# Commercial Refrigeration Equipment (CRE) Notice of Proposed Rulemaking (NOPR) Public Meeting on Energy Conservation Standards (ECS)

Charles Llenza October 03, 2013 commercial_refrigeration_equipment@ee.doe.gov2 

# Welcome

• Introductions (around the room)

• Role of the Facilitator

• Ground Rules

– Speak one at a time.

– Say your name for the record

– there will be a complete transcript of this
meeting.

– Be concise

– share the ‘air

- time ’.

– Keep the focus here

– cell phones on silent; limit sidebar conversations.

– Webinar participants turn phone on mute; ‘raise your hand’ to be recognized

to speak.



# • Housekeeping Items

• Agenda Review

• Opening Remarks3 

# Listening Via the Webcast

• The Department is broadcasting this meeting live over the

Internet.

• DOE is providing the webcast to accommodate stakeholders that are unable to attend the public meeting in person.

• The web broadcast allows stakeholders to listen in and view
the slides.

• All stakeholders are encouraged to submit written comments after the public meeting.4 

# Agenda

9:00

– 9:10 am Welcome, Introductions, Opening Statements

9:10

– 10:00 am Overview, Scope, Market and Technology Assessment, Screening

Analysis

10:00

– 10:45 am Engineering Analysis

10:45

– 11:00 am Break

11:00

– 11:30 am Energy Use, Markup Analysis, Life

- Cycle Cost and Payback Period

Analysis

11:30 am

– 12:00 pm Shipments, National Impact Analysis

12:00 pm

– 1:00 pm Lunch

1:00

– 1:30 pm Manufacturer Impact Analysis

1:30

– 2:00 pm Utility Impact Analysis, Employment Impact Analysis,

Environmental Assessment, Regulatory Impact Analysis

2:00

– 2:15 pm Break

2:15

– 2:45 pm Proposed Standard

2:45

– 3:00 pm Closing Remarks5 

# Purpose of the Public Meeting

• Purpose

- To invite comment on proposed energy conservation standard levels;

- To present methodologies and characterize results of the rulemaking analyses;

- To discuss specific issues related to each analysis;

- To seek input from interested parties on methodologies, assumptions, data sources, and results from the analyses; and

- To describe next steps in the rulemaking.



# • Comments from Participants

- Participants are invited to provide summary comments or statements and
raise additional issues for discussion.

- NOPR comment period closes November 12, 2013

.6 

# Issue “Boxes” for Discussion

• Issue “boxes” correspond to the list of issues for which the Department seeks comments.

• A list of issues are in the NOPR notice, available at:

http ://www.regulations.gov/#! documentDetail;D=EERE

- 2010

- BT

- STD

- 0003

- 0052



## Issue Box: DOE welcomes comments, data, and information concerning the standards it is considering for commercial refrigeration equipment. Issues that correspond to those raised in DOE’s published material will be presented. Whether invited by an issue box or not, comments are welcome on any part of DOE’s analysis.



## • The deadline for submitting comments is November 12, 2013

.7 

# How to Submit Written Comments

• In all correspondence, please refer to the CRE rulemaking by:

– Commercial Refrigeration Equipment Energy Conservation Standards Rulemaking,

– Docket Number EERE

- 2010

- BT

- STD

- 0003 , and

– Regulatory Identification Number (RIN) 1904

- AC19.

• Email : CRE

- 2010

- STD

- 0003@ee.doe.gov

• Comment period closes: November 12 , 2013, 11:59 PM EST

Postal: Courier:

Ms. Brenda Edwards U.S. Department of Energy Building Technologies Program, Mailstop EE

- 2J 1000 Independence Avenue, SW Washington, DC 20585

- 0121 Ms. Brenda Edwards U.S. Department of Energy Building Technologies Program, Suite 600 950 L’Enfant Plaza, SW Washington, DC 20024

Tel: 202 586

- 29458 

# Opening Remarks

Meeting participants are invited to provide opening remarks
or statements at this time.9 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks10 

# Background and Current Standards

• EPACT 2005 amended EPCA to prescribe standards for self

- contained commercial refrigerators, freezers, and refrigerator freezers with doors

.

• EPACT 2005 also directed DOE to set standards by January 1, 2009 for remote

condensing equipment, open cases, and ice cream freezers. DOE published a final rule on January 9, 2009 (74 FR 1092); compliance date January 1, 2012.

• The American Energy Manufacturing Technical Corrections Act amended EPCA in December 2012 to prescribe standards for one class of commercial refrigeration equipment

– service over counter, self

- contained, medium

temperature equipment. Pub. L. 112

- 210 (Dec. 18, 2012 ).

• On September 30, 2013, a notice was issued codifying the AEMTCA material into
the CFR.



## • EPACT 2005 also directed DOE to determine whether to amend the standards set both by the 2009 DOE rulemaking and by EPACT 2005 and, if necessary, perform a rulemaking and publish amended standards by January 1, 2013. The notice of proposed rulemaking for that proceeding is the subject of today’s public meeting.11 

# EPCA Factors

42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1) direct DOE to consider seven factors when setting energy conservation standards. These drive DOE’s analyses.

EPCA Factors Corresponding DOE Analyses

1. Economic impact on customers and
manufacturers Life

- Cycle Cost Analysis Manufacturer Impact Analysis

2. Lifetime operating cost savings compared to increased cost for the product Life

- Cycle Cost Analysis

3. Total projected energy savings National Impact Analysis

4. Impact on utility or performance Engineering Analysis Screening Analysis

5. Impact of any lessening of competition Manufacturer Impact Analysis

6. Need for national energy conservation National Impact Analysis

7. Other factors the Secretary considers
relevant Environmental Assessment Utility Impact Analysis Employment Impact Analysis12 

# Commercial Refrigeration Equipment Rulemaking Schedule

Milestone Date



### Framework Document May 2010

Notice of Public Meeting and Availability of the Preliminary Technical Support Document March 2011

Notice of Proposed Rulemaking (NOPR) September 2013

Final Rule (projected) February 2014

Compliance Date (projected) February 2017 2010 2011 2012 2013 2014 2015 2016 201713 

# Test Procedure

• On December 8, 2006, DOE established a

test procedure for commercial refrigeration equipment, which references the Air

Conditioning and Refrigeration Institute (ARI) Standard 1200

- 2006. ARI 1200

- 2006
references ASHRAE Standard 72

- 2005 as the
method of test.

• DOE adopted AHAM Standard HRF

- 1

- 2004 for measuring refrigerated compartment volume. 71 FR 71370 (Dec. 8, 2006).

• This is the test procedure currently used by manufacturers to demonstrate compliance or make representations.14 

# Test Procedure (cont.)

• On February 21, 2012, DOE issued a test procedure final rule for commercial refrigeration equipment, amending the procedure previously established in 2006. 77 FR 10292; 10318

- 21 (Feb. 21, 2012)

• This final rule made a number of amendments and updates, including:

• Updating references to industry test procedures to their current

versions.

• Incorporating methods to evaluate the energy impacts resulting from the use of night curtains and lighting occupancy sensors and
controls.

• Allowing testing of certain commercial refrigeration equipment at the lowest temperature at which it is able to operate.

• These provisions will be used in conjunction with any amended standards issued through the current rulemaking.15 

# Test Procedure ( cont.)

• On September 30, 2013, DOE issued a test procedure NOPR for commercial refrigeration equipment.

• Go to the following link for more information and a copy of the NOPR:

http :// www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=80



## • In this NOPR, DOE proposes to:

• Revise and reorganize its test procedure for commercial refrigeration equipment in order to clarify certain terms, procedures, and compliance dates.

• Address inquiries regarding scope, definitions, configuration of components and features during testing, application of test procedure provisions, and compliance dates of TP provisions.

• Include a number of test procedure clarifications which have arisen as a result of the negotiated rulemaking process for certification of commercial heating, ventilation, air conditioning, refrigeration, and water heating equipment.16 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks17 

# NOPR Rulemaking Stage

Framework

Document Preliminary Analysis NOPR Final
Rule

Market &
Technology

Screening
Analysis Engineering Analysis

Energy Use Analysis

Shipments
Analysis National
Impact Analysis Markups Analysis

Life

- Cycle
Cost and Payback Period Analysis

Manufacturer
Impact Analysis18 

# Market Assessment: Equipment Classes

• 2009 Final Rule equipment classes

– Consisted of 38 covered classes

– Nomenclature developed allowed for 48 total equipment classes

• 8 equipment families

• 3 rating temperatures (medium, low, and ice cream)

• 2 condensing unit configurations (remote

- condensing and self

- contained)



## • EPACT 2005 equipment

– EPACT 2005 set standards for 5 specific groups of equipment

– Using the DOE equipment class nomenclature developed for the 2009 rulemaking, plus the addition of a “pull

- down” equipment family (to accommodate the single pull

- down class specified in EPACT 2005), this
was classified as 11 additional classes



## • For this rulemaking, DOE is considering a total of 49 covered classes

– A full listing of the equipment classes is shown in Chapter 3 of the TSD19 

# Equipment Classes: Equipment Families

Equipment Family Name Equipment Family
Abbreviation

Vertical Open VOP

Semivertical Open SVO

Horizontal Open HZO

Vertical Closed Transparent VCT

Horizontal Closed Transparent HCT

Vertical Closed Solid VCS

Horizontal Closed Solid HCS

Service Over Counter SOC

Pull

- Down PD20 

# Equipment Classes: Rating Temps. and Operating Modes

Rating Temperature

Designation Rating Temperature Value Rating Temperature
Abbreviation

Medium 38 ° F M

Low 0 ° F L

Ice Cream

- 15 ° F I

Operating Mode Designation Operating Mode Abbreviation

Remote

- Condensing RC

Self

- Contained SC21 

# Technology Assessment: Purpose

• Purpose

– To develop a preliminary list of technology options that could improve the efficiency of commercial refrigeration equipment.

– This list is examined in greater detail, and inappropriate technologies removed, in subsequent analyses.



## • Method

– DOE identified technology options from:

• Literature review

• Manufacturer brochures and specification sheets for commercially available equipment

• Comments and input from stakeholders



## • All technology options are described in Chapter 3 of the TSD.22 

# Technology Assessment: Technologies Identified

Considered for All Equipment Classes (A s Applicable)

Higher Efficiency Lighting Improved Evaporator Coil Design

Higher Efficiency Lighting Ballasts Low Pressure Differential Evaporators

Remote Lighting Ballast Location Case Insulation Increases or Improvements

Higher Efficiency Expansion Valves Defrost Mechanisms

Higher Efficiency Evaporator Fan Motors Defrost Cycle Control

Variable

- Speed Evaporator Fan Motors and Evaporator Fan Motor Controllers Vacuum Insulated Panels

Higher Efficiency Evaporator Fan Blades Occupancy Sensors for Lighting Controls23 

# Technology Assessment: Technologies Identified, Cont.

Considered for Equipment With Doors Only

Improved Transparent Doors Anti

- Fog Films on Transparent Doors

Anti

- Sweat Heater Controls



### Considered for Equipment Without Doors Only

Air Curtain Design Night Curtains



### Considered for Self

- Contained Equipment Only

Higher Efficiency Compressors Liquid Suction Heat Exchangers

Improved Condenser Coil Design Higher Efficiency Condenser Fan Motors

Variable

- Speed Condenser Fan Motors and
Condenser Fan Motors Controllers Higher Efficiency Condenser Fan Blades24 

# Screening Analysis: Purpose

• Purpose

– To determine which technology options will be considered in downstream analyses.



## • Technology options are “screened out” if they

– Are not technologically feasible

– Are not practicable to manufacture, install, and service

– Have adverse impacts on equipment utility or availability to customers

– Have adverse impacts on health or safety



## • In this analysis, DOE also removed from consideration technologies that do not affect calculated energy consumption as measured by the test procedure.

• The methodology and results are presented in detail in Chapter 4 of
the NOPR TSD.25 

# Screening Analysis : Technologies Removed

• Technologies that do not affect calculated energy consumption per the DOE test procedure:

– Higher

- efficiency expansion valves

– Variable

- speed condenser fans and condenser fan motor controllers

– Anti

- sweat heater controllers

– Liquid

- suction heat exchangers



## • Screened

- Out Technology:

– Air curtain design26 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks27 

# NOPR Rulemaking Stage

Framework

Document Preliminary Analysis NOPR Final
Rule

Market &
Technology

Screening
Analysis Engineering Analysis

Energy Use Analysis

Shipments
Analysis National
Impact Analysis Markups Analysis

Life

- Cycle
Cost and Payback Period Analysis

Manufacturer
Impact Analysis28 

# Engineering Analysis: Methodology

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis 

# 



 Choose primary equipment classes, based primarily on their high market volumes, to streamline analysis.

Define characteristics of representative models in each primary equipment class which will serve as reference points to assess baseline and improved performance levels.

Identify and characterize design options which can be implemented to increase equipment efficiency.

Model equipment performance at each level of design option implementation, producing efficiency levels from baseline to

maximum technologically feasible efficiency for each class.

Generate manufacturer production costs (MPCs) for representative units modeled, then apply derived markups and shipping costs to calculate manufacturer selling prices. 

#  29 

# Primary Equipment Classes

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis 

## • DOE first selected primary equipment classes to be the subject of modeling in the engineering analysis.

• These equipment classes were selected based on market share:

• Of the 49 covered equipment classes, 25 were selected as primary classes for analysis.

• These classes (listed in the NOPR and TSD) cover a great majority of CRE units produced by shipment volume.

• The remaining 24 classes were not analyzed in the engineering analysis, but had standards set through an additional analysis.

• This primary class approach is consistent with the methodology used in the development of the 2009 DOE standards levels.

Issue 1: DOE seeks comment regarding its designation of primary and secondary equipment classes.30 

# Representative Units

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis 

## • For each primary equipment class, DOE defined a “representative unit” to serve as its analysis point for modeling. This is a prototypical unit for analytical purposes and does not correspond to a specific manufacturer model.

• The representative unit is composed within DOE’s engineering model as a collection and quantification of the physical and design characteristics needed in order to develop an analytical model of the unit.

• This includes physical, thermal, and electrical properties, as well as the presence or absence of certain features on the unit being modeled.

• These data points were collected from product literature, manufacturer interviews, reverse

engineering, and other sources.

• Full characteristics of the representative units chosen for analysis are included in Appendix 5A of the NOPR TSD.31 

# Representative Unit: Example Data (VOP.RC.M Class)

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis Equipment Class VOP.RC.M

Case Length (ft) 12 Case Gross Refrigerated Volume (ft 3 ) 130.2 Case Total Display Area (ft 2 ) 53.3 Number of Doors (#) 0 Single Door Area (ft 2 ) 0

Non

- Door Glass Area (ft 2 ) 0

Non

- Door Anti

- Sweat Power (W) 0 Wall Area (ft 2 ) 175.9 Insulation Thickness (in.) 1.5 Case Interior Surface Area (ft 2 ) 130.2 Air Curtain Angle from Vertical ( ° ) 8.5 Infiltrated Air Mass Flow (lb/hr) 860 Number of Bulbs in Conditioned Space (#) 12 Number of Bulbs Not in Conditioned Space (#) 9 Number of Ballasts in Conditioned Space (#) 0 Number of Ballasts Not in Conditioned Space (#) 7 Evaporator Fan Nominal Rated Wattage (W/fan) 9 Number of Evaporator Fans per Case (#) 6 Condenser Fan Nominal Rated Wattage (W/fan) 0 Number of Condenser Fans per Case (#) 0 Discharge Air Temperature (DAT) (F) 25 Baseline Evaporator Temperature (SET) (F) 15 Baseline Condenser Temperature (SCT) (F) 0 Compressor Oversize Multiplier 0 Defrost Mechanism (OFF, ELE, MAN) OFF Defrost Time per Day (hr) 4.5 Defrost and Drain Heater Power (W) 0 Condensate Pan Heater Power (W) 032 

# Design Options

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis 

## • Technologies listed in the Market and Technology Assessment and passing the Screening Analysis were considered as the basis for design options in the Engineering Analysis.

• Some technologies passing the Screening Analysis were still found to be inapplicable to the Engineering Analysis and were not considered based on technical grounds.

• Data were developed to characterize the performance of each design option.

• For example, this included the operational efficiencies of different motor types, and the thermal properties of different styles of glass doors.

• These data were developed based on inputs from product literature, manufacturer interviews, and other sources.33 

# Design Options Modeled

Engineering Design Options

Higher Efficiency Lighting and Occupancy Sensors for VOP, SVO, and SOC (Horizontal Fixtures) Higher Efficiency Lighting and Occupancy Sensors for VCT and PD (Vertical Fixtures)

Improved Evaporator Coil Design Higher Efficiency Evaporator Fan Motors

Improved Case Insulation and Vacuum Insulated

Panes Improved Doors for VCT: Low and Ice Cream Temperatures

Improved Doors for VCT and PD: Medium Temperature Improved Doors for HCT: Low and Ice Cream Temperatures

Improved Doors for HCT: Medium Temperature Improved Doors for SOC: Medium Temperature

Improved Condenser Coil Design (SC Only) Higher Efficiency Condenser Fan Motors (SC Only)

Higher Efficiency Compressors (SC Only) Night Curtains (Equipment Without Doors Only)34 

# Performance Modeling

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis 

## • The representative unit and design option data were used as the major inputs into DOE’s performance model.

• This Excel

- based model calculates equipment performance under the DOE test procedure (kWh/day consumed) for baseline and improved equipment configurations.

• Each primary class was modeled at the baseline, as well as at efficiency levels corresponding to implementation of each applicable design option.

• The output was a set of performance results consisting of the modeled energy consumption in kWh/day for each primary class, up to the max

- tech level.

• Details of the performance analysis are included on the
next slides.35 

# Performance Model: Overview

The CRE performance model was developed in the 2009 rulemaking and updated for this rulemaking. It is composed of two main parts:

1) Case Heat Load Model (Under DOE TP Conditions)

• Accounts for thermal loads, including c onduction through doors and walls, radiation through openings, and heat and moisture addition due to warm air infiltration.

• Calculates heat introduced into case by electricity use of internal components including f ans, lighting, defrost, and anti

- sweat. 

### 2) Refrigeration System Performance Model

• Compressor power input is calculated using compressor performance data. Modeling of heat exchanger effectiveness is used to estimate compressor operating conditions.

• The energy use of auxiliary components such as lighting, fans, and anti

- sweat heaters are based on component power input and run time.



### The system energy usage is calculated as the sum of the refrigeration system and auxiliary component energy consumption.36 

# Performance Modeling: Heat Load Calculations

Load calculations are based on the geometry and design parameters of the unit modeled, as well as on the conditions of the DOE test procedure, and include:

DOE TP conditions: 75 ° F, 55% relative humidity, 8

- hour door opening period Radiation through glass.
Key parameters: case and ambient temperatures, door U

- factor, glass

area. Anti

- sweat heat emitted

into case (70% of input power). Fan power rejected
into case as heat. Key parameters: fan input power, number of fans, run

time. Lighting power emitted into
case as heat.
Key parameters: lighting wattage

per fixture, number of fixtures,

run time.

• Case geometries and design parameters based on
manufacturer literature.

• Thermal performance of case and components based on manufacturer and supplier literature and interviews. Warm air infiltration from door openings.
Key parameters: temperature differential, infiltrated air mass. Conduction through walls and glass.
Key parameters: insulation R

value, wall area, glass area, U

factor, temperature differential.37 

# Performance Modeling: Refrigeration System

Refrigeration system performance simulation is driven by compressor modeling. Auxiliary component performance completes the energy use

estimate.

• Compressor energy consumption is calculated based on performance “maps” obtained from compressor suppliers based on testing per ANSI/AHRI Standard 540.

– Compressor “maps” provide compressor performance (capacity, power input, etc.) based on operating conditions (suction and discharge pressure and temperature).

– Within the engineering model, suction and discharge conditions are calculated as a function of the design air temperatures and the design of the heat exchangers.

– Heat exchanger design parameters were developed through first

- principles modeling by an outside subject matter expert.

• Fan and auxiliary component energy consumption are then calculated and added to the compressor electricity consumption.

– Evaporator fans are always assumed on; condenser fans are assumed to cycle with compressor. Fan power
estimates come from fan motor manufacturer literature and interviews.

– Lighting is modeled with the run time specified in the DOE TP; lighting power consumption is based on product literature and CRE manufacturer interviews.

– Anti

- sweat heater power was estimated from CRE and glass door manufacturer literature and interviews. Run time is assumed to be 100% per CRE manufacturer interviews.38 

# Performance Model: Refrigerants

• In the Engineering Analysis, DOE modeled equipment using R404A and R134a, the most often

- used refrigerants in the CRE industry.

• DOE performed this analysis based on a policy of remaining refrigerant

- neutral and focusing on the currently available technologies which could be used to reduce energy consumption.

• The share of non

- HFC units is currently very small, as alternatives have only recently entered the U.S. market.

• However, DOE realizes that non

- HFC refrigerants represent a growing portion of the marketplace.39 

# Refrigerants

Issue 5: DOE requests comment on the extent of the current use or likely future use of lower

- GWP refrigerants and asks manufacturers to submit data related to the ability of equipment (either existing or redesigned) using these refrigerants to meet the proposed standard levels. DOE seeks input as to the impacts of alternative refrigerants on refrigeration systems in this rulemaking.40 

# Cost Modeling

Determine Primary Equipment Classes

Define Representative

Units

Characterize Design Options

Model Unit
Performance

Conduct Price Analysis 

## • DOE developed costs for the modeled equipment in several phases:

• Costs for the “core case” of the refrigerated cabinets, including all non

- energy

- consuming components, were developed from teardowns of units currently on the
market.

• Costs for energy

- consuming components and design options were developed through research of industry literature, supplier price quotes, and manufacturer

interviews.

• Estimates of manufacturer markup were developed with data from the manufacturer interview process.

• Design option costs were applied to core case costs at each modeled efficiency level to yield Manufacturer Production Cost (MPC) values. Markups and outbound freight were added to yield Manufacturer Selling Price (MSP) values.41 

# Cost

- Efficiency Curves

• The final output of the engineering analysis is a set of cost

efficiency curves, one for each primary equipment class, depicting equipment cost and performance at each efficiency level modeled.

• These serve as the inputs to the downstream analyses, and as the basis for development of trial standard levels.42 

# Cost

- Efficiency Results

Issue 2 : 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.43 

# Development of Standard Levels: Offset Factors

• DOE used the engineering analysis results to develop standard levels as a function of volume or TDA for each equipment class at each TSL, including the proposed levels as TSL4.

• In order to go from an analysis point for a class to a standard level equation, DOE adopted the offset factors from the 2009 final rule and EPACT 2005 standards, which account for energy use that is inherent in the operation of any sized unit. DOE scaled these offset factors according to the analytical results so that standards were adjusted evenly for all unit sizes.

• The offset factors and analysis points were used to develop linear standard level equations. Full details are included in TSD Chapter 5.44 

# Offset Factors

Issue 3: DOE seeks comment on its methodology for developing offset factors for the standard level equations presented in this

NOPR.45 

# Extension of Standards

• In the 2009 final rule, DOE developed a method for “extending” standard level equations from primary (directly analyzed) to secondary equipment classes.

• This method was based on matched

- pair analyses of sets of classes having a single different major design characteristic, such as a different operating temperature. This allowed DOE to discern the energy impact of varying this single characteristic.

• The result was a set of “extension multipliers”, factors used to translate standards developed for primary classes to analogous equations for the secondary classes.

• This methodology was retained in this rule, as DOE believed that these extension multipliers largely reflect inherent physical difference in operation that do not scale with efficiency level.

• Full details are included in Chapter 5 of the TSD.46 

# Extension of Standards

Issue 4: DOE seeks comment on its approach in 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.47 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks48 

# NOPR Rulemaking Stage

Framework

Document Preliminary Analysis NOPR Final
Rule

Market &
Technology

Screening
Analysis Engineering Analysis

Energy Use & End

Use Load

Characterization

Shipments
Analysis National
Impact Analysis Markups for Equipment

Price

Determination

Life

- Cycle
Cost and Payback Period Analysis

Manufacturer
Impact Analysis49 

# Energy Use Analysis

Description/Background

• The purpose of this analysis is to translate equipment efficiency as determined in the engineering analysis into real

- world energy use.

• The engineering energy consumption model (Engineering Analysis) was validated during the 2009 rulemaking process by means of whole

- building simulations; this validation was not repeated for NOPR analysis

.

• For this NOPR, DOE estimate annual energy use for self

- contained and remote units by taking the daily energy use estimates from the engineering analysis and multiplying them by number of days per year (365). This is due to the fact that this equipment runs continuously during use. 

## Impact on Building Heating and Cooling Loads

• In the preliminary analysis, DOE evaluated the incremental effect of improved efficiency of self

- contained equipment on restaurant building heating and cooling loads. DOE concluded that efficiency improvements in self

- contained equipment do not have a noticeable impact on building heating and cooling
loads.50 

# Equipment Markups: Distribution Channels and Markups

DOE applies markups to equipment MSP to determine the customer purchase price of analyzed equipment.

• DOE used baseline and incremental markups. These were applied to the MSP in the base case, and to the incremental difference in MSP in each standards case respectively

• DOE determined separate baseline and incremental markups for each of 3 distribution channels (national accounts, wholesaler, and contractor). Each distribution channel was further divided into two equipment groups: display cases and solid

- door equipment.

• The baseline and incremental markups for each distribution channel are displayed below. National sales tax markup is estimated at 1.07

. Equipment Type Ntl

. Acct
Channel Wholesaler
Channel Contractor
Channel Display Cases

- VOP , SVO, HZO, VCT, HCT, SOC, and PD 70 % 15% 15%

Solid

- Door Equipment

- VCS and HCS 30% 60% 10%

Ntl . Acct
Channel Wholesaler
Channel Contractor
Channel* Weighted

- Average Markup Display

Cases Solid

- Door Equipment

Baseline 1.18 1.36 2.00 1.33 1.37

Incremental 1.05 1.10 1.31 1.10 1.11

* includes wholesaler markup51 

# Equipment Markups: Distribution Channels and Markups

Issue 6: DOE welcomes comment on the assumptions and values used for the markups analysis.52 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks53 

# NOPR Rulemaking Stage

Framework

Document Preliminary Analysis 

### NOPR Final
Rule

Market &
Technology

Screening
Analysis Engineering Analysis

Energy Use & End

Use Load

Characterization

Shipments
Analysis National
Impact Analysis Markups for Equipment

Price

Determination

Life

- Cycle
Cost and Payback Period Analysis

Manufacturer
Impact Analysis54 

# Life

- cycle Cost and Payback Period Analysis

Purpose

– To develop the customer life

- cycle cost (LCC) savings and payback period (PBP) for higher

- efficiency equipment compared to the baseline equipment.

Method

– Use Monte Carlo simulation to estimate the life

- cycle costs for a population of commercial refrigeration equipment (10,000 trials for each EC), implemented in an Excel® spreadsheet using Crystal Ball

– Life Cycle Cost: Equipment

- installed price + operating costs over the equipment lifetime

– LCC savings: Base

- case LCC minus standards

- case LCC

– Payback Period: Equipment

- installed price divided by first

- year operating costs

– LCC is discounted; PBP is not discounted (“simple” PBP)55 

# LCC: Overview56 

# LCC: Repair and Maintenance Costs

DOE assumed that repair and maintenance costs do not vary with equipment efficiency, except for repair and maintenance costs relating to CRE lighting.

• Annualized Repair Costs: DOE retained the annualized repair cost approach used in the 2009 rule. Repair costs vary by equipment class and efficiency.

• Annualized Preventative Maintenance Costs: DOE estimates,
based on RS Means Facilities Maintenance and Repair Cost Data

, are $35 for self

- contained, and $220 for remote condensing equipment.

• Annualized Lighting Maintenance: DOE differentiated between the maintenance and repair costs associated with fluorescent lamps and ballasts, and LED lamps and fixtures by efficiency level for each equipment class. The costs are based on OEM costs.57 

# LCC: Annualized Lighting Maintenance Cost by TSL

EC Annualized Lighting Maintenance Costs by Efficiency Level 2012$/ yr Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5

VOP.RC.M 96 96 96 119 119 119

VOP.RC.L 41 41 36 36 36 36

VOP.SC.M 55 55 55 64 64 64

VCT.RC.M 32 32 32 32 32 32

VCT.RC.L 32 32 32 32 32 32

VCT.SC.M 24 24 24 24 24 24

VCT.SC.L 43 24 24 24 24 24

VCT.SC.I 24 24 24 24 24 24

SVO.RC.M 68 68 68 92 92 92

SVO.SC.M 38 38 38 50 50 50

SOC.RC.M 68 68 68 72 72 72

PD.SC.M 13 14 14 14 14 14

SOC.SC.M 93 110 110 116 116 11658 

# LCC: Repair and Maintenance Costs

Issue 8: Currently , DOE assumes no increase in regular maintenance costs at higher efficiency levels, except for lighting maintenance and repair costs. DOE welcomes stakeholder input and additional information to improve these estimates of maintenance and repair costs. Data pertaining to cost increases associated with the specific design options considered in this rulemaking would be greatly appreciated.59 

# LCC Inputs

• Installation Costs: DOE retained estimates from the 2009 rule, escalated to 2012$. These estimates are $863 for all

self

- contained equipment, and $2,301 for remote condensing equipment.

• Discount Rates: DOE developed a distribution of possible discount rates specific to each of the business types
considered.

• Electricity Prices: DOE developed regional electricity prices for each of the business types considered.

• Electricity Price Trend: DOE used the AEO2013 commercial electricity price projections, which vary by census division60 

# LCC Inputs: Lifetime

• Lifetime: Is defined as the age at which the equipment is
retired from service. DOE established lifetime distributions for equipment used in different applications. These distributions had the following average lifetimes:

• 15 years for display cases used in small food retail stores

• 10 years for all remaining equipment

Issue 13: DOE welcomes further input on the average equipment lifetimes for the LCC analysis and NIA.61 

# LCC Inputs: Market Shares of Efficiency Levels

• To represent consumer selection of equipment efficiencies, DOE developed distributions of equipment efficiencies that consumers may purchase under the base case.

• Due to the lack of available data, DOE used a cost

- based method consistent with the approaches that were used in the EIA’s National Energy Modeling System (NEMS) and in the Canadian Integrated Modeling System (CIMS) for estimating efficiency choices within each equipment class.

• In response to the Preliminary analysis, some stakeholders commented that the these distributions were skewed to higher efficiency equipment.

• If the current analysis overstates the share of shipments at higher efficiency levels in the base case scenario, this will result in an under

estimate of the energy and cost savings associated with a standard.62 

# LCC Inputs: Base Case Market Shares of Efficiency Levels

Equipment Class Shipment

- Weighted Market Shares by Efficiency Level

EL 1 EL 2 EL 3 EL 4 EL 5 EL 6 EL 7 EL 8

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

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% 15.4% 13.0% 12.6% 11.7% 11.5% 1.7%

VCT.SC.L 10.5% 13.2% 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 16.2% 17.0% 17.2% 17.1% 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%63 

# LCC Inputs: Market Shares of Efficiency Levels

Issue 7: DOE welcomes information from stakeholders that would aid DOE in improving upon the numbers for market shares of efficiency levels.64 

# LCC and PBP Analysis: Results

– TSL 4

Equipment
Class Average LCC (2012$) Average LCC Savings (2012$) Net Cost ( %) No Impact (%) Net Benefit ( %) Median PBP (Years)

VOP.RC.M 30,348 1,494 11 15 74 3.9

VOP.RC.L 49,830 1,130 1 25 75 2.2

VOP.SC.M 20,351 691 11 14 75 4.4

VCT.RC.M 24,048 1,108 26 16 57 2.7

VCT.RC.L 33,571 798 0 21 79 1.6

VCT.SC.M 10,430 641 27 13 60 2.5

VCT.SC.L 20,303 1,343 7 15 78 1.0

VCT.SC.I 17,736 432 1 16 83 2.0

VCS.SC.M 6,065 132 7 13 80 1.8

VCS.SC.L 8,549 221 20 14 66 1.1

VCS.SC.I 11,913 153 3 16 81 2.4

SVO.RC.M 25,236 1,008 13 16 72 4.5

SVO.SC.M 16,966 492 12 14 75 4.8

SOC.RC.M 27,993 495 29 18 53 4.4

HZO.RC.M 16,972 0 NA NA NA NA

HZO.RC.L 23,884 0 NA NA NA NA

HZO.SC.M 9,408 29 19 24 57 6.4

HZO.SC.L 17,582 0 NA NA NA NA

HCT.SC.M 3,900 254 18 12 70 3.0

HCT.SC.L 4,904 369 23 14 63 1.5

HCT.SC.I 4,344 42 2 23 75 4.3

HCS.SC.M 2,947 9 29 31 40 4.3

HCS.SC.L 3,406 81 2 16 82 2.6

PD.SC.M 6,946 310 41 11 48 2.3

SOC.SC.M 27,736 740 25 16 60 3.0 LCC savings are positive for all equipment classes, and the majority of customers experience net benefits from the proposed standard65 

# Customer End

- Use: Product Attributes

Issue 11: 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.66 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks67 

# NOPR Rulemaking Stage

Framework

Document Preliminary Analysis NOPR Final
Rule

Market &
Technology

Screening
Analysis Engineering Analysis

Energy Use & End

Use Load

Characterization

Shipments
Analysis National
Impact Analysis Markups for Equipment

Price

Determination

Life

- Cycle
Cost and Payback Period Analysis

Manufacturer
Impact Analysis68 

# Shipments: Background and Data Sources

Purpose

• Estimate future stock and shipments of commercial refrigeration equipment by equipment class

• Estimate efficiency mix of stock over time (30 year analysis period) 

# Methodology

• DOE estimated historical shipments data from multiple data sources:

– Shipments for the year 2005 submitted by AHRI in prior rulemaking

– Commercial Refrigeration Equipment to 2014

, Freedonia Group, Inc.,
2010

– 2008 Size and Shape of Industry , North American Association of Food Equipment Manufacturers’ (NAFEM), 2008

– Energy Savings Potential and R&D Opportunities of Commercial Refrigeration , Navigant Consulting, Inc., 2009

• Equipment stock estimates were carried over from the 2009 shipments analysis

• Future shipments are based on historical shipments trends and projections of commercial floor space by sector from AEO 2013.69 

# Shipments: Forecasts

- TSL 4

Equipment Class Thousands of Linear Feet Shipped by Year Cumulative
Total 2017 2020 2025 2030 2035 2040 2045 2046

VOP.RC.M 327 346 359 402 425 463 503 513 12,287

VOP.RC.L 17 18 19 21 22 24 26 27 647

VOP.SC.M 23 24 25 28 30 33 36 36 870

VCT.RC.M 25 26 27 30 32 35 38 39 924

VCT.RC.L 342 362 375 420 444 484 525 537 12,847

VCT.SC.M 154 163 169 189 200 218 237 242 5,792

VCT.SC.L 8 8 8 9 10 11 12 12 289

VCT.SC.I 8 9 9 10 11 12 13 13 317

VCS.SC.M 624 661 685 766 811 884 959 979 23,447

VCS.SC.L 318 336 349 390 413 450 488 499 11,935

VCS.SC.I 2 2 2 3 3 3 3 3 78

SVO.RC.M 263 278 288 322 341 372 403 412 9,866

SVO.SC.M 35 37 38 43 45 49 53 54 1,302

SOC.RC.M 66 70 73 81 86 94 102 104 2,487

HZO.RC.M 40 43 44 50 52 57 62 63 1,516

HZO.RC.L 127 134 139 156 165 180 195 199 4,767

HZO.SC.M 3 3 3 4 4 4 5 5 112

HZO.SC.L 6 7 7 8 8 9 9 10 232

HCT.SC.M 2 2 2 2 3 3 3 3 73

HCT.SC.L 12 13 13 15 16 17 19 19 453

HCT.SC.I 14 14 15 17 18 19 21 21 514

HCS.SC.M 141 150 155 174 184 200 217 222 5,310

HCS.SC.L 18 19 20 22 24 26 28 29 686

PD.SC.M 242 256 266 297 315 343 372 380 9,101

SOC.SC.M 5 5 5 6 6 7 8 8 185
Total 2,821 2,987 3,097 3,466 3,666 3,998 4,337 4,429 106,034 Forecasted Shipments for Commercial Refrigeration Equipment, 2017

− 2046, by Equipment Type (Base Case)70 

# Shipments: Forecasts

• DOE’s model assumes that the primary driver for the replacement of display cases in stores is remodeling. The decision to remodel may be influenced by many factors, but DOE does not believe that an equipment price increase due to an efficiency standard would alter a decision to remodel.

• DOE recognizes that for food service establishments the factors driving equipment replacement may be different, and that equipment price may be a factor in the decision to purchase a new unit.

• DOE does not currently have sufficient shipments data to estimate a price elasticity for the purchase decision in food service establishments.



## Issue 9: DOE welcomes stakeholder input on the impact of amended standards on future commercial refrigeration equipment shipments. DOE also welcomes input and data that may be used to estimate purchase price elasticity for commercial refrigeration equipment.71 

# National Impact Analysis

Purpose

• To assess the impacts at the national level at each efficiency level as measured by

• National Energy Savings (NES) in quadrillion Btu (quads)

• Net Present Value (NPV) of total consumer economic impacts

• NPV results in this presentation do not include monetized emissions

Method

• For each year, for both the base case and standards cases, DOE calculates:

• National energy consumption (energy use per unit multiplied by total stock)

• Total consumer expenditures on commercial refrigeration equipment:

• National equipment expenditures

• National operation and maintenance costs

• The difference between the base case and each standards case, summed over the analysis period, defines the NES and the NPV of consumer economic impacts.

• Dollar values are discounted to the analysis year (2013) using discount rates of 3 and 7 percent.72 

# National Impact Analysis: Trial Standard Levels (TSL)

DOE developed TSLs by combining selected efficiency levels from each equipment class into TSL groupings. These groupings are based on a set of criteria that can be defined consistently across dissimilar types of equipment. TSLs are describe in appendix 10C of the TSD.

The criteria defining the five TSLs for CRE are as follows:

 TSL 5 was set at the maximum technologically feasible (max

- tech) level within each equipment class.

 TSL 4 was chosen as the maximum energy savings (NES) having positive NPV at a 7

- percent discount rate within each equipment class.

 Equipment classes HZO.RC.M, HZO.RC.L & HZO.SC.L stay at EL1

 TSL 3 was chosen as the maximum NPV at a 7

- percent discount rate within each equipment class.

 TSL 2 was chosen as an intermediate level , generally one efficiency level below TSL3

 For TSL 1 was chosen as an intermediate level , generally one efficiency level below TSL273 

# National Impact Analysis: Mapping of Design Options to TSL

• Each TSL is mapped to a set of engineering design options.

• Complete details of this mapping can be found in appendix 10C of
the TSD

• Complete details of the engineering design options can be found in chapter 5 of the TSD Equipment Class Max NPV Max NES w/

NPV > 0 Max

- Tech

TSL 3 TSL 4 TSL 5

VOP.RC.M AD7* AD8 AD9

VOP.RC.L AD8 AD8 AD9

VOP.SC.M AD11 AD12 AD13

VCS.SC.M AD9 AD9 AD10

VCS.SC.L AD8 AD9 AD10

VCS.SC.I AD9 AD9 AD10

“AD” stands for "Analytical Design" and represents “Design Option Level.” For example, AD12 represents Design Option Level 12

. For details on the design options associated with each design option level within each equipment class, see TSD chapter 5.

*”AD” refers to “analytically derived” results, meaning the efficiency levels determined in the engineering analysis.74 

# National Impact Analysis: National Energy Savings (quads)

Equipment Class Trial Standard Level

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 0.007 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

Total 0.236 0.422 0.920 1.001 1.27875 

# National Impact Analysis: Alternative Price Trends

• DOE developed projections of future equipment price trends over the analysis period

• The reference case was derived using inflation adjusted historical equipment price index from the Bureau of Labor Statistics, PPI series Commercial Refrigerators and Related Equipment

• Further information is provided in appendices 8D and 10B of the NOPR TSD 0 0.2 0.4 0.6 0.8

1 1.2

2010 2015 2020 2025 2030 2035 2040 2045 2050Price Factor Index

Year Constant Prices

Reference Price Case



## Issue 10: DOE would welcome historical price data for specific equipment types that could be used in place of PPI. Also DOE seeks comment and manufacturer input on mechanisms that may influence or explain historical price trends.76 

# National Impact Analysis: Light Technology Price Trends

DOE incorporated the price projections for LED lighting into the NIA. These reduce the cost of lighting for certain equipment, under some efficiency levels, over for the period of 2017 to 2030.

LED price deflators used in the NOPR analysis, 2010

- 2046.

Year Normalized

to 2013 Normalized

to 2017 Year Normalized

to 2013 Normalized

to 2017

2010 3.00 5.65 2021 0.36 0.68

2011 1.80 3.39 2022 0.34 0.63

2012 1.29 2.42 2023 0.31 0.59

2013 1.00 1.89 2024 0.29 0.55

2014 0.82 1.54 2025 0.27 0.52

2015 0.69 1.31 2026 0.26 0.49

2016 0.60 1.13 2027 0.25 0.46

2017 0.53 1.00 2028 0.23 0.44

2018 0.48 0.90 2029 0.22 0.42

2019 0.43 0.81 2030 0.21 0.40

2020 0.39 0.74 2031

- 2046* 0.21 0.40

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

Source: Navigant Consulting. "Energy Savings Potential of Solid

- State Lighting in General Illumination Applications 2010 to 2030." Building Technologies Program, Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy, Feb. 2010 

## While these trends show large decreases in LED cost over time, LED lighting comprises an amount on the order of 5% of equipment MSP, so these changes are not a significant portion of equipment price.77 

# National Impact Analysis: Net Present Value (NPV)

Cumulative NPV Results by Trial Standard Level Based on a 7

- Percent Discount Rate (billion 2012$)

Equipment Class Net Present Value (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)

Total 0.561 0.905 1.705 1.606 (6.735)78 

# Analysis Period

Issue 12: 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. DOE seeks input, information and data on whether there are ways to refine the analytic timeline further.79 

# Public Meeting Topics

1 Overview; Scope; Test Procedures;

2 Market & Technology; Screening;

3 Engineering;

4 Energy Use; Markups Analysis;

5 Life

- Cycle Cost & Payback Period Analysis;

6 Shipments; National Impact Analysis;

7 MIA; NOPR Analyses; Closing Remarks80 

# NOPR Rulemaking Stage

Framework

Document Preliminary Analysis NOPR Final
Rule

Market &
Technology

Screening
Analysis Engineering Analysis

Energy Use & End

Use Load

Characterization

Shipments
Analysis National
Impact Analysis Markups for Equipment

Price

Determination

Life

- Cycle
Cost and Payback Period Analysis

Manufacturer
Impact Analysis81 

## • Purpose

– To assess the impacts of standards on manufacturers;

– To identify and estimate impacts on manufacturer subgroups that may be more severely affected than the industry as a whole; and

– To examine the direct employment, product competition, manufacturing capacity, and cumulative regulatory impacts on the industry.



## • Methodology

– Analyze industry cash flow and industry net present value (INPV) through use of the Government Regulatory Impact Model (GRIM); and

– Interview manufacturers to refine inputs to the GRIM, develop subgroup analyses, and address qualitative issues. 

# Manufacturer Impact Analysis: Overview82 

## • Phase 1

– DOE creates an industry profile to characterize the market and identify important issues that require further investigation.



## • Phase 2

– DOE prepares an industry cash flow model and an interview questionnaire to guide subsequent discussions with manufacturers.



## • Phase 3

– DOE interviews manufacturers and assesses the impacts of standards both quantitatively (using the GRIM) and qualitatively (impacts on employment, competition, manufacturing capacity, and regulatory burden). 

# NOPR Manufacturer Impact Analysis: Methodology

Industry profile Develop
straw

- man GRIM Develop interview guide Interviews & industry subgroup analyses Assess employment, competition

, capacity, & regulatory burden s Phase 2 Phase 3 Phase 183 

## • Enforcement

– Manufacturers expressed concern that an energy conservation standard rulemaking could result in unfair competition if the standard is not properly
enforced



## • Disproportionate impact on small businesses

– Small manufacturers indicated they have fewer resources to comply with a
standard. As a result, they feared they would be forced to focus on compliance
rather than on innovation

.



## • Potential Loss of Product Utility and Decrease in Food Safety

– Manufacturers expressed concern that an amended standards would limit their ability to optimize their equipment for specific merchandise and to meet customer requirements

– Manufacturers expressed concern that more

- efficient equipment would have trouble maintaining food safety in extreme, but not uncommon, conditions. 

# Manufacturer Impact Analysis: Key Issues84 

## • DOE modeled two markup scenarios.

– Preservation of Gross Margin Percentage

– Preservation of Operating Profit 

# Manufacturer Impact Analysis: Markup Scenarios

Lower Bound Profitability Scenario (Most Severe for Manufacturers) Upper Bound Profitability Scenario (Least Severe for Manufacturers)

Preservation of Operating

Profit Markup Scenario Preservation of Gross Margin Scenario85 

# Manufacturer Impact Analysis: Industry INPV Results

Summary of Results

Units Base

Case Trial Standard Level

1 2 3 4 5

INPV 2012$

Millions 1,162.0 1,155.2

to 1,15.4 1,135.6

to 1,146.9 1,102.8

to 1,135.7 1,069.4

to 1,116.1 646.0

to 1,136.5

Change in

INPV 2012$

Millions - (6.8 ) to (3.6) (26.4 ) to (15.2) (59.2 ) to (26.3) (92.6 ) to (45.9) (516.0 ) to (25.5)

(%)

- (0.58 ) to (0.31) (2.27 ) to (1.0) (5.09 ) to (2.26) (7.97 ) to (3.95) (44.41 ) to (2.20)

Total

Conversion

Costs 2012$

Millions - s 8.0 28.3 53.4 87.5 320.4



# Summary of TSL 4

• Expected INPV change in the range of

- 7.97% to

- 3.95%

• Product conversion costs total $11.2M for the industry

• Capital conversion costs total $76.3M for the industry86 

## • The Small Business Administration (SBA) has set a size threshold of 750 employees or less for the category “Air

- Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing”

• DOE searched several publicly available databases to identify any potential domestic small business manufacturers.

– These included the Air

- Conditioning, Heating, and Refrigeration Institute (AHRI )
certification database , North American Association of Food Equipment Manufacturers (NAFEM ) database, and market research tools (e.g. Dun & Bradstreet reports).



## • DOE identified 32 small business CRE manufacturers. 

# Manufacturer Impact Analysis: Small Business Impacts87 

## • Small manufacturers could have differential impacts relative to larger competitors due to:

– Access to capital

– Cost of product redesigns

– Pricing for key components 

# Manufacturer Impact Analysis: Small Business Impacts

Large
Manufacturer Small
Manufacturer
Total Conversion Cost as a Percentage of
Annual Revenue 2% 17%88 

# Manufacturer Impact Analysis: Small Business Impacts

Issue 14: DOE requests comment on the potential impacts of amended standards on small manufacturers of commercial refrigeration equipment.89 

# Cumulative Regulatory Burden

Issue 16: The agency seeks input on the cumulative regulatory burden that may

be imposed on industry either from recently implemented rulemakings for this equipment type or other rulemakings that may affect the same industry.90 

### • Purpose

– Evaluate impacts on any identifiable groups or customers who may be disproportionately affected by any amended national energy efficiency
standard level.

• Method

– Analyze the LCC and payback periods (PBPs) for those customers that fall into any identifiable groups. LCC spreadsheet model allows for different inputs to represent particular groups.

• Output

– Customer subgroup life

- cycle costs and payback periods.

– Identification of subgroups particularly affected by an amended standard. 

# LCC Subgroups Analysis91 

## • DOE examined small foodservice (represented by full

- service restaurants) and small food retail (represented by gas station convenience stores) as the representative small businesses for the LCC Subgroups Analysis.

– These groups experience higher electricity prices and higher capital costs than the national average. It was assumed that neither of these subgroups had access to the National Accounts distribution channel.

– While the results showed varied impacts for both subgroups, in most cases the impacts where reduced life

- cycle costs due to the higher electricity prices.

– Details can be found in chapter 11 of the TSD. 

# LCC Subgroups Analysis92 

# Emissions Analysis

DOE estimates the cumulative emissions reductions resulting from amended energy conservation standards. DOE considers full

- fuel

- cycle emissions. Thus, both power plant emissions and “upstream” emissions are included in the analysis.

– Includes fugitive methane emissions.



### Trial Standard Level

1 2 3 4 5



### CO 2 

### (million metric tons) 

### 13.0 23.1 50.4 54.9 70.0

NO x 

### (thousand tons) 

### 19.1 34.2 74.5 81.1 103.4
Hg ( tons) 

### 0.0 0.1 0.1 0.1 0.1

N 2 

### O ( thousand tons ) 

### 0.3 0.5 1.1 1.2 1.5

CH 4 

### ( thousand tons ) 

### 62.8 112.1 244.2 265.9 339.2

SO 2 

### ( thousand tons ) 

### 16.6 29.6 64.4 70.1 89.4



## Cumulative Emissions Reduction for Potential Standards for Commercial Refrigeration Equipment93 

# Emissions Monetization

• DOE uses the most current Social Cost of Carbon (SCC) values developed by interagency process.

• SCC is intended to be a monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, including but not limited to agricultural productivity loss, human health effects, property damage from rising sea level, and changes in the ecosystem.

• The most recent (2013) U.S. government interagency estimates of the SCC for emissions in 2015 are $12.90, $40.80, $62.2, and $117.0 per metric ton avoided (2012 dollars).

• The SCC in constant dollars increases over time

• DOE also monetizes the NO

x 

## emissions reductions resulting from amended standards. The medium estimate is $2639 per ton of NOx

.94 

# Emissions Monetization: Results

TSL Social Cost of Carbon @ $12.9

per metric ton : 5% discount
rate,

average Social Cost of Carbon @ $40.8

per metric ton : 3% discount
rate,

average Social Cost of Carbon @ $62.2

per metric ton : 2.5% discount
rate,

average Social Cost of Carbon @ $117.0 per

metric ton : 3%
discount
rate,

average

1 72.6 355.1 578.7 1074

2 129.8 634.4 1034 1920

3 282.7 1382 2252 4181

4 307.8 1505 2452 4552

5 392.6 1919 3127 5807 

## Present Value of CO 2 

## Reduction (million 2012$)95 

# Emissions Monetization: Results

TSL 3% discount

rate 7% discount

rate

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

Note: Based on medium estimate: $2639 per ton. 

## Present Value of No

x 

## Reduction (million 2012$)96 

# Utility Impact Analysis

Purpose

– To estimate the changes in electric installed capacity and generation that result for each trial standard level (TSL).



# Method

– The NES is used to provide a stream of energy savings over the analysis period

– The Energy Information Administration’s National Energy Modeling System (NEMS) is modified to represent the impacts of DOEs standards program (modified code is known as NEMS

- BT)


# Output

– Reductions in total electricity generation

– Reductions in primary fuel (coal, natural gas etc.) consumption

– Changes to the mix of electricity generation by fuel type

– Changes to total installed capacity97 

# Utility Impact Analysis: Results

Year TSL

1 2 3 4 5

Installed Capacity Reduction (MW)

2020 10 18 39 43 55

2025 35 63 136 148 189

2030 83 148 322 350 447

2035 149 266 578 630 803

2040 253 453 986 1074 1370

Electricity Generation Reduction ( GWh )

2020 279 499 1086 1182 1508

2025 607 1085 2363 2573 3282

2030 853 1524 3319 3613 4609

2035 922 1647 3586 3905 4981

2040 996 1780 3877 4221 538498 

# Employment Analysis

• Purpose



# – To estimate the net jobs created or eliminated nationally as a consequence of amended energy conservation standards. This includes direct and indirect employment impacts.

• Method



# – Uses the ImSET (Impact of Sector Energy Technologies) model for the evaluation of indirect employment impacts.



# – The changes in equipment and energy expenditures are taken from the National Energy Savings Analysis.



# – Direct employment impacts to the CRE industry are developed in the
Manufacturer Impact Analysis (chapter 12).

• Output



# – Change to commercial and energy sector employment as a consequence of amended energy conservation standards99 

# Employment Analysis: Results

Net Short

- term Changes in Employment 2017, and 2021 (jobs, in thousands)

TSL 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 504100 

# Regulatory Impact Analysis

• Purpose

– To investigate the national impacts of non

- regulatory alternatives to mandatory amended energy conservation standards

– The non

- regulatory alternatives that may be considered include:

• No new regulatory action; early replacement; prescriptive standards; customer tax credits; manufacturer tax credits; customer rebates; voluntary efficiency targets and bulk government procurement



# • Method

– The NES spreadsheet model is modified to consider different scenarios

– The variables that may be modified include energy prices and escalation factors, implicit market discount rates, customer purchase price and operating cost, income elasticities, and equipment stock data.



# • Output

– National Energy Savings and Net Present Value for the non

- regulatory
alternatives

– Impact of non

- regulatory alternatives on purchase price and use of energy

efficient equipment101 

# Regulatory Impact Analysis: Results

DOE identified 4 major non

- regulatory alternatives that could potentially achieve similar improvements in CRE energy efficiency, and compared the NES and NPV of these alternatives to the values calculated for the proposed standards.

Policy Alternatives Cumulative Primary NES ( quads) Cumulative Net Present Value ( billion 2012$)

7% Discount 3% Discount

No new regulatory action 0 0 0

Consumer tax credits 0.15 0.26 0.49

Customer rebates 0.20 0.06 0.12

Voluntary energy efficiency targets 0 0 0

Early replacement 0 0 0
Proposed standards (TSL 4) 1.00 1.61 4.07102 

# Proposed Energy Conservation Standards: TSL 4

Equipment
Class Proposed Standard
Level *, † Equipment
Class Proposed Standard
Level *, † Equipment
Class Proposed Standard
Level *, †

VCT.RC.L 0.43 × TDA + 2.03 VCS.SC.M 0.03 × V + 0.53 SOC.RC.L 0.83 × TDA + 0.18

VOP.RC.M 0.61 × TDA + 3.03 VCS.SC.L 0.13 × V + 0.43 SOC.RC.I 0.97 × TDA + 0.21

SVO.RC.M 0.63 × TDA + 2.41 HCT.SC.M 0.02 × V + 0.51 SOC.SC.I 1.35 × TDA + 0.29

HZO.RC.L 0.57 × TDA + 6.88 HCT.SC.L 0.11 × V + 0.6 VCT.RC.I 0.51 × TDA + 2.37

HZO.RC.M 0.35 × TDA + 2.88 HCS.SC.M 0.02 × V + 0.37 HCT.RC.M 0.14 × TDA + 0.11

VCT.RC.M 0.08 × TDA + 0.72 HCS.SC.L 0.12 × V + 0.42 HCT.RC.L 0.3 × TDA + 0.23

VOP.RC.L 2.11 × TDA + 6.36 PD.SC.M 0.03 × V + 0.83 HCT.RC.I 0.35 × TDA + 0.27

SOC.RC.M 0.39 × TDA + 0.08 SOC.SC.M 0.32 × TDA + 0.53 VCS.RC.M 0.1 × V + 0.24

VOP.SC.M 1.51 × TDA + 4.09 VOP.RC.I 2.68 × TDA + 8.08 VCS.RC.L 0.21 × V + 0.5

SVO.SC.M 1.5 × TDA + 3.99 SVO.RC.L 2.11 × TDA + 6.36 VCS.RC.I 0.25 × V + 0.58

HZO.SC.L 1.92 × TDA + 7.08 SVO.RC.I 2.68 × TDA + 8.08 HCS.SC.I 0.35 × V + 0.81

HZO.SC.M 0.75 × TDA + 5.44 HZO.RC.I 0.72 × TDA + 8.74 HCS.RC.M 0.1 × V + 0.24

HCT.SC.I 0.49 × TDA + 0.37 VOP.SC.L 3.79 × TDA + 10.26 HCS.RC.L 0.21 × V + 0.5

VCT.SC.I 0.52 × TDA + 2.56 VOP.SC.I 4.81 × TDA + 13.03 HCS.RC.I 0.25 × V + 0.58

VCS.SC.I 0.35 × V + 0.81 SVO.SC.L 3.77 × TDA + 10.01 SOC.SC.L 0.67 × TDA + 1.12

VCT.SC.M 0.04 × V + 1.07 SVO.SC.I 4.79 × TDA + 12.72

VCT.SC.L 0.22 × V + 1.21 HZO.SC.I 2.44 × TDA + 9.0

* TDA is the total display area of the case, as measured in the Air

- Conditioning, Heating, and Refrigeration Institute (AHRI) Standar d 1200

- 2010, appendix D.

† V is the volume of the case, as measured in American National Standards Institute (ANSI) / Association of Home Appliance Manufa ct urers (AHAM)
Standard HRF

- 1

- 2004.103 

# • Energy

– Cumulative energy savings 1.001 quadrillion Btus (quads) for equipment purchased in 2017

- 2046



# • Cost Savings

– Cumulative national net present value (NPV) = $1.6 billion (7% discount rate (DR)), $4.1 billion (3% DR)

– Estimated average life cycle cost savings are positive for all equipment, with median payback

- periods of under 5 years for most equipment.



# • Environmental Benefit

– Energy saved in the form of electricity would result in cumulative greenhouse gas emission reductions of 54.9 million metric tons (Mt) of carbon dioxide (CO 2 

## ) for equipment purchased in 2017

- 2046

– Estimated net present monetary value of the CO 2 

## emissions reduction is between $ 0.31 and $ 4.6 billion 

# Summary of Proposed Rule Impacts104 

# CRE Schedule: Compliance Date

• The compliance date is the date at which compliance with
the proposed standard would be required.

• 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 date for by an additional 2 years.

• Currently, DOE assumes a compliance date three years from publication of a final rule.

Issue 17 : 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.105 

# Closing Remarks106 

# Summary of Requests for Comment

• Issue 1: DOE seeks comment regarding its designation of primary and secondary equipment classes.

• Issue 2: 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.

• Issue 3: DOE seeks comment on its methodology for developing offset factors for the standard level equations presented in this NOPR.

• Issue 4: DOE seeks comment on its approach in 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.107 

# Summary of Requests for Comment, Continued

• Issue 5: DOE requests comment on the extent of the current use or likely future
use of lower

- GWP refrigerants and asks manufacturers to submit data related to the ability of equipment (either existing or redesigned) using these refrigerants to meet the proposed standard levels. DOE seeks input as to the impacts of alternative refrigerants on refrigeration systems in this rulemaking.

• Issue 6: DOE welcomes comment on the assumptions and values used for the markups analysis

.

• Issue 7: DOE welcomes information from stakeholders that would aid DOE in improving upon the numbers for market shares of efficiency levels.

• Issue 8: Currently, DOE assumes no increase in regular maintenance costs at higher efficiency levels, except for lighting maintenance and repair costs. DOE welcomes stakeholder input and additional information to improve these estimates of maintenance and repair costs. Data pertaining to cost increases associated with the specific design options considered in this rulemaking would be greatly appreciated

.108 

# Summary of Requests for Comment, Continued

• Issue 9: DOE welcomes stakeholder input on the effect of amended standards on future commercial refrigeration equipment shipments. DOE also welcomes input and data that may be used to estimate purchase price elasticity for commercial refrigeration equipment.

• Issue 10: DOE would welcome historical price data for specific equipment types that could be used in place of PPI. Also DOE seeks comment and manufacturer input on mechanisms that may influence or explain historical price trends

.

• Issue 11: 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.109 

# Summary of Requests for Comment, Continued

• Issue 12: 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

.

• Issue 13: DOE welcomes further input on the average equipment lifetimes for the LCC analysis and NIA.

• Issue 14 : 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 business that are small grocery stores, convenience stores, or restaurants.110 

# Summary of Requests for Comment, Continued

• Issue 15: DOE solicits comments 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 cost values.

• Issue 16: The agency seeks input on the cumulative regulatory burden that may be imposed on industry either from recently implemented rulemakings for this equipment type or other rulemakings that may affect the same industry.

• Issue 17: 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.111 

# How to Submit Written Comments

• In all correspondence, please refer to the CRE rulemaking by:

– Commercial Refrigeration Equipment Energy Conservation Standards Rulemaking,

– Docket Number EERE

- 2010

- BT

- STD

- 0003 , and

– Regulatory Identification Number (RIN) 1904

- AC19.

• Email : CRE

- 2010

- STD

- 0003@ee.doe.gov

• Comment period closes: November 12 , 2013, 11:59 PM EST

Postal: Courier:

Ms. Brenda Edwards U.S. Department of Energy Building Technologies Program, Mailstop EE

- 2J 1000 Independence Avenue, SW Washington, DC 20585

- 0121 Ms. Brenda Edwards U.S. Department of Energy Building Technologies Program, Suite 600 950 L’Enfant Plaza, SW Washington, DC 20024

Tel: 202 586

- 2945