 

specifically on equipment utility, stated 

that it believed the issue of open versus 

closed cases is very important from an 

NES perspective, as the preliminary 

analysis documents showed that open 

cases consume two to three times as 

much energy as comparable doored 

cases. (ASAP, Public Meeting 

Transcript, No. 31 at p. 32) CA IOUs 

agreed with DOE’s assessment that 

open, low-temperature vertical and 

semivertical cases represent small 

portions of the market. Further, it 

pointed out that the California Energy 

Commission (CEC) is proposing to 

require doors on all upright, lowtemperature cases at the State level. (CA 

IOUs, No. 42 at p. 5) 

During the preliminary analysis 

comment period, Earthjustice submitted 

a detailed comment outlining its 

position on the issue of open cases. 

Earthjustice expressed its belief that 

separate standards for open cases are 

neither warranted nor required by 

EPCA, as well as its opinion that such 

cases provide no capacity or 

performance features justifying separate 

standards, once again referencing the 

previously submitted ASHRAE and 

Swedish studies. Implicitly in response 

to statements made by AHRI at the 

public meeting, Earthjustice added that 

EPACT 2005’s codification of standards 

for equipment with doors does not 

require DOE to maintain separate 

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classes for equipment without doors. 

(Earthjustice, No. 35 at p.1) Earthjustice 

expressed the belief that DOE’s 

intention to adhere to its previous 

stance that the presence or absence of 

doors on cases affects case utility 

ignores the evidence that has been 

presented in the form of the 

aforementioned ASHRAE and Swedish 

sales studies, and that EPCA requires 

DOE’s factual conclusions to be 

supported by substantial evidence 

which, according to Earthjustice, DOE 

has not provided. (Earthjustice, No. 35 

at p. 2) 

Earthjustice reiterated its 

disagreement with DOE’s assertion in 

the preliminary analysis that open cases 

provide utility in the form of 

‘‘unobstructed view of and access to 

product,’’ citing the two sales studies 

that it believed to conclude otherwise. 

Earthjustice also disagreed with DOE’s 

statement that open cases simplify 

stocking, cleaning, and maintenance, 

questioning how the need to prop a door 

open would impede stocking a case. On 

the contrary, Earthjustice asserted, the 

presence of doors would reduce warm 

air infiltration and the opportunities for 

items to fall out of the case onto the 

store floor, thereby reducing stocking 

burdens and losses due to products 

damaged during stocking. Furthermore, 

Earthjustice stated that DOE has not 

suggested shorter life cycles for 

equipment with doors, something it 

believes would be a logical outcome 

were the presence of doors to impair 

cleaning and maintenance operations. 

(Earthjustice, No. 35 at p. 2) 

Earthjustice then presented a legal 

argument, stating that, in maintaining 

that 42 U.S.C. 6295(o) prevents the 

merging of equipment classes for 

equipment with and without doors, 

DOE has misconstrued the statutory 

authority for whether separate classes 

are required. Earthjustice asserted that 

DOE has, in its preliminary analysis 

TSD, attempted to shift the evidentiary 

burden onto the stakeholders who 

support equivalent standards for the two 

equipment types. Earthjustice 

commented that, in dismissing the 

findings of the ASHRAE study, DOE has 

violated the plain language of EPCA, 

which requires that a preponderance of 

the evidence must support the position 

that open cases provide a unique feature 

in order for DOE to conclude that 

separate equipment classes are required. 

(Earthjustice, No. 35 at pp. 2–3) 

Earthjustice suggested that, should 

DOE decide not to merge classes for 

open and closed cases, DOE should 

adopt standards reflecting the 

overlapping applications for the 

equipment. Earthjustice stated that 

because equipment with doors is 

economically advantageous on an LCC 

basis, encouraging a shift to equipment 

with doors will increase the monetary 

savings from this rulemaking. 

(Earthjustice, No. 35 at p. 3) By adopting 

highly cost-effective standards for 

equipment with doors as well as 

standards that would result in LCC 

increases for open cases, Earthjustice 

suggested, DOE could encourage 

consumers to purchase cases with 

transparent doors. Earthjustice stated 

that DOE has taken a markettransforming approach in the past. 

Specifically, Earthjustice referenced the 

small electric motors rulemaking (75 FR 

10874 (March 9, 2010)), in which DOE 

maintained standards for two types of 

general purpose single-phase motors but 

tailored those standards to encourage 

the market to shift to one of those types. 

(Earthjustice, No. 35 at p. 3) Similarly, 

Earthjustice added, in the rulemaking 

for commercial clothes washers (75 FR 

1122 (Jan. 8, 2010)), DOE adopted 

standards set at the max-tech level for 

top-loading washers, but less aggressive 

standards for front-loading washers, 

partially to encourage the growth of 

front-loader market share. In 

conclusion, Earthjustice suggested that 

DOE adopt the max-tech level for 

equipment without doors and a more 

economically advantageous standard for 

equipment with doors, thus encouraging 

the market to shift to doored cases. 

(Earthjustice, No. 35 at pp. 3–4) 

DOE understands the concern of some 

stakeholders regarding the issue of open 

cases. While some stakeholders have 

reiterated their previous positions on 

this topic, DOE does not believe that 

any new data has been presented since 

the Framework document public 

meeting (May 2010) that would warrant 

a change in DOE’s stance as outlined in 

chapter 2 of the preliminary analysis 

TSD. DOE maintains that to set 

standards discouraging users from 

purchasing open cases would violate its 

statutory charge to preserve the 

availability of features and performance 

characteristics currently on the market. 

While Earthjustice again cited the 

ASHRAE study and the Swedish study 

comparing sales from open and closed 

cases, DOE still maintains its position 

from the preliminary analysis. After 

having reviewed the ASHRAE study, 

DOE believes that because the data were 

collected only under very specific 

conditions in a controlled environment 

and with a limited range of merchandise 

types, the data are insufficient to drive 

a conclusion applicable across the broad 

wide range of open case applications 

and end uses. As one example, DOE 

points out that neither study includes 

fresh produce and packaged meat 

products in the analysis of impact on 

product sales, and that these are types 

of merchandise that manufacturers have 

mentioned as benefiting from the use of 

open cases. 

Regarding the questions about the 

definition of utility raised by 

Earthjustice and PG&E, EPCA states 

that, in setting or amending standards, 

the Secretary must consider, among 

other factors, any lessening of the utility 

or performance of the covered products 

likely from the imposition of the 

standard. (42 U.S.C. 6295(o)(2)(B)(i)(IV) 

and 6316(e)(1)) EPCA further states that 

the Secretary may not prescribe an 

amended or new standard under this 

section if the Secretary finds (and 

publishes such finding) that interested 

persons have established by a 

preponderance of the evidence that the 

standard is likely to result in the 

unavailability in the United States in 

any covered product type (or class) of 

performance characteristics (including 

reliability), features, sizes, capacities, 

and volumes that are substantially the 

same as those generally available in the 

United States at the time of the 

Secretary’s finding. (42 U.S.C. 

6295(o)(4) and 6316(e)(1)) 

Thus, while the term ‘‘utility’’ is not 

specifically defined in EPCA, it is used 

in conjunction with the term 

‘‘performance’’; the statute further 

prohibits DOE from setting standards 

that result in the unavailability of 

performance characteristics or features 

from the U.S. market. In this case, DOE 

has determined that customer access to 

product is a distinct performance 

characteristic or feature in the case of 

commercial refrigeration equipment and 

believes, based on its research and 

discussions with experts and members 

of industry, that open cases provide 

more convenient access to products 

than do closed cases, as well as 

providing other measures of utility, 

such as ease of stocking and cleaning. 

In response to the comment by 

Earthjustice that DOE violated the plain 

language of EPCA, which requires that 

a preponderance of the evidence must 

support the position that open cases 

provide a unique feature in order to 

conclude that separate equipment 

classes are required, DOE refers to the 

language found at 42 U.S.C. 6295(o)(4) 

and 6316(e)(1). This language states that 

the Secretary may not issue a standard 

if interested persons have established by 

a preponderance of the evidence that 

the standard is likely to result in the 

unavailability in the United States of 

any covered product type (or class) of 

performance characteristics (including 

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reliability), or features currently 

available. One statement suggesting that 

the elimination of open cases would 

have this effect was presented at the 

April 2011 preliminary analysis public 

meeting, when Southern Store Fixtures 

explicitly stated that open and doored 

cases are two different equipment types, 

adding that ‘‘substantial analysis and 

evidence would have to be provided’’ to 

ensure that there would be no detriment 

to performance by combining the 

classes. (Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 28–29) 

DOE has agreed with this stance in its 

past and current proceedings, as 

evidenced by the retention of separate 

equipment types for open and closed 

cases in its analyses. At the commercial 

refrigeration equipment test procedure 

NOPR public meeting, Coca-Cola, a 

major purchaser of display cases, cited 

internal studies concluding that the 

presence of doors on displays near 

registers can decrease sales by 35 to 50 

percent. (Docket No. EERE–2010–BT– 

TP–0034, Coca-Cola, No. 19 at p. 90) 

These study results stand in contrast to 

the assertion by Earthjustice that the 

two sales studies it provided show that 

open cases do not provide utility in the 

form of unobstructed view of and access 

to product. The conflict between the 

sets of data suggests that, while both 

conclusions may be correct in the 

specific contexts of the respective 

studies, in some applications the 

presence of doors on cases can 

adversely affect visibility and access to 

product. Therefore, elimination of open 

cases from the market would equate to 

the unavailability of this performance 

characteristic, in direct violation of (42 

U.S.C. 6295(o)(2)(B)(i)(IV) and 

6316(e)(1)). 

In its manufacturer interviews, DOE 

spoke with several manufacturers who 

provided anecdotal data regarding the 

utility of open cases. They pointed to 

increased sales due to ‘‘impulse buys,’’ 

stating that users of open cases reported 

generating higher revenues out of those 

cases. Manufacturers also stated that 

open cases allow for vastly easier 

stocking of high-margin items including 

produce and meat. The ease of stocking 

these items is particularly important to 

retailers, because open cases are stocked 

continuously while shoppers are in the 

store, making simultaneous, 

unobstructed access to the case by both 

the employee and customer an 

important utility issue. Manufacturers 

reaffirmed during these interviews that 

unobstructed view of and access to 

product, as well as simplified stocking, 

as previously referenced by DOE, were 

significant attributes of open cases. 

Furthermore, the manufacturers pointed 

to better accommodation of nonstandard-sized merchandise within 

these cases. The information that DOE 

has gathered regarding market 

perceptions at conferences and other 

venues has indicated that many grocery 

store managers and operators strongly 

prefer open cases to closed cases, as 

they perceive that product visibility 

from a distance is a very strong factor 

in sales. Engineers for large chain 

grocery stores have stated that their 

efforts to convert even part of the 

grocery store equipment from open 

cases to closed cases, during store 

remodeling, have been met with 

opposition from store managers due to 

their perception that open cases lead to 

higher sales compared to closed cases. 

This finding is in contrast to the 

statement by Zero Zone that utility 

differences between open and doored 

cases no longer exist. The statement by 

Zero Zone also conflicts with the 

internal study data quoted by Coca-Cola, 

in which that company noted a 

significant loss in sales due to the 

presence of doors on display cases in 

certain settings. As the result of a 

collective review of the data obtained 

through its public meetings, 

manufacturer interviews, and 

conferences, DOE believes that its 

position of setting separate standards for 

open and closed cases is reasonable and 

based on the distinct performance 

characteristics of each class, as shown 

by a preponderance of the evidence 

presented. DOE notes that 

manufacturers did not cite differences 

in maintenance and cleaning between 

open and closed cases, but DOE believes 

the other utility and performance factors 

cited, including ease of access to the 

product, increased visibility, and ease of 

use during operations and maintenance, 

are sufficient to warrant maintenance of 

two separate equipment classes. 

DOE understands AHRI’s statement 

that the distinction between case types 

was made in the EPACT 2005 language, 

which set standards for closed cases and 

required DOE to set standards for open 

cases (42 U.S.C. 6313(c)), and 

Earthjustice’s response that the 

codification of separate standards does 

not require DOE to maintain different 

classes. However, DOE is restricted by 

EPCA from prescribing energy 

conservation standards in any manner 

that would lessen utility to the customer 

or result in the unavailability of 

performance characteristics or features 

currently on the market. (42 U.S.C. 

6295(o)(2)(B)(IV), 6295(o)(4), and 

6316(e)(1)) Therefore, DOE continues to 

consider open and doored cases to be 

two distinct equipment types due to the 

evident performance and feature 

differences between them. 

DOE acknowledges ASAP’s statement 

that open cases have been shown to 

consume more energy than doored cases 

and CA IOU’s assertion that open, lowtemperature cases comprise a small 

market share. However, independent of 

these factors, as stated above, DOE is 

forbidden by EPCA from setting 

standards that would result in the 

unavailability on the market of the 

performance characteristics and features 

that open cases exhibit. (42 U.S.C. 

6295(o)(4) and 6316(e)(1)) Therefore, 

DOE, through its analyses, sought to 

develop separate proposed standard 

levels for open and closed cases that 

would result in the maximum 

economically justified and 

technologically feasible energy savings 

for the respective equipment. 

Regarding Earthjustice’s assertion that 

DOE failed to suggest shorter life cycles 

for commercial refrigeration equipment 

with doors, DOE points out that the 

replacement of doors is one of the 

factors contributing to repair costs (see 

chapter 8 of the NOPR TSD). Damage to 

doors does not necessarily shorten the 

life of the equipment itself. 

With respect to Earthjustice’s 

suggestion that DOE force a market shift 

from open to closed cases by adopting 

cost-effective standards for doored cases 

but less economically attractive 

standards for open cases, DOE is 

compelled by EPCA to examine the 

economic and technical justification of 

all equipment under the same criteria 

and with the same rigor. (42 U.S.C. 

6295(o) and 6316(e)(1)) In other words, 

DOE must independently determine the 

maximum technologically feasible and 

economically justified standard level for 

each equipment class. Therefore, DOE 

examined all TSLs equally using the 

same quantitative metrics, such as LCC 

and national NPV, and selected a 

proposed standard level using these 

criteria. In response to the suggestion 

that DOE adopt a market-transforming 

approach in which it would 

intentionally shift market share toward 

doored cases, DOE believes that to do so 

would violate the EPCA provision 

barring DOE from setting standards that 

result in the lessening of utility or 

unavailability of performance 

characteristics. (42 U.S.C. 6295(o)(4) 

and 6316(e)(1)) Because DOE has 

determined that open cases present a 

unique set of performance 

characteristics and features to the 

market, to set standards eliminating 

their manufacture and sale would 

violate 42 U.S.C. 6295(o)(4) and 

6316(e)(1). DOE notes that in the 

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28FMI Research. The Food Retailing Industry 

Speaks 2011. 2011. Food Marketing Institute, 

Arlington, VA. 

29 ‘‘Service over counter’’ means equipment with 

sliding or hinged doors in the back intended for use 

by sales personnel for loading and retrieving items 

for sale, and fixed, sliding or hinged transparent 

panels in the front for displaying merchandise. The 

equipment has a height no greater than 66 inches 

and is intended to serve as a counter for 

transactions between sales personnel and 

customers. 

30 DOE had also excluded SOC.SC.L, a lowshipments-volume equipment class, from the 

preliminary analysis as well, as it too is covered 

under standards prescribed by EPACT 2005 for 

freezers with transparent doors found at 10 CFR 

431.66(b). Due to its similarity in design, 

construction, and performance to SOC.SC.M 

equipment, DOE presumed that it too would not be 

able to meet the standards set by EPACT 2005 for 

self-contained equipment with transparent doors. 

31This approach is similar to that adopted for all 

the other equipment classes, as explained in section 

IV.H.1. 

rulemakings for small electric motors 

and commercial clothes washers that 

Earthjustice cited, DOE was careful to 

set standards such that they would not 

result in the unavailability of features or 

performance characteristics. For 

example, the commercial clothes 

washers final rule, published by DOE on 

January 8, 2010, states that the amended 

efficiency levels can be met by either 

top- or front-loading designs. In fact, the 

clothes washers final rule notes that 

there were vertical-axis top-loading and 

horizontal-axis frontloading washers on 

the market at the time that already met 

the higher standard. Thus, DOE 

concluded, consumers would have the 

same range of clothes washer options, 

including features valued by consumers 

such as door placement, capacity, water 

temperature, and adjustable load sizes. 

75 FR 1122, 1133–34 (Jan. 8, 2010). In 

the case of commercial refrigeration 

equipment, DOE believes that separate 

equipment classes are necessary to 

preserve the unique features provided 

by open refrigerated display cases, 

established by interested parties as 

discussed above. DOE does not believe 

it would be possible to combine 

standards classes or arbitrarily set more 

aggressive standards for open cases 

without violating EPCA provisions 

regarding utility/product availability. 

(42 U.S.C. 6295(o)(2)(B) and 6316(e)(1)) 

As a result, DOE has maintained the 

position regarding utility of open cases 

that it asserted in the January 2009 final 

rule and in its preliminary analysis and 

framework document. 74 FR 1099 (Jan. 

9, 2009). 

DOE understands that there are other 

options available in the market to 

reduce the energy consumption of open 

cases, such as retrofitting doors to open 

cases, and that DOE’s energy 

conservation standards may not be the 

only factor related to improving the 

energy efficiency of open cases. DOE 

believes that, in general, management 

staff of grocery stores is well aware of 

high energy costs because energy costs 

consistently figure as one of the top five 

issues in the Food Marketing Institute 

(FMI) Worry Index,28 which is obtained 

through surveys of the food retailers 

regarding the most important issues in 

their businesses that cause them to 

‘‘worry.’’ Some stores have retrofitted 

their open cases with transparent doors 

to achieve substantial savings in energy 

costs. DOE also recognizes that the 

market for retrofitting open, multi-deck 

display cases with transparent doors is 

steadily increasing. In addition, features 

such as night curtains and moreefficient air curtains are also available in 

the market to reduce the energy 

consumption of open cases. 

In its NOPR analyses, DOE modeled 

open and closed display cases 

separately, and has included separate 

proposed standards for the two types of 

equipment in this notice. 

d. Service Over Counter Equipment 

AHRI voiced concerns about selfcontained service over counter (SOC) 

equipment,29 stating that DOE 

incorrectly determined that SOC 

equipment was covered by EPACT 2005 

and that this error resulted in an overly 

stringent standard being applied to the 

equipment. (AHRI, No. 43 at p. 2) AHRI 

commented that it, working with other 

stakeholders, had proposed legislative 

language that defines SOC equipment 

and establishes minimum standards for 

that equipment, which is included in 

the Implementation of National 

Consensus Appliance Agreements Act 

of 2011, S. 398, 112th Cong. (2011). 

AHRI asked that DOE adopt the 

definition of SOC equipment that AHRI 

had proposed in that legislation, and 

also asked DOE to use TDA as a 

normalization metric for this 

equipment. (AHRI, No. 43 at p. 2) 

With respect to the statement by AHRI 

that DOE has incorrectly determined 

that SOC equipment is within the scope 

of coverage of EPACT 2005, DOE 

disagrees, having determined that 

SOC.SC.M equipment meets the 

statutory definition of a self-contained 

commercial refrigerator with transparent 

doors in 42 U.S.C. 6311(9)(A). EPCA 

does not specify equipment subsets 

such as SOC equipment beyond 

defining the terms ‘‘commercial 

refrigerator,’’ ‘‘freezer,’’ and 

‘‘refrigerator-freezer’’ and ‘‘selfcontained condensing unit,’’ among 

other definitions related to this 

equipment. (42 U.S.C. 6311(9)) In 

December 2009, DOE’s Office of 

Hearings and Appeals (OHA) responded 

to an application for exception relief 

from a manufacturer of SOC equipment. 

This manufacturer argued that it was 

entitled to relief because its SOC units 

could not meet the EPACT 2005 

standards for self-contained equipment 

with doors. OHA responded that DOE 

did not have jurisdiction to consider 

such exceptions for equipment covered 

by the statutorily mandated standards. 

(Case No. TEE–0066, Dec. 29, 2009) 

During the preliminary engineering 

analysis for this rulemaking, DOE 

confirmed that the EPACT 2005 

standards for SOC.SC.M (42 U.S.C. 

6313(c)(2)) could not be achieved at 

even the max-tech level (see chapter 2, 

section 2.2.1.5, of the preliminary 

analysis TSD). Therefore, DOE agrees 

with AHRI’s comment that the standard 

set by EPACT 2005 was too stringent for 

equipment belonging to equipment class 

SOC.SC.M. Consequently, DOE had 

excluded SOC.SC.M equipment from 

the preliminary analysis.30

In December 2012, during the NOPR 

analysis for this rulemaking, the 

American Energy Manufacturing 

Technical Corrections Act (AEMTCA), 

Public Law 112–210 (Dec. 18, 2012) 

amended EPCA to establish new 

standards for self-contained service over 

counter medium temperature 

commercial refrigerators. (42 U.S.C. 

6313(c)(4)) The amendment reduces the 

stringency of the standard applicable to 

this equipment. AEMTCA prescribed 

the standard for SOC.SC.M equipment 

manufactured on or after January 1, 

2012 as 0.6 × TDA + 1.0, expressed in 

kilowatt hours per day. (42 U.S.C. 

6313(c)(4)(A)) 

AEMTCA also amended EPCA to 

direct DOE to determine, within 3 years 

of enactment of the new standard for 

SOC.SC.M, whether the standard should 

be amended. (42 U.S.C. 6313(c)(4)(B)(1) 

If DOE determines that the standard 

should be amended, then DOE must 

issue a final rule establishing an 

amended standard within this same 3- 

year period. (42 U.S.C. 6313(c)(4)(B)) 

DOE conducted the analysis for this 

determination of whether to amend the 

standard for equipment class SOC.SC.M 

as part of this NOPR analysis. The 

analysis was carried out in a manner 

similar to that of all the other equipment 

classes being analyzed as part of the 

current rulemaking. DOE used the 

standard established by AEMTCA as the 

baseline efficiency level for equipment 

class SOC.SC.M.31 The results of the 

analysis indicated that if an amendment 

to the AEMTCA standard for equipment 

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32The criteria for trial standard level selection 

can be found in section V.A.1, and discussion 

concerning the selection of the proposed standard 

level can be found in section V.C. 

class SOC.SC.M, based on same criteria 

established for all the other equipment 

classes of the current rulemaking,32

would represent a reduction in energy 

consumption of roughly 30 percent as 

compared to the AEMTCA standard. 

Based on this result, DOE has proposed 

an amended standard for equipment 

class SOC.SC.M in this NOPR (see 

section I and section V.A.2). 

In response to AHRI’s request that 

DOE use TDA as a normalization metric 

for this equipment, the January 2009 

final rule standards for remote 

condensing SOC equipment were 

expressed using TDA as a normalization 

metric. 74 FR 1093 (Jan. 9, 2009). As 

AHRI suggested, DOE proposes in this 

NOPR to continue to use TDA as the 

normalization metric for SOC 

equipment. 

DOE is also proposing to adopt a new 

definition of the ‘‘service over counter’’ 

equipment family, which is included in 

this notice. DOE based its proposed 

definition on the definition of selfcontained service-over-counter 

refrigerators (SOC.SC.M) found in 

Paragraph (1) of section 4 of AEMTCA. 

(42 U.S.C. 6313(c)(1)(C)) However, DOE 

proposes to adopt a broader definition 

of SOC equipment that DOE believes is 

applicable to all of the equipment 

classes that belong to the SOC 

equipment family, not just the single 

SOC.SC.M equipment class described by 

the AEMTCA language. The proposed 

definition can be found in section 0 of 

this NOPR. 

2. Technology Assessment 

As part of the market and technology 

assessment performed for the NOPR 

analysis, DOE developed a 

comprehensive list of technologies that 

would be expected to improve the 

energy efficiency of commercial 

refrigeration equipment. Chapter 3 of 

the NOPR TSD contains a detailed 

description of each technology that DOE 

identified. Although DOE identified a 

complete list of technologies that 

improve efficiency, DOE only 

considered in its analysis technologies 

that would impact the efficiency rating 

of equipment as tested under the DOE 

test procedure. Therefore, DOE 

excluded several technologies from the 

analysis during the technology 

assessment because they do not improve 

the rated efficiency of equipment as 

measured under the specified test 

procedure. Technologies that DOE 

determined impact the rated efficiency 

were carried through to the screening 

analysis and are discussed in section 

IV.D. 

a. Technologies Applicable to All 

Equipment 

In the preliminary analysis market 

and technology assessment, DOE listed 

the following technologies that would 

be expected to improve the efficiency of 

all equipment: higher efficiency 

lighting, higher efficiency lighting 

ballasts, remote lighting ballast location, 

higher efficiency expansion valves, 

higher efficiency evaporator fan motors, 

variable-speed evaporator fan motors 

and evaporator fan motor controllers, 

higher efficiency evaporator fan blades, 

increased evaporator surface area, lowpressure differential evaporators, 

increased case insulation or 

improvements, defrost mechanisms, 

defrost cycle controls, vacuum insulated 

panels, and occupancy sensors for 

lighting controls. Not all of these 

technologies were considered in the 

preliminary engineering analysis; some 

were screened out or removed from 

consideration on technical grounds, as 

described in chapters 3 and 4 of the 

NOPR TSD. After the publication of the 

preliminary analysis, DOE received 

numerous stakeholder comments 

regarding these technologies, discussed 

below. 

Lighting Technologies 

In response to DOE’s request for 

comment, Southern Store Fixtures 

questioned DOE’s specification for lightemitting diode (LED) lighting because it 

appeared that LEDs had a lower efficacy 

in terms of lumens per watt compared 

to T8 fluorescent lighting (the standard 

baseline lighting technology) in DOE’s 

model. (Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 59–60) 

Zero Zone observed that while 

fluorescent lighting is a mature 

technology, LED lighting is constantly 

evolving. (Zero Zone, Public Meeting 

Transcript, No. 31 at p. 63) 

Additionally, Southern Store Fixtures 

suggested that the efficiency of the 

driver powering the LEDs be explicitly 

considered, as it is a key aspect of 

lighting energy consumption. (Southern 

Store Fixtures, Public Meeting 

Transcript, No. 31 at p. 62) True noted 

that light output from LEDs is highly 

directional, and the additional heat load 

from the LEDs increases the load on the 

compressor, which is less efficient than 

the lighting system. (True, Public 

Meeting Transcript, No. 31 at pp. 60–61) 

Regarding the comment by Southern 

Store Fixtures, the output of LED light 

fixtures used in commercial 

refrigeration equipment is indeed lower 

in terms of lumens per watt when 

compared to T8 fluorescent bulbs. 

However, for commercial refrigerated 

display applications, the advantage of 

LED lighting lies in the directionality of 

its light output. While T8 lighting 

produces greater output in lumens, 

much of that light is directed toward the 

ambient space rather than the 

merchandise to be illuminated, and thus 

is wasted from a product merchandising 

perspective. LED lighting, on the other 

hand, is very directional, and the light 

can be aimed directly at the product on 

display. This difference allows for more 

conservative sizing of LED fixtures and, 

as a result, overall power consumption 

is lower compared to T8 fluorescent 

lamps. 

DOE agrees with the comment by Zero 

Zone that LED lighting is an evolving 

technology. As a result, DOE has taken 

efforts to update its LED fixture cost 

estimates throughout the rulemaking 

process, gathering the most current data 

available from publicly available 

sources as well as from manufacturer 

interviews. Regarding Southern Store 

Fixtures’ concern about driver power, 

this power consumption is considered 

in the engineering model and is 

incorporated into the calculation of 

calculated daily energy consumption 

(CDEC). Similarly, with respect to 

True’s comment, the impact of lighting 

on case heat load, and thus compressor 

power consumption, is accounted for in 

the engineering model through the use 

of a multiplier to estimate the fraction 

of light produced that is retained inside 

the case as heat. 

Lighting Controls 

In addition to discussing lighting, 

stakeholders also commented on the 

location of lighting controls. Southern 

Store Fixtures observed that certain 

operators use central energy 

management systems to control the 

display case lighting, and asked if this 

approach would be considered instead 

of just the placement of occupancy 

sensors in individual display cases. The 

company added that when customers 

ask them to supply a case to be 

controlled by a central energy 

management system, the lights in the 

display cases must be wired separately 

from the other energy-consuming 

components. (Southern Store Fixtures, 

Public Meeting Transcript, No. 31 at pp. 

190–91, 194) Further, Southern Store 

Fixtures pointed out that CEC is 

considering these central lighting 

systems in its proceedings. (Southern 

Store Fixtures, Public Meeting 

Transcript, No. 31 at p. 197) Zero Zone 

stated that it typically wires cases with 

a separate lighting circuit to allow for 

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33ANSI/ASHRAE Standard 72–2005. ‘‘Method of 

Testing Commercial Refrigerators and Freezers.’’ 

2005. American Society of Heating, Refrigerating, 

and Air-Conditioning Engineers, Inc. Atlanta, GA. 

independent lighting control, while 

NEEA stated that if a case is wired 

differently to interface with centralized 

controls, it should be treated identically 

to a self-contained set of controls. (Zero 

Zone, Public Meeting Transcript, No. 31 

at p. 196; NEEA, Public Meeting 

Transcript, No. 31 at p. 195) CA IOUs 

supported the manufacturer assertion 

made during the April 2011 preliminary 

analysis public meeting that it is 

possible to distinguish between cases 

designed for remote energy controls and 

those that are not. (CA IOUs, No. 42 at 

p. 4) For this reason, the CA IOUs 

suggested that DOE develop a 

calculation to measure energy savings 

due to the use of such remote systems 

in the test procedure. (CA IOUs, No. 42 

at p. 4) 

DOE acknowledges that there are 

several ways to implement lighting 

controls (e.g., individual case controls, 

controls for a case lineup, storewide 

energy management systems), and that 

allowing certain systems to be included 

in calculating energy consumption may 

set a precedent for how DOE defines the 

boundaries of covered equipment and 

what technologies are allocated energy 

savings for a piece of equipment in the 

test procedure. For example, cases set 

up to accept remote control systems 

have a dedicated circuit for lights so 

that the lights can be controlled 

separately from the rest of the case. 

However, this lighting circuit 

configuration does not inherently save 

energy and must be paired with an 

expensive energy management control 

system, which is sold separately from 

the piece of commercial refrigeration 

equipment, is produced by different 

manufacturers, and is not integral to the 

commercial refrigeration equipment. In 

addition, the existence of an energy 

management system does not 

necessarily mean it will be used with 

commercial refrigeration equipment; for 

example, energy management systems 

are used in many stores and offices to 

control room lighting and temperature 

set points. 

DOE acknowledges that remote 

lighting controls do save energy and 

may be the more commonly used 

technology to dim or turn off lights. 

However, energy consumption for a 

piece of commercial refrigeration 

equipment must be determined using 

the DOE test procedure to measure the 

energy consumption of a representative 

unit, as shipped to customers. Because 

the remote energy management system 

is not part of the piece of commercial 

refrigeration equipment as shipped from 

the manufacturer, but rather is a 

separate piece of equipment supplied by 

a separate manufacturer, remote energy 

management controls will not be 

considered as an energy conservation 

feature in this commercial refrigeration 

equipment rulemaking. 

Part-Load Technologies 

Stakeholders also submitted 

comments on the subject of part-load 

and variable-capacity technologies. 

These are technologies that allow the 

performance of the system components 

to be varied in response to changes in 

the load placed on them, such as 

changes due to varying ambient 

conditions or product loading. PG&E 

requested that DOE clarify its stance on 

part-load technologies, suggesting that 

there was a disparity between the NOPR 

DOE published on November 24, 2010, 

which proposed amendments to DOE’s 

test procedures for commercial 

refrigeration equipment (November 

2010 test procedure NOPR (75 FR 71596 

(Nov. 24, 2010)) and the screening 

analysis presented in chapter 2 of the 

preliminary analysis TSD. Specifically, 

in the November 2010 test procedure 

NOPR, DOE stated that the proposed 

test procedure, which relied on AHRI 

Standard 1200 and ASHRAE Standard 

72,33 is able to capture the energy-saving 

effects of some part-load technologies. 

(76 FR 71601 (Nov. 24, 2010)). 

Conversely, in the screening analysis in 

chapter 2 of the preliminary analysis 

TSD, DOE removed some technologies 

from the analysis and stated that their 

effects could not be measured by the 

steady-state test procedure. PG&E asked 

DOE to clarify its stance and asked that, 

if DOE determines that the effects of 

these technologies can be measured, to 

include them in the screening and 

engineering analyses. PG&E later 

reiterated its desire that DOE be 

consistent in its approach toward 

technologies that maintain energy 

savings at variable ambient conditions 

or variable load. (PG&E, Public Meeting 

Transcript, No. 31 at pp. 51–52, 178) 

Similarly, CA IOUs noted a perceived 

disparity between DOE’s statement in 

the preliminary analysis TSD chapter 2, 

where DOE stated that it ‘‘believes that 

the energy saving potential of these 

technologies is already captured to some 

degree in the current test procedure,’’ 

and chapter 4, where DOE stated that 

‘‘[t]echnologies that reduce energy use 

only under transient conditions, such as 

fluctuations in ambient temperature and 

humidity, periods of product loading, 

and frequent door openings, will not 

affect the measured CDEC. Therefore, 

DOE removed from consideration these 

technologies that do not affect or do not 

reduce CDEC during the tests.’’ CA IOUs 

requested clarification of DOE’s 

rationale for eliminating those 

technologies from consideration, and 

also requested that DOE include in its 

engineering analysis all technologies 

that can be measured in part by the test 

procedure, notably those that save 

energy at variable load or under 

fluctuating ambient conditions. (CA 

IOUs, No. 42 at p. 2) NEEA expressed 

its opinion that DOE had not yet 

adequately justified its lack of initiative 

in examining part-load technologies. 

(NEEA, No. 36 at p. 4) 

Stakeholders questioned the ability of 

the DOE test procedure to reflect the 

performance of part-load technologies. 

In a written comment submitted jointly, 

ASAP and the Natural Resources 

Defense Council (NRDC) encouraged 

DOE to consider technologies that 

improve efficiency under part-load 

conditions in the engineering analysis, 

stating that DOE referenced in its test 

procedure NOPR the fact that units 

tested using ASHRAE 72, namely those 

with doors, experience variation in load 

due to the door opening requirements of 

the test. ASAP and NRDC mentioned 

that there is clearly a variation in 

refrigeration load during the test for this 

equipment, due to the door opening 

requirement. ASAP and NRDC added 

that, in its proposed test procedure, 

DOE also referred to transient load 

variation effects (76 FR 71601 (Nov. 24, 

2010)). ASAP and NRDC stated that, if 

single-speed compressors cycle on and 

off during the test, there is likely 

opportunity for variable-speed 

compressors to reduce energy 

consumption by increasing the 

operating effectiveness of heat 

exchangers and reducing cycling losses. 

(ASAP and NRDC, No. 34 at pp. 1–2) 

Interested parties also commented 

that it is important to distinguish 

between steady-state and full-load 

modes of operation, since equipment 

experiencing relatively constant loads is 

not necessarily operating at full load. 

ASAP and NRDC stated that if the 

compressor is cycling, this indicates 

that the equipment is operating at part 

load. ASAP and NRDC continued, 

stating that if a commercial refrigerator 

or freezer did operate at full load during 

a test, then it would not be able to 

maintain the necessary case temperature 

under the more extreme conditions that 

it would likely encounter in the field, 

posing a risk to food safety. Therefore, 

ASAP and NRDC stated, it is likely that 

manufacturers design equipment to 

meet a higher load than that 

experienced during a test, and that 

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34 Variable-speed compressors are able to control 

the rate at which they operate in order to tailor their 

performance to varying conditions and thus reduce 

compressor cycling. Modulating capacity 

compressors, most commonly found in larger sizes 

used in compressor racks, allow for the volume of 

fluid being compressed by the moving pistons (and 

thus the throughput of the compressor) to be 

changed in response to load variations. 

35U.S. Department of Energy–Office of Energy 

Efficiency and Renewable Energy. Preliminary 

Technical Support Document (TSD): Energy 

Conservation Program for Certain Commercial and 

Industrial Equipment: Commercial Refrigeration 

Equipment. Chapter 5, Engineering Analysis. March 

2011. Washington, DC. www.regulations.gov/

#!documentDetail;D=EERE-2010-BT-STD-0003- 

0030. 

technologies that improve part-load 

performance could reduce energy 

consumption for both open and doored 

cases. (ASAP and NRDC, No. 34 at p. 2) 

NEEA expressed a similar viewpoint, 

commenting that the door opening 

provision in ASHRAE 72 leads to load 

variation and that, even for open cases, 

it is unlikely that the refrigeration 

system is operating at full capacity 

during the test period, as this would 

make the system unable to meet load 

requirements and guarantee food safety 

under more extreme environmental 

conditions. (NEEA, No. 36 at p. 4) NEEA 

stated that, unless a refrigeration system 

is sized exactly for its operating load, 

and that load remains constant, there is 

good reason to examine part-load 

system performance. NEEA added that, 

since most refrigeration systems must 

perform under a variety of conditions, 

they will operate cyclically, leaving 

room for more-efficient operation during 

times of lower load. NEEA urged DOE 

to explore the use of variable-speed and 

variable-capacity components. (NEEA, 

No. 36 at p. 4) 

DOE received comments regarding the 

treatment and modeling of specific partload technologies. ASAP stated that, in 

its proposed energy conservation 

standards for residential refrigerators 

(75 FR 59470 (Sept. 27, 2010)), DOE had 

included variable-speed compressors as 

a design option, and that the residential 

refrigerators test procedure was also a 

steady-state test. ASAP asked why 

variable-speed compressors were 

considered for residential refrigerators 

but not for commercial refrigeration 

equipment. (ASAP, Public Meeting 

Transcript, No. 31 at p. 54) NEEA 

commented that variable-speed 

condenser fans and condenser fan motor 

controllers could enable improved partload performance, and that screening 

them out due to test procedure 

limitations is shortsighted. (NEEA, No. 

36 at p. 3) NEEA added that highefficiency expansion valves are 

becoming much more prevalent in 

refrigeration systems, and that they 

should be included in the analysis. 

NEEA stated that savings associated 

with high-efficiency expansion valves 

may arise in conjunction with other 

technologies installed as part of a partload package and that, while these 

energy savings may be small, this 

should be proven by analysis. (NEEA, 

No. 36 at p. 3) CA IOUs requested 

clarification on how variable-speed 

compressors and modulating capacity 

compressors 34 are covered in this 

rulemaking. CA IOUs stated that such 

compressor technologies did not appear 

to have been screened out or listed as 

an option, and appeared to have been 

included in the engineering analysis 

TSD chapter under the section 

discussing higher efficiency 

compressors. (CA IOUs, No. 42 at p. 2) 

Finally, ASAP and NRDC stated that the 

model used in the engineering analysis 

should be able to capture the potential 

benefits of technologies that improve 

part-load performance and that, if this is 

not the case, DOE should consider a 

different methodology. (ASAP and 

NRDC, No. 34 at p. 3) 

After receiving these stakeholder 

comments, DOE reviewed its position 

on part-load and variable-capacity 

technologies, as articulated in chapter 2 

of the preliminary analysis and test 

procedure NOPR publications (75 FR 

71601 (Nov. 24, 2010)). DOE agrees 

there was a disparity between the 

preliminary analysis, in which DOE 

reiterated its position from the January 

2009 final rule that part-load 

technologies could not be captured by 

the steady-state ASHRAE 72 method of 

test,35 and the test procedure NOPR, in 

which DOE stated that the door opening 

and night curtain testing portions of the 

test would in fact create part-load 

conditions. 75 FR 71601 (Nov. 24, 

2010). DOE believes that the position 

presented in the test procedure NOPR is 

accurate, as the variation in operating 

conditions introduced by door openings 

and the use of night curtains could 

create an opportunity for part-load 

technologies to produce quantifiable 

energy impacts. DOE revised its position 

after reviewing the test procedure 

established in the 2012 test procedure 

final rule (77 FR 10292 (Feb. 21, 2012)) 

and the energy consumption profile of 

equipment observed during testing 

conducted using the DOE test 

procedure. DOE believes the confusion 

arose due to the way in which the 

industry refers to the ASHRAE 72 

method of test. As mentioned above, 

part load technologies allow a piece of 

commercial refrigeration equipment to 

respond to changes in refrigeration load 

that occur due to changes in ambient 

conditions or internal loads on the case. 

The ASHRAE 72 method of test 

prescribes a single fixed set of ambient 

conditions, so no major changes in 

refrigeration load are intentionally 

introduced through changes in ambient 

condition. Thus, the ASHRAE 72 

method of test is often referred to as 

steady-state. However, as stated in the 

November 2010 test procedure NOPR, 

commercial refrigeration equipment 

tested using ASHRAE 72 experiences 

variation in refrigeration load due to 

door openings, drawing of the night 

curtain, and inherent compressor 

cycling that occur during the test. 77 FR 

10308 (Feb. 21, 2012). Realizing this, 

DOE has revised its position and agrees 

with ASAP, NRDC, and NEEA that the 

nature of the ASHRAE 72 method of 

test, while conducted at fixed ambient 

operating conditions, is not strictly 

thermodynamically steady-state, as 

evidenced by compressor cycling and 

minor fluctuations in internal 

temperatures throughout the duration of 

the test. DOE also agrees with these 

stakeholders that the presence of 

compressor cycling demonstrates that 

commercial refrigeration units generally 

do not operate at full load during the 

test. From its discussions with 

manufacturers, DOE understands that 

most equipment can operate at 

temperatures lower than the 

equipment’s given DOE rating 

temperature, and thus performance at 

the test procedure conditions would 

likely not constitute full-capacity 

operation. 

In response to the stakeholder 

suggestions that DOE include specific 

part-load technologies in the NOPR 

analyses, DOE investigated the 

technologies referenced by these 

commenters. DOE researched the state 

of part-load and variable-capacity 

technologies such as fan motor 

controllers and variable-speed 

compressors through available 

manufacturer and component supplier 

literature, as well as through its 

discussions with manufacturers during 

interviews. DOE found that that many of 

these part-load technologies had not yet 

been developed for the commercial 

refrigeration equipment industry to the 

extent that they could be adopted by 

manufacturers in the near future. For 

example, while variable-speed 

compressors are indeed, as some 

stakeholders mentioned, prevalent in 

residential refrigeration applications, 

their availability for commercial 

application is very limited and is not 

applicable to many equipment types. 

Some technologies were also removed 

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55914 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

36LBNL’s WINDOW 5 software is a program 

designed for modeling the performance of windows, 

doors, and other fenestration devices. 

for functional purposes or because of 

concerns over food safety performance. 

Others were removed from 

consideration because they would not 

have measurable impacts under the test 

procedure. Therefore, while DOE did 

not screen out or preclude the analysis 

of part-load technologies, DOE did not 

utilize any of these technologies 

explicitly as design options in its 

engineering analysis. For further 

discussion of DOE’s examination of 

these technologies, see chapters 3 

through 5 of the NOPR TSD. 

DOE reiterates that the design options 

that it has chosen for this particular 

analysis, and the design paths used in 

modeling the proposed standard levels, 

do not constitute a prescriptive design 

requirement. In other words, DOE does 

not claim that the combinations of 

design options presented in the 

engineering analysis form unique paths 

for achieving higher energy efficiency. 

Manufacturers are free to utilize any 

design features available to them in 

order to develop compliant units, 

provided that those units meet all the 

requirements for testing under the DOE 

test procedure and other applicable 

regulations. Thus, should manufacturers 

develop part-load features that produce 

quantifiable reductions in energy 

consumption under the DOE test 

procedure, they are not prohibited from 

taking advantage of those features, even 

if particular technologies were not 

modeled in the analysis for this 

rulemaking. 

b. Technologies Relevant Only to 

Equipment With Doors 

In chapter 3 of the preliminary 

analysis TSD, DOE mentioned three 

technologies that could apply only to 

doored equipment: anti-fog films, antisweat heater controllers, and highperformance doors. Not all of these 

technologies were considered in the 

preliminary engineering analysis, as 

some were screened out or removed 

from consideration on technical 

grounds. The following sections discuss 

stakeholder comments regarding these 

technologies. 

Anti-Fog Films 

Zero Zone stated that research by 

Southern California Edison indicated 

that anti-fog films do not allow for the 

reduction of anti-sweat heat. (Zero 

Zone, Public Meeting Transcript, No. 31 

at p. 47) 

DOE reviewed the available literature 

regarding anti-fog films, and 

understands that these films alone do 

not necessarily eliminate the need for 

anti-sweat heaters under many 

conditions, including high ambient 

humidity, as they cannot prevent 

condensation from forming on the 

outside of the case. This shortcoming of 

anti-fog films can present a major 

problem for customers. Discussions 

with manufacturers have led DOE to 

believe that alternative improvements in 

door construction provide the capacity 

to reduce anti-sweat heat without the 

drawbacks mentioned here. Because of 

these issues, DOE did not consider antifog films on transparent doors as a 

design option. For further discussion of 

this subject, see chapter 5 of the NOPR 

TSD. 

Anti-Sweat Heater Controllers 

During the April 2011 preliminary 

analysis public meeting, Zero Zone 

stated that anti-sweat controllers have 

the potential to save energy because the 

controllers would allow heaters to be 

designed with extra capacity for more 

humid climates. (Zero Zone, Public 

Meeting Transcript, No. 31 at p. 53) 

NEEA, ASAP, and NRDC all suggested 

DOE investigate Zero Zone’s comment 

further, while the CA IOUs noted it may 

be possible to include a calculation 

method to address the benefit of these 

controllers. (NEEA, No. 36 at p. 3; ASAP 

and NRDC, No. 34 at p. 2; CA IOUs, No. 

42 at pp. 2–4) 

DOE raised the subject of anti-sweat 

heater controllers during its 

manufacturer interviews for this NOPR. 

Several manufacturers agreed that, 

within the context of the test procedure, 

anti-sweat heater controllers will 

effectively keep the power to anti-sweat 

heaters at the levels necessary for the 

test conditions. While anti-sweat 

controllers could also modulate the antisweat power further in the field to 

account for more or less extreme 

ambient conditions, a system equipped 

with anti-sweat heater controllers will 

not likely exhibit significantly different 

performance at test procedure 

conditions than will a unit with antisweat heaters tuned for constant 75 °F, 

55 percent relative humidity conditions. 

Therefore, DOE did not consider antisweat heater controllers in the 

engineering analysis, as modeling these 

devices within the context of the test 

procedure would not yield appreciable 

energy savings over anti-sweat heaters 

that are properly sized for the test 

procedure ambient conditions. DOE 

notes that manufacturers that produce 

cases with anti-sweat heater controls for 

higher temperature and humidity 

environments may use anti-sweat heater 

controllers in the test procedure, 

however. 

High-Performance Doors 

Zero Zone also commented on highperformance doors, stating that when 

they were incentivized in California, 

retail stores used more energy because 

they had to set their air conditioning to 

a lower set point to avoid condensation. 

Zero Zone added that high-performance 

doors also sweat under conditions that 

are less favorable than the ASHRAE test 

conditions, and that DOE should 

evaluate technologies intended to be 

used for performance under actual 

conditions, not just under ASHRAE 72 

test procedure conditions. Zero Zone 

stated that DOE should remove highperformance doors from the analysis. 

(Zero Zone, No. 37 at pp. 1 and 3) 

During the NOPR engineering 

analysis, DOE reviewed its data for all 

design options, including highperformance doors. Transparent door 

performance was discussed at 

manufacturer interviews during the 

preliminary analysis and NOPR stages 

of the rulemaking, and the glass door 

designs considered in the engineering 

analysis are based on door models 

currently available on the market. The 

performance of these door designs was 

analyzed using Lawrence Berkeley 

National Laboratory’s (LBNL’s) 

WINDOW 5 software 36 in conjunction 

with the analyses for DOE’s ongoing 

energy conservation standards rule for 

walk-in coolers and freezers, an 

equipment type in which the same 

models of glass display doors are often 

employed. While it is true that extreme 

conditions could adversely impact glass 

door performance, as mentioned by Zero 

Zone, the performance of the equipment 

for this analysis was based on the 

standardized ASHRAE 72 test 

conditions of 75°F and 55 percent 

relative humidity, ambient conditions 

that have been accepted by industry, the 

ASHRAE working group, and DOE as 

being generally representative of the 

environments typically encountered by 

commercial refrigeration equipment. 

DOE believes that high-performance 

doors, such as those offered on the 

market by several door manufacturers 

and analyzed in this rulemaking, have 

the potential to save significant amounts 

of energy for transparent-door cases. 

Based on its market research and 

discussions with manufacturers, DOE 

has concluded that high-performance 

doors meet all the criteria for inclusion 

in its analysis, and has thus considered 

them as a design option in the 

engineering analysis. 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55915 

37Southern California Edison, Refrigeration and 

Technology and Test Center, Energy Efficiency 

Division. Effects of the Low Emissivity Shields on 

Performance and Power Use of a Refrigerated 

Display Case. August 1997. Irwindale, CA. 

www.econofrost.com/acrobat/sce_report_long.pdf. 

38Faramarzi, R. and Woodworth-Szieper, M. 

Effects of Low-E Shields on the Performance and 

Power Use of a Refrigerated Display Case. ASHRAE 

Transactions. 1999. 105(1). 

39Portland Energy Conservation, Inc. Query of 

Database of GrocerySmart Data. Portland, OR. 

Received October 18, 2011. Last viewed July 23, 

2011. 

c. Technologies Applicable Only to 

Equipment Without Doors 

In chapter 3 of the preliminary 

analysis TSD, DOE mentioned two 

technologies, air-curtain design and 

night curtains, that could potentially be 

used to improve the efficiency of 

commercial refrigeration equipment 

without doors. Air curtain design was 

not considered in the preliminary 

engineering analysis, as it was screened 

out and removed from consideration 

because, according to the information 

available to DOE, advanced air curtain 

designs are still in research and 

development stages and are not yet 

available for use in the manufacture of 

commercial refrigeration equipment. 

The following sections address 

stakeholder comments regarding 

technologies applicable to equipment 

without doors. 

Night Curtains 

At the April 2011 preliminary 

analysis public meeting and in written 

comments, DOE received numerous 

comments from stakeholders regarding 

night curtains and their use in 

equipment without doors. CA IOUs 

agreed with DOE’s decision to include 

night curtains in the analysis, but 

pointed out that such energy savings are 

only significant if the night curtains are 

properly deployed, and encouraged 

DOE to review and update its 

assumptions. (CA IOUs, No. 42 at pp. 4– 

5) Zero Zone also commented on the 

potential of night curtains to conserve 

energy, and stated that this technology 

should not be included in this 

rulemaking because there is no 

reasonable way to estimate how it will 

actually be used and because it cannot 

be used in 24-hour stores. (Zero Zone, 

No. 37 at p. 4) Southern Store Fixtures 

agreed with respect to these operational 

challenges, and also pointed out that 

CEC did not consider night curtains due 

to long PBPs, labor costs, and questions 

about the reliability of energy savings. 

(Southern Store Fixtures, No. 38 at p. 1; 

Southern Store Fixtures, Public Meeting 

Transcript, No. 31 at p. 42) 

Southern Store Fixtures expressed 

concern that the use of night curtains on 

open cases could create design and 

operational challenges, potentially 

resulting in an inefficient case with 

product temperature issues and the 

potential for noncompliance with food 

safety regulations. (Southern Store 

Fixtures, No. 38 at p. 1) Southern Store 

Fixtures also noted that major design 

changes will be needed for cases with 

night curtains. Specifically, the 

evaporator coil and expansion devices 

currently used in open cases will be 

significantly oversized for use with 

night curtains; the number of fans 

needed and airflow characteristics will 

change; and lighting and temperature 

controls will need to be altered in 

converting a standard open case to 

accommodate night curtains. Cases with 

night curtains would also, Southern 

Store Fixtures stated, require 

duplication of controls to be able to 

operate with and without the curtains. 

(Southern Store Fixtures, No. 38 at p. 1) 

In summary, Southern Store Fixtures 

asserted that these issues would require 

a redesign of an open case for 

compatibility with night curtains and 

that, when considering the potential 

energy savings associated with the use 

of a night curtain, DOE should include 

the cost of performing such a redesign 

in its analysis. (Southern Store Fixtures, 

No. 38 at p. 1) 

During the public meeting, Zero Zone 

observed that doored and open cases 

have a similar energy profile, and 

therefore, night curtains could be used 

as a design option for doored equipment 

as well. (Zero Zone, Public Meeting 

Transcript, No. 31 at pp. 40–41) 

DOE acknowledges that the use of 

night curtains may not be consistent in 

the field. However, DOE’s test 

procedures and energy conservation 

standards cannot control for equipment 

application and actual end use. Night 

curtains are an available technology for 

reducing energy consumption in 

commercial refrigeration equipment and 

DOE believes that including night 

curtains in its test procedure and energy 

conservation standards would allow 

manufacturers to take credit for the 

energy savings associated with this 

technology. In the 2012 test procedure 

final rule, DOE assumed 6 hours as the 

time period that night curtains would be 

implemented. 77 FR 10310 (Feb. 21, 

2012). DOE believes that 6 hours 

conservatively represents the amount of 

time a night curtain would be drawn in 

a typical, non-24-hour store, when 

accounting for stocking and the fact that 

not all night curtains can be deployed 

at once. In addition, 6 hours is 

consistent with field data and studies 

that DOE has identified.37 38 39

With respect to Zero Zone’s concern 

regarding the use of night curtains in 24- 

hour stores, DOE is not mandating the 

use of night curtains, but is simply 

accounting for them as one available 

energy efficiency technology. In 

addition, DOE notes that night curtains 

may be used in 24-hour stores during 

periods of low customer traffic. DOE 

further acknowledges that accounting 

for the energy savings associated with 

night curtains on open cases would, by 

definition, result in the setting of a 

more-stringent standard for open cases. 

DOE believes such a standard may 

encourage migration to the use of moreefficient doored cases for those cases 

used in contexts where the distinct 

utility of an open case is not required, 

while preserving the availability of open 

cases. 

Regarding Southern Store Fixtures’ 

comment about the cost-effectiveness of 

night curtains, DOE points out that the 

LCC analysis and NIA conducted by 

DOE are specifically aimed at assessing 

the cost-effectiveness of all the design 

options used to achieve greater energy 

efficiency. 

DOE acknowledges Southern Store 

Fixtures’ concerns regarding the costs 

associated with the need for equipment 

redesign due to presence of night 

curtains. After discussions with 

multiple manufacturers, DOE did not 

incorporate additional material costs 

and redesign costs associated with a 

secondary set of controls because most 

manufacturers do not implement this 

design according to information that 

DOE has obtained through market 

research and manufacturer interviews. 

DOE recognizes that individual 

manufacturers may select different 

design options and incur different 

conversion costs than those modeled by 

DOE. However, DOE attempts in its 

analysis to represent the choices most 

likely to be selected by the industry. 

Southern Store Fixtures also 

commented that use of night curtains on 

open cases could create design and 

operational challenges that would result 

in inefficient cases with product 

temperature issues and the potential for 

noncompliance with food safety 

regulations. (Southern Store Fixtures, 

No. 38 at p. 1) DOE acknowledges that, 

as with any new technology, 

implementation of night curtains on 

open cases may require slight 

adjustments to equipment design to 

ensure the case operates efficiently and 

effectively. During manufacturer 

interviews for the MIA, data was 

collected by manufacturer (under 

confidentiality agreements) and, in 

aggregate, DOE’s resulting conclusion 

was that night curtains would not result 

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55916 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

40Strip curtains consist of a series of strips of 

transparent, flexible material (usually plastic) that 

hang down and cover the opening of a case without 

doors. This creates a physical barrier that reduces 

ambient air infiltration into the case while still 

allowing customers and employees to access the 

product contained inside. 

41A liquid suction heat exchanger is a device 

intended to further cool the flow of liquid 

refrigerant entering the expansion valve from the 

condenser using the flow of gaseous refrigerant 

leaving the evaporator. The exchanger provides subcooling for the entering liquid by super-heating the 

exiting suction vapor. Hotter suction vapor is less 

susceptible to heat gains in the return piping to the 

compressor. 

in the challenges discussed by Southern 

Store Fixtures. The prevalence of night 

curtains as retrofit options supports this 

conclusion as well. Thus, DOE believes 

that modifications can be made that 

allow open cases to be used with night 

curtains to achieve energy savings and 

improve temperature control, and has 

accounted for the cost to achieve these 

modifications in the MIA. 

In response to Zero Zone’s comment 

regarding the use of night curtains on 

doored cases, it is DOE’s understanding 

that night curtains can be applied to all 

types of open cases (i.e., vertical, 

semivertical, and horizontal), and that 

night curtains are most effective and 

commonly used on open cases rather 

than doored cases. DOE was not able to 

identify any public data regarding the 

use or potential for energy savings of 

night curtains on doored cases. Lacking 

a sound technical basis for including 

night curtains on doored cases in its 

analysis, DOE is hesitant to expand the 

definition of night curtain, as 

established in the 2012 test procedure 

final rule (77 FR 10296 (Feb. 21, 2012)), 

to explicitly include doored cases at this 

time. On January 6, 2011, DOE held a 

public meeting to discuss amendments 

to the DOE test procedure for 

commercial refrigeration equipment 

proposed in a NOPR DOE published on 

November 24, 2010. 75 FR 71596. At 

that January 2011 test procedure NOPR 

public meeting, True stated that it had 

seen night curtains implemented on 

doored cases and that this does save a 

minimal amount of energy, but that 

these minor savings did not justify 

consideration of night curtains in the 

DOE test procedure. (Docket No. EERE– 

BT–2010–TP–0034, True, Public 

Meeting Transcript, No. 19 at pp. 146– 

47) DOE agrees with True and believes 

that use of night curtains on doored 

cases will not significantly impact the 

daily energy consumption of the display 

case. Therefore, DOE did not 

incorporate the use of night curtains on 

cases with doors in the 2012 test 

procedure final rule. 77 FR 10297 (Feb. 

21, 2012). Because night curtains on 

doored cases cannot be accounted for in 

the DOE test procedure, they are not 

included as a design option in the 

energy conservation standards analyses. 

Strip Curtains 

While not providing specific 

comments on the included technologies, 

Earthjustice questioned DOE’s grounds 

for not considering strip curtains 40 in 

the analysis, stating that the criteria for 

considering design options in the 

analysis should be whether a technology 

is technologically feasible, economically 

justified, and reduces energy 

consumption, not whether it is currently 

used by manufacturers. (Earthjustice, 

Public Meeting Transcript, No. 31 at p. 

36) Earthjustice stated that DOE should 

include strip curtains as a design option 

because these devices can be installed 

by equipment purchasers, and this 

illustrates the ease and practicality of 

their use. (Earthjustice, No. 35 at p. 4) 

True stated that manufacturers do not 

install strip curtains at the factory 

because customers can often receive a 

secondary rebate for installing strip 

curtains at the point of end use. (True, 

Public Meeting Transcript, No. 31 at p. 

40) 

While DOE understands that some 

end users purchase and install strip 

curtains on some open refrigerated 

display cases, DOE has no information 

as to the prevalence of use of these 

accessories. DOE has concerns that 

incorporating strip curtains into its 

analyses, and thus potentially into an 

amended standard, could impose 

restrictions similar to requiring the use 

of doors. Doing so would compromise 

one of the major utility factors of an 

open case. Namely, manufacturers have 

reported to DOE that the major utility of 

an open case is enhanced product 

visibility to the customer and easy 

access to product. Installation of a strip 

curtain would, by definition, inhibit 

both of these functions. Moreover, on 

technical grounds, strip curtains could 

potentially interfere with the operation 

of the existing air curtain in cases in 

which the air curtain is less than 

vertical. Thus, in response to the 

comment by Earthjustice, the latter issue 

described above is one of technical 

feasibility, while the former concern, 

reduction of utility, could make the 

consideration of strip curtains 

inconsistent with the requirements of 

EPCA. (42 U.S.C. 6295(o)(4) and 

6316(e)(1)) While some end users may 

decide to install strip curtains on their 

own accord for their specific 

applications, DOE does not intend to 

explore their use as applicable to entire 

equipment classes. 

d. Self-Contained Equipment 

Technologies 

In chapter 3 of the preliminary 

analysis, DOE listed several 

technologies that are applicable only to 

the self-contained equipment classes. 

One of the technologies mentioned in 

the preliminary market and technology 

assessment, but not considered for 

analysis as a design option, was liquid 

suction heat exchangers (LSHXs).41

NEEA commented that it did not see a 

reason for excluding LSHXs from the 

analysis for systems in which they are 

likely to be used, and that DOE should 

include them to the extent that the test 

procedure can be structured to capture 

their savings. (NEEA, No. 36 at p. 3) 

Southern Store Fixtures suggested that 

DOE investigate why CEC decided not 

to consider LSHXs because of potential 

refrigerant leaks. (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at p. 44) 

During the NOPR stage of this 

rulemaking, DOE further investigated 

the subject of LSHXs as applicable to 

commercial refrigeration equipment. 

The information obtained by DOE 

indicated that LSHX performance 

depends on the specific design of a 

given system, as well as other factors, 

including refrigerant type, operating 

temperature, and ambient conditions. 

These factors all combine to determine 

whether an LSHX will reduce the 

energy consumption of a given system; 

in some systems, the use of an LSHX 

will actually increase energy 

consumption by introducing a greater 

pressure drop within the refrigeration 

circuit. DOE also heard comments from 

parties during manufacturer interviews 

and conferences concerning potential 

reliability and leakage issues such as 

those mentioned by Southern Store 

Fixtures. Because LSHXs may not 

improve efficiency in all systems and 

may experience reliability issues, DOE 

did not include LSHXs in its analysis. 

For more discussion of LSHXs, see 

chapter 3 of the NOPR TSD. 

D. Screening Analysis 

DOE uses four screening criteria to 

determine which design options are 

suitable for further consideration in a 

standards rulemaking. Namely, design 

options will be removed from 

consideration if they are not 

technologically feasible; are not 

practicable to manufacture, install, or 

service; have adverse impacts on 

product utility or product availability; 

or have adverse impacts on health or 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55917 

safety. 10 CFR part 430, subpart C, 

appendix A, sections (4)(a)(4) and (5)(b) 

In written comments submitted 

following the April 2011 preliminary 

analysis public meeting, Zero Zone 

stated that DOE was correct in screening 

out a number of technologies, as any 

technology needs to be thoroughly 

researched and proven reliable before 

inclusion for consideration in a 

standards rulemaking. Zero Zone cited 

demand defrost as an example of an 

unproven technology that, if its use 

were encouraged by an energy 

conservation standard, would produce 

poor results in the field. (Zero Zone, No. 

37 at p. 1) DOE agrees with Zero Zone’s 

comment, as it is compelled by the 

screening criteria to ensure that any 

technology considered is feasible to 

implement; practicable to manufacture, 

install, and service; does not adversely 

impact utility or availability; and would 

not lead to adverse impacts on health or 

safety. 

Based on all available information, 

DOE has concluded that: (1) All of the 

efficiency levels discussed in today’s 

notice are technologically feasible; (2) 

equipment at these efficiency levels 

could be manufactured, installed, and 

serviced on a scale needed to serve the 

relevant markets; (3) these efficiency 

levels would not force manufacturers to 

use technologies that would adversely 

affect product utility or availability; and 

(4) these efficiency levels would not 

adversely affect consumer health or 

safety. Thus, the efficiency levels that 

DOE analyzed and discusses in this 

notice are all achievable through 

technology options that were ‘‘screened 

in’’ during the screening analysis. 

E. Engineering Analysis 

The engineering analysis determines 

the manufacturing costs of achieving 

increased efficiency or decreased energy 

consumption. DOE historically has used 

the following three methodologies to 

generate the manufacturing costs 

needed for its engineering analyses: (1) 

The design-option approach, which 

provides the incremental costs of adding 

to a baseline model design options that 

will improve its efficiency; (2) the 

efficiency-level approach, which 

provides the relative costs of achieving 

increases in energy efficiency levels, 

without regard to the particular design 

options used to achieve such increases; 

and (3) the cost-assessment (or reverse 

engineering) approach, which provides 

‘‘bottom-up’’ manufacturing cost 

assessments for achieving various levels 

of increased efficiency, based on 

detailed data as to costs for parts and 

material, labor, shipping/packaging, and 

investment for models that operate at 

particular efficiency levels. 

As discussed in the Framework 

document and preliminary analysis, 

DOE conducted the engineering 

analyses for this rulemaking using a 

design-option approach for commercial 

refrigeration equipment. The decision to 

use this approach was made due to 

several factors, including the wide 

variety of equipment analyzed, the lack 

of numerous levels of equipment 

efficiency currently available in the 

market, and the prevalence of relatively 

easily implementable energy-saving 

technologies applicable to this 

equipment. More specifically, DOE 

identified design options for analysis 

and used a combination of industry 

research and teardown-based cost 

modeling to determine manufacturing 

costs, then employed numerical 

modeling to determine the energy 

consumption for each combination of 

design options employed in increased 

equipment efficiency. DOE selected a 

set of 24 high-shipment classes, referred 

to as ‘‘primary’’ classes, to analyze 

directly in the engineering analysis. 

Additional details of the engineering 

analysis are available in chapter 5 of the 

NOPR TSD. 

1. Representative Equipment for 

Analysis 

a. Representative Unit Selection 

In performing its engineering analysis, 

DOE selected representative units for 

each primary equipment class to serve 

as analysis points in the development of 

cost-efficiency curves. In selecting these 

units, DOE researched the offerings of 

major manufacturers to select models 

that were generally representative of the 

typical offerings produced within the 

given equipment class. Unit sizes, 

configurations, and features were based 

on high-shipment-volume designs 

prevalent in the market. Using this data, 

a set of specifications was developed 

defining a representative unit for each 

primary equipment class. These 

specifications include geometric 

dimensions, quantities of components 

(such as fans), operating temperatures, 

and other case features that are 

necessary to calculate energy 

consumption. Modifications to the units 

modeled were made as needed to ensure 

that those units were representative of 

typical models from industry, rather 

than a specific unit offered by one 

manufacturer. This process created a 

representative unit for each equipment 

class with typical characteristics for 

physical parameters (e.g., volume, 

TDA), and minimum performance of 

energy-consuming components (e.g., 

fans, lighting). 

In its written comment following the 

preliminary analysis, Traulsen stated 

that DOE’s choice of representative unit 

sizes for self-contained commercial 

refrigeration equipment with doors was 

generally suitable, but added that factors 

such as cabinet sizes, door quantities, 

and door types contribute significantly 

to overall equipment performance. 

Traulsen cautioned that a failure to 

factor these variables into the analysis 

could lead to unintended obsolescence 

of models with these features. (Traulsen, 

No. 45 at p. 2) DOE agrees with Traulsen 

that there are numerous design factors 

that can influence the performance of 

commercial refrigeration equipment. In 

selecting representative units for 

analysis, DOE sought unit sizes and 

configurations that generally 

represented the most commonly sold 

equipment on the market. The geometric 

features DOE considered included unit 

volume, height, length and width, 

number of doors, and door orientation. 

DOE avoided considering any features 

or unit configurations that could skew 

the analysis away from sound 

representation of the majority of units 

produced within a chosen equipment 

class. As a result, DOE believes that its 

analysis and resulting proposed 

standards are applicable and extensible 

to the range of covered equipment in 

each class. In response to Traulsen’s 

concern, DOE wishes to point out that 

it is compelled by statute to avoid the 

elimination of features or utility 

currently present in equipment on the 

market, and that the obsolescence of 

specific unique equipment types would 

be included in this provision. (42 U.S.C. 

6295(o)(2)(B)(IV), 6295(o)(4), and 

6316(e)(1)) 

b. Baseline Models 

DOE created a set of baseline design 

specifications for each equipment class 

analyzed directly in the engineering 

model. Each set of representative 

baseline unit specifications, when 

combined with the lowest technological 

level of each design option applicable to 

the given equipment class, defines the 

energy consumption and cost of the 

lowest efficiency equipment analyzed 

for that class. DOE established baseline 

specifications by reviewing available 

manufacturer data for equipment 

manufactured at the time of the 

analysis, and by selecting components 

and design features that were 

representative of the most basic models 

being manufactured at the time of the 

analysis. Chapter 5 of the NOPR TSD 

sets forth the specifications that DOE 

chose for each equipment class and 

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55918 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

42SNAP is EPA’s program to evaluate and 

regulate substitutes for the ozone-depleting 

chemicals that are being phased out under the 

stratospheric ozone protection provisions of the 

Clean Air Act. For more information, please see: 

www.epa.gov/ozone/snap/. 

43 In May 2010, the Natural Resources Defense 

Council petitioned the EPA to remove HFC–134a 

from the list of acceptable substitutes under the 

SNAP program. In February 2011, the EPA 

concluded that NRDC’s petition was complete with 

respect to the end use of motor vehicle air 

conditioners, and expressed its intent to begin a 

rulemaking on the topic. For more information, 

please see: www.epa.gov/ozone/downloads/NRDC_

petition_responses.pdf. 

discusses baseline models in greater 

detail. 

One complexity involved in 

developing an engineering baseline was 

due to the timing of the analysis, which 

was conducted in 2010 and 2011. 

Because the analysis was performed in 

proximity to the January 2009 final rule 

compliance date of January 1, 2012 (74 

FR 1092 (Jan. 9, 2009)), and the 

compliance date for the standards 

established in EPCA of January 1, 2010 

(42 U.S.C. 6313(c)(2)–(3)), it was 

difficult for DOE to establish a market 

baseline reflecting compliance with any 

specific set of standards. In particular, 

the equipment covered by the January 

2009 final rule was not required to 

comply with amended standards until 

after the preliminary and NOPR 

analyses had been performed. As a 

result, DOE retained the engineering 

baseline and associated technologies 

used in its January 2009 final rule 

engineering analysis and expanded 

them to accommodate the new 

equipment classes covered by the 

standards initially established by EPCA. 

(42 U.S.C. 6313(c)(2)–(3)) DOE then 

added technologies to this baseline to 

develop its cost-efficiency curves. As a 

result, some of the engineering results 

represent units that are below the 

standard levels for equipment currently 

on the market and subject to the DOE’s 

existing standards. 10 CFR 431.66 

However, in its LCC and other 

downstream analyses, DOE accounted 

for this fact by utilizing a standards 

baseline as the minimum efficiency 

level examined, thereby truncating the 

engineering design option levels so that 

the lowest efficiency point analyzed 

corresponded to the current standard 

level with which that particular piece of 

equipment would have to comply. The 

exact procedure is described in section 

IV.H.1, and additional details are 

provided in chapter 8 of NOPR TSD. 

2. Design Options 

After conducting the screening 

analysis and removing from 

consideration technologies that did not 

warrant inclusion on technical grounds, 

DOE included the remaining 

technologies as design options in the 

energy consumption model for its NOPR 

engineering analysis: 

• Higher efficiency lighting and 

occupancy sensors for VOP, SVO, and 

SOC equipment families (horizontal 

fixtures); 

• Higher efficiency lighting and 

occupancy sensors for VCT and PD 

equipment families (vertical fixtures); 

• Improved evaporator coil design; 

• Higher efficiency evaporator fan 

motors; 

• Improved case insulation; 

• Improved doors for VCT equipment 

family, low temperature and ice-cream 

temperature (hinged); 

• Improved doors for VCT and PD 

equipment families, medium 

temperature (hinged); 

• Improved doors for HCT equipment 

family, low temperature and ice-cream 

temperature (sliding); 

• Improved doors for HCT equipment 

family, medium temperature (sliding); 

• Improved doors for SOC equipment 

family, medium temperature (sliding); 

• Improved condenser coil design (for 

self-contained equipment only); 

• Higher efficiency condenser fan 

motors (for self-contained equipment 

only); 

• Higher efficiency compressors (for 

self-contained equipment only); and 

• Night curtains (equipment without 

doors only). 

3. Refrigerants 

For the preliminary analysis, DOE 

considered two refrigerants, 

hydrofluorocarbons (HFCs) R–134a and 

R–404a, because these are the industrystandard choices for use in the vast 

majority of commercial refrigeration 

equipment covered by this rulemaking. 

This selection was consistent with the 

modeling performed in the January 2009 

final rule, which was based on industry 

research and stakeholder feedback at 

that time. After the publication of the 

preliminary analysis, DOE received 

several comments on potential future 

issues relating to refrigerants for this 

equipment. Emerson noted that possible 

future EPA actions could prohibit 

certain refrigerants, which would 

reduce equipment efficiency, and 

suggested that if EPA is going to use 

total emissions as the basis for 

Significant New Alternatives Policy 

(SNAP) 42 regulations, then energy 

efficiency must also be considered by 

the EPA when making those 

determinations. However, Emerson 

conceded that the discussion of 

potential action by EPA was speculative 

at this point. (Emerson, Public Meeting 

Transcript, No. 31 at pp. 48, 157–58) 

Similarly, True observed that EPA 

proposals could result in the banning of 

R134a and R404a, and that while there 

are replacements for R134a, it would be 

difficult to replace R404a. (True, Public 

Meeting Transcript, No. 31 at p. 154) 

However, AHRI remarked that it 

believed that EPA was only considering 

NRDC’s petition for removal of R134a 43

from the list of acceptable substitutes 

under the SNAP program in the context 

of automotive air-conditioning 

applications, and that EPA is not 

currently seeking to restrict the use of 

R134a in the commercial refrigeration 

industry. (AHRI, Public Meeting 

Transcript, No. 31 at pp. 155–56) True 

also pointed out that the removal of 

HFCs from remote condensing 

equipment would likely necessitate a 

total system design and a shift toward 

cascade equipment. (True, Public 

Meeting Transcript, No. 31 at pp. 152– 

53) However, True stated that 90 

percent of its market is for selfcontained equipment, and that 85 

percent of its products could be 

converted to alternative refrigerants 

with minimal cost increases and 

efficiency losses. (True, Public Meeting 

Transcript, No. 31 at p. 155) 

Commenters also provided 

information regarding the performance 

and regulatory status of specific 

alternative refrigerants. True noted that 

it had tested a large amount of isobutene 

and propane-driven equipment, which 

exhibited an efficiency gain of 7 to 11 

percent in smaller equipment. True 

stated that the use of these alternative 

refrigerants was not overly cost 

burdensome because of the recent 

increase in the cost of HFC refrigerants, 

but that they could not be used on larger 

equipment because of SNAP regulations 

involving refrigerant charge levels. 

(True, Public Meeting Transcript, No. 31 

at pp. 151–52, 155) However, True 

added, the need to address flammability 

concerns in the interest of safety could 

result in significant cost increases for 

certain components. True further stated 

that the EPA SNAP program’s 

discussion of allowing 150-gram charges 

of propane as a refrigerant in selfcontained commercial applications 

would not be a factor that could prevent 

use of these refrigerants, and that 

propane is not currently excluded from 

use by most building codes. (True, 

Public Meeting Transcript, No. 31 at p. 

152, 159) Emerson asked whether 

building codes could be changed to 

allow for numerous 150-gram charges 

within a supermarket. (Emerson, Public 

Meeting Transcript, No. 31 at p. 158) 

Coca-Cola mentioned that it had 

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44A transcritical system is one in which the 

refrigerant changes phase during the course of the 

refrigeration cycle. 

45The Montreal Protocol on Substances that 

Deplete the Ozone Layer is an international treaty 

that was designed to protect the ozone layer by 

phasing out many ozone depleting substances. 

46Colloquially known as the Waxman-Markey 

Bill, this legislation (H.R. 2454) would have 

established an emissions cap and trade system in 

the United States. It was passed by the House of 

Representatives in June 2009, but was tabled by the 

Senate. For more information, please see http://

thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.2454:. 

47The reason why no HZO units were torn down 

was that the HZO family is the least complex of the 

equipment classes with respect to its construction. 

DOE felt that there was no additional data which 

could be gained from teardown of this equipment 

Continued 

selected transcritical 44 CO2 as an 

alternative for applications in the 

United States, but could not provide 

efficiency data. (Coca-Cola, Public 

Meeting Transcript, No. 31 at p. 157) 

NEEA noted that Daikin Industries, Ltd., 

the world’s largest central air 

conditioner manufacturer, was 

progressing toward using only nonhalogen refrigerants in its products. 

(NEEA, Public Meeting Transcript, No. 

31 at p. 161) AHRI encouraged DOE to 

not assume constant refrigerant prices 

over the analysis period it considers 

because legislation has been introduced 

that could result in the unavailability of 

HFC refrigerants and lead to significant 

price increases. (AHRI, No. 43 at p. 3) 

In its written comments, NEEA 

provided an alternative viewpoint, 

stating that it did not believe refrigerant 

issues are significant for this 

rulemaking. This is because, according 

to NEEA, refrigerant issues (referring to 

past phase-outs of CFCs, HCFCs, and 

other refrigerant types used in the past) 

have been known for almost 20 years. 

Historically, these issues have included 

the phase-outs of chlorofluorocarbons 

(CFCs) and HFCs in accordance with the 

Montreal Protocol.45 Manufacturers 

have contended with these issues over 

time, and understand the design 

changes needed to adapt to new 

refrigerants. NEEA added that shifts to 

different refrigerants will have to be 

made regardless of the course that any 

one rulemaking takes. Further, NEEA 

pointed to the statements by several 

manufacturers that a reduction of 

system efficiency due to 

implementation of new refrigerants 

should not be assumed. NEEA agreed 

with these manufacturers and suggested 

that it is likely that these parties will 

resolve refrigerant issues in a way that 

will not compromise efficiency and that 

will not be cost-prohibitive. In 

conclusion, NEEA stated that refrigerant 

issues are not new and that the outcome 

of the standards-setting process is not 

likely to affect how manufacturers 

resolve these issues. (NEEA, No. 36 at 

pp. 6–7) 

While future regulations may cap or 

eliminate the use of the currently 

prevalent refrigerants, and proposed 

legislation, such as the American Clean 

Energy and Security Act of 2009,46 has 

included HFC phase-downs, DOE does 

not speculate on the impact of proposed 

legislation in current rulemaking 

analyses. Additionally, as mentioned 

above, many low global warming 

potential (GWP) refrigerants, such as 

CO2 and propane, are being introduced 

to the market, and use of these new 

refrigerants may influence the cost and 

efficiency of equipment. However, DOE 

is not in a position to predict future 

trends of the refrigerants market or the 

performance of alternative refrigerants, 

and any analysis conducted at this time 

would be speculative. Consequently, 

DOE is not considering the potential 

effects of alternative refrigerants or 

current or future legislation on 

refrigerants within the scope of this 

rulemaking. Instead, DOE will continue 

to model equipment as currently 

designed for the U.S. market, utilizing 

the most common HFC refrigerants, R– 

134A and R–404A, accepted and 

broadly used by the industry. To the 

extent that there has been experience 

within the industry, domestically or 

internationally, with the use of 

alternative low-GWP refrigerants, DOE 

requests any available information, 

specifically cost and efficiency 

information relating to use of alternative 

refrigerants. DOE acknowledges that 

there are government-wide efforts to 

reduce emissions of HFCs, and such 

actions are being pursued both through 

international diplomacy as well as 

domestic actions. DOE, in concert with 

other relevant agencies, will continue to 

work with industry and other 

stakeholders to identify safer and more 

sustainable alternatives to HFCs while 

evaluating energy efficiency standards 

for this equipment. 

4. Cost Assessment Methodology 

During the preliminary analysis, DOE 

developed costs for the core case 

structure of the representative units it 

modeled, based on cost estimates 

performed in the analysis for the 

January 2009 final rule. For more 

information, see chapter 5 of the 

preliminary analysis TSD, pp. 5–3 to 5– 

8. DOE also developed costs for the 

design option levels implemented, 

based on publicly available information 

and price quotes provided during 

manufacturer interviews. These costs 

were combined in the engineering cost 

model based on the specifications of a 

given modeled unit in order to yield 

manufacturer production cost (MPC) 

estimates for each representative unit at 

each configuration modeled. At the 

preliminary analysis rulemaking stage, 

DOE’s component cost estimates were 

based on data developed from 

manufacturer interviews, estimates from 

the January 2009 final rule, and publicly 

available cost information. During the 

NOPR analysis, DOE augmented this 

information with data from physical 

teardowns of commercial refrigeration 

equipment currently on the market. 

During the development of the 

engineering analysis for this NOPR, 

DOE interviewed manufacturers to gain 

insight into the commercial refrigeration 

industry, and to request feedback on the 

engineering analysis methodology, data, 

and assumptions that DOE used. Based 

on the information gathered from these 

interviews, along with the information 

obtained through a teardown analysis 

and public comments, DOE refined the 

engineering cost model. Next, DOE 

derived manufacturer markups using 

publicly available commercial 

refrigeration industry financial data, in 

conjunction with manufacturer 

feedback. The markups were used to 

convert the MPCs into MSPs. Further 

discussion of the comments received 

and the analytical methodology used is 

presented in the following subsections. 

For additional detail, see chapter 5 of 

the NOPR TSD. 

a. Teardown Analysis 

In the preliminary analysis TSD, DOE 

expressed its intent to update its core 

case cost estimates, which were at that 

time developed based on estimates from 

the January 2009 final rule, through 

performing physical teardowns of 

selected units. These core case costs 

consist of the costs to manufacture the 

structural members, insulation, 

shelving, wiring, etc., but not the costs 

associated with the components that 

could directly affect energy 

consumption, which were considered 

collectively as design options and 

served as one of many inputs to the 

engineering cost model. DOE first 

selected representative units for 

physical teardown based on available 

offerings from the catalogs of major 

manufacturers. DOE selected units that 

had sizes and feature sets similar to 

those of the representative units 

modeled in the engineering analytical 

model. DOE selected units for teardown 

representing each of the proposed 

equipment families, with the exception 

of the HZO family.47 The units were 

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which would not have already been captured by the 

teardowns of other units. 

then disassembled into their base 

components, and DOE estimated the 

materials, processes, and labor required 

for the manufacture of each individual 

component. This process is referred to 

as a ‘‘physical teardown.’’ Using the 

data gathered from the physical 

teardowns, DOE characterized each 

component according to its weight, 

dimensions, material, quantity, and the 

manufacturing processes used to 

fabricate and assemble it. These 

component data were then entered into 

a spreadsheet and organized by system 

and subsystem levels to produce a 

comprehensive bill of materials (BOM) 

for each unit analyzed through the 

physical teardown process. 

The physical teardowns allowed DOE 

to identify the technologies, designs, 

and manufacturing techniques that 

manufacturers incorporated into the 

equipment that DOE analyzed. The 

result of each teardown was a structured 

BOM, incorporating all materials, 

components, and fasteners, classified as 

either raw materials or purchased parts 

and assemblies, and characterizing the 

materials and components by weight, 

manufacturing processes used, 

dimensions, material, and quantity. The 

BOMs from the teardown analysis were 

then modified, and the results used as 

one of the inputs to the cost model to 

calculate the MPC for each 

representative unit modeled. The MPCs 

resulting from the teardowns were then 

used to develop an industry average 

MPC for each equipment class analyzed. 

See chapter 5 of the NOPR TSD for more 

details on the teardown analysis. 

b. Cost Model 

The cost model for this rulemaking 

was divided into two parts. The first of 

these was a standalone core case cost 

model, based on physical teardowns, 

that was used for developing the core 

case costs for the 24 directly analyzed 

equipment classes. This cost model is a 

spreadsheet that converts the materials 

and components in the BOMs from the 

teardowns units into MPC dollar values 

based on the price of materials, average 

labor rates associated with 

manufacturing and assembling, and the 

cost of overhead and depreciation, as 

determined based on manufacturer 

interviews and DOE expertise. To 

convert the information in the BOMs to 

dollar values, DOE collected 

information on labor rates, tooling costs, 

raw material prices, and other factors. 

For purchased parts, the cost model 

estimates the purchase price based on 

volume-variable price quotations and 

detailed discussions with manufacturers 

and component suppliers. For fabricated 

parts, the prices of raw metal materials 

(e.g., tube, sheet metal) are estimated 

based on 5-year averages calculated 

from cost estimates obtained from 

sources including the American Metal 

Market and manufacturer interviews. 

The cost of transforming the 

intermediate materials into finished 

parts is estimated based on current 

industry pricing. 

The function of the cost model 

described above is solely to convert the 

results of the physical teardown 

analysis into core case costs. To achieve 

this, components immaterial to the core 

case cost (lighting, compressors, fans, 

etc.) were removed from the BOMs, 

leaving the cost model to generate 

values for the core case costs for each of 

the teardown points. Then, these 

teardown-based core case BOMs were 

used to develop a ‘‘parameterized’’ 

computational cost model, which allows 

a user to virtually manipulate case 

parameters such as height, length, 

insulation thickness, and number of 

doors by inputting different numerical 

values for these features to produce new 

cost estimates. For example, a user 

could start with the teardown data for 

a two-door case and expand the model 

of the case computationally to produce 

a cost estimate for a three-door case by 

changing the parameter representing the 

number of doors. This parameterized 

model, coupled with the design 

specifications chosen for each 

representative unit modeled in the 

engineering analysis, was used to 

develop core case MPC cost estimates 

for each of the 24 directly analyzed 

representative units. These values 

served as one of several inputs to the 

engineering cost model. 

The engineering analytical model, as 

implemented by DOE in a Microsoft 

Excel spreadsheet, also incorporated the 

engineering cost model, the second cost 

modeling tool used in this analysis. In 

the engineering cost model, core case 

costs developed based on physical 

teardowns were one input, and costs of 

the additional components required for 

a complete piece of equipment (design 

options) were another input. The two 

inputs were added together to arrive at 

an overall MPC value for each 

equipment class. Based on the 

configuration of the system at a given 

design option level, the appropriate 

design option costs were added to the 

core case cost to reflect the cost of the 

entire system. Costs for design options 

were calculated based on price quotes 

from publicly available sources and 

discussions with commercial 

refrigeration equipment manufacturers. 

Chapter 5 of the NOPR TSD describes 

DOE’s cost model and definitions, 

assumptions, data sources, and 

estimates. 

Some stakeholders expressed concern 

with the potential variability in prices 

that served as inputs to the cost model. 

NEEA suggested that using a forecast of 

materials futures market pricing might 

be a better approach than using a 

historical average, and Hill Phoenix 

questioned whether the 2009 cost model 

had been updated, as its cost structure 

had significantly increased since that 

time. (NEEA, Public Meeting Transcript, 

No. 31 at pp. 85–86; Hill Phoenix, 

Public Meeting Transcript, No. 31 at p. 

84) Southern Store Fixtures agreed with 

Hill Phoenix, and noted that it would be 

advisable to use 2011 costs for 

equipment that complies with the 

January 2009 final rule, instead of a 

current market baseline. (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at pp. 86–87) 

Regarding the comments from Hill 

Phoenix and Southern Store Fixtures, 

DOE has updated all of its cost 

modeling information. This information 

includes component costs, which were 

based on public-source data and 

estimates provided during manufacturer 

interviews, and core case costs, which 

were developed based on DOE’s 

teardown analysis performed during the 

NOPR stage of the rulemaking. In 

response to Southern Store Fixtures’ 

comment that DOE should use 2011 

costs in its analyses for equipment that 

complies with the January 2009 final 

rule, DOE believes that materials prices 

depend on broader market conditions 

and are unlikely to be influenced by 

equipment that complies with the 

January 2009 final rule. DOE calculates 

the materials cost based on price 

information gathered from the market, 

and uses a methodology based on the 

Bureau of Labor Statistics (BLS) 

Producer Price Indices to account for 

fluctuations in materials prices and 

processing costs. Regarding NEEA’s 

suggestion that using a forecast of 

materials futures market pricing might 

be preferable to using an historical 

average, DOE believes that such price 

forecasting is speculative, and therefore 

DOE has continued to use actual prices 

and averages thereof as the basis for its 

analyses. 

c. Manufacturer Production Cost 

Once the cost estimates for all the 

components of each representative unit, 

including the core case cost and design 

option costs, were finalized, DOE 

totaled the costs in the engineering cost 

model to calculate the MPC. DOE 

estimated the MPC at each efficiency 

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48Foaming fixtures are pieces of equipment 

consisting of molds to guide the injection of 

foamed-in-place insulation so that that the foam 

takes a desired shape once hardened. 

49The DOE Solid-State Lighting Research and 

Development Multi-Year Program Plan outlines 

DOE’s research goals and planned methodologies 

with respect to the advancement of solid-state 

lighting technologies in the United States. The 

complete document is available at: http://

apps1.eere.energy.gov/buildings/publications/pdfs/

ssl/ssl_mypp2011_web.pdf. 

level considered for each directly 

analyzed equipment class, from the 

baseline through the max-tech. After 

incorporating all of the assumptions 

into the cost model, DOE calculated the 

percentages attributable to each element 

of total production cost (i.e., materials, 

labor, depreciation, and overhead). DOE 

used these production cost percentages 

in the MIA (see section IV.K). DOE 

revised the cost model assumptions 

used for the preliminary analysis based 

on teardown analysis, updated pricing, 

and additional manufacturer feedback, 

which resulted in refined MPCs and 

production cost percentages. DOE 

calculated the average equipment cost 

percentages by equipment class. Chapter 

5 of the NOPR TSD presents DOE’s 

estimates of the MPCs for this 

rulemaking, along with the different 

percentages attributable to each element 

of the production costs that comprise 

the total MPC. 

d. Cost-Efficiency Relationship 

The result of the engineering analysis 

is a cost-efficiency relationship. DOE 

created a separate relationship for each 

input capacity associated with each 

commercial refrigeration equipment 

class examined for this NOPR. DOE also 

created 24 cost-efficiency curves, 

representing the cost-efficiency 

relationship for each commercial 

refrigeration equipment class. 

To develop cost-efficiency 

relationships for commercial 

refrigeration equipment, DOE examined 

the cost differential to move from one 

design option to the next for 

manufacturers. DOE used the results of 

teardowns to develop core case costs for 

the equipment classes modeled, and 

added those results to costs for design 

options developed from publicly 

available pricing information and 

manufacturer interviews. Additional 

details on how DOE developed the costefficiency relationships and related 

results are available in the chapter 5 of 

the NOPR TSD. Chapter 5 of the NOPR 

TSD also presents these cost-efficiency 

curves in the form of energy efficiency 

versus MPC. After the publication of the 

preliminary analysis, several 

stakeholders provided input and 

feedback regarding DOE’s cost 

estimates, specifically regarding 

insulation costs, LED lighting costs, and 

DOE’s methodology for estimating 

manufacturer overhead in its cost 

model. The following sections address 

these stakeholder comments and 

concerns. 

Insulation Cost Specifications 

Several stakeholders submitted 

comments regarding DOE’s estimated 

costs and specifications for insulation. 

Traulsen observed that DOE’s estimates 

for the number of foaming fixtures 48

present in a manufacturing facility and 

units per year are high if they are meant 

to represent the production of a base 

model by an average manufacturer. 

(Traulsen, No. 45 at p. 4) Zero Zone 

noted that the material costs for 

increasing foamed-in-place panels are 

not trivial, and that its foam cost 

associated with adding a half inch of 

insulation to a five-door case is 

approximately $25. (Zero Zone, No. 37 

at p. 3) Zero Zone also commented that 

the engineering costs modeled by DOE 

do not include any redesign costs that 

are incurred as wall thickness changes, 

and that foamed-in-place sheet metal 

panels are an integral part of the 

structural design of cases. However, 

Zero Zone expressed concern that the 

ability of vacuum insulated panels to 

perform as structural members has not 

been verified and should be validated 

before vacuum insulated panels are 

included in the analysis. (Zero Zone, 

No. 37 at p. 3) Zero Zone concluded by 

stating that increased foam panel 

thickness should be dropped from the 

analysis because DOE had not collected 

sufficient, accurate cost information 

regarding this design option. (Zero 

Zone, No. 37 at p. 3) 

DOE considered these comments in 

revising its implementation of improved 

insulation during the NOPR analyses. 

Regarding Traulsen’s statement, DOE 

based its estimates of costs and 

specifications on discussions with 

manufacturers and site visits of 

manufacturing facilities and, while DOE 

understands the variability in 

manufacturing practices and equipment 

utilization that exists across 

manufacturers and product line 

offerings, DOE believes those estimates 

are sound. DOE took into account the 

comment from Zero Zone regarding 

additional foam costs and, in response, 

accounted for the differential cost of 

additional foam due to changes in wall 

thickness in its engineering analysis for 

the NOPR. However, regarding Zero 

Zone’s assertion that redesign costs are 

not accounted for in the engineering 

analysis, the engineering model does 

include an estimate of engineering cost 

to account for the design efforts that 

must be incurred in developing a case 

with higher wall thickness. DOE has 

also discussed the implementation of 

vacuum insulated panels with 

manufacturers, cross-referenced its data 

with other rulemaking analyses in 

which vacuum insulated panels were 

used, and revised its data accordingly. 

As a result, DOE believes that its 

estimates and assumptions for improved 

insulation are valid, and has retained 

those design options for the NOPR. 

Light-Emitting Diode Cost 

Specifications 

Stakeholders also provided feedback 

on pricing and performance related to 

DOE’s LED specifications in the 

engineering model. ASAP and NRDC 

stated that DOE should not assume LED 

prices remain constant because LEDs are 

an emerging technology and will likely 

experience a dramatic price decline in 

the near future. The comment cited 

DOE’s 2011 Solid-State Lighting 

Research and Development (R&D) MultiYear Program Plan (MYPP),49 which 

projects that, between 2010 and 2015, 

prices of some LEDs will decrease by 85 

percent, while LED lighting will 

experience a significant increase in 

efficacy during the same period. (ASAP 

and NRDC, No. 34 at p. 3) These 

stakeholders added that it is important 

for DOE to capture cost decreases not 

only during the analysis period (2017– 

2046), but prior to the proposed 2017 

compliance date for the amended 

standards considered in this rulemaking 

as well, stating that a price estimate for 

2017 will be needed for the LCC 

calculations to be accurate. ASAP and 

NRDC stated that, according to the DOE 

solid-state lighting documents 

referenced, if today’s LED prices are 

held constant through the 2017 

compliance date, the result will be a 

misrepresentation in the LCC of the 

value of potential LED energy savings; 

as a result, ASAP and NRDC urged DOE 

to develop cost estimates reflecting this 

price decline. (ASAP and NRDC, No. 34 

at p. 3) NEEA referenced the DOE 2011 

MYPP as well, and agreed that it 

believed that DOE is grossly 

overestimating the future cost of LED 

lighting. (NEEA, No. 36 at pp. 3–4) 

DOE agrees with these stakeholders 

that forecasts of the LED lighting 

industry, including those performed by 

DOE, suggest that LED lighting is an 

emerging technology that will continue 

to experience significant price decreases 

in coming years. For this reason, to 

capture the anticipated cost reduction in 

LED fixtures in the analyses for this 

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50Navigant Consulting, Inc., Energy Savings 

Potential for Solid-State Lighting in General 

Illumination Applications. 2012. Prepared for the 

U.S. Department of Energy—Office of Energy 

Efficiency and Renewable Energy Building 

Technologies Office, Washington, DC. 

51 Discussion related to lighting maintenance 

costs for commercial refrigeration equipment can be 

found in section IV.H.3, and a more detailed 

explanation can be found in chapter 8 of the NOPR 

TSD. 

52A searchable directory of SEC filings is 

available at: www.sec.gov/edgar/searchedgar/

companysearch.html. 

rulemaking, DOE incorporated price 

projections from its Solid-State Lighting 

Program into its MPC values for the 

primary equipment classes. The price 

projections for LED case lighting were 

developed from projections developed 

for the DOE Solid-State Lighting 

Program 2012 report, Energy Savings 

Potential of Solid-State Lighting in 

General Illumination Applications 2010 

to 2030 (‘‘the energy savings report’’).50

In the appendix of this report, price 

projections from 2010 to 2030 were 

provided in ($/klm) for LED lamps and 

LED luminaires. DOE analyzed the 

models used in the Solid-State Lighting 

Program work and determined that the 

LED luminaire projection would serve 

as an appropriate proxy for a cost 

projection to apply to refrigerated case 

LEDs. 

The price projections presented in the 

Solid-State Lighting Program’s energy 

savings report are based on the DOE’s 

2011 MYPP. The MYPP is developed 

based on input from manufacturers, 

researchers, and other industry experts. 

This input is collected by the DOE at 

annual roundtable meetings and 

conferences. The projections are based 

on expectations dependent on the 

continued investment into solid-state 

lighting by the DOE. 

DOE incorporated the price projection 

trends from the energy savings report 

into its engineering analysis by using 

the data to develop a curve of 

decreasing LED prices normalized to a 

base year. That base year corresponded 

to the year when LED price data was 

collected for the NOPR analyses of this 

rulemaking from catalogs, manufacturer 

interviews, and other sources. DOE 

started with this commercial 

refrigeration equipment-specific LED 

cost data and then applied the 

anticipated trend from the energy 

savings report to forecast the projected 

cost of LED fixtures for commercial 

refrigeration equipment at the time of 

compliance with the proposed rule 

(2017). These 2017 cost figures were 

incorporated into the engineering 

analysis as comprising the LED cost 

portions of the MPCs for the primary 

equipment classes. Table IV.1 shows the 

normalized LED price deflators used in 

this NOPR analysis. 

TABLE IV.1—LED PRICE DEFLATORS USED IN THE NOPR ANALYSIS

Year Normalized to 

2013 

Normalized to 

2017 Year Normalized to 2013 

Normalized to 

2017 

2010 .................................................. 2.998 5.652 2021 ................................................. 0.361 0.681 

2011 .................................................. 1.799 3.392 2022 ................................................. 0.335 0.631 

2012 .................................................. 1.285 2.423 2023 ................................................. 0.312 0.588 

2013 .................................................. 1.000 1.885 2024 ................................................. 0.292 0.550 

2014 .................................................. 0.819 1.543 2025 ................................................. 0.274 0.517 

2015 .................................................. 0.693 1.306 2026 ................................................. 0.259 0.488 

2016 .................................................. 0.601 1.133 2027 ................................................. 0.245 0.462 

2017 .................................................. 0.530 1.000 2028 ................................................. 0.232 0.438 

2018 .................................................. 0.475 0.895 2029 ................................................. 0.221 0.417 

2019 .................................................. 0.430 0.810 2030 ................................................. 0.211 0.398 

2020 .................................................. 0.393 0.740 2031–2046 * ..................................... 0.211 0.398 

* DOE did not have data available to project prices beyond 2030. Therefore, for the NOPR analysis, it was assumed that the LED prices stay 

constant after 2030. 

The LCC analysis (section IV.H) was 

carried out with the engineering 

numbers that account for the 2017 

prices of LED luminaires. The reduction 

in price of LED luminaires from 2018 

through 2030 was taken into account in 

the NIA (section IV.I). The cost 

reductions were calculated for each year 

from 2018 through 2030 and subtracted 

from the equipment costs in the NIA. 

The reduction in lighting maintenance 

costs 51 due to reduction in LED prices 

for equipment installed in 2018 to 2030 

were also calculated and appropriately 

deducted from the lighting maintenance 

costs. 

Manufacturer Overhead Costs 

NEEA commented that, in the DOE 

rulemaking on distribution 

transformers, manufacturers had stated 

that they do not apply overhead to 

material costs, but to labor costs only, 

and that the application of overhead to 

both of these cost components can have 

a major impact on MPCs, depending on 

how much of the product cost is 

attributed to each component. (NEEA, 

Public Meeting Transcript, No. 31 at pp. 

70–71) In another comment, NEEA 

elaborated on this statement, adding 

that during the distribution transformers 

public meeting, manufacturers stated 

that they do not apply factory overhead 

rates to the cost of materials, but only 

to labor. NEEA went on to suggest that 

DOE use this methodology to the extent 

applicable to commercial refrigeration 

equipment, and adjust its cost 

estimation methods to take this 

approach into account. (NEEA, No. 36 at 

pp. 4–5) 

In DOE’s cost model for commercial 

refrigeration equipment, the following 

three overhead components are 

dependent on labor or materials: 

utilities, property tax, and insurance. 

The cost of utilities is a function of 

equipment costs only (no labor 

included) and is calculated using a ratio 

derived in the past from U.S. Securities 

and Exchange Commission (SEC) 10–K 

forms for appliance manufacturers.52

The ratios for property tax and 

insurance costs are also based on past 

10–K form analysis, but are dependent 

on overall unit costs (i.e., cost of goods 

sold). Altogether, these three 

components represent only about 3 

percent of the total cost of a unit, so 

whether they are based on labor and 

materials or on labor only, they are 

unlikely to have a significant effect on 

MPCs, especially on an incremental cost 

basis. DOE welcomes suggestions on 

how to improve its methodology and 

hopes that stakeholders can provide 

DOE with documentation for improved 

insurance, property tax, and utility 

calculations. In particular, DOE would 

welcome nationwide data on property 

tax rates based on property, plant, and 

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53Typically, DOE uses the data for the 5 years 

preceding the year of analysis. However, in this 

case additional data were available up to 2004. 

Hence, data from 2004 to 2010 were used for these 

calculations. 

equipment valuations; average power 

consumption for conditioned as well as 

unconditioned factory spaces; and 

insurance rates and how they are 

applied. 

For the distribution transformers 

energy conservation standards 

rulemaking, DOE did not apply 

overhead rates to labor—overhead was 

only applied to direct material 

production costs. For more details on 

material and labor inputs for 

distribution transformers, see chapter 5 

of the TSD for the distribution 

transformers preliminary analysis 

(www1.eere.energy.gov/buildings/

appliance_standards/commercial/pdfs/

transformer_preanalysis_ch5.pdf). 

Furthermore, due to the different 

industries in which distribution 

transformer and commercial 

refrigeration manufacturers operate, the 

same cost model may not necessarily be 

applicable to both. 

e. Manufacturer Markup 

To account for manufacturers’ nonproduction costs and profit margin, DOE 

applies a non-production cost multiplier 

(the manufacturer markup) to the full 

MPC. The resulting MSP is the price at 

which the manufacturer can recover all 

production and non-production costs 

and earn a profit. To meet new or 

amended energy conservation 

standards, manufacturers often 

introduce design changes to their 

product lines that result in increased 

MPCs. Depending on the competitive 

environment for this equipment, some 

or all of the increased production costs 

may be passed from manufacturers to 

retailers and eventually to customers in 

the form of higher purchase prices. The 

MSP should be high enough to recover 

the full cost of the equipment (i.e., full 

production and non-production costs) 

and yield a profit. The manufacturer 

markup has an important bearing on 

profitability. A high markup under a 

standards scenario suggests 

manufacturers can readily pass along 

the increased variable costs and some of 

the capital and equipment conversion 

costs (one-time expenditures) to 

customers. A low markup suggests that 

manufacturers will not be able to 

recover as much of the necessary 

investment in plant and equipment. 

To calculate the manufacturer 

markups, DOE used 10–K reports 

submitted to the SEC by the six publicly 

owned commercial refrigeration 

equipment companies in the United 

States. (SEC 10–K reports can be found 

using the search database available at 

www.sec.gov/edgar/searchedgar/

webusers.htm.) The financial figures 

necessary for calculating the 

manufacturer markup are net sales, 

costs of sales, and gross profit. DOE 

averaged the financial figures spanning 

the years from 2004 to 2010 53 to 

calculate the markups. For commercial 

refrigeration equipment, to calculate the 

average gross profit margin for the 

periods analyzed for each firm, DOE 

summed the gross profit earned during 

all of the aforementioned years and then 

divided the result by the sum of the net 

sales for those years. DOE presented the 

calculated markups to manufacturers 

during the manufacturer interviews for 

the NOPR (see section IV.E.4.g). DOE 

considered manufacturer feedback to 

supplement the calculated markup, and 

refined the markup to better reflect the 

commercial refrigeration market. DOE 

developed the manufacturer markup by 

weighting the feedback from 

manufacturers on a market share basis 

because manufacturers with larger 

market shares more significantly affect 

the market average. DOE used a constant 

markup to reflect the MSPs of both the 

baseline equipment and higher 

efficiency equipment. DOE used this 

approach because amended standards 

may transform high-efficiency 

equipment, which currently is 

considered to be premium equipment, 

into baseline equipment. See chapter 5 

of the NOPR TSD for more details about 

the manufacturer markup calculation. 

f. Shipping Costs 

The final component of the MSP after 

the MPC and manufacturer markup is 

the shipping cost associated with 

moving the equipment from the factory 

to the first point on the distribution 

chain. During interviews, manufacturers 

stated that the specific party 

(manufacturer or buyer) that incurs that 

cost for a given shipment may vary 

based on the terms of the sale, the type 

of account, the manufacturer’s own 

business practices, and other factors. 

However, for consistency, DOE includes 

shipping costs as a component of MSP. 

In calculating the shipping costs for use 

in its analysis, DOE first gathered 

estimates of the cost to ship a full trailer 

of manufactured equipment an average 

distance in the United States, generally 

representative of the distance from a 

typical manufacturing facility to the first 

point on the distribution chain. DOE 

then used representative unit sizes to 

calculate a volume for each unit. Along 

with the dimensions of a shipping 

trailer and a loading factor to account 

for inefficiencies in packing, DOE used 

this cost and volume information to 

develop an average shipping cost for 

each equipment class directly analyzed. 

g. Manufacturer Interviews 

Throughout the rulemaking process, 

DOE has sought and continues to seek 

feedback and insight from interested 

parties that would improve the 

information used in its analyses. DOE 

interviewed manufacturers as a part of 

the NOPR MIA (see section IV.K). 

During the interviews, DOE sought 

feedback on all aspects of its analyses 

for commercial refrigeration equipment. 

For the engineering analysis, DOE 

discussed the analytical assumptions 

and estimates, cost model, and costefficiency curves with manufacturers. 

DOE considered all of the information 

learned from manufacturers when 

refining the cost model and 

assumptions. However, DOE 

incorporated equipment and 

manufacturing process figures into the 

analysis as averages to avoid disclosing 

sensitive information about individual 

manufacturers’ equipment or 

manufacturing processes. More details 

about the manufacturer interviews are 

contained in chapter 12 of the NOPR 

TSD. 

5. Energy Consumption Model 

The energy consumption model is the 

second key analytical model used in 

constructing cost-efficiency curves. This 

model estimates the daily energy 

consumption, calculated using the DOE 

test procedure, of commercial 

refrigeration equipment in kilowatthours at various performance levels 

using a design-option approach. In this 

methodology, a unit is initially modeled 

at a baseline level of performance, and 

higher-efficiency technologies, referred 

to as design options, are then 

implemented and modeled to produce 

incrementally more-efficient equipment 

designs. The model is specific to the 

types of equipment covered under this 

rulemaking, but is sufficiently 

generalized to model the energy 

consumption of all covered equipment 

classes. DOE developed the energy 

consumption model as a Microsoft Excel 

spreadsheet. 

For a given equipment class, the 

model estimates the daily energy 

consumption for the baseline, as well as 

the energy consumption of subsequent 

levels of performance above the 

baseline. The model calculates each 

performance level separately. For the 

baseline level, a corresponding cost is 

calculated using the cost model, which 

is described in section IV.E.4.b. For each 

level above the baseline, the changes in 

system cost due to the implementation 

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55924 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

54Fin spacing, or fin pitch, refers to the distance 

between the flat fins that are oriented transverse to 

the direction of airflow across a fin-and-tube heat 

exchanger. 

of various design options are used to 

recalculate the cost. Collectively, the 

data from the energy consumption 

model are paired with the cost model 

data to produce points on costefficiency curves corresponding to 

specific equipment configurations. After 

the publication of the preliminary 

analysis, DOE received numerous 

stakeholder comments regarding the 

methodology and results of the energy 

consumption model. 

a. Energy Consumption Model Results 

Zero Zone noted that, while the 

overall modeling approach is 

appropriate, the results for the 

VCT.RC.M class are, in its opinion, too 

restrictive. (Zero Zone, No. 37 at p. 1) 

Similarly, Traulsen believed that DOE’s 

numbers were slightly high for the 

VCT.SC.L equipment class, and that the 

incremental energy change may have 

been overstated, while the cost was 

understated, for technologies such as 

LED lighting, high-performance doors, 

and vacuum insulated panels. 

(Traulsen, No. 45 at p. 4) 

In its analyses for the NOPR stage of 

this rulemaking, DOE reviewed its 

inputs to the engineering cost model 

and energy consumption model. This 

included reviewing publicly available 

data from sources such as manufacturer 

specification sheets and catalogs, as 

well as incorporating information drawn 

from stakeholder comments and 

manufacturer interviews conducted as 

part of the MIA process. The process 

included discussion and investigation of 

specific design options, such as the 

aforementioned LED lighting and 

vacuum insulated panels. DOE has 

taken efforts to incorporate all available 

information into its models to produce 

the most accurate results possible. In 

response to the comments by Zero Zone 

and Traulsen regarding energy 

consumption and cost results for the 

VCT.RC.M and VCT.SC.L classes, 

respectively, DOE has reviewed and 

updated its methodologies during the 

NOPR analyses to account for the latest 

information available, and is confident 

that its current results best reflect this 

information. 

b. Anti-Sweat Heater Power 

Traulsen suggested that DOE 

investigate whether the anti-sweat 

power consumed by the VCT.SC.L and 

VCT.SC.I equipment classes can truly be 

zero when high-performance doors are 

used, and suggested that DOE review its 

data. Traulsen added that it believed 

that, even with these door types, antisweat heaters are often still found on the 

cabinet body, especially in lowtemperature equipment, which is prone 

to condensation due to conduction. 

(Traulsen, No. 45 at pp. 6–7) 

In DOE’s preliminary engineering 

analysis, anti-sweat heater power values 

were assigned for each of the 

transparent door configurations based 

on available data from manufacturer 

specification sheets and data obtained 

during manufacturer interviews. For 

medium-temperature doors, both 

commercial refrigeration equipment 

manufacturer and door manufacturer 

literature indicated that truly energyfree door designs with no anti-sweat 

heat are available on the market. This 

finding was confirmed through 

discussions with commercial 

refrigeration equipment manufacturers. 

However, for low- and ice-cream 

temperature doors, DOE has found that, 

as Traulsen stated, anti-sweat heat is 

still required, at a minimum, on the 

door frame. Table 5.6.9 of the 

preliminary analysis TSD chapter 5 lists 

anti-sweat heater powers of 165 and 80 

watts for standard and highperformance doors, respectively, at low 

and ice-cream temperatures. These 

values are consistent with those that 

DOE has found through its research, and 

were retained in the NOPR analysis. 

c. Evaporator Fan Motor Power 

Zero Zone observed that, while DOE’s 

assumptions regarding motor efficiency 

are valid, the evaporator fan 

specifications used by DOE for freezers 

of 6 rated watts per fan were flawed 

because freezer fans are generally higher 

in wattage (i.e., 9 or 12 watts) to increase 

airflow and decrease frost formation. 

(Zero Zone, No. 37 at p. 2) 

After receiving the comment by Zero 

Zone, DOE further researched 

evaporator fan motor power values 

through manufacturer catalogs and 

discussed the subject in manufacturer 

interviews during the NOPR stage of the 

rulemaking. The data yielded by this 

effort showed that remote condensing 

freezer cases do utilize evaporator fan 

motors with rated shaft powers 

generally closer to 9 watts. As a result, 

DOE updated the design specifications 

for those representative units in its 

engineering model to more accurately 

reflect the standard design of those 

units. 

d. Condenser Energy Consumption 

Southern Store Fixtures stated that 

the energy usage of the condenser is 

missing from the energy consumption 

model diagram contained in chapter 5 of 

the preliminary analysis TSD (Figure 

5.6.1). 

Regarding the comment by Southern 

Store Fixtures, Figure 5.6.1 of the 

preliminary analysis TSD chapter 5 does 

include a representation of the 

condenser fan motor energy 

consumption under the category of 

component energy consumption. The 

energy usage attributed to the condenser 

fan, found in self-contained units, is 

accounted for in the energy 

consumption model by the compressor 

duty cycle. For remote condensing 

units, the condenser fan energy 

consumption is not explicitly 

calculated; instead, remote case 

compressor energy consumption is 

calculated based on the energy 

efficiency ratio values given in AHRI 

1200. 

e. Evaporator Coil Design 

Zero Zone expressed concerns about 

DOE’s assumptions regarding evaporator 

coils, and noted that reduced fin 

spacing 54 will result in coils that do not 

function well in the field due to 

excessive frost loading. (Zero Zone, No. 

37 at p. 2) Zero Zone also observed that 

the improved evaporator coil described 

in the preliminary analysis TSD for the 

VCT.RC.M and VCT.RC.L equipment 

classes would raise evaporator 

temperatures to the same level as the 

discharge air temperature, which is not 

feasible. (Zero Zone, No. 37 at pp. 2–3) 

Additionally, Zero Zone recommended 

that DOE conduct performance testing 

before assuming that high-performance 

coils will work in all situations because, 

Zero Zone asserted, DOE failed to 

address issues with superheat control 

for these advanced coils, namely that as 

the evaporating temperature becomes 

closer to the return air temperature, the 

ability of the expansion valve to 

maintain a stable superheat is 

decreased. (Zero Zone, No. 37 at p. 3) 

With respect to Zero Zone’s comment 

on reduction of fin spacing, DOE 

confirmed during manufacturer 

interviews that excessive frost loading 

becomes a concern once fin spacing is 

reduced below certain thresholds. As a 

result, DOE sought to ensure that its coil 

models reflected coil geometries that are 

suitable for production and field use 

without incurring such negative 

secondary effects as increased frost 

buildup. With respect to Zero Zone’s 

second comment involving the 

evaporator coil temperatures, the 

referenced statement in the preliminary 

analysis TSD was intended to be a 

single example, and was incorrectly 

presented as applying to all equipment 

classes. The engineering model never 

utilized evaporator temperatures that 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55925 

were physically infeasible or impossible 

to attain. 

During its NOPR analyses, DOE 

performed independent modeling of 

evaporator and condenser coils based on 

physical teardowns of coils available on 

the market, coupled with numerical 

modeling of the coil performance. 

Design parameters were varied from the 

baseline, and the heat transfer 

performance of the coils was iteratively 

analyzed to yield higher efficiency coil 

designs. Cost modeling was utilized to 

produce cost estimates for the baseline 

and high-performance coil designs. This 

analysis served as the basis for the coil 

cost and performance values input into 

the engineering model. While DOE was 

unable to perform physical testing of its 

high-performance coil designs, as those 

designs were solely analytically derived 

and not constructed as prototypes, DOE 

controlled the parameters of its analysis 

to retain the required conditions for 

proper system performance. DOE 

believes that this analysis addresses the 

concerns presented by Zero Zone in its 

comments. For more details on the coil 

modeling process, see chapter 5 of the 

NOPR TSD. 

F. Markups Analysis 

DOE applies multipliers called 

‘‘markups’’ to the MSP to calculate the 

customer purchase price of the analyzed 

equipment. These markups are in 

addition to the manufacturer markup 

(discussed in section IV.E.4.e) and are 

intended to reflect the cost and profit 

margins associated with the distribution 

and sales of the equipment. DOE 

identified three major distribution 

channels for commercial refrigeration 

equipment, and markup values were 

calculated for each distribution channel 

based on industry financial data. The 

overall markup values were then 

calculated by weighted-averaging the 

individual markups with market share 

values of the distribution channels. See 

chapter 6 of the NOPR TSD for more 

details on DOE’s methodology for 

markups analysis. 

DOE received a number of comments 

regarding markups after the publication 

of the preliminary analysis. 

1. Baseline and Incremental Markups 

Traulsen stated that, in its experience, 

the initial markup on equipment will be 

consistent with production costs, and 

that the incremental markups will 

increase with higher levels of product 

efficiency due to product 

differentiation. (Traulsen, No. 45 at p. 4) 

However, Traulsen also stated that it did 

not believe that wholesalers 

differentiate markups based on the 

technologies inherently present in this 

equipment and that, in its experience, 

wholesalers/resellers will use 

traditional markup rates regardless of 

equipment’s energy efficiency. 

(Traulsen, No. 45 at p. 7) 

In general, DOE has found that 

markup values vary over a wide range 

according to general economic outlook, 

manufacturer brand value, inventory 

levels, manufacturer rebates to 

distributors based on sales volume, 

newer versions of the same equipment 

model introduced into the market by the 

manufacturers, and availability of 

cheaper or more technologically 

advanced alternatives. Based on market 

data, DOE divided distributor costs into: 

(1) Direct cost of equipment sales; (2) 

labor expenses; (3) occupancy expenses; 

(4) other operating expenses (such as 

depreciation, advertising, and 

insurance); and (5) profit. DOE assumed 

that, for higher efficiency equipment 

only, the ‘‘other operating costs’’ and 

‘‘profit’’ scale with MSP, while the 

remaining costs scale the same way as 

does the MSP of baseline equipment. In 

other words, the remaining costs stay 

constant irrespective of equipment 

efficiency level. Incremental markups 

were applied as multipliers only to the 

MSP increments (of higher efficiency 

equipment compared to baseline) and 

not to the entire MSP. This assumption 

is in line with Traulsen’s first comment. 

Further, while DOE’s use of separate 

values for baseline and incremental 

markup rates will lead to higher 

marked-up values for equipment at 

higher efficiency levels, the rate of 

markup will be same for all higher 

efficiency levels, which is consistent 

with Traulsen’s second comment. 

2. Distribution Channel Market Shares 

True stated that national chains are a 

major part of the glass-doored, selfcontained equipment market. True 

stated that it serves these via national 

accounts, adding that the market shares 

of the national accounts channel and the 

distributor channel that were used for 

the preliminary analysis of this 

rulemaking should be reversed. (True, 

Public Meeting Transcript, No. 31 at p. 

80) NEEA agreed with True, stating that 

DOE had more or less reversed the 

market shares of the distribution 

channels for glass door and open selfcontained equipment. NEEA also agreed 

with other commenters who stated that 

DOE’s market channel fractions applied 

more to specialty and solid-door selfcontained equipment. (NEEA, No. 36 at 

p. 5) Southern Store Fixtures added that 

it sells many remote condensing units 

directly to the end users, and that it also 

sells many self-contained units directly 

to supermarket and convenience store 

chains without using an intermediary. 

(Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 80–81) 

Traulsen commented that it believed 

that DOE’s distribution channel data 

were reasonably accurate, within plus or 

minus 10 percent. (Traulsen, No. 45 at 

p. 3) 

DOE agrees with comments from 

True, NEEA, and Southern Store 

Fixtures regarding market shares for 

self-contained display cases. 

Consequently, DOE made the 

distribution channel market shares for 

all display cases (VOP, SVO, HZO, VCT, 

HCT, SOC, and PD), irrespective of selfcontained or remote condensing 

configuration, equal to that of the 

remote condensing equipment market 

shares that were proposed in the 

preliminary analysis TSD. DOE kept the 

market shares of VCS and HCS 

equipment families same as the selfcontained equipment market shares 

proposed in the preliminary analysis 

TSD. The distribution channel market 

shares used for this NOPR are shown in 

Table IV.2. Chapter 6 and appendix 6A 

of the NOPR TSD provide complete 

details of the methodology and data 

used in the estimation of the markups. 

TABLE IV.2—DISTRIBUTION CHANNEL MARKET SHARES

Equipment family 

National 

account 

channel 

(percent) 

Wholesaler 

channel 

(percent) 

Contractor 

channel 

(percent) 

VOP, SVO, HZO, VCT, HCT, SOC, and PD .............................................................................. 70 15 15 

VCS and HCS .............................................................................................................................. 30 60 10 

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55926 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

55 DOE–2 is a widely used and accepted freeware 

building energy analysis program that can predict 

the energy use and cost for different types of 

buildings. DOE–2 uses a description of the building 

layout, construction, usage, conditioning systems 

and utility rates provided by the user, along with 

weather data, to perform an hourly simulation of 

the building and to estimate utility bills. 

G. Energy Use Analysis 

Several stakeholders commented on 

DOE’s methodology for investigating 

secondary impacts of efficiency 

improvement, as described in the 

preliminary analysis. Southern Store 

Fixtures agreed with DOE’s conclusion 

that efficiency improvements in selfcontained equipment do not have a 

noticeable impact on building heating 

and cooling loads. Southern Store 

Fixtures further stated that a kitchen 

area, with limited space and limited 

equipment, differs from larger settings 

such as supermarkets, which contain a 

large quantity of self-contained 

equipment. Southern Store Fixtures 

asked whether the impact of large 

numbers of self-contained units on the 

heating and cooling loads of buildings 

had been investigated. (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at pp. 93–94) 

Other stakeholders, however, had 

questions regarding DOE’s methods. 

NRDC asked why only self-contained 

units were reviewed for secondary 

impacts, and whether any rack-based 

units had been reviewed. (NRDC, Public 

Meeting Transcript, No. 31 at p. 100) 

NEEA stated that the placement of 

multiple cases in a supermarket will 

affect heating, ventilation, and airconditioning (HVAC) loads, and 

suggested that DOE reexamine the 

subject by modeling the performance of 

commercial refrigeration equipment in a 

business type other than a restaurant, 

such as a grocery store. NEEA added 

that restaurants typically have high 

ventilation loads, and opined that, in a 

space such as a supermarket, where the 

refrigeration loads approximate the 

ventilation loads, DOE’s results are 

inaccurate. NEEA added that 

mechanical engineers use DOE–2 55 to 

model secondary impacts. (NEEA, 

Public Meeting Transcript, No. 31 at pp. 

98–100) 

NEEA continued, stating that selfcontained equipment, because it is not 

perfectly efficient, will emit more heat 

into its surroundings than it absorbs, 

which could be of benefit in the heating 

season but which is definitely a 

detriment in the cooling season. While 

the magnitude of these effects will 

depend on the equipment’s geographic 

location, NEEA expressed its belief that 

DOE should not ignore this issue. NEEA 

added that DOE should quantify the 

contributions to space cooling and 

heating loads being generated by selfcontained equipment so that 

stakeholders can make an informed 

judgment as to their significance. 

(NEEA, No. 36 at p. 5) 

In response to NRDC’s comment 

regarding modeling rack-based units, 

DOE points to the January 2009 final 

rule analysis that presents an extensive 

energy use analysis for remote 

condensing equipment and selfcontained equipment without doors. 

The analysis was carried out by 

simulating display cases in 

supermarkets using the DOE–2.2 

software package. Details of this 

analysis can be found in chapter 7 of the 

January 2009 final rule TSD 

(www1.eere.energy.gov/buildings/

appliance_standards/commercial/pdfs/

chp_7_cre_energy_final.pdf). Based on 

this energy use analysis, DOE concluded 

that the overall impact of the considered 

design options had only a minor 

differential impact on the overall HVAC 

energy consumption of supermarkets. 

Further, DOE concluded that the energy 

consumption model used in the 

engineering analysis simulated the 

energy consumption of the various 

equipment classes with adequate 

accuracy, and therefore DOE used the 

estimates from the engineering analysis 

for the LCC and subsequent analyses. 

For the current rulemaking, DOE 

received comments during the May 

2010 Framework document public 

meeting regarding the proportionally 

larger share of self-contained equipment 

examined in this rulemaking compared 

to that examined in the January 2009 

final rule, and the impact of this 

equipment on building HVAC loads. 

DOE evaluated the impact of selfcontained equipment through wholebuilding simulations with a VCT.SC.L 

freezer in restaurant buildings using the 

whole-building energy use simulation 

tool EnergyPlus, which is the primary 

software tool supported by DOE’s 

Building Technologies Program for 

energy use analysis of buildings. 

Through these simulations, DOE found 

that the differential impact of efficiency 

improvements in VCT.SC.L equipment 

on the HVAC loads of restaurant 

buildings was negligible. Since 

VCT.SC.L energy consumption is one of 

the highest among the major selfcontained equipment classes, DOE 

concluded that the incremental impact 

of efficiency improvements in all selfcontained refrigerators and freezers on 

HVAC loads of restaurant buildings is 

negligible. While it is true, as stated in 

NEEA’s comment, that restaurant 

building models have higher ventilation 

loads than other building models, DOE 

decided, as a matter of policy, that it 

would not assess the secondary impacts 

of amended standards such as the 

impacts of improved equipment 

efficiency on building HVAC loads. 

Therefore, DOE did not pursue this 

matter any further in its NOPR analysis. 

In response to NEEA’s comment 

regarding the equipment’s heat emitted 

by self-contained equipment and the 

geographic location of these units, DOE 

points to chapter 7 of the preliminary 

analysis TSD for complete details of the 

analysis. The whole-building 

simulations conducted for the 

preliminary analysis were carried out in 

15 different climates zones, representing 

all the major climate zones in the 

United States, with an appropriate 

weighting factor applied to each climate 

zone. Further, the analysis was carried 

out over 1 full year (365 days). The 

results of the preliminary energy use 

analysis were obtained by averaging the 

energy consumption of the equipment 

over 1 full year and over all the major 

climate zones in the United States. 

DOE understands that the presence of 

many self-contained refrigeration units 

may have a considerable impact on the 

HVAC loads of a business 

establishment, as stated by Southern 

Store Fixtures. However, DOE reiterates 

that the objective of its analysis is to 

assess only the differential impact of 

equipment efficiency improvements, 

and not to assess the impact of total heat 

output by a self-contained unit. 

Moreover, DOE’s energy use analysis is 

concerned with the impact of only one 

unit of commercial refrigeration 

equipment. As stated above, DOE found 

that the differential impact of 

equipment efficiency improvements to a 

VCT.SC.L freezer on the building HVAC 

loads was negligible. 

As a matter of policy, DOE has 

determined that it will not carry out 

studies to determine the impact of 

efficiency improvements to equipment 

on building HVAC loads in appliance 

and commercial equipment standards 

rulemakings. 

H. Life-Cycle Cost Analysis 

DOE conducts LCC analysis to 

evaluate the economic impacts of 

potential amended energy conservation 

standards on individual commercial 

customers—that is, buyers of the 

equipment. LCC is defined as the total 

customer cost over the life of the 

equipment, and consists of purchase 

price, installation costs, and operating 

costs (maintenance, repair, and energy 

costs). DOE discounts future operating 

costs to the time of purchase and sums 

them over the expected lifetime of the 

piece of equipment. PBP is defined as 

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56Monte Carlo simulation is, generally, a 

computerized mathematical technique that allows 

for computation of the outputs from a mathematical 

model based on multiple simulations using 

different input values. The input values are varied 

based on the uncertainties inherent to those inputs. 

The combination of the input values of different 

inputs is carried out in a random fashion to 

simulate the different probable input combinations. 

The outputs of the Monte Carlo simulations reflect 

the various outputs that are possible due to the 

variations in the inputs. 

the estimated amount of time it takes 

customers to recover the higher 

installed costs of more-efficient 

equipment through savings in operating 

costs. DOE calculates the PBP by 

dividing the increase in installed costs 

by the average savings in annual 

operating costs. 

As part of the engineering analysis, 

design option levels were ordered based 

on increasing efficiency (i.e., decreasing 

energy consumption) and increasing 

MSP. For the LCC analysis, DOE chose 

a maximum of eight levels, henceforth 

referred to as ‘‘efficiency levels,’’ from 

the list of engineering design option 

levels. For equipment classes for which 

fewer than eight design option levels 

were defined in the engineering 

analysis, all design option levels were 

used. However, for equipment classes 

where more than eight design option 

levels were defined, DOE selected 

specific levels to analyze in the 

following manner: 

1. The lowest and highest energy 

consumption levels provided in the 

engineering analysis were preserved. 

2. If the difference in reported energy 

consumptions and reported 

manufacturer price between sequential 

levels was minimal, only the higher 

efficiency level was selected. 

3. If the energy consumption savings 

benefit between efficiency levels 

relative to the increased cost was very 

similar across multiple sequential 

levels, an intermediate level was not 

selected as an efficiency level. 

The first efficiency level (Level 1) in 

each equipment class is the least 

efficient and the least expensive 

equipment in that class. The higher 

efficiency levels (Level 2 and higher) 

exhibit progressive increases in 

efficiency and cost from Level 1. The 

highest efficiency level in each 

equipment class corresponds to the 

max-tech level. DOE treats the efficiency 

levels as ‘‘candidate standard levels,’’ as 

each higher efficiency level represents a 

potential new standard level. 

The installed cost of equipment to a 

customer is the sum of the equipment 

purchase price and installation costs. 

The purchase price includes MPC, to 

which a manufacturer markup and 

outbound freight cost are applied to 

obtain the MSP. This value is calculated 

as part of the engineering analysis 

(chapter 5 of the NOPR TSD). DOE then 

applies additional markups to the 

equipment to account for the markups 

associated with the distribution 

channels for the particular type of 

equipment (chapter 6 of the NOPR 

TSD). Installation costs varied by State, 

depending on the prevailing labor rates. 

Operating costs for commercial 

refrigeration equipment are the sum of 

maintenance costs, repair costs, and 

energy costs. These costs are incurred 

over the life of the equipment and 

therefore are discounted to the base year 

(2017, which is the compliance date of 

any amended standards that are 

established as part of this rulemaking). 

The sum of the installed cost and the 

operating cost, discounted to reflect the 

present value, is termed the life-cycle 

cost or LCC. 

Generally, customers incur higher 

installed costs when they purchase 

higher efficiency equipment, and these 

cost increments will be partially or 

wholly offset by savings in the operating 

costs over the lifetime of the equipment. 

Usually, the savings in operating costs 

are due to savings in energy costs 

because higher efficiency equipment 

uses less energy over the lifetime of the 

equipment. Often, the LCC of higher 

efficiency equipment is less than lower 

efficiency equipment. LCC savings are 

calculated for each efficiency level of 

each equipment class. 

The PBP of higher efficiency 

equipment is obtained by dividing the 

increase in the installed cost by the 

decrease in annual operating cost. In 

addition to energy costs (calculated 

using the electricity price forecast for 

the first year), the annual operating cost 

includes annualized maintenance and 

repair costs. PBP is calculated for each 

efficiency level of each equipment class. 

Apart from MSP, installation costs, 

and maintenance and repair costs, other 

important inputs for the LCC analysis 

are markups and sales tax, equipment 

energy consumption, electricity prices 

and future price trends, expected 

equipment lifetime, and discount rates. 

Many inputs for the LCC analysis are 

estimated from the best available data in 

the market, and in some cases the inputs 

are generally accepted values within the 

industry. In general, each input value 

has a range of values associated with it. 

While single representative values for 

each input may yield an output that is 

the most probable value for that output, 

such an analysis does not provide the 

general range of values that can be 

attributed to a particular output value. 

Therefore, DOE carried out the LCC 

analysis in the form of Monte Carlo 

simulations,56 in which certain inputs 

were expressed as a range of values and 

probability distributions to account for 

the ranges of values that may be 

typically associated with the respective 

input values. The results, or outputs, of 

the LCC analysis are presented in the 

form of mean and median LCC savings; 

percentages of customers experiencing 

net savings, net cost and no impact in 

LCC; and median PBP. For each 

equipment class, 10,000 Monte Carlo 

simulations were carried out. The 

simulations were conducted using 

Microsoft Excel and Crystal Ball, a 

commercially available Excel add-in 

used to carry out Monte Carlo 

simulations. 

LCC savings and PBP are calculated 

by comparing the installed costs and 

LCC values of standards-case scenarios 

against those of base-case scenarios. The 

base-case scenario is the scenario in 

which equipment is assumed to be 

purchased by customers in the absence 

of the proposed energy conservation 

standards. Standards-case scenarios are 

scenarios in which equipment is 

assumed to be purchased by customers 

after the amended energy conservation 

standards, determined as part of the 

current rulemaking, go into effect. The 

number of standards-case scenarios for 

an equipment class is equal to one less 

than the total number of efficiency 

levels in that equipment class, since 

each efficiency level above Efficiency 

Level 1 represents a potential amended 

standard. Usually, the equipment 

available in the market will have a 

distribution of efficiencies. Therefore, 

for both base-case and standards-case 

scenarios, in the LCC analysis, DOE 

assumed a distribution of efficiencies in 

the market, and the distribution was 

assumed to be spread across all 

efficiency levels in the LCC analysis (see 

NOPR TSD chapter 10). 

Recognizing that each building that 

uses commercial refrigeration 

equipment is unique, DOE analyzed 

variability in the LCC and PBP results 

by performing the LCC and PBP 

calculations for seven types of 

businesses: (1) Supermarkets; (2) 

wholesaler/multi-line retail stores, such 

as ‘‘big-box stores,’’ ‘‘warehouses,’’ and 

‘‘supercenters’’; (3) convenience and 

small specialty stores, such as meat 

markets and wine, beer, and liquor 

stores; (4) convenience stores associated 

with gasoline stations; (5) full-service 

restaurants; (6) limited service 

restaurants; and (7) other foodservice 

businesses, such as caterers and 

cafeterias. Different types of businesses 

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55928 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

57Weibull survival function is a continuous 

probability distribution function that is used to 

approximate the distribution of equipment lifetimes 

of commercial refrigeration equipment. 

58 DOE extended the compliance date for 

manufacturers to submit certification reports tor 

commercial refrigeration equipment until December 

31, 2013. 77 FR 76825 (Dec. 31, 2012). DOE 

emphasizes, however, that the testing and sampling 

requirements for commercial refrigeration 

equipment are unchanged by this extension. 

face different energy prices and also 

exhibit differing discount rates that they 

apply to purchase decisions. 

Expected equipment lifetime is 

another input whose value varies over a 

range. Therefore, DOE assumed a 

distribution of equipment lifetimes that 

are defined by Weibull survival 

functions.57

Another important factor influencing 

the LCC analysis is the State in which 

the commercial refrigeration equipment 

is installed. Inputs that vary based on 

this factor include energy prices and 

sales tax. At the national level, the 

spreadsheets explicitly modeled 

variability in the inputs for electricity 

price and markups, using probability 

distributions based on the relative 

shipments of units to different States 

and business types. 

Detailed descriptions of the 

methodology used for the LCC analysis, 

along with a discussion of inputs and 

results, are presented in chapter 8 and 

appendices 8A and 8B of the NOPR 

TSD. 

1. Effect of Current Standards 

DOE notes that, beginning January 1, 

2012, manufacturers were required to 

comply with the standards set by the 

January 2009 final rule.58 74 FR 1092 

(Jan. 9, 2009). DOE concludes that the 

efficiency level of the equipment on the 

market increased during this time. The 

engineering analysis for this NOPR was 

first developed in 2011, and therefore 

the engineering design option levels 

include efficiency levels of equipment 

available in the market in 2011. This 

means that the engineering efficiency 

levels were built up starting from levels 

which are below the standards set by 

the January 2009 final rule. These levels 

were included for analytical purposes, 

solely to represent the manner in which 

manufacturers may have achieved 

compliance with the January 2009 final 

rule standard levels, and were not 

considered in the development of 

proposed standard levels. The LCC 

analysis and NIA assume the first year 

for the analyses as 2017. As noted 

above, the market in 2017 will be 

different from that in 2011 in terms of 

efficiency distribution of the equipment, 

mainly due to the effect of the standards 

established by the January 2009 final 

rule. Therefore, the market baseline 

(from the year 2011) used as the starting 

point for the engineering analysis is not 

the same as the market baseline in 2017, 

when any amended standards 

prescribed by the current rulemaking 

are scheduled to go into effect. 

To estimate the state of the market 

baseline level in 2017, DOE introduced 

a baseline level termed the ‘‘standards 

baseline.’’ The energy consumption of 

the standards baseline level of an 

equipment class is equal to the standard 

prescribed by the January 2009 final 

rule for that equipment class. 74 FR 

1093 (Jan. 9, 2009). The design option 

levels that are less efficient than the 

standards baseline were disregarded, 

and the more-efficient design option 

levels were carried forward for 

downstream analyses. A detailed 

description of this procedure is 

presented with the aid of an example in 

chapter 8 of NOPR TSD. 

At the April 2011 preliminary 

analysis public meeting, AHRI asked 

whether DOE intended to update the 

LCC analysis once the standards set in 

the January 2009 final rule became 

effective in order to change the baseline. 

(AHRI, Public Meeting Transcript, No. 

31 at pp. 99–100) 

The engineering analysis for this 

NOPR was first developed in 2011, and 

updated with new information as it 

became available up to the time of this 

publication. However, DOE continued 

to use in its engineering baseline 

characteristics reflecting the 

construction of equipment prior to 

required compliance with the standards 

set by the January 2009 final rule. As a 

result, some of the engineering 

efficiency levels reflect levels which do 

not correspond to equipment 

performance currently permitted on the 

market after January 1, 2012. These 

levels, however, are solely used to 

reflect the manner in which DOE 

believes manufacturers could have 

attained the 2009 final rule standard 

levels through implementation of design 

options, and were not used in the 

downstream analysis for the purposes of 

calculating standard levels proposed in 

this NOPR. 

Consistent with the methodology 

described above and explained in detail 

in Chapter 8 of the NOPR TSD, DOE 

developed a ‘‘standards baseline’’ for 

use as the starting point for its 

downstream (LCC and PBP, NIA, etc.) 

analyses. This standards baseline 

corresponds to the lowest efficiency 

level which would be compliant with 

current (January 2009 final rule) 

standards. From there, higher efficiency 

levels were studied as the basis for 

developing potential standard levels as 

proposed in today’s NOPR. In response 

to AHRI’s comment, DOE used updated 

inputs to the baseline in order to reflect 

the compliance date of the January 2009 

final rule standards having passed. This 

includes updates to the non-standards 

case efficiency distribution and other 

inputs to the downstream analyses. 

These inputs were updated based on the 

most recent available information for 

use in conducting the analysis described 

in today’s NOPR. 

2. Equipment Cost 

To calculate customer equipment 

costs, DOE multiplied the MSPs 

developed in the engineering analysis 

by the distribution channel markups, 

described in section IV.F. DOE applied 

baseline markups to baseline MSPs, and 

incremental markups to the MSP 

increments associated with higher 

efficiency levels. 

3. Installation, Maintenance, and Repair 

Costs 

Installation cost includes labor, 

overhead, and any miscellaneous 

materials and parts needed to install the 

equipment. The installation costs may 

vary from one equipment class to 

another, but they do not vary with 

efficiency levels within an equipment 

class. Costs that do not vary with 

efficiency levels do not impact the LCC, 

PBP, or NIA results. DOE retained the 

nationally representative installation 

cost values from the January 2009 final 

rule of $2,000 for all remote condensing 

equipment and $750 for all selfcontained equipment, and simply 

escalated the values from 2007$ to 

2012$, resulting in 2012 installation 

costs of $2,299 and $862, respectively. 

True stated that the average glassdoored merchandiser is moved and 

installed twice in its lifetime, and that 

self-contained, solid-doored units, 

which are used in commercial kitchens, 

are moved and installed in different 

locations at least three times, on 

average, during their lifetimes. 

Therefore, True suggested that DOE 

double or triple its estimated 

installation cost. (True, Public Meeting 

Transcript, No, 31 at p. 110) 

Based on the design options for higher 

efficiency levels, DOE determined that 

installation costs do not vary by 

efficiency levels within a given 

equipment class. Costs that do not vary 

with efficiency levels do not impact the 

LCC, PBP, or NIA results. Because 

doubling or tripling of installation costs 

would not impact the net results, DOE 

did not alter the installation costs for 

the NOPR analyses based on True’s 

comment. 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55929 

Maintenance costs are associated with 

maintaining the operation of the 

equipment. DOE split the maintenance 

costs into regular maintenance costs and 

lighting maintenance costs. Regular 

maintenance activities, which include 

cleaning evaporator and condenser 

coils, drain pans, fans, and intake 

screens; inspecting door gaskets and 

seals; lubricating hinges; and checking 

starter panel, control, and defrost 

system operation, were considered to be 

equivalent for equipment at all 

efficiency levels. Lighting maintenance 

costs are the costs incurred to replace 

display case lighting at regular intervals 

in a preventative fashion. Because lights 

and lighting configuration change with 

efficiency levels, lighting maintenance 

costs vary with efficiency levels. As 

stated in section IV.E.4.d, for efficiency 

levels that incorporate LED lights as a 

design option, the reduction in LED 

costs beyond 2017 were taken into 

account when calculating the lighting 

maintenance costs. 

Repair cost is the cost to the customer 

of replacing or repairing failed 

components. DOE calculated repair 

costs based on the typical failure rate of 

refrigeration system components, 

original equipment manufacturer (OEM) 

cost of the components, and an assumed 

markup value to account for labor cost. 

a. Maintenance and Repair Costs by 

Efficiency Level 

Traulsen commented that it agreed 

with DOE that installation and 

maintenance costs would be flat across 

all efficiency levels. (Traulsen, No. 45 at 

p. 4) AHRI, however, disagreed with 

DOE’s assumption that repair and 

maintenance costs would not vary with 

efficiency. AHRI stated that the 

industry’s experience has been that 

higher efficiency equipment is more 

expensive to repair and maintain since 

it uses more sophisticated components. 

AHRI also added that, if repair and 

maintenance cost data are not available 

by efficiency level, DOE should 

correlate repair and maintenance cost 

with equipment cost. (AHRI, No. 43 at 

p. 3) 

DOE does not believe that any design 

option used in the higher efficiency 

equipment considered in this 

rulemaking would lead to higher costs 

for regular maintenance activities. 

Repair costs and lighting maintenance 

costs, on the other hand, have been 

modeled to be proportional to the OEM 

cost of the components and, 

consequently, are higher for higher 

efficiency equipment. DOE requested 

information from stakeholders regarding 

maintenance and repair costs 

specifically related to any of the design 

options used for this rulemaking, but 

did not receive any such information. 

Therefore, DOE retained its approach of 

using flat costs for regular maintenance, 

and costs proportional to OEM cost for 

repair costs and lighting maintenance 

costs. 

Southern Store Fixtures questioned 

whether DOE would examine the 

economic impact of night curtains and 

lighting occupancy sensors on 

equipment cost and operating cost. 

(Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 185– 

86) CA IOUs stated that labor costs 

related to night curtain deployment can 

be significant. CA IOUs urged DOE to 

review and update its assumptions 

involving night curtains. (CA IOUs, No. 

42 at p. 5) 

Equipment costs, which include costs 

of night curtains and lighting occupancy 

sensors, were covered in the engineering 

analysis used to obtain the MSP (see 

section IV.E). Based on discussions with 

specialists in display case retrofits who 

are familiar with lighting occupancy 

sensor installation and setup, DOE 

concluded that lighting occupancy 

sensors do not increase maintenance 

costs of commercial refrigeration 

equipment. With respect to repair or 

replacement costs, DOE determined that 

the manufacturing processes used today 

produce highly reliable products, 

making the failure of occupancy sensors 

relatively rare. Typically, according to 

the available data, lighting occupancy 

sensors last nearly 15 years, which is 

longer than the average lifetime of 

commercial refrigeration equipment. 

Therefore, DOE did not include lighting 

occupancy sensor repair or replacement 

costs in the LCC analysis. 

DOE believes that the night curtains 

currently available in the market are 

designed for easy deployment and 

retraction. In most instances, it takes 

less than 15 seconds per refrigerated 

display case to deploy or retract a night 

curtain. DOE believes that deployment 

and retraction of night curtains can be 

easily assimilated into the activities 

associated with store closing or opening 

operations, and will not amount to an 

added expense. Therefore, DOE did not 

add labor costs for night curtain 

deployment and retraction to the LCC 

analysis or NIA. 

b. Maintenance and Repair Cost 

Annualization 

Stakeholders provided feedback on 

DOE’s methodology in annualizing the 

costs of equipment maintenance and 

repair. ASAP stated that annualizing 

lighting maintenance costs results in a 

present value that is greater than it 

would be if DOE were to model lighting 

replacement costs in the years in which 

they actually were incurred. (ASAP, 

Public Meeting Transcript, No. 31 at p. 

104) NEEA agreed that DOE should try 

to characterize maintenance costs as 

accurately as possible, modeling truly 

annual costs on an annual basis, and 

other costs as they occur (i.e., as capital 

equipment costs). NEEA added that it is 

not appropriate to annualize all costs 

because, while some costs are truly 

annual or biannual, others are periodic 

maintenance investments and should be 

treated as such. NEEA referenced the 

fluorescent lamp ballast rulemaking 

(Docket No. EE–2007–BT–STD–0016), 

in which DOE accounted for lamp 

replacement costs in the years in which 

they occurred, and urged DOE to adopt 

a similar methodology in this 

rulemaking. (NEEA, Public Meeting 

Transcript, No. 31 at p. 105, No. 36 at 

pp. 5–6) ASAP and NRDC echoed this 

stance in their jointly submitted written 

comment, stating that, while it is 

reasonable to annualize costs that are 

indeed incurred annually or biannually, 

annualizing costs that only occur in 

certain years could distort the LCC 

output, resulting in a higher present 

value of annualized costs. ASAP and 

NRDC also referenced the fluorescent 

ballast rulemaking, and suggested that 

DOE account for costs similarly in this 

rulemaking’s analyses. (ASAP and 

NRDC, No. 34 at p. 4) Southern Store 

Fixtures, however, offered a dissenting 

opinion, adding that it is a common 

practice in supermarkets to have 

lighting contracts under which a 

maintenance worker changes the lights 

on a scheduled basis, whether they are 

broken or not, making lighting costs 

indeed annual. (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at p. 107) 

DOE has determined that, if the costs 

of known items occurring at predictable 

intervals are appropriately discounted 

when annualized, there will be no 

impact on LCC and NIA results, 

regardless of whether or not the costs 

are annualized. Additionally, in the 

commercial refrigeration equipment 

analyses, repairs and replacements have 

been modeled as a combination of 

known, expected items, plus others 

modeled simply as a fraction of failed 

components that are expected to be 

replaced during equipment lifetime. 

Such a characterization of maintenance 

and repair costs does not lend itself to 

specification of a particular time, during 

the equipment lifetime, when such 

repairs are likely to occur. Further, the 

PBP by its very definition cannot be 

calculated unless the costs are 

annualized. Finally, if multiple explicit 

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55930 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

59RS Means Company, Inc. Means Costworks 

2010: Facility, Maintenance and Repair Cost Data. 

2010. Kingston, MA. 

60U.S. Energy Information Administration. EIA– 

826 Sales and Revenue Spreadsheets. (Last 

accessed May 16, 2012). www.eia.doe.gov/cneaf/

electricity/page/eia826.html 

61The spreadsheet tool that DOE used to conduct 

the LCC and PBP analyses allows users to select 

price forecasts from either AEO’s High Economic 

Growth or Low Economic Growth Cases. Users can 

thereby estimate the sensitivity of the LCC and PBP 

results to different energy price forecasts. 

repair and maintenance line items were 

tracked individually in the NIA model, 

the size and complexity of the computer 

model would grow exponentially 

without a commensurate improvement 

in value. Therefore, DOE has retained its 

conventional approach of annualizing 

the maintenance and repair costs. 

c. Maintenance Cost Estimates 

At the April 2011 preliminary 

analysis public meeting, Coca-Cola 

stated that its largest maintenance cost 

is condenser cleaning, which is much 

more expensive than lighting 

maintenance. (Coca-Cola, Public 

Meeting Transcript, No. 31 at p. 109) 

NEEA commented that, in the case of 

actual maintenance costs, it agreed with 

Coca-Cola’s assertion that $35 per year, 

the maintenance cost presented by DOE 

in its preliminary analysis, is too low 

based on its intuition regarding the cost 

of labor and travel to maintain 

equipment. (NEEA, No. 36 at p. 6) 

DOE obtained its annualized 

maintenance costs for commercial 

refrigeration equipment from RS Means 

Facilities Maintenance and Repair Cost 

Data.59 RS Means data provide estimates 

of the person-hours, labor rates, and 

materials required to maintain 

commercial refrigeration equipment. 

While it could be true that an amount 

of $35 per year does not reflect travel 

and other overhead charges, DOE 

believes that the value reflects the cost 

incurred for labor if the maintenance 

were to be performed by in-house 

personnel of the business establishment. 

In any case, the actual amount allocated 

to the regular maintenance costs has no 

effect on the LCC analysis or the NIA 

because maintenance costs do not vary 

based on efficiency levels in any 

equipment class. DOE believes the 

higher efficiency design options 

selected for this rulemaking do not 

result in changes to the regular 

maintenance costs of the commercial 

refrigeration equipment. Therefore, DOE 

believes that a value of $35 is 

reasonably representative of the regular 

maintenance costs for self-contained 

equipment. 

d. Refrigerant Costs 

Southern Store Fixtures stated that 

DOE should include refrigerant recharge 

costs in its maintenance cost estimates, 

because EPA and DOE have accepted 

that there is an 18-percent refrigerant 

leakage rate annually, or at least 

regularly, for rack systems. (Southern 

Store Fixtures, Public Meeting 

Transcript, No. 31 at p. 108) 

Costs incurred due to refrigerant 

leakage do not vary with equipment 

efficiency levels. Therefore, these costs 

will not affect the LCC analysis or NIA 

results. DOE did not take these costs 

into account for the NOPR analysis. 

e. Repair Costs 

Traulsen stated that repair costs 

would increase commensurate with the 

purchase price of the components to be 

repaired. This increase, Traulsen added, 

would be consistent with the increase in 

manufacturing cost due to the 

implementation of a technology. 

(Traulsen, No. 45 at p. 4) 

DOE modeled repair costs as directly 

proportional to the OEM cost of the 

failed components. This approach 

yields higher repair costs for higher 

efficiency equipment and is consistent 

with Traulsen’s comment. 

Zero Zone stated that it suspected the 

average lifetime of an LED light is less 

than 5 years, and that the cost to replace 

one will be higher than estimated. This, 

Zero Zone added, is because LEDs 

continue to evolve and older models are 

discontinued, meaning that replacement 

of failed LEDs will require a complete 

relamping to maintain consistent 

product appearance. (Zero Zone, No. 37 

at p. 4) 

All major manufacturers of LED 

lighting solutions for refrigerated 

display cases state that the 

maintenance-free lifetime for LED lights 

is 50,000 hours, and some of the 

retailers offer a 5-year warranty. DOE 

did not find any basis for doubting the 

assumption of a 50,000-hour lifetime for 

LED lights in refrigerated display cases. 

Recognizing that replacement of LED 

strip lighting in refrigerated display 

cases involves higher labor costs 

compared to the simple lamp 

replacement process of fluorescent tube 

lights, DOE applied a retrofit factor 

(multiplier) of 1.4 to the LED lamp cost 

to account for relamping of LED lights 

in display cases. The results presented 

in the preliminary analysis used the 

retrofit factor of 1.4, and DOE used the 

same factor for its NOPR analysis. 

4. Annual Energy Consumption 

Annual energy consumption of 

commercial refrigeration equipment is 

obtained from engineering analysis 

(chapter 5 of the NOPR TSD). 

5. Energy Prices 

DOE calculated average commercial 

electricity prices using the U.S. Energy 

Information Administration’s (EIA’s) 

Form EIA–826, ‘‘Database Monthly 

Electric Utility Sales and Revenue 

Data.’’ 60 DOE calculated an average 

national commercial price by (1) 

estimating an average commercial price 

for each utility company by dividing the 

commercial revenues by commercial 

sales; and (2) weighting each utility by 

the number of commercial customers it 

served in that region, across the nation. 

6. Energy Price Projections 

To estimate energy prices in future 

years for the preliminary analysis TSD, 

DOE multiplied the average regional 

energy prices described above by the 

forecast of annual average commercial 

energy price indices developed in the 

Reference Case from 

AEO2013.61AEO2013 forecasted prices 

through 2040. To estimate the price 

trends after 2040, DOE assumed the 

same average annual rate of change in 

prices as from 2031 to 2040. 

7. Equipment Lifetime 

DOE defines lifetime as the age at 

which a commercial refrigeration 

equipment unit is retired from service. 

DOE based expected equipment lifetime 

on discussions with industry experts, 

and concluded that a typical lifetime of 

10 years is appropriate for most 

commercial refrigeration equipment in 

large grocery/multi-line stores and 

restaurants. Industry experts believe 

that operators of small food retail stores, 

on the other hand, tend to use display 

cases longer. DOE used 15 years as the 

average equipment lifetime for display 

cases used in such retail stores. DOE 

reflects the uncertainty of equipment 

lifetimes in the LCC analysis for both 

equipment markets as probability 

distributions, as discussed in section 

8.2.3.5 of the TSD. 

Traulsen stated that 10 years is an 

acceptable estimate for the lifetime of 

self-contained equipment, and that it is 

not uncommon for some applications to 

have a 20-year lifetime. However, 

Traulsen added that smaller units 

subject to more frequent human 

interaction, such as undercounter units, 

would likely have shorter lifetimes, 

such as 7 years. Traulsen also stated that 

price point could indicate potential 

lifetime. (Traulsen, Public Meeting 

Transcript, No. 31 at p. 4) AHRI 

commented that properly installed and 

maintained equipment typically has a 

much longer lifetime than the actual 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55931 

62The LCC analysis estimates the economic 

impact on the individual customer from that 

customer’s own economic perspective in the year of 

purchase and therefore needs to reflect that 

individual’s own perceived cost of capital. By way 

of contrast DOE’s analysis of national impact 

requires a societal discount rate. These rates used 

in that analysis are 7 percent and 3 percent, as 

required by OMB Circular A–4, September 17, 2003. 

63Harris, R.S. Applying the Capital Asset Pricing 

Model. UVA–F–1456. Available at SSRN: http://

ssrn.com/abstract=909893. 

64U.S. Energy Information Administration. 

National Energy Modeling System Commercial 

Model (2004 Version). 2004. Washington, DC. 

65The CIMS Model was originally known as the 

Canadian Integrated Modeling System, but as the 

model is now being applied to other countries, the 

acronym is now used as its proper name. 

66Energy Research Group/M.K. Jaccard & 

Associates. Integration of GHG Emission Reduction 

Options using CIMS. 2000. Vancouver, B.C. 

www.emrg.sfu.ca/media/publications/Reports%20

for%20Natural%20Resources%20Canada/

Rollup.pdf 

period of time the end use customers 

retain it, and that this is entirely 

dependent on the specific business 

models of and competitive demands on 

different users. However, AHRI added 

that the 10-year lifetime used by DOE is 

an appropriate average value. (AHRI, 

No. 43 at p. 3) NEEA concurred, stating 

that it generally agreed with the inputs 

to the Crystal Ball simulations that DOE 

used. In particular, NEEA stated that it 

was comfortable with the assumed 

equipment lifetimes and distributions 

thereof, and that, while much of the 

equipment does indeed last longer, at 

that point the equipment becomes used 

equipment and is not directly applicable 

to the rulemaking except for purposes of 

estimating shipments. (NEEA, No. 36 at 

p. 6) 

DOE appreciates the comments 

previously submitted and welcomes 

further input on the equipment lifetimes 

for the LCC analysis and NIA. 

8. Discount Rates 

In calculating the LCC, DOE applies 

discount rates to estimate the present 

value of future operating costs to the 

customers for commercial refrigeration 

equipment. The discount rate is the rate 

at which future expenditures are 

discounted to establish their present 

value to the customer.62 DOE derived 

the discount rates for the commercial 

refrigeration equipment analysis by 

estimating the cost of capital for a large 

number of companies similar to those 

that could purchase commercial 

refrigeration equipment and then 

sampling them to characterize the effect 

of a distribution of potential customer 

discount rates. The cost of capital is 

commonly used to estimate the present 

value of cash flows to be derived from 

a typical company project or 

investment. Most companies use both 

debt and equity capital to fund 

investments, so their cost of capital is 

the weighted average of the cost to the 

company of equity and debt financing. 

DOE estimated the cost of equity 

financing by using the Capital Asset 

Pricing Model (CAPM).63 The CAPM, 

among the most widely used models to 

estimate the cost of equity financing, 

assumes that the cost of equity is 

proportional to the amount of 

systematic risk associated with a 

company. The cost of equity financing 

tends to be high when a company faces 

a large degree of systematic risk, and it 

tends to be low when the company faces 

a small degree of systematic risk. 

9. Compliance Date of Standards 

EPCA prescribes that DOE must 

review and determine whether to amend 

performance-based standards for 

commercial refrigeration equipment by 

January 1, 2013. (42 U.S.C. 

6313(c)(6)(A)) In addition, EPCA 

requires that any amended standards 

established in this rulemaking must 

apply to equipment that is 

manufactured on or after 3 years after 

the final rule is published in the Federal 

Register unless DOE determines, by 

rule, that a 3-year period is inadequate, 

in which case DOE may extend the 

compliance date for that standard by an 

additional 2 years. (42 U.S.C. 

6313(c)(6)(C)) Based on these criteria, 

DOE reasoned due to the cumulative 

regulatory burden of the recently 

implemented 2009 CRE final rule and of 

the upcoming walk-in cooler and freezer 

rule, which both affect the same 

industry that the most likely compliance 

date for standards set by this rulemaking 

would be in 2017. Therefore, DOE 

calculated the LCC and PBP for 

commercial refrigeration equipment 

under the assumption that compliant 

equipment would be purchased in 2017. 

DOE seeks comment on whether it 

should extend the compliance date as 

authorized, and, if so, by how long. 

10. Base-Case and Standards-Case 

Efficiency Distributions 

To accurately estimate the share of 

affected customers who would likely be 

impacted by a standard at a particular 

efficiency level, DOE’s LCC analysis 

considers the projected distribution of 

efficiencies of equipment that customers 

purchase under the base case (that is, 

the case without new or amended 

energy efficiency standards). DOE refers 

to this distribution of equipment 

efficiencies as a base-case efficiency 

distribution. 

DOE’s methodology to estimate 

market shares of each efficiency level 

within each equipment class is a costbased method consistent with the 

approaches that were used in the EIA’s 

National Energy Modeling System 

(NEMS) 64 and in the Canadian 

Integrated Modeling System (CIMS) 65 66

for estimating efficiency choices within 

each equipment class. DOE then 

extrapolated future scenarios of the 

equipment efficiency for the base case 

and amended standards cases using the 

same cost-based method. The difference 

in equipment efficiency between the 

base case and amended standards case 

was the basis for determining the 

reduction in unit energy consumption 

resulting from amended standards. 

Traulsen commented that it believed 

that DOE’s estimates of shipmentweighted market share are skewed 

toward the higher performance levels. 

Traulsen added that it believed that 

DOE has overestimated the value that 

end users place on energy efficiency. 

(Traulsen, No. 45 at p. 7) 

DOE recognizes Traulsen’s concern, 

but at this time has no data to more 

accurately define the market shares by 

efficiency level within each equipment 

class. No data on shipments by 

efficiency level of either self-contained 

or remote condensing equipment classes 

are known to DOE or were provided by 

industry or other stakeholders. 

Currently, there is also no extensive 

database of available efficiency levels by 

model that could be used to provide a 

proxy for efficiency levels for shipped 

equipment, an approach that has been 

used in rulemakings for other products 

when efficiency data on shipped 

products was lacking. The methodology 

used for this analysis was identical to 

that used in the January 2009 final rule 

analysis. See chapter 10 of the TSD for 

the January 2009 final rule, available at: 

www1.eere.energy.gov/buildings/

appliance_standards/commercial/pdfs/

chp_10_cre_shipmts_final.pdf. If the 

model overstates the share of shipments 

at higher efficiency levels in the base 

case scenario, it results in analysis 

erring on the side of lower NES and 

NPV values. 

11. Inputs to Payback Period Analysis 

Payback period is the amount of time 

it takes the customer to recover the 

higher purchase cost of more energy 

efficient equipment as a result of lower 

operating costs. Numerically, the PBP is 

the ratio of the increase in purchase cost 

to the decrease in annual operating 

expenditures. This type of calculation is 

known as a ‘‘simple’’ PBP because it 

does not take into account changes in 

operating cost over time or the time 

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55932 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

67Freedonia Group, Inc. Commercial 

Refrigeration Equipment to 2014. 2010. Cleveland, 

OH. Study 2261. www.freedoniagroup.com/

Commercial-Refrigeration-Equipment.html 

68North American Association of Food 

Equipment Manufacturers. 2008 Size and Shape of 

Industry. 2008. Chicago, IL. 

69Navigant Consulting, Inc. Energy Savings 

Potential and R&D Opportunities for Commercial 

Refrigeration. 2009. Prepared by Navigant 

Consulting, Inc. for the U.S. Department of Energy, 

Washington, DC. 

value of money; that is, the calculation 

is done at an effective discount rate of 

zero percent. PBPs are expressed in 

years. PBPs greater than the life of the 

equipment mean that the increased total 

installed cost of the more-efficient 

equipment is not recovered in reduced 

operating costs over the life of the 

equipment. 

The inputs to the PBP calculation are 

the total installed cost to the customer 

of the equipment for each efficiency 

level and the average annual operating 

expenditures for each efficiency level in 

the first year. The PBP calculation uses 

the same inputs as the LCC analysis, 

except that electricity price trends and 

discount rates are not used. 

12. Rebuttable-Presumption Payback 

Period 

Sections 325(o)(2)(B)(iii) and 

345(e)(1)(A) of EPCA, (42 U.S.C. 

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

6316(e)(1)(A)), establish a rebuttable 

presumption applicable to commercial 

refrigeration equipment. The rebuttable 

presumption states that a new or 

amended standard is economically 

justified if the Secretary finds that the 

additional cost to the consumer of 

purchasing a product complying with 

an energy conservation standard level 

will be less than three times the value 

of the energy savings during the first 

year that the consumer will receive as 

a result of the standard, as calculated 

under the applicable test procedure. 

This rebuttable presumption test is an 

alternative way of establishing 

economic justification. 

To evaluate the rebuttable 

presumption, DOE estimated the 

additional cost of purchasing moreefficient, standards-compliant 

equipment, and compared this cost to 

the value of the energy saved during the 

first year of operation of the equipment. 

DOE interprets that the increased cost of 

purchasing standards-compliant 

equipment includes the cost of 

installing the equipment for use by the 

purchaser. DOE calculated the 

rebuttable presumption payback period 

(RPBP), or the ratio of the value of the 

increased installed price above the 

baseline efficiency level to the first 

year’s energy cost savings. When the 

RPBP is less than 3 years, the rebuttable 

presumption is satisfied; when the 

RPBP is equal to or more than 3 years, 

the rebuttable presumption is not 

satisfied. Note that this PBP calculation 

does not include other components of 

the annual operating cost of the 

equipment (i.e., maintenance costs and 

repair costs). 

While DOE examined the rebuttablepresumption, it also considered whether 

the standard levels considered are 

economically justified through a more 

detailed analysis of the economic 

impacts of these levels pursuant to 42 

U.S.C. 6295(o)(2)(B)(i). The results of 

this analysis served as the basis for DOE 

to evaluate the economic justification 

for a potential standard level 

definitively (thereby supporting or 

rebutting the results of any preliminary 

determination of economic 

justification). 

I. National Impact Analysis—National 

Energy Savings and Net Present Value 

The NIA assesses the NES and the 

NPV of total customer costs and savings 

that would be expected as a result of 

amended energy conservation 

standards. The NES and NPV are 

analyzed at specific efficiency levels for 

each equipment class of commercial 

refrigeration equipment. DOE calculates 

the NES and NPV based on projections 

of annual equipment shipments, along 

with the annual energy consumption 

and total installed cost data from the 

LCC analysis. For the NOPR analysis, 

DOE forecasted the energy savings, 

operating cost savings, equipment costs, 

and NPV of customer benefits for 

equipment sold from 2017 through 

2046—the year in which the last 

standards-compliant equipment is 

shipped during the 30-year analysis 

period. 

DOE evaluates the impacts of the 

amended standards by comparing basecase projections with standards-case 

projections. The base-case projections 

characterize energy use and customer 

costs for each equipment class in the 

absence of any amended energy 

conservation standards. DOE compares 

these projections with projections 

characterizing the market for each 

equipment class if DOE were to adopt 

an amended standard at specific energy 

efficiency levels for that equipment 

class. For the standards cases, DOE 

considered a ‘‘roll-up’’ scenario, in 

which DOE assumed that equipment 

efficiencies that do not meet the 

standard level under consideration 

would ‘‘roll-up’’ to meet the amended 

standard level, and those already above 

the proposed standard level would 

remain unaffected. 

DOE uses a Microsoft Excel 

spreadsheet model to calculate the 

energy savings and the national 

customer costs and savings from each 

TSL. The NOPR TSD and other 

documentation that DOE provides 

during the rulemaking help explain the 

models and how to use them, and 

interested parties can review DOE’s 

analyses by interacting with these 

spreadsheets. The NIA spreadsheet 

model uses average values as inputs (as 

opposed to probability distributions of 

key input parameters from a set of 

possible values). 

For the current analysis, the NIA used 

projections of energy prices and 

commercial building starts from the 

AEO2013 Reference Case. In addition, 

DOE analyzed scenarios that used 

inputs from the AEO2013 Low 

Economic Growth and High Economic 

Growth Cases. These cases have lower 

and higher energy price trends, 

respectively, compared to the Reference 

Case. NIA results based on these cases 

are presented in chapter 10 of the NOPR 

TSD. 

A detailed description of the 

procedure to calculate NES and NPV, 

and inputs for this analysis are provided 

in chapter 10 of the NOPR TSD. 

1. Shipments 

Complete historical shipments data 

for commercial refrigeration equipment 

could not be obtained from a single 

source; therefore, DOE used data from 

multiple sources to estimate historical 

shipments. The major sources were 

2005 shipments data provided by ARI as 

part of its comments submitted in 

response to the January 2009 final rule 

Framework document, ARI 2005 Report 

(Docket No. EERE–2006–BT–STD–0126, 

ARI, No. 7, Exhibit B at p. 1); 

Commercial Refrigeration Equipment to 

2014 by Freedonia Group, Inc.67; 2008 

Size and Shape of Industry by the North 

American Association of Food 

Equipment Manufacturers; 68 and 

Energy Savings Potential and R&D 

Opportunities for Commercial 

Refrigeration prepared by Navigant 

Consulting, Inc. for DOE.69 Exact 

shipments numbers and assumptions 

have been withheld because some of the 

sources cited above are not public 

documents and are available only for 

purchase. 

Historical linear feet of shipped units 

depicts the annual amount of 

commercial refrigeration equipment 

capacity shipped, and is an alternative 

way to express shipments data. DOE 

determined the linear feet shipped for 

any given year by multiplying each unit 

shipped by its associated average length, 

and then summing all the linear footage 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55933 

values. Table IV.3 presents the 

representative equipment class lengths 

used for the conversion of per-unit 

shipments to linear footage within each 

equipment class. 

TABLE IV.3—EQUIPMENT LINEAR DIMENSIONS ASSUMED FOR SHIPMENTS ANALYSIS

Equipment class Assumed length 

ft Basis 

VOP.RC.M ................................................ 10 Average of 8 ft and 12 ft, manufacturer interviews. 

VOP.RC.L ................................................. 10 Average of 8 ft and 12 ft, manufacturer interviews. 

VOP.SC.M ................................................ 4 Baseline equipment used for engineering analysis. 

SVO.RC.M ................................................ 10 Average of 8 ft and 12 ft, manufacturer interviews. 

SVO.SC.M ................................................ 4 Baseline equipment used for engineering analysis. 

HZO.RC.M ................................................ 10 Average of 8 ft and 12 ft, manufacturer interviews. 

HZO.RC.L ................................................. 10 Average of 8 ft and 12 ft, manufacturer interviews. 

HZO.SC.M ................................................ 4 Baseline equipment used for engineering analysis. 

HZO.SC.L ................................................. 4 Baseline equipment used for engineering analysis. 

VCT.RC.M ................................................ 10 Average of 3-door and 5-door (30 in. per door), manufacturer interviews. 

VCT.RC.L ................................................. 10 Average of 3-door and 5-door (3 in. per door), manufacturer interviews. 

VCT.SC.M ................................................. 4 Engineering estimate.* 

VCT.SC.L .................................................. 3 .5 Average of 1-door and 2-door freezer. 

VCT.SC.I ................................................... 5 Baseline equipment used for engineering analysis. 

VCS.SC.M ................................................ 4 Engineering estimate.* 

VCS.SC.L ................................................. 3 .5 Average of 1-door and 2-door freezer. 

VCS.SC.I .................................................. 5 Baseline equipment used for engineering analysis. 

HCT.SC.M ................................................ 3 Engineering estimate.* 

HCT.SC.L ................................................. 3 Engineering estimate.* 

HCT.SC.I .................................................. 3 .4 Baseline equipment used for engineering analysis. 

HCS.SC.M ................................................ 4 Engineering estimate.* 

HCS.SC.L ................................................. 5 Engineering estimate.* 

SOC.RC.M ................................................ 8 Average of 4 ft, 8 ft, 12 ft, all common equipment lengths. 

PD.SC.M ................................................... 2 .5 Baseline equipment used for engineering analysis. 

SOC.SC.M ................................................ 5 Engineering estimate.* 

* For equipment classes that exhibit a wide range of equipment lengths in the market, DOE assumed a value for equipment length based on its 

best engineering judgment. 

DOE converted the estimated 2009 

shipments data in each equipment class 

to percentages of total shipped linear 

feet of commercial refrigeration 

equipment for use in the shipments 

model. This established the commercial 

refrigeration equipment market share 

attributed to each equipment class. DOE 

calculated the percentage of shipped 

linear footage by dividing the linear 

footage shipped for each equipment 

class by the overall linear footage 

shipped for all commercial refrigeration 

equipment covered in this rulemaking. 

Table IV.4 summarizes DOE’s 

estimated division of historical annual 

shipments into new and replacement 

categories by building type. The 

distributions shown in Table IV.4 result 

from several discrete steps. First, 

equipment types were identified by the 

type of business they generally serve. 

For example, vertical open cases with 

remote compressors are associated with 

large grocers and multi-line retail stores. 

Remote condensing equipment is 

generally associated with retail stores 

that sell high volumes of perishable 

goods, while self-contained units are 

associated with foodservice and 

convenience or small food sales stores. 

When there was no strong association 

between the building type and 

equipment class, equipment was 

distributed across broader classes. 

Second, a ratio of new versus 

replacement equipment was developed 

based on commercial floor space 

estimates (floor space estimates are 

discussed below). Using the expected 

useful life of commercial refrigeration 

equipment and commercial floor space 

stock, additions, and retirements, ratios 

were developed of new versus 

replacement stock for use in this 

analysis. Using these and related factors 

(e.g., the division of foodservice into the 

three building types—limited service 

restaurants, full-service restaurants, and 

other), DOE distributed commercial 

refrigeration equipment shipments 

among building types and new versus 

replacement shipments, as shown in 

Table IV.4. 

TABLE IV.4—ESTIMATED DISTRIBUTION OF 2009 LINEAR FEET OF COMMERCIAL REFRIGERATION EQUIPMENT SHIPMENTS

AMONG NEW VS. REPLACEMENT EQUIPMENT

Building type Replacement 

(percent) 

New 

(percent) 

Total 

(percent) 

Large Grocery/Multi-Line Retail ................................................................................................... 30.5 8.6 39.1 

Small Grocery/Convenience ........................................................................................................ 14.6 4.1 18.7 

Limited Service Restaurants ........................................................................................................ 9.4 3.3 12.7 

Full Service Restaurants ............................................................................................................. 9.8 3.4 13.2 

Other ............................................................................................................................................ 12.1 4.2 16.3 

Total ...................................................................................................................................... 76.4 23.6 100.0 

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55934 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

70U.S. Energy Information Administration. 

Annual Energy Outlook 2013. Washington, DC. 

DOE/EIA–0383(2013). 

Table IV.5 shows the forecasted 

square footage of new construction used 

to scale annual new commercial 

refrigeration equipment shipments. As 

the data in Table IV.5 show, forecasted 

square footage additions to the building 

stocks vary from year to year, with the 

first few years of the analyzed period 

exhibiting lower levels of growth due to 

predicted lingering impacts of the U.S. 

economic recession. The forecasted 

commercial refrigeration equipment 

shipments therefore show some 

variability as well, tracking the 

forecasted square footage floor space 

additions. The growth rates over the last 

10 years of the AEO2013 forecast (2031 

through 2040) were used to extend the 

AEO forecast out until the year 2046 to 

develop the full 30-year forecast needed 

for the NIA. 

TABLE IV.5—AEO2013 FORECAST OF NEW FOOD SALES AND FOODSERVICE SQUARE FOOTAGE

Year 

New construction 

million ft 2

Foodservice Food sales 

2009 ......................................................................................................................................................................... 47.715 34.070 

2012 ......................................................................................................................................................................... 31.455 22.149 

2017 ......................................................................................................................................................................... 49.076 34.496 

2020 ......................................................................................................................................................................... 47.617 33.447 

2025 ......................................................................................................................................................................... 47.522 33.416 

2030 ......................................................................................................................................................................... 53.630 37.836 

2035 ......................................................................................................................................................................... 55.536 39.107 

2040 ......................................................................................................................................................................... 55.814 39.243 

Annual Growth Factor, 2031–2040 .................................................................................................................. 2.41% 2.27% 

Source: U.S. Energy Information Administration, Annual Energy Outlook 2013. 

DOE then estimated the annual linear 

footage shipped for each of the 24 

primary equipment classes. The 

shipments analysis relies on the 24 

primary equipment classes to represent 

the commercial refrigeration equipment 

market. Table IV.6 shows the fraction of 

the linear footage shipped by each of 

these 24 equipment classes. 

TABLE IV.6—PERCENT OF SHIPPED

LINEAR FEET OF COMMERCIAL REFRIGERATION EQUIPMENT

Equipment class 

Percentage of 

linear feet 

shipped* 

VOP.RC.M ............................ 11.59 

VOP.RC.L ............................. 0.61 

VOP.SC.M ............................ 0.82 

SVO.RC.M ............................ 9.30 

SVO.SC.M ............................ 1.23 

HZO.RC.M ............................ 1.43 

HZO.RC.L ............................. 4.49 

HZO.SC.M ............................ 0.11 

HZO.SC.L ............................. 0.22 

VCT.RC.M ............................ 0.87 

VCT.RC.L ............................. 12.11 

VCT.SC.M ............................. 5.46 

VCT.SC.L .............................. 0.27 

VCT.SC.I ............................... 0.30 

VCS.SC.M ............................ 22.11 

VCS.SC.L ............................. 11.25 

VCS.SC.I .............................. 0.07 

HCT.SC.M ............................ 0.07 

HCT.SC.L ............................. 0.43 

HCT.SC.I .............................. 0.48 

HCS.SC.M ............................ 5.01 

HCS.SC.L ............................. 0.65 

SOC.RC.M ............................ 2.34 

PD.SC.M ............................... 8.58 

TABLE IV.6—PERCENT OF SHIPPED

LINEAR FEET OF COMMERCIAL REFRIGERATION EQUIPMENT—Continued 

Equipment class 

Percentage of 

linear feet 

shipped* 

SOC.SC.M ............................ 0.17 

* The percentages in this column do not 

sum to 100 percent because shipments of 

secondary equipment classes and certain 

other equipment classes that were not analyzed in this rulemaking were not included. 

The amount of new and existing 

commercial floor space is the main 

driver for commercial refrigeration 

equipment shipments, and is 

appropriately one of the basic inputs 

into the shipments model. The model 

divides commercial space into two 

components: space from new 

construction floor space and space from 

existing floor space. 

DOE took the projected floor space 

construction after the year 2009 from 

the NEMS projection underlying 

AEO2013.70 DOE extracted annual 

estimates of new floor space additions 

from an AEO2013 data file (kdbout) for 

the period from 2009 through 2040. As 

stated earlier, the last 10 years of the 

AEO forecast were used to develop 

growth rates used to extend the forecast 

to 2046. 

Detailed description of the procedure 

to calculate future shipments is 

presented in chapter 9 of NOPR TSD. 

Comments related to shipment analysis 

received during the April 2011 

preliminary analysis public meeting are 

listed below, along with DOE’s 

responses to the comments. 

a. VOP.RC.L Shipments 

At the April 2011 preliminary 

analysis public meeting, Southern Store 

Fixtures stated that vertical open 

freezers represent far less than the figure 

of 1.9 percent of the commercial 

refrigeration equipment shipments that 

DOE included in the preliminary 

analysis TSD. (Southern Store Fixtures, 

Public Meeting Transcript, No. 31 at p. 

123) In a written comment, NEEA 

referenced this statement by Southern 

Store Fixtures, urging DOE to ensure the 

accuracy of its shipments data for the 

VOP.RC.L equipment class, but stating 

that it generally agreed with DOE’s 

shipments analysis. (NEEA, No. 36 at p. 

6) 

Shipments estimates for VOP.RC.L 

were not explicitly stated in the ARI 

2005 Report. DOE assumed that these 

shipments numbers were likely grouped 

with those of VOP.RC.M. For the 

preliminary analysis, DOE allocated a 

portion of VOP.RC.M shipments to the 

VOP.RC.L equipment class. In response 

to the comments from Southern Store 

Fixtures and based on new evidence, 

DOE reduced the portion of VOP.RC.M 

shipments (obtained from the ARI 2005 

Report) that it allocated to the VOP.RC.L 

equipment class. 

b. Shipments by End User Type 

Southern Store Fixtures stated that 

the shipments estimates presented in 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55935 

the preliminary analysis for new 

equipment for large supermarkets and 

smaller markets did not appear to reflect 

the assumption of 10- and 15-year 

equipment lifetimes. Specifically, 

Southern Store Fixtures pointed out that 

the replacement shipment numbers 

were much higher than the new 

shipments in the small grocery store 

segment. Southern Store Fixtures 

pointed out that because the equipment 

life in small grocery stores is 15 years, 

compared to 10 years in large grocery 

stores, the ratio of replacement 

shipments to new shipments for small 

grocery stores should be smaller than 

the same ratio for large grocery stores. 

(Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at p. 124) 

Small grocery stores and convenience 

stores house many self-contained units. 

In many stores, self-contained units 

comprise most of the refrigeration load, 

when the refrigeration from walk-in 

cold rooms is discounted (as it does not 

belong in the commercial refrigeration 

equipment rulemaking). In the current 

rulemaking, all self-contained units are 

assumed to have an average lifetime of 

10 years. Therefore, the ratio of 

replacement shipments to new 

shipments in small grocery stores and 

convenience stores is dictated largely by 

the 10-year lifetime of self-contained 

units, and is relatively less impacted by 

the 15-year lifetime of remote 

condensing display cases, which form a 

much smaller share of the commercial 

refrigeration equipment found in small 

grocery and convenience stores. DOE 

believes that this factor explains the 

apparent discrepancy highlighted in the 

comment by Southern Store Fixtures. 

Traulsen expressed the belief that 

DOE’s values for projected shipments 

for the foodservice building type, as 

well as its projected shipments by 

equipment class, were low. (Traulsen, 

No. 45 at p. 4) 

DOE calculated future shipments 

based on forecasted square footage of 

new construction, obtained from the 

AEO forecast and historical shipments 

data. The ratio of floor space occupied 

by commercial refrigeration equipment 

to the total commercial floor space is 

much smaller in foodservice buildings 

than in food sales buildings such as 

grocery stores. Further, DOE converted 

the historical shipment numbers from 

number of units into number of linear 

feet by multiplying the number of units 

by the average linear feet of equipment. 

Commercial refrigeration equipment 

used in the foodservice industry is 

overwhelmingly dominated by selfcontained equipment, which, on an 

average, has a shorter length compared 

to the remote condensing equipment 

found in grocery stores. A combination 

of these factors results in the shipments 

numbers (in linear feet) to foodservice 

buildings being much lower than 

shipments numbers to food sales 

buildings. However, in terms of number 

of units shipped, the proportion of 

shipments to foodservice buildings is 

much higher as compared to shipments 

to food sales buildings. 

c. Shipments Forecasts 

Traulsen commented that overly 

aggressive performance standards are 

likely to add costs that will be passed 

along to the customer, resulting in 

stunted market growth and retention of 

less-efficient units. Traulsen estimated 

that equipment prices have increased 1– 

2 percent based on variable 

manufacturing cost increases alone as a 

result of the need to comply with the 

standards set by EPACT 2005. 

(Traulsen, No. 45 at p. 6) 

DOE does not have detailed 

information on the historical shipments 

data of various types of commercial 

refrigeration equipment by equipment 

classes. As described in earlier in this 

section, DOE extracted shipments data 

from certain publications and estimated 

the shipments by equipment class. The 

ARI 2005 report only contains 

shipments data for the year 2005. With 

the available shipments data for 

commercial refrigeration equipment, its 

difficult to determine the impact of 

price increases on future shipments. 

Regarding display cases, which are 

predominantly used in supermarkets 

and grocery stores, DOE believes that 

replacement of display cases is largely 

performed during store remodeling, and 

that the major driving factor behind 

remodeling is the need to improve 

aesthetics. Decisions regarding store 

remodeling are influenced by many 

factors, including overall future 

economic outlook and availability of 

capital, and DOE believes that 

equipment price increases do not figure 

as the major factor. DOE recognizes that, 

on the other hand, foodservice 

establishments may be more sensitive to 

equipment prices. The equipment that is 

predominantly used in this sector is 

composed of refrigerators and freezers 

with solid doors. The MSP increases 

related to the higher efficiency 

refrigerators and freezers were estimated 

as part of the engineering analysis, and 

were found to be 6 to 8 percent of the 

baseline MSPs. The effect of amended 

DOE standards could be that foodservice 

establishments extend the life of their 

existing equipment. DOE expects that 

this effect will result in a slight dip in 

shipments only in the early years after 

amended standards go into effect 

because the old equipment will have to 

be replaced eventually. The effect of 

such a dip will not have a significant 

impact on the NIA, which is carried out 

over a 30-year period. Extending the life 

of the existing equipment may also 

result in higher maintenance and repair 

costs that may offset part or all of the 

apparent customer savings. 

DOE welcomes stakeholder input in 

this regard, as the information currently 

available to DOE is not sufficient to 

determine the impact of price increases 

on future shipments of commercial 

refrigeration equipment. 

2. Forecasted Efficiency in the Base Case 

and Standards Cases 

The method for estimating the market 

share distribution of efficiency levels is 

presented in section IV.H.9, and a 

detailed description can be found in 

chapter 11 of the NOPR TSD. To 

estimate efficiency trends in the 

standards cases, DOE uses a ‘‘roll-up’’ 

scenario in its standards rulemakings. 

Under the roll-up scenario, DOE 

assumes that equipment efficiencies in 

the base case that do not meet the 

standard level under consideration 

would ‘‘roll up’’ to meet the new 

standard level, and equipment 

efficiencies above the standard level 

under consideration would be 

unaffected. Table IV.7 shows the 

shipment-weighted market shares by 

efficiency level in the base-case 

scenario. 

TABLE IV.7—SHIPMENT-WEIGHTED MARKET SHARES BY EFFICIENCY LEVEL, BASE CASE

Equipment class 

Shipment-weighted market shares by efficiency level * ** 

Level 1 

(percent) 

Level 2 

(percent) 

Level 3 

(percent) 

Level 4 

(percent) 

Level 5 

(percent) 

Level 6 

(percent) 

Level 7 

(percent) 

Level 8 

(percent) 

VOP.RC.M ....................... 24.3 24.0 23.4 13.4 12.8 2.0 NA NA 

VOP.RC.L ........................ 26.0 26.1 23.2 22.4 2.2 NA NA NA 

VOP.SC.M ........................ 19.1 19.0 18.8 18.1 11.3 10.7 3.1 NA 

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71 Docket ID: EERE–2010–BT–NOA–0028, 

comment by Kirk Lundblade. 

TABLE IV.7—SHIPMENT-WEIGHTED MARKET SHARES BY EFFICIENCY LEVEL, BASE CASE—Continued 

Equipment class 

Shipment-weighted market shares by efficiency level * ** 

Level 1 

(percent) 

Level 2 

(percent) 

Level 3 

(percent) 

Level 4 

(percent) 

Level 5 

(percent) 

Level 6 

(percent) 

Level 7 

(percent) 

Level 8 

(percent) 

VCT.RC.M ........................ 18.8 18.8 15.9 15.5 14.8 14.5 1.7 NA 

VCT.RC.L ......................... 19.5 20.4 20.0 19.4 19.0 1.8 NA NA 

VCT.SC.M ........................ 16.7 17.4 15.5 13.0 12.6 11.7 11.5 1.7 

VCT.SC.L ......................... 10.5 13.3 16.4 16.2 14.4 14.2 13.1 2.0 

VCT.SC.I .......................... 16.4 18.1 17.8 15.9 15.5 14.8 1.5 NA 

VCS.SC.M ........................ 13.1 14.9 15.0 15.0 14.6 14.0 12.6 0.8 

VCS.SC.L ......................... 12.1 15.1 15.3 15.4 14.3 13.9 13.3 0.6 

VCS.SC.I .......................... 16.7 16.8 17.4 17.0 16.0 15.4 0.7 NA 

SVO.RC.M ....................... 24.5 24.5 22.2 13.2 12.6 3.0 NA NA 

SVO.SC.M ........................ 19.5 19.5 18.5 18.0 10.8 10.1 3.7 NA 

SOC.RC.M ....................... 17.7 17.8 17.8 14.5 14.1 12.7 5.4 NA 

HZO.RC.M ....................... 78.4 21.6 NA NA NA NA NA NA 

HZO.RC.L ........................ 86.2 13.8 NA NA NA NA NA NA 

HZO.SC.M ........................ 25.4 25.4 25.0 21.9 2.4 NA NA NA 

HZO.SC.L ......................... 71.8 28.2 NA NA NA NA NA NA 

HCT.SC.M ........................ 14.8 15.4 15.6 15.7 13.4 12.8 11.0 1.4 

HCT.SC.L ......................... 12.3 13.3 13.6 15.8 15.6 15.0 13.2 1.2 

HCT.SC.I .......................... 25.6 25.8 25.1 22.3 1.1 NA NA NA 

HCS.SC.M ........................ 17.2 17.5 17.2 16.8 15.9 13.3 2.1 NA 

HCS.SC.L ......................... 17.2 17.5 17.2 16.8 16.6 14.5 1.5 NA 

PD.SC.M .......................... 14.0 17.2 16.1 15.8 15.3 11.0 9.7 1.0 

SOC.SC.M ....................... 14.7 15.1 15.1 15.0 12.5 12.1 11.0 4.6 

* ‘‘NA’’ means that no market share was calculated for this efficiency level. For example, the VOP.RC.M equipment class only had six possible 

efficiency levels, so no market share was allotted to Efficiency Levels 7 and 8. 

** Shares may not add to 100 percent exactly due to rounding. 

3. National Energy Savings 

For each year in the forecast period, 

DOE calculates the NES for each 

potential standard level by multiplying 

the stock of equipment affected by the 

energy conservation standards by the 

estimated per-unit annual energy 

savings. DOE typically considers the 

impact of a rebound effect, introduced 

in the energy use analysis, in its 

calculation of NES for a given product. 

A rebound effect occurs when users 

operate higher efficiency equipment 

more frequently and/or for longer 

durations, thus offsetting estimated 

energy savings. However, DOE used a 

rebound factor of 1, or no effect, for 

commercial refrigeration equipment 

because it is operates 24 hours a day, 

and therefore there is no potential for a 

rebound effect. 

Major inputs to the calculation of NES 

are annual unit energy consumption, 

shipments, equipment stock, a site-tosource conversion factor, and a full fuel 

cycle factor. 

The annual unit energy consumption 

is the site energy consumed by a 

commercial refrigeration unit in a given 

year. Because the equipment classes 

analyzed represent equipment sold 

across a range of sizes, DOE’s ‘‘unit’’ in 

the NES is actually expressed as a linear 

foot of equipment in an equipment 

class, and not an individual unit of 

commercial refrigeration equipment of a 

specific size. DOE determined annual 

forecasted shipment-weighted average 

equipment efficiencies that, in turn, 

enabled determination of shipmentweighted annual energy consumption 

values. 

The commercial refrigeration 

equipment stock in a given year is the 

total linear footage of commercial 

refrigeration equipment shipped from 

earlier years (up to 15 years, depending 

on the type of equipment) that is in use 

in that year. The NES spreadsheet 

model keeps track of the total linear 

footage of commercial refrigeration units 

shipped each year. For purposes of the 

NES and NPV analyses conducted for 

the NOPR, DOE assumed that, based on 

15-year and 10-year average equipment 

lifetimes, approximately 6.67 and 10 

percent, respectively, of the existing 

commercial refrigeration units are 

retired in each year. DOE assumes that, 

for units shipped in 2046, any units 

remaining at the end of 2060 will be 

replaced. 

DOE has historically presented NES 

in terms of primary energy savings. In 

response to the recommendations of a 

committee on ‘‘Point-of-Use and FullFuel-Cycle Measurement Approaches to 

Energy Efficiency Standards’’ appointed 

by the National Academy of Science, 

DOE announced its intention to use fullfuel-cycle (FFC) measures of energy use 

and greenhouse gas and other emissions 

in the national impact analyses and 

emissions analyses included in future 

energy conservation standards 

rulemakings. 76 FR 51281 (August 18, 

2011) While DOE stated in that notice 

that it intended to use the Greenhouse 

Gases, Regulated Emissions, and Energy 

Use in Transportation (GREET) model to 

conduct the analysis, it also said it 

would review alternative methods, 

including the use of NEMS. After 

evaluating both models and the 

approaches discussed in the August 18, 

2011 notice, DOE published a statement 

of amended policy in the Federal 

Register in which DOE explained its 

determination that NEMS is a more 

appropriate tool for its FFC analysis and 

its intention to use NEMS for that 

purpose. 77 FR 49701 (August 17, 2012). 

DOE received one comment, which was 

supportive of the use of NEMS for 

DOE’s FFC analysis.71

The approach used for today’s NOPR, 

and the FFC multipliers that were 

applied, are described in appendix 10D 

of the NOPR TSD. NES results are 

presented in both primary and FFC 

savings in section V.B.3.a. 

4. Net Present Value of Customer 

Benefit 

The inputs for determining the NPV 

of the total costs and benefits 

experienced by customers of the 

commercial refrigeration equipment are: 

(1) total annual installed cost; (2) total 

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annual savings in operating costs; and 

(3) a discount factor. DOE calculated net 

national customer savings for each year 

as the difference between the base-case 

scenario and standards-case scenarios in 

terms of installation and operating costs. 

DOE calculated operating cost savings 

over the life of each piece of equipment 

shipped in the forecast period. 

DOE multiplied monetary values in 

future years by the discount factor to 

determine the present value of costs and 

savings. DOE estimated national 

impacts using both a 3-percent and a 7- 

percent real discount rate as the average 

real rate of return on private investment 

in the U.S. economy. These discount 

rates are used in accordance with the 

Office of Management and Budget 

(OMB) guidance to Federal agencies on 

the development of regulatory analysis 

(OMB Circular A–4, September 17, 

2003), and section E, ‘‘Identifying and 

Measuring Benefits and Costs,’’ therein. 

DOE defined the present year as 2013 

for the NOPR analysis. The 7-percent 

real value is an estimate of the average 

before-tax rate of return to private 

capital in the U.S. economy. The 3- 

percent real value represents the 

‘‘societal rate of time preference,’’ which 

is the rate at which society discounts 

future consumption flows to their 

present. 

5. Benefits From Effects of Amended 

Standards on Energy Prices 

The reduction in electricity 

consumption associated with amended 

standards for commercial refrigeration 

equipment could reduce the electricity 

prices charged to customers in all 

sectors of the economy, and thereby 

reduce electricity expenditures. In 

chapter 2 of the preliminary analysis 

TSD, DOE explained that, because the 

power industry is a complex mix of fuel 

and equipment suppliers, electricity 

producers, and distributors, it did not 

plan to estimate the value of potentially 

reduced electricity costs for all 

customers associated with new or 

amended standards for refrigeration 

products. 

For this rulemaking, DOE used 

NEMS–BT to assess the impacts of the 

reduced need for new electric power 

plants and infrastructure projected to 

result from amended standards. In 

NEMS–BT, changes in power generation 

infrastructure affect utility revenue 

requirements, which in turn affect 

electricity prices. DOE estimated the 

impact on electricity prices associated 

with each considered TSL. Although the 

aggregate benefits for electricity users 

are potentially large, there may be 

negative effects on some involved in 

electricity supply, particularly power 

plant providers and fuel suppliers. DOE 

has concluded that, at present, it should 

not give significant weighting to this 

factor (aggregate benefit to customers 

due to reductions in electricity prices) 

in its consideration of the justification 

of the amended standards because there 

is uncertainty about the extent to which 

the benefits to electricity users from 

reduced electricity prices would 

represent a transfer from those involved 

in electricity supply to electricity 

customers. DOE is continuing to 

investigate the extent to which 

electricity price changes projected to 

result from amended standards 

represent a net gain to society. 

J. Customer Subgroup Analysis 

In analyzing the potential impact of 

new or amended standards on 

commercial customers, DOE evaluates 

the impact on identifiable groups (i.e., 

subgroups) of customers, such as 

different types of businesses that may be 

disproportionately affected. Based on 

data from the 2007 U.S. Economic 

Census and size standards set by the 

U.S. Small Business Administration 

(SBA), DOE determined that a majority 

of convenience stores and restaurants 

fall under the definition of small 

businesses (see chapter 11 of NOPR TSD 

for details). Small businesses typically 

face higher cost of capital. In general, 

the lower the cost of electricity and 

higher the cost of capital, the more 

likely it is that an entity would be 

disadvantaged by the requirement to 

purchase higher efficiency equipment. 

Table IV.8 and Table IV.9 present 

average commercial electricity prices by 

business type and discount rates by 

building types, respectively. 

Comparing the small grocery and 

convenience store category to the 

convenience store with gas station 

category, both face the same cost of 

capital, but convenience stores with gas 

stations generally incur lower electricity 

prices. Therefore, convenience stores 

with gas stations were chosen for LCC 

subgroup analysis in the food-retail 

segment. 

In the foodservice segment, limited 

service restaurants and full-service 

restaurants have similar electricity price 

and discount rates, with limited service 

restaurants paying slightly lower 

electricity rates and full-service 

restaurants facing a slightly higher cost 

of capital. DOE chose to study fullservice restaurants for the LCC subgroup 

analysis in the foodservice segment 

because a higher percentage of fullservice restaurants tend to be operated 

by independent small business 

concerns, as compared to a majority of 

fast-food restaurants which are owned 

by or affiliated with national restaurant 

chains. 

DOE estimated the impact on the 

identified customer subgroups using the 

LCC spreadsheet model. The standard 

LCC analysis (described in section IV.H) 

includes various types of businesses 

that use commercial refrigeration 

equipment. For the LCC subgroup 

analysis, it was assumed that the 

subgroups analyzed do not have access 

to national commercial refrigeration 

equipment purchasing accounts and, 

consequently, face a higher distribution 

channel markup. Further, electricity 

rates and discount rates differ among 

these subgroups. Details of the data used 

for LCC subgroup analysis and results 

are presented in chapter 11 of the NOPR 

TSD. 

TABLE IV.8—DERIVED AVERAGE COMMERCIAL ELECTRICITY PRICE BY BUSINESS TYPE

Business type Electricity price cents/ 

kWh 

Ratio of electricity price 

to average price for all 

commercial buildings 

Grocery store/food market ....................................................................................................... 0.07222 0.910 

Convenience store * ................................................................................................................. 0.08583 1.082 

Convenience store with gas station ........................................................................................ 0.07722 0.973 

Multi-line retail ** ...................................................................................................................... 0.07262 0.915 

Limited service restaurant ....................................................................................................... 0.07962 1.003 

Full service restaurant ............................................................................................................. 0.08467 1.067 

Other foodservice .................................................................................................................... 0.07664 0.966 

All commercial buildings .......................................................................................................... 0.07936 1.000 

Source: Commercial Buildings Energy Consumption Survey 2003. 

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This group is assumed to include convenience stores without gas stations, specialty stores (such as meat markets), and beer, wine, and liquor 

stores. 

** This group is assumed to include mainly large multi-line retailers and supercenters that sell both grocery and non-grocery items. 

TABLE IV.9—DERIVATION OF REAL DISCOUNT RATES BY BUILDING TYPE

Building type description 

Major chain Local or non-chain Governmental 

Discount 

rate 

(percent) 

No. Obs.†

WACC * 

(percent) 

Percent of 

stock 

Small frm 

premium ** 

(percent) 

Percent of 

stock 

Muni bond 

rate 

(percent) 

Percent of 

stock 

Large Grocery .................. 4.16 100 0.0 0 0 0 4.16 18 

Small Grocery & Convenience ............................. 4.20 50 1.9 50 0 0 5.19 5 

Gas Station With Convenience Store ................... 4.20 50 1.9 50 0 0 5.19 NA 

Multi-Line Retail ............... 4.33 100 0.0 0 0 0 4.33 6 

Restaurant—Limited Service ................................. 5.29 50 1.9 50 0 0 6.29 21 

Restaurant—Full Service 5.61 50 1.9 50 0 0 6.62 24 

Restaurant—Other 

Foodservice .................. 5.61 25 1.9 25 2.34 50 4.48 NA 

Source: Pacific Northwest National Laboratory (PNNL) Weighted Average Cost of Capital (WACC) calculations applied to firms sampled from 

the Damodaran Online web site (http://pages.stern.nyu.edu/∼adamodar/New_Home_Page/papers.html). Assumptions for weighting factors for 

convenience and foodservice reflect lack of reliable data sources. The estimate of inflation used to translate nominal rates to real rates is based 

on a 40-year (1971–2010) average gross domestic product deflator (3.832 percent). 

* WACC stands for weighted-average cost of capital. See chapter 8 of the NOPR TSD for additional details. 

** Small Firm Premium refers to higher premium paid by smaller firms that face higher risks of loss of invested capital. Source: Small Business 

Administration data on loans between $10,000 and $99,000 compared to AAA Corporate Rates. http://www.sba.gov/advocacy/7540/6282. Data 

compiled 6/20/2013. † ‘‘NA’’ means no Damodaran observations available. 

K. Manufacturer Impact Analysis 

1. Overview 

DOE performed an MIA to estimate 

the financial impact of amended energy 

conservation standards on 

manufacturers of commercial 

refrigeration equipment and to calculate 

the impact of such standards on 

employment and manufacturing 

capacity. The MIA has both quantitative 

and qualitative aspects. The quantitative 

part of the MIA primarily relies on the 

Government Regulatory Impact Model 

(GRIM), an industry cash-flow model 

with inputs specific to this rulemaking. 

The key GRIM inputs are data on the 

industry cost structure, product costs, 

shipments, and assumptions about 

markups and conversion expenditures. 

The key output is the INPV. Different 

sets of markup scenarios will produce 

different results. The qualitative part of 

the MIA addresses factors such as 

equipment characteristics, impacts on 

particular subgroups of manufacturers, 

and important market and product 

trends. The complete MIA is outlined in 

chapter 12 of the NOPR TSD. 

DOE conducted the MIA for this 

rulemaking in three phases. In Phase 1 

of the MIA, DOE prepared a profile of 

the commercial refrigeration equipment 

industry that includes a top-down cost 

analysis of manufacturers used to derive 

preliminary financial inputs for the 

GRIM (e.g., sales general and 

administration (SG&A) expenses; 

research and development (R&D) 

expenses; and tax rates). DOE used 

public sources of information, including 

company SEC 10–K filings, corporate 

annual reports, the U.S. Census 

Bureau’s Economic Census, and 

Hoover’s reports. 

In Phase 2 of the MIA, DOE prepared 

an industry cash-flow analysis to 

quantify the impacts of an amended 

energy conservation standard. In 

general, more-stringent energy 

conservation standards can affect 

manufacturer cash flow in three distinct 

ways: (1) by creating a need for 

increased investment; (2) by raising 

production costs per unit; and (3) by 

altering revenue due to higher per-unit 

prices and possible changes in sales 

volumes. 

In Phase 3 of the MIA, DOE 

conducted structured, detailed 

interviews with a representative crosssection of manufacturers. During these 

interviews, DOE discussed engineering, 

manufacturing, procurement, and 

financial topics to validate assumptions 

used in the GRIM and to identify key 

issues or concerns. See section IV.K.4 

for a description of the key issues 

manufacturers raised during the 

interviews. 

Additionally, in Phase 3, DOE 

evaluated subgroups of manufacturers 

that may be disproportionately 

impacted by amended standards, or that 

may not be accurately represented by 

the average cost assumptions used to 

develop the industry cash-flow analysis. 

For example, small manufacturers, 

niche players, or manufacturers 

exhibiting a cost structure that largely 

differs from the industry average could 

be more negatively affected. 

DOE identified one subgroup, small 

manufacturers, for separate impact 

analyses. DOE applied the small 

business size standards published by 

the SBA to determine whether a 

company is considered a small business. 

65 FR 30836, 30848 (May 15, 2000), as 

amended at 65 FR 53533, 53544 (Sept. 

5, 2000) and codified at 13 CFR part 

121. To be categorized as a small 

business under North American 

Industry Classification System (NAICS) 

333415, ‘‘Air-Conditioning and Warm 

Air Heating Equipment and Commercial 

and Industrial Refrigeration Equipment 

Manufacturing,’’ a commercial 

refrigeration manufacturer and its 

affiliates may employ a maximum of 

750 employees. The 750-employee 

threshold includes all employees in a 

business’s parent company and any 

other subsidiaries. Based on this 

classification, DOE identified at least 32 

commercial refrigeration equipment 

manufacturers that qualify as small 

businesses. The commercial 

refrigeration equipment small 

manufacturer subgroup is discussed in 

chapter 12 of the NOPR TSD and in 

section VI.B.1 of this notice. 

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2. Government Regulatory Impact Model 

DOE uses the GRIM to quantify the 

changes in the commercial refrigeration 

equipment industry cash flow due to 

amended standards that result in a 

higher or lower industry value. The 

GRIM analysis uses a standard, annual 

cash-flow analysis that incorporates 

manufacturer costs, markups, 

shipments, and industry financial 

information as inputs, and models 

changes in costs, investments, and 

manufacturer margins that would result 

from new and amended energy 

conservation standards. The GRIM 

spreadsheet uses the inputs to arrive at 

a series of annual cash flows, beginning 

with the base year of the analysis, 2013 

in this case, and continuing to 2046. 

DOE calculated INPVs by summing the 

stream of annual discounted cash flows 

during this period. For commercial 

refrigeration equipment manufacturers, 

DOE used a real discount rate of 10 

percent. DOE’s discount rate estimate 

was derived from industry financials 

and then modified according to 

feedback during manufacturer 

interviews. 

The GRIM calculates cash flows using 

standard accounting principles and 

compares changes in INPV between a 

base case and various TSLs (the 

standards cases). The difference in INPV 

between the base case and a standards 

case represents the financial impact of 

the amended standard on 

manufacturers. As discussed previously, 

DOE collected the information on the 

critical GRIM inputs from a number of 

sources, including publicly available 

data and interviews with a number of 

manufacturers (described in the next 

section). The GRIM results are shown in 

section V.B.2.a. Additional details about 

the GRIM can be found in chapter 12 of 

the NOPR TSD. 

a. Government Regulatory Impact Model 

Key Inputs 

Manufacturer Production Costs 

Manufacturing a higher efficiency 

product is typically more expensive 

than manufacturing a baseline product 

due to the use of more complex 

components, which are more costly than 

baseline components. The changes in 

the MPCs of the analyzed products can 

affect the revenues, gross margins, and 

cash flow of the industry, making these 

product cost data key GRIM inputs for 

DOE’s analysis. 

In the MIA, DOE used the MPCs for 

each considered efficiency level 

calculated in the engineering analysis, 

as described in section IV.C and further 

detailed in chapter 5 of the NOPR TSD. 

In addition, DOE used information from 

its teardown analysis, described in 

section IV.E.4.a, to disaggregate the 

MPCs into material, labor, and overhead 

costs. To calculate the MPCs for 

equipment above the baseline, DOE 

added incremental material, labor, 

overhead costs from the engineering 

cost-efficiency curves to the baseline 

MPCs. These cost breakdowns and 

equipment markups were validated with 

manufacturers during manufacturer 

interviews. 

Base-Case Shipments Forecast 

The GRIM estimates manufacturer 

revenues based on total unit shipment 

forecasts and the distribution of these 

values by efficiency level. Changes in 

sales volumes and efficiency mix over 

time can significantly affect 

manufacturer finances. For this analysis, 

the GRIM uses the NIA’s annual 

shipment forecasts derived from the 

shipments analysis from 2013, the base 

year, to 2046, the end of the analysis 

period. See chapter 9 of the NOPR TSD 

for additional details. 

Product and Capital Conversion Costs 

Amended energy conservation 

standards will cause manufacturers to 

incur conversion costs to bring their 

production facilities and product 

designs into compliance. For the MIA, 

DOE classified these conversion costs 

into two major groups: (1) Product 

conversion costs and (2) capital 

conversion costs. Product conversion 

costs are investments in research, 

development, testing, marketing, and 

other non-capitalized costs necessary to 

make product designs comply with a 

new or amended energy conservation 

standard. Capital conversion costs are 

investments in property, plant, and 

equipment necessary to adapt or change 

existing production facilities such that 

new product designs can be fabricated 

and assembled. 

To evaluate the level of capital 

conversion expenditures manufacturers 

would likely incur to comply with 

amended energy conservation 

standards, DOE used manufacturer 

interviews to gather data on the level of 

capital investment required at each 

efficiency level. DOE validated 

manufacturer comments through 

estimates of capital expenditure 

requirements derived from the product 

teardown analysis and engineering 

model described in section IV.E.4. 

DOE assessed the equipment 

conversion costs at each level by 

integrating data from quantitative and 

qualitative sources. DOE considered 

feedback regarding the potential costs of 

each efficiency level from multiple 

manufacturers to determine conversion 

costs such as R&D expenditures and 

certification costs. Manufacturer data 

were aggregated to better reflect the 

industry as a whole and to protect 

confidential information. 

In general, DOE assumes that all 

conversion-related investments occur 

between the year of publication of the 

final rule and the year by which 

manufacturers must comply with an 

amended standard. The investment 

figures used in the GRIM can be found 

in section V.B.2.a of this notice. For 

additional information on the estimated 

product conversion and capital 

conversion costs, see chapter 12 of the 

NOPR TSD. 

b. Government Regulatory Impact Model 

Scenarios 

Markup Scenarios 

As discussed above, MSPs include 

direct manufacturing production costs 

(i.e., labor, material, and overhead 

estimated in DOE’s MPCs) and all nonproduction costs (i.e., SG&A, R&D, and 

interest), along with profit. To calculate 

the MSPs in the GRIM, DOE applied 

markups to the MPCs estimated in the 

engineering analysis and then added in 

the cost of shipping. Modifying these 

markups in the standards case yields 

different sets of impacts on 

manufacturers. For the MIA, DOE 

modeled two standards-case markup 

scenarios to represent the uncertainty 

regarding the potential impacts on 

prices and profitability for 

manufacturers following the 

implementation of amended energy 

conservation standards: (1) A 

preservation of gross margin percentage 

markup scenario; and (2) a preservation 

of operating profit markup scenario. 

These scenarios lead to different 

markups values that, when applied to 

the inputted MPCs, result in varying 

revenue and cash flow impacts. 

Under the preservation of gross 

margin percentage scenario, DOE 

applied a single uniform ‘‘gross margin 

percentage’’ markup across all efficiency 

levels. As production costs increase 

with efficiency, this scenario implies 

that the absolute dollar markup will 

increase as well. Based on publicly 

available financial information for 

manufacturers of commercial 

refrigeration equipment and comments 

from manufacturer interviews, DOE 

assumed the non-production cost 

markup—which includes SG&A 

expenses, R&D expenses, interest, and 

profit—to be 1.42. Because this markup 

scenario assumes that manufacturers 

would be able to maintain their gross 

margin percentage markups as 

production costs increase in response to 

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55940 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

72ENERGY STAR is a joint program of EPA and 

DOE that helps the Nation save money and protect 

the environment through energy efficient products 

and practices. More information can be found at: 

www.energystar.gov. 

an amended energy conservation 

standard, the scenario represents a high 

bound to industry profitability under an 

amended energy conservation standard. 

In the preservation of operating profit 

scenario, manufacturer markups are set 

so that operating profit 1 year after the 

compliance date of the amended energy 

conservation standard is the same as in 

the base case. Under this scenario, as 

the cost of production and the cost of 

sales go up, manufacturers are generally 

required to reduce their markups to a 

level that maintains base-case operating 

profit. The implicit assumption behind 

this markup scenario is that the industry 

can only maintain its operating profit in 

absolute dollars after compliance with 

the amended standard is required. 

Therefore, operating margin in 

percentage terms is squeezed (reduced) 

between the base case and standards 

case. DOE adjusted the manufacturer 

markups in the GRIM at each TSL to 

yield approximately the same earnings 

before interest and taxes in the 

standards case in the year after the 

compliance date of the amended 

standards as in the base case. This 

markup scenario represents a low bound 

to industry profitability under an 

amended energy conservation standard. 

3. Discussion of Comments 

During the April 2011 preliminary 

analysis public meeting, interested 

parties commented on the assumptions 

and results of the preliminary analysis 

TSD. Oral and written comments 

addressed several topics, including 

testing and certification, cumulative 

regulatory burden, small manufacturers, 

and manufacturer markups. 

a. Testing and Certification 

At the public meeting and in written 

comments, several stakeholders 

expressed concern to DOE regarding the 

potential burden of testing. 

Traulsen stated that certification, 

compliance, and enforcement (CC&E) is 

its most significant cost item in terms of 

internal resources in the form of time 

and direct expenses. Traulsen further 

explained that, with respect to the 

manufacturer impacts, the three most 

important topics are CC&E, testing 

burden, and compliance with other 

(unspecified) certifications. (Traulsen, 

No. 45 at pp. 4–5) NEEA expressed the 

opinion that the most significant issue 

associated with manufacturer impacts is 

testing and compliance for a wide array 

of equipment offerings, especially given 

the large number of variations on single 

models. AHRI also stated that the CC&E 

requirements put in place by DOE have 

the potential to bankrupt the industry 

due to the excessive number of tests 

required. (AHRI, No. 43 at p. 3) True 

added that it believed there are 

economies of scale in testing 

commercial refrigeration equipment 

units. (True, Public Meeting Transcript, 

No. 31 at p. 151) True also stated that 

the testing and regulatory burden, 

including tooling, fixturing, and setup 

costs imposed on small production runs 

is an issue for large manufacturers as 

well as small manufacturers. (True, 

Public Meeting Transcript, No. 31 at pp. 

206, 210) NEEA expressed agreement 

with manufacturers that testing each 

variation would create a significant 

potential burden, especially on small 

manufacturers. (NEEA, No. 36 at p. 7) In 

addition, Southern Store Fixtures stated 

that it would be difficult to produce 

information to estimate the compliance 

testing burden on manufacturers, as the 

certification and compliance 

requirements had not yet been finalized. 

(Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 149– 

50) Southern Store Fixtures added that 

it is impossible to determine potential 

impacts of testing and certification on 

manufacturers until the definition of a 

basic model is clarified. (Southern Store 

Fixtures, No. 38 at p. 1) 

DOE recognizes industry concerns 

regarding CC&E testing requirements. 

Although CC&E costs are not directly 

analyzed in the GRIM because they do 

not vary with different standard levels, 

the CC&E burden is identified as a key 

issue and as a cumulative regulatory 

burden in the MIA. DOE intends to 

address these manufacturer concerns in 

ongoing CC&E rulemakings. Moreover, 

DOE is currently considering alternative 

efficiency determination methods 

(AEDMs) for commercial refrigeration 

equipment and issued a notice of 

proposed rulemaking on Alternative 

Efficiency Determination Methods and 

Alternative Rating Methods in May 

2012. 77 FR 32038 (May 31, 2012). 

AEDMs are computer modeling tools 

used to establish a model’s efficiency 

rating in lieu of testing. More 

information about the AEDM 

rulemaking can be found at: 

www1.eere.energy.gov/buildings/

appliance_standards/certification_

enforcement.html. 

While the GRIM does not account for 

DOE certification costs, it does account 

for industry certification (i.e., 

Underwriters Laboratories (UL) and NSF 

testing) and research and development 

costs in its analysis of product 

conversion costs, which are associated 

with a change in standards. The change 

in INPV, the primary output of the 

GRIM, reflects the possible increase in 

industry certification costs and is 

considered by DOE when proposing a 

standard. 

b. Cumulative Regulatory Burden 

Numerous stakeholders commented 

on the cumulative regulatory burden 

tied to DOE efficiency standards. Some 

stakeholders expressed concern 

regarding potential conflicts with other 

certification programs. Traulsen stated 

that the redundancy of testing required 

by other Federal programs (such as EPA 

ENERGY STAR®),72 potentially involves 

conflicting criteria, increases cost, and 

that cross-references to databases with 

inconsistent tests, classes, and 

enforcement requirements adds further 

complications. Traulsen estimated that 

the financial burden associated with 

meeting both DOE and EPA ENERGY 

STAR requirements has been greater 

than 0.5 percent of revenue, and that it 

would be beneficial to reconcile the 

differences between DOE and EPA 

standards. (Traulsen, No. 45 at pp. 5–6) 

NEEA stated that the burden of 

certifications and associated testing is 

inherent in the manufacturing industry, 

and that this burden should have little 

to do with the current standards 

rulemaking. However, NEEA added, any 

steps that can be taken to harmonize test 

methods and procedures between 

certifications should be taken. (NEEA, 

No. 36 at p. 7) 

DOE realizes that the cumulative 

effect of multiple regulations on an 

industry may significantly increase the 

burden faced by manufacturers that 

need to comply with regulations and 

certification programs from different 

organizations and levels of government. 

However, DOE notes that certain 

standards, such as ENERGY STAR, are 

optional for manufacturers. 

AHRI stated that there are several 

legislative and regulatory activities that 

could significantly burden 

manufacturers of commercial 

refrigeration equipment, including the 

DOE CC&E program and the upcoming 

amended energy conservation standards 

for walk-in coolers and freezers. AHRI 

also added that climate change bills 

could have a significant negative impact 

on the availability and price of HFC 

refrigerants. (AHRI, No. 43 at p. 4) 

DOE estimates the present value of 

the total benefits over the analysis 

period (2010–2040) of the EPACT 2005 

standards for CRE to be $2.3 billion and 

the costs to be $0.32 billion, in 2012 

dollars and using a discount rate of 7 

percent. DOE estimates the present 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55941 

73California Air Resources Board. Refrigerant 

Management Program Final Regulation. 2011. (Last 

accessed March 16, 2012.) www.arb.ca.gov/cc/

reftrack/reftrackrule.html. 

value of total benefits over the analysis 

period (2012–2042) of the DOE 2009 

standards for CRE to be $3.97 billion 

and the costs to be $1.52 billion, in 2012 

dollars and using a 7 percent discount 

rate. Additionally, in the energy 

conservation standard NOPR for walk-in 

coolers and freezers, DOE estimates the 

net present value of the total benefits 

over the analysis period (2017–2046) to 

be $21.6 billion and the costs to be $3.7 

billion, in 2012% and using a discount 

rate of 7 percent. 

DOE takes into account the 

cumulative cost of multiple Federal 

regulations on manufacturers, including 

CC&E, in the cumulative regulatory 

burden (CRB) section of its analysis. The 

CRB can be found in section V.B.2.e of 

this document. The CRB review also 

recognizes the additional burden faced 

by manufacturers that produce both 

commercial refrigeration equipment and 

walk-in coolers and freezers. 

AHRI also stated that California is 

currently working on new regulations as 

part of Title 24 that will likely establish 

new prescriptive requirements on 

commercial refrigeration equipment 

beginning in 2013. AHRI added that 

other States on the West Coast are 

following California’s lead and are 

likely to implement similar regulations 

in the near future. AHRI suggested that 

DOE account for these developments in 

its analysis. (AHRI, No. 43 at p. 4) 

Finally, AHRI commented that several 

States have enacted their own climate 

change legislation, including regulations 

established by the California Air 

Resources Board (CARB) to limit GHGs 

and reduce the usage of high GWP 

refrigerants such as HFCs. AHRI stated 

that CARB will implement these 

regulations in 2011. (AHRI, No. 43 at p. 

4) 

According to the California Code of 

Regulations, title 24, part 6, any 

appliance for which there is a California 

standard established may be installed 

only if the manufacturer has certified to 

the CEC, as specified in those 

regulations, that the appliance complies 

with the applicable standard for that 

appliance. California’s appliance 

efficiency regulations require that the 

MDEC (in kilowatt-hours) for 

commercial refrigerators manufactured 

on or after January 1, 2010 does not 

exceed the following: 

• Refrigerators with solid doors: 

0.10V + 2.04 

• Refrigerators with transparent 

doors: 0.12V + 3.34 

• Freezers with solid doors: 0.40V + 

1.38 

• Freezers with transparent doors: 

0.75V + 4.10 

• Refrigerator/freezers with solid 

doors: the greater of 0.27AV–0.71 or 

0.70 

• Refrigerators with self-condensing 

unit designed for pull-down 

temperature applications: 0.126V + 3.51 

Since these standards are identical to 

the ones prescribed in EPACT 2005 and 

the efficiency levels set by the current 

rulemaking will either exceed or be 

equivalent to the EPACT 2005 levels, 

DOE does not expect the Title 24 

regulations to create a cumulative 

regulatory burden on manufacturers. 

California also has started a rulemaking 

proceeding to adopt changes to the 

building energy efficiency standards 

contained in the California Code of 

Regulations, title 24, part 6, but the CEC 

is currently in the pre-rulemaking stage 

and any new standards will not be 

published until 2013. DOE has not 

evaluated the impacts of the 2013 rule 

because any analysis would be 

speculative in the absence of final 

regulations. 

CARB is currently limiting the inState use of high-GWP refrigerants in 

non-residential refrigeration systems 

through its Refrigerant Management 

Program, effective January 1, 2011.73

According to this new regulation, 

facilities with refrigeration systems that 

have a refrigerant capacity exceeding 50 

pounds must repair leaks within 14 

days of detection, maintain on-site 

records of all leak repairs, and keep 

receipts of all refrigerant purchases. The 

regulation applies to any person or 

company that installs, services, or 

disposes of appliances with high-GWP 

refrigerants. Refrigeration systems with 

a refrigerant capacity exceeding 50 

pounds typically belong to food retail 

operations with remote condensing 

racks that store refrigerant serving 

multiple commercial refrigeration 

equipment units within a business. 

However, commercial refrigeration 

equipment units in food retail 

establishments are usually installed and 

serviced by refrigeration contractors, not 

manufacturers. As a result, although 

these CARB regulations apply to 

refrigeration technicians and owners of 

facilities with refrigeration systems, 

they are unlikely to represent a 

regulatory burden for commercial 

refrigeration manufacturers. 

The cumulative regulatory burden on 

manufacturers of commercial 

refrigeration equipment is discussed in 

further detail in chapter 12 of the NOPR 

TSD. 

c. Small Manufacturers 

During the April 2011 preliminary 

analysis public meeting, Southern Store 

Fixtures stated that the impact of 

research, development, and testing is 

greater on smaller manufacturers 

because, while they may have the same 

number of models in their product lines 

as do larger manufacturers, they 

produce fewer units of each model. 

(Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at p. 150) 

Similarly, Zero Zone stated that 

amended standards have large impacts 

on small companies. For example, Zero 

Zone uses foamed-in-place urethane 

panels. If it were to become necessary to 

use thicker foam, Zero Zone stated, the 

company could face capital conversion 

expenditures of roughly $250,000. (Zero 

Zone, Public Meeting Transcript, No. 31 

at p. 199) 

DOE agrees that amended standards 

may have disproportionate impacts on 

smaller manufacturers. As a result, the 

DOE conducts a small business analysis 

to assess those impacts, the results of 

which are set forth in section VI.B of 

this notice. 

Stakeholders also commented on 

DOE’s classification of small 

manufacturers. NEEA suggested that 

DOE review its characterizations of 

small and large manufacturers, as it 

believed there to be disparities between 

the listed company sizes and market 

shares in DOE’s classifications. (NEEA, 

Public Meeting Transcript, No. 31 at p. 

160) Emerson stated that manufacturers’ 

sizes should be characterized by their 

operations in the market. According to 

Emerson, some manufacturers are part 

of larger companies, but the fact that 

they are owned by larger companies 

does not change the potential for 

impacts on their employment levels or 

risk of going out of business. (Emerson, 

Public Meeting Transcript, No. 31 at p. 

207) 

DOE requested feedback regarding the 

accuracy of its list of small businesses 

during its interviews with 

manufacturers. Since the publication of 

the preliminary analysis TSD, DOE has 

revised the list based on responses 

received from manufacturers. 

Furthermore, DOE understands that 

manufacturers that are owned by large 

parent companies may not be protected 

from the potential impacts of amended 

standards. However, in its analysis of 

small businesses, DOE also takes into 

account that manufacturers that belong 

to large parent companies are more 

likely to have better access to capital 

and engineering resources than 

manufacturers that have no parent 

company or have parent companies 

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55942 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

with a total size of less than 750 

employees. 

A detailed discussion of the impact of 

the proposed standards on small 

manufacturers can be found in chapter 

12 of the NOPR TSD. 

d. Manufacturer Markup 

Southern Store Fixtures expressed 

concern that research and development 

was considered part of the manufacturer 

markup. The company also asked 

whether sales, marketing, and 

engineering costs were included in this 

markup as well, and suggested that all 

of these expenses should be considered 

indirect costs instead. (Southern Store 

Fixtures, Public Meeting Transcript, No. 

31 at pp. 71–72) 

DOE incorporates all non-production 

costs, including sales, marketing, and 

R&D, in its manufacturer markup. 

Although manufacturers’ accounting 

practices may vary, DOE uses this 

standard model to approximate the cost 

structure of the commercial refrigeration 

industry as a whole. A detailed 

explanation of the manufacturer markup 

can be found in section V.B.2 of this 

notice and in chapter 5 of the NOPR 

TSD. 

4. Manufacturer Interviews 

DOE interviewed manufacturers 

representing over 90 percent of food 

retail sales and over 60 percent of 

foodservice sales. These interviews were 

in addition to those DOE conducted as 

part of the engineering analysis. The 

information gathered during these 

interviews enabled DOE to tailor the 

GRIM to reflect the unique financial 

characteristics of the commercial 

refrigeration industry. All interviews 

provided information that DOE used to 

evaluate the impacts of potential 

amended energy conservation standards 

on manufacturer cash flows, 

manufacturing capacities, and 

employment levels. 

During the manufacturer interviews, 

DOE asked manufacturers to describe 

their major concerns about this 

rulemaking. The following sections 

describe the most significant issues 

identified by manufacturers. DOE has 

also included additional concerns in 

chapter 12 of the NOPR TSD. 

a. Enforcement 

Interviewed manufacturers expressed 

concern about the enforcement of an 

amended energy efficiency standard for 

commercial refrigeration equipment. 

Manufacturers believe that insufficient 

enforcement will lead to market 

distortions, as companies that make the 

necessary investments to meet amended 

standards and compliance requirements 

would be at a distinct pricing 

disadvantage to unscrupulous 

competitors that do not fully comply. 

The manufacturers requested that DOE 

take the enforcement action necessary to 

maintain a level playing field and to 

eliminate non-compliant products from 

the market. 

b. Certification and Compliance Costs 

Nearly all manufacturers expressed 

concern over CC&E costs. In particular, 

confusion over the definition of ‘‘basic 

model’’ and the implementation of 

AEDMs is making it difficult for some 

manufacturers to anticipate their total 

testing needs and total testing costs. 

Manufacturers are concerned that 

CC&E requirements for commercial 

refrigeration equipment do not take into 

account the customized nature of the 

commercial refrigeration equipment 

industry. Manufacturers stated that their 

industry has a high level of end-user 

specification and low production 

volumes compared to other industries, 

such as residential refrigeration. As a 

result, the strictest interpretations of the 

CC&E requirements could lead to 

hundreds of thousands of tests per 

company. Additional clarification of 

how basic models and AEDMs apply to 

the commercial refrigeration equipment 

industry would help manufacturers 

understand the testing investments that 

will be necessary. DOE is aware of the 

current confusion and continues to 

work with industry to improve the 

CC&E process and AEDM rules to 

address these concerns. 

c. Disproportionate Impact on Small 

Businesses 

Manufacturers noted that small 

businesses will be disproportionately 

impacted by certification and 

compliance requirements compared to 

larger businesses. One manufacturer 

indicated that small and large 

manufacturers of the same equipment 

tend to have similar numbers of basic 

models, but large manufacturers offer a 

broader suite of products based on those 

basic models and have higher sales. 

Therefore, the manufacturer expressed 

concern that small manufacturers will 

be at a disadvantage because they will 

need to spread both industry 

certification and conversion costs over a 

smaller number of shipments. 

Also, small manufacturers indicated 

they have fewer resources with which to 

manage CC&E requirements. As a result, 

they will be forced to focus on 

compliance rather than on innovation. 

Small manufacturers believe that their 

large competitors will have greater 

resources to continue innovating while 

meeting amended energy conservation 

standards. 

d. Potential Loss of Product Utility and 

Decrease in Food Safety 

Manufacturers expressed concern 

about the potential impact of amended 

energy conservation standards on 

product performance. Specifically, 

manufacturers serving the foodservice 

industry were concerned about negative 

impacts on food safety, while 

manufacturers serving the food retail 

industry were concerned about negative 

impacts on merchandising design. 

One manufacturer of commercial 

refrigeration equipment for the 

foodservice industry summarized the 

challenge of amended energy 

conservation standards as ‘‘the design 

trade-off between product price, energy 

efficiency, and food safety.’’ In the 

foodservice industry, refrigeration 

equipment must maintain safe food 

temperatures despite frequent door 

openings in challenging environments, 

such as kitchens with high temperatures 

and high humidity. The infiltration of 

warm, moist air places an additional 

burden on the refrigeration equipment 

and increases energy usage. 

Manufacturers expressed concern that 

more-efficient equipment would have 

trouble maintaining food safety in 

extreme, but not uncommon, 

conditions. 

Manufacturers in the food retail 

market design their equipment to 

optimally present merchandise. Some 

manufacturers were concerned that 

amended energy conservation standards 

would limit their ability to tailor their 

commercial refrigeration equipment for 

specific merchandise. Specifically, 

manufacturers noted that the highly 

directional light from LED bulbs 

provides poor light for display case 

applications where the product is 

presented in multiple layers, such as 

prepared food display cases. 

Additionally, manufacturers noted that 

higher efficiency designs generally have 

less airflow (due to reduced fan power 

consumption). They stated that this 

reduction in airflow could result in less 

desirable presentation of meats and in 

increased icing on products. In general, 

more-efficient standards limit 

manufacturer options for optimizing the 

presentation features of products. Food 

retail customers such as supermarkets 

make purchasing decisions based on the 

various presentation features of 

commercial refrigeration equipment 

offered by different manufacturers. 

L. Employment Impact Analysis 

Employment impacts are one of the 

factors that DOE considers in selecting 

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74U.S. Department of Commerce, Bureau of 

Economic Analysis. Benchmark Input-Output 

Accounts. 1997. U.S. Government Printing Office: 

Washington, DC. 

75On December 30, 2011, the DC Circuit stayed 

the new rules while a panel of judges reviews them, 

and told EPA to continue administering CAIR. See 

EME Homer City Generation, LP v. EPA, Order, No. 

11–1302, Slip Op. at *2 (D.C. Cir. Dec. 30, 2011). 

On August 21, 2012, the DC Circuit issued a 

decision to vacate CSAPR. See EME Homer City 

Generation, LP v. EPA, No. 11–1302, 2012 WL 

3570721 at *24 (D.C. Cir. Aug. 21, 2012). The court 

again ordered EPA to continue administering CAIR. 

AEO2012 had been finalized prior to both these 

decisions, however. DOE understands that CAIR 

and CSAPR are similar with respect to their effect 

on emissions impacts of energy efficiency 

standards. 

an efficiency standard. Employment 

impacts include direct and indirect 

impacts. Direct employment impacts are 

any changes that affect employment of 

commercial refrigeration equipment 

manufacturers, their suppliers, and 

related service firms. Indirect impacts 

are those changes in employment in the 

larger economy that occur because of 

the shift in expenditures and capital 

investment caused by the purchase and 

operation of more-efficient commercial 

refrigeration equipment. Direct 

employment impacts are analyzed as 

part of the MIA. Indirect impacts are 

assessed as part of the employment 

impact analysis. 

Indirect employment impacts from 

amended commercial refrigeration 

equipment standards consist of the net 

jobs created or eliminated in the 

national economy, other than in the 

manufacturing sector being regulated, as 

a consequence of (1) reduced spending 

by end users on electricity; (2) reduced 

spending on new energy supply by the 

utility industry; (3) increased spending 

on the purchase price of new 

commercial refrigeration equipment; 

and (4) the effects of those three factors 

throughout the Nation’s economy. DOE 

expects the net monetary savings from 

amended standards to stimulate other 

forms of economic activity. DOE also 

expects these shifts in spending and 

economic activity to affect the demand 

for labor. 

In developing this analysis in the 

NOPR, DOE estimated indirect national 

employment impacts using an input/

output model of the U.S. economy, 

called ImSET (Impact of Sector Energy 

Technologies), developed by DOE’s 

Building Technologies Program. ImSET 

is an economic analysis model that 

characterizes the interconnections 

among 188 sectors of the economy as 

national input/output structural 

matrices, using data from the U.S. 

Department of Commerce’s 1997 

Benchmark U.S. input/output table.74

The ImSET model estimates changes in 

employment, industry output, and wage 

income in the overall U.S. economy 

resulting from changes in expenditures 

in various sectors of the economy. DOE 

estimated changes in expenditures using 

the NIA model. ImSET then estimated 

the net national indirect employment 

impacts that amended commercial 

refrigeration equipment efficiency 

standards could have on employment by 

sector. 

For more details on the employment 

impact analysis and its results, see 

chapter 16 of the NOPR TSD and section 

0 of this notice. 

M. Utility Impact Analysis 

The utility impact analysis estimates 

several important effects on the utility 

industry of the adoption of new or 

amended standards. For this analysis, 

DOE used the NEMS–BT model to 

generate forecasts of electricity 

consumption, electricity generation by 

plant type, and electric generating 

capacity by plant type, that would result 

from each considered TSL. DOE 

obtained the energy savings inputs 

associated with efficiency 

improvements to considered products 

from the NIA. DOE conducts the utility 

impact analysis as a scenario that 

departs from the latest AEO Reference 

Case. In the analysis for today’s rule, the 

estimated impacts of standards are the 

differences between values forecasted 

by NEMS–BT and the values in the 

AEO2013 Reference Case. For more 

details on the utility impact analysis, 

see chapter 15 of the NOPR TSD. 

N. Emissions Analysis 

In the emissions analysis, DOE 

estimated the reduction in power sector 

emissions of CO2, NOX, sulfur dioxide 

(SO2) and Hg from amended energy 

conservation standards for commercial 

refrigeration equipment. In addition, 

DOE estimates emissions impacts in 

production activities (extracting, 

processing, and transporting fuels) that 

provide the energy inputs to power 

plants. These are referred to as 

‘‘upstream’’ emissions. Together, these 

emissions account for the full-fuel-cycle 

(FFC). In accordance with DOE’s FFC 

Statement of Policy (76 FR 51282 (Aug. 

18, 2011)) 77 FR 49701 (August 17, 

2012), the FFC analysis includes 

impacts on emissions of methane (CH4) 

and nitrous oxide (N2O), both of which 

are recognized as greenhouse gases. 

DOE conducted the emissions 

analysis using emissions factors that 

were derived from data in EIA’s Annual 

Energy Outlook 2013 (AEO 2013), 

supplemented by data from other 

sources. DOE developed separate 

emissions factors for power sector 

emissions and upstream emissions. The 

method that DOE used to derive 

emissions factors is described in chapter 

13 of the NOPR TSD. 

EIA prepares the Annual Energy 

Outlook using the National Energy 

Modeling System (NEMS). Each annual 

version of NEMS incorporates the 

projected impacts of existing air quality 

regulations on emissions. AEO 2013 

generally represents current legislation 

and environmental regulations, 

including recent government actions, for 

which implementing regulations were 

available as of December 31, 2012. 

SO2 emissions from affected electric 

generating units (EGUs) are subject to 

nationwide and regional emissions capand-trade programs. Title IV of the 

Clean Air Act sets an annual emissions 

cap on SO2 for affected EGUs in the 48 

contiguous States (42 U.S.C. 7651 et 

seq.) and the District of Columbia (DC). 

SO2 emissions from 28 eastern States 

and DC were also limited under the 

Clean Air Interstate Rule (CAIR; 70 FR 

25162 (May 12, 2005)), which created an 

allowance-based trading program. CAIR 

was remanded to the U.S. 

Environmental Protection Agency (EPA) 

by the U.S. Court of Appeals for the 

District of Columbia but it remained in 

effect. See North Carolina v. EPA, 550 

F.3d 1176 (D.C. Cir. 2008); North 

Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 

2008). On July 6, 2011, EPA issued a 

replacement for CAIR, the Cross-State 

Air Pollution Rule (CSAPR). 76 FR 

48208 (Aug. 8, 2011). On August 21, 

2012, the DC Circuit issued a decision 

to vacate CSAPR. See EME Homer City 

Generation, LP v. EPA, 696 F.3d 7, 38 

(D.C. Cir. 2012). The court ordered EPA 

to continue administering CAIR. The 

AEO 2013 emissions factors used for 

today’s NOPR assume that CAIR 

remains a binding regulation through 

2040.75

The attainment of emissions caps is 

typically flexible among EGUs and is 

enforced through the use of emissions 

allowances and tradable permits. Under 

existing EPA regulations, any excess 

SO2 emissions allowances resulting 

from the lower electricity demand 

caused by the adoption of a new or 

amended efficiency standard could be 

used to permit offsetting increases in 

SO2 emissions by any regulated EGU. In 

past rulemakings, DOE recognized that 

there was uncertainty about the effects 

of efficiency standards on SO2

emissions covered by the existing capand-trade system, but it concluded that 

negligible reductions in power sector 

SO2 emissions would occur as a result 

of standards. 

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55944 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

76National Research Council. Hidden Costs of 

Energy: Unpriced Consequences of Energy 

Beginning in 2015, however, SO2

emissions will fall as a result of the 

Mercury and Air Toxics Standards 

(MATS) for power plants, which were 

announced by EPA on December 21, 

2011. 77 FR 9304 (Feb. 16, 2012). In the 

final MATS rule, EPA established a 

standard for hydrogen chloride as a 

surrogate for acid gas hazardous air 

pollutants (HAP), and also established a 

standard for SO2 (a non-HAP acid gas) 

as an alternative equivalent surrogate 

standard for acid gas HAP. The same 

controls are used to reduce HAP and 

non-HAP acid gas; thus, SO2 emissions 

will be reduced as a result of the control 

technologies installed on coal-fired 

power plants to comply with the MATS 

requirements for acid gas. AEO2013 

assumes that, in order to continue 

operating, coal plants must have either 

flue gas desulfurization or dry sorbent 

injection systems installed by 2015. 

Both technologies, which are used to 

reduce acid gas emissions, also reduce 

SO2 emissions. Under the MATS, NEMS 

shows a reduction in SO2 emissions 

when electricity demand decreases (e.g., 

as a result of energy efficiency 

standards). Emissions will be far below 

the cap that would be established by 

CAIR, so it is unlikely that excess SO2

emissions allowances resulting from the 

lower electricity demand would be 

needed or used to permit offsetting 

increases in SO2 emissions by any 

regulated EGU. Therefore, DOE believes 

that efficiency standards will reduce 

SO2 emissions in 2015 and beyond. 

CAIR established a cap on NOX

emissions in 28 eastern States and the 

District of Columbia. Energy 

conservation standards are expected to 

have little effect on NOX emissions in 

those States covered by CAIR because 

excess NOX emissions allowances 

resulting from the lower electricity 

demand could be used to permit 

offsetting increases in NOX emissions. 

However, standards would be expected 

to reduce NOX emissions in the States 

not affected by the caps, so DOE 

estimated NOX emissions reductions 

from the standards considered in 

today’s NOPR for these States. 

The MATS limit mercury emissions 

from power plants, but they do not 

include emissions caps and, as such, 

DOE’s energy conservation standards 

would likely reduce Hg emissions. DOE 

estimated mercury emissions factors 

based on AEO2013, which incorporates 

the MATS. 

After the preliminary analysis, two 

stakeholders provided comments 

pertinent to the emissions analysis. 

NRDC stated that, given that 

supermarket rack-based commercial 

refrigeration equipment units have 

leakage rates of 15 to 30 percent and use 

HFC refrigerants with GWPs in the 

range of 2,000 to 3,400, direct emissions 

can be as large as the indirect emissions 

due to energy use. NRDC added that 

DOE or EPA should review emissions 

due to leakage. (NRDC, Public Meeting 

Transcript, No. 31 at p. 173) CA IOUs 

stated that refrigerant emissions and 

leakage may have a significant GWP, 

and suggested that DOE include in its 

environmental impact analysis 

estimates of changes in refrigerant 

emissions, and their effects on total 

GHG emissions and GWP. CA IOUs 

pointed to the CEC analysis as a 

potential starting point for DOE to use 

in including refrigerants in the 

environmental impact analysis. (CA 

IOUs, No. 42 at p. 6) 

DOE appreciates the comments by 

stakeholders regarding the emissions 

analysis of refrigerants. DOE’s emission 

analysis adheres to the guidance and 

methodologies that has been outlined in 

this section. 

DOE also adds that the design options 

used for efficiency improvement of 

commercial refrigeration equipment in 

this rulemaking are not expected to 

impact refrigerant leakage rates. 

Consequently, the proposed standards 

would not affect refrigerant emissions. If 

stakeholders believe that the proposed 

standards would lead to an increase or 

a decrease in refrigerant emissions, then 

supporting arguments may be submitted 

for DOE’s consideration during the 

NOPR public meeting or comment 

period. 

O. Monetizing Carbon Dioxide and 

Other Emissions Impacts 

As part of the development of the 

proposed standards in this NOPR, DOE 

considered the estimated monetary 

benefits from the reduced emissions of 

CO2 and NOX that are expected to result 

from each of the TSLs considered. In 

order to make this calculation analogous 

to the calculation of the NPV of 

customer benefit, DOE considered the 

reduced emissions expected to result 

over the lifetime of equipment shipped 

in the forecast period for each TSL. This 

section summarizes the basis for the 

monetary values used for each of these 

emissions and presents the values 

considered in this NOPR. 

For today’s NOPR, DOE is relying on 

a set of values for the SCC that was 

developed by a Federal interagency 

process. The basis for these values is 

summarized below, and a more detailed 

description of the methodologies used is 

provided as an appendix to chapter 14 

of the NOPR TSD. 

1. Social Cost of Carbon 

The SCC is an estimate of the 

monetized damages associated with an 

incremental increase in carbon 

emissions in a given year. It is intended 

to include (but is not limited to) changes 

in net agricultural productivity, human 

health, property damages from 

increased flood risk, and the value of 

ecosystem services. Estimates of the 

SCC are provided in dollars per metric 

ton of carbon dioxide. A domestic SCC 

value is meant to reflect the value of 

damages in the United States resulting 

from a unit change in carbon dioxide 

emissions, while a global SCC value is 

meant to reflect the value of damages 

worldwide. 

Under section 1(b) of Executive Order 

12866, agencies must, to the extent 

permitted by law, ‘‘assess both the costs 

and the benefits of the intended 

regulation and, recognizing that some 

costs and benefits are difficult to 

quantify, propose or adopt a regulation 

only upon a reasoned determination 

that the benefits of the intended 

regulation justify its costs.’’ The purpose 

of the SCC estimates presented here is 

to allow agencies to incorporate the 

monetized social benefits of reducing 

CO2 emissions into cost-benefit analyses 

of regulatory actions that have small, or 

‘‘marginal,’’ impacts on cumulative 

global emissions. The estimates are 

presented with an acknowledgement of 

the many uncertainties involved and 

with a clear understanding that they 

should be updated over time to reflect 

increasing knowledge of the science and 

economics of climate impacts. 

As part of the interagency process that 

developed these SCC estimates, 

technical experts from numerous 

agencies met on a regular basis to 

consider public comments, explore the 

technical literature in relevant fields, 

and discuss key model inputs and 

assumptions. The main objective of this 

process was to develop a range of SCC 

values using a defensible set of input 

assumptions grounded in the existing 

scientific and economic literatures. In 

this way, key uncertainties and model 

differences transparently and 

consistently inform the range of SCC 

estimates used in the rulemaking 

process. 

a. Monetizing Carbon Dioxide Emissions 

When attempting to assess the 

incremental economic impacts of carbon 

dioxide emissions, the analyst faces a 

number of serious challenges. A report 

from the National Research Council 76

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Production and Use. 2009. National Academies 

Press: Washington, DC. 

77See Average Fuel Economy Standards 

Passenger Cars and Light Trucks Model Year 2011, 

74 FR 14196 (March 30, 2009) (Final Rule); Final 

Environmental Impact Statement Corporate Average 

Fuel Economy Standards, Passenger Cars and Light 

Trucks, Model Years 2011–2015 at 3–90 (Oct. 2008) 

(Available at: www.nhtsa.gov/fuel-economy). 

78See Average/fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 

2011–2015, 73 FR 24352 (May 2, 1008) (Proposed 

Rule); Draft Environmental Impact Statement 

Corporate Average Fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 

2011–2015 at 3-58 (June 2008) (Available at 

www.nhtsa.gov/fuel-economy). 

79See Average/fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 

2011–2015, 73 FR 24352 (May 2, 1008) (Proposed 

Rule); Draft Environmental Impact Statement 

Corporate Average Fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 

2011–2015 at 3-58 (June 2008) (Available at 

www.nhtsa.gov/fuel-economy). 

points out that any assessment will 

suffer from uncertainty, speculation, 

and lack of information about (1) future 

emissions of GHGs; (2) the effects of 

past and future emissions on the climate 

system, (3) the impact of changes in 

climate on the physical and biological 

environment, and (4) the translation of 

these environmental impacts into 

economic damages. As a result, any 

effort to quantify and monetize the 

harms associated with climate change 

will raise serious questions of science, 

economics, and ethics and should be 

viewed as provisional. 

Despite the serious limits of both 

quantification and monetization, SCC 

estimates can be useful in estimating the 

social benefits of reducing CO2

emissions. Most Federal regulatory 

actions can be expected to have 

marginal impacts on global emissions. 

For such policies, the agency can 

estimate the benefits from reduced (or 

costs from increased) emissions in any 

future year by multiplying the change in 

emissions in that year by the SCC value 

appropriate for that year. The net 

present value of the benefits can then be 

calculated by multiplying each of these 

future benefits by an appropriate 

discount factor and summing across all 

affected years. This approach assumes 

that the marginal damages from 

increased emissions are constant for 

small departures from the baseline 

emissions path, an approximation that 

is reasonable for policies that have 

effects on emissions that are small 

relative to cumulative global CO2

emissions. For policies that have a large 

(non-marginal) impact on global 

cumulative emissions, there is a 

separate question of whether the SCC is 

an appropriate tool for calculating the 

benefits of reduced emissions. This 

concern is not applicable to this notice, 

however. 

It is important to emphasize that the 

interagency process is committed to 

updating these estimates as the science 

and economic understanding of climate 

change and its impacts on society 

improves over time. In the meantime, 

the interagency group will continue to 

explore the issues raised by this analysis 

and consider public comments as part of 

the ongoing interagency process. 

b. Social Cost of Carbon Values Used in 

Past Regulatory Analyses 

Economic analyses for Federal 

regulations have used a wide range of 

values to estimate the benefits 

associated with reducing CO2 emissions. 

The model year 2011 Corporate Average 

Fuel Economy final rule, the U.S. 

Department of Transportation (DOT) 

used both a ‘‘domestic’’ SCC value of $2 

per metric ton of CO2 and a ‘‘global’’ 

SCC value of $33 per metric ton of CO2

for 2007 emission reductions (in 2007$), 

increasing both values at 2.4 percent per 

year. DOT also included a sensitivity 

analysis at $80 per metric ton of CO2.77

A 2008 regulation proposed by DOT 

assumed a domestic SCC value of $7 per 

metric ton of CO2 (in 2006$) for 2011 

emission reductions (with a range of $0– 

$14 for sensitivity analysis), also 

increasing at 2.4 percent per year.78 79 A 

regulation for packaged terminal air 

conditioners and packaged terminal 

heat pumps finalized by DOE in 2008 

used a domestic SCC range of $0 to $20 

per metric ton CO2 for 2007 emission 

reductions (in 2007$). 73 FR 58772, 

58814 (Oct. 7, 2008) In addition, EPA’s 

2008 Advance Notice of Proposed 

Rulemaking on Regulating Greenhouse 

Gas Emissions Under the Clean Air Act 

identified what it described as ‘‘very 

preliminary’’ SCC estimates subject to 

revision. 73 FR 44354 (July 30, 2008). 

EPA’s global mean values were $68 and 

$40 per metric ton CO2 for discount 

rates of approximately 2 percent and 3 

percent, respectively (in 2006$ for 2007 

emissions). 

In 2009, an interagency process was 

initiated to offer a preliminary 

assessment of how best to quantify the 

benefits from reducing carbon dioxide 

emissions. To ensure consistency in 

how benefits are evaluated across 

Federal agencies, the Administration 

sought to develop a transparent and 

defensible method, specifically 

designed for the rulemaking process, to 

quantify avoided climate change 

damages from reduced CO2 emissions. 

The interagency group did not 

undertake any original analysis. Instead, 

it combined SCC estimates from the 

existing literature to use as interim 

values until a more comprehensive 

analysis could be conducted. The 

outcome of the preliminary assessment 

by the interagency group was a set of 

five interim values: global SCC 

estimates for 2007 (in 2006$) of $55, 

$33, $19, $10, and $5 per metric ton of 

CO2. These interim values represented 

the first sustained interagency effort 

within the U.S. government to develop 

an SCC for use in regulatory analysis. 

The results of this preliminary effort 

were presented in several proposed and 

final rules. 

c. Current Approach and Key 

Assumptions 

Since the release of the interim 

values, the interagency group 

reconvened on a regular basis to 

generate improved SCC estimates. 

Specially, the group considered public 

comments and further explored the 

technical literature in relevant fields. 

The interagency group relied on three 

integrated assessment models 

commonly used to estimate the SCC: the 

FUND, DICE, and PAGE models. These 

models are frequently cited in the peerreviewed literature and were used in the 

last assessment of the Intergovernmental 

Panel on Climate Change. Each model 

was given equal weight in the SCC 

values that were developed. 

Each model takes a slightly different 

approach to model how changes in 

emissions result in changes in economic 

damages. A key objective of the 

interagency process was to enable a 

consistent exploration of the three 

models, while respecting the different 

approaches to quantifying damages 

taken by the key modelers in the field. 

An extensive review of the literature 

was conducted to select three sets of 

input parameters for these models: 

climate sensitivity, socio-economic and 

emissions trajectories, and discount 

rates. A probability distribution for 

climate sensitivity was specified as an 

input into all three models. In addition, 

the interagency group used a range of 

scenarios for the socio-economic 

parameters and a range of values for the 

discount rate. All other model features 

were left unchanged, relying on the 

model developers’ best estimates and 

judgments. 

The interagency group selected four 

sets of SCC values for use in regulatory 

analyses. Three sets of values are based 

on the average SCC from the three IAMs, 

at discount rates of 2.5, 3, and 5 percent. 

The fourth set, which represents the 

95th percentile SCC estimate across all 

three models at a 3-percent discount 

rate, was included to represent higher 

than expected impacts from temperature 

change further out in the tails of the 

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55946 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

80 It is recognized that this calculation for 

domestic values is approximate, provisional, and 

highly speculative. There is no a priori reason why 

domestic benefits should be a constant fraction of 

net global damages over time. 81Social Cost of Carbon for Regulatory Impact 

Analysis Under Executive Order 12866. Interagency 

Working Group on Social Cost of Carbon, United 

States Government, February 2010. 

www.whitehouse.gov/sites/default/files/omb/ 

inforeg/for-agencies/Social-Cost-of-Carbon-forRIA.pdf. 82Technical Update of the Social Cost of Carbon 

for Regulatory Impact Analysis Under Executive 

Order 12866. Interagency Working Group on Social 

Cost of Carbon, United States Government. May 

2013. http://www.whitehouse.gov/sites/default/ 

files/omb/inforeg/social_cost_of_carbon_for

_ria_2013_update.pdf 

SCC distribution. The values grow in 

real terms over time. Additionally, the 

interagency group determined that a 

range of values from 7 percent to 23 

percent should be used to adjust the 

global SCC to calculate domestic 

effects,80 although preference is given to 

consideration of the global benefits of 

reducing CO2 emissions. Table IV.10 

presents the values in the 2010 

interagency group report,81 which is 

reproduced in appendix 14A of the 

NOPR TSD. 

TABLE IV.10—ANNUAL SCC VALUES FROM 2010 INTERAGENCY REPORT, 2010–2050 

[In 2007 dollars per metric ton] 

Year 

Discount rate 

5% 3% 2.5% 3% 

Average Average Average 95th percentile 

2010 ................................................................................................................. 4.7 21.4 35.1 64.9 

2015 ................................................................................................................. 5.7 23.8 38.4 72.8 

2020 ................................................................................................................. 6.8 26.3 41.7 80.7 

2025 ................................................................................................................. 8.2 29.6 45.9 90.4 

2030 ................................................................................................................. 9.7 32.8 50.0 100.0 

2035 ................................................................................................................. 11.2 36.0 54.2 109.7 

2040 ................................................................................................................. 12.7 39.2 58.4 119.3 

2045 ................................................................................................................. 14.2 42.1 61.7 127.8 

2050 ................................................................................................................. 15.7 44.9 65.0 136.2 

The SCC values used for today’s 

notice were generated using the most 

recent versions of the three integrated 

assessment models that have been 

published in the peer-reviewed 

literature.82 Table IV.11 shows the 

updated sets of SCC estimates in 5-year 

increments from 2010 to 2050. The full 

set of annual SCC estimates between 

2010 and 2050 is reported in appendix 

14A of the TSD. The central value that 

emerges is the average SCC across 

models at the 3 percent discount rate. 

However, for purposes of capturing the 

uncertainties involved in regulatory 

impact analysis, the interagency group 

emphasizes the importance of including 

all four sets of SCC values. 

TABLE IV.11—ANNUAL SCC VALUES FROM 2013 INTERAGENCY REPORT, 2010–2050 

[in 2007 dollars per metric ton] 

Year 

Discount rate 

5% 3% 2.5% 3% 

Average Average Average 95th Percentile 

2010 ................................................................................................................. 11 33 52 90 

2015 ................................................................................................................. 12 38 58 109 

2020 ................................................................................................................. 12 43 65 129 

2025 ................................................................................................................. 14 48 70 144 

2030 ................................................................................................................. 16 52 76 159 

2035 ................................................................................................................. 19 57 81 176 

2040 ................................................................................................................. 21 62 87 192 

2045 ................................................................................................................. 24 66 92 206 

2050 ................................................................................................................. 27 71 98 221 

It is important to recognize that a 

number of key uncertainties remain, and 

that current SCC estimates should be 

treated as provisional and revisable 

since they will evolve with improved 

scientific and economic understanding. 

The interagency group also recognizes 

that the existing models are imperfect 

and incomplete. The 2009 National 

Research Council report mentioned 

above points out that there is tension 

between the goal of producing 

quantified estimates of the economic 

damages from an incremental ton of 

carbon and the limits of existing efforts 

to model these effects. There are a 

number of concerns and problems that 

should be addressed by the research 

community, including research 

programs housed in many of the Federal 

agencies participating in the interagency 

process to estimate the SCC. The 

interagency group intends to 

periodically review and reconsider 

those estimates to reflect increasing 

knowledge of the science and 

economics of climate impacts, as well as 

improvements in modeling. 

The interagency group intends to 

periodically review and reconsider 

those estimates to reflect increasing 

knowledge of the science and 

economics of climate impacts, as well as 

improvements in modeling. 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55947 

83The interagency report presents SCC values 

through 2050. DOE derived values after 2050 using 

the 3-percent per year escalation rate used by the 

interagency group. 

84For additional information, refer to U.S. Office 

of Management and Budget, Office of Information 

and Regulatory Affairs, 2006 Report to Congress on 

the Costs and Benefits of Federal Regulations and 

Unfunded Mandates on State, Local, and Tribal 

Entities, Washington, DC. 

85OMB, Circular A–4: Regulatory Analysis (Sept. 

17, 2003). 

In summary, in considering the 

potential global benefits resulting from 

reduced CO2 emissions, DOE used the 

values from the 2013 interagency report 

adjusted to 2012$ using the GDP price 

deflator. For each of the four sets of SCC 

values, the values for emissions in 2015 

were $12.9, $40.8, $62.2, and $117 per 

metric ton avoided 83 (values expressed 

in 2012$). DOE derived values after 

2050 using the relevant growth rates for 

the 2040–2050 period in the interagency 

update. 

DOE multiplied the CO2 emissions 

reduction estimated for each year by the 

SCC value for that year in each of the 

four cases. To calculate a present value 

of the stream of monetary values, DOE 

discounted the values in each of the 

four cases using the specific discount 

rate that had been used to obtain the 

SCC values in each case. 

2. Valuation of Other Emissions 

Reductions 

DOE investigated the potential 

monetary benefit of reduced NOX

emissions from the potential standards 

it considered. As noted above, DOE has 

taken into account how new or 

amended energy conservation standards 

would reduce NOX emissions in those 

22 States not affected by emissions caps. 

DOE estimated the monetized value of 

NOX emissions reductions resulting 

from each of the TSLs considered for 

today’s NOPR based on estimates found 

in the relevant scientific literature. 

Available estimates suggest a very wide 

range of monetary values per ton of NOX

from stationary sources, ranging from 

$468 to $4,809 per ton in 2012$).84 In 

accordance with OMB guidance, 85 DOE 

calculated a range of monetary benefits 

using each of the economic values for 

NOX and real discount rates of 3 percent 

and 7 percent. 

DOE is evaluating appropriate 

monetization of avoided SO2 and Hg 

emissions in energy conservation 

standards rulemakings. It has not 

included monetization in the current 

analysis 

P. Regulatory Impact Analysis 

DOE prepared a regulatory impact 

analysis (RIA) for this rulemaking, 

which is described in chapter 16 of the 

NOPR TSD. The RIA is subject to review 

by OIRA in the OMB. The RIA consists 

of (1) a statement of the problem 

addressed by this regulation and the 

mandate for Government action; (2) a 

description and analysis of policy 

alternatives to this regulation; (3) a 

qualitative review of the potential 

impacts of the alternatives; and (4) the 

national economic impacts of the 

proposed standard. 

The RIA assesses the effects of 

feasible policy alternatives to amended 

commercial refrigeration equipment 

standards and provides a comparison of 

the impacts of the alternatives. DOE 

evaluated the alternatives in terms of 

their ability to achieve significant 

energy savings at reasonable cost, and 

compared them to the effectiveness of 

the proposed rule. 

DOE identified the following major 

policy alternatives for achieving 

increased commercial refrigeration 

equipment efficiency: 

• No new regulatory action 

• commercial customer tax credits 

• commercial customer rebates 

• voluntary energy efficiency targets 

• bulk government purchases 

• early replacement 

DOE qualitatively evaluated each 

alternative’s ability to achieve 

significant energy savings at reasonable 

cost and compared it to the effectiveness 

of the proposed rule. DOE assumed that 

each alternative policy would induce 

commercial customers to voluntarily 

purchase at least some higher efficiency 

equipment at any of the TSLs. In 

contrast to a standard at one of the 

TSLs, the adoption rate of the 

alternative non-regulatory policy cases 

may not be 100 percent, which would 

result in lower energy savings than a 

standard. The following paragraphs 

discuss each policy alternative. (See 

chapter 17 of the NOPR TSD for further 

details.) 

No new regulatory action: The case in 

which no regulatory action is taken for 

commercial refrigeration equipment 

constitutes the base case (or no action) 

scenario. By definition, no new 

regulatory action yields zero energy 

savings and an NPV of zero dollars. 

Commercial customer tax credits: 

Customer tax credits are considered a 

viable non-regulatory market 

transformation program. From a 

customer perspective, the most 

important difference between rebate and 

tax credit programs is that a rebate can 

be obtained quickly, whereas receipt of 

tax credits is delayed until income taxes 

are filed or a tax refund is provided by 

the Internal Revenue Service (IRS). 

From a societal perspective, tax credits 

(like rebates) do not change the installed 

cost of the equipment, but rather 

transfer a portion of the cost from the 

customer to taxpayers as a whole. DOE, 

therefore, assumed that equipment costs 

in the customer tax credits scenario 

were identical to the NIA base case. The 

change in the NES and NPV is a result 

of the change in the efficiency 

distributions that results from lowering 

the prices of higher efficiency 

equipment. 

Commercial customer rebates: 

Customer rebates cover a portion of the 

difference in incremental product price 

between products meeting baseline 

efficacy levels and those meeting higher 

efficacy levels, resulting in a higher 

percentage of customers purchasing 

more-efficacious models and decreased 

aggregated energy use compared to the 

base case. Although the rebate program 

reduces the total installed cost to the 

customer, it is financed by tax revenues. 

Therefore, from a societal perspective, 

the installed cost at any efficiency level 

does not change with the rebate 

program; rather, part of the cost is 

transferred from the customer to 

taxpayers as a whole. Consequently, 

DOE assumed that equipment costs in 

the rebates scenario were identical to 

the NIA base case. The change in the 

NES and NPV is a result of the change 

in the efficiency distributions that 

results as a consequence of lowering the 

prices of higher efficiency equipment. 

Voluntary energy efficiency targets: 

While it is possible that voluntary 

programs for equipment would be 

effective, DOE lacks a quantitative basis 

to determine how effective such a 

program might be. As noted previously, 

broader economic and social 

considerations are in play than simple 

economic return to the equipment 

purchaser. DOE lacks the data necessary 

to quantitatively project the degree to 

which voluntary programs for more 

expensive, higher efficiency equipment 

would modify the market. 

Bulk government purchases and early 

replacement incentive programs: DOE 

also considered, but did not analyze, the 

potential of bulk government purchases 

and early replacement incentive 

programs as alternatives to the proposed 

standards. Bulk government purchases 

would have a very limited impact on 

improving the overall market efficiency 

of commercial refrigeration equipment 

because they would be a negligible part 

of the total equipment sold in the 

market. In the case of replacement 

incentives, several policy options exist 

to promote early replacement, including 

a direct national program of customer 

incentives, incentives paid to utilities to 

promote an early replacement program, 

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55948 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

86As explained in section IV.H.1, the baseline 

efficiency levels for equipment classes HZO.RC.M, 

HZO. RC.L and HZO.SC.L were set by their 

respective standards baseline values. The latest 

amended standards for these equipment classes 

were specified by the January 2009 final rule. DOE 

could identify only one design option (vacuum 

insulated panels) that could increase the efficiency 

of these equipment classes above the standards 

baseline. Therefore, apart from the baseline 

efficiency levels (standard baseline levels), there 

was only one additional efficiency level for each of 

these three equipment classes. 

market promotions through equipment 

manufacturers, and replacement of 

government-owned equipment. In 

considering early replacements, DOE 

estimates that the energy savings 

realized through a one-time early 

replacement of existing stock equipment 

does not result in energy savings 

commensurate to the cost to administer 

the program. Consequently, DOE did not 

analyze this option in detail. 

V. Analytical Results 

A. Trial Standard Levels 

1. Trial Standard Level Formulation 

Process and Criteria 

DOE selected between five and eight 

efficiency levels for all but three 

equipment classes for the LCC analysis 

and NIA; the three exceptions were the 

HZO.RC.M, HZO.RC.L, and HZO.SC.L 

equipment classes, which had only two 

efficiency levels each, including the 

baseline efficiency levels.86 For all 

equipment classes, the first efficiency 

level is the baseline efficiency level. 

Based on the results of the LCC analysis 

and NIA, DOE selected five TSLs above 

the baseline level for each equipment 

class for the NOPR stage of this 

rulemaking. TSL 5 was selected at the 

max-tech level for all equipment classes. 

TSL 4 was chosen so as to group the 

efficiency levels with the highest energy 

savings combined with a positive 

customer NPV at a 7-percent discount 

rate. ‘‘Customer NPV’’ is the NPV of 

future savings obtained from the NIA. It 

provides a measure of the benefits only 

to the customers of the commercial 

refrigeration equipment, and does not 

account for the net benefits to the 

Nation. The net benefits to the Nation 

also include monetized values of 

emissions reductions in addition to the 

customer NPV. TSL 3 was chosen to 

represent the group of efficiency levels 

with the highest customer NPV at a 7- 

percent discount rate. While the 

selection of TSL 4 and TSL 3 were based 

on customer NPV, the proposed 

standard levels were selected on the 

basis of net social benefits. TSL 2 and 

TSL 1 were selected to provide 

intermediate efficiency levels that fill 

the gap between the baseline efficiency 

level and TSL 3. For the HZO.RC.M, 

HZO.RC.L, and HZO.SC.L equipment 

classes, there is only one efficiency level 

above baseline. While TSL 5 was 

associated with the max-tech level for 

these three equipment classes, TSLs 1 

through 4 did not have corresponding 

efficiency levels that satisfied TSL 

formulation criteria. Therefore, the 

baseline efficiency level was assigned to 

TSL 1 through TSL 4 for each of these 

three equipment classes. Table V.1 

shows the mapping between TSLs and 

efficiency levels. 

TABLE V.1—MAPPING BETWEEN TSLS AND EFFICIENCY LEVELS

Equipment class Baseline 

Intermediate 

level * 

Intermediate 

level ** 

Max NPV *** Max eff. lvl with 

pos-NPV†

Max-tech 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ................... Level 1 ................ Level 2 ............... Level 3 ................ Level 4 ............... Level 5 ............... Level 6. 

VOP.RC.L .................... Level 1 ................ Level 2 ............... Level 3 ............... Level 4 ................ Level 4 ............... Level 5. 

VOP.SC.M ................... Level 1 ................ Level 3 ............... Level 4 ................ Level 5 ............... Level 6 ............... Level 7. 

VCT.RC.M ................... Level 1 ................ Level 2 ............... Level 3 ............... Level 4 ................ Level 6 ............... Level 7. 

VCT.RC.L .................... Level 1 ............... Level 3 ................ Level 4 ............... Level 5 ................ Level 5 ............... Level 6. 

VCT.SC.M ................... Level 1 ................ Level 2 ............... Level 3 ............... Level 4 ................ Level 7 ............... Level 8. 

VCT.SC.L .................... Level 1 ............... Level 3 ................ Level 4 ............... Level 5 ................ Level 7 ............... Level 8. 

VCT.SC.I ..................... Level 1 ................ Level 3 ............... Level 5 ............... Level 6 ................ Level 6 ............... Level 7. 

VCS.SC.M ................... Level 1 ............... Level 3 ................ Level 5 ............... Level 7 ............... Level 7 ................ Level 8. 

VCS.SC.L .................... Level 1 ............... Level 3 ............... Level 5 ................ Level 6 ............... Level 7 ................ Level 8. 

VCS.SC.I ..................... Level 1 ............... Level 3 ................ Level 5 ............... Level 6 ............... Level 6 ................ Level 7. 

SVO.RC.M ................... Level 1 ................ Level 2 ............... Level 3 ................ Level 4 ............... Level 5 ............... Level 6. 

SVO.SC.M ................... Level 1 ................ Level 3 ............... Level 4 ................ Level 5 ............... Level 6 ............... Level 7. 

SOC.RC.M .................. Level 1 ................ Level 2 ............... Level 3 ................ Level 4 ............... Level 6 ............... Level 7. 

HZO.RC.M † ................. Level 1 ............... Level 1 ................ Level 1 ............... Level 1 ................ Level 1 ............... Level 2. 

HZO.RC.L † .................. Level 1 ............... Level 1 ................ Level 1 ............... Level 1 ............... Level 1 ................ Level 2. 

HZO.SC.M ................... Level 1 ............... Level 2 ................ Level 2 ............... Level 3 ............... Level 4 ................ Level 5. 

HZO.SC.L † .................. Level 1 ............... Level 1 ................ Level 1 ............... Level 1 ............... Level 1 ................ Level 2. 

HCT.SC.M ................... Level 1 ................ Level 3 ............... Level 5 ............... Level 6 ................ Level 7 ............... Level 8. 

HCT.SC.L .................... Level 1 ............... Level 3 ................ Level 4 ............... Level 5 ................ Level 7 ............... Level 8. 

HCT.SC.I ..................... Level 1 ................ Level 2 ............... Level 3 ............... Level 4 ................ Level 4 ............... Level 5. 

HCS.SC.M ................... Level 1 ............... Level 2 ................ Level 3 ............... Level 4 ............... Level 5 ................ Level 7. 

HCS.SC.L .................... Level 1 ............... Level 4 ............... Level 5 ................ Level 6 ............... Level 6 ................ Level 7. 

PD.SC.M ..................... Level 1 ............... Level 2 ............... Level 2 ................ Level 3 ............... Level 7 ................ Level 8. 

SOC.SC.M ................... Level 1 ................ Level 3 ............... Level 4 ................ Level 5 ............... Level 7 ............... Level 8. 

‘‘Level’’ stands for ‘‘Efficiency Level.’’ 

* TSL 1 was generally chosen as one level below TSL 2, but in some cases an even lower efficiency level was chosen if the Level immediately 

below TSL 2 had an NPV value that was close to the NPV value of TSL 2. 

** TSL 2 was generally chosen as one level below TSL 3, but in some cases an even lower efficiency level was chosen if the Level immediately below TSL 3 had an NPV value that was close to the NPV value of TSL 3. 

*** Efficiency level that has the highest NPV at a 7-percent discount rate. 

† Highest efficiency level with a positive NPV at a 7-percent discount rate. 

‡TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L do not satisfy the criteria for the corresponding TSL selection. See explanation in section V.A.1. TSLs 1 through 4 were assigned to the baseline efficiency level for all three equipment classes. 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55949 

2. Trial Standard Level Equations 

Because of the equipment size 

variation within each equipment class 

and the use of daily energy 

consumption as the efficiency metric, 

DOE developed a methodology to 

express efficiency standards in terms of 

a normalizing metric. DOE used two 

normalizing metrics that were used for 

all equipment classes: (1) Volume (V) 

and (2) TDA. The use of these two 

normalization metrics allows for the 

development of the standard in the form 

of a linear equation that can be used to 

represent the entire range of equipment 

sizes within a given equipment class. 

DOE retained the respective 

normalization metric (TDA or volume) 

previously used in the EPACT 2005 or 

the January 2009 final rule standards for 

each covered equipment class. (42 

U.S.C. 6313(c)(2)–(3)); 74 FR 1093 (Jan. 

9, 2009). Additionally, in its January 

2009 final rule, DOE developed offset 

factors as a method to adjust the energy 

efficiency requirements for smaller 

equipment in each equipment class 

analyzed. These offset factors, which 

form the y-intercept on a plot of each 

standard level equation (representing a 

fictitious case of zero volume or zero 

TDA), accounted for certain components 

of the refrigeration load (such as 

conduction end effects) that remain 

constant even when equipment sizes 

vary. These constant loads affect smaller 

cases disproportionately. The offset 

factors were intended to approximate 

these constant loads and provide a fixed 

end point in an equation that describes 

the relationship between energy 

consumption and the corresponding 

normalization metric. 74 FR 1,118–19 

(Jan. 9, 2009). The standard level 

equations prescribed by EPACT 2005 

also contained similar fixed parts not 

multiplied by the volume metric and 

which correspond to these offset factors. 

(42 U.S.C. 6313(c)(2)) In this NOPR, 

DOE modified the January 2009 final 

rule (74 FR 1,118–19 (Jan. 9, 2009)) and 

EPACT 2005 offset factors at each TSL 

to reflect the proportional changes in 

energy consumption for each equipment 

class, as modeled in the engineering 

analysis. See chapter 5 of the NOPR 

TSD for further details and discussion of 

offset factors. 

For the equipment classes covered 

under this rulemaking, the standards 

equation at each TSL is proposed in the 

form of MDEC (in kilowatt-hours per 

day), normalized by a volume (V) or 

TDA metric, with an offset factor added 

to that value. These equations take the 

form: 

MDEC = A × TDA + B (for equipment 

using TDA as a normalizing metric) 

or 

MDEC = A × V + B (for equipment using 

volume as a normalizing metric) 

For equipment classes directly 

analyzed in the engineering analysis, 

offset factor B was calculated for each 

class (see chapter 5 of the NOPR TSD for 

discussion of offset factors). The slope, 

A, was derived based on the offset 

factor, B, and the CDEC of the 

representative unit modeled in the 

engineering analysis for that equipment 

class is presented in Table V.2. The 

standards equations may be used to 

prescribe the MDEC for equipment of 

different sizes within the same 

equipment class. Chapter 9 of the NOPR 

TSD explains the methodology used for 

selecting TSLs and developing the 

coefficients shown in Table V.3. 

TABLE V.2—CDEC VALUES BY TSL FOR REPRESENTATIVE UNITS ANALYZED IN THE ENGINEERING ANALYSIS FOR EACH

PRIMARY EQUIPMENT CLASS

Equipment class 

CDEC Values by TSL 

kWh/day 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 46.84 44.33 35.71 35.51 35.06 

VOP.RC.L ............................................................................ 106.22 101.03 100.51 100.51 98.87 

VOP.SC.M ............................................................................ 30.03 29.60 26.70 26.62 26.46 

VCT.RC.M ............................................................................ 15.56 8.10 6.26 5.97 5.49 

VCT.RC.L ............................................................................. 31.13 30.58 30.29 30.29 28.85 

VCT.SC.M ............................................................................ 7.56 4.08 3.24 2.97 2.68 

VCT.SC.L ............................................................................. 13.48 13.30 12.44 12.09 11.57 

VCT.SC.I .............................................................................. 17.45 16.36 16.14 16.14 15.37 

VCS.SC.M ............................................................................ 2.36 2.17 1.81 1.81 1.39 

VCS.SC.L ............................................................................. 7.26 6.75 6.66 6.56 5.71 

VCS.SC.I .............................................................................. 18.24 17.79 17.64 17.64 16.53 

SVO.RC.M ........................................................................... 36.11 33.85 27.71 27.57 27.26 

SVO.SC.M ............................................................................ 25.74 25.36 23.29 23.24 23.12 

SOC.RC.M ........................................................................... 25.62 24.97 20.43 20.15 19.93 

HZO.RC.M ........................................................................... 14.43 14.43 14.43 14.43 14.17 

HZO.RC.L ............................................................................ 33.10 33.10 33.10 33.10 32.22 

HZO.SC.M ............................................................................ 14.76 14.76 14.60 14.49 14.26 

HZO.SC.L ............................................................................. 30.12 30.12 30.12 30.12 29.91 

HCT.SC.M ............................................................................ 1.87 0.84 0.75 0.67 0.49 

HCT.SC.L ............................................................................. 4.11 1.77 1.70 1.57 1.18 

HCT.SC.I .............................................................................. 3.22 3.07 2.86 2.86 2.13 

HCS.SC.M ............................................................................ 0.65 0.60 0.56 0.50 0.25 

HCS.SC.L ............................................................................. 1.61 1.46 1.27 1.27 0.74 

PD.SC.M .............................................................................. 3.90 3.90 2.23 1.64 1.42 

SOC.SC.M ........................................................................... 27.04 26.80 22.02 21.70 21.41 

TABLE V.3—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL PRIMARY EQUIPMENT CLASSES

Equipment 

class 

Trial standard levels for primary equipment classes analyzed 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VCT.RC.L .... 0.56 × TDA + 2.61 0.45 × TDA + 2.08 0.44 × TDA + 2.05 0.43 × TDA + 2.03 0.43 × TDA + 2.03 0.41 × TDA + 1.93 

VOP.RC.M ... 0.82 × TDA + 4.07 0.8 × TDA + 3.99 0.76 × TDA + 3.78 0.61 × TDA + 3.04 0.61 × TDA + 3.03 0.6 × TDA + 2.99 

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55950 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

87The matched-pair analyses compared 

calculated energy consumption levels for pieces of 

equipment with similar designs but one major 

construction or operational difference; for example, 

vertical open remote condensing cases operating at 

medium and low temperatures. The relationships 

between these sets of units were used to determine 

the effect of the design or operational difference on 

applicable equipment. For more information, please 

see chapter 5 of the 2009 final rule TSD, which can 

be found at http://www.regulations.gov/#!document

Detail;D=EERE-2006-STD-0126-0058. 

TABLE V.3—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL PRIMARY EQUIPMENT CLASSES— 

Continued 

Equipment 

class 

Trial standard levels for primary equipment classes analyzed 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

SVO.RC.M ... 0.83 × TDA + 3.18 0.82 × TDA + 3.16 0.77 × TDA + 2.96 0.63 × TDA + 2.42 0.63 × TDA + 2.41 0.62 × TDA + 2.38 

HZO.RC.L .... 0.57 × TDA + 6.88 0.57 × TDA + 6.88 0.57 × TDA + 6.88 0.57 × TDA + 6.88 0.57 × TDA + 6.88 0.55 × TDA + 6.7 

HZO.RC.M ... 0.35 × TDA + 2.88 0.35 × TDA + 2.88 0.35 × TDA + 2.88 0.35 × TDA + 2.88 0.35 × TDA + 2.88 0.34 × TDA + 2.83 

VCT.RC.M ... 0.22 × TDA + 1.95 0.21 × TDA + 1.87 0.11 × TDA + 0.97 0.08 × TDA + 0.75 0.08 × TDA + 0.72 0.07 × TDA + 0.66 

VOP.RC.L .... 2.27 × TDA + 6.85 2.23 × TDA + 6.72 2.12 × TDA + 6.39 2.11 × TDA + 6.36 2.11 × TDA + 6.36 2.07 × TDA + 6.26 

SOC.RC.M .. 0.51 × TDA + 0.11 0.5 × TDA + 0.11 0.49 × TDA + 0.11 0.4 × TDA + 0.09 0.39 × TDA + 0.08 0.39 × TDA + 0.08 

VOP.SC.M ... 1.74 × TDA + 4.71 1.7 × TDA + 4.61 1.68 × TDA + 4.54 1.51 × TDA + 4.1 1.51 × TDA + 4.09 1.5 × TDA + 4.06 

SVO.SC.M ... 1.73 × TDA + 4.59 1.67 × TDA + 4.42 1.64 × TDA + 4.35 1.51 × TDA + 4. 1.5 × TDA + 3.99 1.5 × TDA + 3.97 

HZO.SC.L .... 1.92 × TDA + 7.08 1.92 × TDA + 7.08 1.92 × TDA + 7.08 1.92 × TDA + 7.08 1.92 × TDA + 7.08 1.91 × TDA + 7.03 

HZO.SC.M ... 0.77 × TDA + 5.55 0.77 × TDA + 5.54 0.77 × TDA + 5.54 0.76 × TDA + 5.48 0.75 × TDA + 5.44 0.74 × TDA + 5.35 

HCT.SC.I ..... 0.56 × TDA + 0.43 0.55 × TDA + 0.42 0.52 × TDA + 0.4 0.49 × TDA + 0.37 0.49 × TDA + 0.37 0.36 × TDA + 0.28 

VCT.SC.I ..... 0.67 × TDA + 3.29 0.56 × TDA + 2.77 0.53 × TDA + 2.6 0.52 × TDA + 2.56 0.52 × TDA + 2.56 0.5 × TDA + 2.44 

VCS.SC.I ..... 0.38 × V + 0.88 0.36 × V + 0.84 0.35 × V + 0.82 0.35 × V + 0.81 0.35 × V + 0.81 0.33 × V + 0.76 

VCT.SC.M ... 0.12 × V + 3.34 0.1 × V + 2.74 0.05 × V + 1.48 0.04 × V + 1.17 0.04 × V + 1.07 0.03 × V + 0.97 

VCT.SC.L .... 0.53 × V + 2.92 0.25 × V + 1.35 0.24 × V + 1.33 0.23 × V + 1.25 0.22 × V + 1.21 0.21 × V + 1.16 

VCS.SC.M ... 0.06 × V + 1.31 0.03 × V + 0.69 0.03 × V + 0.64 0.03 × V + 0.53 0.03 × V + 0.53 0.02 × V + 0.41 

VCS.SC.L .... 0.21 × V + 0.72 0.14 × V + 0.48 0.13 × V + 0.44 0.13 × V + 0.44 0.13 × V + 0.43 0.11 × V + 0.38 

HCT.SC.M ... 0.06 × V + 1.73 0.05 × V + 1.42 0.02 × V + 0.63 0.02 × V + 0.57 0.02 × V + 0.51 0.01 × V + 0.38 

HCT.SC.L .... 0.36 × V + 1.98 0.29 × V + 1.57 0.12 × V + 0.68 0.12 × V + 0.65 0.11 × V + 0.6 0.08 × V + 0.45 

HCS.SC.M ... 0.03 × V + 0.54 0.02 × V + 0.49 0.02 × V + 0.45 0.02 × V + 0.41 0.02 × V + 0.37 0.01 × V + 0.18 

HCS.SC.L .... 0.2 × V + 0.69 0.15 × V + 0.53 0.14 × V + 0.48 0.12 × V + 0.42 0.12 × V + 0.42 0.07 × V + 0.24 

PD.SC.M ..... 0.13 × V + 3.51 0.07 × V + 1.98 0.07 × V + 1.98 0.04 × V + 1.13 0.03 × V + 0.83 0.03 × V + 0.72 

SOC.SC.M ... 0.6 × TDA + 1.0 0.4 × TDA + 0.67 0.4 × TDA + 0.66 0.33 × TDA + 0.54 0.32 × TDA + 0.53 0.32 × TDA + 0.53 

In addition to the 24 primary 

equipment classes analyzed, DOE 

evaluating existing and potentially 

amended standards for 23 secondary 

equipment classes of commercial 

refrigeration equipment covered in this 

rulemaking that were not directly 

analyzed in the engineering analysis. 

DOE’s approach to evaluating standards 

for these secondary equipment classes 

involves extension multipliers 

developed using the engineering results 

for the primary equipment classes 

analyzed and a set of matched-pair 

analyses performed during the January 

2009 final rule analysis.87 In addition, 

DOE believes that standards for certain 

primary equipment classes can be 

directly applied to similar secondary 

equipment classes. Chapter 5 of the 

NOPR TSD discusses the development 

of the extension multipliers. 

Using the extension multiplier 

approach, DOE developed an additional 

set of TSLs and associated equations for 

the secondary equipment classes, as 

shown in Table V.4. The TSLs shown in 

Table V.4 do not necessarily satisfy the 

criteria spelled out in section V.A. DOE 

is presenting the standards equations 

developed for each TSL for all 47 

equipment classes to allow interested 

parties to better review the ramifications 

of each TSL across the range of 

equipment sizes on the market. 

TABLE V.4—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL SECONDARY EQUIPMENT CLASSES

Equipment 

class 

Trial standard levels for secondary equipment classes analyzed 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.I ..... 2.89 × TDA + 8.7 2.83 × TDA + 8.54 2.69 × TDA + 8.12 2.68 × TDA + 8.08 2.68 × TDA + 8.08 2.63 × TDA + 7.95 

SVO.RC.L .... 2.27 × TDA + 6.85 2.23 × TDA + 6.72 2.12 × TDA + 6.39 2.11 × TDA + 6.36 2.11 × TDA + 6.36 2.07 × TDA + 6.26 

SVO.RC.I ..... 2.89 × TDA + 8.7 2.83 × TDA + 8.54 2.69 × TDA + 8.12 2.68 × TDA + 8.08 2.68 × TDA + 8.08 2.63 × TDA + 7.95 

HZO.RC.I ..... 0.72 × TDA + 8.74 0.72 × TDA + 8.74 0.72 × TDA + 8.74 0.72 × TDA + 8.74 0.72 × TDA + 8.74 0.7 × TDA + 8.5 

VOP.SC.L .... 4.37 × TDA + 11.82 4.27 × TDA + 11.57 4.21 × TDA + 11.4 3.8 × TDA + 10.29 3.79 × TDA + 10.26 3.77 × TDA + 10.2 

VOP.SC.I ..... 5.55 × TDA + 15.02 5.43 × TDA + 14.69 5.35 × TDA + 14.48 4.83 × TDA + 13.06 4.81 × TDA + 13.03 4.78 × TDA + 12.95 

SVO.SC.L .... 4.34 × TDA + 11.51 4.18 × TDA + 11.09 4.12 × TDA + 10.93 3.78 × TDA + 10.04 3.77 × TDA + 10.01 3.76 × TDA + 9.96 

SVO.SC.I ..... 5.52 × TDA + 14.63 5.31 × TDA + 14.09 5.23 × TDA + 13.88 4.8 × TDA + 12.75 4.79 × TDA + 12.72 4.77 × TDA + 12.65 

HZO.SC.I ..... 2.44 × TDA + 9.0 2.44 × TDA + 9.0 2.44 × TDA + 9.0 2.44 × TDA + 9.0 2.44 × TDA + 9.0 2.42 × TDA + 8.93 

SOC.RC.L ... 1.08 × TDA + 0.22 1.05 × TDA + 0.23 1.02 × TDA + 0.22 0.84 × TDA + 0.18 0.83 × TDA + 0.18 0.82 × TDA + 0.18 

SOC.RC.I .... 1.26 × TDA + 0.26 1.23 × TDA + 0.27 1.2 × TDA + 0.26 0.98 × TDA + 0.21 0.97 × TDA + 0.21 0.96 × TDA + 0.21 

SOC.SC.I ..... 1.76 × TDA + 0.36 1.72 × TDA + 0.37 1.68 × TDA + 0.36 1.37 × TDA + 0.3 1.35 × TDA + 0.29 1.34 × TDA + 0.29 

VCT.RC.I ..... 0.66 × TDA + 3.05 0.52 × TDA + 2.44 0.51 × TDA + 2.39 0.51 × TDA + 2.37 0.51 × TDA + 2.37 0.48 × TDA + 2.26 

HCT.RC.M ... 0.16 × TDA + 0.13 0.16 × TDA + 0.12 0.15 × TDA + 0.12 0.14 × TDA + 0.11 0.14 × TDA + 0.11 0.1 × TDA + 0.08 

HCT.RC.L .... 0.34 × TDA + 0.26 0.33 × TDA + 0.26 0.32 × TDA + 0.24 0.3 × TDA + 0.23 0.3 × TDA + 0.23 0.22 × TDA + 0.17 

HCT.RC.I ..... 0.4 × TDA + 0.31 0.39 × TDA + 0.3 0.37 × TDA + 0.29 0.35 × TDA + 0.27 0.35 × TDA + 0.27 0.26 × TDA + 0.2 

VCS.RC.M ... 0.11 × V + 0.26 0.11 × V + 0.24 0.1 × V + 0.24 0.1 × V + 0.24 0.1 × V + 0.24 0.1 × V + 0.22 

VCS.RC.L .... 0.23 × V + 0.54 0.22 × V + 0.51 0.22 × V + 0.5 0.21 × V + 0.5 0.21 × V + 0.5 0.2 × V + 0.46 

VCS.RC.I ..... 0.27 × V + 0.63 0.26 × V + 0.6 0.25 × V + 0.58 0.25 × V + 0.58 0.25 × V + 0.58 0.23 × V + 0.54 

HCS.SC.I ..... 0.38 × V + 0.88 0.36 × V + 0.84 0.35 × V + 0.82 0.35 × V + 0.81 0.35 × V + 0.81 0.33 × V + 0.76 

HCS.RC.M ... 0.11 × V + 0.26 0.11 × V + 0.24 0.1 × V + 0.24 0.1 × V + 0.24 0.1 × V + 0.24 0.1 × V + 0.22 

HCS.RC.L .... 0.23 × V + 0.54 0.22 × V + 0.51 0.22 × V + 0.5 0.21 × V + 0.5 0.21 × V + 0.5 0.2 × V + 0.46 

HCS.RC.I ..... 0.27 × V + 0.63 0.26 × V + 0.6 0.25 × V + 0.58 0.25 × V + 0.58 0.25 × V + 0.58 0.23 × V + 0.54 

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TABLE V.4—EQUATIONS REPRESENTING THE STANDARDS AT EACH TSL FOR ALL SECONDARY EQUIPMENT CLASSES— 

Continued 

Equipment 

class 

Trial standard levels for secondary equipment classes analyzed 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

SOC.SC.L* .. 0.75 × V + 4.10 0.84 × TDA + 1.4 0.83 × TDA + 1.39 0.68 × TDA + 1.14 0.67 × TDA + 1.12 0.66 × TDA + 1.11 

* Equipment class SOC.SC.L was inadvertently grouped under the category self-contained commercial freezers with transparent doors in the standards prescribed 

by EPCA, as amended by EPACT 2005. (42 U.S.C. 6313(c)(2)) The baseline expression is thus given by the expression 0.75 × V + 4.10, which is the current standard for SOC.SC.L equipment. A similar anomaly (of inadvertent classification under a different equipment category) for SOC.SC.M equipment was corrected by the 

standard established by AEMTCA (see section IV.C.1.d for a detailed discussion). (42 U.S.C. 6313(c)(4)) However, no such corrective action has been prescribed for 

standards for SOC.SC.L equipment. In establishing a new standard for SOC.SC.M equipment, AEMTCA also changed the normalization metric from volume (V) to 

total display area (TDA). Accordingly, DOE is proposing the amended standards for SOC.SC.M equipment with TDA as the normalization metric (see Table V.3), 

DOE derives the proposed standards for secondary equipment classes based on the proposed standard of a primary equipment that has similar characteristics as the 

secondary equipment class under consideration (see chapter 5 of the NOPR TSD for details). For the equipment class SOC.SC.L, the proposed standards were derived from the proposed standards for equipment class SOC.SC.M. Since the proposed standards for SOC.SC.M are in terms of TDA, the proposed standards for 

SOC.SC.L equipment have also been specified in terms of TDA. Therefore, while the baseline expression has been shown with V as the normalization metric, the expressions for TSLs 1 through 5 have been shown in terms of TDA. This change of normalization metric for equipment class SOC.SC.L is consistent with the legislative intent, evident in AEMTCA, for equipment class SOC.SC.M. 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Customers 

a. Life-Cycle Cost and Payback Period 

Customers affected by new or 

amended standards usually incur higher 

purchase prices and lower operating 

costs. DOE evaluates these impacts on 

individual customers by calculating the 

LCC and the PBP associated with the 

TSLs. The results of the LCC analysis for 

each TSL were obtained by comparing 

the installed and operating costs of the 

equipment in the base-case scenario 

(scenario with no amended energy 

conservation standards) against the 

standards-case scenarios at each TSL. 

The energy consumption values for both 

the base-case and standards-case 

scenarios were calculated based on the 

DOE test procedure conditions specified 

in the 2012 test procedure final rule. 77 

FR 10292, 10318–21 (Feb 21, 2012) The 

DOE test procedure adopted an 

industry-accepted test method and has 

been widely accepted as a reasonably 

accurate representation of the 

conditions to which a vast majority of 

the equipment covered in this 

rulemaking is subjected during actual 

use. Using the approach described in 

section IV.H, DOE calculated the LCC 

savings and PBPs for the TSLs 

considered in this NOPR. The LCC 

analysis was carried out in the form of 

Monte Carlo simulations. Consequently, 

the results of LCC analysis are 

distributed over a range of values, as 

opposed to a single deterministic value. 

DOE presents the mean or median 

values, as appropriate, calculated from 

the distributions of results. 

Table V.5 through Table V.29 show 

the results of LCC analysis for each 

equipment class. Each table presents the 

important results of the LCC analysis, 

including mean LCC, mean LCC savings, 

median PBP, and distribution of 

customer impacts in the form of 

percentages of customers who 

experience net cost, no impact, or net 

benefit. 

All of the equipment classes have 

negative LCC savings values at TSL 5. 

Negative average LCC savings imply 

that, on average, customers experience 

an increase in LCC of the equipment as 

a consequence of buying equipment 

associated with that particular TSL. TSL 

5 is associated with the max-tech level 

for all the equipment classes. Vacuum 

insulated panel technology is the design 

option associated with the max-tech 

efficiency levels for all equipment 

classes. The cost increments associated 

with vacuum insulated panels are 

considerably high, and the increase in 

LCC indicates that this design option 

may not be economically justified. 

The mean LCC savings associated 

with TSL 4 are all either positive values 

or zero (in the case of equipment classes 

HZO.RC.M, HZO.RC.L, and HZO.SC.L) 

for all equipment classes, and the nonzero values range from $9 to $1,494. The 

mean LCC savings at all lower TSL 

levels are also positive. This implies 

that, on average, all the equipment 

classes show either no change in LCC or 

a decrease in LCC for TSL 1 through 

TSL 4. A comparison of LCC savings 

between TSL 4 and TSL 3, across all 

equipment classes, shows that the LCC 

savings associated with TSL 3 are either 

greater than or equal to the LCC savings 

associated with TSL 4. LCC savings are 

equal in cases in which both TSLs are 

associated with the same efficiency 

level. 

As described in section IV.I.2, DOE 

used a ‘‘roll-up’’ scenario in this 

rulemaking. Under the roll-up scenario, 

DOE assumes that the market shares of 

the efficiency levels (in the base case) 

that do not meet the standard level 

under consideration would be ‘‘rolled 

up’’ into (meaning ‘‘added to’’) the 

market share of the efficiency level at 

the standard level under consideration, 

and the market shares of efficiency 

levels that are above the standard level 

under consideration would remain 

unaffected. Customers, in the base-case 

scenario, who buy the equipment at or 

above the TSL under consideration 

would be unaffected if the amended 

standard were to be set at that TSL. 

Customers, in the base-case scenario, 

who buy equipment below the TSL 

under consideration would be affected if 

the amended standard were to be set at 

that TSL. Among these affected 

customers, some may benefit from lower 

LCC of the equipment and some may 

incur net cost due to higher LCC, 

depending on the inputs to LCC analysis 

such as electricity prices, discount rates 

and markups. DOE’s results clearly 

indicate that only a small percentage of 

customers may benefit from an amended 

standard that is set at TSL 5. At TSL 4, 

the percentage of customers who 

experience net benefits or no impacts 

ranges from 59 to 100 percent. At TSL 

3, a larger percentage of customers 

experience net benefits or no impacts as 

compared to TSL 4. At TSLs 1 and 2, 

almost all customers experience either 

net benefits or no impacts. 

For most of the equipment classes, the 

median PBPs for TSL 5 are greater than 

the average lifetime of the equipment, 

indicating that a majority of customers 

may not be able to recover the higher 

equipment installed costs through 

savings in operating costs throughout 

the life of the equipment. The median 

PBP values for TSL 4 range from 0.96 

years to 6.40 years. The average lifetime 

of a majority of the commercial 

refrigeration equipment under 

consideration is 10 years. Therefore, 

PBP results for TSL 4 indicate that, in 

general, the majority of customers will 

be able to recover the increased 

purchase costs associated with 

equipment that is compliant with TSL 4 

through operating cost savings within 

the lifetime of the equipment. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

55952 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

TABLE V.5—SUMMARY LCC AND PBP RESULTS FOR VOP.RC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period, years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 17,095 9,490 20,618 30,108 236 0 76 24 1.73 

2 ............ 16,180 9,633 19,849 29,482 743 0 52 48 1.77 

3 ............ 13,033 10,823 17,364 28,187 1,789 0 28 72 3.77 

4 ............ 12,962 10,898 17,303 28,201 1,494 11 15 74 3.91 

5 ............ 12,798 14,006 17,162 31,168 (1,669) 90 2 8 11.76 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.6—SUMMARY LCC AND PBP RESULTS FOR VOP.RC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period, years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 38,770 10,099 39,184 49,282 537 0 74 26 1.11 

2 ............ 36,877 10,511 37,520 48,031 1,517 0 48 52 2.03 

3 ............ 36,685 10,594 37,356 47,950 1,130 0 25 75 2.22 

4 ............ 36,685 10,594 37,356 47,950 1,130 0 25 75 2.22 

5 ............ 36,088 15,667 36,847 52,513 (3,693) 98 2 0 18.30 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.7—SUMMARY LCC AND PBP RESULTS FOR VOP.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period, years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 10,960 4,650 15,471 20,120 171 0 62 38 1.61 

2 ............ 10,804 4,693 15,314 20,008 227 0 43 57 2.17 

3 ............ 9,747 5,183 14,180 19,364 815 0 25 75 4.12 

4 ............ 9,718 5,234 14,147 19,381 691 11 14 75 4.39 

5 ............ 9,660 6,293 14,079 20,373 (377) 77 3 20 11.37 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.8—SUMMARY LCC AND PBP RESULTS FOR VCT.RC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period, years Installed cost 

Discounted 

Operating 

Cost 

LCC 

Affected customers’ average savings 

2012$ 

% of Customers that Experience** 

Net cost No impact Net benefit 

1 ............ 5,679 12,070 11,800 23,870 175 0 81 19 1.23 

2 ............ 2,955 12,669 9,411 22,081 1,864 0 62 38 2.42 

3 ............ 2,285 12,819 8,809 21,629 1,759 0 46 54 2.43 

4 ............ 2,177 12,929 8,715 21,644 1,108 26 16 57 2.70 

5 ............ 2,005 16,537 8,560 25,097 (2,509) 94 2 4 13.09 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.9—SUMMARY LCC AND PBP RESULTS FOR VCT.RC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period, years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 11,362 13,756 17,581 31,337 1,357 0 60 40 1.30 

2 ............ 11,161 13,836 17,401 31,237 1,005 0 40 60 1.51 

3 ............ 11,056 13,887 17,311 31,198 798 0 21 79 1.64 

4 ............ 11,056 13,887 17,311 31,198 798 0 21 79 1.64 

5 ............ 10,531 18,626 16,840 35,466 (3,624) 97 2 1 15.75 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55953 

TABLE V.10—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period, years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 2,758 4,594 5,261 9,855 566 0 83 17 0.86 

2 ............ 1,488 4,849 3,916 8,764 1,364 0 66 34 1.73 

3 ............ 1,182 4,999 3,583 8,582 1,122 0 51 49 2.21 

4 ............ 1,082 5,088 3,489 8,578 641 27 13 60 2.54 

5 ............ 979 6,362 3,377 9,739 (596) 74 2 24 8.13 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.11—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.L EQUIPMENT CLASS

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 4,921 6,101 8,222 14,323 4,186 0 76 24 0.58 

2 ............ 4,853 6,120 8,150 14,270 2,523 0 60 40 0.61 

3 ............ 4,541 6,271 7,811 14,082 1,984 0 44 56 0.83 

4 ............ 4,411 6,364 7,692 14,056 1,343 7 15 78 0.96 

5 ............ 4,222 8,077 7,486 15,562 (343) 74 2 24 3.65 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.12—SUMMARY LCC AND PBP RESULTS FOR VCT.SC.I EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 6,370 6,383 10,160 16,543 572 0 65 35 0.86 

2 ............ 5,972 6,558 9,733 16,292 486 1 32 68 1.74 

3 ............ 5,891 6,612 9,644 16,256 432 1 16 83 1.97 

4 ............ 5,891 6,612 9,644 16,256 432 1 16 83 1.97 

5 ............ 5,609 8,883 9,332 18,215 (1,592) 95 1 3 13.21 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.13—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 863 3,386 2,122 5,508 279 0 72 28 0.78 

2 ............ 793 3,406 2,070 5,476 163 0 42 58 0.98 

3 ............ 659 3,484 1,967 5,451 132 7 13 80 1.75 

4 ............ 659 3,484 1,967 5,451 132 7 13 80 1.75 

5 ............ 507 4,771 1,837 6,608 (1,042) 99 1 0 14.11 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.14—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 2,649 3,673 3,829 7,501 525 0 73 27 0.55 

2 ............ 2,463 3,735 3,671 7,405 329 0 42 58 0.91 

3 ............ 2,432 3,751 3,651 7,402 268 5 28 68 1.00 

4 ............ 2,394 3,776 3,630 7,405 221 20 14 66 1.15 

5 ............ 2,084 5,505 3,366 8,871 (1,274) 97 1 2 10.54 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

55954 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

TABLE V.15—SUMMARY LCC AND PBP RESULTS FOR VCS.SC.I EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 6,657 4,148 7,526 11,674 237 0 67 33 0.80 

2 ............ 6,492 4,218 7,392 11,610 177 0 32 68 2.07 

3 ............ 6,438 4,243 7,357 11,600 153 3 16 81 2.42 

4 ............ 6,438 4,243 7,357 11,600 153 3 16 81 2.42 

5 ............ 6,034 6,535 7,013 13,548 (1,819) 99 1 0 27.19 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.16—SUMMARY LCC AND PBP RESULTS FOR SVO.RC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 13,179 8,341 16,821 25,161 74 0 75 25 1.31 

2 ............ 12,355 8,547 16,098 24,645 552 0 51 49 2.64 

3 ............ 10,114 9,455 14,347 23,802 1,217 0 29 71 4.34 

4 ............ 10,065 9,517 14,304 23,821 1,008 13 16 72 4.50 

5 ............ 9,949 11,511 14,202 25,713 (1,015) 85 3 12 11.60 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.17—SUMMARY LCC AND PBP RESULTS FOR SVO.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

9,396 ..... 3,885 12,744 16,629 324 0 61 39 1.97 9,396 

9,255 ..... 3,914 12,600 16,514 335 0 43 57 2.06 9,255 

8,501 ..... 4,314 11,866 16,180 588 0 25 75 4.43 8,501 

8,481 ..... 4,359 11,843 16,202 492 12 14 75 4.75 8,481 

8,439 ..... 5,049 11,796 16,844 (202) 69 4 27 10.36 8,439 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.18—SUMMARY LCC AND PBP RESULTS FOR SOC.RC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 9,353 12,766 15,106 27,872 118 0 82 18 1.25 

2 ............ 9,115 12,799 14,906 27,704 226 0 64 36 1.44 

3 ............ 7,455 13,343 13,511 26,854 998 0 47 53 3.31 

4 ............ 7,356 13,570 13,443 27,012 495 29 18 53 4.41 

5 ............ 7,274 15,050 13,372 28,423 (982) 89 5 6 11.88 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.19—SUMMARY LCC AND PBP RESULTS FOR HZO.RC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 5,267 8,056 8,916 16,972 NA NA NA NA NA 

2 ............ 5,267 8,056 8,916 16,972 NA NA NA NA NA 

3 ............ 5,267 8,056 8,916 16,972 NA NA NA NA NA 

4 ............ 5,267 8,056 8,916 16,972 NA NA NA NA NA 

5 ............ 5,173 9,406 8,837 18,243 (1,271) 78 22 0 161.23 

‘‘NA’’ stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the LCC savings, distribution of customer impacts and PBP are 

shown as ‘‘NA.’’ 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55955 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.20—SUMMARY LCC AND PBP RESULTS FOR HZO.RC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 12,082 8,895 14,989 23,884 NA NA NA NA NA 

2 ............ 12,082 8,895 14,989 23,884 NA NA NA NA NA 

3 ............ 12,082 8,895 14,989 23,884 NA NA NA NA NA 

4 ............ 12,082 8,895 14,989 23,884 NA NA NA NA NA 

5 ............ 11,759 11,301 14,718 26,019 (2,135) 86 14 0 83.78 

‘‘NA’’ stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the LCC savings, distribution of customer impacts and PBP are 

shown as ‘‘NA.’’ 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.21—SUMMARY LCC AND PBP RESULTS FOR HZO.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 5,388 2,343 7,055 9,399 9 0 75 25 1.89 

2 ............ 5,388 2,343 7,055 9,399 9 0 75 25 1.89 

3 ............ 5,330 2,356 6,999 9,354 49 0 49 51 2.42 

4 ............ 5,289 2,405 6,954 9,358 29 19 24 57 6.40 

5 ............ 5,206 3,340 6,862 10,202 (822) 98 2 0 55.78 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.22—SUMMARY LCC AND PBP RESULTS FOR HZO.SC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 10,994 3,691 13,891 17,582 NA NA NA NA NA 

2 ............ 10,994 3,691 13,891 17,582 NA NA NA NA NA 

3 ............ 10,994 3,691 13,891 17,582 NA NA NA NA NA 

4 ............ 10,994 3,691 13,891 17,582 NA NA NA NA NA 

5 ............ 10,916 4,251 13,804 18,056 (474) 72 28 0 73.62 

‘‘NA’’ stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the LCC savings, distribution of customer impacts and PBP are 

shown as ‘‘NA.’’ 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.23—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 683 2,057 1,685 3,742 107 0 70 30 0.69 

2 ............ 305 2,161 1,263 3,423 359 0 38 62 2.24 

3 ............ 275 2,175 1,236 3,411 307 0 25 75 2.42 

4 ............ 244 2,220 1,200 3,420 254 18 12 70 3.08 

5 ............ 181 2,812 1,127 3,939 (294) 89 1 10 12.26 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.24—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 1,499 2,240 2,336 4,576 217 0 75 26 0.53 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

55956 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

TABLE V.24—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.L EQUIPMENT CLASS*—Continued 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

2 ............ 667 2,337 1,589 3,926 791 0 61 39 1.00 

3 ............ 647 2,344 1,574 3,918 571 0 45 55 1.05 

4 ............ 572 2,403 1,513 3,916 369 23 14 63 1.47 

5 ............ 432 3,204 1,385 4,590 (355) 76 1 23 7.15 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.25—SUMMARY LCC AND PBP RESULTS FOR HCT.SC.I EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 1,174 2,331 1,991 4,322 22 0 74 26 0.88 

2 ............ 1,121 2,346 1,953 4,299 35 0 49 51 2.39 

3 ............ 1,045 2,391 1,889 4,279 42 2 23 75 4.28 

4 ............ 1,045 2,391 1,889 4,279 42 2 23 75 4.28 

5 ............ 776 3,461 1,663 5,124 (811) 99 1 0 27.99 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.26—SUMMARY LCC AND PBP RESULTS FOR HCS.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 238 1,951 972 2,924 23 0 83 17 0.50 

2 ............ 220 1,957 959 2,916 19 0 65 35 1.64 

3 ............ 203 1,964 948 2,912 17 1 48 51 2.54 

4 ............ 183 1,979 937 2,916 9 29 31 40 4.28 

5 ............ 90 2,490 857 3,347 (423) 98 2 0 34.05 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.27—SUMMARY LCC AND PBP RESULTS FOR HCS.SC.L EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience** 

Net cost No impact Net benefit 

1 ............ 588 1,988 1,284 3,272 75 0 50 50 0.86 

2 ............ 534 2,003 1,244 3,246 81 0 33 67 1.36 

3 ............ 464 2,046 1,184 3,231 81 2 16 82 2.57 

4 ............ 464 2,046 1,184 3,231 81 2 16 82 2.57 

5 ............ 271 2,681 1,020 3,700 (401) 98 2 0 14.98 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

TABLE V.28—SUMMARY LCC AND PBP RESULTS FOR PD.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of Customers that experience 

Net cost No impact Net benefit 

1 ............ 1,423 3,002 2,926 5,927 1,010 0 86 14 0.53 

2 ............ 1,423 3,002 2,926 5,927 1,010 0 86 14 0.53 

3 ............ 815 3,121 2,322 5,444 934 0 69 31 1.10 

4 ............ 597 3,348 2,112 5,460 310 41 11 48 2.27 

5 ............ 517 4,347 2,031 6,379 (638) 86 1 13 7.61 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55957 

TABLE V.29—SUMMARY LCC AND PBP RESULTS FOR SOC.SC.M EQUIPMENT CLASS* 

TSL 

Annual energy 

consumption 

kWh/yr 

Life-cycle cost, all customers 

2012$ 

Life-cycle cost savings 

Median 

payback 

period years Installed cost Discounted 

operating cost LCC 

Affected customers’ average savings 

2012$ 

% of customers that experience 

Net cost No impact Net benefit 

1 ............ 9,869 12,314 14,364 26,678 646 0 70 30 1.12 

2 ............ 9,783 12,339 14,301 26,640 466 0 55 45 1.24 

3 ............ 8,039 12,883 12,863 25,747 1,242 0 40 60 2.35 

4 ............ 7,920 13,110 12,777 25,887 740 25 16 60 2.99 

5 ............ 7,814 14,591 12,687 27,277 (735) 80 5 16 7.42 

* Values in parentheses are negative values. 

** Percentages may not add up to 100 percent due to rounding. 

b. Life-Cycle Cost Subgroup Analysis 

As described in section IV.J, DOE 

estimated the impact of potential 

amended efficiency standards for 

commercial refrigeration equipment, at 

each TSL, on two customer subgroups, 

one belonging to the foodservice sector 

and one to the food-retail sector. For the 

small business segment in the 

foodservice sector, full-service 

restaurants were chosen as the 

representative subgroup, and for the 

food-retail sector, convenience stores 

with gas stations were chosen as the 

representative subgroup. DOE carried 

out two LCC subgroup analyses by using 

the LCC spreadsheet described in 

chapter 8 of the NOPR TSD, but with 

certain modifications. The input for 

business type was fixed to the identified 

subgroup, which ensured that the 

discount rates and electricity price rates 

associated with only that subgroup were 

selected in the Monte Carlo simulations 

(see chapter 8 of the NOPR TSD). The 

discount rate was further increased by 

applying the small firm premium to the 

WACC (See Table IV.9 for details). 

Another major modification to the LCC 

analysis was an added assumption that 

the subgroups do not have access to 

national accounts, which results in 

higher distribution channel markups for 

the subgroups, leading to higher 

equipment purchase prices. Apart from 

these changes, all other inputs for LCC 

subgroup analysis are same as those in 

the LCC analysis described in chapter 8 

of the NOPR TSD. 

The results for the small business 

subgroup in the foodservice sector 

(Table V.30, Table V.31, and Table V.32) 

are presented only for the self-contained 

equipment classes because full-service 

restaurants that are small businesses 

generally do not use remote condensing 

equipment. Table V.30 presents the 

comparison of mean LCC savings for the 

small business subgroup in foodservice 

sector (full-service restaurants) with the 

national average values (LCC savings 

results from chapter 8 of the NOPR 

TSD). For all TSLs in all equipment 

classes, the LCC savings for the small 

business subgroup are lower than the 

national average values. Table V.31 

presents the percentage change in LCC 

savings compared to national average 

values for self-contained equipment. For 

many of the equipment classes in Table 

V.31, the percentage decrease in LCC 

savings is less than 15 percent. 

Equipment classes that show a 

substantial decrease in LCC savings, 

compared to national average values, are 

VOP.SC.M, VCT.SC.M, VCT.SC.L, 

VCT.SC.I, SVO.SC.M, HZO.SC.M, 

HCT.SC.I and PD.SC.M, which belong to 

the classification of self-contained 

display type equipment. It is uncommon 

to find display type equipment in small 

full-service restaurants. An 

overwhelming majority of commercial 

refrigeration equipment in small 

restaurants is composed of solid door 

refrigerators and freezers that are used 

for food storage in the kitchen. The 

solid-door equipment (VCS and HCS) 

exhibits a relatively smaller percentage 

decrease in LCC savings. In any case, 

the value of LCC savings at TSL 4 is 

positive for all equipment classes as 

shown in Table V.30. Therefore, even 

though the LCC savings for small 

business subgroup in foodservice sector 

are lower than the national average 

values, they are still positive, implying 

that small businesses still save money 

over the equipment lifetime at TSL 4. 

Table V.32 presents the comparison of 

median PBPs for the small business 

subgroup in the foodservice sector with 

national median values (median PBPs 

from chapter 8 of the NOPR TSD). The 

PBP values are higher for the small 

business subgroup in all cases, which is 

consistent with the decrease in LCC 

savings. 

Table V.33 presents the comparison of 

mean LCC savings for the small business 

subgroup in the food-retail sector 

(convenience stores with gasoline 

stations) with the national average 

values (LCC savings results from chapter 

8 of the NOPR TSD) at each TSL. This 

comparison shows mixed results, with 

higher LCC savings for the subgroup in 

some instances and lower LCC savings 

in others. The higher LCC savings for 

the subgroup are exhibited in the case 

of large display cases such as 

VOP.RC.M, VOP.RC.L, VCT.RC.M, 

VCT.RC.L, SVO.RC.M, and SOC.RC.M. 

This equipment is predominantly used 

in large grocery stores, where the 

average lifetime of the equipment was 

assumed to be 10 years, while the 

average lifetime of this equipment in 

convenience stores with gas stations 

was assumed to be 15 years (see chapter 

8 of the NOPR TSD for discussion of 

equipment lifetime assumptions). In 

general, the longer the equipment 

lifetime, the lower the LCC values 

because of a longer available timeframe 

to offset the initial cost increases by 

savings in energy costs. Because the 

large display type equipment is 

predominantly used in larger grocery 

and multi-line retail stores, the national 

average values show lower LCC savings 

compared to the LCC savings of the 

subgroup. Self-contained equipment, on 

the other hand, was assumed to have a 

10-year average lifetime in all 

businesses. For self-contained 

equipment, the subgroup LCC savings 

were lower than the national average 

LCC savings with the exception of the 

HCT.SC.L cases. 

Table V.34 presents the percentage 

change in LCC savings of the customer 

subgroup in the food-retail sector 

compared to national average values at 

each TSL. For a majority of equipment 

classes that show a decrease in LCC 

savings for the subgroup, the percentage 

decrease in LCC savings is less than 15 

percent. Equipment classes that show a 

substantial decrease in LCC savings, 

compared to national average values, are 

VOP.SC.M, SVO.SC.M, HZO.SC.M, 

HCT.SC.M, HCT.SC.I, and HSC.SC.M. 

Among these, the equipment classes 

that show decrease in LCC saving of 

greater than 15 percent at TSL 4 are 

VOP.SC.M (27 percent), SVO.SC.M (26 

percent), HZO.SC.M (38 percent), 

HCT.SC.M (21 percent), HCT.SC.I (17 

percent), and HCS.SC.M (15 percent). 

Even though the percentage decrease in 

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55958 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

LCC savings for these equipment classes 

may appear to be high, the absolute 

value of decrease in LCC savings is 

small when compared to the total LCC 

for each equipment class. Table V.35 

presents the comparison of median 

PBPs for small business subgroup in the 

foodservice sector with national median 

values (median PBPs from chapter 8 of 

the NOPR TSD) at each TSL. The PBP 

values are higher in the small business 

subgroup in all instances, including 

instances in which the LCC savings for 

the subgroup are higher than national 

average values. This is an expected 

outcome because the PBP values are 

obtained by dividing the increase in 

equipment installed cost by the first 

year savings in operating costs, and are 

not affected by the higher average 

lifetime of the equipment in the 

convenience stores with gas stations. 

TABLE V.30—COMPARISON OF MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE SECTOR

WITH THE NATIONAL AVERAGE VALUES

Equipment class* Category 

Mean LCC savings 

2012$** 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.SC.M ................. Small Business ............................ $157.27 $205.50 $690.22 $576.21 ($586.43) 

All Business Types ...................... 170.78 227.17 814.91 691.27 (376.52) 

VCT.SC.M .................. Small Business ............................ 421.59 960.34 752.15 405.47 (954.55) 

All Business Types ...................... 566.18 1,363.60 1,122.14 641.05 (595.52) 

VCT.SC.L ................... Small Business ............................ 3,127.24 1,879.37 1,433.25 941.77 (906.58) 

All Business Types ...................... 4,186.06 2,522.67 1,984.45 1,342.84 (343.16) 

VCT.SC.I .................... Small Business ............................ 414.02 310.26 261.24 261.24 (2,036.01) 

All Business Types ...................... 572.05 486.28 431.88 431.88 (1,591.87) 

VCS.SC.M ................. Small Business ............................ 272.26 158.67 125.72 125.72 (1,079.78) 

All Business Types ...................... 278.84 162.88 131.80 131.80 (1,042.03) 

VCS.SC.L .................. Small Business ............................ 511.64 318.96 259.10 213.08 (1,326.22) 

All Business Types ...................... 524.52 329.33 267.81 220.83 (1,274.03) 

VCS.SC.I ................... Small Business ............................ 231.08 170.13 146.54 146.54 (1,884.22) 

All Business Types ...................... 236.77 176.83 152.69 152.69 (1,818.87) 

SVO.SC.M ................. Small Business ............................ 296.25 305.21 486.70 397.67 (356.12) 

All Business Types ...................... 324.33 334.89 587.90 491.99 (201.61) 

HZO.SC.M ................. Small Business ............................ 8.16 8.16 44.26 18.90 (925.33) 

All Business Types ...................... 8.85 8.85 48.60 28.78 (821.57) 

HZO.SC.L † ................ Small Business ............................ NA NA NA NA (532.72) 

All Business Types ...................... NA NA NA NA (473.71) 

HCT.SC.M ................. Small Business ............................ 99.52 323.44 274.76 219.49 (385.92) 

All Business Types ...................... 106.59 359.48 307.26 253.60 (293.54) 

HCT.SC.L .................. Small Business ............................ 209.05 754.27 544.14 344.36 (458.19) 

All Business Types ...................... 217.19 790.53 571.07 368.92 (354.75) 

HCT.SC.I ................... Small Business ............................ 21.15 32.20 35.19 35.19 (926.07) 

All Business Types ...................... 21.83 34.69 42.48 42.48 (811.31) 

HCS.SC.M ................. Small Business ............................ 22.47 18.59 16.03 7.99 (436.55) 

All Business Types ...................... 23.07 19.18 16.66 8.68 (422.79) 

HCS.SC.L .................. Small Business ............................ 72.79 78.72 76.67 76.67 (422.16) 

All Business Types ...................... 74.69 80.97 80.72 80.72 (400.63) 

PD.SC.M .................... Small Business ............................ 815.04 815.04 729.72 187.05 (861.56) 

All Business Types ...................... 1,009.53 1,009.53 933.59 310.43 (637.94) 

SOC.SC.M ................. Small Business ............................ 625.01 449.27 1,149.04 651.93 (959.99) 

All Business Types ...................... 646.15 466.47 1,241.60 739.75 (735.33) 

* Only self-contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used 

by small full-service restaurants. 

** Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values 

imply increase in LCC savings. †TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the LCC savings are shown as 

‘‘NA’’. 

TABLE V.31—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE

SECTOR COMPARED TO NATIONAL AVERAGE VALUES

Equipment class* 

(percent) 

TSL 1** 

(percent) 

TSL 2** 

(percent) 

TSL 3** 

(percent) 

TSL 4** 

(percent) 

TSL 5** 

(percent) 

VOP.SC.M ............................................................................ (8) (10) (15) (17) (56) 

VCT.SC.M ............................................................................ (26) (30) (33) (37) (60) 

VCT.SC.L ............................................................................. (25) (26) (28) (30) (164) 

VCT.SC.I .............................................................................. (28) (36) (40) (40) (28) 

VCS.SC.M ............................................................................ (2) (3) (5) (5) (4) 

VCS.SC.L ............................................................................. (2) (3) (3) (4) (4) 

VCS.SC.I .............................................................................. (2) (4) (4) (4) (4) 

SVO.SC.M ............................................................................ (9) (9) (17) (19) (77) 

HZO.SC.M ............................................................................ (8) (8) (9) (34) (13) 

HZO.SC.L‡ ........................................................................... NA NA NA NA (12) 

HCT.SC.M ............................................................................ (7) (10) (11) (13) (31) 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55959 

TABLE V.31—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE

SECTOR COMPARED TO NATIONAL AVERAGE VALUES—Continued 

Equipment class* 

(percent) 

TSL 1** 

(percent) 

TSL 2** 

(percent) 

TSL 3** 

(percent) 

TSL 4** 

(percent) 

TSL 5** 

(percent) 

HCT.SC.L ............................................................................. (4) (5) (5) (7) (29) 

HCT.SC.I .............................................................................. (3) (7) (17) (17) (14) 

HCS.SC.M ............................................................................ (3) (3) (4) (8) (3) 

HCS.SC.L ............................................................................. (3) (3) (5) (5) (5) 

PD.SC.M .............................................................................. (19) (19) (22) (40) (35) 

SOC.SC.M ........................................................................... (3) (4) (7) (12) (31) 

* Only self-contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used 

by small full-service restaurants. 

** Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values 

imply increase in LCC savings. †This value is high because of change of sign from subgroup value to national average value. 

‡TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the percentage changes in LCC 

savings are shown as ‘‘NA’’. 

‘0%’ means the value is in between ¥0.5% and 0.5%. 

TABLE V.32—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE SMALL BUSINESS SUBGROUP IN THE FOODSERVICE

SECTOR WITH NATIONAL MEDIAN VALUES

Equipment class* Category 

Median payback period years 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.SC.M ................. Small Business ............................ 1.77 2.38 4.52 4.81 12.46 

All Business Types ...................... 1.61 2.17 4.12 4.39 11.37 

VCT.SC.M .................. Small Business ............................ 0.89 1.77 2.27 2.61 8.34 

All Business Types ...................... 0.86 1.73 2.21 2.54 8.13 

VCT.SC.L ................... Small Business ............................ 0.60 0.63 0.85 0.99 3.76 

All Business Types ...................... 0.58 0.61 0.83 0.96 3.65 

VCT.SC.I .................... Small Business ............................ 0.93 1.89 2.14 2.14 14.34 

All Business Types ...................... 0.86 1.74 1.97 1.97 13.21 

VCS.SC.M ................. Small Business ............................ 0.74 0.94 1.68 1.68 13.51 

All Business Types ...................... 0.78 0.98 1.75 1.75 14.11 

VCS.SC.L .................. Small Business ............................ 0.53 0.87 0.96 1.10 10.11 

All Business Types ...................... 0.55 0.91 1.00 1.15 10.54 

VCS.SC.I ................... Small Business ............................ 0.77 1.99 2.32 2.32 26.08 

All Business Types ...................... 0.80 2.07 2.42 2.42 27.19 

SVO.SC.M ................. Small Business ............................ 2.15 2.25 4.83 5.17 11.30 

All Business Types ...................... 1.97 2.06 4.43 4.75 10.36 

HZO.SC.M ................. Small Business ............................ 2.07 2.07 2.64 6.98 60.83 

All Business Types ...................... 1.89 1.89 2.42 6.40 55.78 

HZO.SC.L** ............... Small Business ............................ NA NA NA NA 80.27 

All Business Types ...................... NA NA NA NA 73.62 

HCT.SC.M ................. Small Business ............................ 0.77 2.49 2.69 3.43 13.64 

All Business Types ...................... 0.69 2.24 2.42 3.08 12.26 

HCT.SC.L .................. Small Business ............................ 0.58 1.10 1.15 1.61 7.83 

All Business Types ...................... 0.53 1.00 1.05 1.47 7.15 

HCT.SC.I ................... Small Business ............................ 0.96 2.60 4.67 4.67 30.57 

All Business Types ...................... 0.88 2.39 4.28 4.28 27.99 

HCS.SC.M ................. Small Business ............................ 0.48 1.57 2.42 4.06 32.56 

All Business Types ...................... 0.50 1.64 2.54 4.28 34.05 

HCS.SC.L .................. Small Business ............................ 0.82 1.30 2.47 2.47 14.38 

All Business Types ...................... 0.86 1.36 2.57 2.57 14.98 

PD.SC.M .................... Small Business ............................ 0.53 0.53 1.11 2.28 7.63 

All Business Types ...................... 0.53 0.53 1.10 2.27 7.61 

SOC.SC.M ................. Small Business ............................ 1.14 1.26 2.40 3.06 7.59 

All Business Types ...................... 1.12 1.24 2.35 2.99 7.42 

* Only self-contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used 

by small full-service restaurants. 

** TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the payback period is shown as 

‘‘NA.’’ 

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55960 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

TABLE V.33—COMPARISON OF LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD-RETAIL SECTOR WITH

THE NATIONAL AVERAGE VALUES

Equipment class Category 

Mean LCC savings 

2012$* 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ................. Small Business ............................ $295.31 $927.25 $2,347.11 $1,970.10 ($1,528.98) 

All Business Types ...................... 235.92 743.00 1,788.85 1,493.72 (1,668.79) 

VOP.RC.L .................. Small Business ............................ 668.10 1,899.69 1,421.70 1,421.70 (3,855.19) 

All Business Types ...................... 537.27 1,516.59 1,129.51 1,129.51 (3,692.90) 

VOP.SC.M ................. Small Business ............................ 145.72 187.71 608.29 503.17 (655.21) 

All Business Types ...................... 170.78 227.17 814.91 691.27 (376.52) 

VCT.RC.M ................. Small Business ............................ 205.12 2,200.61 2,074.57 1,313.23 (2,663.30) 

All Business Types ...................... 175.23 1,864.44 1,758.73 1,108.13 (2,508.61) 

VCT.RC.L .................. Small Business ............................ 1,586.15 1,177.93 937.97 937.97 (3,902.43) 

All Business Types ...................... 1,357.25 1,004.72 797.91 797.91 (3,624.20) 

VCT.SC.M .................. Small Business ............................ 535.27 1,264.79 1,024.79 574.38 (784.35) 

All Business Types ...................... 566.18 1,363.60 1,122.14 641.05 (595.52) 

VCT.SC.L ................... Small Business ............................ 3,980.86 2,396.41 1,864.97 1,248.55 (602.09) 

All Business Types ...................... 4,186.06 2,522.67 1,984.45 1,342.84 (343.16) 

VCT.SC.I .................... Small Business ............................ 529.93 430.30 375.53 375.53 (1,881.48) 

All Business Types ...................... 572.05 486.28 431.88 431.88 (1,591.87) 

VCS.SC.M ................. Small Business ............................ 271.17 157.63 124.30 124.30 (1,081.39) 

All Business Types ...................... 278.84 162.88 131.80 131.80 (1,042.03) 

VCS.SC.L .................. Small Business ............................ 510.86 318.22 258.09 211.59 (1,328.25) 

All Business Types ...................... 524.52 329.33 267.81 220.83 (1,274.03) 

VCS.SC.I ................... Small Business ............................ 230.24 169.16 145.08 145.08 (1,886.42) 

All Business Types ...................... 236.77 176.83 152.69 152.69 (1,818.87) 

SVO.RC.M ................. Small Business ............................ 89.01 674.27 1,544.54 1,286.98 (949.64) 

All Business Types ...................... 73.77 551.98 1,216.77 1,008.46 (1,015.16) 

SVO.SC.M ................. Small Business ............................ 285.37 292.93 449.78 364.68 (387.03) 

All Business Types ...................... 324.33 334.89 587.90 491.99 (201.61) 

SOC.RC.M ................. Small Business ............................ 147.25 280.43 1,278.84 670.29 (960.27) 

All Business Types ...................... 118.36 226.26 997.89 494.51 (982.21) 

HZO.RC.M** .............. Small Business ............................ 0.00 0.00 0.00 0.00 (1,384.63) 

All Business Types ...................... 0.00 0.00 0.00 0.00 (1,271.24) 

HZO.RC.L** ............... Small Business ............................ 0.00 0.00 0.00 0.00 (2,306.30) 

All Business Types ...................... 0.00 0.00 0.00 0.00 (2,134.96) 

HZO.SC.M ................. Small Business ............................ 8.05 8.05 43.45 17.89 (927.01) 

All Business Types ...................... 8.85 8.85 48.60 28.78 (821.57) 

HZO.SC.L** ............... Small Business ............................ 0.00 0.00 0.00 0.00 (533.60) 

All Business Types ...................... 0.00 0.00 0.00 0.00 (473.71) 

HCT.SC.M ................. Small Business ............................ 93.73 299.66 253.49 199.55 (407.29) 

All Business Types ...................... 106.59 359.48 307.26 253.60 (293.54) 

HCT.SC.L .................. Small Business ............................ 249.39 906.61 655.15 425.64 (366.23) 

All Business Types ...................... 217.19 790.53 571.07 368.92 (354.75) 

HCT.SC.I ................... Small Business ............................ 21.15 32.20 35.19 35.19 (926.07) 

All Business Types ...................... 21.83 34.69 42.48 42.48 (811.31) 

HCS.SC.M ................. Small Business ............................ 22.48 18.44 15.75 7.40 (437.16) 

All Business Types ...................... 23.07 19.18 16.66 8.68 (422.79) 

HCS.SC.L .................. Small Business ............................ 72.46 78.02 75.98 75.98 (423.21) 

All Business Types ...................... 74.69 80.97 80.72 80.72 (400.63) 

PD.SC.M .................... Small Business ............................ 1,026.80 1,026.80 945.24 299.03 (744.27) 

All Business Types ...................... 1,009.53 1,009.53 933.59 310.43 (637.94) 

SOC.SC.M ................. Small Business ............................ 619.20 444.70 1,138.70 643.60 (967.59) 

All Business Types ...................... 646.15 466.47 1,241.60 739.75 (735.33) 

* Values in parentheses are negative values. 

** TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. Hence, the 

LCC savings are shown as ‘‘NA.’’ 

TABLE V.34—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD RETAIL

SECTOR COMPARED TO NATIONAL AVERAGE VALUES

Equipment class TSL 1* 

(percent) 

TSL 2* 

(percent) 

TSL 3* 

(percent) 

TSL 4* 

(percent) 

TSL 5* 

(percent) 

VOP.RC.M ........................................................................... 25 25 31 32 8 

VOP.RC.L ............................................................................ 24 25 26 26 (4) 

VOP.SC.M ............................................................................ (15) (17) (25) (27) (74) 

VCT.RC.M ............................................................................ 17 18 18 19 (6) 

VCT.RC.L ............................................................................. 17 17 18 18 (8) 

VCT.SC.M ............................................................................ (5) (7) (9) (10) (32) 

VCT.SC.L ............................................................................. (5) (5) (6) (7) (75) 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55961 

TABLE V.34—PERCENTAGE CHANGE IN MEAN LCC SAVINGS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD RETAIL

SECTOR COMPARED TO NATIONAL AVERAGE VALUES—Continued 

Equipment class TSL 1* 

(percent) 

TSL 2* 

(percent) 

TSL 3* 

(percent) 

TSL 4* 

(percent) 

TSL 5* 

(percent) 

VCT.SC.I .............................................................................. (7) (12) (13) (13) (18) 

VCS.SC.M ............................................................................ (3) (3) (6) (6) (4) 

VCS.SC.L ............................................................................. (3) (3) (4) (4) (4) 

VCS.SC.I .............................................................................. (3) (4) (5) (5) (4) 

SVO.RC.M ........................................................................... 21 22 27 28 6 

SVO.SC.M ............................................................................ (12) (13) (23) (26) (92) 

SOC.RC.M ........................................................................... 24 24 28 36 2 

HZO.RC.M † ......................................................................... NA NA NA NA (9) 

HZO.RC.L † .......................................................................... NA NA NA NA (8) 

HZO.SC.M ............................................................................ (9) (9) (11) (38) (13) 

HZO.SC.L† ........................................................................... NA NA NA NA (13) 

HCT.SC.M ............................................................................ (12) (17) (17) (21) (39) 

HCT.SC.L ............................................................................. 15 15 15 15 (3) 

HCT.SC.I .............................................................................. (3) (7) (17) (17) (14) 

HCS.SC.M ............................................................................ (3) (4) (5) (15) (3) 

HCS.SC.L ............................................................................. (3) (4) (6) (6) (6) 

PD.SC.M .............................................................................. 2 2 1 (4) (17) 

SOC.SC.M ........................................................................... (4) (5) (8) (13) (32) 

* Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values imply 

increase in LCC savings. 

† TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. Hence, the 

LCC savings are zero and the decrease in LCC savings are shown as ‘‘NA.’’ 

‘0%’ implies the value is in between ¥0.5 and 0.5. 

TABLE V.35—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD-RETAIL

SECTOR WITH THE NATIONAL MEDIAN VALUES

Equipment class Category 

Median payback period years 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ................. Small Business ............................ 1.78 1.83 3.88 4.02 12.09 

All Business Types ...................... 1.73 1.77 3.77 3.91 11.76 

VOP.RC.L .................. Small Business ............................ 1.15 2.10 2.30 2.30 18.90 

All Business Types ...................... 1.11 2.03 2.22 2.22 18.30 

VOP.SC.M ................. Small Business ............................ 1.95 2.65 5.02 5.34 13.84 

All Business Types ...................... 1.61 2.17 4.12 4.39 11.37 

VCT.RC.M ................. Small Business ............................ 1.28 2.51 2.53 2.80 13.61 

All Business Types ...................... 1.23 2.42 2.43 2.70 13.09 

VCT.RC.L .................. Small Business ............................ 1.35 1.57 1.71 1.71 16.40 

All Business Types ...................... 1.30 1.51 1.64 1.64 15.75 

VCT.SC.M .................. Small Business ............................ 0.98 1.95 2.49 2.87 9.17 

All Business Types ...................... 0.86 1.73 2.21 2.54 8.13 

VCT.SC.L ................... Small Business ............................ 0.65 0.68 0.93 1.09 4.12 

All Business Types ...................... 0.58 0.61 0.83 0.96 3.65 

VCT.SC.I .................... Small Business ............................ 1.02 2.08 2.35 2.35 15.75 

All Business Types ...................... 0.86 1.74 1.97 1.97 13.21 

VCS.SC.M ................. Small Business ............................ 0.79 1.01 1.79 1.79 14.45 

All Business Types ...................... 0.78 0.98 1.75 1.75 14.11 

VCS.SC.L .................. Small Business ............................ 0.56 0.93 1.03 1.18 10.80 

All Business Types ...................... 0.55 0.91 1.00 1.15 10.54 

VCS.SC.I ................... Small Business ............................ 0.82 2.12 2.48 2.48 27.85 

All Business Types ...................... 0.80 2.07 2.42 2.42 27.19 

SVO.RC.M ................. Small Business ............................ 1.36 2.74 4.49 4.66 12.01 

All Business Types ...................... 1.31 2.64 4.34 4.50 11.60 

SVO.SC.M ................. Small Business ............................ 2.29 2.40 5.18 5.55 12.12 

All Business Types ...................... 1.97 2.06 4.43 4.75 10.36 

SOC.RC.M ................. Small Business ............................ 1.28 1.48 3.41 4.54 12.24 

All Business Types ...................... 1.25 1.44 3.31 4.41 11.88 

HZO.RC.M* ................ Small Business ............................ 0.00 0.00 0.00 0.00 166.41 

All Business Types ...................... 0.00 0.00 0.00 0.00 161.23 

HZO.RC.L* ................. Small Business ............................ 0.00 0.00 0.00 0.00 86.47 

All Business Types ...................... 0.00 0.00 0.00 0.00 83.78 

HZO.SC.M ................. Small Business ............................ 2.14 2.14 2.74 7.23 62.97 

All Business Types ...................... 1.89 1.89 2.42 6.40 55.78 

HZO.SC.L* ................. Small Business ............................ 0.00 0.00 0.00 0.00 83.02 

All Business Types ...................... 0.00 0.00 0.00 0.00 73.62 

HCT.SC.M ................. Small Business ............................ 0.80 2.60 2.81 3.58 14.23 

All Business Types ...................... 0.69 2.24 2.42 3.08 12.26 

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TABLE V.35—COMPARISON OF MEDIAN PAYBACK PERIODS FOR THE SMALL BUSINESS SUBGROUP IN THE FOOD-RETAIL

SECTOR WITH THE NATIONAL MEDIAN VALUES—Continued 

Equipment class Category 

Median payback period years 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

HCT.SC.L .................. Small Business ............................ 0.59 1.12 1.17 1.65 8.01 

All Business Types ...................... 0.53 1.00 1.05 1.47 7.15 

HCT.SC.I ................... Small Business ............................ 0.96 2.60 4.67 4.67 30.57 

All Business Types ...................... 0.88 2.39 4.28 4.28 27.99 

HCS.SC.M ................. Small Business ............................ 0.51 1.68 2.60 4.39 34.88 

All Business Types ...................... 0.50 1.64 2.54 4.28 34.05 

HCS.SC.L .................. Small Business ............................ 0.88 1.40 2.63 2.63 15.35 

All Business Types ...................... 0.86 1.36 2.57 2.57 14.98 

PD.SC.M .................... Small Business ............................ 0.58 0.58 1.22 2.50 8.40 

All Business Types ...................... 0.53 0.53 1.10 2.27 7.61 

SOC.SC.M ................. Small Business ............................ 1.23 1.36 2.58 3.28 8.13 

All Business Types ...................... 1.12 1.24 2.35 2.99 7.42 

* TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. Hence, the 

payback period is shown as ‘‘NA.’’ 

2. Economic Impacts on Manufacturers 

DOE performed an MIA to estimate 

the impact of amended energy 

conservation standards on 

manufacturers of commercial 

refrigeration equipment. The following 

section describes the expected impacts 

on manufacturers at each TSL. Chapter 

12 of the NOPR TSD explains the 

analysis in further detail. 

a. Industry Cash-Flow Analysis Results 

The following tables depict the 

financial impacts (represented by 

changes in INPV) of amended energy 

standards on manufacturers as well as 

the conversion costs that DOE estimates 

manufacturers would incur for all 

equipment classes at each TSL. To 

evaluate the range of cash flow impacts 

on the commercial refrigeration 

industry, DOE modeled two different 

scenarios using different assumptions 

for markups that correspond to the 

range of anticipated market responses to 

amended standards. 

To assess the lower (less severe) end 

of the range of potential impacts, DOE 

modeled a preservation of gross margin 

percentage markup scenario, in which a 

uniform ‘‘gross margin percentage’’ 

markup was applied across all potential 

efficiency levels. In this scenario, DOE 

assumed that a manufacturer’s absolute 

dollar markup would increase as 

production costs increase in the 

amended standards case. Manufacturers 

have indicated that it is optimistic to 

assume that they would be able to 

maintain the same gross margin 

percentage markup as their production 

costs increase in response to an 

amended efficiency standard, 

particularly at higher TSLs. To assess 

the higher (more severe) end of the 

range of potential impacts, DOE 

modeled the preservation of operating 

profit markup scenario, which assumes 

that manufacturers would be able to 

earn the same operating margin in 

absolute dollars in the amended 

standards case as in the base case. Table 

V.36 and Table V.37 show the potential 

INPV impacts for commercial 

refrigeration equipment manufacturers 

at each TSL: Table V.36 reflects the 

lower bound of impacts and Table V.37 

represents the upper bound. 

Each of the modeled scenarios results 

in a unique set of cash flows and 

corresponding industry values at each 

TSL. In the following discussion, the 

INPV results refer to the difference in 

industry value between the base case 

and each potential amended standards 

case that results from the sum of 

discounted cash flows from the base 

year 2013 through 2046, the end of the 

analysis period. To provide perspective 

on the short-run cash flow impact, DOE 

includes in the discussion of the results 

below a comparison of free cash flow 

between the base case and the standards 

case at each TSL in the year before 

amended standards take effect. 

TABLE V.36—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL REFRIGERATION EQUIPMENT—PRESERVATION OF

GROSS MARGIN PERCENTAGE MARKUP SCENARIO* 

Units Base case 

Trial standard level 

1 2 3 4 5 

INPV ...................... 2012$ Millions ...... 1,162.0 1,158.4 1,146.9 1,135.7 1,116.1 1,136.5 

Change in INPV .... 2012$ Millions ...... ........................ (3.6) (15.2) (26.3) (45.9) (25.5) 

(%) ........................ ........................ (0.31) (1.30) (2.26) (3.95) (2.20) 

Product Conversion 

Costs.

2012$ Millions ...... ........................ 8.0 9.9 10.5 11.2 68.0 

Capital Conversion 

Costs.

2012$ Millions ...... ........................ ........................ 18.4 42.9 76.3 252.4 

Total Conversion Costs.2012$ Millions ...... ........................ 8.0 28.3 53.4 87.5 320.4 

* Values in parentheses are negative values. 

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TABLE V.37—MANUFACTURER IMPACT ANALYSIS FOR COMMERCIAL REFRIGERATION EQUIPMENT—PRESERVATION OF

OPERATING PROFIT MARKUP SCENARIO* 

Units Base case 

Trial standard level 

1 2 3 4 5 

INPV ...................... 2012$ Millions ...... 1,162.0 1,155.2 1,135.6 1,102.8 1,069.4 646.0 

Change in INPV .... 2012$ Millions ...... ........................ (6.8) (26.4) (59.2) (92.6) (516.0) 

(%) ........................ ........................ (0.58) (2.27) (5.09) (7.97) (44.41) 

Product Conversion 

Costs.

2012$ Millions ...... ........................ 8.0 9.9 10.5 11.2 68.0 

Capital Conversion 

Costs.

2012$ Millions ...... ........................ ........................ 18.4 42.9 76.3 252.4 

Total Conversion Costs.2012$ Millions ...... ........................ 8.0 28.3 53.4 87.5 320.4 

* Values in parentheses are negative values. 

At TSL 1, DOE estimates impacts on 

INPV for commercial refrigeration 

equipment manufacturers to range from 

¥$6.8 million to ¥$3.6 million, or a 

change in INPV of ¥0.58 percent to 

¥0.31 percent. At this potential 

standard level, industry free cash flow 

is estimated to decrease by 

approximately 2.85 percent to $89.6 

million, compared to the base-case 

value of $92.2 million in the year before 

the compliance date (2016). 

DOE anticipates no capital conversion 

costs at TSL 1 because manufacturers 

would be able to make simple 

component swaps to meet the efficiency 

levels for each equipment class at this 

TSL. However, small product 

conversion costs may be incurred in 

order to incorporate the new 

components in existing designs. 

At TSL 2, DOE estimates impacts on 

INPV for commercial refrigeration 

equipment manufacturers to range from 

¥$26.4 million to ¥$15.2 million, or a 

change in INPV of ¥2.27 percent to 

¥1.30 percent. At this potential 

standard level, industry free cash flow 

is estimated to decrease by 

approximately 12.48 percent to $80.7 

million, compared to the base-case 

value of $92.2 million in the year before 

the compliance date (2016). 

At TSL 2, DOE expects mild impacts 

on the industry. While capital 

conversion costs ramp up to $18.4 

million for the industry, these costs are 

entirely accounted for by the VOP.RC.L 

and VCT.RC.L equipment classes. This 

is due to the potential need for foam 

insulation that is a half-inch thicker to 

meet a standard set at this level. Product 

conversion costs also slightly increase 

as design options that require new UL 

or NSF certification are incorporated. 

Detailed discussion can be found in 

chapter 12 of NOPR TSD. 

At TSL 3, DOE estimates impacts on 

INPV for commercial refrigeration 

equipment manufacturers to range from 

¥$59.2 million to ¥$26.3 million, or a 

change in INPV of ¥5.09 percent to 

¥2.26 percent. At this potential 

standard level, industry free cash flow 

is estimated to decrease by 

approximately 24.65 percent to $69.5 

million, compared to the base-case 

value of $92.2 million in the year before 

the compliance date (2016). 

DOE expects mild, though slightly 

higher, conversion costs at TSL 3. The 

majority of the capital conversion costs 

are associated with the potential need 

for additional foam insulation for highvolume products, such as VCS.SC.M, 

which accounts for approximately 27 

percent of total shipments, and for 

VCS.SC.L, which accounts for 

approximately16 percent. In total, DOE 

expects 8 of the 24 equipment classes to 

require new production equipment due 

to higher standards at this level. 

At TSL 4, DOE estimates impacts on 

INPV for commercial refrigeration 

equipment manufacturers to range from 

¥$92.6 million to ¥$45.9 million, or a 

change in INPV of ¥7.97 percent to 

¥3.95 percent. At this proposed 

standard level, industry free cash flow 

is estimated to decrease by 

approximately 41.19 percent to $54.2 

million, compared to the base-case 

value of $92.2 million in the year before 

the compliance date (2016). 

At TSL 4, the drop in INPV is largely 

driven by continued increases in 

conversion costs. The increase in 

conversion costs is caused by the need 

for new tooling to accommodate 

additional foam insulation. At TSL 4, 

DOE expects 18 of the 24 equipment 

classes to require new production 

equipment due to higher standards. 

At TSL 5, DOE estimates impacts on 

INPV for commercial refrigeration 

equipment manufacturers to range from 

¥$516.0 million to ¥$25.5 million, or 

a change in INPV of ¥44.41 percent to 

2.20 percent. At this potential standard 

level, industry free cash flow is 

estimated to decrease by approximately 

147.31 percent to ¥$43.6 million, 

compared to the base-case value of 

$92.2 million in the year before the 

compliance date (2016). 

A substantial increase in conversion 

costs are expected at TSL 5 due to the 

possible need for vacuum insulated 

panel technology required to meet a 

standard at TSL 5. Vacuum insulated 

panels are not currently used by any 

commercial refrigeration equipment 

manufacturers, and the production of 

vacuum insulated panels would require 

processes different from those used to 

produce standard foam panels. 

Therefore, high R&D investments may 

be necessary to redesign commercial 

refrigeration equipment cases. It is 

possible that substantial new equipment 

would be necessary to produce vacuum 

insulated panels for commercial 

refrigeration equipment applications. 

Current panel production equipment 

that cannot be used to produce vacuum 

insulated panels would be retired before 

it reaches the end of its useful life and 

would become a stranded asset. 

b. Impacts on Direct Employment 

To quantitatively assess the impacts 

of amended energy conservation 

standards on employment, DOE used 

the GRIM to estimate the domestic labor 

expenditures and number of employees 

in the base case and at each TSL from 

2013 through 2046. DOE used statistical 

data from the U.S. Census Bureau’s 2011 

Annual Survey of Manufacturers (ASM), 

the results of the engineering analysis, 

the commercial refrigeration equipment 

shipments forecast, and interviews with 

manufacturers to determine the inputs 

necessary to calculate industry-wide 

labor expenditures and domestic 

employment levels. Labor expenditures 

related to manufacturing of the product 

are a function of the labor intensity of 

the product, the sales volume, and an 

assumption that wages remain fixed in 

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55964 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

real terms over time. The total labor 

expenditures in each year are calculated 

by multiplying the MPCs by the labor 

percentage of MPCs. 

The total labor expenditures in the 

GRIM were then converted to domestic 

production employment levels by 

dividing production labor expenditures 

by the annual payment per production 

worker (production worker hours times 

the labor rate found in the U.S. Census 

Bureau’s 2011 ASM). The estimates of 

production workers in this section cover 

workers, including line supervisors who 

are directly involved in fabricating and 

assembling a product within the OEM 

facility. Workers performing services 

that are closely associated with 

production operations, such as materials 

handling tasks using forklifts, are also 

included as production labor. DOE’s 

estimates only account for production 

workers who manufacture the specific 

products covered by this rulemaking. 

TABLE V.38—POTENTIAL CHANGES IN THE NUMBER OF COMMERCIAL REFRIGERATION EQUIPMENT PRODUCTION WORKERS

IN 2017 

Base case 

Trial Standard Level* 

1 2 3 4 5 

Total Number of Domestic Production 

Workers in 2017 (assuming no 

changes in production locations) ......... 3,672 3,672 3,672 3,672 3,672 3,925 

Range of Potential Changes in Domestic 

Production Workers in 2017 ** ............. ........................ ¥3,672 to 0 ¥3,672 to 0 ¥3,672 to 0 ¥3,672 to 0 ¥3,672 to 253 

* Numbers in parentheses are negative numbers. 

** DOE presents a range of potential employment impacts, where the lower range represents the scenario in which all domestic manufacturers 

move production to other countries. 

The employment impacts shown in 

Table V.38 represent the potential 

production employment changes that 

could result following the compliance 

date of an amended energy conservation 

standard. The upper end of the results 

in the table estimates the maximum 

increase in the number of production 

workers after the implementation of 

new energy conservation standards and 

it assumes that manufacturers would 

continue to produce the same scope of 

covered products within the United 

States. The lower end of the range 

indicates the total number of U.S. 

production workers in the industry who 

could lose their jobs if all existing 

production were moved outside of the 

United States. Though manufacturers 

stated in interviews that shifts in 

production to foreign countries is 

unlikely, the industry did not provide 

enough information for DOE fully 

quantify what percentage of the industry 

would move production at each 

evaluated standard level. 

The majority of design options 

analyzed in the engineering analysis 

require manufacturers to purchase 

more-efficient components from 

suppliers. These components do not 

require significant additional labor to 

assemble. A key component of a 

commercial refrigeration equipment 

unit that requires fabrication labor by 

the commercial refrigeration equipment 

manufacturer is the shell of the unit, 

which needs to be formed and foamed 

in. Although this activity may require 

new production equipment if thicker 

insulation is needed to meet higher 

efficiency levels, the process of building 

the panels would essentially remain the 

same, and therefore require no 

additional labor costs. As a result, labor 

needs are not expected to increase as the 

amended energy conservation standard 

increases from baseline to TSL 4. 

At TSL 5, the introduction of hybrid 

vacuum insulation panels may lead to 

greater labor requirements. In general, 

the production and handling of hybrid 

VIPs will require more labor than the 

production of standard panels. This is 

due to the delicate nature of VIPs and 

the additional labor necessary to embed 

them into a hybrid panel. The 

additional labor and handling 

associated with hybrid panels account 

for the increase in labor at the max-tech 

trial standard level. 

DOE notes that the employment 

impacts discussed here are independent 

of the employment impacts to the 

broader U.S. economy, which are 

documented in the Employment Impact 

Analysis, chapter 16 of the TSD. 

c. Impacts on Manufacturing Capacity 

According to the majority of 

commercial refrigeration equipment 

manufacturers interviewed, amended 

energy conservation standards will not 

significantly affect manufacturers’ 

production capacities. Any necessary 

redesign of commercial refrigeration 

equipment would not change the 

fundamental assembly of the 

equipment, but manufacturers do 

anticipate some potential for minor 

changes to tooling. The most significant 

of these would come as a result of any 

redesigns performed to accommodate 

additional foam insulation thickness. 

Additionally, most of the design options 

being evaluated are already available on 

the market as product options. Thus, 

DOE believes manufacturers would be 

able to maintain manufacturing capacity 

levels and continue to meet market 

demand under amended energy 

conservation standards. 

d. Impacts on Subgroups of 

Manufacturers 

Small manufacturers, niche 

equipment manufacturers, and 

manufacturers exhibiting a cost 

structure substantially different from the 

industry average could be affected 

disproportionately. As discussed in 

section IV.K, using average cost 

assumptions to develop an industry 

cash-flow estimate is inadequate to 

assess differential impacts among 

manufacturer subgroups. 

For commercial refrigeration 

equipment, DOE identified and 

evaluated the impact of amended energy 

conservation standards on one 

subgroup: small manufacturers. The 

SBA defines a ‘‘small business’’ as 

having 750 employees or less for NAICS 

333415, ‘‘Air-Conditioning and Warm 

Air Heating Equipment and Commercial 

and Industrial Refrigeration Equipment 

Manufacturing.’’ Based on this 

definition, DOE identified 32 

manufacturers in the commercial 

refrigeration equipment industry that 

are small businesses. 

For a discussion of the impacts on the 

small manufacturer subgroup, see the 

regulatory flexibility analysis in section 

VI.B of this notice and chapter 12 of the 

NOPR TSD. 

e. Cumulative Regulatory Burden 

While any one regulation may not 

impose a significant burden on 

manufacturers, the combined effects of 

recent or impending regulations may 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55965 

have serious consequences for some 

manufacturers, groups of manufacturers, 

or an entire industry. Assessing the 

impact of a single regulation may 

overlook this cumulative regulatory 

burden. In addition to energy 

conservation standards, other 

regulations can significantly affect 

manufacturers’ financial operations. 

Multiple regulations affecting the same 

manufacturer can strain profits and lead 

companies to abandon product lines or 

markets with lower expected future 

returns than competing products. For 

these reasons, DOE conducts an analysis 

of cumulative regulatory burden as part 

of its rulemakings pertaining to 

appliance efficiency. 

During previous stages of this 

rulemaking, DOE identified a number of 

requirements in addition to amended 

energy conservation standards for 

commercial refrigeration equipment. 

The following section briefly addresses 

comments DOE received with respect to 

cumulative regulatory burden and 

summarizes other key related concerns 

that manufacturers raised during 

interviews. 

Certification, Compliance, and 

Enforcement Rule 

Multiple manufacturers have 

expressed concerns about the CC&E 

burdens for commercial refrigeration 

equipment. Traulsen stated that CC&E is 

the most significant cost item in terms 

of internal resources in the form of time 

and direct expenses. (Traulsen, No. 45 

at pp. 4–5) NEEA expressed the opinion 

that the most significant issue 

associated with manufacturer impacts is 

testing and compliance for a wide array 

of equipment offerings, especially 

considering the large number of 

variations on single models. NEEA also 

agreed with manufacturers that testing 

each variation would create a significant 

potential burden, especially on small 

manufacturers. (NEEA, No. 36 at p. 7) 

AHRI stated that the CC&E requirements 

put in place by DOE have the potential 

to bankrupt the industry due to the 

excessive number of tests required. 

(AHRI, No. 43 at p. 3) In addition, 

Southern Store Fixtures stated that it 

would be difficult to produce 

information to estimate the compliance 

testing burden on manufacturers, as the 

certification and compliance 

requirements had not yet been finalized. 

(Southern Store Fixtures, Public 

Meeting Transcript, No. 31 at pp. 149– 

50) Southern Store Fixtures added that 

it is impossible to determine potential 

impacts of testing and certification on 

manufacturers until the issue of basic 

model is clarified. (Southern Store 

Fixtures, No. 38 at p. 1) 

DOE understands that testing and 

certification requirements may have a 

significant impact on manufacturers, 

and the CC&E burden is identified as a 

key issue in the MIA. DOE also 

understands that CC&E requirements 

can be particularly onerous for 

manufacturers producing low volume or 

highly customized commercial 

refrigeration equipment. As a result, 

DOE is conducting a rulemaking to 

expand AEDM coverage and has issued 

a proposed rule to permit the 

application of AEDMs for commercial 

refrigeration equipment. 77 FR 32038 

(May 31, 2012). More information about 

the AEDM rulemaking can be found at: 

www1.eere.energy.gov/buildings/

appliance_standards/certification_

enforcement.html. 

EPA and ENERGY STAR 

Some stakeholders also expressed 

concern regarding potential conflicts 

with other certification programs. 

Traulsen stated that redundancy of 

testing given other Federal programs 

(such as EPA ENERGY STAR), where 

there may be conflicting criteria, 

increases cost, and that cross-references 

to other databases with inconsistent 

tests, classes, and enforcement adds 

further complications. Traulsen 

estimated that the financial impact of 

meeting DOE and EPA ENERGY STAR 

requirements has been greater than 0.5 

percent of revenue, and stated that it 

would be beneficial to reconcile the 

differences between DOE and EPA 

standards. (Traulsen, No. 45 at pp. 5–6) 

NEEA stated that the burden of 

certifications and associated testing is 

inherent in the manufacturing industry, 

and that this burden should have little 

to do with the standards rulemaking. 

However, NEEA added, any steps that 

can be taken to harmonize test methods 

and procedures between certifications 

should be taken. (NEEA, No. 36 at p. 7) 

DOE realizes that the cumulative 

effect of several regulations on an 

industry may significantly increase the 

burden faced by manufacturers that 

need to comply with multiple 

regulations and certification programs 

from different organizations and levels 

of government. However, DOE notes 

that certain standards, such as ENERGY 

STAR, are optional for manufacturers. 

Harmonizing of test methods and 

procedures is not part of the energy 

conservation standards rulemaking. In 

its test procedure rulemaking, which 

culminated in the publication of the 

February 2012 test procedure final rule 

(77 FR 10292 (Feb. 21, 2012)), DOE 

attempted to set the test procedure in 

such a way so as to maximize the 

similarities between the DOE test 

procedure and the test procedure 

required for ENERGY STAR 

certification. 

Other Federal Regulations 

AHRI stated that there are several 

legislative and regulatory activities that 

could significantly burden 

manufacturers of commercial 

refrigeration equipment, including the 

upcoming amended energy conservation 

standards for walk-in coolers and 

freezers. AHRI also added that climate 

change bills that could be presented 

before Congress could have significant 

negative impact on the availability and 

price of HFC refrigerants. (AHRI, No. 43 

at p. 4) 

DOE recognizes the additional burden 

faced by manufacturers that produce 

both commercial refrigeration 

equipment and walk-in coolers and 

freezers. Companies that produce a wide 

range of regulated equipment may be 

faced with more capital and equipment 

design development expenditures than 

competitors with a narrower scope of 

production. However, DOE cannot 

consider the quantitative impacts of 

amended standards that have not yet 

been finalized, such as those for walkins. Likewise, DOE cannot consider the 

impacts of potential climate change bills 

because any potential impacts would be 

speculative in the absence of finalized 

legislation. 

State Regulations 

AHRI stated that California is 

currently working on new regulations as 

part of Title 24 that will likely establish 

new prescriptive requirements on 

commercial refrigeration equipment 

beginning in 2013. Additionally, AHRI 

added, other States on the West Coast 

are following California’s lead and are 

likely to implement similar regulations 

in the near future. Finally, AHRI 

commented that several States have 

enacted their own climate change 

legislation, including regulations 

established by CARB to limit GHGs and 

reduce the usage of high-GWP 

refrigerants such as HFCs. AHRI stated 

that CARB will implement these 

regulations in 2011. (AHRI, No. 43 at p. 

4) 

According to the latest California 

Code of Regulations, title 24, part 6, any 

appliance for which there is a California 

energy conservation standard 

established in the California Appliance 

Efficiency Regulations may be installed 

only if the manufacturer has certified to 

the CEC, as specified in those 

regulations, that the appliance complies 

with the applicable standard for that 

appliance. The Commission’s appliance 

efficiency regulations require that the 

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55966 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

88California Air Resources Board. Refrigerant 

Management Program Final Regulation. 2011. Cal. 

Code Regs. tit. 17, § 95386. (Last accessed March 16, 2012.) www.arb.ca.gov/cc/reftrack/

reftrackrule.html. 

MDEC (in kilowatt-hours) for 

commercial refrigerators manufactured 

on or after January 1, 2010 does not 

exceed the following: 

• Refrigerators with solid doors: 

0.10V + 2.04 

• refrigerators with transparent doors: 

0.12V + 3.34 

• freezers with solid doors: 0.40V + 

1.38 

• freezers with transparent doors: 

0.75V + 4.10 

• refrigerator/freezers with solid 

doors: the greater of 0.27AV–0.71 or 

0.70 

• refrigerators with self-condensing 

unit designed for pull-down 

temperature applications: 0.126V + 3.51 

Since these standards are identical to 

the ones prescribed in EPACT 2005, and 

the efficiency levels set by the current 

rulemaking will either exceed or be 

equivalent to the EPACT 2005 levels, 

DOE does not expect the Title 24 

regulations to create a cumulative 

regulatory burden on manufacturers. 

California has started a rulemaking 

proceeding to adopt changes to the 

building energy efficiency standards 

contained in the California Code of 

Regulations, title 24, part 6, but the CEC 

is currently in the pre-rulemaking stage 

and amended standards will not be 

published until 2013. 

Further, CARB is currently limiting 

the in-State use of high-GWP 

refrigerants in non-residential 

refrigeration systems through its 

Refrigerant Management Program, 

effective January 1, 2011.88 According to 

this new regulation, facilities with 

refrigeration systems that have a 

refrigerant capacity exceeding 50 

pounds must repair leaks within 14 

days of detection, maintain on-site 

records of all leak repairs, and keep 

receipts of all refrigerant purchases. The 

regulation applies to any person or 

company that installs, services, or 

disposes of appliances with high-GWP 

refrigerants. Refrigeration systems with 

a refrigerant capacity exceeding 50 

pounds typically belong to food retail 

operations with remote condensing 

racks that store refrigerant serving 

multiple commercial refrigeration 

equipment units within a business. 

However, commercial refrigeration 

equipment units in food retail are 

usually installed and serviced by 

refrigeration contractors, not 

manufacturers. As a result, although 

these CARB regulations do apply to 

refrigeration technicians and owners of 

facilities with refrigeration systems, 

they are unlikely to represent a 

regulatory burden for commercial 

refrigeration manufacturers. 

DOE discusses these and other 

requirements, and includes the full 

details of the cumulative regulatory 

burden analysis, in chapter 12 of the 

NOPR TSD. 

3. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

DOE estimated the NES by calculating 

the difference in annual energy 

consumption for the base-case scenario 

and standards-case scenario at each TSL 

for each equipment class and summing 

up the annual energy savings for all 

equipment purchased in 2017–2046. 

The energy consumption calculated in 

the NIA is source energy, taking into 

account losses in the generation and 

transmission of electricity as discussed 

in section IV.I. 

Table V.39 presents the NES for all 

equipment classes at each TSL and the 

sum total of NES for each TSL and Table 

V.40 presents estimated FFC energy 

savings for each considered TSL. The 

total NES progressively increases from 

0.236 quads at TSL 1 to 1.278 quads at 

TSL 5. Table V.41 presents the energy 

savings at each TSL for each equipment 

class in the form of percentage of the 

cumulative energy use of the equipment 

stock in the base case scenario. 

TABLE V.39—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046 

Equipment class 

Quads * 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.007 0.045 0.238 0.244 0.257 

VOP.RC.L ............................................................................ 0.001 0.005 0.006 0.006 0.009 

VOP.SC.M ............................................................................ 0.001 0.003 0.017 0.018 0.019 

VCT.RC.M ............................................................................ 0.000 0.007 0.009 0.009 0.010 

VCT.RC.L ............................................................................. 0.061 0.071 0.078 0.078 0.121 

VCT.SC.M ............................................................................ 0.011 0.057 0.074 0.081 0.092 

VCT.SC.L ............................................................................. 0.005 0.005 0.006 0.007 0.008 

VCT.SC.I .............................................................................. 0.001 0.003 0.003 0.003 0.005 

VCS.SC.M ............................................................................ 0.047 0.064 0.111 0.111 0.176 

VCS.SC.L ............................................................................. 0.042 0.064 0.068 0.076 0.144 

VCS.SC.I .............................................................................. 0.000 0.000 0.000 0.000 0.001 

SVO.RC.M ........................................................................... 0.002 0.029 0.139 0.142 0.150 

SVO.SC.M ............................................................................ 0.004 0.006 0.021 0.022 0.023 

SOC.RC.M ........................................................................... 0.001 0.002 0.017 0.019 0.020 

HZO.RC.M ........................................................................... - - - - 0.001 

HZO.RC.L ............................................................................ - - - - 0.009 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.000 

HZO.SC.L ............................................................................. - - - - 0.000 

HCT.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.001 

HCT.SC.L ............................................................................. 0.001 0.004 0.004 0.005 0.006 

HCT.SC.I .............................................................................. 0.000 0.000 0.001 0.001 0.005 

HCS.SC.M ............................................................................ 0.001 0.001 0.002 0.004 0.013 

HCS.SC.L ............................................................................. 0.001 0.001 0.002 0.002 0.005 

PD.SC.M .............................................................................. 0.047 0.047 0.105 0.157 0.181 

SOC.SC.M ........................................................................... 0.000 0.000 0.002 0.002 0.002 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55967 

TABLE V.39—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046— 

Continued 

Equipment class 

Quads * 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Net NES ........................................................................ 0.233 0.416 0.905 0.985 1.257 

‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated 

with the baseline efficiency level. 

* A value of 0.000 means NES values are less than 0.0005 quads. 

TABLE V.40—CUMULATIVE NATIONAL FULL-FUEL-CYCLE ENERGY SAVINGS FOR EQUIPMENT PURCHASED IN 2017–2046 

Equipment class 

Quads * 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.007 0.046 0.242 0.248 0.262 

VOP.RC.L ............................................................................ 0.001 0.005 0.006 0.006 0.009 

VOP.SC.M ............................................................................ 0.001 0.003 0.018 0.018 0.019 

VCT.RC.M ............................................................................ 0.000 0.007 0.009 0.009 0.010 

VCT.RC.L ............................................................................. 0.062 0.072 0.079 0.079 0.123 

VCT.SC.M ............................................................................ 0.011 0.058 0.075 0.083 0.094 

VCT.SC.L ............................................................................. 0.005 0.006 0.006 0.007 0.008 

VCT.SC.I .............................................................................. 0.001 0.003 0.003 0.003 0.005 

VCS.SC.M ............................................................................ 0.048 0.065 0.112 0.112 0.179 

VCS.SC.L ............................................................................. 0.043 0.065 0.070 0.077 0.146 

VCS.SC.I .............................................................................. 0.000 0.000 0.000 0.000 0.001 

SVO.RC.M ........................................................................... 0.002 0.030 0.141 0.144 0.152 

SVO.SC.M ............................................................................ 0.004 0.006 0.022 0.022 0.023 

SOC.RC.M ........................................................................... 0.001 0.002 0.018 0.019 0.020 

HZO.RC.M ........................................................................... - - - - 0.001 

HZO.RC.L ............................................................................ - - - - 0.009 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.000 

HZO.SC.L ............................................................................. - - - - 0.000 

HCT.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.001 

HCT.SC.L ............................................................................. 0.001 0.004 0.004 0.005 0.006 

HCT.SC.I .............................................................................. 0.000 0.000 0.001 0.001 0.005 

HCS.SC.M ............................................................................ 0.001 0.001 0.002 0.004 0.013 

HCS.SC.L ............................................................................. 0.001 0.001 0.002 0.002 0.005 

PD.SC.M .............................................................................. 0.048 0.048 0.106 0.159 0.184 

SOC.SC.M ........................................................................... 0.000 0.000 0.002 0.002 0.002 

Net NES ........................................................................ 0.236 0.422 0.920 1.001 1.278 

‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated 

with the baseline efficiency level. 

* A value of 0.000 means NES values are less than 0.0005 quads. 

TABLE V.41—CUMULATIVE ENERGY SAVINGS BY TSL FOR EACH EQUIPMENT CLASS EXPRESSED AS A PERCENTAGE OF

CUMULATIVE BASE-CASE ENERGY USAGE OF THE NEW COMMERCIAL REFRIGERATION EQUIPMENT STOCK PURCHASED IN 2017–2046 

Equipment class 

Total basecase energy 

use 

quads * 

TSL Savings as percent of total base-case energy use 

TSL 1 

(percent) 

TSL 2 

(percent) 

TSL 3 

(percent) 

TSL 4 

(percent) 

TSL 5 

(percent) 

VOP.RC.M ............................................... 1.606 0 3 15 15 16 

VOP.RC.L ................................................ 0.203 0 3 3 3 4 

VOP.SC.M ................................................ 0.231 1 1 8 8 8 

VCT.RC.M ................................................ 0.027 1 25 33 35 39 

VCT.RC.L ................................................. 1.198 5 6 7 7 10 

VCT.SC.M ................................................ 0.235 5 25 32 35 40 

VCT.SC.L ................................................. 0.036 15 15 18 19 22 

VCT.SC.I .................................................. 0.047 3 6 7 7 10 

VCS.SC.M ................................................ 0.472 10 14 24 24 38 

VCS.SC.L ................................................. 0.720 6 9 10 11 20 

VCS.SC.I .................................................. 0.012 1 3 3 3 8 

SVO.RC.M ............................................... 0.990 0 3 14 15 15 

SVO.SC.M ................................................ 0.300 1 2 7 7 8 

SOC.RC.M ............................................... 0.173 0 1 10 11 12 

HZO.RC.M ............................................... 0.066 0 0 0 0 1 

HZO.RC.L ................................................ 0.475 0 0 0 0 2 

HZO.SC.M ................................................ 0.015 0 0 1 1 2 

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55968 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

89EPCA requires DOE to review its standards at 

least once every 6 years (42 U.S.C. 6295(m)(1), 

6316(e)), and requires, for certain products, a 3-year 

period after any new standard is promulgated 

before compliance is required, except that in no 

case may any new standards be required within 6 

years of the compliance date of the previous 

standards. (42 U.S.C. 6295(m)(4), 6316(e)).While 

adding a 6-year review to the 3-year compliance 

period sums to 9 years, DOE notes that it may 

undertake reviews at any time within the 6-year 

period, and that the 3 year compliance date may be 

extended to 5 years. A 9-year analysis period may 

not be appropriate given the variability that occurs 

in the timing of standards reviews and the fact that, 

for some consumer products, the period following 

establishment of a new or amended standard before 

which compliance is required is 5 years rather than 

3 years. 

TABLE V.41—CUMULATIVE ENERGY SAVINGS BY TSL FOR EACH EQUIPMENT CLASS EXPRESSED AS A PERCENTAGE OF

CUMULATIVE BASE-CASE ENERGY USAGE OF THE NEW COMMERCIAL REFRIGERATION EQUIPMENT STOCK PURCHASED IN 2017–2046—Continued 

Equipment class 

Total basecase energy 

use 

quads * 

TSL Savings as percent of total base-case energy use 

TSL 1 

(percent) 

TSL 2 

(percent) 

TSL 3 

(percent) 

TSL 4 

(percent) 

TSL 5 

(percent) 

HZO.SC.L ................................................. 0.063 0 0 0 0 0 

HCT.SC.M ................................................ 0.001 5 40 43 48 57 

HCT.SC.L ................................................. 0.012 6 33 33 38 50 

HCT.SC.I .................................................. 0.017 1 3 7 7 27 

HCS.SC.M ................................................ 0.026 2 5 8 14 49 

HCS.SC.L ................................................. 0.010 8 13 21 21 48 

PD.SC.M .................................................. 0.401 12 12 27 40 46 

SOC.SC.M ............................................... 0.014 3 3 13 13 14 

Totals ................................................ 7.349 3 6 13 14 17 

* Energy use of the entire commercial refrigeration equipment stock in the base-case scenario in 2017–2046 plus the energy use of the surviving stock of equipment in 2047–2060 for equipment purchased in 2017–2046. 

‘-’ represents zero energy savings, since TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with 

the baseline efficiency level. 

Circular A–4 requires agencies to 

present analytical results, including 

separate schedules of the monetized 

benefits and costs that show the type 

and timing of benefits and costs. 

Circular A–4 also directs agencies to 

consider the variability of key elements 

underlying the estimates of benefits and 

costs. For this rulemaking, DOE 

undertook a sensitivity analysis using 

nine rather than 30 years of product 

shipments. The choice of a 9-year 

period is a proxy for the timeline in 

EPCA for the review of certain energy 

conservation standards and potential 

revision of and compliance with such 

revised standards.89 We would note that 

the review timeframe established in 

EPCA generally does not overlap with 

the product lifetime, product 

manufacturing cycles or other factors 

specific to commercial refrigeration 

equipment. Thus, this information is 

presented for informational purposes 

only and is not indicative of any change 

in DOE’s analytical methodology. The 

primary and full-fuel cycle NES results 

based on a 9-year analysis period are 

presented in Table V.42 and Table V.43, 

respectively. The impacts are counted 

over the lifetime of products purchased 

in 2017–2025. 

TABLE V.42—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR 9-YEAR ANALYSIS PERIOD

[Equipment purchased in 2017–2025] 

Equipment class 

quads* 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.001 0.009 0.049 0.050 0.053 

VOP.RC.L ............................................................................ 0.000 0.001 0.001 0.001 0.002 

VOP.SC.M ............................................................................ 0.000 0.001 0.004 0.004 0.004 

VCT.RC.M ............................................................................ 0.000 0.001 0.002 0.002 0.002 

VCT.RC.L ............................................................................. 0.012 0.015 0.016 0.016 0.025 

VCT.SC.M ............................................................................ 0.002 0.012 0.015 0.017 0.019 

VCT.SC.L ............................................................................. 0.001 0.001 0.001 0.001 0.002 

VCT.SC.I .............................................................................. 0.000 0.001 0.001 0.001 0.001 

VCS.SC.M ............................................................................ 0.010 0.013 0.023 0.023 0.036 

VCS.SC.L ............................................................................. 0.009 0.013 0.014 0.016 0.030 

VCS.SC.I .............................................................................. 0.000 0.000 0.000 0.000 0.000 

SVO.RC.M ........................................................................... 0.000 0.006 0.029 0.029 0.031 

SVO.SC.M ............................................................................ 0.001 0.001 0.004 0.004 0.005 

SOC.RC.M ........................................................................... 0.000 0.000 0.004 0.004 0.004 

HZO.RC.M ........................................................................... - - - - 0.000 

HZO.RC.L ............................................................................ - - - - 0.002 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.000 

HZO.SC.L ............................................................................. - - - - 0.000 

HCT.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.000 

HCT.SC.L ............................................................................. 0.000 0.001 0.001 0.001 0.001 

HCT.SC.I .............................................................................. 0.000 0.000 0.000 0.000 0.001 

HCS.SC.M ............................................................................ 0.000 0.000 0.000 0.001 0.003 

HCS.SC.L ............................................................................. 0.000 0.000 0.000 0.000 0.001 

PD.SC.M .............................................................................. 0.010 0.010 0.021 0.032 0.037 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55969 

TABLE V.42—CUMULATIVE NATIONAL PRIMARY ENERGY SAVINGS FOR 9-YEAR ANALYSIS PERIOD—Continued 

[Equipment purchased in 2017–2025] 

Equipment class 

quads* 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

SOC.SC.M ........................................................................... 0.000 0.000 0.000 0.000 0.000 

Net NES ........................................................................ 0.048 0.085 0.185 0.202 0.258 

‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated 

with the baseline efficiency level. 

* A value of 0.000 means NES values are less than 0.0005 quads. 

TABLE V.43 CUMULATIVE FULL FUEL CYCLE NATIONAL ENERGY SAVINGS FOR 9-YEAR ANALYSIS PERIOD

[Equipment purchased in 2017–2025] 

Equipment class 

quads* 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.001 0.009 0.050 0.051 0.054 

VOP.RC.L ............................................................................ 0.000 0.001 0.001 0.001 0.002 

VOP.SC.M ............................................................................ 0.000 0.001 0.004 0.004 0.004 

VCT.RC.M ............................................................................ 0.000 0.001 0.002 0.002 0.002 

VCT.RC.L ............................................................................. 0.013 0.015 0.016 0.016 0.025 

VCT.SC.M ............................................................................ 0.002 0.012 0.015 0.017 0.019 

VCT.SC.L ............................................................................. 0.001 0.001 0.001 0.001 0.002 

VCT.SC.I .............................................................................. 0.000 0.001 0.001 0.001 0.001 

VCS.SC.M ............................................................................ 0.010 0.013 0.023 0.023 0.037 

VCS.SC.L ............................................................................. 0.009 0.013 0.014 0.016 0.030 

VCS.SC.I .............................................................................. 0.000 0.000 0.000 0.000 0.000 

SVO.RC.M ........................................................................... 0.000 0.006 0.029 0.030 0.031 

SVO.SC.M ............................................................................ 0.001 0.001 0.004 0.005 0.005 

SOC.RC.M ........................................................................... 0.000 0.000 0.004 0.004 0.004 

HZO.RC.M ........................................................................... - - - - 0.000 

HZO.RC.L ............................................................................ - - - - 0.002 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.000 

HZO.SC.L ............................................................................. - - - - 0.000 

HCT.SC.M ............................................................................ 0.000 0.000 0.000 0.000 0.000 

HCT.SC.L ............................................................................. 0.000 0.001 0.001 0.001 0.001 

HCT.SC.I .............................................................................. 0.000 0.000 0.000 0.000 0.001 

HCS.SC.M ............................................................................ 0.000 0.000 0.000 0.001 0.003 

HCS.SC.L ............................................................................. 0.000 0.000 0.000 0.000 0.001 

PD.SC.M .............................................................................. 0.010 0.010 0.022 0.033 0.038 

SOC.SC.M ........................................................................... 0.000 0.000 0.000 0.000 0.000 

Net NES ........................................................................ 0.048 0.087 0.189 0.205 0.262 

‘-’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated 

with the baseline efficiency level. 

* A value of 0.000 means NES values are less than, 0.0005 quads. 

b. Net Present Value of Customer Costs 

and Benefits 

DOE estimated the cumulative NPV to 

the Nation of the total savings for the 

customers that would result from 

potential standards at each TSL. In 

accordance with OMB guidelines on 

regulatory analysis (OMB Circular A–4, 

section E, September 17, 2003), DOE 

calculated NPV using both a 7-percent 

and a 3-percent real discount rate. The 

7-percent rate is an estimate of the 

average before-tax rate of return on 

private capital in the U.S. economy, and 

reflects the returns on real estate and 

small business capital, including 

corporate capital. DOE used this 

discount rate to approximate the 

opportunity cost of capital in the private 

sector because recent OMB analysis has 

found the average rate of return on 

capital to be near this rate. In addition, 

DOE used the 3-percent rate to capture 

the potential effects of amended 

standards on private consumption. This 

rate represents the rate at which society 

discounts future consumption flows to 

their present value. It can be 

approximated by the real rate of return 

on long-term government debt (i.e., 

yield on Treasury notes minus annual 

rate of change in the Consumer Price 

Index), which has averaged about 3 

percent on a pre-tax basis for the last 30 

years. 

Table V.44 and Table V.45 show the 

customer NPV results for each of the 

TSLs DOE considered for commercial 

refrigeration equipment at both 7- 

percent and 3-percent discount rates. In 

each case, the impacts cover the 

expected lifetime of equipment 

purchased in 2017–2046. Detailed NPV 

results are presented in chapter 10 of 

the NOPR TSD. 

The NPV results at a 7-percent 

discount rate were negative for all 

equipment classes at TSL 5. This is 

consistent with the results of LCC 

analysis results for TSL 5, which 

showed significant increase in LCC and 

significantly high PBPs that were greater 

than the average equipment lifetimes. 

Efficiency levels for TSL 4 were chosen 

to correspond to the highest efficiency 

level with a positive NPV at a 7-percent 

discount rate for each equipment class. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS3

55970 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

Similarly, the criteria for choice of 

efficiency levels for TSL 3, TSL 2, and 

TSL 1 were such that the NPV values for 

all the equipment classes show positive 

values. The criterion for TSL 3 was to 

select efficiency levels with the highest 

NPV at a 7-percent discount rate. 

Consequently, the total NPV for 

commercial refrigeration equipment is 

highest for TSL 3, with a value of $1.705 

billion (2012$) at a 7-percent discount 

rate. TSL 4 shows the second highest 

total NPV, with a value of $1.606 billion 

(2012$) at a 7-percent discount rate. TSL 

2 and TSL 1 have a total NPV lower 

than TSL 4, while TSL 5 has a negative 

total NPV of $6.735 billion (2012$). 

TABLE V.44—NET PRESENT VALUE AT A 7-PERCENT DISCOUNT RATE

Equipment class 

Billion 2012$ * ** 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.016 0.099 0.466 0.461 (0.466) 

VOP.RC.L ............................................................................ 0.002 0.013 0.014 0.014 (0.062) 

VOP.SC.M ............................................................................ 0.003 0.005 0.027 0.025 (0.041) 

VCT.RC.M ............................................................................ 0.001 0.013 0.017 0.017 (0.060) 

VCT.RC.L ............................................................................. 0.141 0.155 0.161 0.161 (1.170) 

VCT.SC.M ............................................................................ 0.026 0.120 0.136 0.129 (0.340) 

VCT.SC.L ............................................................................. 0.014 0.014 0.015 0.015 (0.016) 

VCT.SC.I .............................................................................. 0.003 0.004 0.005 0.005 (0.042) 

VCS.SC.M ............................................................................ 0.113 0.135 0.153 0.153 (1.720) 

VCS.SC.L ............................................................................. 0.105 0.138 0.139 0.135 (1.084) 

VCS.SC.I .............................................................................. 0.000 0.001 0.001 0.001 (0.011) 

SVO.RC.M ........................................................................... 0.004 0.057 0.245 0.240 (0.231) 

SVO.SC.M ............................................................................ 0.008 0.012 0.029 0.027 (0.037) 

SOC.RC.M ........................................................................... 0.001 0.004 0.039 0.031 (0.056) 

HZO.RC.M ........................................................................... - - - - (0.039) 

HZO.RC.L ............................................................................ - - - - (0.229) 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 0.000 (0.007) 

HZO.SC.L ............................................................................. - - - - (0.006) 

HCT.SC.M ............................................................................ 0.000 0.001 0.001 0.001 (0.003) 

HCT.SC.L ............................................................................. 0.002 0.009 0.010 0.009 (0.016) 

HCT.SC.I .............................................................................. 0.000 0.001 0.001 0.001 (0.039) 

HCS.SC.M ............................................................................ 0.001 0.002 0.003 0.001 (0.166) 

HCS.SC.L ............................................................................. 0.002 0.002 0.003 0.003 (0.021) 

PD.SC.M .............................................................................. 0.119 0.119 0.237 0.176 (0.872) 

SOC.SC.M ........................................................................... 0.001 0.001 0.004 0.003 (0.003) 

Sum Total ..................................................................... 0.561 0.905 1.705 1.606 (6.735) 

‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the 

baseline efficiency level. 

* A value of $0.000 means NES values are less than 0.001 billion 2012$. 

** Values in parentheses are negative values. 

TABLE V.45—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE

Equipment class 

Billion 2012$ * ** 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.037 0.233 1.144 1.140 (0.549) 

VOP.RC.L ............................................................................ 0.005 0.030 0.032 0.032 (0.104) 

VOP.SC.M ............................................................................ 0.006 0.012 0.070 0.068 (0.053) 

VCT.RC.M ............................................................................ 0.001 0.031 0.041 0.041 (0.100) 

VCT.RC.L ............................................................................. 0.327 0.363 0.383 0.383 (2.017) 

VCT.SC.M ............................................................................ 0.059 0.283 0.331 0.326 (0.524) 

VCT.SC.L ............................................................................. 0.031 0.032 0.035 0.035 (0.020) 

VCT.SC.I .............................................................................. 0.007 0.011 0.012 0.012 (0.071) 

VCS.SC.M ............................................................................ 0.259 0.316 0.398 0.398 (2.976) 

VCS.SC.L ............................................................................. 0.239 0.323 0.329 0.327 (1.837) 

VCS.SC.I .............................................................................. 0.001 0.001 0.002 0.002 (0.018) 

SVO.RC.M ........................................................................... 0.008 0.137 0.615 0.608 (0.249) 

SVO.SC.M ............................................................................ 0.018 0.028 0.078 0.074 (0.043) 

SOC.RC.M ........................................................................... 0.003 0.010 0.093 0.079 (0.078) 

HZO.RC.M ........................................................................... - - - - (0.071) 

HZO.RC.L ............................................................................ - - - - (0.411) 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 0.000 (0.013) 

HZO.SC.L ............................................................................. - - - - (0.012) 

HCT.SC.M ............................................................................ 0.000 0.002 0.002 0.002 (0.004) 

HCT.SC.L ............................................................................. 0.004 0.022 0.022 0.022 (0.023) 

HCT.SC.I .............................................................................. 0.001 0.002 0.003 0.003 (0.066) 

HCS.SC.M ............................................................................ 0.003 0.005 0.007 0.006 (0.292) 

HCS.SC.L ............................................................................. 0.004 0.006 0.007 0.007 (0.034) 

PD.SC.M .............................................................................. 0.270 0.270 0.551 0.494 (1.406) 

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TABLE V.45—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE—Continued 

Equipment class 

Billion 2012$ * ** 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

SOC.SC.M ........................................................................... 0.002 0.002 0.009 0.008 (0.003) 

Sum Total ..................................................................... 1.285 2.118 4.165 4.067 (10.972) 

‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the 

baseline efficiency level. 

* A value of $0.000 means NES values are less than 0.001 billion 2012$. 

** Values in parentheses are negative values. 

The NPV results based on the 

aforementioned 9-year analysis period 

are presented in Table V.46 and Table 

V.47. The impacts are counted over the 

lifetime of products purchased in 2017– 

2025. As mentioned previously, this 

information is presented for 

informational purposes only and is not 

indicative of any change in DOE’s 

analytical methodology or decision 

criteria. 

TABLE V.46—NET PRESENT VALUE AT A 7-PERCENT DISCOUNT RATE FOR 9-YEAR ANALYSIS PERIOD

[Equipment purchased in 2017–2025] 

Equipment class 

billion 2012$ * ** †

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.008 0.039 0.154 0.150 (0.294) 

VOP.RC.L ............................................................................ 0.001 0.005 0.005 0.005 (0.032) 

VOP.SC.M ............................................................................ 0.001 0.002 0.008 0.007 (0.025) 

VCT.RC.M ............................................................................ 0.000 0.005 0.006 0.006 (0.031) 

VCT.RC.L ............................................................................. 0.054 0.059 0.060 0.060 (0.583) 

VCT.SC.M ............................................................................ 0.011 0.045 0.049 0.044 (0.182) 

VCT.SC.L ............................................................................. 0.005 0.005 0.006 0.006 (0.009) 

VCT.SC.I .............................................................................. 0.001 0.002 0.002 0.002 (0.021) 

VCS.SC.M ............................................................................ 0.043 0.051 0.049 0.049 (0.858) 

VCS.SC.L ............................................................................. 0.041 0.051 0.051 0.047 (0.548) 

VCS.SC.I .............................................................................. 0.000 0.000 0.000 0.000 (0.005) 

SVO.RC.M ........................................................................... 0.003 0.021 0.078 0.075 (0.151) 

SVO.SC.M ............................................................................ 0.003 0.004 0.008 0.007 (0.024) 

SOC.RC.M ........................................................................... 0.001 0.002 0.014 0.009 (0.032) 

HZO.RC.M ........................................................................... - - - - (0.019) 

HZO.RC.L ............................................................................ - - - - (0.111) 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 (0.000) (0.004) 

HZO.SC.L ............................................................................. - - - - (0.003) 

HCT.SC.M ............................................................................ 0.000 0.000 0.000 0.000 (0.001) 

HCT.SC.L ............................................................................. 0.001 0.004 0.004 0.003 (0.009) 

HCT.SC.I .............................................................................. 0.000 0.000 0.000 0.000 (0.019) 

HCS.SC.M ............................................................................ 0.001 0.001 0.001 0.000 (0.082) 

HCS.SC.L ............................................................................. 0.001 0.001 0.001 0.001 (0.011) 

PD.SC.M .............................................................................. 0.047 0.047 0.090 0.049 (0.455) 

SOC.SC.M ........................................................................... 0.000 0.000 0.001 0.001 (0.002) 

Sum Total ..................................................................... 0.221 0.343 0.586 0.521 (3.509) 

‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the 

baseline efficiency level. * A value of $0.000 means NES values are less than 0.001 billion 2012$. 

** Values in parentheses are negative values. 

†The impacts were calculated over the lifetime of the equipment purchased in 2017–2025. 

TABLE V.47—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE FOR 9-YEAR ANALYSIS PERIOD

[Equipment purchased in 2017–2025] 

Equipment class 

Billion 2012$ * ** †

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M ........................................................................... 0.013 0.063 0.267 0.263 (0.330) 

VOP.RC.L ............................................................................ 0.001 0.008 0.008 0.008 (0.040) 

VOP.SC.M ............................................................................ 0.002 0.003 0.015 0.014 (0.028) 

VCT.RC.M ............................................................................ 0.001 0.008 0.010 0.010 (0.039) 

VCT.RC.L ............................................................................. 0.088 0.096 0.099 0.099 (0.753) 

VCT.SC.M ............................................................................ 0.017 0.073 0.083 0.077 (0.222) 

VCT.SC.L ............................................................................. 0.008 0.009 0.009 0.009 (0.011) 

VCT.SC.I .............................................................................. 0.002 0.003 0.003 0.003 (0.027) 

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TABLE V.47—NET PRESENT VALUE AT A 3-PERCENT DISCOUNT RATE FOR 9-YEAR ANALYSIS PERIOD—Continued 

[Equipment purchased in 2017–2025] 

Equipment class 

Billion 2012$ * ** †

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VCS.SC.M ............................................................................ 0.069 0.082 0.090 0.090 (1.111) 

VCS.SC.L ............................................................................. 0.064 0.083 0.084 0.080 (0.702) 

VCS.SC.I .............................................................................. 0.000 0.000 0.000 0.000 (0.007) 

SVO.RC.M ........................................................................... 0.004 0.036 0.138 0.135 (0.166) 

SVO.SC.M ............................................................................ 0.005 0.007 0.016 0.014 (0.027) 

SOC.RC.M ........................................................................... 0.001 0.003 0.023 0.017 (0.038) 

HZO.RC.M ........................................................................... - - - - (0.025) 

HZO.RC.L ............................................................................ - - - - (0.147) 

HZO.SC.M ............................................................................ 0.000 0.000 0.000 (0.000) (0.005) 

HZO.SC.L ............................................................................. - - - - (0.004) 

HCT.SC.M ............................................................................ 0.000 0.000 0.000 0.000 (0.002) 

HCT.SC.L ............................................................................. 0.001 0.006 0.006 0.006 (0.011) 

HCT.SC.I .............................................................................. 0.000 0.000 0.001 0.001 (0.025) 

HCS.SC.M ............................................................................ 0.001 0.001 0.002 0.001 (0.107) 

HCS.SC.L ............................................................................. 0.001 0.001 0.002 0.002 (0.014) 

PD.SC.M .............................................................................. 0.074 0.074 0.145 0.102 (0.568) 

SOC.SC.M ........................................................................... 0.001 0.001 0.002 0.002 (0.002) 

Sum Total ..................................................................... 0.352 0.558 1.003 0.934 (4.410) 

‘-’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the 

baseline efficiency level. 

* A value of $0.000 means NES values are less than 0.001 billion 2012$. 

** Values in parentheses are negative values. 

† The impacts were calculated over the lifetime of the equipment purchased in 2017–2025. 

c. Employment Impacts 

In addition to the direct impacts on 

manufacturing employment discussed 

in section V.B.2, DOE develops general 

estimates of the indirect employment 

impacts of proposed standards on the 

economy. As discussed above, DOE 

expects energy amended conservation 

standards for commercial refrigeration 

equipment to reduce energy bills for 

commercial customers, and the resulting 

net savings to be redirected to other 

forms of economic activity. DOE also 

realizes that these shifts in spending 

and economic activity by commercial 

refrigeration equipment owners could 

affect the demand for labor. Thus, 

indirect employment impacts may result 

from expenditures shifting between 

goods (the substitution effect) and 

changes in income and overall 

expenditure levels (the income effect) 

that occur due to the imposition of 

amended standards. These impacts may 

affect a variety of businesses not directly 

involved in the decision to make, 

operate, or pay the utility bills for 

commercial refrigeration equipment. To 

estimate these indirect economic effects, 

DOE used an input/output model of the 

U.S. economy using U.S. Department of 

Commerce, Bureau of Economic 

Analysis (BEA) and BLS data (as 

described in section IV.L of this notice; 

see chapter 16 of the NOPR TSD for 

more details). 

Customers who purchase moreefficient equipment pay lower amounts 

towards utility bills, which results in 

job losses in the electric utilities sector. 

However, in the input/output model, 

the dollars saved on utility bills are reinvested in economic sectors that create 

more jobs than are lost in the electric 

utilities sector. Thus, the proposed 

amended energy conservation standards 

for commercial refrigeration equipment 

are likely to slightly increase the net 

demand for labor in the economy. 

However, the net increase in jobs might 

be offset by other, unanticipated effects 

on employment. Neither the BLS data 

nor the input/output model used by 

DOE includes the quality of jobs. As 

shown in Table V.48, DOE estimates 

that net indirect employment impacts 

from a proposed commercial 

refrigeration equipment amended 

standard are small relative to the 

national economy. 

TABLE V.48—NET SHORT-TERM

CHANGE IN EMPLOYMENT* 

Trial 

standard 

level 

2017 2021 

1 ........... 35 to 38 .................. 198 to 201 

2 ........... 53 to 61 .................. 345 to 354 

3 ........... 74 to 108 ................ 719 to 749 

4 ........... 60 to 105 ................ 760 to 801 

5 ........... (728) to (363) ......... 130 to 504 

* Values in parentheses are negative values. 

4. Impact on Utility or Performance of 

Equipment 

In performing the engineering 

analysis, DOE considers design options 

that would not lessen the utility or 

performance of the individual classes of 

equipment. (42 U.S.C. 

6295(o)(2)(B)(i)(IV) and 6316(e)(1)) As 

presented in the screening analysis 

(chapter 4 of the NOPR TSD), DOE 

eliminates from consideration any 

design options that reduce the utility of 

the equipment. For this notice, DOE 

concluded that none of the efficiency 

levels proposed for commercial 

refrigeration equipment reduce the 

utility or performance of the equipment. 

5. Impact of Any Lessening of 

Competition 

EPCA directs DOE to consider any 

lessening of competition likely to result 

from amended standards. It directs the 

Attorney General to determine in 

writing the impact, if any, of any 

lessening of competition likely to result 

from a proposed standard. (42 U.S.C. 

6295(o)(2)(B)(i)(V) and 6316(e)(1)) To 

assist the Attorney General in making 

such a determination, DOE provided the 

Department of Justice (DOJ) with copies 

of this notice and the TSD for review. 

During MIA interviews, domestic 

manufacturers indicated that foreign 

manufacturers have begun to enter the 

commercial refrigeration equipment 

industry, but not in significant numbers. 

Manufacturers also stated that 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55973 

consolidation has occurred among 

commercial refrigeration equipment 

manufacturers in recent years. 

Interviewed manufacturers believe that 

these trends may continue in this 

market even in the absence of amended 

standards. 

DOE does not believe that amended 

standards would result in domestic 

firms moving their production facilities 

outside the United States. The majority 

of commercial refrigeration equipment 

is manufactured in the United States 

and, during interviews, manufacturers 

in general indicated they would modify 

their existing facilities to comply with 

amended energy conservation 

standards. 

6. Need of the Nation to Conserve 

Energy 

An improvement in the energy 

efficiency of the equipment subject to 

today’s NOPR is likely to improve the 

security of the Nation’s energy system 

by reducing overall demand for energy. 

Reduced electricity demand may also 

improve the reliability of the electricity 

system. Reductions in national electric 

generating capacity estimated for each 

considered TSL are reported in chapter 

14 of the NOPR TSD. 

Energy savings from amended 

standards for commercial refrigeration 

equipment could also produce 

environmental benefits in the form of 

reduced emissions of air pollutants and 

GHGs associated with electricity 

production. Table V.49 provides DOE’s 

estimate of cumulative emissions 

reductions projected to result from the 

TSLs considered in this rule. The table 

includes both power sector emissions 

and upstream emissions. The upstream 

emissions were calculated using the 

multipliers discussed in section IV.N. 

DOE reports annual CO2, NOX, SO2, 

NO2, CH4 and Hg emissions reductions 

for each TSL in chapter 15 of the NOPR 

TSD. As discussed in Section IV.N DOE 

also did not include NOX emission 

reduction from power plants in States 

subject to CAIR because an amended 

energy conservation standard would not 

affect the overall level of NOX emissions 

in those States due to the emission caps 

mandated by CAIR. 

TABLE V.49—CUMULATIVE EMISSIONS REDUCTION ESTIMATED FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS FOR

EQUIPMENT PURCHASED IN 2017–2046 

TSL 

1 2 3 4 5 

Primary Emissions 

CO2 (million metric tons) ...................................................... 12.22 21.83 47.55 51.77 66.05 

NOX (thousand tons) ........................................................... 9.05 16.18 35.23 38.36 48.93 

Hg (tons) .............................................................................. 0.03 0.05 0.10 0.11 0.14 

N2O (thousand tons) ............................................................ 0.26 0.47 1.02 1.11 1.42 

CH4 (thousand tons) ............................................................ 1.53 2.73 5.95 6.48 8.27 

SO2 (thousand tons) ............................................................ 16.39 29.28 63.78 69.43 88.58 

Upstream Emissions 

CO2 (million metric tons) ...................................................... 0.73 1.31 2.85 3.10 3.96 

NOX (thousand tons) ........................................................... 10.08 18.01 39.23 42.71 54.49 

Hg (tons) .............................................................................. 0.000 0.001 0.002 0.002 0.002 

N2O (thousand tons) ............................................................ 0.01 0.01 0.03 0.03 0.04 

CH4 (thousand tons) ............................................................ 61.23 109.39 238.27 259.41 330.92 

SO2 (thousand tons) ............................................................ 0.16 0.28 0.61 0.67 0.85 

Total Emissions 

CO2 (million metric tons) ...................................................... 12.95 23.14 50.41 54.88 70.01 

NOX (thousand tons) ........................................................... 19.14 34.19 74.46 81.07 103.42 

Hg (tons) .............................................................................. 0.03 0.05 0.10 0.11 0.14 

N2O (thousand tons) ............................................................ 0.27 0.48 1.05 1.15 1.46 

CH4 (thousand tons) ............................................................ 62.76 112.13 244.22 265.89 339.19 

SO2 (thousand tons) ............................................................ 16.55 29.56 64.39 70.10 89.43 

As part of the analysis for this NOPR, 

DOE estimated monetary benefits likely 

to result from the reduced emissions of 

CO2 and NOX that DOE estimated for 

each of the TSLs considered. As 

discussed in section IV.O for CO2, DOE 

used values for the SCC developed by 

an interagency process. The interagency 

group selected four sets of SCC values 

for use in regulatory analyses. Three sets 

are based on the average SCC from three 

integrated assessment models, at 

discount rates of 2.5 percent, 3 percent, 

and 5 percent. The fourth set, which 

represents the 95th-percentile SCC 

estimate across all three models at a 3- 

percent discount rate, is included to 

represent higher-than-expected impacts 

from temperature change further out in 

the tails of the SCC distribution. The 

four SCC values for CO2 emissions 

reductions in 2015, expressed in 2012$, 

are $12.9/ton, $40.8/ton, $62.2/ton, and 

$117.0/ton. These values for later years 

are higher due to increasing emissionsrelated costs as the magnitude of 

projected climate change increase. 

Table V.50 presents the global value 

of CO2 emissions reductions at each 

TSL. DOE calculated domestic values as 

a range from 7 percent to 23 percent of 

the global values, and these results are 

presented in chapter 14 of the NOPR 

TSD. 

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TABLE V.50—GLOBAL PRESENT VALUE OF CO2 EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL

REFRIGERATION EQUIPMENT

TSL 

SCC Scenario* 

5% Discount 

rate, average 

3% Discount 

rate, average 

2.5% Discount 

rate, average 

3% Discount 

rate, 95th percentile 

million 2012$ 

Primary Emissions 

1 ....................................................................................................... 68.6 335.1 546.1 1,013.7 

2 ....................................................................................................... 122.6 598.7 975.6 1,811.1 

3 ....................................................................................................... 266.9 1,304.1 2,124.9 3,944.8 

4 ....................................................................................................... 290.6 1,419.8 2,313.4 4,294.8 

5 ....................................................................................................... 370.7 1,811.2 2,951.2 5,478.8 

Upstream Emissions 

1 ....................................................................................................... 4.0 20.0 32.6 60.6 

2 ....................................................................................................... 7.2 35.7 58.3 108.3 

3 ....................................................................................................... 15.8 77.8 126.9 236.0 

4 ....................................................................................................... 17.1 84.7 138.1 256.9 

5 ....................................................................................................... 21.9 108.1 176.2 327.7 

Total Emissions 

1 ....................................................................................................... 72.6 355.1 578.7 1,074.4 

2 ....................................................................................................... 129.8 634.4 1,033.8 1,919.5 

3 ....................................................................................................... 282.7 1,381.9 2,251.8 4,180.7 

4 ....................................................................................................... 307.8 1,504.5 2,451.6 4,551.7 

5 ....................................................................................................... 392.6 1,919.2 3,127.4 5,806.5 

* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.9, $40.8, $62.2 and $117.0 per metric ton (2012$). 

DOE is well aware that scientific and 

economic knowledge about the 

contribution of CO2 and other GHG 

emissions to changes in the future 

global climate and the potential 

resulting damages to the world economy 

continues to evolve rapidly. Thus, any 

value placed in this NOPR on reducing 

CO2 emissions is subject to change. 

DOE, together with other Federal 

agencies, will continue to review 

various methodologies for estimating 

the monetary value of reductions in CO2

and other GHG emissions. This ongoing 

review will consider the comments on 

this subject that are part of the public 

record for this NOPR and other 

rulemakings, as well as other 

methodological assumptions and issues. 

However, consistent with DOE’s legal 

obligations, and taking into account the 

uncertainty involved with this 

particular issue, DOE has included in 

this NOPR the most recent values and 

analyses resulting from the ongoing 

interagency review process. 

DOE also estimated a range for the 

cumulative monetary value of the 

economic benefits associated with NOX

emission reductions anticipated to 

result from amended commercial 

refrigeration equipment standards. 

Estimated monetary benefits for CO2

and NOX emission reductions are 

detailed in chapter 14 of the NOPR TSD. 

Table V.51 presents the present value of 

cumulative NOX emissions reductions 

for each TSL calculated using the 

average dollar-per-ton values and 7- 

percent and 3-percent discount rates. 

TABLE V.51—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL

REFRIGERATION EQUIPMENT

TSL 3% Discount rate 7% Discount rate 

million 2012$ 

Primary Emissions 

1 ................................................................................................................................................................... 12.0 5.6 

2 ................................................................................................................................................................... 21.4 10.0 

3 ................................................................................................................................................................... 46.6 21.7 

4 ................................................................................................................................................................... 50.7 23.6 

5 ................................................................................................................................................................... 64.7 30.1 

Upstream Emissions 

1 ................................................................................................................................................................... 13.4 6.2 

2 ................................................................................................................................................................... 24.0 11.0 

3 ................................................................................................................................................................... 52.3 24.0 

4 ................................................................................................................................................................... 56.9 26.1 

5 ................................................................................................................................................................... 72.6 33.3 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55975 

TABLE V.51—PRESENT VALUE OF NOX EMISSIONS REDUCTION FOR POTENTIAL STANDARDS FOR COMMERCIAL

REFRIGERATION EQUIPMENT—Continued 

TSL 3% Discount rate 7% Discount rate 

Total Emissions 

1 ................................................................................................................................................................... 25.4 11.7 

2 ................................................................................................................................................................... 45.4 21.0 

3 ................................................................................................................................................................... 98.9 45.7 

4 ................................................................................................................................................................... 107.6 49.8 

5 ................................................................................................................................................................... 137.3 63.5 

The NPV of the monetized benefits 

associated with emission reductions can 

be viewed as a complement to the NPV 

of the customer savings calculated for 

each TSL considered in this NOPR. 

Table V.52 presents the NPV values that 

result from adding the estimates of the 

potential economic benefits resulting 

from reduced CO2 and NOX emissions 

in each of four valuation scenarios to 

the NPV of consumer savings calculated 

for each TSL considered in this 

rulemaking, at both a 7-percent and a 3- 

percent discount rate. The CO2 values 

used in the table correspond to the four 

scenarios for the valuation of CO2

emission reductions discussed above. 

TABLE V.52—COMMERCIAL REFRIGERATION EQUIPMENT TSLS: NET PRESENT VALUE OF CONSUMER SAVINGS COMBINED

WITH NET PRESENT VALUE OF MONETIZED BENEFITS FROM CO2 AND NOX EMISSIONS REDUCTIONS

TSL 

Consumer NPV at 3% discount rate added with: 

SCC Value of $12.9/

metric ton CO2

* and low 

value for NOX** 

SCC Value of $40.8/

metric ton CO2

* and medium value for NOX** 

SCC Value of $62.2/

metric ton CO2

* and medium value for NOX** 

SCC Value of $117.0/

metric ton CO2

* and 

high value for NOX** 

billion 2012$ 

1 ....................................................... 1.362 1.665 1.889 2.406 

2 ....................................................... 2.256 2.798 3.197 4.120 

3 ....................................................... 4.466 5.646 6.516 8.526 

4 ....................................................... 4.394 5.679 6.626 8.815 

5 ....................................................... (10.555) (8.916) (7.708) (4.916) 

Consumer NPV at 7% Discount Rate added with: 

TSL SCC Value of $12.9/

metric ton CO2* and 

Low Value for NOX** 

SCC Value of $40.8/

metric ton CO2* and 

Medium Value for NOX** 

SCC Value of $62.2/

metric ton CO2* and 

Medium Value for NOX** 

SCC Value of $117.0/

metric ton CO2* and 

High Value for NOX** 

billion 2012$ 

1 ....................................................... 0.636 0.928 1.151 1.657 

2 ....................................................... 1.038 1.560 1.959 2.862 

3 ....................................................... 1.996 3.133 4.002 5.969 

4 ....................................................... 1.922 3.160 4.107 6.248 

5 ....................................................... (6.331) (4.752) (3.544) (0.813) 

Note: Parentheses indicate negative values.* 

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

rates. 

** Low Value corresponds to $468 per ton of NOX emissions. Medium Value corresponds to $2,639 per ton of NOX emissions. High Value corresponds to $4,809 per ton of NOX emissions. 

Although adding the value of 

customer savings to the values of 

emission reductions provides a valuable 

perspective, two issues should be 

considered. First, the national operating 

cost savings are domestic U.S. customer 

monetary savings that occur as a result 

of market transactions, while the value 

of CO2 reductions is based on a global 

value. Second, the assessments of 

operating cost savings and the SCC are 

performed with different methods that 

use quite different time frames for 

analysis. The national operating cost 

savings is measured for the lifetime of 

products shipped in 2017–2046. The 

SCC values, on the other hand, reflect 

the present value of future climaterelated impacts resulting from the 

emission of one metric ton of CO2 in 

each year. These impacts continue well 

beyond 2100. 

7. Other Factors 

EPCA allows the Secretary, in 

determining whether a proposed 

standard is economically justified, to 

consider any other factors that the 

Secretary deems to be relevant. (42 

U.S.C. 6295(o)(2)(B)(i)(VII) and 

6316(e)(1)) DOE considered LCC 

impacts on identifiable groups of 

customers, such as customers of 

different business types, who may be 

disproportionately affected by any 

amended national energy conservation 

standard level. DOE also considered the 

reduction in generation capacity that 

could result from the imposition of any 

amended national energy conservation 

standard level. 

DOE carried out a RIA, as described 

in section IV.P, to study the impact of 

certain non-regulatory alternatives that 

may encourage customers to purchase 

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55976 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

higher efficiency equipment and, thus, 

achieve NES. The two major alternatives 

identified by DOE are customer rebates 

and customer tax credits. DOE surveyed 

the various rebate programs available in 

the United States. Typically, rebates are 

offered for grocery stores that retrofit 

their display cases with energy 

efficiency components such as LED 

lamps, electronically commutated motor 

(ECM) fan motors, night curtains, and 

higher efficiency doors. Based on 

comparison with the incremental MSP 

values obtained from the engineering 

analysis, DOE chose to model a scenario 

in which customers are offered, as 

rebates, 60 percent of the incremental 

equipment installed cost. The value of 

60 percent is very high compared to 

most rebate programs and was chosen to 

represent the maximum possible rebate 

scenario. 

For the tax credits scenario, DOE did 

not find a suitable program by which to 

model the scenario. Therefore, DOE 

used a 5-percent/10-percent tax credit 

scenario. DOE first calculated the MSP 

increments over baseline for each TSL 

for each equipment class. For TSLs that 

had an increase in MSP between 10 and 

15 percent over the baseline MSP, DOE 

applied a 5-percent tax credit, where the 

amount of tax credit was equal to 5 

percent of the MSP of the higher 

efficiency equipment. For TSLs that had 

increase of 15 percent or more in MSP 

values over the baseline MSP, DOE 

applied a 10-percent tax credit. This 

type of tax credit scenario is an attempt 

to approximate a model in which the tax 

credits are proportional to the 

magnitude of efficiency improvement 

with the implicit assumption that the 

magnitude of the increase in MSP is 

proportional to the magnitude of 

increase in energy efficiency. 

Table V.53 and Table V.54 show the 

NES and NPV, respectively, for the nonregulatory alternatives analyzed. For 

comparison, the table includes the 

results of the NES and NPV for TSL 4, 

the proposed energy conservation 

standard. Energy savings are expressed 

in quads in terms of primary or source 

energy, which includes generation and 

transmission losses from electricity 

utility sector. 

TABLE V.53—CUMULATIVE PRIMARY

ENERGY SAVINGS OF NON-REGULATORY ALTERNATIVES COMPARED

TO THE PROPOSED STANDARDS FOR

COMMERCIAL REFRIGERATION

EQUIPMENT *

Policy Alternatives 

Cumulative 

NES 

Quads 

No new regulatory action ..... 0 

Customer tax credits ............ 0.151 

Customer rebates ................. 0.198 

Voluntary energy efficiency 

targets** ............................ NA 

Early replacement** .............. NA 

Proposed standards (TSL 4) 0.985 

* Chapter 17 of the TSD describes the inputs and their respective sources for the RIA. **Analysis of two non-regulatory alternatives: voluntary energy efficiency targets 

and early replacement were not performed as 

DOE expected minimal potential benefits as 

discussed in Chapter 17 of the TSD. 

TABLE V.54—CUMULATIVE NPV OF NON-REGULATORY ALTERNATIVES COMPARED TO THE PROPOSED STANDARDS FOR

COMMERCIAL REFRIGERATION EQUIPMENT

Policy Alternatives 

Cumulative Net Present Value 

billion 2012$ 

7% Discount 3% Discount 

No new regulatory action ......................................................................................................................................... 0 0 

Customer tax credits ................................................................................................................................................ 0.257 0.489 

Customer rebates .................................................................................................................................................... 0.055 0.122 

Voluntary energy efficiency targets* ........................................................................................................................ NA NA 

Early replacement* .................................................................................................................................................. NA NA 

Proposed standards (TSL 4) ................................................................................................................................... 1.606 4.067 

*Analysis of two non-regulatory alternatives: voluntary energy efficiency targets and early replacement, were not performed as DOE expected 

minimal potential benefits as discussed in Chapter 17 of the TSD. 

As shown above, none of the policy 

alternatives DOE examined would 

achieve close to the amount of energy or 

monetary savings that could be realized 

under the proposed amended standard. 

Also, implementing either tax credits or 

customer rebates would incur initial 

and/or administrative costs that were 

not considered in this analysis. 

C. Proposed Standard 

DOE recognizes that when it 

considers proposed standards, it is 

subject to the EPCA requirement that 

any new or amended energy 

conservation standard for any type (or 

class) of covered product be designed to 

achieve the maximum improvement in 

energy efficiency that the Secretary 

determines is technologically feasible 

and economically justified. (42 U.S.C. 

6295(o)(2)(A) and 6316(e)(1)) In 

determining whether a proposed 

standard is economically justified, the 

Secretary must determine whether the 

benefits of the standard exceed its 

burdens to the greatest extent 

practicable, in light of the seven 

statutory factors discussed previously. 

(42 U.S.C. 6295(o)(2)(B)(i) and 

6316(e)(1)) The new or amended 

standard must also result in a significant 

conservation of energy. (42 U.S.C. 

6295(o)(3)(B) and 6316(e)(1)) 

DOE considered the impacts of 

potential standards at each TSL, 

beginning with the maximum 

technologically feasible level, to 

determine whether that level met the 

evaluation criteria. If the max-tech level 

was not justified, DOE then considered 

the next most efficient level and 

undertook the same evaluation until it 

reached the highest efficiency level that 

is both technologically feasible and 

economically justified and saves a 

significant amount of energy. 

DOE discusses the benefits and/or 

burdens of each TSL in the following 

sections. DOE bases its discussion on 

quantitative analytical results for each 

TSL, including NES, NPV (discounted at 

7 and 3 percent), emission reductions, 

INPV, LCC, and customers’ installed 

price increases. Beyond the quantitative 

results, DOE also considers other 

burdens and benefits that affect 

economic justification, including how 

technological feasibility, manufacturer 

costs, and impacts on competition may 

affect the economic results presented. 

Table V.55, Table V.56, Table V.57 

and Table V.58 present a summary of 

the results of DOE’s quantitative 

analysis for each TSL. In addition to the 

quantitative results presented in the 

tables, DOE also considers other 

burdens and benefits that affect 

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economic justification of certain 

customer subgroups that are 

disproportionately affected by the 

proposed standards. Section V.B.7 

presents the estimated impacts of each 

TSL for these subgroups. 

TABLE V.55—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: NATIONAL IMPACTS *

Category TSL 1 TSL 2 TSL 3 TSL 4 TSL5 

Cumulative National Energy Savings 2017 through 2060 

quads 

Undiscounted values.0.236 ........................... 0.422 ........................... 0.920 ........................... 1.001 ........................... 1.278 

Cumulative NPV of Customer Benefits 2017 through 2060 

2012$ billion 

3% discount rate $1.285 ......................... $2.118 ......................... $4.165 ......................... $4.067 ......................... ($10.972) 

7% discount rate $0.561 ......................... $0.905 ......................... $1.705 ......................... $1.606 ......................... ($6.735) 

Industry Impacts 

Change in Industry NPV (2012$ 

million).

(3.6) to (6.8) ............... (15.2) to (26.4) ........... (26.3) to (59.2) ........... (45.9) to (92.6) ........... (25.5) to (516.0)

Change in Industry NPV (%).(0.58) to (0.31) ........... (2.27) to (1.30) ........... (5.09) to (2.26) ........... (7.97) to (3.95) ........... (44.41) to (2.20) 

Cumulative Emissions Reductions 2017 through 2060 

CO2 (MMt)** ....... 12.95 ........................... 23.14 ........................... 50.41 ........................... 54.88 ........................... 70.01 

NOX (kt)** ........... 19.14 ........................... 34.19 ........................... 74.46 ........................... 81.07 ........................... 103.42 

Hg (t)** ............... 0.03 ............................. 0.05 ............................. 0.10 ............................. 0.11 ............................. 0.14 

N2O (kt)** ........... 0.27 ............................. 0.48 ............................. 1.05 ............................. 1.15 ............................. 1.46 

N2O (kt CO2eq)** 80.56 ........................... 143.92 ......................... 313.48 ......................... 341.29 ......................... 435.39 

CH4 (kt)** ............ 62.76 ........................... 112.13 ......................... 244.22 ......................... 265.89 ......................... 339.19 

CH4 (kt CO2eq) ** 1,568.96 ...................... 2,803.13 ...................... 6,105.43 ...................... 6,647.15 ...................... 8,479.71 

SO2 (kt) ** ............ 16.55 ........................... 29.56 ........................... 64.39 ........................... 70.10 ........................... 89.43 

Monetary Value of Cumulative Emissions Reductions 2017 through 2060 †

CO2 (2012$ million).73 to 1,074 ................. 130 to 1,919 ............... 283 to 4,181 ............... 308 to 4,552 ............... 393 to 5,807 

NOX—3% discount rate 

(2012$ million).

4.5 to 46.3 .................. 8.1 to 82.7 .................. 17.5 to 180.2 .............. 19.1 to 196.2 .............. 24.4 to 250.2 

NOX—7% discount rate 

(2012$ million).

2.1 to 21.4 .................. 3.7 to 38.2 .................. 8.1 to 83.3 .................. 8.8 to 90.7 .................. 11.3 to 115.7 

Employment Impacts 

Net Change in Indirect Domestic 

Jobs by 2021.

198 to 201 .................. 345 to 354 .................. 719 to 749 .................. 760 to 801 .................. 130 to 504 

*Values in parentheses are negative values. 

** ‘‘MMt’’ stands for million metric tons; ‘‘kt’’ stands for kilotons; ‘‘t’’ stands for tons. CO2eq is the quantity of CO2 that would have the same 

global warming potential (GWP) † Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions. 

TABLE V.56—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEAN LCC SAVINGS

Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL5 

Mean LCC Savings* 

2012$ 

VOP.RC.M ........................................................................... $235.92 $743.00 $1,788.85 $1,493.72 ($1,668.79) 

VOP.RC.L ............................................................................ 537.27 1,516.59 1,129.51 1,129.51 (3,692.90) 

VOP.SC.M ............................................................................ 170.78 227.17 814.91 691.27 (376.52) 

VCT.RC.M ............................................................................ 175.23 1,864.44 1,758.73 1,108.13 (2,508.61) 

VCT.RC.L ............................................................................. 1,357.25 1,004.72 797.91 797.91 (3,624.20)

VCT.SC.M ............................................................................ 566.18 1,363.60 1,122.14 641.05 (595.52) 

VCT.SC.L ............................................................................. 4,186.06 2,522.67 1,984.45 1,342.84 (343.16) 

VCT.SC.I .............................................................................. 572.05 486.28 431.88 431.88 (1,591.87) 

VCS.SC.M ............................................................................ 278.84 162.88 131.80 131.80 (1,042.03) 

VCS.SC.L ............................................................................. 524.52 329.33 267.81 220.83 (1,274.03) 

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TABLE V.56—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEAN LCC SAVINGS— 

Continued 

Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL5 

VCS.SC.I .............................................................................. 236.77 176.83 152.69 152.69 (1,818.87) 

SVO.RC.M ........................................................................... 73.77 551.98 1,216.77 1,008.46 (1,015.16) 

SVO.SC.M ............................................................................ 324.33 334.89 587.90 491.99 (201.61) 

SOC.RC.M ........................................................................... 118.36 226.26 997.89 494.51 (982.21) 

HZO.RC.M** ......................................................................... 0.00 0.00 0.00 0.00 (1,271.24) 

HZO.RC.L** .......................................................................... 0.00 0.00 0.00 0.00 (2,134.96) 

HZO.SC.M ............................................................................ 8.85 8.85 48.60 28.78 (821.57) 

HZO.SC.L** .......................................................................... 0.00 0.00 0.00 0.00 (473.71) 

HCT.SC.M ............................................................................ 106.59 359.48 307.26 253.60 (293.54) 

HCT.SC.L ............................................................................. 217.19 790.53 571.07 368.92 (354.75) 

HCT.SC.I .............................................................................. 21.83 34.69 42.48 42.48 (811.31) 

HCS.SC.M ............................................................................ 23.07 19.18 16.66 8.68 (422.79) 

HCS.SC.L ............................................................................. 74.69 80.97 80.72 80.72 (400.63) 

PD.SC.M .............................................................................. 1,009.53 1,009.53 933.59 310.43 (637.94) 

SOC.SC.M ........................................................................... 646.15 466.47 1,241.60 739.75 (735.33) 

* Values in parentheses are negative values. 

** ‘‘NA’’ means ‘‘not applicable,’’ because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1 through 4 are associated with 

the baseline efficiency level. 

TABLE V.57—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: MEDIAN PAYBACK PERIOD

Equipment class TSL 1 TSL 2 TSL 3 TSL 4 TSL5 

Median Payback Period 

years 

VOP.RC.M ........................................................................... 1.73 1.77 3.77 3.91 11.76 

VOP.RC.L ............................................................................ 1.11 2.03 2.22 2.22 18.30 

VOP.SC.M ............................................................................ 1.61 2.17 4.12 4.39 11.37 

VCT.RC.M ............................................................................ 1.23 2.42 2.43 2.70 13.09 

VCT.RC.L ............................................................................. 1.30 1.51 1.64 1.64 15.75 

VCT.SC.M ............................................................................ 0.86 1.73 2.21 2.54 8.13 

VCT.SC.L ............................................................................. 0.58 0.61 0.83 0.96 3.65 

VCT.SC.I .............................................................................. 0.86 1.74 1.97 1.97 13.21 

VCS.SC.M ............................................................................ 0.78 0.98 1.75 1.75 14.11 

VCS.SC.L ............................................................................. 0.55 0.91 1.00 1.15 10.54 

VCS.SC.I .............................................................................. 0.80 2.07 2.42 2.42 27.19 

SVO.RC.M ........................................................................... 1.31 2.64 4.34 4.50 11.60 

SVO.SC.M ............................................................................ 1.97 2.06 4.43 4.75 10.36 

SOC.RC.M ........................................................................... 1.25 1.44 3.31 4.41 11.88 

HZO.RC.M* .......................................................................... 0.00 0.00 0.00 0.00 161.23 

HZO.RC.L* ........................................................................... 0.00 0.00 0.00 0.00 83.78 

HZO.SC.M ............................................................................ 1.89 1.89 2.42 6.40 55.78 

HZO.SC.L* ........................................................................... 0.00 0.00 0.00 0.00 73.62 

HCT.SC.M ............................................................................ 0.69 2.24 2.42 3.08 12.26 

HCT.SC.L ............................................................................. 0.53 1.00 1.05 1.47 7.15 

HCT.SC.I .............................................................................. 0.88 2.39 4.28 4.28 27.99 

HCS.SC.M ............................................................................ 0.50 1.64 2.54 4.28 34.05 

HCS.SC.L ............................................................................. 0.86 1.36 2.57 2.57 14.98 

PD.SC.M .............................................................................. 0.53 0.53 1.10 2.27 7.61 

SOC.SC.M ........................................................................... 1.12 1.24 2.35 2.99 7.42 

* ‘‘NA’’ means ‘‘not applicable,’’ because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1 through 4 are associated with 

the baseline efficiency level. 

TABLE V.58—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER

LCC IMPACTS

Category TSL 1* TSL 2* TSL 3* TSL 4* TSL 5* 

VOP.RC.M: 

Net Cost (%) ................................................................. 0 0 0 11 90 

No Impact (%) ............................................................... 76 52 28 15 2 

Net Benefit (%) ............................................................. 24 48 72 74 8 

VOP.RC.L: 

Net Cost (%) ................................................................. 0 0 0 0 98 

No Impact (%) ............................................................... 74 48 25 25 2 

Net Benefit (%) ............................................................. 26 52 75 75 0 

VOP.SC.M: 

Net Cost (%) ................................................................. 0 0 0 11 77 

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TABLE V.58—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER

LCC IMPACTS—Continued 

Category TSL 1* TSL 2* TSL 3* TSL 4* TSL 5* 

No Impact (%) ............................................................... 62 43 25 14 3 

Net Benefit (%) ............................................................. 38 57 75 75 20 

VCT.RC.M: 

Net Cost (%) ................................................................. 0 0 0 26 94 

No Impact (%) ............................................................... 81 62 46 16 2 

Net Benefit (%) ............................................................. 19 38 54 57 4 

VCT.RC.L: 

Net Cost (%) ................................................................. 0 0 0 0 97 

No Impact (%) ............................................................... 60 40 21 21 2 

Net Benefit (%) ............................................................. 40 60 79 79 1 

VCT.SC.M: 

Net Cost (%) ................................................................. 0 0 0 27 74 

No Impact (%) ............................................................... 83 66 51 13 2 

Net Benefit (%) ............................................................. 17 34 49 60 24 

VCT.SC.L: 

Net Cost (%) ................................................................. 0 0 0 7 74 

No Impact (%) ............................................................... 76 60 44 15 2 

Net Benefit (%) ............................................................. 24 40 56 78 24 

VCT.SC.I: 

Net Cost (%) ................................................................. 0 1 1 1 95 

No Impact (%) ............................................................... 65 32 16 16 1 

Net Benefit (%) ............................................................. 35 68 83 83 3 

VCS.SC.M: 

Net Cost (%) ................................................................. 0 0 7 7 99 

No Impact (%) ............................................................... 72 42 13 13 1 

Net Benefit (%) ............................................................. 28 58 80 80 0 

VCS.SC.L: 

Net Cost (%) ................................................................. 0 0 5 20 97 

No Impact (%) ............................................................... 73 42 28 14 1 

Net Benefit (%) ............................................................. 27 58 68 66 2 

VCS.SC.I: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 3 3 99 

No Impact (%) ............................................................... 67 32 16 16 1 

Net Benefit (%) ............................................................. 33 68 81 81 0 

SVO.RC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 13 85 

No Impact (%) ............................................................... 75 51 29 16 3 

Net Benefit (%) ............................................................. 25 49 71 72 12 

SVO.SC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 12 69 

No Impact (%) ............................................................... 61 43 25 14 4 

Net Benefit (%) ............................................................. 39 57 75 75 27 

SOC.RC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 29 89 

No Impact (%) ............................................................... 82 64 47 18 5 

Net Benefit (%) ............................................................. 18 36 53 53 6 

HZO.RC.M:** ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. NA NA NA NA 78 

No Impact (%) ............................................................... NA NA NA NA 22 

Net Benefit (%) ............................................................. NA NA NA NA 0 

HZO.RC.L:** ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. NA NA NA NA 86 

No Impact (%) ............................................................... NA NA NA NA 14 

Net Benefit (%) ............................................................. NA NA NA NA 0 

HZO.SC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 19 98 

No Impact (%) ............................................................... 75 75 49 24 2 

Net Benefit (%) ............................................................. 25 25 51 57 0 

HZO.SC.L:** ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. NA NA NA NA 72 

No Impact (%) ............................................................... NA NA NA NA 28 

Net Benefit (%) ............................................................. NA NA NA NA 0 

HCT.SC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 18 89 

No Impact (%) ............................................................... 70 38 25 12 1 

Net Benefit (%) ............................................................. 30 62 75 70 10 

HCT.SC.L: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 23 76 

No Impact (%) ............................................................... 75 61 45 14 1 

Net Benefit (%) ............................................................. 26 39 55 63 23 

HCT.SC.I: ........................ ........................ ........................ ........................ ........................

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55980 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

90Sanstad, A. Notes on the Economics of 

Household Energy Consumption and Technology 

Choice. 2010. Lawrence Berkeley National 

Laboratory, Berkeley, CA. www1.eere.energy.gov/ 

buildings/appliance_standards/pdfs/ 

consumer_ee_theory.pdf. 

TABLE V.58—SUMMARY OF RESULTS FOR COMMERCIAL REFRIGERATION EQUIPMENT TSLS: DISTRIBUTION OF CUSTOMER

LCC IMPACTS—Continued 

Category TSL 1* TSL 2* TSL 3* TSL 4* TSL 5* 

Net Cost (%) ................................................................. 0 0 2 2 99 

No Impact (%) ............................................................... 74 49 23 23 1 

Net Benefit (%) ............................................................. 26 51 75 75 0 

HCS.SC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 1 29 98 

No Impact (%) ............................................................... 83 65 48 31 2 

Net Benefit (%) ............................................................. 17 35 51 40 0 

HCS.SC.L: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 2 2 98 

No Impact (%) ............................................................... 50 33 16 16 2 

Net Benefit (%) ............................................................. 50 67 82 82 0 

PD.SC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 41 86 

No Impact (%) ............................................................... 86 86 69 11 1 

Net Benefit (%) ............................................................. 14 14 31 48 13 

SOC.SC.M: ........................ ........................ ........................ ........................ ........................

Net Cost (%) ................................................................. 0 0 0 25 80 

No Impact (%) ............................................................... 70 55 40 16 5 

Net Benefit (%) ............................................................. 30 45 60 60 16 

* Values have been rounded to the nearest integer. Therefore, some of the percentages may not add up to 100. 

** ‘‘NA’’ means ‘‘not applicable’’; because for equipment classes HZO.RC.M, HZO.RC.L and HZO.SC.L, TSLs 1 through 4 are associated with 

the baseline efficiency level. 

DOE also notes that the economics 

literature provides a wide-ranging 

discussion of how consumers trade off 

upfront costs and energy savings in the 

absence of government intervention. 

Much of this literature attempts to 

explain why consumers appear to 

undervalue energy efficiency 

improvements. This undervaluation 

suggests that regulation that promotes 

energy efficiency can produce 

significant net private gains (as well as 

producing social gains by, for example, 

reducing pollution). There is evidence 

that consumers undervalue future 

energy savings as a result of (1) a lack 

of information; (2) a lack of sufficient 

salience of the long-term or aggregate 

benefits; (3) a lack of sufficient savings 

to warrant delaying or altering 

purchases (e.g., an inefficient 

ventilation fan in a new building or the 

delayed replacement of a water pump); 

(4) excessive focus on the short term, in 

the form of inconsistent weighting of 

future energy cost savings relative to 

available returns on other investments; 

(5) computational or other difficulties 

associated with the evaluation of 

relevant tradeoffs; and (6) a divergence 

in incentives (e.g., renter versus 

building owner, builder versus home 

buyer). Other literature indicates that 

with less than perfect foresight and a 

high degree of uncertainty about the 

future, consumers may trade off these 

types of investments at a higher than 

expected rate between current 

consumption and uncertain future 

energy cost savings. 

While DOE is not prepared at present 

to provide a fuller quantifiable 

framework for estimating the benefits 

and costs of changes in consumer 

purchase decisions due to an amended 

energy conservation standard, DOE has 

posted a paper that discusses the issue 

of consumer welfare impacts of 

appliance energy efficiency standards, 

and potential enhancements to the 

methodology by which these impacts 

are defined and estimated in the 

regulatory process.90 DOE is committed 

to developing a framework that can 

support empirical quantitative tools for 

improved assessment of the consumer 

welfare impacts of appliance standards. 

DOE welcomes comments on 

information and methods to better 

assess the potential impact of energy 

conservation standards on consumer 

choice and methods to quantify this 

impact in its regulatory analysis in 

future rulemakings. 

TSL 5 corresponds to the max-tech 

level for all the equipment classes and 

offers the potential for the highest 

cumulative energy savings. The 

estimated energy savings from TSL 5 is 

1.2784 quads of energy. DOE projects a 

net negative NPV for customers with 

estimated increased costs valued at 

$6.735 billion at a 7-percent discount 

rate. Estimated emissions reductions are 

70.0 MMt of CO2, and up to 103.4 kt of 

NOX, and 89.4 kt of SO2. DOE also 

projects a decrease in Hg emissions of 

up to 0.14 tons. The CO2 emissions have 

a value of up to $5.8 billion and the 

NOX emissions have a value of $115.7 

million at a 7-percent discount rate. 

For TSL 5 the mean LCC savings for 

all equipment classes are negative, 

implying an increase in LCC, with the 

increase ranging from $202 for the 

SVO.SC.M equipment class to $3,693 for 

the VOP.RC.L equipment class. 

At TSL 5, manufacturers may expect 

diminished profitability due to large 

increases in product costs, capital 

investments in equipment and tooling, 

and expenditures related to engineering 

and testing. The projected change in 

INPV ranges from a decrease of $516.0 

million to a decrease of $25.5 million 

based on DOE’s manufacturer markup 

scenarios. The upper bound of -$25.5 

million is considered an optimistic 

scenario for manufacturers because it 

assumes manufacturers can fully pass 

on substantial increases in equipment 

costs. DOE recognizes the risk of large 

negative impacts on industry if 

manufacturers’ expectations concerning 

reduced profit margins are realized. TSL 

5 could reduce commercial refrigeration 

equipment INPV by up to 44.41 percent 

if impacts reach the lower bound of the 

range. 

After carefully considering the 

analyses results and weighing the 

benefits and burdens of TSL 5, DOE 

finds that the benefits to the Nation 

from TSL 5, in the form of energy 

savings and emissions reductions, 

including environmental and monetary 

benefits, are small compared to the 

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burdens, in the form of a decrease of 

$6.735 billion in customer NPV and a 

decrease of up to 44.41 percent in INPV. 

DOE concludes that the burdens of TSL 

5 outweigh the benefits and, therefore, 

does not find TSL 5 to be economically 

justifiable. DOE is not proposing to 

adopt TSL 5 in this notice. 

TSL 4 corresponds to the highest 

efficiency level, in each equipment 

class, with a positive NPV at a 7-percent 

discount rate. The estimated energy 

savings for equipment purchased in 

2017–2046 is 1.001 quads of energy, an 

amount DOE deems significant. At TSL 

4, DOE projects an increase in customer 

NPV of $1.606 billion at a 7-percent 

discount rate; estimated emissions 

reductions of 54.88 MMt of CO2; up to 

81.1 kt of NOX, 0.11 in Hg and 70.1 kt 

of SO2. The monetary value of these 

emissions was estimated to be up to 

$4.55 billion for CO2 and up to $90.7 

million for NOX at a 7-percent discount 

rate. 

At TSL 4, the mean LCC savings vary 

from $8.68 for HCS.SC.M to $1,493.72 

for VOP.RC.M, which implies that on an 

average customers will experience a 

decrease in LCC. For equipment classes 

HZO.RC.M, HZO.RC.L, and HZO.SC.L, 

TSL 4 is associated with the baseline 

level because these equipment classes 

have only one efficiency level above 

baseline and each of those higher 

efficiency levels yields a negative NPV. 

Therefore, there are no efficiency levels 

that satisfy the criteria used for selection 

of TSLs 1 through 4. DOE is not 

proposing to amend the standards for 

these three equipment classes. 

At TSL 4, the projected change in 

INPV ranges from a decrease of $92.6 

million to a decrease of $45.9 million. 

At TSL 4, DOE recognizes the risk of 

negative impacts if manufacturers’ 

expectations concerning reduced profit 

margins are realized. If the lower bound 

of the range of impacts is reached, as 

DOE expects, TSL 4 could result in a net 

loss of 7.97 percent in INPV for 

commercial refrigeration equipment 

manufacturers. 

DOE contrasted the benefits and 

burdens of TSL 4 with those of TSL 3 

because even though TSL 4 has higher 

energy savings than TSL 3, the customer 

NPV values at TSL 3 are higher than at 

TSL 4. The estimated energy savings at 

TSL 3 is 0.920 quads of energy, whereas 

at TSL 4 the energy savings are higher 

by about 9 percent at 1.001 quads. At 

TSL 3, DOE projects an increase in 

customer NPV of $1.705 billion at a 7- 

percent discount rate, whereas at TSL 4 

the customer NPV is lower by about 6 

percent at $1.606 billion, with the actual 

difference amounting to approximately 

$99 million. Estimated emissions 

reductions at TSL 3 are 50.41 MMt of 

CO2 as opposed to 54.88 MMt at TSL 4, 

and up to 74.46 kt of NOX at TSL 3 as 

compared to 81.07 kt at TSL 4. The 

monetary value of the CO2 emissions 

reductions was estimated to be up to 

$4.18 billion at TSL 3 compared to 

$4.55 billion at TSL 4, and NOX

emission reductions at a 7-percent 

discount rate were valued at up to $83.3 

million at TSL 3 compared to $90.7 

million at TSL 4. 

To facilitate a direct comparison 

between the benefits of TSL 3 versus 

those of TSL4, DOE evaluated the net 

social benefits of TSL 3 and TSL 4 by 

combining the customer NPV values 

with monetized emissions reductions. 

While Table V.55 provides a range of 

monetized values for CO2 and NOX

emissions reductions, DOE calculated 

certain intermediate values here for the 

purpose of net benefits calculation. The 

monetized CO2 emissions reduction 

values were calculated at $40.8 per ton 

in 2012$ and the monetized NOX

emissions reductions were calculated at 

an intermediate value of $2,639 per ton 

in 2012$. These monetized emissions 

reduction values were added to the 

customer NPV at a 7-percent discount 

rate to obtain a value of 3.133 billion at 

TSL 3. At TSL 4, the net benefit value 

of $3.160 billion is higher than that at 

TSL 3. 

After careful consideration of the 

analyses results, weighing the benefits 

and burdens of TSL 4, and comparing 

them to those of TSL 3, DOE believes 

that setting the standards for 

commercial refrigeration equipment at 

TSL 4 represents the maximum 

improvement in energy efficiency that is 

technologically feasible and 

economically justified. TSL 4 is 

technologically feasible because the 

technologies required to achieve these 

levels already exist in the current 

market. TSL 4 is economically justified 

because the benefits to the Nation in the 

form of energy savings, customer NPV at 

3 percent and at 7 percent, and 

emissions reductions outweigh the costs 

associated with reduced INPV. 

Therefore, DOE has decided to 

propose the adoption of amended 

energy conservation standards for 

commercial refrigeration equipment at 

TSL 4. DOE specifically seeks comment 

on the magnitude of the estimated 

decline in INPV at TSL 4 compared to 

the baseline, and whether this impact 

could risk industry consolidation. DOE 

also specifically requests comment on 

whether DOE should adopt TSL 5, and 

in particular whether, compared to TSL 

4, TSL 5’s higher energy savings 

outweigh its lower NPV benefits and 

higher manufacturer impacts. DOE may 

reexamine this level depending on the 

nature of the information it receives 

during the comment period and adjust 

its final levels in response to that 

information. 

VI. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866 and 13563 

Section 1(b)(1) of Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ 58 FR 51735 (Oct. 4, 1993), 

requires each agency to identify the 

problem that it intends to address, 

including, where applicable, the failures 

of private markets or public institutions 

that warrant new agency action, as well 

as to assess the significance of that 

problem. The problems that today’s 

standards address are as follows: 

1. There is a lack of consumer 

information and/or information 

processing capability about energy 

efficiency opportunities in the 

commercial refrigeration equipment 

market. 

2. There is asymmetric information 

(one party to a transaction has more and 

better information than the other) and/ 

or high transactions costs (costs of 

gathering information and effecting 

exchanges of goods and services). 

3. There are external benefits resulting 

from improved energy efficiency of 

commercial refrigeration equipment that 

are not captured by the users of such 

equipment. These benefits include 

externalities related to environmental 

protection and energy security that are 

not reflected in energy prices, such as 

reduced emissions of GHGs. 

In addition, DOE has determined that 

today’s regulatory action is an 

‘‘economically significant regulatory 

action’’ under section 3(f)(1) of 

Executive Order 12866. Accordingly, 

section 6(a)(3) of the Executive Order 

requires that DOE prepare an RIA on 

today’s rule and that OIRA in OMB 

review this rule. DOE presented to OIRA 

for review the draft rule and other 

documents prepared for this 

rulemaking, including the RIA, and has 

included these documents in the 

rulemaking record. The assessments 

prepared pursuant to Executive Order 

12866 can be found in the TSD for this 

rulemaking. 

DOE has also reviewed this regulation 

pursuant to Executive Order 13563, 

issued on January 18, 2011. 76 FR 3281 

(Jan. 21, 2011). Executive Order 13563 

is supplemental to and explicitly 

reaffirms the principles, structures, and 

definitions governing regulatory review 

established in Executive Order 12866. 

To the extent permitted by law, agencies 

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55982 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

91See www.ahridirectory.org/ahriDirectory/

pages/home.aspx. 92See http://dsbs.sba.gov/dsbs/search/dsp_

dsbs.cfm. 93See www.dnb.com/. 94See www.hoovers.com/. 

95 32nd Annual Portrait of the U.S. Appliance 

Industry. Appliance Magazine. September 2009. 

66(7). 

are required by Executive Order 13563 

to: (1) Propose or adopt a regulation 

only upon a reasoned determination 

that its benefits justify its costs 

(recognizing that some benefits and 

costs are difficult to quantify); (2) tailor 

regulations to impose the least burden 

on society, consistent with obtaining 

regulatory objectives, taking into 

account, among other things, and to the 

extent practicable, the costs of 

cumulative regulations; (3) select, in 

choosing among alternative regulatory 

approaches, those approaches that 

maximize net benefits (including 

potential economic, environmental, 

public health and safety, and other 

advantages; distributive impacts; and 

equity); (4) to the extent feasible, specify 

performance objectives, rather than 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and (5) identify and assess 

available alternatives to direct 

regulation, including providing 

economic incentives to encourage the 

desired behavior, such as user fees or 

marketable permits, or providing 

information upon which choices can be 

made by the public. 

DOE emphasizes as well that 

Executive Order 13563 requires agencies 

to use the best available techniques to 

quantify anticipated present and future 

benefits and costs as accurately as 

possible. In its guidance, ORIA has 

emphasized that such techniques may 

include identifying changing future 

compliance costs that might result from 

technological innovation or anticipated 

behavioral changes. For the reasons 

stated in the preamble, DOE believes 

that today’s NOPR is consistent with 

these principles, including the 

requirement that, to the extent 

permitted by law, benefits justify costs 

and that net benefits are maximized. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of a final regulatory flexibility analysis 

(FRFA) for any rule that by law must be 

proposed for public comment, unless 

the agency certifies that the rule, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities. As required by 

Executive Order 13272, ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking’’ 67 FR 53461 (Aug. 

16, 2002), DOE published procedures 

and policies on February 19, 2003 to 

ensure that the potential impacts of its 

rules on small entities are properly 

considered during the rulemaking 

process. 68 FR 7990. DOE has made its 

procedures and policies available on the 

Office of the General Counsel’s Web site 

(http://energy.gov/gc/office-generalcounsel ). 

1. Description and Estimated Number of 

Small Entities Regulated 

For the manufacturers of commercial 

refrigeration equipment, the SBA has set 

a size threshold, which defines those 

entities classified as ‘‘small businesses’’ 

for the purposes of the statute. DOE 

used the SBA’s small business size 

standards to determine whether any 

small entities would be subject to the 

requirements of the rule. 65 FR 30836, 

30848 (May 15, 2000), as amended at 65 

FR 53533, 53544 (Sept. 5, 2000) and 

codified at 13 CFR part 121. The size 

standards are listed by NAICS code and 

industry description and are available 

at: http://www.sba.gov/sites/default/

files/files/Size_Standards_Table.pdf. 

Commercial refrigeration equipment 

manufacturing is classified under 

NAICS 333415, ‘‘Air-Conditioning and 

Warm Air Heating Equipment and 

Commercial and Industrial Refrigeration 

Equipment Manufacturing.’’ The SBA 

sets a threshold of 750 employees or less 

for an entity to be considered as a small 

business for this category. 

During its market survey, DOE used 

available public information to identify 

potential small manufacturers. DOE’s 

research involved industry trade 

association membership directories 

(including AHRI), public databases (e.g., 

AHRI Directory,91 the SBA Database 92), 

individual company Web sites, and 

market research tools (e.g., Dunn and 

Bradstreet reports 93 and Hoovers 

reports)94 to create a list of companies 

that manufacture or sell products 

covered by this rulemaking. DOE also 

asked stakeholders and industry 

representatives if they were aware of 

any other small manufacturers during 

manufacturer interviews and at DOE 

public meetings. DOE reviewed publicly 

available data and contacted select 

companies on its list, as necessary, to 

determine whether they met the SBA’s 

definition of a small business 

manufacturer of covered commercial 

refrigeration equipment. DOE screened 

out companies that do not offer 

products covered by this rulemaking, do 

not meet the definition of a ‘‘small 

business,’’ or are foreign owned. 

DOE identified 54 companies selling 

commercial refrigeration equipment 

products in the United States. Nine of 

the companies are foreign-owned firms. 

Of the remaining 45 companies, about 

70 percent (32 companies) are small 

domestic manufacturers. DOE contacted 

eight domestic commercial refrigeration 

equipment manufacturers for interviews 

and all eight companies accepted. Of 

these eight companies, four were small 

businesses. 

2. Description and Estimate of 

Compliance Requirements 

The 32 identified domestic 

manufacturers of commercial 

refrigeration equipment that qualify as 

small businesses under the SBA size 

standard account for approximately 26 

percent of commercial refrigeration 

equipment shipments.95 While some 

small businesses have significant market 

share (e.g., Continental has a 4-percent 

market share for foodservice commercial 

refrigeration)95, the majority of small 

businesses have less than a 1-percent 

market share. These smaller firms often 

specialize in designing custom products 

and servicing niche markets. 

At the proposed level, the average 

small manufacturer is expected to face 

capital conversion costs that are more 

than triple the average annual capital 

expenditures, and product conversion 

costs that are 80% of annual R&D 

spending, as shown in Table VI.1. At the 

proposed level, the conversion costs are 

driven by the incorporation of thicker 

insulation into case designs. The thicker 

cases design may necessitate the 

purchase of new jigs for production. 

Manufacturer estimates of the cost of a 

new jig ranged from $50,000 to $300,000 

in 2011, depending on the jig design. In 

addition to the cost of jigs, changes in 

case thickness may require product 

redesign due to changes in the interior 

volume of the equipment and may 

require new industry certifications. 

The proposed standard could cause 

small manufacturers to be at a 

disadvantage relative to large 

manufacturers. The capital conversion 

costs represent a smaller percentage of 

annual capital expenditures for large 

manufacturers than for small 

manufacturers. The capital conversion 

costs are 60 percent of annual capital 

expenditures for an average large 

manufacturer, while capital conversion 

costs are 423 percent of annual capital 

expenditures for an average small 

manufacturer. Small manufacturers may 

have greater difficulty obtaining credit, 

or may obtain less favorable terms than 

larger competitors when financing the 

equipment necessary to meet an 

amended standard. 

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Additionally, small manufacturers 

may be disproportionately affected by 

equipment conversion costs. Product 

redesign and industry certification costs 

tend to be fixed and do not scale with 

sales volume. For each equipment 

platform, small businesses must make 

equipment redesign investments that are 

similar to their large competitors. 

However, small manufacturer costs are 

spread over a much lower volume of 

units, making cost recovery more 

difficult. 

Manufacturers indicated that many 

design options evaluated in the 

engineering analysis (e.g., higher 

efficiency lighting, motors, and 

compressors) would force them to 

purchase more expensive components. 

Due to smaller purchasing volumes, 

small manufacturers typically pay 

higher prices for components, while 

their large competitors receive volume 

discounts. At the proposed standard, 

small businesses will likely have greater 

increases in component costs than large 

businesses and will thus be at a pricing 

disadvantage. 

Small firms would likely be at a 

disadvantage relative to larger firms in 

meeting an amended energy 

conservation standard for commercial 

refrigeration equipment. The small 

businesses face disadvantages in terms 

of access to capital, the cost of product 

redesigns, and pricing for key 

components. As a result, DOE could not 

certify that the proposed standards 

would not have a significant impact on 

a significant number of small 

businesses. 

To estimate how small manufacturers 

would be potentially impacted, DOE 

used the market share of small 

manufacturers to estimate the annual 

revenue, earnings before interest and tax 

(EBIT), R&D expense, and capital 

expenditures for a typical small 

manufacturer. DOE then compared these 

costs to the required capital and product 

conversion costs at each TSL for both an 

average small manufacturer (Table VI.1) 

and an average large manufacturer 

(Table VI.2). In the following tables, TSL 

4 represents the proposed standard. 

TABLE VI.1—COMPARISON OF AN AVERAGE SMALL COMMERCIAL REFRIGERATION EQUIPMENT MANUFACTURER’S

CONVERSION COSTS TO ANNUAL EXPENSES, REVENUE, AND PROFIT

TSL 

Capital conversion cost 

as a percentage of 

annual capital 

expenditures 

Product conversion cost 

as a percentage of 

annual R&D expense 

Total conversion cost as 

a percentage of annual 

revenue 

Total conversion cost as 

a percentage of annual 

EBIT 

TSL 1 ............................................... 0 0 0 0 

TSL 2 ............................................... 102 71 5 63 

TSL 3 ............................................... 238 76 10 119 

TSL 4 ............................................... 423 80 17 196 

TSL 5 ............................................... 1400 489 62 717 

TABLE VI.2—COMPARISON OF AN AVERAGE LARGE COMMERCIAL REFRIGERATION EQUIPMENT MANUFACTURER’S

CONVERSION COSTS TO ANNUAL EXPENSES, REVENUE, AND PROFIT

TSL 

Capital conversion cost 

as a percentage of 

annual capital 

expenditures 

Product conversion cost 

as a percentage of 

annual R&D expense 

Total conversion cost as 

a percentage of annual 

revenue 

Total conversion cost as 

a percentage of annual 

EBIT 

TSL 1 ............................................... 0 0 0 0 

TSL 2 ............................................... 15 10 1 9 

TSL 3 ............................................... 34 11 1 17 

TSL 4 ............................................... 60 11 2 28 

TSL 5 ............................................... 200 70 9 102 

3. Duplication, Overlap, and Conflict 

With Other Rules and Regulations 

DOE is not aware of any rules or 

regulations that duplicate, overlap, or 

conflict with the rule being proposed 

today. 

4. Significant Alternatives to the Rule 

The primary alternatives to the 

proposed rule are the TSLs other than 

the one proposed today, TSL 4. DOE 

explicitly considered the role of 

manufacturers, including small 

manufacturers, in its selection of TSL 4 

rather than TSL 5. Though TSL 5 results 

in greater energy savings for the 

country, the standard would place 

excessive burdens on manufacturers. 

Chapter 12 of the NOPR TSD contains 

additional information about the impact 

of this rulemaking on manufacturers. 

In addition to the other TSLs being 

considered, the NOPR TSD includes an 

RIA. For commercial refrigeration 

equipment, the RIA discusses the 

following policy alternatives: (1) No 

change in standard; (2) customer 

rebates; (3) customer tax credits; (4) 

manufacturer tax credits; and (5) early 

replacement. While these alternatives 

may mitigate to some varying extent the 

economic impacts on small entities 

compared to the amended standards, 

DOE determined that the energy savings 

of these regulatory alternatives would be 

at least five times smaller than those 

that would be expected to result from 

adoption of the proposed amended 

standard levels. Thus, DOE rejected 

these alternatives and is proposing to 

adopt the amended standards set forth 

in this rulemaking. (See chapter 17 of 

the NOPR TSD for further detail on the 

policy alternatives DOE considered.) 

However, DOE seeks comment and, in 

particular, data on the impacts of this 

rulemaking on small businesses. (See 

Issue 10 under ‘‘Issues on Which DOE 

Seeks Comment’’ in section VII.E of this 

NOPR.) 

C. Review Under the Paperwork 

Reduction Act 

Manufacturers of commercial 

refrigeration equipment must certify to 

DOE that their products comply with 

any applicable energy conservation 

standards. In certifying compliance, 

manufacturers must test their products 

according to the DOE test procedures for 

commercial refrigeration equipment, 

including any amendments adopted for 

those test procedures. DOE has 

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established regulations for the 

certification and recordkeeping 

requirements for all covered consumer 

products and commercial equipment, 

including commercial refrigeration 

equipment. 76 FR 12422 (March 7, 

2011). The collection-of-information 

requirement for the certification and 

recordkeeping is subject to review and 

approval by OMB under the Paperwork 

Reduction Act (PRA). This requirement 

has been approved by OMB under OMB 

Control Number 1910–1400. Public 

reporting burden for the certification is 

estimated to average 20 hours per 

response, including the time for 

reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing the collection 

of information. 

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the PRA, unless 

that collection of information displays a 

currently valid OMB Control Number. 

D. Review Under the National 

Environmental Policy Act of 1969 

Pursuant to the National 

Environmental Policy Act (NEPA) of 

1969, (42 U.S.C. 4321 et seq.) DOE has 

determined that the proposed rule fits 

within the category of actions included 

in Categorical Exclusion (CX) B5.1 and 

otherwise meets the requirements for 

application of a CX. See 10 CFR part 

1021, appendix B, B5.1(b); 1021.410(b) 

and appendix B, B(1)–(5). The proposed 

rule fits within the category of actions 

because it is a rulemaking that 

establishes energy conservation 

standards for consumer products or 

industrial equipment, and for which 

none of the exceptions identified in CX 

B5.1(b) apply. Therefore, DOE has made 

a CX determination for this rulemaking, 

and DOE does not need to prepare an 

Environmental Assessment or 

Environmental Impact Statement for 

this proposed rule. DOE’s CX 

determination for this proposed rule is 

available at http://cxnepa.energy.gov/. 

E. Review Under Executive Order 13132 

Executive Order 13132, ‘‘Federalism,’’ 

64 FR 43255 (Aug. 10, 1999), imposes 

certain requirements on Federal 

agencies formulating and implementing 

policies or regulations that preempt 

State law or that have Federalism 

implications. The Executive Order 

requires agencies to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and to carefully assess the 

necessity for such actions. The 

Executive Order also requires agencies 

to have an accountable process to 

ensure meaningful and timely input by 

State and local officials in the 

development of regulatory policies that 

have Federalism implications. On 

March 14, 2000, DOE published a 

statement of policy describing the 

intergovernmental consultation process 

it will follow in the development of 

such regulations. 65 FR 13735. EPCA 

governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the products 

that are the subject of today’s proposed 

rule. States can petition DOE for 

exemption from such preemption to the 

extent, and based on criteria, set forth in 

EPCA. (42 U.S.C. 6297) No further 

action is required by Executive Order 

13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform,’’ imposes on Federal agencies 

the general duty to adhere to the 

following requirements: (1) eliminate 

drafting errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. 61 FR 4729 (Feb. 

7, 1996). Section 3(b) of Executive Order 

12988 specifically requires that 

Executive agencies make every 

reasonable effort to ensure that the 

regulation: (1) Clearly specifies the 

preemptive effect, if any; (2) clearly 

specifies any effect on existing Federal 

law or regulation; (3) provides a clear 

legal standard for affected conduct 

while promoting simplification and 

burden reduction; (4) specifies the 

retroactive effect, if any; (5) adequately 

defines key terms; and (6) addresses 

other important issues affecting clarity 

and general draftsmanship under any 

guidelines issued by the Attorney 

General. Section 3(c) of Executive Order 

12988 requires Executive agencies to 

review regulations in light of applicable 

standards in section 3(a) and section 

3(b) to determine whether they are met 

or it is unreasonable to meet one or 

more of them. DOE has completed the 

required review and determined that, to 

the extent permitted by law, this 

proposed rule meets the relevant 

standards of Executive Order 12988. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA) requires 

each Federal agency to assess the effects 

of Federal regulatory actions on State, 

local, and Tribal governments and the 

private sector. Public Law 104–4, sec. 

201 (codified at 2 U.S.C. 1531). For a 

proposed regulatory action likely to 

result in a rule that may cause the 

expenditure by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector of $100 million or more 

in any one year (adjusted annually for 

inflation), section 202 of UMRA requires 

a Federal agency to publish a written 

statement that estimates the resulting 

costs, benefits, and other effects on the 

national economy. (2 U.S.C. 1532(a), (b)) 

The UMRA also requires a Federal 

agency to develop an effective process 

to permit timely input by elected 

officers of State, local, and Tribal 

governments on a proposed ‘‘significant 

intergovernmental mandate,’’ and 

requires an agency plan for giving notice 

and opportunity for timely input to 

potentially affected small governments 

before establishing any requirements 

that might significantly or uniquely 

affect small governments. On March 18, 

1997, DOE published a statement of 

policy on its process for 

intergovernmental consultation under 

UMRA. 62 FR 12820. DOE’s policy 

statement is also available at http://

energy.gov/gc/office-general-counsel. 

Although today’s proposed rule does 

not contain a Federal intergovernmental 

mandate, it may require expenditures of 

$100 million or more on the private 

sector. Specifically, the proposed rule 

will likely result in a final rule that 

could require expenditures of $100 

million or more. Such expenditures may 

include: (1) Investment in research and 

development and in capital 

expenditures by commercial 

refrigeration equipment manufacturers 

in the years between the final rule and 

the compliance date for the new 

standards; and (2) incremental 

additional expenditures by customers to 

purchase higher efficiency commercial 

refrigeration equipment, starting at the 

compliance date for the applicable 

standard. 

Section 202 of UMRA authorizes a 

Federal agency to respond to the content 

requirements of UMRA in any other 

statement or analysis that accompanies 

the proposed rule. (2 U.S.C. 1532(c)) 

The content requirements of section 

202(b) of UMRA relevant to a private 

sector mandate substantially overlap the 

economic analysis requirements that 

apply under section 325(o) of EPCA and 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55985 

Executive Order 12866. The 

SUPPLEMENTARY INFORMATION section of 

this NOPR and the ‘‘Regulatory Impact 

Analysis’’ section of the NOPR TSD for 

this proposed rule respond to those 

requirements. 

Under section 205 of UMRA, DOE is 

obligated to identify and consider a 

reasonable number of regulatory 

alternatives before promulgating a rule 

for which a written statement under 

section 202 is required. (2 U.S.C. 

1535(a)) DOE is required to select from 

those alternatives the most cost-effective 

and least burdensome alternative that 

achieves the objectives of the proposed 

rule unless DOE publishes an 

explanation for doing otherwise, or the 

selection of such an alternative is 

inconsistent with law. As required by 42 

U.S.C. 6295(d), (f), and (o), 6313(e), and 

6316(a), today’s proposed rule would 

establish energy conservation standards 

for commercial refrigeration equipment 

that are designed to achieve the 

maximum improvement in energy 

efficiency that DOE has determined to 

be both technologically feasible and 

economically justified. A full discussion 

of the alternatives considered by DOE is 

presented in the ‘‘Regulatory Impact 

Analysis’’ section of the TSD for today’s 

proposed rule. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any rule 

that may affect family well-being. This 

rule would not have any impact on the 

autonomy or integrity of the family as 

an institution. Accordingly, DOE has 

concluded that it is not necessary to 

prepare a Family Policymaking 

Assessment. 

I. Review Under Executive Order 12630 

DOE has determined, under Executive 

Order 12630, ‘‘Governmental Actions 

and Interference with Constitutionally 

Protected Property Rights,’’ 53 FR 8859 

(Mar. 18, 1988), that this regulation 

would not result in any takings that 

might require compensation under the 

Fifth Amendment to the U.S. 

Constitution. 

J. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

Section 515 of the Treasury and 

General Government Appropriations 

Act, 2001 (44 U.S.C. 3516, note) 

provides for Federal agencies to review 

most disseminations of information to 

the public under guidelines established 

by each agency pursuant to general 

guidelines issued by OMB. OMB’s 

guidelines were published at 67 FR 

8452 (Feb. 22, 2002), and DOE’s 

guidelines were published at 67 FR 

62446 (Oct. 7, 2002). DOE has reviewed 

today’s NOPR under the OMB and DOE 

guidelines and has concluded that it is 

consistent with applicable policies in 

those guidelines. 

K. Review Under Executive Order 13211 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ 66 FR 28355 (May 

22, 2001), requires Federal agencies to 

prepare and submit to OIRA at OMB a 

Statement of Energy Effects for any 

proposed significant energy action. A 

‘‘significant energy action’’ is defined as 

any action by an agency that 

promulgates or is expected to lead to 

promulgation of a final rule, and that: 

(1) Is a significant regulatory action 

under Executive Order 12866, or any 

successor order; and (2) is likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy, or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed significant energy action, 

the agency must give a detailed 

statement of any adverse effects on 

energy supply, distribution, or use 

should the proposal be implemented, 

and of reasonable alternatives to the 

action and their expected benefits on 

energy supply, distribution, and use. 

DOE has tentatively concluded that 

today’s regulatory action, which sets 

forth proposed energy conservation 

standards for commercial refrigeration 

equipment, is not a significant energy 

action because the proposed standards 

are not likely to have a significant 

adverse effect on the supply, 

distribution, or use of energy, nor has it 

been designated as such by the 

Administrator at OIRA. Accordingly, 

DOE has not prepared a Statement of 

Energy Effects on the proposed rule. 

L. Review Under the Information 

Quality Bulletin for Peer Review 

On December 16, 2004, OMB, in 

consultation with the Office of Science 

and Technology Policy (OSTP), issued 

its Final Information Quality Bulletin 

for Peer Review (the Bulletin). 70 FR 

2664 (Jan. 14, 2005). The Bulletin 

establishes that certain scientific 

information shall be peer reviewed by 

qualified specialists before it is 

disseminated by the Federal 

Government, including influential 

scientific information related to agency 

regulatory actions. The purpose of the 

Bulletin is to enhance the quality and 

credibility of the Government’s 

scientific information. Under the 

Bulletin, the energy conservation 

standards rulemaking analyses are 

‘‘influential scientific information,’’ 

which the Bulletin defines as scientific 

information the agency reasonably can 

determine will have, or does have, a 

clear and substantial impact on 

important public policies or private 

sector decisions. 70 FR 2667 (Jan. 14, 

2005). 

In response to OMB’s Bulletin, DOE 

conducted formal in-progress peer 

reviews of the energy conservation 

standards development process and 

analyses and has prepared a Peer 

Review Report pertaining to the energy 

conservation standards rulemaking 

analyses. Generation of this report 

involved a rigorous, formal, and 

documented evaluation using objective 

criteria and qualified and independent 

reviewers to make a judgment as to the 

technical/scientific/business merit, the 

actual or anticipated results, and the 

productivity and management 

effectiveness of programs and/or 

projects. The ‘‘Energy Conservation 

Standards Rulemaking Peer Review 

Report,’’ dated February 2007, has been 

disseminated and is available at the 

following Web site: 

www1.eere.energy.gov/buildings/

appliance_standards/peer_review.html. 

VII. Public Participation 

A. Attendance at the Public Meeting 

The time, date, and location of the 

public meeting are listed in the DATES

and ADDRESSES sections at the beginning 

of this notice. If you plan to attend the 

public meeting, please notify Ms. 

Brenda Edwards at (202) 586–2945 or 

Brenda.Edwards@ee.doe.gov. Please 

note that foreign nationals visiting DOE 

Headquarters are subject to advance 

security screening procedures. Any 

foreign national wishing to participate 

in the meeting should advise DOE as 

soon as possible by contacting Ms. 

Edwards to initiate the necessary 

procedures. Please also note that those 

wishing to bring laptops into the 

Forrestal Building will be required to 

obtain a property pass. Visitors should 

avoid bringing laptops, or allow an extra 

45 minutes. 

In addition, you can attend the public 

meeting via webinar. Webinar 

registration information, participant 

instructions, and information about the 

capabilities available to webinar 

participants will be published on DOE’s 

Web site at: www1.eere.energy.gov/

buildings/appliance_standards/

product.aspx/productid/52. Participants 

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55986 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

are responsible for ensuring their 

systems are compatible with the 

webinar software. 

B. Procedure for Submitting Prepared 

General Statements for Distribution 

Any person who has plans to present 

a prepared general statement may 

request that copies of his or her 

statement be made available at the 

public meeting. Such persons may 

submit requests, along with an advance 

electronic copy of their statement in 

PDF (preferred), Microsoft Word or 

Excel, WordPerfect, or text (ASCII) file 

format, to the appropriate address 

shown in the ADDRESSES section at the 

beginning of this notice. The request 

and advance copy of statements must be 

received at least one week before the 

public meeting and may be emailed, 

hand-delivered, or sent by mail. DOE 

prefers to receive requests and advance 

copies via email. Please include a 

telephone number to enable DOE staff to 

make follow-up contact, if needed. 

C. Conduct of the Public Meeting 

DOE will designate a DOE official to 

preside at the public meeting and may 

also use a professional facilitator to aid 

discussion. The meeting will not be a 

judicial or evidentiary-type public 

hearing, but DOE will conduct it in 

accordance with section 336 of EPCA 

(42 U.S.C. 6306). A court reporter will 

be present to record the proceedings and 

prepare a transcript. DOE reserves the 

right to schedule the order of 

presentations and to establish the 

procedures governing the conduct of the 

public meeting. After the public 

meeting, interested parties may submit 

further comments on the proceedings as 

well as on any aspect of the rulemaking 

until the end of the comment period. 

The public meeting will be conducted 

in an informal, conference style. DOE 

will present summaries of comments 

received before the public meeting, 

allow time for prepared general 

statements by participants, and 

encourage all interested parties to share 

their views on issues affecting this 

rulemaking. Each participant will be 

allowed to make a general statement 

(within time limits determined by DOE), 

before the discussion of specific topics. 

DOE will allow, as time permits, other 

participants to comment briefly on any 

general statements. 

At the end of all prepared statements 

on a topic, DOE will permit participants 

to clarify their statements briefly and 

comment on statements made by others. 

Participants should be prepared to 

answer questions by DOE and by other 

participants concerning these issues. 

DOE representatives may also ask 

questions of participants concerning 

other matters relevant to this 

rulemaking. The official conducting the 

public meeting will accept additional 

comments or questions from those 

attending, as time permits. The 

presiding official will announce any 

further procedural rules or modification 

of the above procedures that may be 

needed for the proper conduct of the 

public meeting. 

A transcript of the public meeting will 

be included in the docket, which can be 

viewed as described in the Docket 

section at the beginning of this notice. 

In addition, any person may buy a copy 

of the transcript from the transcribing 

reporter. 

D. Submission of Comments 

DOE will accept comments, data, and 

information regarding this proposed 

rule before or after the public meeting, 

but no later than the date provided in 

the DATES section at the beginning of 

this proposed rule. Interested parties 

may submit comments, data, and other 

information using any of the methods 

described in the ADDRESSES section at 

the beginning of this notice. 

Submitting comments via 

regulations.gov. The regulations.gov 

Web page will require you to provide 

your name and contact information. 

Your contact information will be 

viewable to DOE Building Technologies 

staff only. Your contact information will 

not be publicly viewable except for your 

first and last names, organization name 

(if any), and submitter representative 

name (if any). If your comment is not 

processed properly because of technical 

difficulties, DOE will use this 

information to contact you. If DOE 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, DOE may not be 

able to consider your comment. 

However, your contact information 

will be publicly viewable if you include 

it in the comment itself or in any 

documents attached to your comment. 

Any information that you do not want 

to be publicly viewable should not be 

included in your comment, nor in any 

document attached to your comment. 

Otherwise, persons viewing comments 

will see only first and last names, 

organization names, correspondence 

containing comments, and any 

documents submitted with the 

comments. 

Do not submit to regulations.gov 

information for which disclosure is 

restricted by statute, such as trade 

secrets and commercial or financial 

information (hereinafter referred to as 

Confidential Business Information 

(CBI)). Comments submitted through 

regulations.gov cannot be claimed as 

CBI. Comments received through the 

Web site will waive any CBI claims for 

the information submitted. For 

information on submitting CBI, see the 

Confidential Business Information 

section below. 

DOE processes submissions made 

through regulations.gov before posting. 

Normally, comments will be posted 

within a few days of being submitted. 

However, if large volumes of comments 

are being processed simultaneously, 

your comment may not be viewable for 

up to several weeks. Please keep the 

comment tracking number that 

regulations.gov provides after you have 

successfully uploaded your comment. 

Submitting comments via email, hand 

delivery/courier, or mail. Comments and 

documents submitted via email, hand 

delivery, or mail also will be posted to 

regulations.gov. If you do not want your 

personal contact information to be 

publicly viewable, do not include it in 

your comment or any accompanying 

documents. Instead, provide your 

contact information in a cover letter. 

Include your first and last names, email 

address, telephone number, and 

optional mailing address. The cover 

letter will not be publicly viewable as 

long as it does not include any 

comments. 

Include contact information each time 

you submit comments, data, documents, 

and other information to DOE. If you 

submit via mail or hand delivery/ 

courier, please provide all items on a 

CD, if feasible. It is not necessary to 

submit printed copies. No facsimiles 

(faxes) will be accepted. 

Comments, data, and other 

information submitted to DOE 

electronically should be provided in 

PDF (preferred), Microsoft Word or 

Excel, WordPerfect, or text (ASCII) file 

format. Provide documents that are not 

secured, that are written in English, and 

that are free of any defects or viruses. 

Documents should not contain special 

characters or any form of encryption 

and, if possible, they should carry the 

electronic signature of the author. 

Campaign form letters. Please submit 

campaign form letters by the originating 

organization in batches of between 50 to 

500 form letters per PDF or as one form 

letter with a list of supporters’ names 

compiled into one or more PDFs. This 

reduces comment processing and 

posting time. 

Confidential Business Information. 

According to 10 CFR 1004.11, any 

person submitting information that he 

or she believes to be confidential and 

exempt by law from public disclosure 

should submit via email, postal mail, or 

hand delivery/courier two well-marked 

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96For an overview of lower-GWP alternatives 

available to certain sections of the commercial 

refrigeration equipment sector, please see http:// 

www.epa.gov/ozone/downloads/ 

EPA_HFC_ComRef.pdf 

copies: One copy of the document 

marked confidential including all the 

information believed to be confidential, 

and one copy of the document marked 

non-confidential with the information 

believed to be confidential deleted. 

Submit these documents via email or on 

a CD, if feasible. DOE will make its own 

determination about the confidential 

status of the information and treat it 

according to its determination. 

Factors of interest to DOE when 

evaluating requests to treat submitted 

information as confidential include: (1) 

A description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by or available from 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

It is DOE’s policy that all comments 

may be included in the public docket, 

without change and as received, 

including any personal information 

provided in the comments (except 

information deemed to be exempt from 

public disclosure). 

E. Issues on Which DOE Seeks Comment 

Although DOE welcomes comments 

on any aspect of this proposal, DOE is 

particularly interested in receiving 

comments and views of interested 

parties concerning the following issues. 

1. Primary and Secondary Equipment 

Classes 

In the January 2009 final rule 

analysis, DOE selected 15 ‘‘primary’’ 

classes to analyze directly in its 

engineering analyses, and designated 

the remaining 23 classes as ‘‘secondary’’ 

classes, for which standards were 

developed based on the primary class 

results. These designations were based 

on shipment-volume data coupled with 

input from stakeholders during that 

rulemaking process. As this rulemaking 

seeks to review and potentially amend 

standards for the 38 total equipment 

classes examined in the January 2009 

final rule, DOE retained those primary 

and secondary class designations in its 

analyses. Additionally, equipment for 

which EPACT 2005 directly set 

standards was incorporated into the 

scope of this rulemaking. DOE treated 

all of these equipment classes 

previously covered by EPACT 2005 

standards as primary classes. DOE seeks 

comment regarding its designation of 

primary and secondary equipment 

classes. 

2. Design Option and Core Case Costs 

During the NOPR analyses, DOE 

performed physical teardowns on a 

selection of units currently on the 

market. From the bills of materials and 

cost model developed using this 

teardown data, DOE calculated an 

estimate of the manufacturer production 

cost of the core case assembly for each 

of the primary equipment classes in the 

engineering analysis. DOE also 

developed estimates of the costs for 

components that affect energy 

consumption, namely those it 

considered as design options. These 

estimates were obtained from a 

combination of sources, including 

publicly available prices from vendors 

and confidential estimates provided by 

manufacturers. This price data was 

aggregated for use in the engineering 

analysis. DOE seeks comment and data 

regarding the manufacturer production 

costs for commercial refrigeration 

equipment cases and components and 

the technological feasibility of applying 

technologies identified in the 

engineering analysis to meeting the 

proposed standards. 

3. Offset Factors 

In its January 2009 final rule, DOE 

developed offset factors as a way to 

adjust the energy efficiency 

requirements for smaller equipment in 

each equipment class analyzed. These 

offset factors accounted for certain 

components of the refrigeration load 

(such as conduction end effects) that 

remain constant when equipment size 

varies and thus affect smaller cases 

disproportionately. The offset factors 

were intended to approximate these 

constant loads and provide a fixed end 

point, corresponding to a zero-volume 

or zero-TDA case, in an equation that 

describes the relationship between 

energy consumption and the 

corresponding TDA or volume metric. 

Similarly, the EPACT 2005 standards 

also contained values that did not vary 

with unit volume and which served a 

similar purpose. In developing standard 

level equations for the proposed 

amended standards, DOE scaled the 

existing offset factors by the ratio of the 

amount of energy consumption allowed 

by the existing standards for a given 

representative unit and the energy use 

calculated in the engineering analysis at 

each TSL. This adjustment of the offset 

factors ensures that neither larger nor 

smaller units are disadvantaged by these 

proposed standards. DOE seeks 

comment on its methodology for 

developing offset factors for the 

standard level equations presented in 

this NOPR. 

4. Extension of Standards 

In its January 2009 final rule, DOE 

developed a quantitative method for 

applying the standards developed for its 

primary equipment classes to the 

remaining, secondary classes. This 

approach involved extension 

multipliers created using results from 

the analysis of the primary equipment 

classes and a set of focused matchedpair analyses. Additionally, DOE 

applied standards developed for certain 

primary equipment classes directly to 

other similar secondary classes. In this 

rulemaking, DOE retained the extension 

multipliers from the January 2009 final 

rule and reapplied them to the 

equipment classes from that rulemaking 

for which DOE is proposing amended 

standards. DOE believes that the 

relationship between the performances 

of various types of equipment is still 

adequately modeled by the use of those 

multipliers. DOE’s approach in 

developing extension multipliers in the 

2009 rulemaking and its rationale for 

retaining them in this rulemaking are 

discussed in detail in section 5.9 of the 

NOPR TSD. DOE seeks comment on its 

approach to extending the results of the 

engineering analysis to secondary 

equipment classes. Specifically, DOE 

requests comment on whether the 

assumptions underlying its 

development and application of 

extension multipliers are appropriate, or 

whether there are additional differences 

between related equipment classes that 

DOE should take into account. 

5. Types of Refrigerant Analyzed 

DOE based its analysis on 

refrigeration equipment using R404A 

and R134a, HFC refrigerants widely 

used in the commercial refrigeration 

industry. DOE received comments 

regarding the consideration of 

refrigerants with lower GWP due to 

possible shifts in the marketplace 

toward these refrigerants and notes that 

a number of lower-GWP alternatives are 

available for use within certain portions 

of the commercial refrigeration sector.96

The use of alternative refrigerants could 

be impacting to Climate Change and the 

environment. DOE requests comment on 

the extent of the current use or likely 

future use of lower-GWP refrigerants, 

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and asks manufacturers to submit data 

related to the ability of equipment 

(either existing or redesigned) using 

these refrigerants to meet the proposed 

standard. DOE seeks input as to the 

impacts of alternative refrigerants to the 

refrigeration system in this rulemaking. 

6. Distribution Channel Market Shares 

and Markups 

DOE has revised the distribution 

channel market shares for some of the 

equipment classes based on comments 

received during April 2011 preliminary 

analysis public meeting. The markup 

values associated with each distribution 

channel have been updated based on 

currently available industry profit data. 

DOE welcomes comment on the 

assumptions and values used for the 

markups analysis. 

7. Market Shares of Efficiency Levels 

DOE seeks comments on the market 

shares of efficiency levels used for this 

NOPR analysis. DOE is currently using 

a model to predict the market share of 

efficiency levels. According to 

commenters, the calculated market 

shares are biased toward the higher 

efficiency levels. However, DOE has 

cited lack of data as the primary reason 

for its lack of more accurate numbers. 

DOE welcomes information from 

stakeholders that would aid DOE in 

improving upon the numbers for market 

shares of efficiency levels. 

8. Maintenance and Repair Costs at 

Higher Efficiency Levels. 

Currently, DOE assumes no increase 

in regular maintenance costs at higher 

efficiency levels contemplated in the 

proposed rule. Lighting maintenance 

and repair costs are estimated based on 

OEM costs; they vary with higher 

efficiency levels. DOE welcomes 

stakeholder input and additional 

information to improve upon these 

estimates with respect to maintenance 

and repair costs. Data pertaining to cost 

increases specifically associated with 

the design options considered in this 

rulemaking would be greatly 

appreciated. 

9. Impact of Amended Standards on 

Future Shipments 

Currently, DOE assumes that future 

shipments of commercial refrigeration 

equipment will not be affected by 

amended standards. While DOE has 

cited strong reasons to believe that this 

assumption is true for display cases, the 

assumption may not be entirely true in 

the case of equipment used in the 

foodservice industry. While there may 

be a small effect in the initial years of 

amended standards, DOE does not have 

data for the commercial refrigeration 

industry to obtain a reasonably accurate 

estimate of this effect. DOE welcomes 

stakeholder input and estimates on the 

effect of amended standards on future 

commercial refrigeration equipment 

shipments. DOE also welcomes input 

and data on the demand elasticity 

estimates used in the analysis. 

10. Learning Impacts on Price Forecast 

for Future Shipments 

Currently, DOE projects future prices 

by subtracting the cost reductions 

associated with learning effects from the 

cost associated with the amended 

standards. DOE analyzes learning effects 

using PPI, a quantity adjusted index of 

wholesale prices, as a proxy for price of 

commercial refrigerators. DOE is seeking 

input, and price data that could be used 

in place of PPI. Also DOE is seeking 

input on the magnitude of the price data 

and the cause of those price changes. 

11. Product Attributes 

DOE requests comment on whether 

there are features or attributes of the 

more energy-efficient commercial 

refrigerators that manufacturers would 

produce to meet the standards in this 

proposed rule that might affect how 

they would be used by different 

customer categories (e.g., refrigeration in 

grocery stores or restaurants). One 

example of such an effect might be that 

grocers or restaurant operators would 

change where, how, and how long food 

items would be stored or displayed. 

DOE requests comment specifically on 

how any such effects should be weighed 

in the choice of standards for these 

refrigerators for the final rule. 

12. Analytical Timeline 

For this rulemaking, DOE analyzed 

the effects of this proposal assuming 

that the commercial refrigerators would 

be available to purchase for 30 years and 

undertook a sensitivity analysis using 9 

years rather than 30 years of product 

shipments. The choice of a 30-year 

period of shipments is consistent with 

the DOE analysis for other products and 

commercial equipment. The choice of a 

9-year period is a proxy for the timeline 

in EPCA for the review of certain energy 

conservation standards and potential 

revision of and compliance with such 

revised standards. We are seeking input, 

information and data on whether there 

are ways to refine the analytic timeline 

further. 

13. Equipment Lifetime 

DOE defines lifetime as the age at 

which a commercial refrigeration 

equipment unit is retired from service. 

DOE based expected equipment lifetime 

on discussions with industry experts 

and concluded that a typical lifetime of 

10 years is appropriate for most 

commercial refrigeration equipment in 

large grocery/multi-line stores and 

restaurants. Operators of small food 

retail stores, on the other hand, tend to 

use display cases longer. DOE used 15 

years as the average equipment lifetime 

for display cases used in such retail 

stores. DOE welcomes further input on 

the average equipment lifetimes for the 

LCC analysis and NIA. 

14. Small Businesses 

During the Framework and 

preliminary analysis public meetings, 

DOE received many comments 

regarding the potential impacts of 

amended energy conservation standards 

on small business manufacturers of 

commercial refrigeration equipment. In 

its market and technology assessment 

and manufacturer impact analysis 

research, DOE developed a list of 

companies falling under its 

classification of small businesses, and 

sought specific feedback regarding 

potentially disproportionate impacts of 

amended standards on these businesses. 

DOE incorporated this feedback into its 

analyses for the NOPR and has 

presented its results in this notice and 

the technical support document. 

However, DOE seeks comment and, in 

particular, data, in its efforts to quantify 

the impacts of this rulemaking on small 

business manufacturers. In addition, 

DOE seeks comment on any 

disproportionate impacts of amended 

standards on any particular customer 

groups, such as small businesses that 

are small grocery, convenience stores, 

and restaurants. 

15. Update to Social Cost of Carbon 

Values 

DOE solicits comment on the 

application of the new SCC values used 

to determine the social benefits of CO2

emissions reductions over the 

rulemaking analysis period. The 

rulemaking analysis period covers from 

2017 to 2046 plus an additional 15 years 

to account for the lifetime of the 

equipment purchased between 2017 and 

2046. In particular, the agency solicits 

comment on the agency’s derivation of 

SCC values after 2050 where the agency 

applied the average annual growth rate 

of the SCC estimates in 2040–2050 

associated with each of the four sets of 

values. 

16. Cumulative Regulatory Burdens 

The agency seeks input on the 

cumulative regulatory burden that may 

be imposed on industry either from 

recently implemented rulemakings for 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55989 

this product class or other rulemakings 

that affect the same industry. 

17. Compliance Date 

Pursuant to EPCA, any amended 

standards established in this rulemaking 

must apply to equipment that is 

manufactured on or after 3 years after 

the final rule is published in the Federal 

Register unless DOE determines, by 

rule, that a 3-year period is inadequate, 

in which case DOE may extend the 

compliance date for that standard by an 

additional 2 years. DOE proposes to 

provide 3 years for compliance with this 

standard, but seeks comment on 

whether it should consider a longer 

compliance date as authorized, and, if 

so, by how much. 

VIII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s proposed rule. 

List of Subjects in 10 CFR Part 431 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, and 

Reporting and recordkeeping 

requirements. 

Issued in Washington, DC, on August 29, 

2013. 

Mike Carr, 

Acting Assistant Secretary, Energy Efficiency 

and Renewable Energy. 

For the reasons set forth in the 

preamble, DOE proposes to amend part 

431 of chapter II of title 10, of the Code 

of Federal Regulations, as set forth 

below: 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. Section 431.62 is amended by 

adding in alphabetical order a definition 

for ‘‘service over counter,’’ to read as 

follows: 

§ 431.62 Definitions concerning 

commercial refrigerators, freezers and 

refrigerator-freezers. 

* * * * * 

Service over counter means 

equipment with sliding or hinged doors 

in the back intended for use by sales 

personnel for loading and retrieving 

items for sale and fixed, sliding or 

hinged transparent panels in the front 

for displaying merchandise. The 

equipment has a height no greater than 

66 inches and is intended to serve as a 

counter for transactions between sales 

personnel and customers. 

* * * * * 

■ 3. Section 431.66 is amended by: 

■ a. Revising paragraph (a)(3); 

■ b. Revising paragraph (b) introductory 

text; 

■ c. Revising paragraph (c); 

■ d. Revising paragraph (d) introductory 

text; and 

■ c. Adding paragraph (e). 

The revisions and addition read as 

follows: 

§ 431.66 Energy conservation standards 

and their effective dates. 

(a) * * * 

(3) For the purpose of paragraph (d) 

of this section, the term ‘‘TDA’’ means 

the total display area (ft2) of the case, as 

defined in ARI Standard 1200–2006, 

appendix D (incorporated by reference, 

see § 431.63). For the purpose of 

paragraph (e) of this section, the term 

‘‘TDA’’ means the total display area (ft2) 

of the case, as defined in AHRI Standard 

1200 (I–P)-2010, appendix D 

(incorporated by reference, see 

§ 431.63). 

(b) Each commercial refrigerator, 

freezer, and refrigerator-freezer with a 

self-contained condensing unit designed 

for holding temperature applications 

manufactured on or after January 1, 

2010 and before [date 3 years after date 

of publication of the final rule in the 

Federal Register] shall have a daily 

energy consumption (in kilowatt-hours 

per day) that does not exceed the 

following: 

* * * * * 

(c) Each commercial refrigerator with 

a self-contained condensing unit 

designed for pull-down temperature 

applications and transparent doors 

manufactured on or after January 1, 

2010 and before [date 3 years after date 

of publication of the final rule in the 

Federal Register] shall have a daily 

energy consumption (in kilowatt-hours 

per day) of not more than 0.126V + 3.51. 

(d) Each commercial refrigerator, 

freezer, and refrigerator-freezer with a 

self-contained condensing unit and 

without doors; commercial refrigerator, 

freezer, and refrigerator-freezer with a 

remote condensing unit; and 

commercial ice-cream freezer 

manufactured on or after January 1, 

2012 and before [date 3 years after date 

of publication of the final rule in the 

Federal Register] shall have a daily 

energy consumption (in kilowatt-hours 

per day) that does not exceed the levels 

specified: 

* * * * * 

(e) Each commercial refrigerator, 

freezer, and refrigerator-freezer with a 

self-contained condensing unit designed 

for holding temperature applications 

and with solid or transparent doors; 

commercial refrigerator with a selfcontained condensing unit designed for 

pull-down temperature applications and 

with transparent doors; commercial 

refrigerator, freezer, and refrigeratorfreezer with a self-contained condensing 

unit and without doors; commercial 

refrigerator, freezer, and refrigeratorfreezer with a remote condensing unit; 

and commercial ice-cream freezer 

manufactured on or after [date 3 years 

after date of publication of the final rule 

in the Federal Register], shall have a 

daily energy consumption (in kilowatthours per day) that does not exceed the 

levels specified: 

(1) For equipment other than hybrid 

equipment, refrigerator/freezers, or 

wedge cases: 

Equipment category Condensing unit configuration Equipment family Rating temp. 

°F 

Operating 

temp. 

°F 

Equipment class 

designation* 

Maximum daily energy 

consumption 

kWh/day 

Remote Condensing 

Commercial Refrigerators and Commercial Freezers.

Remote (RC) .............. Vertical Open (VOP) .. 38 (M) ........................

0 (L) ...........................

≥32 

<32 

VOP.RC.M .................

VOP.RC.L ..................

0.61 × TDA + 3.03 

2.11 × TDA + 6.36 

Semivertical Open 

(SVO).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

SVO.RC.M .................

SVO.RC.L ..................

0.63 × TDA + 2.41 

2.11 × TDA + 6.36 

Horizontal Open 

(HZO).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

HZO.RC.M .................

HZO.RC.L ..................

0.35 × TDA + 2.88 

0.57 × TDA + 6.88 

Vertical Closed Transparent (VCT).38 (M) ........................

0 (L) ...........................

≥32 

<32 

VCT.RC.M ..................

VCT.RC.L ...................

0.08 × TDA + 0.72 

0.43 × TDA + 2.03 

Horizontal Closed 

Transparent (HCT).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

HCT.RC.M .................

HCT.RC.L ..................

0.14 × TDA + 0.11 

0.3 × TDA + 0.23 

Vertical Closed Solid 

(VCS).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

VCS.RC.M .................

VCS.RC.L ..................

0.1 × V + 0.24 

0.21 × V + 0.5 

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55990 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 

Equipment category Condensing unit configuration Equipment family Rating temp. °F 

Operating 

temp. 

°F 

Equipment class 

designation* 

Maximum daily energy 

consumption 

kWh/day 

Horizontal Closed 

Solid (HCS).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

HCS.RC.M .................

HCS.RC.L ..................

0.1 × V + 0.24 

0.21 × V + 0.5 

Service Over Counter 

(SOC).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

SOC.RC.M .................

SOC.RC.L ..................

0.39 × TDA + 0.08 

0.83 × TDA + 0.18 

Self-Contained Commercial Refrigerators 

and Commercial 

Freezers Without 

Doors.

Self-Contained (SC) ... Vertical Open (VOP) .. 38 (M) ........................

0 (L) ...........................

≥32 

<32 

VOP.SC.M .................

VOP.SC.L ..................

1.51 × TDA + 4.09 

3.79 × TDA + 10.26 

Semivertical Open 

(SVO).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

SVO.SC.M .................

SVO.SC.L ..................

1.5 × TDA + 3.99 

3.77 × TDA + 10.01 

Horizontal Open 

(HZO).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

HZO.SC.M .................

HZO.SC.L ..................

0.75 × TDA + 5.44 

1.92 × TDA + 7.08 

Self-Contained Commercial Refrigerators 

and Commercial 

Freezers With Doors.

Self-Contained (SC) ... Vertical Closed Transparent (VCT).38 (M) ........................

0 (L) ...........................

≥32 

<32 

VCT.SC.M ..................

VCT.SC.L ...................

0.04 × V + 1.07 

0.22 × V + 1.21 

Vertical Closed Solid 

(VCS).

38 (M) ........................

0(L) .............................

≥32 

<32 

VCS.SC.M ..................

VCS.SC.L ...................

0.03 × V + 0.53 

0.13 × V + 0.43 

Horizontal Closed 

Transparent (HCT).

38 (M) ........................

0 (L) ...........................

≥32 

<32 

HCT.SC.M ..................

HCT.SC.L ...................

0.02 × V + 0.51 

0.11 × V + 0.6 

Horizontal Closed 

Solid (HCS). 0 (L).

≥32 

<32 

HCS.SC.M .................

HCS.SC.L ..................

0.02 × V + 0.37 

0.12 × V + 0.42 

Service Over Counter 

(SOC). 0 (L).

≥32 

<32 

SOC.SC.M .................

SOC.SC.L ..................

0.32 × TDA + 0.53 

0.67 × TDA + 1.12 

Self-Contained Commercial Refrigerators 

with Transparent 

Doors for Pull-Down 

Temperature Applications.

Self-Contained (SC) ... Pull-Down (PD) .......... 38 (M) ........................ ≥32 PD.SC.M .................... 0.03 × V + 0.83 

Commercial Ice-Cream 

Freezers.

Remote (RC) .............. Vertical Open (VOP) .. ¥15 (I) ....................... ≤¥5** VOP.RC.I ................... 2.68 × TDA + 8.08 

Semivertical Open 

(SVO).

.................................... ........................ SVO.RC.I ................... 2.68 × TDA + 8.08 

Horizontal Open 

(HZO).

.................................... ........................ HZO.RC.I ................... 0.72 × TDA + 8.74 

Vertical Closed Transparent (VCT)..................................... ........................ VCT.RC.I .................... 0.51 × TDA + 2.37 

Horizontal Closed 

Transparent (HCT).

.................................... ........................ HCT.RC.I ................... 0.35 × TDA + 0.27 

Vertical Closed Solid 

(VCS).

.................................... ........................ VCS.RC.I ................... 0.25 × V + 0.58 

Horizontal Closed 

Solid (HCS).

.................................... ........................ HCS.RC.I ................... 0.25 × V + 0.58 

Service Over Counter 

(SOC).

.................................... ........................ SOC.RC.I ................... 0.97 × TDA + 0.21 

Self-Contained (SC) ... Vertical Open (VOP) .. .................................... ........................ VOP.SC.I ................... 4.81 × TDA + 13.03 

Semivertical Open 

(SVO)\.

.................................... ........................ SVO.SC.I ................... 4.79 × TDA + 12.72 

Horizontal Open 

(HZO).

.................................... ........................ HZO.SC.I ................... 2.44 × TDA + 9.0 

Vertical Closed Transparent (VCT)..................................... ........................ VCT.SC.I .................... 0.52 × TDA + 2.56 

Horizontal Closed 

Transparent (HCT).

.................................... ........................ HCT.SC.I .................... 0.49 × TDA + 0.37 

Vertical Closed Solid 

(VCS).

.................................... ........................ VCS.SC.I .................... 0.35 × V + 0.81 

Horizontal Closed 

Solid (HCS).

.................................... ........................ HCS.SC.I ................... 0.35 × V + 0.81 

Service Over Counter 

(SOC).

.................................... ........................ SOC.SC.I ................... 1.35 × TDA + 0.29 

* The meaning of the letters in this column is indicated in the columns to the left. 

** Ice-cream freezer is defined in 10 CFR 431.62 as a commercial freezer that is designed to operate at or below ¥5 °F *(¥21 °C) and that the manufacturer designs, markets, or intends for the storing, displaying, or dispensing of ice cream. 

(2) For commercial refrigeration 

equipment with two or more 

compartments (i.e., hybrid refrigerators, 

hybrid freezers, hybrid refrigeratorfreezers, and non-hybrid refrigeratorfreezers), the maximum daily energy 

consumption for each model shall be 

the sum of the MDEC values for all of 

its compartments. For each 

compartment, measure the TDA or 

volume of that compartment, and 

determine the appropriate equipment 

class based on that compartment’s 

equipment family, condensing unit 

configuration, and designed operating 

temperature. The MDEC limit for each 

compartment shall be the calculated 

value obtained by entering that 

compartment’s TDA or volume into the 

standard equation in paragraph (e)(1) of 

this section for that compartment’s 

equipment class. Measure the CDEC or 

TDEC for the entire case as described in 

§ 431.66(d)(2)(i) through (iii), except 

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Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Proposed Rules 55991 

that where measurements and 

calculations reference ARI Standard 

1200–2006 (incorporated by reference, 

see § 431.63), AHRI Standard 1200 (I–P)- 

2010 (incorporated by reference, see 

§ 431.63) shall be used. 

(3) For remote condensing and selfcontained wedge cases, measure the 

CDEC or TDEC according to the AHRI 

Standard 1200 (I–P)-2010 test procedure 

(incorporated by reference, see 

§ 431.63). For wedge cases in equipment 

classes for which a volume metric is 

used, the MDEC shall be the amount 

derived from the appropriate standards 

equation in paragraph (e)(1) of this 

section. For wedge cases of equipment 

classes for which a TDA metric is used, 

the MDEC for each model shall be the 

amount derived by incorporating into 

the standards equation in paragraph 

(e)(1) of this section for the equipment 

class a value for the TDA that is the 

product of: 

(i) The vertical height of the air 

curtain (or glass in a transparent door) 

and 

(ii) The largest overall width of the 

case, when viewed from the front. 

[FR Doc. 2013–21531 Filed 9–10–13; 8:45 am] 

BILLING CODE 6450–01–P 

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