[Federal Register Volume 89, Number 13 (Friday, January 19, 2024)]
[Proposed Rules]
[Pages 3714-3875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28976]



[[Page 3713]]

Vol. 89

Friday,

No. 13

January 19, 2024

Part II





Department of Energy





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10 CFR Parts 429 and 431





Energy Conservation Program: Energy Conservation Standards for Fans and 
Blowers; Proposed Rule

Federal Register / Vol. 89 , No. 13 / Friday, January 19, 2024 / 
Proposed Rules

[[Page 3714]]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 431

[EERE-2022-BT-STD-0002]
RIN 1904-AF40


Energy Conservation Program: Energy Conservation Standards for 
Fans and Blowers

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

ACTION: Notice of proposed rulemaking and announcement of public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including fans and 
blowers. EPCA also requires the U.S. Department of Energy (``DOE'') to 
periodically determine whether more stringent standards would be 
technologically feasible and economically justified and would result in 
significant energy savings. In this notice of proposed rulemaking 
(``NOPR''), DOE proposes energy conservation standards for two 
categories of fans and blowers: air circulating fans (``ACFs''), and 
fans and blowers that are not ACFs, referred to as general fans and 
blowers (``GFBs'') throughout this document. DOE also announces a 
public meeting to receive comment on these proposed standards and 
associated analyses and results.

DATES: Comments: DOE will accept comments, data, and information 
regarding this NOPR no later than March 19, 2024.
    Meeting: DOE will hold a public meeting on Wednesday, February 21, 
2024, from 10 a.m. to 4 p.m., in Washington, DC. This meeting will also 
be broadcast as a webinar.
    Comments regarding the likely competitive impact of the proposed 
standard should be sent to the Department of Justice contact listed in 
the ADDRESSES section on or before February 20, 2024.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 6E-069, 1000 Independence Avenue SW, 
Washington, DC 20585. See section VII of this document, ``Public 
Participation,'' for further details, including procedures for 
attending the in-person meeting, webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants.
    Interested persons are encouraged to submit comments using the 
Federal eRulemaking Portal at www.regulations.gov under docket number 
EERE-2022-BT-STD-0002. Follow the instructions for submitting comments. 
Alternatively, interested persons may submit comments, identified by 
docket number EERE-2022-BT-STD-0002, by any of the following methods:
    Email: <a href="/cdn-cgi/l/email-protection#e4a2858a97a58a80a6888b93819697d6d4d6d6b7b0a0d4d4d4d6a48181ca808b81ca838b92"><span class="__cf_email__" data-cfemail="8fc9eee1fccee1ebcde3e0f8eafdfcbdbfbdbddcdbcbbfbfbfbdcfeaeaa1ebe0eaa1e8e0f9">[email protected]</span></a>. Include docket number 
EERE-2022-BT-STD-0002 in the subject line of the message.
    No telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section VII of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at www.regulations.gov. All documents in the 
docket are listed in the www.regulations.gov index. However, not all 
documents listed in the index may be publicly available, such as 
information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2022-BT-STD-0002. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket. See 
section VII of this document for information on how to submit comments 
through www.regulations.gov.
    EPCA requires the Attorney General to provide DOE a written 
determination of whether the proposed standard is likely to lessen 
competition. The U.S. Department of Justice Antitrust Division invites 
input from market participants and other interested persons with views 
on the likely competitive impact of the proposed standard. Interested 
persons may contact the Division at <a href="/cdn-cgi/l/email-protection#284d464d5a4f51065b5c49464c495a4c5b685d5b4c4742064f475e"><span class="__cf_email__" data-cfemail="f99c979c8b9e80d78a8d98979d988b9d8ab98c8a9d9693d79e968f">[email protected]</span></a> on or 
before the date specified in the DATES section. Please indicate in the 
``Subject'' line of your email the title and Docket Number of this 
proposed rulemaking.

FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Dommu, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-9870. Email: 
<a href="/cdn-cgi/l/email-protection#0c4d7c7c60656d626f695f786d62686d7e687f5d79697f786563627f4c696922686369226b637a"><span class="__cf_email__" data-cfemail="1f5e6f6f73767e717c7a4c6b7e717b7e6d7b6c4e6a7a6c6b7670716c5f7a7a317b707a31787069">[email protected]</span></a>.
    Ms. Amelia Whiting, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-2588. Email: 
<a href="/cdn-cgi/l/email-protection#7839151d141119562f10110c11161f381009561c171d561f170e"><span class="__cf_email__" data-cfemail="1e5f737b72777f304976776a7770795e766f307a717b30797168">[email protected]</span></a>.
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact the Appliance and Equipment Standards Program staff at (202) 
287-1445 or by email: <a href="/cdn-cgi/l/email-protection#602110100c09010e03053314010e04011204133115051314090f0e132005054e040f054e070f16"><span class="__cf_email__" data-cfemail="79380909151018171a1c2a0d18171d180b1d0a280c1c0a0d1016170a391c1c571d161c571e160f">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: DOE maintains previously approved 
incorporations by reference (AMCA 210-16, AMCA 214-21, and ISO 
5801:2017) and incorporates by reference the following material into 
part 431:
    IEC 61800-9-2:2023, Adjustable speed electrical power drive systems 
(PDS)--Part 9-2: Ecodesign for motor systems--Energy efficiency 
determination and classification, Edition 2.0, 2023-10.
    IEC TS 60034-30-2:2016, Rotating electrical machines--Part 30-2: 
Efficiency classes of variable speed AC motors (IE-code), Edition 1.0, 
2016-12.
    IEC TS 60034-31:2021, Rotating electrical machines--Part 31: 
Selection of energy-efficient motors including variable speed 
applications--Application guidelines, Edition 2.0, 2021-03.
    Copies of IEC 61800-9-2:2023, IEC TS 60034-30-2:2016 and IEC TS 
60034-31:2021 are available from the International Electrotechnical 
Committee (IEC), Central Office, 3, rue de Varemb[eacute], P.O. Box 
131, CH-1211 GENEVA 20, Switzerland; + 41 22 919 02 11; 
webstore.iec.ch.
    For a further discussion of these standards, see section VI.M of 
this document.

Table of Contents

I. Synopsis of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    1. General Fans and Blowers
    2. Air Circulating Fans
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Fans and Blowers
    C. Deviation From Process Rule
    1. Framework Document
    2. Public Comment Period
III. General Discussion
    A. General Comments
    B. Scope of Coverage
    1. General Fans and Blowers
    2. Air Circulating Fans
    a. Ceiling Fan Distinction

[[Page 3715]]

    C. Test Procedure and Metric
    1. General Fans and Blowers
    a. General
    b. Combined Motor and Motor Controller Efficiency Calculation
    2. Air Circulating Fans
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared to Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Equipment Classes
    a. General Fans and Blowers
    b. Air Circulating Fans
    2. Scope of Analysis and Data Availability
    a. General Fans and Blowers
    b. Air Circulating Fans
    3. Technology Options
    B. Screening Analysis
    C. Engineering Analysis
    1. General Fans and Blowers
    a. Baseline Efficiency
    b. Selection of Efficiency Levels
    c. Higher Efficiency Levels
    d. Cost Analysis
    2. Air Circulating Fans
    a. Representative Units
    b. Baseline Efficiency and Efficiency Level 1
    c. Selection of Efficiency Levels
    d. Cost Analysis
    3. Cost-Efficiency Results
    D. Markups Analysis
    E. Energy Use Analysis
    1. General Fans and Blowers
    2. Air-Circulating fans
    F. Life-Cycle Cost and Payback Period Analyses
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Equipment Lifetime
    7. Discount Rates
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    1. General Fans and Blowers
    2. Air Circulating Fans
    H. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs
    d. Markup Scenarios
    3. Manufacturer Interviews
    4. Discussion of MIA Comments
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation to Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Fans and Blowers 
Standards
    a. General Fans and Blowers
    b. Air Circulating Fans
    2. Annualized Benefits and Costs of the Proposed Standards
    a. General Fans and Blowers
    b. Air Circulating Fans
    D. Reporting, Certification, and Sampling Plan
    E. Representations and Enforcement Provisions
    1. Representations for General Fans and Blowers
    2. Enforcement Provisions for General Fans and Blowers
    a. Testing a Single Fan at Multiple Duty Points
    b. Testing Multiple Fans at One or Several Duty Points
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Review Under the Regulatory Flexibility Act
    1. Description of Reasons Why Action Is Being Considered
    2. Objectives of, and Legal Basis for, Rule
    3. Description on Estimated Number of Small Entities Regulated
    4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    5. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    6. 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. Information Quality
    M. Description of Materials Incorporated by Reference
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
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    The Energy Policy and Conservation Act, Public Law 94-163, as 
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency 
of a number of consumer products and certain industrial equipment. (42 
U.S.C. 6291-6317) Title III, Part C \2\ of EPCA established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes fans and blowers. This proposed rule 
concerns two categories of fans and blowers: air circulating fans 
(``ACFs''), and fans and blowers that are not ACFs, which are referred 
to as general fans and blowers (``GFBs'') throughout this document.
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in a significant 
conservation of energy. (42 U.S.C.

[[Page 3716]]

6316(a); 42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later 
than 6 years after issuance of any final rule establishing or amending 
a standard, DOE must publish either a notice of determination that 
standards for the product do not need to be amended, or a notice of 
proposed rulemaking including new proposed energy conservation 
standards (proceeding to a final rule, as appropriate). (42 U.S.C. 
6316(a); 42 U.S.C. 6295(m))
    In accordance with these and other statutory provisions discussed 
in this document, DOE analyzed the benefits and burdens of six trial 
standard levels (``TSLs'') for two categories of fans and blowers: GFBs 
and ACFs. The TSLs and their associated benefits and burdens are 
discussed in detail in sections V.A through V.C of this document. As 
discussed in section V.C, DOE has tentatively determined that TSL 4 
represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified. The proposed 
standards, which are expressed in terms of a fan energy index (``FEI'') 
for GFBs, are shown in Table I-1 through Table I-3. The proposed 
standards, which are expressed in terms of efficacy in cubic feet per 
minute per watt (``CFM/W'') at maximum speed for ACFs, are shown in 
Table I-3. These proposed standards, if adopted, would apply to all 
GFBs listed in Table I-1 and Table I-2 and ACFs listed in Table I-3 
manufactured in, or imported into, the United States starting on the 
date 5 years after the publication of the final rule for this 
rulemaking. For GFBs, DOE proposes that every duty point at which the 
basic model is offered for sale would need to meet the proposed energy 
conservation standards. (See section III.C.1 of this document).
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A. Benefits and Costs to Consumers

    Table I-4 and Table I-5 present DOE's evaluation of the economic 
impacts of the proposed standards on consumers of GFBs and ACFs, as 
measured by the average life-cycle cost (``LCC'') savings and the 
simple payback period (``PBP'').\3\ The average LCC savings are 
positive for all equipment classes, and the PBP is less than the 
average lifetime of the considered equipment, which is estimated to be 
16.0 years for GFBs and 6.3 years for ACFs (see section IV.F.6 of this 
document).
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    \3\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.E.9 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is also measured 
relative to the no-new-standards case (see section IV.C of this 
document).

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BILLING CODE 6450-01-C
    DOE's analysis of the impacts of the proposed standards on 
consumers is described in section IV.F of this document.

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 through the 
end of the analysis period (2024-2059). Using a real discount rate of 
11.4 percent, DOE estimates that the INPV for manufacturers of fans and 
blowers in the case without new standards is $649 million in 2022 
dollars for ACFs and $4,935 million in 2022 dollars for GFBs. Under the 
proposed standards, the change in INPV is estimated to range from -10.9 
percent to less than 0.1 percent for ACFs, which represents a change in 
INPV of approximately -$71 million to less than $0.1 million, and from 
-9.2 percent to less than 0.1 percent for GFBs, which represents a 
change in INPV of approximately -$455 million to $1 million. In order 
to bring products into compliance with new standards, it is estimated 
that the industry would incur total conversion costs of $118 million 
for ACFs and $770 million for GFBs.
    DOE's analysis of the impacts of the proposed standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

C. National Benefits and Costs <SUP>4</SUP>
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    \4\ All monetary values in this document are expressed in 2022 
dollars.
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    This section presents the combined results for GFBs and ACFs. 
Specific results for GFBs and ACFs are also discussed in sections I.C.1 
and I.C.2 of this document, respectively.
    DOE's analyses indicate that the proposed energy conservation 
standards for GFBs and ACFs would save a significant amount of energy. 
Relative to the case without new standards, the lifetime energy savings 
for GFBs and ACFs purchased in the 30-year period that begins in the 
anticipated first full year of compliance with the new standards (2030-
2059) amount to 18.3 quadrillion British thermal units (``Btu''), or 
quads.\5\
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    \5\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.G.1 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for GFBs and ACFs ranges from $19.0 
billion (at a 7 percent discount rate) to $49.5 billion (at a 3 percent 
discount rate). This NPV expresses the estimated total value of future 
operating cost savings minus the estimated increased equipment and 
installation costs for GFBs and ACFs purchased in 2030-2059.
    In addition, the proposed standards for GFBs and ACFs are projected 
to yield significant environmental benefits. DOE estimates that the 
proposed standards would result in cumulative emission reductions (over 
the same period as for energy savings) of 317.9

[[Page 3719]]

million metric tons (``Mt'') \6\ of carbon dioxide 
(``CO<INF>2</INF>''), 92.7 thousand tons of sulfur dioxide 
(``SO<INF>2</INF>''), 598.9 thousand tons of nitrogen oxides 
(``NO<INF>X</INF>''), 2,760.5 thousand tons of methane 
(``CH<INF>4</INF>''), 2.9 thousand tons of nitrous oxide 
(``N<INF>2</INF>O''), and 0.6 tons of mercury (``Hg'').\7\
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    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO<INF>2</INF> are presented in short tons.
    \7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 represents current Federal and 
State legislation and final implementation of regulations as of the 
time of its preparation. See section IV.J of this document for 
further discussion of AEO2023 assumptions that affect air pollutant 
emissions.
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    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost of CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of 
methane (``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide 
(``SC-N<INF>2</INF>O''). Together these represent the social cost of 
GHG (``SC-GHG''). DOE used interim SC-GHG values developed by an 
Interagency Working Group on the Social Cost of Greenhouse Gases 
(``IWG'').\8\ The derivation of these values is discussed in section 
IV.L of this document. For presentational purposes, the climate 
benefits associated with the average SC-GHG at a 3 percent discount 
rate are estimated to be $16.3 billion. DOE does not have a single 
central SC-GHG point estimate and it emphasizes the importance and 
value of considering the benefits calculated using all four sets of SC-
GHG estimates.
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    \8\ To monetize the benefits of reducing GHG emissions, this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive Order 13990, published in February 
2021 by the IWG (``February 2021 SC-GHG TSD'').  www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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    DOE estimated the monetary health benefits of SO<INF>2</INF> and 
NO<INF>X</INF> emissions reductions using benefit per ton estimates 
from the scientific literature, as discussed in section IV.L of this 
document. DOE did not monetize the reduction in mercury emissions 
because the quantity is very small. DOE estimated the present value of 
the health benefits would be $11.4 billion using a 7 percent discount 
rate, and $31.6 billion using a 3 percent discount rate.\9\ DOE is 
currently only monetizing (for SO<INF>2</INF> and NO<INF>X</INF>) 
PM<INF>2.5</INF> precursor health benefits and (for NO<INF>X</INF>) 
ozone precursor health benefits, but will continue to assess the 
ability to monetize other effects such as health benefits from 
reductions in direct PM<INF>2.5</INF> emissions.
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    \9\ DOE estimates the economic value of these emissions 
reductions resulting from the considered trial standards levels 
(``TSLs'') for the purpose of complying with the requirements of 
Executive Order 12866.
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    Table I-6 summarizes the monetized benefits and costs expected to 
result from the proposed standards for GFBs and ACFs. There are other 
important unquantified effects, including certain unquantified climate 
benefits, unquantified public health benefits from the reduction of 
toxic air pollutants and other emissions, unquantified energy security 
benefits, and distributional effects, among others.
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    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the monetized value of climate and health 
benefits of emission reductions, all annualized.\10\
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    \10\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2024, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2024. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
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    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of GFBs and ACFs 
shipped in 2030-2059. The benefits associated with reduced emissions 
achieved as a result of the proposed standards are also calculated 
based on the lifetime of GFBs and ACFs shipped in 2030-2059. Total 
benefits for both the 3 percent and 7 percent cases are presented using 
the average GHG social costs with a 3-percent discount rate.\11\ 
Estimates of total benefits are presented for all four SC-GHG discount 
rates in section V.B.6 of this document.
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    \11\ As discussed in section IV.L.1 of this document, DOE agrees 
with the IWG that using consumption-based discount rates e.g., 3 
percent) is appropriate when discounting the value of climate 
impacts. Combining climate effects discounted at an appropriate 
consumption-based discount rate with other costs and benefits 
discounted at a capital-based rate (i.e., 7 percent) is reasonable 
because of the different nature of the types of benefits being 
measured.
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    Table I-7 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7 percent discount rate for consumer benefits and costs and 
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF> 
emissions, and the 3 percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $360 million per year in increased equipment 
costs, while the estimated annual benefits are $2,506 million in 
reduced equipment operating costs, $963 million in monetized climate 
benefits, and $1,285 million in monetized health benefits. In this 
case, the monetized net benefit would amount to $4,394 million per 
year.
    Using a 3 percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $374 million per year in 
increased equipment costs, while the estimated annual benefits are 
$3,302 million in reduced operating costs, $963 million in monetized 
climate benefits, and $1,869 million in monetized health benefits. In 
this case, the monetized net benefit would amount to $5,760 million per 
year.

[[Page 3722]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.007


[[Page 3723]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.008

    DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.H, IV.K and IV.L of this document.
1. General Fans and Blowers
    DOE's analyses indicate that the proposed energy conservation 
standards for GFBs would save a significant amount of energy. Relative 
to the case without new standards, the lifetime energy savings for GFBs 
purchased in the 30-year period that begins in the anticipated first 
full year of compliance with the new standards (2030-2059) amount to 
13.8 quadrillion British thermal units (``Btu''), or quads.\12\ This 
represents a savings of 11.4 percent relative to the energy use of 
these products in the case without standards (referred to as the ``no-
new-standards case'').
---------------------------------------------------------------------------

    \12\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.G.1 of this document.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for GFBs ranges from $13.7 billion 
(at a 7 percent discount rate) to $36.9 billion (at a 3 percent 
discount rate). This NPV expresses the estimated total value of future 
operating cost savings minus the estimated increased equipment and 
installation costs for GFBs purchased in 2030-2059.
    In addition, the proposed standards for GFBs are projected to yield 
significant environmental benefits. DOE estimates that the proposed 
standards would result in cumulative emission reductions (over the same 
period as for energy savings) of 239.4 Mt of CO<INF>2</INF>, 73.1 
thousand tons of SO<INF>2</INF>, 450.9 thousand tons of NO<INF>X</INF>, 
2,073.9 thousand tons of CH<INF>4</INF>, 2.3 thousand tons of 
N<INF>2</INF>O, and 0.5 tons of Hg''.\13\
---------------------------------------------------------------------------

    \13\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in AEO 2023. AEO2023 
represents current Federal and State legislation and final 
implementation of regulations as of the time of its preparation. See 
section IV.J of this document for further discussion of AEO2023 
assumptions that affect air pollutant emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost of CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of 
methane (``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide 
(``SC-N<INF>2</INF>O''). Together these represent the social cost of 
GHG (``SC-GHG''). DOE used interim SC-GHG values developed by an 
Interagency Working Group on the Social Cost of Greenhouse Gases 
(``IWG'').\14\ The derivation of these values is discussed in section 
IV.K of this document. For presentational purposes, the climate 
benefits associated with the average SC-GHG at a 3 percent discount 
rate are estimated to be $11.9 billion. DOE does not have a single 
central SC-GHG point estimate and it emphasizes the importance and 
value of considering the benefits calculated using all four sets of SC-
GHG estimates.
---------------------------------------------------------------------------

    \14\ To monetize the benefits of reducing GHG emissions, this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive Order 13990, published in February 
2021 by the IWG (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupport 
Document_SocialCostofCarbonMethaneNitrous Oxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO<INF>2</INF> and 
NO<INF>X</INF> emissions reductions using benefit per ton estimates 
from the scientific literature, as discussed in section IV.L of this 
document. DOE did not monetize the reduction in mercury emissions 
because the quantity is very small. DOE estimated the present value of 
the health benefits would be $8.2 billion using a 7 percent discount 
rate, and $23.4 billion

[[Page 3724]]

using a 3 percent discount rate.\15\ DOE is currently only monetizing 
(for SO<INF>2</INF> and NO<INF>X</INF>) PM<INF>2.5</INF> precursor 
health benefits and (for NO<INF>X</INF>) ozone precursor health 
benefits, but will continue to assess the ability to monetize other 
effects such as health benefits from reductions in direct 
PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

    \15\ DOE estimates the economic value of these emissions 
reductions resulting from the considered trial standards levels 
(``TSLs'') for the purpose of complying with the requirements of 
Executive Order 12866.
---------------------------------------------------------------------------

    Table I-8 summarizes the monetized benefits and costs expected to 
result from the proposed standards for GFBs. There are other important 
unquantified effects, including certain unquantified climate benefits, 
unquantified public health benefits from the reduction of toxic air 
pollutants and other emissions, unquantified energy security benefits, 
and distributional effects, among others.

[[Page 3725]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.009


[[Page 3726]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.010

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the monetized value of climate and health 
benefits of emission reductions, all annualized.\16\
---------------------------------------------------------------------------

    \16\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2024, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2024. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of GFBs shipped in 
2030-2059. The benefits associated with reduced emissions achieved as a 
result of the proposed standards are also calculated based on the 
lifetime of GFBs shipped in 2030-2059. Total benefits for both the 3 
percent and 7 percent cases are presented using the average GHG social 
costs with a 3-percent discount rate.\17\ Estimates of total benefits 
are presented for all four SC-GHG discount rates in section V.B.6 of 
this document.
---------------------------------------------------------------------------

    \17\ As discussed in section IV.L.1 of this document, DOE agrees 
with the IWG that using consumption-based discount rates e.g., 3 
percent) is appropriate when discounting the value of climate 
impacts. Combining climate effects discounted at an appropriate 
consumption-based discount rate with other costs and benefits 
discounted at a capital-based rate (i.e., 7 percent) is reasonable 
because of the different nature of the types of benefits being 
measured.
---------------------------------------------------------------------------

    Table I-9 presents the total estimated monetized benefits and costs 
associated with the proposed standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7 percent discount rate for consumer benefits and costs and 
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF> 
emissions, and the 3 percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $329 million per year in increased equipment 
costs, while the estimated annual benefits are $1,880 million in 
reduced equipment operating costs, $703 million in monetized climate 
benefits, and $932 million in monetized health benefits. In this case, 
the monetized net benefit would amount to $3,185 million per year.
    Using a 3 percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $340 million per year in 
increased equipment costs, while the estimated annual benefits are 
$2,524 million in reduced operating costs, $703 million in monetized 
climate benefits, and $1,384 million in monetized health benefits. In 
this case, the monetized net benefit would amount to $4,271 million per 
year.

[[Page 3727]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.011


[[Page 3728]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.012

    DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.H, IV.K and IV.L of this document.
2. Air Circulating Fans
    DOE's analyses indicate that the proposed energy conservation 
standards for ACFs would save a significant amount of energy. Relative 
to the case without new standards, the lifetime energy savings for ACFs 
purchased in the 30-year period that begins in the anticipated first 
full year of compliance with the new standards (2030-2059) amount to 
4.5 quadrillion British thermal units (``Btu''), or quads.\18\ This 
represents a savings of 37.3 percent relative to the energy use of 
these products in the case without standards (referred to as the ``no-
new-standards case'').
---------------------------------------------------------------------------

    \18\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the proposed standards for ACFs ranges from $5.3 billion 
(at a 7 percent discount rate) to $12.6 billion (at a 3 percent 
discount rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased equipment costs 
for ACFs purchased in 2030-2059.
    In addition, the proposed standards for ACFs are projected to yield 
significant environmental benefits. DOE estimates that the proposed 
standards would result in cumulative emission reductions (over the same 
period as for energy savings) of 78.5 Mt \19\ of CO<INF>2</INF>, 19.7 
thousand tons of SO<INF>2</INF>, 148.0 thousand tons of NO<INF>X</INF>, 
686.7 thousand tons of CH<INF>4</INF>, 0.6 thousand tons of 
N<INF>2</INF>O, and 0.1 tons of mercury Hg.\20\
---------------------------------------------------------------------------

    \19\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO<INF>2</INF> are presented in short tons.
    \20\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in AEO2023. AEO2023 
represents current Federal and State legislation and final 
implementation of regulations as of the time of its preparation. See 
section IV.K of this document for further discussion of AEO2023 
assumptions that affect air pollutant emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (GHG) using four different estimates of the social 
cost of CO<INF>2</INF> (``SC-CO<INF>2</INF>''), the social cost of 
methane (``SC-CH<INF>4</INF>''), and the social cost of nitrous oxide 
(``SC-N<INF>2</INF>O''). Together these represent the social cost of 
GHG (SC-GHG). DOE used interim SC-GHG values developed by an 
Interagency Working Group on the Social Cost of Greenhouse Gases 
(IWG).\21\ The derivation of these values is discussed in section IV.L 
of this document. For presentational purposes, the climate benefits 
associated with the average SC-GHG at a 3 percent discount rate are 
estimated to be $4.4 billion. DOE does not have a single central SC-GHG 
point estimate and it emphasizes the importance and value of 
considering the benefits calculated using all four sets of SC-GHG 
estimates.
---------------------------------------------------------------------------

    \21\ To monetize the benefits of reducing GHG emissions, this 
analysis uses the interim estimates presented in the Technical 
Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide 
Interim Estimates Under Executive order 13990, published in February 
2021 by the IWG.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO<INF>2</INF> and 
NO<INF>X</INF> emissions reductions using benefit per ton estimates 
from the scientific literature, as discussed in section IV.L of this 
document. DOE did not monetize the reduction in mercury emissions 
because the quantity is very small. DOE estimated the present value of 
the health benefits would be $3.1 billion using a 7-percent discount 
rate, and $8.2 billion using a 3-percent discount rate.\22\ DOE

[[Page 3729]]

is currently only monetizing (for SO<INF>2</INF> and NO<INF>X</INF>) 
PM<INF>2.5</INF> precursor health benefits and (for NO<INF>X</INF>) 
ozone precursor health benefits, but will continue to assess the 
ability to monetize other effects such as health benefits from 
reductions in direct PM<INF>2.5</INF> emissions.
---------------------------------------------------------------------------

    \22\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

    Table I-10 summarizes the monetized benefits and costs expected to 
result from the proposed standards for ACFs. There are other important 
unquantified effects, including certain unquantified climate benefits, 
unquantified public health benefits from the reduction of toxic air 
pollutants and other emissions, unquantified energy security benefits, 
and distributional effects, among others.

[[Page 3730]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.013


[[Page 3731]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.014

    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are (1) the reduced consumer operating 
costs, minus (2) the increase in product purchase prices and 
installation costs, plus (3) the monetized value of climate and health 
benefits of emission reductions, all annualized.\23\
---------------------------------------------------------------------------

    \23\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2022, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2030), and then discounted the present value from each year 
to 2022. Using the present value, DOE then calculated the fixed 
annual payment over a 30-year period, starting in the compliance 
year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of GFBs shipped in 
2030-2059. The benefits associated with reduced emissions achieved as a 
result of the proposed standards are also calculated based on the 
lifetime of GFBs shipped in 2030-2059. Total benefits for both the 3 
percent and 7 percent cases are presented using the average GHG social 
costs with 3 percent discount rate.\24\ Estimates of total benefits are 
presented for all four SC-GHG discount rates in section V.B.6 of this 
document.
---------------------------------------------------------------------------

    \24\ As discussed in section IV.L.1 of this document, DOE agrees 
with the IWG that using consumption-based discount rates e.g., 3 
percent) is appropriate when discounting the value of climate 
impacts. Combining climate effects discounted at an appropriate 
consumption-based discount rate with other costs and benefits 
discounted at a capital-based rate (i.e., 7 percent) is reasonable 
because of the different nature of the types of benefits being 
measured.
---------------------------------------------------------------------------

    Table I-11 presents the total estimated monetized benefits and 
costs associated with the proposed standard, expressed in terms of 
annualized values. The results under the primary estimate are as 
follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $31 million per year in increased equipment 
costs, while the estimated annual benefits are $626 million in reduced 
equipment operating costs, $261 million in monetized climate benefits, 
and $353 million in monetized health benefits. In this case. The net 
monetized benefit would amount to $1,209 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $34 million per year in 
increased equipment costs, while the estimated annual benefits are $778 
million in reduced operating costs, $261 million in monetized climate 
benefits, and $485 million in monetized health benefits. In this case, 
the monetized net benefit would amount to $1,489 million per year.

[[Page 3732]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.015


[[Page 3733]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.016

BILLING CODE 6450-01-C
    DOE's analysis of the national impacts of the proposed standards is 
described in sections IV.H, IV.K and IV.L of this document.

D. Conclusion

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. Specifically, with regards to 
technological feasibility products achieving these standard levels are 
already commercially available for all equipment classes covered by 
this proposal. As for economic justification, DOE's analysis shows that 
the benefits of the proposed standard exceed, to a great extent, the 
burdens of the proposed standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for GFBs is $329 million per year in increased GFB 
costs, while the estimated annual benefits are $1,880 million in 
reduced GFB operating costs, $703 million in monetized climate benefits 
and $932 million in monetized health benefits. The net monetized 
benefit amounts to $3,185 million per year. DOE notes that the net 
benefits are substantial even in the absence of the climate 
benefits,\25\ and DOE would adopt the same standards in the absence of 
such benefits.
---------------------------------------------------------------------------

    \25\ The information on climate benefits is provided in 
compliance with Executive Order 12866.
---------------------------------------------------------------------------

    Using a 7-percent discount rate for consumer benefits and costs and 
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for ACFs is $31 million per year in increased ACF 
costs, while the estimated annual benefits are $626 million in reduced 
ACF operating costs, $261 million in monetized climate benefits and 
$353 million in monetized health benefits. The net monetized benefit 
amounts to $1,209 million per year.
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\26\ For 
example, some covered products and equipment have substantial energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

    \26\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As previously mentioned, the proposed standards are projected to 
result in estimated national energy savings of 13.8 quad FFC for GFBs 
and 4.5 quads FFC for ACFs, the equivalent of the primary annual energy 
use of 148 and 48 million homes, respectively. In addition, they are 
projected to reduce CO<INF>2</INF> emissions by 239.4 Mt and 78.5 Mt, 
for GFBs and ACFs, respectively. Based on these findings, DOE has 
initially determined the energy savings from the proposed standard 
levels are ``significant'' within the meaning of 42 U.S.C. 
6295(o)(3)(B). A more detailed discussion of the basis for these 
tentative conclusions is contained in the remainder of this document 
and the NOPR TSD.
    DOE also considered more-stringent energy efficiency levels as 
potential standards, and is still considering them in this rulemaking. 
However, DOE has tentatively concluded that the potential burdens of 
the more stringent energy

[[Page 3734]]

efficiency levels would outweigh the projected benefits.
    Based on consideration of the public comments DOE receives in 
response to this document and related information collected and 
analyzed during the course of this rulemaking effort, DOE may adopt 
energy efficiency levels presented in this document 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 this proposed rule, as well as some of the relevant 
historical background related to the establishment of standards for 
fans and blowers.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Public Law 95-619, Title IV, section 441(a) (42 
U.S.C. 6311-6317, as codified), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency.
    EPCA specifies a list of equipment that constitutes covered 
equipment (hereafter referred to as ``covered equipment'').\27\ EPCA 
also provides that ``covered equipment'' includes any other type of 
industrial equipment for which the Secretary of Energy (``the 
Secretary'') determines inclusion is necessary to carry out the purpose 
of Part A-1. (42 U.S.C. 6311(1)(L); 42 U.S.C. 6312(b)) EPCA specifies 
the types of industrial equipment that can be classified as covered in 
addition to the equipment enumerated in 42 U.S.C. 6311(1). This 
industrial equipment includes fans and blowers, the subjects of this 
document. (42 U.S.C. 6311(2)(B)(ii) and (iii)) Additionally, industrial 
equipment must be of a type that consumes, or is designed to consume, 
energy in operation; is distributed in commerce for industrial or 
commercial use; and is not a covered product as defined in 42 U.S.C. 
6291(a)(2) other than a component of a covered product with respect to 
which there is in effect a determination under 42 U.S.C. 6312(c). (42 
U.S.C. 6311(2)(A)) On August 19, 2021, DOE published a final 
determination concluding that the inclusion of fans and blowers as 
covered equipment was necessary to carry out the purpose of Part A-1 
and classifying fans and blowers as covered equipment. 86 FR 46579, 
46588.
---------------------------------------------------------------------------

    \27\ ``Covered equipment'' means one of the following types of 
industrial equipment: electric motors and pumps; small commercial 
package air conditioning and heating equipment; large commercial 
package air conditioning and heating equipment; very large 
commercial package air conditioning and heating equipment; 
commercial refrigerators, freezers, and refrigerator-freezers; 
automatic commercial ice makers; walk-in coolers and walk-in 
freezers; commercial clothes washers; packaged terminal air-
conditioners and packaged terminal heat pumps; warm air furnaces and 
packaged boilers; and storage water heaters, instantaneous water 
heaters, and unfired hot water storage tanks. (42 U.S.C. 6311(1)(A)-
(K))
---------------------------------------------------------------------------

    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316; 42 U.S.C. 6296).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(a) and (b); 42 U.S.C. 6297) There are currently no Federal 
energy conservation standards for fans and blowers. However, as noted 
in the Existing Efficiency Standards subsection of section IV.C.1.b of 
this document, the California Energy Commission (``CEC'') has finalized 
a rulemaking that requires manufacturers to report fan operating 
boundaries that result in operation at a FEI of greater than or equal 
to 1.00 for all fans within the scope of that rulemaking.\28\ The scope 
of the CEC rulemaking includes some, but not all, GFBs that are 
considered in the scope of this energy conservation rulemaking. The CEC 
rulemaking goes into effect on November 1, 2023. However, if the 
Federal standards in this NOPR are finalized and made effective, they 
will supersede the CEC standard requirements. The CEC standards with 
respect to fans and blowers covered by a standard set in a final rule 
would be superseded once the Federal standard takes effect, meaning on 
the compliance date applicable to GFBs, which is expected to be 5 years 
after the publication of any final rule. 42 U.S.C. 6316(a)(10).
---------------------------------------------------------------------------

    \28\ California Energy Commission. Commercial and Industrial 
Fans and Blowers. Docket No. 22-AAER-01. Available at 
efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=22-AAER-01.
---------------------------------------------------------------------------

    Furthermore, EPCA prescribes that all representations of energy 
efficiency and energy use, including those made on marketing materials 
and product labels, for certain equipment, including fans and blowers, 
must be made in accordance with an amended test procedure, beginning 
180 days after publication of the final rule in the Federal Register. 
(42 U.S.C. 6314(d)(1)) DOE notes that Federal test procedures generally 
supersede any State regulation insofar as such State regulation 
provides for the disclosure of information with respect to any measure 
of energy consumption or water use of any covered product (42 U.S.C 
6297(a)(1)) The Federal test procedure for fans and blowers was 
published on May 1, 2023, and all representations of energy efficiency 
and energy use, including those made on marketing materials and product 
labels, must be made in accordance with this test procedure beginning 
October 30, 2023. 88 FR 27312. Therefore, DOE notes that any disclosure 
of information regarding any measure of energy consumption for fans 
required by the CEC must be tested in accordance with the Federal test 
procedure beginning October 30, 2023.
    DOE may, however, grant waivers of Federal preemption for 
particular State laws or regulations, in accordance with the procedures 
and other provisions set forth under EPCA. (See 42 U.S.C. 6316(a) 
(applying the preemption waiver provisions of 42 U.S.C. 6297).)
    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 covered equipment. (42 
U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295I) Manufacturers of covered 
equipment must use the Federal test procedures as the basis for: (1) 
certifying to DOE that their equipment complies with the applicable 
energy conservation standards adopted pursuant to EPCA (42 U.S.C. 
6316(a); 42 U.S.C. 6295(s)), and (2) making representations about the 
efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE must 
use these test procedures to determine whether the equipment complies 
with relevant standards promulgated under EPCA. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(s)) The DOE test procedures for fans and blowers appear at 
title 10 of the Code of Federal Regulations (``CFR'') part 431, subpart 
J, appendices A and B.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including fans and blowers. 
Any new or

[[Page 3735]]

amended standard for covered equipment must be designed to achieve the 
maximum improvement in energy efficiency that the Secretary of Energy 
determines is technologically feasible and economically justified. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B)) 
Furthermore, DOE may not adopt any standard that would not result in 
the significant conservation of energy. (42 U.S.C. 6316(a); (42 U.S.C. 
6295(o)(3))
    Moreover, DOE may not prescribe a standard: (1) for certain 
equipment, including fans and blowers, if no test procedure has been 
established for the equipment, or (2) if DOE determines by rule that 
the standard is not technologically feasible or economically justified. 
(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(3)(A)-(B)) 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. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after 
receiving comments on the proposed standard, and by considering, to the 
greatest extent practicable, the following seven statutory 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 standard;
    (3) The total projected amount of energy (or, as applicable, water) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the covered 
equipment likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary of Energy (``Secretary'') considers 
relevant.

(42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA establishes a rebuttable presumption that a standard 
is economically justified if the Secretary finds that the additional 
cost to the consumer of purchasing equipment 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. (42 U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(iii))

    EPCA 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. 6316(a); 42 U.S.C. 6295(o)(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 in any 
covered equipment 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. 6316(a); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for covered equipment that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of equipment that has the same function or intended use, if 
DOE determines that equipment 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 which other equipment within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6316(a); 42 U.S.C. 6295(q)(1)) In determining 
whether a performance-related 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. 6316(a); 42 U.S.C. 6295(q)(2))

B. Background

1. Current Standards
    DOE does not currently have energy conservation standards for fans 
and blowers. The following section summarizes relevant background 
information regarding DOE's consideration of energy conservation 
standards for fans and blowers.
    On May 10, 2021, DOE published a request for information requesting 
comments on a potential fan or blower definition. 86 FR 24752. DOE 
followed this with a publication of a final determination on August 19, 
2021, classifying fans and blowers as covered equipment (``August 2021 
Final Coverage Determination''). 86 FR 46579. At this time, DOE 
determined that the term ``blower'' is used interchangeably in the U.S. 
market with the term ``fan.'' 86 FR 46579, 46583. DOE defines a fan (or 
blower) as a rotary bladed machine used to convert electrical or 
mechanical power to air power, with an energy output limited to 25 
kilojoule (``kJ'') per kilogram (``kg'') of air. It consists of an 
impeller, a shaft and bearings and/or driver to support the impeller, 
as well as a structure or housing. A fan (or blower) may include a 
transmission, driver, and/or motor controller. 10 CFR 431.172.
2. History of Standards Rulemaking for Fans and Blowers
    In considering whether to establish standards, on June 28, 2011 DOE 
published a notice of proposed determination of coverage to initiate an 
energy conservation standards rulemaking for fans, blowers, and fume 
hoods. 76 FR 37678. Subsequently, DOE published a notice of public 
meeting and availability of the Framework document for GFBs in the 
Federal Register. 78 FR 7306 (February 1, 2013). In the Framework 
document (``2013 Framework Document''), DOE requested feedback from 
interested parties on many issues, including the engineering analysis, 
the MIA, the LCC and PBP analyses, and the national impact analysis 
(``NIA'').
    On December 10, 2014, DOE published a notice of data availability 
(``December 2014 NODA'') that estimated the potential economic impacts 
and energy savings that could result from promulgating energy 
conservation standards for fans. 79 FR 73246. The December 2014 NODA 
analysis used FEI, a ``wire-to-air'' fan electrical input power metric, 
to characterize fan performance.
    In October 2014, several representatives of fan manufacturers and 
energy efficiency advocates \29\ (``Joint Stakeholders'') presented DOE 
with an alternative metric approach, the ``Fan Efficiency Ratio,'' 
which included a fan efficiency-only metric approach 
(``FER<INF>H</INF>'') and a wire-to-air metric approach 
(``FER<INF>W</INF>'').\30\ On May 1, 2015,

[[Page 3736]]

based on the additional information received and comments to the 
December 2014 NODA, DOE published a second NODA (``May 2015 NODA'') 
that announced data availability from DOE analyses conducted using a 
modified FEI metric, similar to the FER<INF>W</INF> metric presented by 
the Joint Stakeholders. 80 FR 24841, 24843.
---------------------------------------------------------------------------

    \29\ The Air Movement and Control Association (AMCA), New York 
Blower Company, Natural Resources Defense Council (NRDC), the 
Appliance Standards Awareness Project (ASAP), and the Northwest 
Energy Efficiency Alliance (NEEA).
    \30\ Supporting documents from this meeting, including 
presentation slides are available at www.regulations.gov/document?D=EERE-2013-BT-STD-0006-0029.
---------------------------------------------------------------------------

    Concurrent with these efforts, DOE established an Appliance 
Standards Rulemaking Federal Advisory Committee (``ASRAC'') Working 
Group (``Working Group'') to discuss negotiated energy conservation 
standards and test procedures for fans.\31\
---------------------------------------------------------------------------

    \31\ Information on the ASRAC, the commercial and industrial 
fans Working Group, and meeting dates is available at: energy.gov/eere/buildings/appliance-standards-and-rulemaking-federal-advisory-committee.
---------------------------------------------------------------------------

    The Working Group concluded its negotiations on September 3, 2015, 
and, by consensus vote,\32\ approved a term sheet containing 27 
recommendations related to scope, test procedure, and energy 
conservation standards (``term sheet''). (See Docket No. EERE-2013-BT-
STD-0006, No. 179.) ASRAC approved the term sheet on September 24, 
2015. (Docket No. EERE-2013-BT-NOC-0005; Public Meeting Transcript, No. 
58, at p. 29)
---------------------------------------------------------------------------

    \32\ At the beginning of the negotiated rulemaking process, the 
Working Group defined that before any vote could occur, the Working 
Group must establish a quorum of at least 20 of the 25 members and 
defined consensus as an agreement with less than 4 negative votes. 
Twenty voting members of the Working Group were present for this 
vote. Two members (Air-Conditioning, Heating, and Refrigeration 
Institute and Ingersoll Rand/Trane) voted no on the term sheet.
---------------------------------------------------------------------------

    On November 1, 2016, DOE published a third notification of data 
availability (``November 2016 NODA'') that presented a revised analysis 
for GFBs consistent with the scope and metric recommendations in the 
term sheet. 81 FR 75742, 75743. As recommended by the working group, 
the November 2016 NODA used the fan electrical input power metric (FEP) 
\33\ in conjunction with FEI to characterize fan performance. DOE made 
several additional updates to the November 2016 NODA to address the 
term sheet recommendations developed by the Working Group as well as 
stakeholder feedback submitted via public comment. Specifically, the 
analysis presented in the November 2016 NODA was updated to include (1) 
augmentation of the Air Movement and Control Association International 
(``AMCA'') sales data used in the May 2015 NODA to better account for 
fans made by companies that incorporate those fans for sale in their 
own equipment, (2) augmentation of the AMCA sales data to represent 
additional sales of forward-curved fans, and (3) inclusion of original 
equipment manufacturer (``OEM'') conversion costs. Id. The November 
2016 NODA evaluated only fans with a fan shaft input power equal to, or 
greater than, 1 horsepower (``hp'') and a fan airpower equal to or less 
than 150 hp. 81 FR 75742, 75746.
---------------------------------------------------------------------------

    \33\ The FEP metric represents the electrical input power of the 
fan and includes the performance of the motor, and any transmission 
and/or control if integrated, assembled, or packaged with the fan. 
In the November 2016 NODA, DOE developed standards based on FEI 
values evaluated relative to the EL 3 standard FEP.
---------------------------------------------------------------------------

    On October 1, 2021, DOE published a request for information 
pertaining to test procedures for fans and blowers (``October 2021 TP 
RFI''). 86 FR 54412. As part of the October 2021 TP RFI, DOE discussed 
definitions and potential scope for ACFs. 86 FR 54412, 54414-54415. DOE 
published a separate request for information on February 8, 2022 
(``February 2022 RFI''), to seek input to aid in its development of the 
technical and economic analyses regarding whether standards for ACFs 
may be warranted. 87 FR 7048. On October 13, 2022, DOE published a 
notice of data availability (``October 2022 NODA'') to present its 
preliminary engineering analysis for ACFs and to seek input to support 
DOE in completing a notice of proposed rulemaking analysis for all fans 
and blowers. 87 FR 62038.
    DOE received comments in response to the October 2022 NODA from the 
interested parties listed in Table II-1.
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[[Page 3738]]


BILLING CODE 6450-01-C
    DOE also acknowledges that it received numerous identical comments 
via a mass email campaign stating that standards for fans and blowers 
is an important issue and requesting that DOE pursue an approach that 
is fair and equitable to both businesses and consumers. \34\
---------------------------------------------------------------------------

    \34\ Comment numbers 14-118 in the docket (Docket No. EERE-2022-
BT-STD-0002, maintained at www.regulations.gov).
---------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\35\
---------------------------------------------------------------------------

    \35\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for fans and blowers. (Docket No. 
EERE-2022-BT-STD-0002, maintained at www.regulations.gov). The 
references are arranged as follows: (commenter name, comment docket 
ID number, page of that document).
---------------------------------------------------------------------------

C. Deviation From Process Rule

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``Process Rule''), DOE notes that it is deviating from the 
provision in the Process Rule regarding the pre-NOPR and NOPR stages 
for an energy conservation standards rulemaking.
1. Framework Document
    Section 6(a)(2) of the Process Rule states that if DOE determines 
it is appropriate to proceed with a rulemaking, the preliminary stages 
of a rulemaking to issue or amend an energy conservation standard that 
DOE will undertake will be a framework document and preliminary 
analysis, or an advance notice of proposed rulemaking.
    As described in section II.B.2 of this document, DOE published the 
2013 Framework Document, the December 2014 NODA, the May 2015 NODA, and 
the November 2016 NODA for GFBs. 78 FR 7306; 79 FR 73246; 80 FR 24841; 
81 FR 75742. The three NODAs presented DOE's analysis at various 
points, provided stakeholders opportunity to review and provide 
comment. Furthermore, while DOE published the February 2022 RFI and 
October 2022 NODA for ACFs, DOE did not publish a framework document in 
conjunction with the NODA for ACFs. 87 FR 62038. DOE notes that ACFs 
and GFBs are analyzed separately, however, the general analytical 
framework that DOE uses in evaluating and developing potential new 
energy conservation standards for both GFBs and ACFs is similar. As 
such, publication of a separate framework document for ACFs would be 
largely redundant of previously published documents.
2. Public Comment Period
    Section 6(f)(2) of the Process Rule specifies that the length of 
the public comment period for a NOPR will be not less than 75 calendar 
days. For this NOPR, DOE is instead providing a 60-day comment period, 
consistent with EPCA requirements. 42 U.S.C. 6316(a); 42 U.S.C. 
6295(p). DOE is opting to deviate from the 75-day comment period 
because of the robust opportunities already afforded to stakeholders to 
provide comments on this proposed rulemaking.
    DOE is providing a 60-day comment period, which DOE believes is 
appropriate given the substantial stakeholder engagement for general 
fans and blowers to date, as discussed in section II.B.2 of this 
document. Furthermore, the request for information on air circulating 
fans that was published on February 8, 2022, provided early notice to 
interested parties that DOE was interested in evaluating potential 
energy conservation standards for air circulating fans. DOE also 
provided a 45-day comment period for the notice of data availability 
that was published on October 13, 2022. Therefore, DOE believes a 60-
day comment period is appropriate and will provide interested parties 
with a meaningful opportunity to comment on the proposed rule.

III. General Discussion

    DOE developed this proposal after considering oral and written 
comments, data, and information from interested parties that represent 
a variety of interests. The following discussion addresses issues 
raised by these commenters.

A. General Comments

    This section summarizes general comments received from interested 
parties in response to the October 2022 NODA regarding rulemaking 
timing, process, and impact.
    In response to many of DOE's requests for comment, AMCA recommended 
that DOE obtain the requested information through confidential 
interviews with fan manufacturers. (AMCA, No. 132 at pp. 6-14) DOE 
notes that it used information collected during manufacturer interviews 
to inform its engineering, market, and manufacturer analyses.
    NEMA commented that its interpretation of DOE's analysis in the 
October 2022 NODA was that DOE was proposing energy efficiency 
requirements for motors that are used in ACFs, which would be confusing 
and problematic for the motor industry, since there is a separate 
rulemaking for motors. (NEMA, No. 125 at pp. 2, 4). Additionally, NEMA 
stated that DOE's inclusion of higher efficiency small, non-``small 
electric motor'' electric motors (``SNEMs'') as a technology option for 
increasing the efficiency of ACFs could be an issue because of an 
ongoing rulemaking for SNEMs. (NEMA, No. 125 at p. 2) DOE notes that in 
a NOPR for expanded scope electric motors (``ESEMs'') published on 
December 15, 2023 (``December 2023 ESEM NOPR''), motors that were 
previously referred to as SNEMs were redefined to be ESEMs. 88 FR 87062 
DOE will use the term ``ESEM'' throughout the remainder of this 
document to refer to these motors. Morrison commented that it is 
concerned about the small motors rulemaking being in progress at the 
same time as this fans and blowers rulemaking. (Morrison, No. 128 at p. 
1)
    DOE notes that it is proposing energy conservation standards for 
fans and blowers, including ACFs and GFBs, and that it is not proposing 
energy conservation standards for motors in this rulemaking. DOE 
typically defines a likely design path to structure its engineering 
analysis; however, DOE notes that this design path is not prescriptive. 
DOE heard from ACF manufacturers that replacing a less efficient motor 
with a more efficient motor would be one of the first options they 
would evaluate. Therefore, DOE considered more efficient motors as an 
option that a manufacturer might apply to reach a given ACF efficiency 
level. DOE acknowledges that the electric motors rulemaking involving 
ESEMs is ongoing (see EERE-2020-BT-STD-0007) and that stakeholders made 
a joint recommendation for the efficiencies at which they believe the 
standards for ESEMs should be set. (Docket No. EERE-2020-BT-STD-0007, 
Joint Stakeholders, No. 38 at p. 6, Table 2) As discussed in section 
IV.C.2.c, DOE defined an efficiency level (EL 2) in its ACF engineering 
analysis based on the efficiencies recommended for ESEMs by the Joint 
Stakeholders. DOE may consider adjusting the baseline efficiency level 
for ACFs if it sets a standard in the ESEM rulemaking at the 
recommended ESEM levels.
    AMCA commented that it generally supports NEMA's comments. (AMCA, 
No. 132 at pp. 2, 21) DOE therefore notes that throughout this 
document, reference to comments made by NEMA are understood to be 
representative of the viewpoints of AMCA as well.
    Greenheck stated that it would be beneficial for the ACF rulemaking 
to be delayed until after AMCA 230-2023 is

[[Page 3739]]

published. (Greenheck, No. 122 at p. 1) AMCA commented that DOE should 
finalize a test procedure before proceeding with its fans and blowers 
energy conservation standards rulemaking so that stakeholders can make 
informed comments on the energy conservation standards rulemaking. 
(AMCA, No. 132 at p. 10) DOE notes that ACMA 230-23 was published on 
February 10, 2023, and that DOE has since published its test procedure 
final rule for fans and blowers, on May 1, 2023. 88 FR 27312.
    MIAQ commented that it disagrees with DOE's decision to provide a 
45-day comment period instead of the usual 75-day comment period for 
the October 2022 NODA. (MIAQ, No. 124 at p. 2) In the October 2022 
NODA, DOE discussed its decision to deviate from section 3(a) of 
appendix A to subpart C of 10 CFR part 430 and reduce the comment 
period. 87 FR 62038, 62039. DOE provided a 45-day comment period given 
the substantial stakeholder engagement prior to the publication of the 
NODA and to provide DOE with ample time to review comments to inform 
this NOPR analysis. Id.
    The CA IOUs commented that they are concerned that the energy 
conservation standards may supersede the fan input power limits 
currently in place for building codes, such as the California Building 
Energy Code (Title 24), American Society of Heating, Refrigerating, and 
Air-Conditioning Engineers (``ASHRAE'') Standard 90.1, ``Energy 
Standard for Buildings Except Low-Rise Residential Buildings,'' and the 
International Energy Conservation Code (``IECC'') 2021, which would 
reduce the influence of these building codes and ultimately result in 
an increase in the energy consumption of the equipment in which fans 
are embedded because the fan power limits in those codes are 
significantly more stringent than the FEI requirements and ensure the 
overall fan system in a building is designed efficiently. (CA IOUs, No. 
127 at p. 6) Damas and Boldt also expressed their concern that energy 
conservation standards may preempt the limits on fan system power in 
building energy codes such as ASHRAE 90.1 and therefore could 
potentially increase energy use in new construction. (Damas and Boldt, 
No. 131 at p. 5) AHRI commented that an energy conservation standard is 
not needed for fans because all States are obligated to comply with 
ASHRAE 90.1. (AHRI, No. 130 at pp. 16-17)
    DOE notes that neither ASHRAE 90.1 nor IECC 2021 are federally 
mandated standards. Although ASHRAE 90.1 and IECC 2021 may be 
incorporated into municipal and/or building codes, this is not required 
and is performed on a State and local level. Furthermore, their 
incorporation does not always mandate standard efficiency requirements. 
DOE also acknowledges that as stated in section II.A, Federal energy 
efficiency requirements for covered equipment established under EPCA 
generally supersede State laws and regulations concerning energy 
conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and 
(b); 42 U.S.C. 6297) Therefore, if energy conservation standards for 
fans and blowers were to be adopted, they would supersede State laws 
and regulations for the efficiency of individual fans and blowers at 
the product or equipment level. DOE considered the fan efficiency 
requirements in ASHRAE 90.1 and IECC 2021 in its analysis, as discussed 
in section IV.C.1.b of this document. With regard to CA IOUs concern 
that DOE's regulation would supersede current regulations for fan input 
power limits, DOE notes that the standards proposed in this NOPR apply 
only to individual fans, whether embedded or standalone, that are 
within the proposed scope of this rulemaking. DOE is not proposing 
minimum input power requirements for fan systems that may be 
incorporated into buildings. Therefore, although the individual fans 
used in fan systems would be required to comply with DOE's minimum FEI 
requirements if the fan is within the proposed scope of this 
rulemaking, DOE's proposed regulations would not supersede input power 
requirements for fan systems.

B. Scope of Coverage

    This NOPR covers those commercial and industrial equipment that 
meet the definition of ``fan'' or ``blower,'' as codified at 10 CFR 
431.172 and for which DOE has finalized test procedures in subpart J of 
10 CFR part 431.
    As discussed, DOE defines a ``fan'' or ``blower'' as a rotary 
bladed machine used to convert electrical or mechanical power to air 
power, with an energy output limited to 25 kJ/kg of air. It consists of 
an impeller, a shaft and bearings and/or driver to support the 
impeller, as well as a structure or housing. A fan or blower may 
include a transmission, driver, and/or motor controller. 10 CFR 
431.172. DOE separates fans and blowers into general fans and blowers 
and air circulating fans.
    An ``air circulating fan'' means a fan that has no provision for 
connection to ducting or separation of the fan inlet from its outlet 
using a pressure boundary, operates against zero external static 
pressure loss, and is not a jet fan. 10 CFR 431.172. Fans and blowers 
that are not ACFs are referred to as general fans and blowers 
(``GFBs'') throughout this document.
    In response to the October 2022 NODA, DOE received comments on the 
fans considered within the scope of its analysis.
    Greenheck, AMCA, and Morrison commented that ACFs should be 
considered in a separate rule from GFBs since ACFs and GFBs are 
utilized in different applications and use different industry test 
procedures (i.e., AMCA 230 for ACFs and AMCA 214 for GFBs). (Greenheck, 
No. 122 at p. 1; AMCA, No. 132 at pp. 1, 20-21; Morrison, No. 128 at p. 
2)
    DOE acknowledges that ACFs and GFBs have separate utilities and 
test procedures. In the test procedure final rule that was published on 
May 1, 2023 (``May 2023 TP Final Rule''), DOE adopted separate test 
procedures for GFBs and ACFs (see appendix A and appendix B, 
respectively, to subpart J of 10 CFR part 431). 88 FR 27312. Similarly, 
in this NOPR, separate analyses were conducted for ACFs and GFBs to 
account for the difference in test procedures, metrics, and utility. 
DOE is proposing separate standards for GFBs and ACFs, expressed in 
different metrics, as discussed in later sections.
1. General Fans and Blowers
    In the May 2023 TP Final Rule, DOE established the scope of the 
test procedure. 88 FR 27312. In this NOPR, DOE is proposing energy 
conservation standards for GFBs consistent with the scope of coverage 
defined in the May 2023 TP Final Rule.
    Specifically, in this NOPR, DOE proposes energy conservation 
standards for the following GFB categories, as defined in the DOE test 
procedure: (1) axial inline fan; (2) axial panel fan; (3) centrifugal 
housed fan; (4) centrifugal unhoused fan; (5) centrifugal inline fan; 
(6) radial housed fan; and (7) power roof/wall ventilator (``PRV''). 
Furthermore, consistent with the DOE test procedure, DOE proposes that 
the scope of this energy conservation standards rulemaking for GFBs 
would apply to fans with duty points with a fan shaft input power equal 
to or greater than 1 hp and a fan static or total air power equal to or 
less than 150 hp.
    Additionally, DOE did not evaluate or consider potential energy 
conservation standards for GFBs that were not included in the scope of 
its test procedure. See 10 CFR 431.174. DOE notes that its test 
procedure excludes fans that create a vacuum of 30 inches water gauge 
or greater. 10 CFR

[[Page 3740]]

431.174(a)(2)(vii) In this NOPR, DOE proposes to further clarify that 
this provision excludes fans that are manufactured and marketed 
exclusively to create a vacuum of 30 inches water gauge or greater.
    DOE requests comment on its proposed clarification for fans that 
create a vacuum. Specifically, DOE requests comment on whether fans 
that are manufactured and marketed exclusively to create a vacuum of 30 
inches water gauge or greater could also be used in positive pressure 
applications. Additionally, DOE requests information on the 
applications in which a fan not manufactured or marketed exclusively 
for creating a vacuum would be used to create a vacuum of 30 inches 
water gauge or greater.
    Consistent with the test procedure, DOE has excluded certain 
embedded fans, listed in Table III-1, from its analysis. See the May 
2023 TP Final Rule for a detailed discussion of these exclusions. 88 FR 
27312, 27322-27331.
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BILLING CODE 6450-01-C
    In response to the October 2022 NODA, DOE received comments 
regarding the scope of the energy conservation standards for GFBs.
    AHAM agreed with DOE's proposal to only cover GFBs that were rated 
at 1 hp or higher because it effectively excluded most fans used in 
consumer product applications. (AHAM, No. 123 at p. 5) AHRI commented 
that regulating GFBs

[[Page 3742]]

with an input power of less than 1 hp would include residential fans. 
(AHRI, No. 130 at p. 3) Morrison expressed concern with the minimum 
power limit for GFBs being 0.1 hp instead of 1 hp since most GFBs with 
input powers less than 1 hp are not commercial or industrial. 
(Morrison, No. 128 at p. 1). DOE interprets Morrison's reference to a 
0.1 hp limit to be a reference to the 0.1 hp representative unit for 
ACFs in the October 2022 NODA. DOE notes that a minimum power limit of 
0.1 hp for GFBs was not proposed in the October 2022 NODA. As 
discussed, GFBs with an input power of less than 1 hp are excluded from 
the scope of this rulemaking, which is consistent with the scope of 
coverage in the DOE test procedure. See 10 CFR 431.174(a)(4)(i).
    In response to both the October 2022 NODA and the July 2022 TP 
NOPR, AHRI and Morrison commented that they were concerned about how 
energy conservation standards would apply to replacement fans. 
(Morrison, No. 128 at p. 2; AHRI, No. 130 at pp. 2, 5, 12) Morrison and 
AHRI stated that replacement fans should be exempt from the standards 
rulemaking because a fan with the same specific performance and safety 
devices needs to be used for replacement in order to achieve the same 
system performance and to comply with safety requirements. Id. DOE 
notes that the comments from AHRI and Morrison submitted in response to 
the October 2022 NODA are identical in content to the comments 
submitted from these and other stakeholders to the July 2022 NOPR. 
These comments are fully summarized in the May 2023 TP Final Rule. 88 
FR 27312, 27334.
    CA IOUs stated that consumers seeking to replace low-pressure fans 
in constrained spaces may not be able to find replacement fans that 
meet a higher FEI. Since a more efficient fan may require a larger 
diameter, it might not fit in the constrained space. Therefore, either 
the constrained space will need to be enlarged to fit the larger fan 
(which is likely to be costly for the consumer) or the consumer would 
select a replacement fan of the same size but with higher pressure 
(resulting in more power use to achieve the same airflow). (CA IOUs, 
No. 127 at p. 6) CA IOUs therefore proposed a narrow exception for 
[non-embedded] centrifugal fans with a rated pressure not greater than 
1.5 inches water gauge. (CA IOUs, No. 127 at p. 7)
    Consistent with DOE's response to these comments in the April 2023 
Final Rule, DOE is proposing to exclude certain embedded fans from 
potential energy conservation standards in this rulemaking, whether 
sold for incorporation into the equipment or already incorporated in 
the equipment, if embedded in equipment listed in Table III-1. This 
approach would exclude replacement fans for the equipment listed in 
Table III-1. For equipment not listed in Table III-1, DOE notes that it 
is not excluding replacement fans from the scope of the rulemaking, 
consistent with the scope of the DOE test procedure. In its analysis, 
which is discussed in further detail in section IV.C.1 of this 
document, DOE evaluated improved efficiency options while maintaining 
constant diameter and duty point (i.e., air flow and operating 
pressures remained constant as efficiency increased); therefore, DOE 
has tentatively concluded that a compliant fan of the same size and 
performance would be available for use as an embedded fan or 
replacement for an embedded fan. Additionally, DOE does not expect that 
manufacturers of equipment that contain embedded fans would need to 
redesign their equipment. Furthermore, DOE is not excluding centrifugal 
fans based on its rated pressure. In its analysis, DOE specifically 
examined centrifugal housed fans designed at both lower- and higher-
pressure duty points. Based on that analysis, DOE did not find a 
significant difference in the achievable FEI values between the higher- 
and lower-pressure duty points. Accordingly, DOE has tentatively 
determined that centrifugal housed fans do not require an exclusion 
based on rated pressure. Additional details on DOE's analysis are 
presented in chapter 3 of the accompanying TSD.
    DOE also received multiple comments from stakeholders about fans 
that should be excluded from the scope of the rulemaking; these 
comments were similar to the comments received in response to the July 
2022 TP NOPR. Morrison and AHRI commented that they are concerned over 
double regulation of products. (Morrison, No. 128 at pp. 2-3; AHRI, No. 
130 at p. 2) AHRI commented that fans embedded in boilers and 
commercial water heaters should be excluded. (AHRI, No. 130 at pp. 10-
11) DOE notes that these comments were summarized and responded to in 
the May 2023 TP Final Rule. 88 FR 27312, 27329-27330. Additionally, 
AHRI commented that the regulation of fans within air-cooled water 
chillers would not improve the efficiency of the entire equipment, nor 
would it lead to net energy savings because ASHRAE 90.1 already sets 
efficiency standards for the equipment and the entire system is 
designed to meet the ASHRAE 90.1 efficiency standards. (AHRI, No. 130 
at pp. 9-10) MIAQ commented that energy conservation standards for 
embedded fans would not necessarily improve the performance of the 
products in which the fans are embedded if the products are already 
regulated. (MIAQ, No. 124 at p. 4)
    As previously discussed, DOE is exempting fans embedded in the 
equipment listed in Table III-1, consistent with the DOE test 
procedure, and continues to exclude fans in covered equipment in which 
the fan energy use is already captured in the equipment-specific test 
procedures. Furthermore, as discussed in section III.A of this 
document, ASHRAE 90.1 is not a federally mandated standard, though it 
may be adopted by State and local governments, and therefore DOE is not 
specifically exempting fans that are in equipment that are regulated by 
IECC and ASHRAE 90.1.
    More details regarding the scope of GFBs that are included in this 
NOPR can be found in the May 2023 TP Final Rule. 88 FR 27312, 27317-
27336.
2. Air Circulating Fans
    In the October 2022 NODA, DOE stated that it was considering all 
air circulating fans in its analysis of potential energy conservation 
standards for fans and blowers, including unhoused air circulating fan 
heads and housed air circulating fan heads. 87 FR 62038, 62041. DOE 
received comments from stakeholders in response to the scope discussion 
in the October 2022 NODA.
    AHAM commented there is a lack of clarity about which products are 
included and excluded in DOE's proposed scope and that DOE was 
improperly expanding the scope of products included in the fans and 
blowers category by including residential products. AHAM stated that it 
did not believe that the metric, technology options, assumptions, and 
test procedure discussed in the October 2022 NODA are relevant to 
residential fans. (AHAM, No. 123 at pp. 1-2) Specifically, AHAM 
commented that the proposed test procedure from the July 2022 TP NOPR 
and AMCA 214-21 are not applicable to residential fans and that no 
energy conservation standards should be set for residential fans until 
a test procedure for residential fans is established. (AHAM, No. 123 at 
pp. 5, 9) AHAM, Greenheck, and AMCA also commented that ACFs with an 
input power less than 125 W should be excluded from scope to coincide 
with the scope limit in AMCA 230-23 and IEC 60879. (AHAM, No. 123

[[Page 3743]]

at pp. 5-6; Greenheck, No. 122 at p. 2; AMCA, No. 132 at pp. 1-2, 19-
20) AHAM noted that this would effectively differentiate between 
residential and consumer products, so long as the 125 W threshold 
applies to the fan rating alone and not to the entire product or the 
fan and motor. (AHAM, No. 123 at p. 5) DOE notes that ACFs are tested 
in a configuration that measures electrical input power to the fan, 
inclusive of the motor, and that the existing test procedures (i.e., 
AMCA 230-23 or IEC 60879:2019) do not allow measuring the mechanical 
shaft power to the fan, exclusive of the motor. Therefore, DOE has 
determined that a limit in terms of electrical input power (applicable 
to the fan and motor) is more appropriate. DOE notes that AHAM 
submitted additional comments recommending exclusion of residential 
fans and fans embedded in residential products that were also submitted 
in response to the July 2022 TP NOPR. (AHAM, No. 123 at pp. 2-5) DOE 
addressed those comments in the May 2023 TP Final Rule. 88 FR 27312, 
27326. In the May 2023 TP Final Rule, DOE established the scope of the 
test procedure for ACFs and excluded ACFs with an input power of less 
than 125 W at maximum speed. 88 FR 27312, 27331. In this NOPR, DOE is 
proposing energy conservation standards for ACFs consistent with the 
scope of coverage defined in the May 2023 TP Final Rule. (see 10 CFR 
431.174(b)). Therefore, DOE proposes that ACFs with an input power of 
less than 125 W at maximum speed are excluded from the scope of this 
standards rulemaking. DOE is aware, however, that ACFs with an input 
power less than 125 W at maximum speed could be distributed in commerce 
for industrial and commercial use, and that ACFs with an input power 
greater than 125 W at maximum speed could be distributed in commerce 
for residential use. However, any equipment that meets the definition 
of air circulating fan, has an input power greater than or equal to 125 
W at maximum speed, as measured by the test procedure at high speed, 
and is of a type that is not a covered consumer product and is, to any 
significant extent, distributed in commerce for industrial or 
commercial purposes would be subject to these proposed energy 
conservation standards, regardless of whether it is sold for use in 
commercial, industrial, or residential settings.
    AHAM commented that the terminology used in the October 2022 NODA 
for fan head diameter, rather than fan blade diameter, is inconsistent 
with how residential ACFs are typically analyzed. (AHAM, No. 123 at p. 
8) DOE notes that while it works to use terminology that is consistent 
with industry terminology, it is not always possible given the size and 
maturity of test standards development in a given industry. DOE 
clarifies that its usage of the term ``fan head diameter'' in the 
October 2022 NODA was intended to be analogous to ``fan blade 
diameter.'' Additionally, DOE notes that it is proposing a definition 
for ``diameter'' for fans and blowers that is consistent with the term 
``fan blade diameter'' in this NOPR, which is discussed in section 
IV.A.1.b of this document.
    AHAM also commented that it did not believe that DOE has enough 
data on residential fans to analyze them. AHAM stated that DOE's 
analysis in the October 2022 NODA had an ACF with a 24-inch (``in.'') 
blade and a 0.5 hp motor, which is not representative of residential 
ACFs. (AHAM, No. 123 at p. 8) DOE notes that in the October 2022 NODA, 
it analyzed ACFs at multiple representative sizes and motor 
horsepowers, including a 12 in. diameter, 0.1 motor hp unit; a 20 in. 
diameter, 0.33 motor hp unit; a 24 in. diameter, 0.5 motor hp unit; a 
36 in. diameter, 0.5 motor hp unit; and 50 in. diameter, 1 motor hp 
unit. 87 FR 62038, 62046. DOE had determined that these diameters and 
motor horsepowers were representative of the full scope of ACFs 
considered in the October 2022 NODA. Id.
    AHAM stated that the size of motors that are typically used in 
residential ACFs are excluded from the scope of the ongoing electric 
motors rulemaking; therefore, residential ACFs should be excluded from 
this rulemaking since DOE would not see potential savings. (AHAM, No. 
123 at p. 9) DOE notes that this is a rulemaking for fans and blowers. 
For ACFs, DOE considers higher-efficiency motors as a design option as 
well as other design options but emphasizes that the approach that DOE 
uses to evaluate potential efficiency standards is not prescriptive 
(see section IV.A.3 of this document). Furthermore, DOE considers both 
potential economic and energy savings in its analysis, which is 
discussed in section IV.G of this document.
    Additionally, AHAM commented that it was their understanding that 
the proposed definitions for ACFs in the July 2022 TP NOPR did not 
include bladeless fans and agreed with the exclusion of bladeless ACFs 
from scope. (AHAM, No. 123 at p. 5) The definition of air circulating 
fan, ``a fan that has no provision for connection to ducting or 
separation of the fan inlet from its outlet using a pressure boundary, 
operates against zero external static pressure loss, and is not a jet 
fan,'' does not exclude bladeless fans. See 10 CFR 431.172. However, as 
discussed above, ACFs with input powers less than 125 W at maximum 
speed are excluded from the scope of this rulemaking. Therefore, 
bladeless fans, which have input power less than 125 W are excluded 
from the scope of this NOPR.
    NEMA expressed concern that the July 2022 TP NOPR proposed only 
including fans with a shaft input power between 1 hp and 150 hp, but 
that the October 2022 NODA proposed including fans with a shaft input 
power of less than 1 hp. (NEMA, No. 125 at p. 2). DOE notes that, as 
specified in the test procedure, the 1 hp and 150 hp limits are 
applicable to GFBs, and that GFBs with an input power of less than 1 hp 
are excluded from scope. See 10 CFR 431.174(a)(4)(i). Additionally, DOE 
clarifies that the 150-hp limit applies to the fan air power. 10 CFR 
431.174(a)(4)(ii) DOE notes that the ACF scope evaluated in this NOPR 
is consistent with the scope DOE adopted in the May 2023 TP Final Rule, 
which excludes ACFs with an input power of less than 125 W. 88 FR 
27312, 27333.
a. Ceiling Fan Distinction
    DOE explained in the coverage determination that fans and blowers, 
the subjects of this rulemaking, do not include ceiling fans, as 
defined at 10 CFR 430.2. See 86 FR 46579, 46586 and 10 CFR 431.171. 
Therefore, as stated in the May 2023 TP Final Rule, equipment that 
meets the definition of a ceiling fan would be excluded from the scope 
of equipment included under ``fan and blower''. 88 FR 27312, 27365. A 
ceiling fan means a nonportable device that is suspended from a ceiling 
for circulating air via the rotation of fan blades. 10 CFR 430.2. In 
the ceiling fan test procedure final rule published on August 16, 2022, 
DOE finalized an amendment to the ceiling fan definition at 10 CFR 
430.2 to specify that a ceiling fan provides ``circulating air,'' which 
means ``the discharge of air in an upward or downward direction. A 
ceiling fan that has a ratio of fan blade span (in inches) to maximum 
rotation rate (in revolutions per minute) greater than 0.06 provides 
circulating air.'' 87 FR 50396, 50402. Specifically, the 0.06 in/RPM 
ratio was added in the ceiling fans definition to distinguish fans with 
directional airflow from circulating airflow. Id.
    DOE also finalized a definition for ``high-speed belt-driven 
ceiling fan'' (``HSBD'') and added language to clarify that high-speed 
belt-driven ceiling fans were to be subject to the AMCA 230-15

[[Page 3744]]

test procedure and subject to a similar efficiency metric as large-
diameter ceiling fans (namely the ceiling fan energy index ``CFEI''). 
Id. at 87 FR 50424, 50426, 50431.
    In the May 2023 TP Final Rule, DOE established the definitions of 
ACF and related terms. DOE defined the term air circulating fan as ``a 
fan that has no provision for connection to ducting or separation of 
the fan inlet from its outlet using a pressure boundary, operates 
against zero external static pressure loss, and is not a jet fan''. In 
addition, DOE defined an unhoused circulating fan as ``an air 
circulating fan without housing, having an axial impeller with a ratio 
of fan blade span (in inches) to maximum rate of rotation (in 
revolutions per minute) less than or equal to 0.06. The impeller may or 
may not be guarded.'' 88 FR 27312, 27389-27390. DOE relied on the blade 
span to maximum rpm ratio to distinguish these ACFs from ceiling fans. 
87 FR 44194, 44216. For housed ACFs however, DOE defined a housed ACF 
as an air circulating fan with an axial or centrifugal impeller, and a 
housing. 88 FR 27312, 27390. This definition aligns with the housed ACF 
definition in AMCA 230-23 and does not specify a diameter to speed 
ratio limit because housed ACFs can have blade span to maximum rpm 
ratios that are in the same range as ceiling fans (i.e., greater than 
0.06).
    In the Ceiling Fan ECS NOPR published on June 22, 2023, DOE noted 
that that a ceiling fan must be ``distributed in commerce with 
components that enable it to be suspended from a ceiling.'' 88 FR 
40932, 40943. Belt-driven fans are often distributed in commerce 
without components that enable the fan to be suspended from a ceiling. 
For example, some belt-driven fans are sold connected to wheels or to a 
pedestal base. In this case, such a fan would not meet the definition 
of a ceiling fan because it has not been manufactured to be suspended 
from the ceiling, and therefore would not be subject to the HSBD test 
procedure or any potential energy conservation standards for HSBDs even 
though a consumer could independently purchase their own straps or 
chains and elect to hang this fan from the ceiling. 88 FR 40932, 40943.
    DOE stated that HSBD ceiling fans, in contrast to belt-driven fans 
connected to wheel or a pedestal base, are distributed in commerce with 
specific straps, chains, or other similar components that are designed 
and tested by the manufacturer to safely support the weight of the 
ceiling fan in an overhead configuration. Further, they circulate air 
since they meet the 0.06 blade span to maximum rpm ratio. 88 FR 40932, 
40943.
    Many belt-driven fans are housed (i.e., the fan blades are 
contained within a cylindrical enclosure, often with solid metal sides 
and a cage on the front and back). However, the presence of a housing 
is not relevant in determining whether a product meets the definition 
of ceiling fan. While a housing is generally included to better direct 
air, a housing could be added to a ceiling fan, including those that 
are clearly intended to circulate air. As such, DOE emphasizes that the 
definition of a ceiling fan requires that fan to be ``suspended from a 
ceiling'' and to ``circulate air'', rather than the presence or absence 
of a fan housing. 88 FR 40932, 40943.
    In response to the June 2023 Ceiling Fan ECS NOPR (88 FR 40932), CA 
IOUs commented that CFEI is not intended for small-diameter ceiling 
fans.\36\ (CA IOUs, No. EERE-2021-BT-STD-0011-0049 at p. 3). All HSBD 
ceiling fans identified by DOE would be small-diameter ceiling fans. 
Therefore, DOE interprets CA IOU's comment to mean that the CFEI metric 
is not intended for HSBD ceiling fans. VES also pointed out in response 
to the September 2019 Ceiling Fan TP NOPR (84 FR 51440) that they sell 
shrouded fans that currently are not subject to ceiling fan energy 
conservation standards because they are belt-driven. VES added that if 
they transition to a direct-drive motor they would be subject to high-
speed small-diameter ceiling fan standards, which are not appropriate 
as the airflow of their products is significantly higher than high-
speed small-diameter ceiling fans given the intended directional 
application. (VES, No. EERE-2013-BT-TP-0050-0026 at pp. 1-2)
---------------------------------------------------------------------------

    \36\ According to the DOE test procedure for ceiling fans at 
appendix U to subpart B of 10 CFR part 430, a small diameter ceiling 
fan means ``a ceiling fan that has a represented value of blade 
span, as determined in 10 CFR 429.32(a)(3)(i), less than or equal to 
seven feet.''
---------------------------------------------------------------------------

    DOE notes that VES did not make a statement as to whether or not 
the 0.06 blade span to rpm ratio would appropriately distinguish 
between their circulating fans and traditional ceiling fans. However, 
as the air circulating fan definitions have pointed out, the 0.06 blade 
span to rpm ratio is most appropriate for distinguishing between 
unhoused air circulating fans. Housed air circulating fans may exceed 
the 0.06 blade span to rpm ratio and commonly do, despite the fact that 
they are typically thought of in industry as air circulating fans and 
not ceiling fans, even if they are ceiling mounted.
    Based on the interpretation of the ceiling fan definition in the 
June 2023 Ceiling Fan ECS NOPR, an identical fan product could switch 
between being regulated as a high-speed belt-driven ceiling fan and a 
housed air circulating fan based only on if the equipment is sold with 
straps or chains for mounting overhead. Similarly, an identical direct 
drive fan product could switch between being regulated as a high-speed 
small-diameter ceiling fan and a housed air circulating fan based only 
on the if the product is sold with straps or chains for mounting 
overhead. Further complicating the analysis is the fact that high-speed 
belt-driven ceiling fans, air circulating fans and high-speed small-
diameter ceiling fans are subject to different test procedures and 
different efficiency standards. DOE believes this confusion 
necessitates further refinement.
    To avoid this confusion, DOE is reinterpreting the scope of the 
ceiling fan definition based on the potential overlap of products with 
housed air circulating fans. As DOE noted in the September 2019 Ceiling 
Fan TP NOPR, the intent of the ceiling fan definition is to be limited 
to ``nonportable'' devices that ``circulate air''. 84 FR 51440, 51444. 
Specifically, to clarify the distinction between air circulating fans 
and ceiling fans, DOE is interpreting the elements of the ceiling fan 
definition in the following way:
    <bullet> Portable--means: (1) that a fan is offered for mounting on 
surfaces other than or in addition to the ceiling; and (2) that a 
consumer can vary the location of the product/equipment throughout the 
product/equipment lifetime. A ceiling fan is only mounted to the 
ceiling and is not intended to be installed in any other mounting 
configuration or change location after it's been installed. This is in 
contrast to housed air circulating fans sold with straps and chains, 
where the products are intended to be regularly modified to direct air 
in different directions or move airflow around different obstacles or 
in different areas. DOE also notes that once a ceiling fan is mounted 
to the ceiling, it is often hard-wired in place;
    <bullet> Not for the purpose of circulating air--While DOE has 
traditionally emphasized the 0.06 fan blade span to maximum rotation 
rate ratio as the distinction between circulating air and direction 
airflow, DOE notes that the definition of ``circulating air'' in the 
ceiling fan definition is provided in contrast to directional airflow. 
DOE is interpreting the presence of a housing as evidence of airflow 
that is intended to be directional. In addition, DOE is interpreting 
the ability for the consumer

[[Page 3745]]

to easily modify the direction of the airflow via mounting by ceiling 
mounted chains, straps or via a ceiling bracket wherein the fan is able 
to be pointed in different directions as evidence that the fan is 
providing directional airflow.\37\
---------------------------------------------------------------------------

    \37\ See example of ``ceiling mounted fans'' that are intended 
to provide directional, rather than circulating air at 
www.trianglefans.com/type/ceiling-mounted-fans.
---------------------------------------------------------------------------

    Based on the interpretation, the scope of the ceiling fan 
definition would be limited to only traditional ceiling fan products 
that are connected to the ceiling via a downrod, flush mounting, or 
similar, non-portable device. All other portable ceiling mounted fans 
that provide directional airflow would be regulated under the air 
circulating fan regulation. While the June 2023 Ceiling Fan ECS NOPR 
included proposed efficiency standards for high-speed belt-driven 
ceiling fans, under the proposed interpretation of the ceiling fan 
definition, all high-speed belt-driven ceiling fan products identified 
by DOE would not be within the scope of the ceiling fan definition and 
would instead meet the definition of housed air-circulating fans. 
Further, any direct-drive ceiling-mounted fan that is portable and 
provides directional airflow (i.e., with a housing) would meet the 
housed air circulating fan definition and be subject to the air 
circulating fan test procedure and standards. In line with this 
interpretation of the ceiling fan definition, all housed air-
circulating fans have been included within this NOPR analysis 
regardless of whether they are sold with a straps or chains to hang 
them from the ceiling or with wheels or other mounting configurations.

C. Test Procedure and Metric

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered products must use these test procedures to 
certify to DOE that their product complies with energy conservation 
standards and to quantify the efficiency of their product.
    As previously discussed, DOE published its test procedure final 
rule on May 1, 2023, which established separate uniform test procedures 
for GFBs and ACFs. 88 FR 27312. The test procedure for GFBs is based on 
American National Standards Institute (``ANSI'')/AMCA Standard 214-21 
``Test Procedure for Calculating Fan Energy Index (FEI) for Commercial 
and Industrial Fans and Blowers'' (``AMCA 214-21'') with some 
modification and prescribes test methods for measuring the fan 
electrical input power and determining the FEI of GFBs. The test 
procedure for ACFs is based on ANSI/AMCA Standard 230-23 ``Laboratory 
Methods of Testing Air Circulating Fans for Rating and Certification'' 
(``AMCA 230-23'') with some modification and prescribes test methods 
for measuring the fan airflow in cubic feet per minute per watt (``CFM/
W'') of electric input power to an ACF. (See 10 CFR part 431, subpart 
J, appendices A and B, respectively.) 88 FR 27312, 27315.
    In response to the October 2022 NODA, AHAM commented that the test 
procedure proposed in the July 2022 TP NOPR was inconsistent with 
agreements made in the 2015 ASRAC negotiations, which diminishes the 
value of participating in ASRAC negotiations. (AHAM, No. 123 at pp. 10-
11) DOE notes that the context of this comment is the same as an AHAM 
comment submitted by AHAM to the July 2022 TP NOPR that DOE summarized 
and responded to in the May 2023 TP Final Rule. 88 FR 27312, 27377.
1. General Fans and Blowers
a. General
    DOE is proposing energy conservation standards for GFBs in terms of 
FEI, which is calculated in accordance with the DOE test procedure. See 
10 CFR part 431, subpart J, appendix A. In accordance with the DOE test 
procedure, the FEI metric would be evaluated at each duty point as 
specified by the manufacturer and, if adopted, DOE proposes that each 
duty point at which the fan is offered for sale would need to meet the 
proposed energy conservation standards.
    FEI provides for evaluation of the efficiency of a GFB across a 
range of operating conditions, captures the performance of the motor, 
transmission, or motor controllers (if any), and allows for the 
differentiation of fans with motors, transmissions, and motor 
controllers with differing efficiency levels. FEI is a wire-to-air 
metric, which means that it considers the efficiency from the input 
power to the output power of a fan, including the efficiencies of the 
motor, motor controller (if included), transmission, and fan itself. 
The inclusion of all of these components encourages the improvement of 
motor, motor controller, and transmission efficiencies, in addition to 
the improvement of a fan's aerodynamic efficiency. In addition, FEI 
aligns with the industry test standard (AMCA 214-21) and can help drive 
better fan selections by making it easier to compare performance of 
different fans. AMCA 214-21 defines FEI as the ratio of the electrical 
input power (``FEP'') of a reference fan to the FEP of the fan for 
which the FEI is calculated, both established at the same duty point. 
The DOE test procedure provides methods to calculate both FEP and FEI 
of a fan at a given duty point.
    In response to the October 2022 NODA, DOE received comment on the 
metric used for GFBs. Morrison and AHRI commented that they disagreed 
with using the weighted FEI (``WFEI'') metric that was discussed in the 
July 2022 TP NOPR. (Morrison, No. 128 at pp. 1, 3; AHRI, No. 130 at p. 
2-3). DOE notes that these comments are similar to the comments 
submitted to the July 2022 TP NOPR that DOE summarized in the May 2023 
TP Final Rule. MIAQ commented in support of using FEI as the metric 
used for regulation and disagreed with the use of WFEI because it has 
not been evaluated by fan manufacturers or their customers (MIAQ, No. 
124 at p. 2). In the May 2023 TP Final Rule, DOE responded to similar 
comments and ultimately defined FEI as the metric for general fans and 
blowers. 88 FR 27312, 27367-27369.
    Morrison commented that the FEI metric aligned well with the 
agreements made in the ASRAC Term Sheet and that FEI is now being used 
by numerous standards as the metric for efficiency. (Morrison, No. 128 
at pp. 2-3) DOE interprets Morrison's comment as support for using the 
FEI metric.
    Morrison commented that variable-frequency drive (``VFD'') control 
provides a good method to dynamically achieve part-load operation to 
promote energy savings. Morrison stated that since the FEP calculation 
metric penalizes the use of VFDs, DOE should consider providing an 
equivalent bonus factor, at a minimum, to gain back the losses in the 
calculation. Morrison commented that operating at part load saves 
significantly more energy than any other efficiency change. (Morrison, 
No. 128 at p. 3) As discussed in the May 2023 TP Final Rule, DOE is not 
adopting a control credit in the calculation of FEP for fans with a 
motor controller, such as a VFD; however, as shown in Table I-1, DOE is 
proposing lower standards for fans sold with motor controllers to 
account for the motor controller losses in the FEP metric associated 
with testing a fan with a controller.
    As discussed in the May 2023 TP Final Rule, to the extent that 
manufacturers of general fans and blowers are making voluntary 
representations of FEI, then they would need to ensure that the product 
is tested in accordance with the DOE test

[[Page 3746]]

procedure and that any voluntary representations of FEI (such as in 
marketing materials or on any label affixed to the product) disclosure 
the results of such testing. DOE recognizes that the ability to make an 
additional voluntary representation of the EU metric in marketing 
materials and on product labels may limit manufacturer burden. DOE is 
clarifying that manufacturers may represent the additional EU metric, 
but if doing so they must also represent the FEI metric in accordance 
with the existing DOE test procedure.
b. Combined Motor and Motor Controller Efficiency Calculation
    For fans with a polyphase regulated motor and a controller, AMCA 
214-21 allows testing these fans using a shaft-to-air test (i.e., a 
test that does not include the motor and controller performance). When 
conducting a shaft-to-air test, the mechanical fan shaft input power is 
measured and the FEP is calculated by using a mathematical model to 
represent the performance of the combined motor and controller (i.e., 
its part-load efficiency). The FEP is then used to calculate the FEI of 
the fan.
    Section 6.4.2.4 of AMCA 214-21, which relies on Annex B, ``Motor 
Constants if Used With VFD (Normative),'' and Annex C, ``VFD 
Performance Constants (Normative),'' provides a method to estimate the 
combined motor and controller part-load efficiency for certain electric 
motors and controller combinations that meet the requirements in 
sections 6.4.1.3 and 6.4.1.4 of AMCA 214-21, which specify that the 
motor must be polyphase regulated motor (i.e., an electric motor 
subject to energy conservation standards at 10 CFR 431.25).
    In the July 2022 TP NOPR, DOE stated its concerns that the 
equations described in section 6.4.2.4 of AMCA 214-21 may not be 
appropriately representative, resulting in FEI ratings that would be 
higher than FEI ratings obtained using the wire-to-air test method 
described in section 6.1 of AMCA 214-21. Therefore, in the July 2022 TP 
NOPR, DOE did not propose to allow the use of section 6.4.2.4 of AMCA 
214-21. Instead, DOE proposed that fans with a motor and controller be 
tested in accordance with section 6.1 of AMCA 214-21. DOE indicated 
that manufacturers would still be able to rely on a mathematical model 
(including the same mathematical model as described in section 6.4.2.4 
of AMCA 214-21, if the mathematical model met the AEDM requirements) in 
lieu of testing to determine the FEI of a fan with a motor and 
controller. 87 FR 44194, 44223. In the July 2022 TP NOPR, DOE also 
reviewed the reference motor and controller (``power drive system'') 
efficiency provided in IEC 61800-9-2:2017 ``Adjustable speed electrical 
power drive systems Part 9-2: Ecodesign for power drive systems, motor 
starters, power electronics and their driven applications--Energy 
efficiency indicators for power drive systems and motor starters,'' 
which also provides equations to represent the performance of a motor 
and controller used with fans, and found that the IEC model predicted 
values of efficiency that were significantly lower (more than 10 
percent on average) than the model included in AMCA 214-21. Id.
    In the May 2023 TP Final Rule, DOE further reviewed the model in 
AMCA 214-21 section 6.4.2.4 and stated that it continued to have 
concerns that applying the model in section 6.4.2.4 of AMCA 214-21 may 
result in fan FEI ratings that would be higher than FEI ratings 
obtained using the wire-to-air test method described in section 6.1 of 
AMCA 214-21. 88 FR 27312, 27347. Specifically, DOE reviewed information 
provided by AMCA analyzing the AHRI 1210 database of certified motor 
controllers and providing graphical representations comparing the AHRI 
data to the AMCA 207 model and found that there were several AHRI-
certified motor and motor controller combinations that had a tested 
efficiency that is lower than the model in section 6.4.2.4 of AMCA 214-
21. (Docket No. EERE-2021-BT-TP-0021-0046, AMCA, No. 41 at pp. 18-19) 
In their comments, AMCA stated that the model in AMCA 214-21, section 
6.4.2.4, was not intended to be a conservative estimate of losses. 
Instead, according to AMCA, the model was intended to provide a level 
playing field between manufacturers that chose to test wire-to-air and 
those that chose to test fan shaft power and calculate wire-to-air 
losses. (Docket No. EERE-2021-BT-TP-0021-0046, AMCA, No. 41 at p. 18) 
88 FR 27312, 27348.
    Therefore, to minimize the possibility that using the calculation 
approach would result in better energy efficiency ratings than when 
testing the equipment inclusive of the motor and controller, in the May 
2023 TP Final Rule, DOE did not allow the use of section 6.4.2.4 of 
AMCA 214-21. Instead, DOE required that fans with motor and controller 
be tested in accordance with section 6.1 of AMCA 214-21. DOE noted that 
manufacturers would still be able to rely on a mathematical model 
(including the same mathematical model as described in section 6.4.2.4 
of AMCA 214-21) in lieu of testing to determine the FEI of a fan with a 
motor and controller, as long as the mathematical model meets the AEDM 
requirements. Id. In other words, manufacturers would not be able to 
generally apply the model in section 6.4.2.4 of AMCA 214-21. 
Manufacturers would have to first go through the AEDM validation 
process to demonstrate that the FEI as established by the AEDM (or a 
calculation method that would rely on the model in section 6.4.2.4 of 
AMCA 214-21) would be less than or equal to 105 percent of the FEI 
determined from the wire-to-air test of the basic models used to 
validate the AEDM. See 10 CFR 429.70(n).
    Since the publication of the May 2023 Final Rule, the IEC published 
a new version of IEC 61800-9-2 (``IEC 61800-9-2: 2023''). Compared to 
IEC 61800-9-2:2017, which included a calculation method to directly 
establish typical losses of a reference motor and motor controller 
combination (or ``Power Drive System'', ``PDS''), this version provides 
the reference motor controller. It also points to a separate IEC 
publication (IEC TS 60034-30-2:2016 ``Rotating electrical machines--
Part 30-2: Efficiency classes of variable speed AC motors (IE-code)'') 
for establishing the reference motor losses. The detailed calculations 
of losses for a reference motor and motor controller are also described 
in IEC TS 60034-31: 2021 (``Rotating electrical machines--Part 31: 
Selection of energy-efficient motors including variable speed 
applications--Application guidelines'').
    IEC 61800-9-2:2023 also characterizes the reference motor 
controller or ``complete drive module'' (``CDM'') as corresponding to 
an IE1 efficiency class.\38\ See section 6.2 of IEC 61800-9-2:2023. IEC 
61800-9-2:2023 further establishes efficiency classes for PDS based on 
pairing different levels of efficiency motors to baseline efficiency 
CDMs at IE2 levels. See section 6.5 of IEC 61800-9-2:2023. DOE reviewed 
a report from the International Energy Agency, Electric Motor Systems 
Annex \39\ which included test data from 179 tests on 57 motor 
controllers, as well as additional market data and showed that VFDs on 
the market today are all within the same efficiency class corresponding 
to ``IE2'', in line with the baseline levels used in IEC 61800-9-2

[[Page 3747]]

Ed. 2:2023. Therefore, DOE has tentatively determined that the IE2 
level is appropriate to represent a baseline CDM or motor controller.
---------------------------------------------------------------------------

    \38\ IEC 61900-9-2 Ed.2:2023 establishes three efficiency 
classes (IE0, IE1, and IE2) to characterize the different efficiency 
levels of CDMs on the market.
    \39\ International Energy Agency, Electric Motor Systems Annex, 
Report on Round Robin of Converter Losses, Final Report of Results. 
www.iea-4e.org/wp-content/uploads/2022/11/rrc_report_final_2022dec.pdf.
---------------------------------------------------------------------------

    In order to support an alternative credit calculation (See 
discussion in section IV.C.1.b) and potentially reduce test burden, DOE 
evaluated the model in IEC 61800-9-2:2023 assuming a polyphase 
regulated motor that exactly meets the standards at 10 CFR 431.25, and 
a motor controller at IE2 level. In addition, DOE adjusted the IE3 
levels \40\ to exactly match the standards at 10 CFR 431.25 and be 
comparable to the motor losses in AMCA 214-21.\41\ DOE found that 
compared to the AMCA model, the IEC 61800-9-2:2023 model resulted in 
generally lower combined motor and motor controller efficiencies.\42\ 
Based on this analysis, DOE has tentatively determined that the IEC 
model provides a better representation of a baseline motor and VFD 
combination (i.e., resulting in a conservative estimate of losses) as 
by definition it relies on a regulated polyphase motor that exactly 
meets the standards at 10 CFR 431.25 and on a baseline IE2 motor 
controller.
---------------------------------------------------------------------------

    \40\ The IEC defines motor efficiency classes. See IEC TS 60034-
30-2:2016, Rotating electrical machines--Part 30-2: Efficiency 
classes of variable speed AC motors (IE-code).
    \41\ For the purposes of this analysis, DOE considered a 4-pole 
motor. DOE relied on the coefficients provided in the EXCEL sheet 
accompanying the IEC TS 60034-31 Ed.2:2021 to calculate the motor 
losses equivalent to an IE3 motor (See Table 4 of IEC TS 60034-30-
2:2016) and multiplied each coefficient by ((100-[eta]<INF>r</INF>) 
[eta]<INF>IE3</INF>)/((100-[eta]<INF>IE3</INF>) [eta]<INF>r</INF> 
where [eta]<INF>r</INF> is the minimum value of full-load efficiency 
at 10 CFR 431.25 at a given horsepower across open and enclosed 
enclosure categories and [eta]<INF>IE3</INF> is the IE3 full load 
efficiency at the same horsepower and pole configuration.
    \42\ Two percent lower on average for 4 poles motors at 1, 10, 
15, 25, 75, and 200 hp for loads between 0.25 and 1.
---------------------------------------------------------------------------

    Therefore, DOE proposes to reduce test burden by adding a combined 
motor and controller efficiency calculation to allow establishing the 
FEI of fans sold with a regulated polyphase motor and a motor 
controller based on a shaft-to-air test and calculated motor and 
controller efficiency. DOE proposes that the performance of the motor 
and motor controller combination be allowed for certain electric motors 
and controller combinations that meet the requirements in sections 
6.4.1.3 and 6.4.1.4 of AMCA 214-21, which specify that the motor must 
be polyphase regulated motor (i.e., an electric motor subject to energy 
conservation standards at 10 CFR 431.25). To support this approach, DOE 
proposes that the performance of the motor and motor controller 
combination be calculated in accordance with the model described in IEC 
61800-9-2:2023 and the calculation in IEC TS 60034-31: 2016, and 
assuming a regulated polyphase motor that exactly meets the standards 
at 10 CFR 431.25 and a baseline IE2 motor controller. For the final 
rule, DOE may also consider an approach where the calculation of AMCA 
214-21 would be preserved but adjusted (i.e., same equations but with 
different coefficients) to align with the results of the IEC 61800-9-
2:2023 model as proposed.
    DOE requests comments and feedback on the proposed methodology and 
calculation of motor and motor controller losses as well as potentially 
using an alternative calculation based on adjusted AMCA 214-21 
equations.
2. Air Circulating Fans
    In the October 2022 NODA, DOE used FEI as the metric for ACFs in 
its analysis. DOE requested feedback on the FEI values that it 
determined and its approach for estimating FEI values for ACFs. 87 FR 
62038, 62050.
    AHAM commented that FEI is not an appropriate metric to use for 
residential ACFs because the reference fan used for FEI is based on a 
commercial fan. (AHAM, No. 123 at p. 7) Furthermore, AHAM commented 
that the AMCA 214-21 test procedure, which DOE proposed to incorporate 
by reference in the July 2022 TP NOPR, is not applicable to residential 
ACFs. (AHAM, No. 123 at p. 6) DOE notes that, as discussed in section 
III.B.2 of this document, ACFs with an input power of less than 125 W 
are excluded from the scope of the rulemaking.
    The CA IOUs and AMCA commented that the reason FEI values are much 
higher for ACFs at diameters less than 20 in. is because the airflow 
constant in the FEI calculation (3,210 CFM) is more impactful for ACFs 
with lower CFM. (CA IOUs, No. 127 at pp. 4-5; AMCA, No. 132 at pp. 10-
11, 19) To support their comment, the CA IOUs provided data 
demonstrating how, at lower airflows, there is a ``bonus'' value added 
to reference shaft input power as a result of the airflow constant. (CA 
IOUs, No. 127 at pp. 4-5) Ultimately, the CA IOUs recommended that DOE 
consider using a different airflow constant for lower airflow fans to 
counter this effect. Id. Greenheck explained that the airflow constant 
in AMCA 214-21 is higher than the 12-in. representative unit can 
generate; therefore, Greenheck would expect that efficiencies of the 
12-in. representative unit would be greater than the efficiencies of 
larger units, which is why AMCA 214-21 limits the application of FEI to 
fans with airpowers of at least 125 W. (Greenheck, No. 122 at p. 2) 
NEEA suggested that DOE review and confirm the increases in FEI for 
ACFs at diameters of 20 in. or less. (NEEA, No. 129 at p. 4) AMCA 
commented that there was a discrepancy between the airflow constant 
defined for ACFs in the July 2022 TP NOPR (3,210 CFM) and the airflow 
constant that DOE used in the October 2022 NODA (3,201 CFM). (AMCA, No. 
132 at p. 10) In response, DOE confirms that the airflow constant used 
in the October 2022 NODA is consistent with that in the July 2022 TP 
NOPR (3,210 CFM) and that the value of 3,201 CFM was a typographical 
error in the October 2022 NODA. Greenheck commented that using the FEI 
metric for both GFBs and ACFs would cause confusion regarding which 
constants should be used for GFBs and which constants should be used 
for ACFs. (Greenheck, No. 122 at p. 1)
    Based on additional evaluation and stakeholder feedback on the 
airflow constant in the FEI calculation, DOE has adopted the efficacy 
metric in terms of CFM/W at maximum speed for ACFs in appendix B to 
subpart J of 10 CFR part 431 (see section 2.2). In the May 2023 TP 
Final Rule, DOE explained that it has concerns over the readiness of an 
FEI metric for ACFs and acknowledged the uncertainty regarding the 
airflow and pressure constant values that should be used when 
calculating FEI for ACFs. Additionally, the efficacy metric is 
consistent with the metric used in the ACF industry. 88 FR 27312, 
27371. Therefore, DOE conducted its analysis for this NOPR and is 
proposing standards in efficacy in terms of CFM/Wat maximum speed.

D. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, DOE conducts a 
screening analysis based on information gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the equipment that is the subject of the rulemaking. As 
the first step in such an analysis, DOE develops a list of technology 
options for consideration in consultation with manufacturers, design 
engineers, and other interested parties. DOE then determines which of 
those means for improving efficiency are technologically feasible. DOE 
considers technologies incorporated in commercially available equipment 
or in working prototypes to be technologically feasible. 10 CFR 431.4; 
10 CFR part 430, subpart C, appendix A, section 6I(3)(i) and 7(b)(1) 
(``Process Rule'').

[[Page 3748]]

    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety, and (4) unique-pathway proprietary technologies. 10 
CFR 431.4; Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of the Process 
Rule. Section IV.B of this document discusses the results of the 
screening analysis for fans and blowers, particularly the designs DOE 
considered, those it screened out, and those that are the basis for the 
standards considered in this rulemaking. For further details on the 
screening analysis for this rulemaking, see chapter 4 of the NOPR 
technical support document (``TSD'').
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt a standard for a type or class of 
covered equipment, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such equipment. (42 U.S.C. 6316(a); 42 U.S.C. 6295(p)(1)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for fans and blowers, using the design parameters for the 
most efficient products available on the market or in working 
prototypes. The max-tech levels that DOE determined for this rulemaking 
are described in section IV.C of this proposed rule and in chapter 5 of 
the NOPR TSD.

E. Energy Savings

1. Determination of Savings
    For each trial standard level (``TSL''), DOE projected energy 
savings from application of the TSL to fans and blowers purchased in 
the 30-year period that begins in the first full year of compliance 
with the proposed standards (2030-2059).\43\ The savings are measured 
over the entire lifetime of fans and blowers purchased in the previous 
30-year period. DOE quantified the energy savings attributable to each 
TSL as the difference in energy consumption between each standards case 
and the no-new-standards case. The no-new-standards case represents a 
projection of energy consumption that reflects how the market for 
equipment would likely evolve in the absence of energy conservation 
standards.
---------------------------------------------------------------------------

    \43\ Each TSL is composed of specific efficiency levels for each 
product class. The TSLs considered for this NOPR are described in 
section V.A of this document. DOE conducted a sensitivity analysis 
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet model 
to estimate national energy savings (``NES'') from potential new 
standards for fans and blowers. The NIA spreadsheet model (described in 
section IV.I of this document) calculates energy savings in terms of 
site energy, which is the energy directly consumed by equipment at the 
locations where they are used. For electricity, DOE reports national 
energy savings in terms of primary energy savings, which is the savings 
in the energy that is used to generate and transmit the site 
electricity. DOE also calculates NES in terms of FFC energy savings. 
The FFC metric includes the energy consumed in extracting, processing, 
and transporting primary fuels (i.e., coal, natural gas, petroleum 
fuels), and thus presents a more complete picture of the impacts of 
energy conservation standards.\44\ DOE's approach is based on the 
calculation of an FFC multiplier for each of the energy types used by 
covered products or equipment. For more information on FFC energy 
savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------

    \44\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (August 18, 2011), as 
amended at 77 FR 49701 (August 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for covered equipment, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6316(a); (42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\45\ For 
example, some covered equipment have most of their energy consumption 
occur during periods of peak energy demand. The impacts of these 
equipment on the energy infrastructure can be more pronounced than 
equipment with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis, taking into 
account the significance of cumulative FFC national energy savings, the 
cumulative FFC emissions reductions, and the need to confront the 
global climate crisis, among other factors. DOE has initially 
determined the energy savings from the proposed standard levels are 
``significant'' within the meaning of 42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(3)(B).
---------------------------------------------------------------------------

    \45\ The numeric threshold for determining the significance of 
energy savings established in a final rule published on February 14, 
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule 
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

F. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of a potential new standard on 
manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. DOE first uses an annual cash flow approach to determine 
the quantitative impacts. This step includes both a short-term 
assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include (1) INPV, which 
values the industry on the basis of expected future cash flows, (2) 
cash flows by year, (3) changes in revenue and income, and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new standards. These measures 
are discussed further in the following section. For consumers in the 
aggregate, DOE also calculates the national net present value of the 
consumer costs and benefits expected to result from particular 
standards. DOE also evaluates the impacts of potential standards on 
identifiable subgroups of consumers that may be affected 
disproportionately by a standard.

[[Page 3749]]

b. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider 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 of, or in the 
initial charges for, or maintenance expenses of, the covered equipment 
that are likely to result from a standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analysis.
    The LCC is the sum of the purchase price of equipment (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the equipment. The LCC analysis requires a variety of inputs, such as 
equipment prices, equipment energy consumption, energy prices, 
maintenance and repair costs, equipment lifetime, and discount rates 
appropriate for consumers. To account for uncertainty and variability 
in specific inputs, such as equipment lifetime and discount rate, DOE 
uses a distribution of values, with probabilities attached to each 
value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of more efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered equipment in the first full year of compliance 
with new standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.F of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA 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. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section III.E, DOE uses the NIA 
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing equipment classes and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered equipment. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
proposed in this document would not reduce the utility or performance 
of the equipment under consideration in this rulemaking.
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 a proposed standard. (42 U.S.C. 6316(a); 42 
U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to 
determine the impact, if any, of any lessening of competition likely to 
result from a proposed standard and to transmit such determination to 
the Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy 
of this proposed rule to the Attorney General with a request that the 
Department of Justice (``DOJ'') provide its determination on this 
issue. DOE will publish and respond to the Attorney General's 
determination in the final rule. DOE invites comment from the public 
regarding the competitive impacts that are likely to result from this 
proposed rule. In addition, stakeholders may also provide comments 
separately to DOJ regarding these potential impacts. See the ADDRESSES 
section for information to send comments to DOJ.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the proposed standards 
are likely to provide improvements to the security and reliability of 
the Nation's energy system. Reductions in the demand for electricity 
also may result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how standards may affect the Nation's needed power generation 
capacity, as discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The proposed standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases (``GHGs'') associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions, as discussed in section 
IV.K; the estimated emissions impacts are reported in section V.B.6 of 
this document. DOE also estimates the economic value of emissions 
reductions resulting from the considered TSLs, as discussed in section 
V.C.1 of this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant 
information regarding economic justification that does not fit into the 
other categories described previously, DOE could consider such 
information under ``other factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
equipment that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate 
values used to calculate the effects that proposed energy conservation 
standards would have on the payback period for consumers. These 
analyses include, but are not limited to, the 3-year payback period 
contemplated under the rebuttable-presumption test. In addition, DOE 
routinely conducts an economic analysis that considers the full range 
of impacts to consumers, manufacturers, the Nation, and the 
environment, as required under 42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(B)(i). The results of this analysis serve as the basis for 
DOE's evaluation of the economic justification for a potential standard 
level (thereby supporting or rebutting the results of any preliminary 
determination of

[[Page 3750]]

economic justification). The rebuttable presumption payback calculation 
is discussed in section V.B.1.c of this proposed rule.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to fans and blowers. Separate subsections 
address each component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards proposed in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential new energy 
conservation standards. The national impacts analysis uses a second 
spreadsheet set that provides shipments projections and calculates 
national energy savings and net present value of total consumer costs 
and savings expected to result from potential energy conservation 
standards. DOE uses the third spreadsheet tool, the Government 
Regulatory Impact Model (``GRIM''), to assess manufacturer impacts of 
potential standards. These three spreadsheet tools are available on the 
DOE website for this proposed rulemaking: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=51&action=viewlive. Additionally, DOE used 
output from the latest version of the Energy Information 
Administration's (``EIA's'') Annual Energy Outlook (``AEO''), a widely 
known energy projection for the United States, for the emissions and 
utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the equipment. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include (1) determination of equipment 
classes, (2) scope of the analysis and data availability, and (3) 
technology and design options that could improve the energy efficiency 
of fans and blowers. The key findings of DOE's market assessment are 
summarized in the following sections. See chapter 3 of the NOPR TSD for 
further discussion of the market and technology assessment.
1. Equipment Classes
    When evaluating and establishing energy conservation standards, DOE 
is required to establish separate standards for a group of covered 
equipment (i.e., establish a separate equipment class) based on the 
type of energy used. DOE may also establish separate standards if DOE 
determines that an equipment's capacity or other performance-related 
feature that other equipment lacks justifies a different standard. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(q)) In making a determination whether a 
performance-related feature justifies a different standard, DOE must 
consider such factors as the utility of the feature to the consumer and 
other factors DOE determines are appropriate. (Id.)
a. General Fans and Blowers
    As discussed, DOE develops equipment classes based on specific 
performance-related features that impact utility and may necessarily 
impact efficiency in serving that utility. For GFBs, DOE identified the 
direction of airflow through the fan, the outlet configuration of the 
fan, housing features, and impeller features as characteristics that 
may justify establishing separate equipment classes. DOE also 
considered the presence of motor controllers as an additional factor 
for developing equipment classes.
    Based on the direction of airflow through a fan impeller, the 
classification of a fan may be either axial or centrifugal. Axial fans 
move air parallel to their axis of rotation and are suitable for 
applications requiring high airflow at relatively low pressures. 
Alternatively, centrifugal fans move air radially outward from the axis 
of rotation, resulting in a change in direction of the air from the 
inlet of the fan to the impeller edge occurring at or close to 90 
degrees. This air is often redirected by a housing, which may 
concentrate the airflow into a perpendicular outlet, as in the case of 
a scroll housing, or again redirect the air to move parallel to the 
inlet flow, as in the case of an inline fan. Centrifugal fans can 
overcome much higher pressures than axial fans, but operate at lower 
airflow, resulting in a difference in utility where different airflows 
and pressures are required. DOE has tentatively determined that the 
differences between axial- and centrifugal-flow fans result in a 
difference in utility based on the pressure and airflow ranges under 
which they are able to operate. For example, an axial fan may be better 
suited for a general-purpose ventilation application, in which large 
volumes of air are required at low pressure, whereas a centrifugal fan 
may be more appropriate for an air conditioning application, which may 
require a greater operating pressure than could be achieved by an axial 
fan. Mixed-flow fans utilize a combination of axial and centrifugal 
flows to provide similar pressures at higher airflows compared to 
centrifugal fans where the outlet flow is parallel to the inlet flow. 
Based on a review of the market, DOE has tentatively determined that 
mixed-flow fans do not provide a unique utility from centrifugal fans 
in similar arrangements, due to their similar operating pressure and 
airflow ranges. Therefore, DOE separated GFBs into equipment classes 
based on whether they utilize an axial or centrifugal airflow in this 
NOPR.
    The outlet configuration of a fan can also affect its efficiency. 
In the DOE test procedure, DOE established test configuration and 
measurement requirements based on whether the immediate outlet of a fan 
is ducted or not ducted.\46\ See appendix A to subpart J of 10 CFR part 
431. For GFBs, ducted fans may be utilized to move air directly from 
the outlet of the fan through HVAC ducting internal to a building, 
while not ducted fans discharge air into a plenum or open space. For 
example, not ducted fans may be utilized to exhaust large quantities of 
air from a building. Not ducted fans are also better suited for 
applications in which the fan discharge needs to split into multiple 
directions, such as ventilation systems which recirculate air from one 
room to other parts of a building via multiple branching outlets. When 
a fan outlet is ducted, the outlet air moves through the duct system, 
and the velocity pressure associated with that air can be regained as 
static pressure as it travels through the ducting. In this case, FEI is 
calculated based on a total pressure basis accounting for both the 
static pressure and the pressure associated with the speed of the 
outlet air of the fan.\47\ When a fan outlet is not ducted,

[[Page 3751]]

the outlet air is immediately released into the surroundings, and the 
velocity pressure of this air is lost to its surroundings. In this 
case, FEI is calculated only on a static pressure basis since the 
pressure associated with the outlet speed of the air is not aiding the 
system. Because these outlet configurations have different utilities, 
and in providing this utility the efficiency is calculated differently 
according to the DOE test procedure, DOE is proposing to separate GFBs 
into equipment classes based on their outlet configuration.
---------------------------------------------------------------------------

    \46\ For the purposes of DOE's test procedure, ducting refers to 
the immediate discharge of a fan and not the fan's application. For 
example, a centrifugal unhoused fan which exhausts air in all 
directions into a plenum or open space would be considered not 
ducted, and tested via the corresponding test configuration, even if 
that fan is ultimately installed in ducted ventilation system.
    \47\ Static pressure is defined as the pressure exerted by a 
fluid that is not in motion. Total pressure is defined as the sum of 
the static pressure and the pressure that arises from the movement 
of a fluid, or the velocity pressure. A fan's static pressure is the 
static pressure at the outlet of the fan minus the total pressure at 
the inlet of the fan. The total pressure of a fan is the total 
pressure at the outlet of the fan minus the total pressure at the 
inlet of the fan.
---------------------------------------------------------------------------

    DOE has determined that a fan's housing may also impact utility. A 
fan housing is the structure that encloses and guides the airflow of a 
fan. Fans require certain housing features for specific utilities. For 
example, PRVs require a special housing to prevent precipitation from 
entering buildings. Further, different fan housings result in different 
outlet directions for airflow. For example, centrifugal fans with a 
scroll-shaped housing redirect airflow perpendicular to the fan inlet, 
while centrifugal fans with a cylindrical or inline housing have 
parallel inlet and outlet airflow. In applications that require 
continuous airflow in a single direction, such as in a long ventilation 
duct, a centrifugal fan with inline housing could be directly placed in 
the duct to push air along the single direction. Inserting a 
centrifugal fan with a scroll housing in the same application, however, 
would create unnecessary complexity because it would create multiple 
changes of direction of airflow, may require changes to the ducting 
work, and could lead to reduced performance in a space-constrained 
environment. Because the described housings have specific utilities and 
DOE has observed different FEI ranges for fans with the described 
housings, DOE is proposing to separate GFBs into separate equipment 
classes by whether they are housed or unhoused, and to further separate 
GFBs by the types of housings described.
    DOE also considered impeller features for separating fans into 
equipment classes. DOE identified that radial impellers as defined in 
AMCA 214-21 offer unique self-cleaning characteristics that allow them 
to be utilized with significantly less maintenance in airstreams with a 
high density of particulate matter, such as fume exhaust from a 
mine.\48\ However, these impellers are also less efficient than other 
centrifugal impellers. Therefore, DOE is proposing a separate equipment 
class for fans that use a radial impeller.
---------------------------------------------------------------------------

    \48\ AMCA 214-21 defines a radial impeller as a form of 
centrifugal impeller with several blades extending radially from a 
central hub. Airflow enters axially through a single inlet and exits 
radially at the impeller periphery into a housing with impeller 
blades; the blades are positioned so their outward direction is 
perpendicular within 25 degrees to the axis of rotation.
---------------------------------------------------------------------------

    The last feature that DOE evaluated for separating GFBs into 
equipment classes was the use of motor controllers, which allow a fan 
to adapt to changing load requirements. This enables a fan to run at 
lower speed when the system requirements allow, thus saving energy. 
While this may result in energy savings during operation, the DOE test 
procedure for fans does not account for these possible changes in 
operation and energy savings. Furthermore, FEI is a wire-to-air metric, 
as discussed in section III.C.1 of this document, which means that the 
use of a motor controller would act to reduce the FEI of a fan at each 
of its individual operating points. Any efficiency standard set without 
consideration of the motor controller would be more stringent. DOE 
recognizes the energy savings benefits of using a motor controller with 
a fan to allow the energy consumption of fan to be adjusted based on 
the changing load requirements of the system; therefore, to avoid 
penalizing the use of such technology, DOE proposes to create equipment 
classes for GFBs sold with and without motor controllers.
    In the DOE Test Procedure, DOE adopted definitions consistent with 
AMCA 214-21 for several categories of fans and blowers that are within 
the scope of this NOPR. See 10 CFR 431.172. DOE also established a 
modified definition for axial-panel fans to distinguish these fans from 
ACFs. Id. Table IV-1 presents the fan categories and corresponding 
definitions adopted by DOE.
BILLING CODE 6450-01-P

[[Page 3752]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.019

    During its analysis, DOE tentatively determined that additional 
definitions would help to clarify certain fan equipment classes. DOE is 
proposing in this NOPR to adopt the definitions for ``radial 
impeller'', ``mixed-flow impeller'' and ``housing'' presented in Table 
IV-2. DOE notes that these proposed definitions are consistent with 
those in AMCA 214-21, with some minor modifications for clarity.
---------------------------------------------------------------------------

    \49\ AMCA 214-21 defines fan flow angle as the angle of the 
centerline of the air-conducting surface of a fan blade measured at 
the midpoint of its trailing edge with the centerline of the 
rotation axis in a plane through the rotation axis and the midpoint 
of the trialing edge.
[GRAPHIC] [TIFF OMITTED] TP19JA24.020

    DOE found some fans are sold as radial fans but have impellers that 
incorporate both radial and non-radial features, such as blades with a 
slight backward-inclined design or blades with both straight and 
backward-curved portions. To ensure that these fans are properly and 
consistently classified as either radial or centrifugal housed, DOE

[[Page 3753]]

is proposing a definition for ``radial impeller''.
    Additionally, DOE is proposing to define ``mixed flow impeller'' to 
distinguish mixed flow impellers from axial and centrifugal impellers 
and to ensure that fans sold with a mixed flow impeller are correctly 
classified. DOE notes that, as defined in Table IV-1, inline fans with 
mixed flow impellers are considered in the centrifugal inline equipment 
class.
    Lastly, DOE is proposing to define ``fan housing'' since housing is 
a criterion used to separate equipment classes. In its evaluation of 
the market, DOE found some fans that may not be easily classified 
without a clear and consistent definition for housing. For example, 
cabinet fans are sold with an enclosure surrounding their internal 
moving components and an additional enclosure further directing 
airflow. DOE has observed that cabinet fans are commonly marketed as 
inline fans since the outermost enclosure directs the airflow to be 
inline; however, the internal enclosure, which directs airflow into and 
out of the impeller, directs airflow at a 90-degree angle, which would 
be consistent with a centrifugal housed fan. Based on DOE's proposed 
definitions, cabinet fans would be part of the centrifugal housed 
equipment class.
    DOE evaluated each of the fan categories defined in the DOE test 
procedure using the identified GFB performance features and proposes 
that each fan category defined in the test procedure will be evaluated 
as a separate equipment class. For PRVs, DOE has found that they can be 
either axial or centrifugal, and their outlets can either be ducted or 
not ducted. PRVs used for supply will have a ducted outlet, while PRVs 
used for exhaust will not have a ducted outlet. DOE notes that while 
centrifugal PRVs serve both supply and exhaust functions, DOE did not 
find a significant number of axial PRVs being used for supply in the 
market. Therefore, DOE is proposing to further divide PRVs into three 
distinct equipment classes: axial PRVs, centrifugal PRV exhaust fans, 
and centrifugal PRV supply fans. Table IV-3 presents the proposed 
definitions for each of the three PRV fan equipment classes, which 
align with the definitions in AMCA 214-21.
[GRAPHIC] [TIFF OMITTED] TP19JA24.021

    Additionally, DOE is proposing that each GFB equipment class be 
split into a class of fans that are sold with motor controllers and a 
class of fans that are sold without motor controllers. For example, 
there would be two equipment classes for axial PRVs--one for axial PRVs 
sold with motor controllers and one for axial PRVs sold without motor 
controllers. This would be the same for all remaining proposed GFB 
equipment classes.
    In summary, DOE is proposing to separate GFBs into 18 equipment 
classes in this NOPR. These equipment classes are shown in Table IV-4. 
As just discussed, DOE notes that each equipment class shown in the 
table has a variable-speed and a constant-speed variant. As mentioned 
previously, these equipment classes directly correspond to the GFB fan 
categories defined in the DOE test procedure, with the exception of 
PRVs.

[[Page 3754]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.022

    Although GFBs were not discussed in the October 2022 NODA, DOE 
received comment on GFB equipment classes. Specifically, AHRI commented 
that forward-curved fans, which are typically used in low-pressure 
applications, could be removed from the market by energy conservation 
standards. (AHRI, No. 130 at pp. 12-13) AHRI stated that forward-curved 
fans should have a separate equipment class because they provide code-
required sound quality in low-pressure and low-speed ranges. Id. 
Morrison and AHRI also commented that return or relief fans, which are 
commonly used for energy-saving economizer functions in systems, could 
be removed from the market if they are regulated by a DOE energy 
conservation standard. (Morrison, No. 128 at p. 2; AHRI, No. 130 at p. 
2, 13)
    DOE notes that the FEI metric is a function of the operating 
pressure. As mentioned in section III.C.1 of this document, FEI is the 
ratio of the reference FEP to the actual FEP. The reference fan is used 
to normalize the FEI calculation by evaluating fan performance compared 
to a consistent reference fan at each duty point and configuration. 
Evaluating FEI in this manner allows for comparison of different fans 
independent of the wide variety of fan types and duty points. 
Consequently, a return or relief fan operating at a lower pressure than 
a supply fan at a given airflow would be compared to a reference FEP 
specific to that duty point, which accounts for the lower operating 
pressure and mitigates disproportionate impacts; therefore, DOE has 
tentatively concluded that return and relief fans do not need a 
separate equipment class.
    To address AHRI's comment that forward-curved fans provide code-
required sound quality in low-pressure and low-speed ranges, DOE 
evaluated data on inlet and outlet noise obtained from manufacturer fan 
selection software for centrifugal-housed fans at low-pressure duty 
points. Based on this analysis, DOE observed centrifugal-housed fans 
with both backward-inclined and airfoil impellers that provided 
equivalent or nearly equivalent noise levels, in A-weighted decibels, 
to forward-curved fans operating at the same duty point. Furthermore, 
DOE observed that noise levels significantly decreased as the FEI of 
the fan increased, indicating that energy conservation standards would 
not inhibit fans from complying with sound quality requirements. 
Therefore, DOE has tentatively determined that forward-curved fans do 
not require a separate equipment class. However, to ensure that 
forward-curved fans were adequately evaluated, DOE evaluated a parallel 
design path in which it assumed that all forward-curved fans would be 
redesigned to meet any proposed energy conservation standards, rather 
than replacing the forward-curved impeller with another impeller 
topology such as airfoil or backward-inclined. DOE evaluated this 
parallel design path to consider the costs required to preserve 
forward-curved fans in the market. Additional details on the parallel 
design path for forward-curved fans are provided in section IV.C.1.b of 
this document and chapter 5 of the NOPR TSD.
    DOE received no further comments on GFB equipment classes and is 
therefore proposing the equipment classes in Table IV-4.
b. Air Circulating Fans
    In response to the October 2022 NODA, AMCA recommended that DOE use 
the same ACF definitions as those used in AMCA 230-23. (AMCA, No. 132 
at pp. 2, 18) As discussed in the May 2023 Test Procedure Final Rule, 
the definitions that DOE adopted for ACF, unhoused air circulating fan 
head (``ACFH''), housed ACFH, air circulating axial panel fan, box fan, 
cylindrical

[[Page 3755]]

ACF, and housed centrifugal ACF align with the definitions published in 
AMCA 230-23. 88 FR 27312, 27339. DOE additionally adopted definitions 
for air circulating axial panel fan, box fan, cylindrical ACF, and 
housed centrifugal ACF in the DOE test procedure, as defined in Annex B 
of AMCA 230-23. See 10 CFR 431.172. These definitions are reproduced 
Table IV-5. 
[GRAPHIC] [TIFF OMITTED] TP19JA24.023

BILLING CODE 6450-01-C
    In the October 2022 NODA, DOE did not evaluate separate equipment 
classes for housed and unhoused ACFs and requested comment and 
supporting data on whether housed and unhoused ACFs have significant 
differences in utility and/or efficiency. 87 FR 62038, 62045. NEEA 
stated that DOE should analyze unhoused and housed ACFs separately in 
its analysis because the efficiencies of housed and unhoused fans 
differ enough that an analysis of both together could result in non-
representative EL values. To support this point, NEEA referenced a plot 
that was included in the supplementary spreadsheet for the October 2022 
NODA that showed ACF efficiency distribution overlayed on the 
efficiency levels analyzed in the NODA \50\ and stated that the 
efficiency distributions in the plot were wide for all diameters. 
(NEEA, No. 129 at p. 1-2) NEEA commented that, given the many 
performance-related features with unquantifiable impacts on the fan 
efficiency data DOE used for its analysis, DOE should separate housed 
and unhoused ACFs into separate equipment classes to ensure that housed 
and unhoused ACFs are fairly analyzed. NEEA added that the separation 
of housed and unhoused fans aligns with the approach taken for GFBs in 
NODA 3. (NEEA, No. 129 at p. 2-3)
---------------------------------------------------------------------------

    \50\ See Docket No. EERE-2022-BT-STD-0002, No. 11 for the 
supplementary spreadsheet associated with the October 2022 NODA.
---------------------------------------------------------------------------

    The Efficiency Advocates commented that DOE should group ACFHs, box 
fans, panel fans, and personnel coolers together into a single axial 
ACF class since they are all axial fans that provide directional 
airflow and do not differ significantly in FEI. (Efficiency Advocates, 
No. 126 at p. 3) They noted that the ACF subcategories in AMCA 230 are 
delineated in AMCA 230 primarily for descriptive purposes and not for 
regulatory purposes. Id. DOE interprets ACFHs and personnel coolers, as 
referenced by the Efficiency Advocates, to align with the definitions 
given for unhoused ACFHs and cylindrical ACFs, respectively, in Table 
IV-5. DOE therefore interprets the Efficiency Advocates' comment as a 
recommendation to combine all axial ACFs into a single equipment class.
    DOE's review of the ACF market generally indicated that air 
circulating axial panel fans, box fans, cylindrical ACFs, and unhoused 
ACFHs could all be used interchangeably for air circulation 
applications. DOE did observe that cylindrical ACFs are sometimes 
marketed toward high-velocity applications. To verify whether design in 
high-velocity applications would warrant separating cylindrical ACFs 
into their own equipment class, DOE reviewed available air velocity and 
thrust data for air circulating axial panel fans, box fans, cylindrical 
ACFs, and unhoused ACFHs. Based on this analysis, DOE did not find a 
consistent trend of one or more of these subcategories of ACFs 
producing more air velocity or thrust than another, further indicating 
that they may be used interchangeably. DOE therefore

[[Page 3756]]

evaluated air circulating axial panel fans, box fans, cylindrical ACFs, 
and unhoused ACFHs as a single ``axial ACF'' equipment class in this 
NOPR. DOE is therefore proposing that an axial ACF be defined as ``an 
ACF with an axial impeller that is either housed or unhoused.'' DOE 
considers all fans that meet the axial ACF definition to be subject to 
the DOE test procedure, and these fans, unless specifically excluded, 
would be subject to any future energy conservation standards.
    DOE requests comment on whether there are specific fans that meet 
the axial ACF definition that provide utility substantially different 
from the utility provided from other axial ACFs and that would impact 
energy use. If so, DOE requests information on how the utility of these 
fans differs from other axial ACFs and requests data showing the 
differences in energy use due to differences in utility between these 
fans and other axial ACFs.
    In the October 2022 NODA, DOE also requested comment on whether 
each of the following design characteristics may impact the utility of 
air circulating fans: presence or absence of a safety guard, presence 
or absence of housing, housing design, blade type, power requirements, 
and air velocity or throw. 87 FR 62038, 62045. Additionally, DOE 
requested information on any additional design characteristics that may 
impact ACF utility. Id. In response, AMCA commented that all the design 
variables on which DOE requested comment are combined to influence an 
ACF's performance characteristics. (AMCA, No. 132 at p. 6-7). DOE 
reviewed the market and found that adjusting these design variables 
while keeping other design parameters constant did not produce a 
significant difference in efficiency, impact the operation, or impact 
the fan's application. Therefore, DOE has tentatively decided not to 
delineate separate equipment classes for axial ACFs based on safety 
guards, housing, blade type, power requirements, or air velocity and 
throw.
    In the October 2022 NODA, DOE additionally requested comment and 
supporting data on whether belt-driven and direct-driven ACFs have 
significant differences in utility or efficiency. 87 FR 62038, 62045. 
The Efficiency Advocates commented that DOE should not consider belt-
driven fans as a separate equipment class because those fans are merely 
a low-cost alternative to the more efficient direct-drive fans rather 
than a different performance or utility consideration, and that a 
separate equipment class for belt-driven ACFs could undermine the 
potential energy savings for larger diameter ACFs. (Efficiency 
Advocates, No. 126 at p. 3) DOE's review of belt-driven ACFs on the 
market indicated that, while belt drives do provide a utility for 
adjusting the rotational speed of the ACF, VFDs also allow users to 
adjust the rotational speed of the ACF. Therefore, DOE has tentatively 
determined that belt drives do not provide a unique utility and DOE did 
not treat belt-driven ACFs as an equipment class in its NOPR analysis. 
The shift from belt drive to direct drive is instead discussed as a 
design option in section IV.C.2.b of this document.
    DOE further reviewed the ACF market to determine if additional 
equipment classes were appropriate for axial ACFs. DOE observed that 
axial ACFs with larger impeller diameters tended to be more efficient 
than axial ACFs with smaller impeller diameters. DOE also received 
feedback during manufacturer interviews that fans with larger diameters 
are generally more efficient. Therefore, DOE considered diameter as a 
class-setting variable for axial ACFs in this NOPR. DOE found multiple 
efficiency incentive programs that provide rebates to agricultural fan 
manufacturers if they meet certain efficiency targets.\51\ For axial 
ACFs, these agricultural rebate programs typically define four diameter 
ranges to which the rebate efficiency levels applied: ``12-inch to less 
than 24-inch diameter range,'' ``24-inch to less than 36-inch diameter 
range,'' ``36-inch to less than 48-inch diameter range,'' and ``48-inch 
diameter or greater range.'' To align with these programs, DOE 
initially considered four different equipment classes for axial ACFs, 
one for each diameter range. However, after reviewing efficacy data for 
axial ACFs, DOE did not find a significant difference in efficacy 
between axial ACFs in the 12-inch to less than 24-inch diameter range 
and the 24-inch to less than 36-inch diameter range. Therefore, DOE 
combined these two diameter ranges into a single equipment class: the 
``12-inch to less than 36-inch diameter axial ACF'' class. DOE assigned 
the 36-inch to less than 48-inch diameter range to a ``36-inch to less 
than 48-inch diameter axial ACF'' class and the 48-inch diameter or 
greater range to a ``48-inch diameter or greater axial ACF'' class.
---------------------------------------------------------------------------

    \51\ See cecnet.net/agriculture; www.ecirec.coop/rebate-forms-
and-specifications; and www.tiprec.com/rebates.
---------------------------------------------------------------------------

    The term ``diameter'' in the context of fans and blowers refers to 
the impeller diameter of a fan. Impeller diameter is typically 
determined by measuring the radial distance from the tip of one of the 
impeller blades to the center of the impeller hub and doubling that 
value. DOE is therefore proposing to define diameter for fans and 
blowers as ``the impeller diameter of a fan, which is twice the 
measured radial distance between the tip of one of the impeller blades 
of a fan to the center axis of its impeller hub.'' DOE notes that 
impeller diameter may often be different than nominal diameter.
    Additionally, in the October 2022 NODA, DOE summarized a comment 
from the Efficiency Advocates stating that portable blowers may require 
an equipment class separate from other ACFs because they provide a 
unique application (i.e., drying floors), have centrifugal rather than 
axial construction, and are relatively low in efficiency. 87 FR 62038, 
62045. DOE understands the term ``portable blower'' to be a housed 
centrifugal ACF. As discussed in section IV.A.1.a of this document, DOE 
tentatively determined that axial and centrifugal fans generally have 
different utilities. DOE also reviewed the housed centrifugal ACF 
market and found that housed-centrifugal ACFs are used primarily as 
carpet dryers. Additionally, DOE observed that housed-centrifugal ACFs 
with input powers greater than or equal to 125 W typically have 
impeller diameters of 4 in. to 20 in., while axial ACFs with input 
powers greater than 125 W often have impeller diameters exceeding 20 
in. DOE also reviewed housed centrifugal ACF efficiency data and found 
that the most efficient housed centrifugal ACFs can be 3 to 4 times 
less efficient than the most efficient axial ACFs with a comparable 
diameter. Since housed centrifugal ACFs have a different construction, 
are only used as carpet dryers, are smaller, and are less efficient 
than axial ACFs, DOE has created a separate equipment class for housed 
centrifugal ACFs. DOE did not consider different diameter ranges for 
the housed centrifugal ACF equipment class because it did not observe a 
significant variation in efficiency for housed centrifugal ACFs with 
diameter. The proposed equipment classes for ACFs are summarized in 
Table IV-6.

[[Page 3757]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.024

2. Scope of Analysis and Data Availability
a. General Fans and Blowers
    DOE conducted the GFB engineering analysis for this NOPR using a 
database of confidential sales information provided by AMCA (``AMCA 
sales database''), performance data from manufacturer online fan 
selection software, and performance data provided from confidential 
manufacturer interviews.
    In response to the July 2022 TP NOPR, DOE received comments about 
the data used in its historical analyses. Specifically, AHRI expressed 
concern with DOE's use of the AMCA sales database in the December 2014 
NODA, the May 2015 NODA, and the November 2016 NODA, which contains 
efficiencies established at a variety of different speeds. (Docket No. 
EERE-2021-BT-TP-0021, AHRI, No. 40 at p. 13). AHRI stated that this 
approach was inconsistent with the ASRAC Working Group agreement for 
establishing product performance and, as disclosed during ASRAC 
negotiations, much of the data in the database was not certified 
performance and may not be reliable for evaluating the impact of 
efficiency standards. (Id.)
    With respect to the AMCA sales database providing efficiency data 
at a variety of speeds, DOE notes that, in accordance with the DOE test 
procedure, fans must be tested at a range of duty points over which 
they may operate. Duty points are characterized by a given airflow and 
pressure at a corresponding operating speed. In other words, fans could 
be tested at a variety of different speeds depending on the duty point 
at which the fan is being operated. As discussed in section IV.B of 
this document, DOE evaluated the entire range of duty points when 
developing the proposed efficiency levels for each class; therefore, 
DOE has used the performance data provided in the AMCA sales database 
as a basis for its engineering analysis. Furthermore, in response to 
the data in the database not being certified performance data, DOE 
compared the fan models in the AMCA sales database with the fan models 
in the AMCA Certified Rating Program.\52\ DOE found that the fan models 
in the AMCA sales database are certified as part of AMCA's Certified 
Rating Program.
---------------------------------------------------------------------------

    \52\ Detail on AMCA's Certified Ratings Program can be found at 
www.amca.org/certify/#about-crp (last accessed September 2022).
---------------------------------------------------------------------------

    The AMCA sales database that DOE used in this analysis is the same 
database that was used in the May 2015 NODA and the November 2016 NODA. 
To validate that the AMCA sales database remains representative of the 
current market, DOE verified the data with current manufacture product 
literature. DOE selected several fans from the AMCA sales database from 
each manufacturer and equipment class and verified that those fans are 
currently available with the same performance data. DOE specifically 
checked that the model, diameter, operating pressure, airflow, and 
brake horsepower (``bhp'') aligned between the AMCA sales database and 
current product literature. DOE was able to verify a majority of the 
fans selected from each manufacturer and equipment class. Additionally, 
DOE obtained recent performance and sales data from confidential 
manufacturer interviews and determined that the data were consistent 
with the data in the AMCA sales database; therefore, DOE has 
tentatively concluded that the AMCA sales database that it uses in its 
engineering analysis for this NOPR is representative of the current 
market.
    DOE notes that it made some updates to the AMCA sales database to 
ensure consistency with the proposed scope and equipment classes for 
PRVs. The AMCA sales database grouped all centrifugal PRVs together; 
however, as discussed in section IV.A.1.a, DOE has separated 
centrifugal PRVs by whether they are supply or exhaust (ducted or non-
ducted). To separately analyze the two classes, DOE manually 
recategorized the centrifugal PRVs as either supply or exhaust fans 
using the manufacturer and model provided in the AMCA sales database 
for most fans to identify from manufacturer literature which 
centrifugal PRVs were supply and which were exhaust. Centrifugal PRVs 
that could not be identified by their model name were left categorized 
as exhaust for the analysis since, based on data collected during 
confidential manufacturer interviews, DOE believes that there are more 
centrifugal PRV exhaust fan product lines and models than centrifugal 
PRV supply fans.
    Additionally, DOE determined that the AMCA sales database included 
many radial fans that are considered out of scope in the DOE test 
procedure. 10 CFR 431.174((a)2)(i). As discussed in section III.B.1, 
radial fans that are unshrouded and have an impeller diameter less than 
30 in. or a blade width of less than 3 in. are excluded from the scope 
of the DOE test procedure. DOE identified these radial fans by looking 
up each model in manufacturer product literature to determine whether 
it contained a shrouded impeller. Some fans in the database could not 
be identified by model, or the impeller characteristics could not be 
determined from their catalogs. DOE opted to include these fans in the 
database for analysis because including them likely results in a more 
conservative estimate of FEI since DOE has found that unshrouded 
impellers typically have lower FEI.
    DOE acknowledges that there are limitations to the data provided in 
the AMCA sales database. For example, factors such as drive type, motor 
horsepower, and the presence of motor controllers were not specified in 
the AMCA sales database, unless indicated by the model number. 
Additionally, DOE estimates that AMCA members make up 60 percent of fan 
manufacturers. DOE understands that the AMCA sales database includes 
only a portion of the sales data from AMCA members; however, given the 
range in equipment classes, FEIs, and costs in the AMCA sales database, 
DOE believes that the data are representative of the U.S. GFB market. 
Furthermore, to supplement the data from the AMCA sales database, DOE 
also pulled

[[Page 3758]]

performance data from online fan manufacturer selection software. DOE 
notes that it did not select representative units, such as a particular 
fan model, to conduct its analysis since fan performance relies on fan 
diameter and operating point. Instead, DOE identified between three and 
ten representative diameters and operating points for each equipment 
class in the AMCA sales database and pulled additional performance data 
for these operating points from manufacturer fan selection software. 
Each representative operating point was defined by equipment class, 
diameter, operating pressure, and airflow. DOE analyzed data points 
from multiple fan models and manufacturers for each representative 
diameter and operating point representing a variety of fan designs and 
efficiencies. Using the data from manufacturer fan selection software, 
DOE was able to identify the drive type, motor horsepower, and whether 
or not motor controllers were present for each evaluated fan.
    More detail on the databases DOE used in its analyses can be found 
in chapter 5 of the NOPR TSD.
b. Air Circulating Fans
    During manufacturer interviews conducted prior to the October 2022 
NODA, manufacturers recommended that DOE use ACF data from a publicly 
available database provided by the Bioenvironmental and Structural 
Systems Laboratory associated with the University of Illinois-Champaign 
(``BESS Labs database'').\53\ Based on this feedback, DOE conducted its 
October 2022 NODA analyses using data from the BESS Labs database and 
data collected from ACF testing performed by DOE at BESS Labs. DOE 
referred to this collective database as the ``BESS Labs combined 
database'' in the October 2022 NODA. DOE notes that, although BESS Labs 
uses the test setups defined in the 2012 edition of AMCA 230 for its 
testing, BESS Labs does not apply standard air density conversions to 
its measurements, which are required by the DOE test procedure. See 
section 2.2.2 of appendix B to subpart J to 10 CFR part 431. Therefore, 
in the October 2022 NODA, DOE applied conversion formulas to the BESS 
Labs combined database performance data to align the airflow and input 
power calculations with the DOE test procedure. Details on these 
conversions can be found in chapter 5 of the TSD.
---------------------------------------------------------------------------

    \53\ BESS Labs is a research, product testing, and educational 
laboratory. BESS Labs provides engineering data to aid in the 
selection and design of agricultural buildings and assists equipment 
manufacturers in developing better products. Test reports for ACFs 
are publicly available at bess.illinois.edu/searchc.asp.
---------------------------------------------------------------------------

    As discussed in section III.B.2, all ACFs with input power less 
than 125 W are outside the proposed scope of this rulemaking. 
Therefore, DOE removed all ACFs with input powers less than 125 W from 
the BESS Labs combined database prior to its analysis for this NOPR.
    In the October 2022 NODA, DOE requested comment on whether the BESS 
Labs combined database was representative of the performance of the 
entire ACF market. 87 FR 62038, 62045. In response, AMCA commented that 
it expects the fan efficiencies reported in the BESS Labs database to 
be higher than the typical efficiencies seen on the market for ACFs. 
AMCA stated that this is because the fans in the BESS Labs database are 
typically agricultural fans, and these fans are the subject of utility 
rebates to encourage the production of higher-efficiency fans. AMCA 
further stated that it is unlikely performance data for a fan was 
voluntarily added to the public BESS Labs database unless the fan was 
eligible for these utility rebates. (AMCA, No. 132 at p. 4-5) Greenheck 
also commented that the ACF efficiencies in the BESS Labs database 
would generally be higher than typical ACFs on the market because of 
their participation in rebate efficiency incentive programs, and 
Greenheck suggested that DOE utilize more data sources than just the 
BESS Labs combined database. (Greenheck, No. 122 at p. 2)
    In the October 2022 NODA, DOE also requested information on ACF 
performance data. 87 FR 62038, 62045. In response, AMCA commented that 
ACF catalog data is publicly available. However, AMCA also stated that 
it believes that public performance data for fans not listed in the 
BESS Labs database was likely either not collected using the most 
recent version of AMCA 230 or not collected using any version of AMCA 
230 at all. AMCA further commented that testing of ACFs at an AMCA-
accredited facility yielded performance data that was inconsistent with 
the performance data published in catalogs for certain tested fans, and 
because of this, AMCA cautioned DOE on the use of catalog data that has 
not been certified by a third party. (AMCA, No. 132 at p. 5-6) 
Similarly, Greenheck recommended that DOE only use ACF data that has 
been certified by an independent performance certification program to 
ensure that the data are accurate. (Greenheck, No. 122 at p. 2) In the 
October 2022 NODA, DOE discussed a comment from AMCA stating that ACF 
product literature may advertise performance calculated using outdated 
versions of AMCA 230 and that all versions aside from AMCA 230-15 had 
at least one error pertaining to the calculations of thrust, airflow, 
or input power. 87 FR 62038, 62043-62044. A table summarizing these 
errors can be found in the October 2022 NODA. Id.
    In the October 2022 NODA, DOE also requested comment on whether the 
fan affinity laws could be used to extrapolate ACF performance data to 
smaller and larger diameters to increase the size of its ACF dataset. 
87 FR 62038, 62045. In response, NEEA stated that since the fan 
affinity laws assume that efficiency remains constant, utilizing them 
for determining efficiency gains would be incorrect. Instead, NEEA 
recommended that DOE obtain data on smaller- and larger-diameter ACFs 
by either testing additional smaller- and larger-diameter ACFs or by 
using empirical relationships to extrapolate data to smaller and larger 
diameters. (NEEA, No. 129 at p. 3-4) AMCA stated that the fan affinity 
laws require knowledge of the impeller shaft power, which is often not 
measured for ACFs. AMCA added that electrical input power, which is 
often measured for ACFs, cannot be scaled to obtain reasonable 
estimates. (AMCA, No. 132 at p. 6) In response to this feedback, DOE 
did not utilize the fan affinity laws to extrapolate fan performance 
data to different diameters and instead included catalog data in its 
dataset for this NOPR.
    DOE acknowledges that the BESS Labs combined database likely 
contains higher efficiency fans than the overall ACF market, since many 
agricultural incentive programs require that fans be tested at BESS 
Labs and meet certain performance requirements. Additionally, DOE notes 
that the BESS Labs combined database contains data on axial ACFs only. 
Therefore, to supplement the BESS Labs combined database and gain 
additional information representative of the ACF market, DOE collected 
ACF catalog data from manufacturer and distributor websites. DOE did 
not consider catalog data in the October 2022 NODA because catalog data 
did not include information on the air density measured during testing, 
which is required to calculate FEI. Since DOE updated the ACF metric to 
be efficacy instead of FEI, DOE was able to use catalog data for this 
NOPR. In response to AMCA and Greenheck's concerns about the accuracy 
of catalog data that have not been certified by a third party, DOE 
notes that, while the catalog data it collected is not certified by a 
third party, there were no ACFs listed in AMCA's certified product

[[Page 3759]]

database at the time of DOE's market review,\54\ and DOE is not aware 
of any other certification programs for ACFs.
---------------------------------------------------------------------------

    \54\ AMCA's certified product database for ACFs can be found at 
www.amca.org/certify/certified-product-search/product-type/air-circulating-fan.html (last accessed 4/10/23).
---------------------------------------------------------------------------

    In response to AMCA's concerns about manufacturers' use of outdated 
and inaccurate versions of AMCA 230 to generate catalog data, DOE 
applied a correction factor to some catalog data. DOE is aware that 
many ACF manufacturers may use an outdated version of AMCA 230 and that 
the calculation methods used in these older versions do not align with 
AMCA 230-15 or with AMCA 230-23, which is referenced by the DOE test 
procedure. See section 2.2.2 of appendix B to subpart J of 10 CFR part 
431. In DOE's review of the ACF market and product literature, it 
observed that the 1999 edition of AMCA 230 (``AMCA 230-99'') was the 
most common test method manufacturers cited in their product literature 
for measurement of ACF performance data, while a small number of 
manufacturers cited AMCA 230-15. DOE did not find any other methods 
that manufacturers cited for measuring ACF performance. Therefore, for 
all manufacturers that did not explicitly state in their product 
literature that they collected their ACF performance data using AMCA 
230-15, DOE applied a correction factor to the catalog data to account 
for differences in the calculation methods between AMCA 230-99 and the 
DOE test procedure. DOE acknowledges that this approach may result in 
lower efficacy values for ACFs where a correction factor was already 
applied; however, DOE notes that it lacks other sources of ACF 
performance data aside from the BESS Labs combined database and this 
catalog data. DOE combined the corrected catalog data and the BESS Labs 
data, herein referred to as the ``updated ACF database,'' and used this 
database for its analysis of ACFs in this NOPR.
    DOE also removed outliers from the dataset using a box plot 
approach. For axial ACF catalog data, DOE removed extremely high-
efficacy outliers and did not identify any extremely low-efficacy 
outliers. For axial ACFs from the BESS Labs combined database, DOE only 
removed extremely high-efficacy outliers because ACFs in the BESS Labs 
combined database are generally expected to have higher efficacies than 
the overall ACF market. DOE did not remove outliers for housed 
centrifugal ACFs.
3. Technology Options
    In the February 2022 RFI, DOE identified five technology options 
that would be expected to improve the efficiency of ACFs, as expected 
to be measured by a future DOE test procedure. These technology options 
were improved aerodynamic design, blade shape, more efficient motors, 
material selection, and variable-speed drives (``VSDs''). 87 FR 7048, 
7052. In the October 2022 NODA, DOE focused its analyses on aerodynamic 
redesign and more efficient motors. 87 FR 62038, 62042. In response to 
the October 2022 NODA, the CA IOUs suggested that DOE investigate 
individual components of improved aerodynamic design so that 
incremental efficiency levels could be evaluated in the engineering 
analysis. (CA IOUs, No. 127 at p. 2) DOE has since identified several 
additional technology options that would be expected to improve the 
efficiency of GFBs and ACFs, including options that are components of 
aerodynamic design. The technology options that DOE considered for this 
NOPR are:
    <bullet> Improved housing design;
    <bullet> Reduced manufacturing tolerances;
    <bullet> Addition of guide vanes;
    <bullet> Addition of appurtenances;
    <bullet> Improved impeller design;
    <bullet> Impeller topology;
    <bullet> Increased impeller diameter;
    <bullet> Impeller material;
    <bullet> More efficient transmissions;
    <bullet> More efficient motors; and
    <bullet> Motor controllers.
    DOE notes that not every technology option listed above will be 
analyzed for each equipment class in this NOPR. For example, DOE did 
not analyze increased impeller diameter for ACFs because impeller 
diameter is used to separate ACF equipment classes (see section 
IV.A.1.b). The following discussion provides a brief overview of the 
technology options under consideration and addresses stakeholder 
comments that DOE has received on the October 2022 NODA.
    Improved housing design includes any changes to the enclosure of a 
fan, such as modifying the volute \55\ for centrifugal fans or reducing 
the blade-to-housing clearance for axial fans. In response to the 
October 2022 NODA, the CA IOUs stated that a fan's blade-to-housing 
clearance determines its static pressure capabilities and efficiency, 
and fans with larger clearances generally have lower efficiency. They 
also stated that the use of a wall ring can improve the efficiency of 
an ACF. (CA IOUs, No. 127 at pp. 2-3) DOE has considered the addition 
of a wall ring under the ``improved housing design'' technology option. 
Additionally, DOE considered the effects of reduced running clearances 
as a component of the ``reduced manufacturing tolerances'' technology 
option. During manufacturer interviews, manufacturers stated that 
reducing the manufacturing tolerances for fan components can increase 
efficiency. Therefore, DOE considered reduced manufacturing tolerances 
as a technology option for this NOPR.
---------------------------------------------------------------------------

    \55\ A volute is a spiral or scroll-shaped housing used with 
centrifugal fans.
---------------------------------------------------------------------------

    The addition of guide vanes reduces pressure loss by directing and 
smoothing airflow as it exits a fan. DOE observed in its market 
research that the integration of guide vanes into the outlet of a fan 
can improve efficiency by over 10 percent. For example, DOE observed 
that vane axial fans can achieve up to 20-percent higher FEIs than 
similarly sized tube axial fans. Appurtenances are similar to guide 
vanes but are not integral to the fan--rather, appurtenances can be 
added to change the performance of a fan and fans may be sold with 
different appurtenances to provide the end user with the desired 
effect. In the October 2022 NODA, DOE summarized a comment from ebm-
papst stating that the use of outlet guide vanes or appurtenances, such 
as inlet cones on housings or winglets on impellers, could improve the 
fan efficiency. 87 FR 62038, 62042. DOE recognizes that the addition of 
appurtenances described by ebm-papst has the potential to increase fan 
efficiency. Therefore, DOE considered the addition of guide vanes and 
appurtenances as technology options in this NOPR.
    Regarding impeller design, DOE considered any aerodynamic 
improvement of an impeller that does not include a change to its 
topology under the impeller design technology option. This includes 
modifications, such as incorporating beneficial ridges into the blade 
surface as well as improving impeller blade surface quality. DOE 
observed the presence of these modifications to blade design during 
teardowns of GFBs and ACFs. Therefore, DOE considered improved impeller 
design as a technology option in this NOPR.
    Regarding fan impeller topology, DOE considered changes in the 
orientation or basic shape of the blades, such as switching from a 
backward-curved blade to an airfoil blade. In the October 2022 NODA, 
DOE summarized a comment from the Joint Commenters encouraging DOE to 
evaluate more efficient blade designs as a technology option because of 
their energy savings potential. The Joint Commenters added that the use 
of advanced blade designs,

[[Page 3760]]

such as airfoil blades, can improve the efficiency of a fan relative to 
traditional single-thickness blades. 87 FR 62038, 62042. In addition, 
DOE received comment from the CA IOUs in response to the October 2022 
NODA stating that impeller blades may have either a ``true'' or 
``progressive'' pitch, and that the pitch of the blades will affect 
efficiency. (CA IOUs, No. 127 at p. 2) DOE's research and feedback 
received during manufacturer interviews also indicated that certain 
impeller topologies can be more efficient than others. Therefore, DOE 
considered impeller topology as a technology option.
    In response to the October 2022 NODA, AHAM commented that DOE's use 
of general blade design as a technology option for ACFs did not factor 
in specific differences in application of different blade shapes 
between unique fan configurations, including ACFs with horizontal axes, 
ACFs with vertical axes, or bladeless ACFs. AHAM added that DOE has not 
tested these different fan configurations. (AHAM, No. 123 at p. 8) DOE 
notes that the DOE test procedure specifies testing ACFs only in a 
horizontal configuration. DOE also notes that bladeless fans are 
excluded from the proposed scope for ACFs, as discussed in section 
III.B.2 of this document. Therefore, DOE did not consider differences 
in axis orientation or bladeless fans in its evaluation of ACF impeller 
topology or improved impeller design.
    DOE received feedback during confidential GFB manufacturer 
interviews that increasing the diameter of a fan impeller can improve 
the efficiency of a fan. Additionally, when comparing fans on the 
market with different diameters and otherwise similar characteristics, 
DOE observed that fans with larger diameters were typically more 
efficient for certain equipment classes; therefore, DOE considered 
increased impeller diameter as a technology option in this NOPR.
    When reviewing available data from the market, its databases, and 
information received during confidential manufacturer interviews, DOE 
could not distinguish between the effects of improved housing design, 
reduced manufacturing tolerances, addition of appurtenances, and 
improved impeller design on the performance of GFBs; therefore, DOE has 
grouped these technology options together and collectively refers to 
them as ``aerodynamic redesign'' for GFBs in the remainder of this 
document. For ACFs, DOE additionally lacked quantitative efficiency 
data regarding specific impeller topologies and the addition of guide 
vanes, and therefore grouped the addition of guide vanes as well as any 
blade adjustments that improve the efficiency of ACFs, such as the 
curvature or pitch, along with improved housing design, reduced 
manufacturing tolerances, addition of appurtenances, and improved 
impeller design under the umbrella of aerodynamic redesign for ACFs in 
the remainder of this document. The technology options considered under 
aerodynamic redesign for both GFBs and ACFs are summarized in Table IV-
7.
    DOE previously considered ``material selection'' in general as a 
technology option in the February 2022 RFI. 87 FR 7048, 7052. For this 
NOPR, DOE is clarifying that material selection is specific to impeller 
materials. DOE did not receive comments from stakeholders pertaining to 
material selection for either the February 2022 RFI or the October 2022 
NODA; however, during confidential interviews, manufacturers stated 
that minimal efficiency gains would be achieved by changing the blade 
material. When reviewing manufacturer fan selection software data, DOE 
identified similar fans with different blade materials and investigated 
the impact of different materials on FEI. Consistent with manufacturer 
feedback, DOE found that material selection of the impeller had minimal 
or no impact on efficiency for either GFBs or ACFs. Therefore, DOE did 
not consider material selection as a technology option in this NOPR.
    With regard to transmissions, DOE notes that the DOE test procedure 
includes a loss factor associated with belt-drive transmissions, while 
direct-drive transmissions are treated as having no loss when 
calculating efficiency. This indicates that replacing a belt-drive with 
a direct-drive transmission can improve efficiency. For ACFs, DOE 
considered the change from belt-drive to direct-drive as a technology 
option. For GFBs, as discussed in section IV.A.1.a, DOE is proposing to 
establish separate equipment classes for GFBs sold with or without 
motor controllers to account for the added utility provided by GFBs 
with motor controllers (i.e., variable-speed operation to allow a fan 
to adapt to changing load requirements). Belt-drive transmissions can 
be manually adjusted during installation to achieve all airflow and 
pressure operating requirements in a fan's operating range for 
different field applications, whereas direct-drive fans would only be 
able to achieve all operating points within the fan's operating range 
if paired with a motor controller. As a result, DOE did not consider 
the shift from belt-drive to direct-drive transmission as a technology 
option for GFBs to maintain the added utility provided by belt-drive 
transmission.
    Regarding motors, motor efficiency can depend on motor topology as 
well as the individual design features of a single motor topology. For 
example, most motors used in ACFs are permanent split capacitor 
(``PSC'') motors, and these motors have a wide range of operating 
efficiencies. In addition, some ACFs use electronically commutated 
motors (``ECMs''). ECMs operate in a higher efficiency range than PSC 
motors, so using an ECM may improve the overall efficiency of an ACF. 
In this NOPR, DOE considers both switching to a more efficient motor 
topology and improved efficiency of a single motor topology in the more 
efficient motors technology option.
    For GFBs, DOE learned from confidential manufacturer interviews 
that motors are not always sold as integral parts of a fan. Many sales 
of GFBs do not include a motor and require the customer to provide this 
part. Furthermore, the motors used for GFBs are nearly all 3-phase 
induction motors currently regulated by DOE, including motors between 
100 and 150 hp. See 10 CFR 431.25. On June 1, 2023, DOE published an 
energy efficiency standards direct final rule for these electric 
motors. 88 FR 36066. In this rule, DOE increased the minimum required 
efficiency of induction motors between 100 and 250 hp from IE 3 to IE 
4. 88 FR 36066, 36144. IE 3 and IE 4 motor efficiencies are defined in 
IEC 60034-30-1:2014: ``Rotating Electrical Machines--Part 30-1: 
Efficiency classes of line operated AC motors (IE code),'' (``IEC 
60034-30-1:2014'') published by the International Electrotechnical 
Commission. The compliance date of this rule is June 1, 2027 and any 
standards promulgated as a result of this fans rulemaking would take 
effect after that date.
    Because of the new 2027 electric motor standards, there will be 
impacts on the motor market from a product availability, size, and 
technology standpoint as the efficiency moves from IE 3 to IE 4. These 
changes would need to be considered in this rulemaking, but electric 
motor manufacturers are still in the design and planning process to 
migrate their product offerings to be in compliance with the 2027 
electric motors standards recently adopted. If DOE were closer to the 
2027 compliance date or this was a first-time regulation for these 
induction motors, DOE would be able to better understand how 
manufacturers were going to fully

[[Page 3761]]

respond and the innovations that may be introduced into the market to 
be able to carefully consider how the motors offerings could be 
considered as part of the CIFB designs affecting the fan efficiencies. 
At this time, DOE does not have sufficient data to fully evaluate the 
impact of those efficiency and technology changes on the proposed 
efficiency levels (``ELs''). DOE has therefore not evaluated more 
efficient motors as a technology option for GFBs in this NOPR; however, 
DOE may consider more efficient motors as a viable technology option 
for improving GFB efficiency in a future rulemaking.
    DOE evaluated more efficient motors for ACFs in the October 2022 
NODA. 87 FR 62038, 62042. DOE also assumed that all ACFs are sold with 
a motor. Id. Furthermore, DOE requested comment on its estimated base 
manufacturer production cost for ACFs excluding motors. 87 FR 62038, 
62053. In response, AMCA commented that, to the best of its knowledge, 
ACFs are always sold with motors. (AMCA, No. 132 at p. 12) In this 
NOPR, DOE therefore continued with its assumption that all ACFs are 
sold with motors.
    In the October 2022 NODA, DOE assumed that most motors paired with 
ACFs are lower efficiency induction motors that were not regulated by 
DOE and requested comment on that assumption. 87 FR 62038, 62042. DOE 
also requested data on the percentage of ACFs sold with split-phase, 
PSC, shaded-pole and ECMs. 87 FR 62038, 62049. In response, AMCA 
commented that some of its members sell ACFs with shaded-pole motors, 
PSC motors, polyphase motors, or ECMs. (AMCA, No. 132 at p. 3) NEMA 
commented that, depending on the horsepower requirements, a split-
phase, shaded-pole, capacitor start/capacitor run, or three-phase motor 
could be used for ACFs. NEMA added that shaded-pole motors are often 
used at 0.1 hp and under for ACFs, while PSC motors are very common for 
1 hp and under. (NEMA, No. 125 at p. 3) In response to this feedback, 
DOE conducted a review of its updated ACF database (discussed further 
in section IV.A.2.b) and identified ACFs sold with multiple different 
motor topologies, including PSC, polyphase, and EC motors. 
Additionally, DOE identified many ACFs using PSC motors at high and low 
motor efficiencies. Because DOE has identified that ACF motor 
efficiency may be improved through changing motor topology as well as 
improving efficiency within a single motor topology, it considered both 
switching to a more efficient motor topology and improving efficiency 
within a single motor topology as components of the more efficient 
motors technology option for ACFs.
    Regarding motor controllers, motor controllers are used to change 
the operating point of fans by altering their motor speed. This allows 
a fan to operate at a lower speed when possible, which can result in a 
reduction of power consumption. In response to the October 2022 NODA, 
the Efficiency Advocates encouraged DOE to evaluate fans that operate 
at multiple speeds, rather than just the highest speed, because 
lowering the fan speed can significantly reduce the amount of power 
used by a fan. (Efficiency Advocates, No. 126 at p. 2-3) Conversely, 
AMCA stated that the utility of ACFs to provide the necessary air-throw 
distance and air velocity may be diminished or removed entirely by 
reducing the fan speed with motor controllers, which is a negative 
impact on product utility. (AMCA, No. 132 at p. 3) While DOE 
acknowledges that fan power consumption can be reduced by lowering the 
speed of a fan, it notes that the DOE test procedure for ACFs specifies 
testing and reporting efficacy for ACFs at the maximum speed of the 
fan. See appendix B to subpart J of 10 CFR part 431, section 2.2.1. 
DOE's analysis in this NOPR remains consistent with the DOE test 
procedure for ACFs, so DOE did not evaluate efficiencies at less than 
maximum speed. Therefore, DOE did not consider motor controllers as a 
technology option for ACFs in this NOPR.
    In response to the October 2022 NODA, the CA IOUs commented that 
choosing a low-speed range for a particular impeller improves its 
efficiency. (CA IOUs, No. 127 at p. 2) DOE notes the speed and 
operating point of a fan are strongly related and that any change to 
the speed of a fan will likely change the utility of that fan. 
Therefore, DOE did not consider reduced speed as a technology option 
for this NOPR.
    As discussed in section IV.A.1.a, GFBs with motor controllers allow 
a fan to adapt to changing load requirements. While this may result in 
energy savings during application, the DOE test procedure for fans does 
not account for these possible changes in operation and energy savings. 
As a result, DOE is proposing to establish separate equipment classes 
for GFBs sold with and without motor controllers and is not considering 
motor controllers as a technology option.
    Table IV-7 lists the technology options for GFBs and ACFs that DOE 
evaluated in its screening analysis. Both GFBs and ACFs include an 
aerodynamic redesign technology option, which contains technology 
options that DOE determined to be viable, but for which DOE lacked 
sufficient data to fully analyze individually.
[GRAPHIC] [TIFF OMITTED] TP19JA24.025


[[Page 3762]]


    Further details on technology options that DOE considered for this 
NOPR can be found in chapter 3 of the NOPR TSD.

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (1) Technological feasibility. Technologies that are not 
incorporated in industrial equipment or in commercially viable, 
existing prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in industrial equipment 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the equipment to 
subgroups of consumers, or results in the unavailability of any covered 
equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as products generally available in the United 
States at the time, it will not be considered further.
    (4) Safety of technologies. If it is determined that a technology 
would have significant adverse impacts on health or safety, it will not 
be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving a 
given efficiency level, it will not be considered further, due to the 
potential for monopolistic concerns.
    10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections 
6(c)(3) and 7(b).
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis.
    Through a review of each technology, DOE tentatively concludes that 
the technologies listed in Table IV-7 of this document met all five 
screening criteria to be examined further as design options in DOE's 
NOPR analysis. Comments DOE received regarding screening for these 
technologies are discussed below.
    In response to the October 2022 NODA, DOE received several comments 
pertaining to how the screening criteria apply to aerodynamic redesign, 
blade shape, and motors. AMCA stated that aerodynamic efficiency 
improvements can often lead to an increase in the cost and complexity 
of manufacturing, which can have an adverse impact on the 
practicability of manufacturing. AMCA added that some ACF components 
that can be adjusted to improve efficiency are patentable, including 
impellers, impeller blades, impeller rings, housings, outlet 
appurtenances, and motors, which relates to the screening criteria for 
unique-pathway proprietary technologies. (AMCA, No. 132 at p. 3). AMCA 
also commented that the removal of a safety guard on an ACF to increase 
its efficiency would decrease the safety of an ACF, which is an adverse 
impact on health or safety. Id.
    Regarding AMCA's comment on the potential for increased cost or 
complexity of manufacturing associated with an aerodynamic redesign, 
DOE notes that it accounted for this increased cost and complexity 
through conversion costs, which are discussed in section IV.J. 
Regarding patentable technologies, DOE notes that in manufacturer 
interviews, it specifically asked about whether patentable technologies 
could pose a problem in meeting energy conservation standards. In 
response, no GFB or ACF manufacturers expressed concerns regarding 
patents. Therefore, DOE has tentatively concluded that none of the 
proposed design options meet the unique pathway-proprietary 
technologies screening criteria.
    In terms of safety guards, DOE agrees that the removal of a safety 
guard would compromise the safety of a fan.
    DOE notes that the motor efficiency technology options are based on 
general industry standards rather than specific motor designs that 
could be patented; therefore, DOE has tentatively concluded that the 
unique-pathway proprietary technologies screening criterion does not 
apply to the more-efficient motor technology option.
    DOE did not receive comment related to screening for any other 
technology options. The remaining technology options that DOE did not 
screen from its analysis are listed in Table IV-8.
[GRAPHIC] [TIFF OMITTED] TP19JA24.026

    DOE has initially determined that these technology options are 
technologically feasible because they are being used or have previously 
been used in commercially available equipment or working prototypes. 
DOE also finds that all of the remaining technology options meet the 
other screening criteria (i.e., practicable to manufacture, install, 
and service and do not result in adverse impacts on consumer utility, 
product availability, health, or safety, unique-pathway proprietary 
technologies). For additional details, see chapter 4 of the NOPR TSD.

[[Page 3763]]

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of fans and blowers. There 
are two elements to consider in the engineering analysis; the selection 
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of equipment cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
equipment, DOE considers technologies and design option combinations 
not eliminated by the screening analysis. For each equipment class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
equipment at efficiency levels above the baseline. The output of the 
engineering analysis is a set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
1. General Fans and Blowers
a. Baseline Efficiency
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class, and measures changes resulting from 
potential energy conservation standards against the baseline. The 
baseline model in each equipment class represents the typical 
characteristics of that class (e.g., capacity, physical size). 
Generally, a baseline model is one that just meets current energy 
conservation standards, or, if no standards are in place, the baseline 
is typically the most common or least efficient unit on the market.
    As discussed in section II.B.1, there are currently no energy 
conservation standards for GFBs. In this analysis, DOE set the baseline 
efficiency as the lowest reasonable efficiency on the market after 
removing potential outliers for each analyzed equipment class.
    DOE established baseline ELs using performance data in the AMCA 
sales database. DOE filtered the database by equipment class and 
evaluated the fan performance range for each equipment class. 
Additionally, as described in section IV.A.3, DOE based its GFB 
analysis on design options that specifically improve fan performance. 
DOE did not consider improvements to the motor, transmission, or motor 
controllers. Therefore, for this analysis, DOE calculated FEI according 
to the bare shaft method described in the DOE Test Procedure. See 
sections 2.2 and 2.6 of appendix A to subpart J of 10 CFR part 431. For 
both the AMCA sales database and any manufacturer fan selection 
software data, DOE recalculated FEI on a bare shaft basis. Accordingly, 
the standards proposed in this notice are based only on fan design and 
exclude any impact that the motor, transmission, or motor controllers 
may have on fan efficiency.
    Based on a review of the market, DOE tentatively determined that 
the FEI values corresponding to the 5th percentile in the AMCA sales 
database were generally representative of baseline efficiency across 
all diameters and duty points within a given equipment class. Defining 
baseline efficiency at the 5th percentile enabled DOE to remove 
potential outlier fans and fans that may no longer exist on the market. 
DOE compared the 5th percentile for each equipment class to data 
retrieved from manufacturer fan selection software to ensure that 
baseline efficiencies were representative of the current market. In 
instances where the 5th percentile removed a substantial number of 
models that had FEI values consistent with what was seen on the market, 
DOE adjusted the baseline efficiency to align with the distribution of 
FEIs observed in the manufacturer fan selection software. Additional 
details on the development of baseline efficiency levels for each 
equipment class are included in chapter 5 of the NOPR TSD.
b. Selection of Efficiency Levels
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing equipment (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual equipment on the market) may be 
extended using the design option approach to ``gap fill'' levels (to 
bridge large gaps between other identified efficiency levels) and/or to 
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on 
the market).
    In this NOPR, DOE relied on a combination of the efficiency level 
and design-option approaches. DOE used the efficiency level approach to 
determine the baseline, max-tech, and aerodynamic redesign efficiency 
levels and used the design-option approach to gap fill intermediate 
efficiency levels.
General Approach
    DOE applied design options to the initial efficiency levels 
evaluated above baseline for each equipment class. As discussed in 
section IV.A.3, DOE has identified the following design options for 
GFBs:
    <bullet> Impeller topology;
    <bullet> Addition of guide vanes;
    <bullet> Increased impeller diameter; and
    <bullet> Aerodynamic redesign (improved housing design, reduced 
manufacturing tolerances, addition of appurtenances, improved impeller 
design).
    For each equipment class, DOE evaluated both the AMCA sales 
database as a whole and data from manufacturer fan selection software 
for specific representative diameters and operating points to set the 
efficiency levels and associated design options for its analysis. DOE 
used data pulled from manufacturer fan selection software to understand 
the incremental impact of design options on fan performance and cost. 
DOE then applied these incremental FEI increases to the baseline fan 
for each equipment class to set intermediate efficiency levels.
    To estimate the incremental increases in FEI, DOE first selected 
between three and six representative operating points based on the fan 
diameters, operating pressures, and airflows that were most common for 
each equipment class in the AMCA sales database, as discussed in 
section IV.A.2.a. DOE then used manufacturer fan selection software to 
obtain data for each representative operating point at a specific 
diameter, airflow, and pressure. From the manufacturer fan selection 
software, DOE evaluated how FEI changed as various design options were 
applied while holding constant the diameter (for all equipment classes 
except PRVs) and duty point. DOE calculated bare shaft FEI for fans 
evaluated using manufacturer fan selection software to eliminate the 
effects of transmission on the efficiency. Additional details on how 
manufacturer fan selection software was evaluated and used in the 
development of intermediate efficiency levels are included in chapter 5 
of the NOPR TSD.

[[Page 3764]]

    DOE recognizes that relying on data from fans at representative 
diameters and operating points to characterize efficiency improvements 
may not sufficiently account for the entire range of duty points and 
diameters typical for each equipment class. Therefore, after 
determining the impact of potential design options on fan efficiency 
using the manufacturer fan selection software, DOE used the AMCA sales 
database to validate the estimated incremental FEI increases for each 
design option. In its review of the market, DOE found that most 
manufacturer model numbers correspond to a specific impeller type and 
design. To make comparisons between fan models in the AMCA sales 
database, DOE used the model numbers included in the AMCA sales 
database to characterize each fan's impeller. DOE then evaluated the 
potential efficiency gain of each design option across the entire range 
of operating points in the AMCA sales database. For example, for 
centrifugal housed fans, DOE calculated the average increase in FEI 
that would be observed for a fan with a backward-inclined impeller at a 
given diameter compared to a fan with a forward-curved impeller at the 
same diameter. DOE evaluated the AMCA sales database in this way to 
confirm that its estimated increases in FEI seemed feasible across the 
range of operating duty points, since the AMCA sales database contains 
data points at a variety of duty points for each equipment class.
    In response to the July 2022 TP NOPR, AHRI commented that fan 
performance in the AMCA sales database was never confirmed to be 
reflective of embedded fans, including system effect, and that 
finalizing the determination using the analysis conducted to date, 
especially if embedded fans are within the scope, would be 
inappropriate. (Docket No. EERE-2021-BT-TP-0021, AHRI, No. 40 at p. 13) 
DOE notes that, as discussed in III.B.1, embedded fans listed in Table 
III-1 are outside the scope of this analysis. All other fans within the 
scope of this rulemaking would be tested in accordance with the DOE 
test procedure, which reflects performance of fans outside of equipment 
into which they may be installed and does not evaluate system effects.
    Additionally, in response to the October 2022 NODA, Morrison 
suggested that the data evaluation and analysis conducted in the 2016 
NODA should be restarted to address current stakeholder concerns and 
account for changes in the market environment, including widespread 
adoption of building codes and use of the FEI metric. (Morrison, No. 
128 at p. 3) In response to the July 2022 TP NOPR, AHRI commented that 
it is not reasonable to assume that substitutions can be made for any 
fan within 20 percent of static pressure or airflow requirements and 
within two inches of the original diameter tolerances. AHRI stated that 
selecting a fan that two inches larger in diameter would translate to a 
four-inch increase in housing size. Additionally, AHRI commented that 
commercial heating, ventilation, and air conditioning (``HVAC'') 
equipment fan selection requires design to a specific airflow and 
static pressure and that in virtually all cases, a two-percent 
selection window is required so the 20 percent selection window would 
not satisfy the heating, cooling or ventilation needs for the 
application. (Docket No. EERE-2021-BT-TP-0021, AHRI, No. 40 at p. 12-
13) Furthermore, AHRI commented that variable air volume systems and 
systems with economizers need to operate over a range of airflow. Low 
static, high airflow fans (forward-curved fans) are used in these 
applications; therefore, the number of fans that would require redesign 
is closer to 100 percent than the 30 percent included in the NODA 3 
(2016 NODA) analysis. (Id.)
    DOE notes that all analyses from the 2016 NODA have been 
reevaluated in this NOPR to reflect current market trends and industry 
standards. While DOE maintained some structural elements from the 2016 
NODA, such as some equipment classes and use of the AMCA sales 
database, DOE updated its efficiency levels and cost analyses based on 
manufacturer feedback from recent interviews, publicly available sales 
data, and a thorough review of the current market. Additionally, in 
this analysis, DOE did not assume that static pressure or airflow could 
vary by 20 percent or that the diameter of embedded fans could increase 
by any amount. In its analysis for this NOPR, DOE evaluated efficiency 
increases with operating point and diameter remaining constant for fan 
equipment classes that could be embedded in equipment, which is 
discussed in more detail in section IV.C.1.b (subsection Determination 
of Efficiency Levels). Additionally, DOE's analysis reflects that 
forward-curved fans should be preserved in the market and would likely 
be redesigned to do so. In section IV.C.1.b (see subsection Parallel 
Design Path for Forward-curved Fans), DOE describes how it analyzed 
forward-curved fans. DOE also evaluated the potential impact of duty 
point on whether a fan could be redesigned to higher FEI levels. Using 
the AMCA sales database, DOE developed FEI distributions for each 
equipment class to evaluate how FEI varied with specified design 
pressure, airflow, and diameter. Based on these FEI distributions, DOE 
was not able to identify any duty point ranges with disproportionately 
lower fan availability at higher FEI values for any equipment class. 
DOE has tentatively determined that the efficiency relationships it 
developed based on the selected representative operating points could 
be applied to fans at other diameters and duty points; therefore, there 
is only one set of efficiency levels for each equipment class.
Determination of Efficiency Levels
    The first design option that DOE evaluated for most equipment 
classes was changing the fan impeller. Based on its review of the 
market, DOE determined that manufacturers often have a variety of 
impeller topologies available for each fan class. For example, some 
manufacturers have economy impellers, which are less efficient and less 
expensive than other available impellers. DOE also found that 
manufacturers may have impellers that are designed to operate at 
different duty points, such as high-pressure impellers. These impellers 
achieve different levels of performance based on blade shape, blade 
pitch, number of blades, etc. Therefore, rather than attempt to 
characterize each of these individual impellers and how they may impact 
FEI, DOE evaluated manufacturer fan selection software to estimate the 
average increase in FEI for a typical impeller change for each 
equipment class and then used the AMCA sales database to validate that 
these increases are applicable to the broader fans market. DOE notes 
that the centrifugal housed equipment class is the only equipment class 
for which specific impeller changes were characterized. This is because 
DOE was able to identify distinct differences in efficiency between 
forward-curved, backward-inclined or backward-curved,\56\ and airfoil 
impellers for centrifugal housed fans. The impeller change design 
options were either applied to the baseline fan or applied successively 
to a previous impeller change.
---------------------------------------------------------------------------

    \56\ In reviewing both the AMCA sales database and manufacturer 
fan selection software, DOE was unable to distinguish between 
backward-inclined and backward-curved impellers for many fan models. 
It is also DOE's understanding that both backward-inclined and 
backward-curved impellers perform similarly regarding fan 
efficiency. Therefore, DOE considered both backward-inclined and 
backward-curved impellers together as a single design option.

---------------------------------------------------------------------------

[[Page 3765]]

    DOE followed a similar method of analyzing both the manufacturer 
fan selection software and the AMCA sales database to estimate the 
increase in FEI that could be achieved for design options other than 
impeller changes, including substituting a tube axial fan for a vane 
axial fan, substituting a mixed flow fan for a centrifugal inline fan, 
and increasing the PRV fans diameter. Additional details on how DOE 
estimated the incremental increases in FEI for each design option and 
for each equipment class are included in chapter 5 of the NOPR TSD.
    For many categories of fans, increasing the diameter of a fan could 
increase efficiency when a fan operates at the same duty point; 
however, during manufacturer interviews, DOE received feedback that 
increasing the diameter of a fan is only applicable to certain fan 
classes. Specifically, DOE learned that increasing the diameter of a 
fan that would be embedded in OEM equipment could impact the overall 
performance of the equipment, could impact its utility for use in 
space-constrained OEM equipment, and would substantially increase OEM 
redesign costs. Alternatively, for fan types that do not have space-
constraints, a fan could typically be increased by one or two sizes 
without impacting the utility of the fan.
    For fan equipment classes that could be embedded, either into other 
equipment or into spaced constrained applications, such as ducted 
ventilation systems, DOE did not consider increased impeller diameter 
as a design option. These types of fans include axial inline, panel, 
centrifugal housed, centrifugal unhoused, and centrifugal inline fans.
    For radial fans, DOE analyzed the diameter increase design option 
since this fan class is typically not used in space-constrained 
applications; However, DOE did not observe consistent efficiency 
changes with increased diameter for radial fans; therefore, DOE did not 
consider larger fan diameter as a design option for radial fans.
    In general, PRVs (axial PRV, centrifugal PRV exhaust, and 
centrifugal PRV supply) are not subject to the same size and weight 
constraints experienced by other embedded fan classes. These units are 
placed in open air environments to supply or exhaust air from the top 
of a building, which enables them to increase in size. DOE found that 
increasing PRV diameter consistently increases the efficiency; 
therefore, DOE considered diameter increase as a design option for 
axial and centrifugal PRVs.
    DOE requests comment on its understanding that the diameter 
increase design option could be applied to non-embedded, non-space-
constrained equipment classes.
    In its analysis for axial and centrifugal PRVs, DOE used an 18-
percent increase in diameter to represent a diameter increase and 
rounded the impeller diameter to the nearest whole number, since DOE 
found that the 18-percent increase was representative of the fan sizes 
available on the market. For example, the increased diameter design 
option for a 15-in. diameter fan would increase the fan diameter to 18-
in. and a 36-in. diameter fan would increase to a 42-in. diameter fan. 
When analyzing its data sources, DOE found that this 18 percent 
diameter increase when maintaining the operating point could result in 
a range of FEI increases, from as low as 4-percent to as high as 30-
percent, corresponding to a FEI increase of approximately 0.03 to 0.30. 
For this NOPR analysis, DOE assumed that a diameter increase for 
centrifugal PRV exhaust and supply fans would result in a 0.03 increase 
in FEI and a diameter increase for axial PRV fans would result in a 
0.09-0.10 increase in FEI. DOE recognizes that initial diameter size, 
operating airflow, and operating pressure may impact how effective an 
impeller diameter increase is for increasing FEI. Specifically, the 
duty points that DOE chose to evaluate may be duty points where a 
diameter increase is very effective at increasing fan efficiency or may 
be duty points where a diameter increase has minimal impact on fan 
efficiency. DOE could adjust the efficiency gains from an impeller 
diameter increase in its analysis so that there is a larger FEI gain 
for all PRVs, and where PRVs could reach higher FEI values for a lower 
cost. Alternately, DOE could decrease the FEI gain for axial PRVs from 
an impeller diameter increase, allowing axial PRVs to reach higher FEI 
values for a higher cost since the impeller diameter increase would no 
longer provide such a large increase in FEI.
    DOE requests comment on whether the FEI increases associated with 
an impeller diameter increase for centrifugal PRVs and for axial PRVs 
are realistic. Specifically, DOE requests comment on whether it is 
realistic for axial PRVs to have a FEI increase that is 3 times greater 
than that for centrifugal PRVs when starting at the same initial 
diameter. Additionally, DOE requests comment on the factors that may 
impact how much an impeller diameter increase impacts a FEI increase.
    In its analysis, DOE applied the impeller changes and aerodynamic 
redesigns for PRVs to the baseline fan such that PRVs could reach 
higher efficiency levels while maintaining the baseline impeller 
diameter. While manufacturers would have the option of achieving higher 
efficiencies by increasing fan diameter, DOE assumed that if 
manufacturers were to change the impeller or redesign a PRV, 
manufacturers would apply these design changes to their entire diameter 
range, enabling the baseline diameter fan to reach the higher 
efficiency levels.
    The design path for all PRVs is shown in Table IV-11. For the PRV 
equipment classes, the impeller change(s) and diameter increase(s) are 
ordered by FEI increase, where the design option with the smallest FEI 
increase is ordered first. DOE could consider an analysis with a 
different ordering of design option based on MSP increase or cost-
effectiveness. Alternately, DOE could consider an analysis that does 
not include increased fan diameter as a design option. In this 
alternative analysis, DOE could consider an additional impeller change 
as a design option to increase FEI. However, based on its analysis, DOE 
expects that removing increased fan diameter as a design option in its 
analysis would increase the cost to achieve a higher efficiency of a 
PRV.
    DOE requests comment on the ordering and implementation of design 
options for centrifugal PRV exhaust and supply fans and axial PRV fans.
    DOE additionally determined that manufacturers may improve 
efficiency through aerodynamic redesign, as described in section IV.A.3 
of this document. It is DOE's understanding that aerodynamic redesign 
may require significant product and capital investment. Accordingly, 
DOE only applied aerodynamic redesign after applying the design options 
DOE expected would be less cost-intensive for manufacturers. 
Additionally, the impact of aerodynamic redesign on efficiency is 
expected to vary significantly depending on the design choices made by 
the manufacturer. Therefore, DOE determined that the design option 
approach would not be appropriate for evaluating efficiency 
improvements for aerodynamic redesign. Instead, DOE evaluated 
aerodynamic redesign using the efficiency level approach. Generally, 
DOE set the FEIs for aerodynamic redesigns by assigning evenly spaced 
FEIs between the highest non-redesign EL (i.e., the EL immediately 
before the first aerodynamic redesign) and the max-tech EL. A numerical 
example

[[Page 3766]]

demonstrating how FEIs were assigned to the aerodynamic redesign ELs 
for the centrifugal PRV exhaust equipment class is provided in the 
following section.
Existing Efficiency Standards
    DOE also evaluated other efficiency programs to inform the 
development of its efficiency levels. Energy efficiency provisions for 
commercial fans are prescribed in U.S. building codes, primarily 
developed by the International Code Council and specified in the 
International Energy Conservation Code (``IECC''). The IECC was most 
recently updated in 2021 (``IECC-2021'') and specifies that commercial 
buildings shall comply with the requirements of ASHRAE 90.1.\57\ The 
most recent edition of ASHRAE 90.1 was published in September 2022, and 
sets an FEI target of 1.00 for all fans within the scope of ASHRAE 
90.1.\58\ While the standards established under IECC and ASHRAE 90.1 
are not federally mandated, they are used by individual States and 
municipalities to support the development of local building codes. DOE 
is also aware that the CEC has finalized a rulemaking, which requires 
manufacturers to report fan operating boundaries that result in 
operation at an FEI of greater than or equal to 1.00 for all fans 
within the scope of that rulemaking.\59\ Furthermore, during 
confidential manufacturer interviews, DOE received feedback that an FEI 
of 1.00 is a realistic efficiency target and DOE does not have any 
indication that an FEI of 1.00 would not be achievable for all fan 
equipment classes.
---------------------------------------------------------------------------

    \57\ International Code Council. ``2021 International Energy 
Conservation Code Chapter 4: Commercial Energy Efficiency''. 
September 2021. Available at codes.iccsafe.org/content/IECC2021P2/chapter-4-ce-commercial-energy-efficiency.
    \58\ ASHRAE. ``Standard 90.1-2022--Energy Standard for Sites and 
Buildings Except Low-Rise Residential Buildings.'' September 2022. 
Available at www.ashrae.org/technical-resources/bookstore/standard-90-1.
    \59\ California Energy Commission. Commercial and Industrial 
Fans and Blowers. Docket No. 22-AAER-01. Available at 
efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=22-AAER-01.
---------------------------------------------------------------------------

    Based on this feedback and to align with the aforementioned 
standards, DOE elected to evaluate an efficiency level at an FEI of 
1.00 for all fan classes. The efficiency level and design option that 
corresponds to an FEI of 1.00 differs for each equipment class 
depending on the FEI difference between the baseline and max-tech 
efficiency levels for each equipment class and the efficiency gain 
identified for each design option. For the axial inline, centrifugal 
inline, and centrifugal unhoused equipment classes, DOE determined that 
an FEI of 1.00 could be achieved using the identified design options. 
Therefore, each of these equipment classes has specific design options 
associated with the EL set at an FEI of 1.00. For example, for the 
centrifugal inline equipment class, DOE tentatively determined through 
the design option approach that an FEI of 1.00 could be achieved by 
using a mixed flow impeller (EL 3). For all other equipment classes, 
DOE assumed that manufacturers could achieve an FEI of 1.00 through an 
aerodynamic redesign.
    For equipment classes that had an aerodynamic redesign assigned at 
an EL with an FEI of 1.00, DOE evenly spaced all other aerodynamic 
redesign ELs at FEIs above and below a value of 1.00, where applicable. 
For example, the centrifugal PRV exhaust equipment class has a total of 
four aerodynamic redesign ELs, with the second aerodynamic redesign (EL 
4) corresponding to an FEI of 1.00. The highest non-redesign EL occurs 
at EL 2, corresponding to an FEI of 0.76, and max- tech occurs at EL 6, 
corresponding to an FEI of 1.37. Therefore, the first aerodynamic 
redesign was set at the midpoint between EL 2 and EL 4, corresponding 
to an FEI of 0.88, and the third aerodynamic redesign was set as the 
midpoint between an FEI of 1.00 and the max-tech EL, corresponding to 
an FEI of 1.19.
Parallel Design Path for Forward-Curved Fans
    DOE received feedback during interviews that forward-curved 
impellers should be preserved in the market because they offer distinct 
utility over backward-inclined or airfoil impellers and typically 
operate at lower pressures where efficiency is inherently lower. 
However, as discussed in section IV.A.1.a, DOE has tentatively 
determined that forward-curved fans do not require a separate equipment 
class since the FEI metric is a function of operating pressure and 
accounts for the inherently lower efficiency at lower pressures.
    Instead, to assess any costs associated with preserving forward-
curved fans, DOE evaluated two parallel design paths for centrifugal 
housed fans. DOE used the first design path (hereafter referred to as 
the ``primary design path'') to evaluate all fans with impellers other 
than forward-curved impellers. For the primary design path, DOE 
observed a significant number of fans with backward-inclined impellers 
that exhibited FEIs similar to those with forward-curved impellers, 
despite backward-inclined impellers generally being more efficient. 
Therefore, DOE assigned the same baseline FEI to both design paths and 
assumed baseline efficiency on the primary design path to be 
represented by an inefficient backward-inclined fan which would meet EL 
1 via aerodynamic redesign of the backward-inclined impeller. EL 2 on 
the primary design path represents substituting a more typical 
backward-inclined impeller with an airfoil impeller to achieve an FEI 
of 1.00.
    For the second design path (hereafter referred to as the ``forward-
curved design path''), DOE assumed that the baseline efficiency was 
represented by a forward-curved fan that would meet all subsequent ELs 
via aerodynamic redesign while maintaining a forward-curved impeller. 
The design options for both design paths are summarized in Table IV-9 
and additional details on how DOE defined the efficiency levels for the 
separate centrifugal housed design paths are provided in chapter 5 of 
the NOPR TSD.
    Additionally, for the forward-curved design path, EL 4 approaches 
max-tech for forward-curved fans. Although DOE identified fans with 
forward-curved impellers above this EL, DOE could not confirm that 
forward-curved fans could be designed above this EL at all duty points. 
Therefore, DOE defined the third aerodynamic redesign on the forward-
curved design path (EL 4) as the max-tech for forward-curved impellers 
and assumed that any fans above this FEI would need to transition to a 
backward-inclined or airfoil impeller. As such, all fans above EL 4 
were analyzed using the primary design path.
    DOE notes that, in practice, manufacturers may substitute forward-
curved impellers with a backward-inclined or airfoil impeller to 
improve efficiency. However, based on DOE's review of the market and 
stakeholder feedback on the importance of maintaining fans with 
forward-curved impellers, DOE could not determine a representative 
percentage of forward-curved fans that would be redesigned versus 
substituted with a different impeller. Therefore, to avoid 
underestimating the costs required to preserve forward-curved 
impellers, DOE assumed that all forward-curved fans currently on the 
market would maintain their impellers and follow the forward-curve 
design path.
    DOE utilized a dual-design path approach for centrifugal housed 
fans to consider the fact that manufacturers may be required to incur 
higher conversion costs to maintain use of forward-curved impellers. 
DOE estimated the costs associated with redesigning forward-curved fans 
using

[[Page 3767]]

the same method used to estimate aerodynamic redesign conversion costs 
for all other equipment classes and product types, as discussed in 
section IV.J.2.c. However, DOE may revise its analysis to consider 
additional conversion costs for forward-curved fans if sufficient data 
is provided to demonstrate that these fans may experience unique 
challenges in meeting higher FEI values.
    DOE requests comment on its approach for estimating the industry-
wide conversion costs that may be necessary to redesign fans with 
forward-curved impellers to meet higher FEI values. Specifically, DOE 
is interested in the costs associated with any capital equipment, 
research and development, or additional labor that would be required to 
design more efficient fans with forward-curved impellers. DOE 
additionally requests comment and data on the percentage of forward-
curved impellers that manufacturers would expect to maintain as a 
forward-curved impeller relative to those expected to transition to a 
backward-inclined or airfoil impeller.
[GRAPHIC] [TIFF OMITTED] TP19JA24.027

Efficiency Levels for General Fans and Blowers Sold With a Motor
    As discussed in the May 2023 TP Final Rule, DOE adopted the FEP and 
FEI calculations specified in AMCA 214-21, which provides a method for 
calculating the FEI of fans sold with motors based on a table of 
polyphase regulated motors (See Annex A of AMCA 214-21). 88 FR 27312, 
27348. However, as discussed in the May 2023 TP Final Rule, the DOE 
test procedure replaces Annex A of AMCA 214-21 with a reference to the 
current energy conservation standards for polyphase regulated motors in 
10 CFR 431.25, with the intention that the values of regulated 
polyphase motor efficiencies would remain up to date with any potential 
future updates established by DOE. 88 FR 27312, 27349.
    In a final rule published on June 1, 2023, DOE finalized amended 
energy conservation standards for electric motors. These standards 
adopted amended efficiency requirements for motors rated at or between 
100 hp and 250 hp. Therefore, for GFBs sold with a motor rated at or 
between 100 hp and 250 hp, FEI would be evaluated using the amended 
efficiencies specified in table 8 of 10 CFR 431.25, in accordance with 
the DOE test procedure. However, the motor efficiencies used to 
calculate the reference fan FEP have not been similarly updated based 
on the amended standards for electric motors. Therefore, the reference 
fan FEP for GFBs with a motor rated at or between 100 hp and 250 hp 
would be calculated using a motor efficiency that would not be 
compliant with the adopted energy conservation standards for electric 
motors and would no longer be available on the market. In other words, 
the reference fan used in the FEI calculation would have a lower 
efficiency than that required for electric motors, resulting in an 
inappropriately greater FEI for the tested fan.
    To avoid providing an unintended advantage to these GFBs, DOE 
proposes that the FEI level for GFBs sold with a motor rated at or 
between 100 hp and 250 hp would be calculated by applying a correction 
factor to the FEI standard for GFBs sold with any other sized motor. 
This correction factor would be designed to offset the difference in 
motor efficiencies specified for the reference fan versus the amended 
motor efficiency standards. DOE found that, at a given duty point, the 
correction factor, A, can be expressed as a function of the motor 
efficiency as follows:
[GRAPHIC] [TIFF OMITTED] TP19JA24.028

    Where [eta]<INF>mtr,2023</INF> is the motor efficiency in 
accordance with table 8 at 10 CFR 431.25, and [eta]<INF>mtr,2014</INF> 
is the motor efficiency in accordance with table 5 at 10 CFR 431.25 and 
Annex A of AMCA 214-21, and FEPact is determined according to the DOE 
test procedure in appendix A to subpart J of part 431. The FEI in 
accordance with the proposed TSL would be multiplied by this correction 
factor to result in the FEI standard. For fans with motors rated below 
100 hp, the correction factor, A, would be equal to 1.00. DOE is also 
proposing to add the motor efficiency requirements specified in Table 5 
at 10 CFR 431.25 for motors rated at or between 100 hp and 250 hp in 10 
CFR 431.175 and reference these values for the correction factor 
calculation to ensure that these motor efficiency values are not 
inadvertently removed in any separate motors rulemakings.
Efficiency Levels for General Fans and Blowers With a Motor Controller
    As discussed in the May 2023 TP Final Rule, DOE adopted the FEP and 
FEI calculation as specified in AMCA 214-21 but did not develop a 
control credit for fans with a controller to offset

[[Page 3768]]

the losses inherent to the motor controller when calculating the FEI of 
these fans at a given duty point. In the May 2023 TP Final Rule, DOE 
stated that, to the extent use of a controller impacts the energy use 
characteristics of a fan or blower, the test procedure should account 
for such impact and that appropriate consideration of any such impact 
would be part of the evaluation of potential energy conservation 
standards. 88 FR 27312, 27371. DOE further stated that the FEP [and 
FEI] metric penalizes the use of VFDs (variable speed drives which are 
a category of motor controller), since these metrics incorporate the 
losses from the VFD and that appropriate consideration of any such 
impact would be part of the evaluation of potential energy conservation 
standards. 88 FR 27312, 27372.
    To avoid penalizing GFBs sold with a motor controller, DOE proposes 
that the FEI standard for GFBs sold with a motor controller be 
calculated by applying a credit to the FEI standard for GFBs sold 
without a motor controller, where the credit is designed to offset the 
losses inherent to the motor controller. To determine the credit, DOE 
compared the FEP values of fans with a motor controller (FEPact,mc) to 
the FEP values of the same fans without a motor controller, as 
calculated in accordance with section 6.4.2.4 of AMCA 214-21 which 
represents typical motor and motor controller performance, and using 
the fan selection duty points provided in the sample of consumers.\60\ 
(See section IV.E.1). DOE found that, at a given duty point, the credit 
can be expressed as a function of the FEP, in kW, as follows:
---------------------------------------------------------------------------

    \60\ For this calculation, DOE used the AMCA 214-21 equations 
for the motor and motor controller which are representative of the 
losses of typical variable frequency drives instead of equations 
discussed in section III.C.1 which were developed as representative 
of less efficient, baseline, motor and motor controller combinations 
(i.e., representative of lowest market efficiency). 
[GRAPHIC] [TIFF OMITTED] TP19JA24.029

    Where FEPact is the actual fan electrical input power of the fan 
with a motor controller at the given duty point.
    To convert the credit into a multiplier to the FEI and to calculate 
the FEI values at each efficiency level considered for GFBs with a 
motor controller, DOE relied on the following equation:
[GRAPHIC] [TIFF OMITTED] TP19JA24.030

    Where FEIEL\no\mc is the FEI value at a given EL for a fan without 
a motor controller.
    When applying this equation, DOE observed that for GFBs with a 
motor controller and with FEP values above 20 kW, the value of the 
multiplier to the FEI is approximately constant and equal to 0.966. 
Therefore, DOE proposes to simplify the calculation of FEI standards 
for fans with motor controllers as follows:
[GRAPHIC] [TIFF OMITTED] TP19JA24.031

    Further, considering the proposed addition of default calculation 
methods to represent the combined motor and motor controller efficiency 
(see section III.C.1.b), in the final rule, DOE may also consider an 
alternative credit calculation based on the proposed equations in 
section III.C.1.b which represent baseline (and not typical) motor and 
motor controller performance, and would potentially result in a higher 
credit.
    DOE requests comment on the equations developed to calculate the 
credit for determining the FEI standard for GFBs sold with a motor 
controller and with an FEP<INF>act</INF> less than 20 kW and on 
potentially using an alternative credit calculation based on the 
proposed equations in section III.C.1.b of this document. Additionally, 
DOE requests comment on its use of a constant value, and its proposed 
value, of the credit applied for determining the FEI standard for GFBs 
with a motor controller and an FEP<INF>act</INF> of greater than or 
equal for 20 kW.

[[Page 3769]]

c. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given product. Similar to the baseline 
efficiency levels, DOE established max-tech efficiency levels by 
reviewing the performance data in the AMCA sales database. DOE 
initially evaluated max-tech for each class using the FEI corresponding 
to the 95th percentile (i.e., the FEI resulting in a 5-percent pass 
rate). DOE used the 95th percentile instead of the absolute maximum FEI 
observed in the AMCA sales database to avoid setting a max-tech FEI 
that may not be achievable across most of a fan's operating range. DOE 
further refined these levels based on manufacturer fan selection 
software performance data collected at the representative diameters and 
operating points for each class. Additional details on the selection of 
max-tech efficiency levels can be found in chapter 5 of the NOPR TSD.
    As previously described, DOE assigned design options and 
corresponding FEIs to each equipment class based on the analysis 
described in sections IV.C.1.a-b. DOE conducted this analysis up to a 
max-tech EL for each equipment class. Final results are shown in Table 
IV-11. These results were used in all downstream analyses for this 
NOPR.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP19JA24.032


[[Page 3770]]


Potential Adjustments to Efficiency Levels Based on AMCA 211 Tolerances
    GFBs can be certified by AMCA to bear the AMCA certified ratings 
seal. AMCA publishes a manual prescribing the technical procedures to 
be used in connection with the AMCA Certified Ratings Program for fan 
air performance: ``AMCA 211-22 (Rev. 01-23)--Certified Ratings 
Program--Product Rating Manual for Fan Air Performance'' (``AMCA 211-
22'')
    Certified AMCA GFBs are subject to precertification and periodic 
check tests as defined in section 10 of AMCA 211-22. When products are 
check tested, the check test performance must be within the tolerance 
for airflow, pressure, and power when compared with the manufacturer's 
catalog data. Specifically, section 10 of AMCA 211-22 allows for a 5 
percent tolerance on the fan shaft power when conducting a 
precertification check test and a 7.5 percent tolerance when conducting 
a periodic check test.
    As discussed in section IV.A.2.a, DOE conducted the GFB engineering 
analysis for this NOPR primarily using a database of confidential sales 
information provided by AMCA, which includes AMCA certified data 
related to fan shaft power at a given duty point. DOE also relied on 
manufacturer fan selection software from manufacturers that are AMCA 
members, which frequently provided data that was AMCA certified.
    DOE understands that it may be common practice for manufacturers to 
include the AMCA 211-22 tolerance when submitting performance data to 
AMCA. As a result, the fan shaft power data included in the AMCA sales 
database and manufacturer fan selection software may include a 5 to 
7.5-percent tolerance and may be underestimated.\61\ For the final 
rule, DOE is considering adjusting the fan shaft power values included 
in the performance data used in its analysis to account for this 
tolerance. In the final rule, DOE is also considering adjusting the 
values of FEI associated to each efficiency level analyzed to account 
for this tolerance.
---------------------------------------------------------------------------

    \61\ For example, a manufacturer may report a value of 92.5 
instead of 100 to incorporate a 7.5 percent tolerance.
---------------------------------------------------------------------------

    DOE may consider revising the brake horsepower values in the AMCA 
sales database and from manufacturer fan selection software by 
increasing each value by 5 percent. DOE used the 5-percent 
precertification check test tolerance for the adjustments, as DOE 
expects this would be the tolerance applied to any ratings certified to 
AMCA. This would result in lower FEI values for each data point and 
could result in lower FEI values associated with each EL.
    To determine how this may impact the analysis, DOE increased the 
brake horsepower values in the AMCA sales database by 5 percent and 
recalculated the bare shaft FEIs of all fans in the database. As 
discussed in section IV.C.1, the baseline and max-tech FEIs of all 
equipment classes were determined based on percentiles in the AMCA 
sales database. DOE used the same percentiles to determine the baseline 
and max-tech for each equipment class using the recalculated bare shaft 
FEIs. For efficiency levels that were based on the design option 
approach (e.g., impeller changes), DOE maintained the percent increases 
in FEI associated with each design option to determine the adjusted 
FEI. For ELs that were based on the efficiency level approach (i.e., 
aerodynamic redesigns), DOE adjusted the FEI levels to maintain the 
same percentage of models that meet each aerodynamic redesign 
efficiency level (i.e., pass rate). The FEI values in Table IV-12 show 
what the results of the engineering analysis may look like if the 
tolerance that is allowed in AMCA 211-22 is considered in the 
databases.

[[Page 3771]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.033

BILLING CODE 6450-01-C
    DOE requests comments on whether it should apply a correction 
factor to the analyzed efficiency levels to account for the tolerance 
allowed in AMCA 211-22 and if so, DOE requests comment on the 
appropriate correction factor. DOE requests comment on the potential 
revised levels as presented in Table IV-12. Additionally, DOE requests 
comments on whether it should continue to evaluate an FEI of 1.00 for 
all fan classes if it updates the databases used in its analysis to 
consider the tolerance allowed in AMCA 211-22.
    Additionally, DOE does not anticipate that the efficiency levels 
captured in Table IV-12 would impact the cost, energy, and economic 
analyses presented in this document. As such, DOE considers the results 
of these analyses presented throughout this document applicable to the 
efficiency levels with a 5% tolerance allowance. DOE seeks comment on 
the analyses as applied to the efficiency levels in Table IV-12.
d. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
equipment, and the availability and timeliness of purchasing the 
equipment on the market. The cost approaches are summarized as follows:
    <bullet> Physical teardowns: Under this approach, DOE physically 
dismantles commercially available equipment, component-by-component, to 
develop a detailed bill of materials for the equipment.
    <bullet> Catalog teardowns: In lieu of physically deconstructing 
equipment, DOE identifies each component using parts diagrams 
(available from manufacturer websites or appliance repair websites, for 
example) to develop the bill of materials for the equipment.
    <bullet> Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g., large commercial boilers), DOE conducts price 
surveys using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the present case, DOE conducted its analysis for GFBs using a 
combination of price surveys from manufacturer fan selection software, 
the AMCA sales database, and physical teardowns. DOE notes that due to 
time constraints and the variety of fans available in the market (e.g., 
commercial or industrial application, construction class, equipment 
class), DOE was unable to conduct sufficient teardowns to rely solely 
on a manufacturer production cost (``MPC'') approach informed by 
physical teardowns. Therefore, DOE used manufacturer sales prices 
(``MSP'') for its cost analysis since DOE had substantially more MSP 
data than MPC data available for GFBs. When DOE pulled data from 
manufacturer fan selection software, the fan MSP was typically 
included; if the MSP was not included, DOE requested quotes to obtain a 
sales price. The AMCA sales database includes confidential total sales 
value and total sales volume for each fan model. DOE divided the total 
sales value by the sales volume to calculate the MSP for a single fan. 
MSPs from the AMCA sales database were

[[Page 3772]]

adjusted to 2022 dollars to account for inflation.\62\
---------------------------------------------------------------------------

    \62\ DOE used the Federal Reserve Economic Data's ``Producer 
Price Index by Industry: Fan, Blower, Air Purification Equipment 
Manufacturing'' to account for inflation to 2022 dollars. DOE used a 
multiplication factor of 1.4 to convert from 2012 dollars to 2022 
dollars. (fred.stlouisfed.org/series/PCU333413333413)
---------------------------------------------------------------------------

    DOE recognizes that fan costs would not follow a simple scaling 
model as there are several factors that could impact the sales price of 
a fan, including construction class,\63\ drive assembly, production 
volume, manufacturer purchasing power, mark-up, commercial or 
industrial application, etc. To account for these factors, DOE averaged 
MSPs from the AMCA sales database at each diameter for each fan 
equipment class to conduct its cost analysis. Average MSPs were 
obtained at a range of duty points that DOE determined to be reflective 
of the entire market, rather than only at the specific representative 
operating points that DOE selected. Additionally, based on its analysis 
of manufacturer fan selection software, DOE determined that fans may be 
sold with a variety of motors, each with a distinct cost that 
contributes to the overall selling price. Therefore, DOE decided to use 
average MSPs to account for the variety of motors on the market, rather 
than attempt to evaluate fan costs without a motor by subtracting an 
assumed unique motor cost from each fan in the AMCA sales database. 
This process was completed to ensure that all fan design options were 
evaluated with constant motor and motor controller cost estimates and 
DOE notes that the MSP change from EL to EL ultimately drives the 
downstream analyses. While DOE recognizes that an average is not 
representative of all fan designs, DOE had limited data and therefore 
determined that an average would provide the most representative 
estimate based on the data available.
---------------------------------------------------------------------------

    \63\ Fans can be grouped into three AMCA construction classes 
(Class I-III) based on operation static pressure and outlet 
velocity. A Class I fan would have a lower operating static pressure 
and outlet velocity than a Class III fan. As a result, Class I fans 
tend to have a less-rugged construction than Class II-III fans.
---------------------------------------------------------------------------

    DOE used data from both the AMCA sales database and sales data 
pulled from manufacturer fan selection software to create an MSP versus 
diameter curve for each equipment class. First, DOE averaged the MSPs 
in the AMCA sales database, as discussed earlier, to generate an MSP-
versus-diameter curve. DOE then calibrated this curve with MSPs from 
manufacturer fan selection software. DOE used the MSP-versus-diameter 
curves to determine the baseline MSP for each equipment class at a 
given diameter.
    As discussed in section IV.C.1.b, DOE used individual design 
options for the lower ELs in each class and aerodynamic redesign for 
the higher ELs. To determine the incremental costs associated with the 
design option ELs above baseline, DOE compared the MSPs of similarly 
constructed fans operating at the same duty point. For example, DOE 
evaluated the increase in MSP for impeller changes by calculating the 
percentage change in MSP for two fans operating at the same duty point 
and with similar housings, but different impeller designs. DOE averaged 
changes in MSP for each analyzed fan within each equipment class to 
obtain typical incremental costs for each design option, which were 
applied above baseline to obtain MSPs for each efficiency level. For 
fans where diameter increases were evaluated as a design option, DOE 
used the diameter-versus-MSP curves to estimate the increase in MSP 
relative to the baseline fan. As discussed in section IV.C.1.b, DOE 
used an 18-percent increase as the standard value for each impeller 
diameter increase. MSPs corresponding to each EL assume no change in 
motor or drive costs since DOE kept the motor and drive costs constant 
over all ELs; therefore, the change in MSP at each design option EL is 
reflective of the cost of incorporating the corresponding design 
option.
    DOE additionally conducted teardowns to validate the MSPs applied 
to each EL. For axial inline fans, DOE initially estimated a high MSP 
from manufacturer fan selection software for replacing a tube axial fan 
with a vane axial fan; however, teardown data suggested that a lower 
MSP would be more realistic. DOE believes this discrepancy is due to 
differences in production volume between tube axial and vane axial 
fans, with vane axial fans having lower production volumes in the 
current market. In the presence of energy conservation standards, 
however, DOE expects that production volumes for vane axial fans would 
increase, reducing this price difference. Therefore, DOE adjusted the 
MSP for substituting a tube axial fan with a vane axial fan assuming 
equivalent production volumes in the presence of energy conservation 
standards.
    Similarly, for centrifugal inline fans, DOE found that the average 
MSP when substituting a centrifugal inline impeller with a mixed-flow 
impeller was higher than would have been expected based on the teardown 
data. DOE believes this may be due to a mix of lower production volumes 
in the current market, underlying conversion costs, and increased 
markups for mixed-flow fans in the current market. Therefore, DOE 
reduced the MSP when substituting a centrifugal inline impeller with a 
mixed-flow impeller. To account for any costs associated with 
redesigning a centrifugal inline fan, DOE modelled most costs for 
applying a mixed-flow impeller as conversion costs, similar to those 
applied for aerodynamic redesigns.
    As discussed, DOE evaluated aerodynamic redesigns as the final ELs 
for all equipment classes. DOE assumed a constant MSP for each 
aerodynamic redesign EL, with no change in MSP from the last design 
option EL to the first aerodynamic redesign EL. DOE assumed that the 
redesign, reengineering, and new production equipment required for 
aerodynamic redesign efficiency levels would result in significant one-
time capital and product conversion costs. To account for expected 
manufacturer markups at these ELs, DOE applied a conversion cost markup 
that increases as capital costs increase. Aerodynamic redesign 
conversion costs are further discussed in section IV.J.2.c of this 
NOPR.
    DOE assumed that shipping costs remained constant over all analyzed 
ELs for all equipment classes except for PRVs, where the increased 
diameter design options are expected to have a substantial impact on 
equipment dimensions and weight. To estimate shipping costs for PRVs, 
DOE used data from product teardowns and product literature for the 
representative operating points. DOE compared measured shipping 
dimensions from physical teardowns with listed unit dimensions in 
manufacturers' product literature and extrapolated the difference 
between them to estimate representative shipping dimensions for the 
units that DOE did not tear down. These dimensions were then used to 
estimate the number of PRVs that could be shipped per truck load. Based 
on this analysis, an additional shipping cost for each individual PRV 
was then applied to DOE's estimated MSPs.
    DOE requests comment on its method to use both the AMCA sales 
database and sales data pulled from manufacturer fan selection data to 
estimate MSP. DOE also requests comment on the use of the MSP approach 
for its cost analysis for GFBs or whether an MPC-based approach would 
be appropriate. If interested parties believe an MPC-based approach 
would be more appropriate, DOE requests MPC data for the equipment 
classes and efficiency levels analyzed, which may be confidentially

[[Page 3773]]

submitted to DOE using the confidential business information label.
2. Air Circulating Fans
    In the following sections, DOE discusses the engineering analysis 
performed to establish a relationship between ACF efficacy and MPC.
a. Representative Units
    When performing engineering analyses for energy conservation 
standards rulemakings, rather than model every possible set of 
characteristics an equipment could have, DOE often evaluates the 
efficiency and cost of specific units that are most representative of 
the equipment. These representative units are typically chosen based on 
size or performance-related features. In the October 2022 NODA, DOE 
modeled five ACF representative units: a 12-in. ACF with a 0.01 hp 
motor; a 20-in. ACF with a 0.33 hp motor; a 24-in. ACF with a 0.5 hp 
motor, a 36-in. ACF with a 0.5 hp motor; and a 50-in. ACF with a 1 hp 
motor. 87 FR 62038, 62046. In the October 2022 NODA, DOE requested 
comment on whether the motor hp it has associated with each 
representative diameter (i.e., 0.1 hp for 12 in., 0.33 hp for 20 in., 
0.5 hp for 24 in. and 36 in., and 1 hp for 50 in.) appropriately 
represented the motor hp for fans sold with those corresponding 
diameters. Id.
    In response to the October 2022 NODA, AMCA commented that DOE 
should consider decoupling fan size and motor nameplate hp for its 
representative units because the motor nameplate hp is not always 
representative of how much loading is placed on the motors and may 
therefore mislead any estimates of efficiency. (AMCA, No. 132 at p. 7)
    In response to stakeholder concerns about establishing 
representative motor powers for the engineering analysis, DOE 
reevaluated its approach. After reviewing the updated ACF database, 
which contains catalog data not included in the October 2022 NODA 
analysis, DOE found that motor nameplate power may vary too much from 
fan to fan to establish a single representative motor power for a given 
fan diameter. Instead, for this NOPR analysis, DOE used the 
distribution of motor nameplate powers for each representative diameter 
to determine weighted averages for motor efficiency and motor costs. 
Further details on these distributions and their use can be found in 
chapter 5 of the NOPR TSD.
    For this NOPR, DOE evaluated slightly different representative 
units than it evaluated in the October 2022 NODA analysis. DOE did not 
consider a 12-in. representative unit for the NOPR because ACFs with 
input powers less than 125 W were excluded from the scope, which 
significantly reduced the number of in-scope 12-in. ACFs in DOE's 
updated ACF database. As discussed in section IV.A.1.b, DOE identified 
three equipment classes for axial ACFs, a 12-in. to less than 36-in. 
diameter axial ACF class, a 36-in. to less than 48-in. diameter axial 
ACF class, and a 48-in. diameter or greater axial ACF class. DOE 
defined a single representative unit for each axial ACF equipment 
class. DOE reviewed ACF diameters in its updated ACF database and 
determined that the most common diameters for the 12-in. to less than 
36-in. diameter range, the 36-in. to less than 48-in. diameter range, 
and the 48-in. diameter or greater range were 24 in., 36 in., and 52 
in., respectively. Therefore, DOE used these three diameters as its 
representative units for the ACF analysis. DOE did not consider the 20-
in. or 50-in. representative units included in the October 2022 NODA 
because neither of these sizes were the most common diameter for axial 
ACFs in the corresponding diameter range. For housed centrifugal ACFs, 
DOE chose 11 in. as the representative unit, since it is the most 
common diameter for housed centrifugal ACFs in the updated ACF 
database, Further details regarding the selection of representative 
units can be found in chapter 5 of the NOPR TSD.
b. Baseline Efficiency and Efficiency Level 1
Motors
    As discussed in section IV.C.1.a, baseline models are typically 
either the most common or the least efficient units on the market. In 
the October 2022 NODA, DOE assigned split-phase motors to be the 
baseline technology option for ACFs because split-phase motors are the 
least efficient type of motor used for ACFs. 87 FR 62038, 62048. As 
discussed in the October 2022 NODA, the BESS Labs combined database 
contained ACFs sold with PSC motors, polyphase motors, and ECMs, but no 
split-phase motors. Id. Therefore, DOE used the lowest efficiencies 
observed in the BESS Labs combined database, associated with low-
efficiency PSC motors, to establish EL 1. To estimate baseline 
efficiencies from EL 1, DOE applied an efficiency loss associated with 
switching from a low-efficiency PSC motor to a split-phase motor. 87 FR 
62038, 62049.
    In the October 2022 NODA, DOE requested feedback on the methodology 
used to determine the baseline efficiency values for the representative 
units and on the expected average improvement in ACF efficiency when a 
split-phase motor is replaced by a low-efficiency PSC motor. 87 FR 
62038, 62049. In response, the Efficiency Advocates stated that, since 
DOE utilized the BESS Labs combined database to determine efficiency in 
the October 2022 NODA, that baseline efficiency could be higher than 
the actual least efficient ACFs on the market. (Efficiency Advocates, 
No. 126 at p. 1) In response to stakeholder feedback and after 
reviewing its updated ACF database, DOE utilized a different 
methodology for determining baseline efficiency in this NOPR. Rather 
than determining EL 1 and back-calculating baseline from EL 1, DOE 
defined the baseline efficiencies for each representative unit using 
the minimum efficiency values in its updated ACF database. 
Additionally, as discussed in section IV.A.3 of this NOPR, additional 
review of the ACF market indicated that very few ACFs use split-phase 
motors compared to the number of ACFs that use PSC motors. Therefore, 
DOE decided to consider low-efficiency PSC motors as a baseline design 
option for ACFs in this NOPR.
    As discussed in section IV.A.2.b, DOE included catalog data in its 
updated ACF database to supplement the BESS Labs combined database. DOE 
did not consider catalog data in the October 2022 NODA because catalog 
data did not include information on the air density measured during 
testing, which is required when calculating FEI. Since DOE updated the 
ACF efficiency metric to be efficacy instead of FEI, DOE was able to 
use catalog data for efficiency information for this NOPR. Therefore, 
DOE expects the minimum efficacy values used in this NOPR analysis to 
be more representative of the baseline fans on the market than those 
used in the October 2022 NODA.
Transmission
    In the October 2022 NODA, since DOE did not consider more efficient 
transmissions as a design option, the baseline fan was not defined by a 
transmission type. However, in this NOPR analysis, DOE is considering 
more-efficient transmissions as a design option for ACFs. As discussed 
in section IV.A.3, using a direct-drive transmission instead of a belt-
drive transmission can increase the efficiency of a fan. Manufacturers 
also indicated in interviews that the fan industry is transitioning 
away from using belt-drive transmissions in favor of direct-drive 
transmissions. Therefore, DOE decided to assign a belt-drive 
transmission as a

[[Page 3774]]

baseline design option and tentatively determined that a change from 
belt-drive to direct-drive would be the first design change ACF 
manufacturers would make to improve efficiency. Therefore, DOE chose a 
direct-drive transmission as the EL 1 design option. DOE notes, 
however, that not all the equipment classes it analyzed typically use 
belt drives. DOE reviewed the housed centrifugal ACF market and 
concluded that belt drives are not used for housed centrifugal ACFs. 
Additionally, DOE's review of the axial ACF market indicated that belt 
drives are not commonly used for axial ACFs less than 36 in. in 
diameter. DOE found that only 2 percent of ACF models in its updated 
ACF database with a diameter less than 36 in. had belt drives, while 66 
percent of ACF models in its updated ACF database with a diameter of 36 
in. or larger had belt drives. Therefore, DOE has determined that a 
direct-driven fan is representative of both the baseline and EL 1 for 
the 24-in. axial ACF and centrifugal housed ACF representative units.
    For the 36-in. and 52-in. axial ACF representative units, DOE 
determined EL 1 by applying an efficacy delta to the baseline efficacy 
representing a transition from a belt-drive transmission to a direct-
drive transmission. To estimate this incremental impact on efficacy 
when transitioning from a belt-drive transmission to a direct-drive 
transmission, DOE used the equations defined in sections 6.3.1 and 
6.3.2 of AMCA 214-21. The equations in section 6.3.1 of AMCA 214-21 
define the efficiency of direct-drive transmissions as 100 percent and 
define the efficiency of belt-drive transmissions based on the shaft 
power of the fan. Since shaft powers are generally unknown for ACFs, 
DOE used the equation defined in section 6.3.2 of AMCA 214-21 to 
determine theoretical motor output powers associated with given shaft 
powers and transmission efficiencies. DOE then plotted a curve to 
estimate belt-drive transmission efficiency as a function of motor 
output power, which was used to estimate the belt-drive efficiencies 
for all motor hp values in its updated ACF database. To account for the 
range of motor hp values that could be used in ACFs for each 
representative unit, DOE determined the percentage of fans in its 
updated ACF database that corresponded to each motor hp in the 
database. DOE then used these percentages as weights to calculate a 
weighted-average belt-drive efficiency for each motor hp.
    DOE evaluated the relationship between transmission efficiency and 
fan efficacy and determined that transmission efficiency and fan 
efficacy are directly proportional. Therefore, the percent increase in 
fan efficacy associated with using a more efficient transmission is 
equal to the percent increase in transmission efficiency. Further 
details of this analysis can be found in chapter 5 of the NOPR TSD. DOE 
applied the percent increase in efficiency when transitioning from a 
belt-drive transmission to a direct-drive transmission to the baseline 
efficacies for the 36-in. axial ACF and 52-in. axial ACF representative 
units to determine EL 1. DOE used the resulting weighted-average belt-
drive efficiency to determine the percent difference in efficiency 
between a belt-drive transmission and a direct-drive transmission. 
Based on this approach, DOE estimated 13.5-percent and 10.4-percent 
improvements in efficacy when changing from a belt-drive transmission 
to a direct-drive transmission for the 36-in. axial ACF and 52-in. 
axial ACF representative units, respectively.
    As mentioned previously, DOE defined both the baseline fan and EL 1 
as direct driven for the 24-in. axial ACF and the housed centrifugal 
ACF representative units. Therefore, for these two representative 
units, DOE set EL 1 equal to the baseline efficacy to account for the 
fact that there would be no efficacy gain associated with the more-
efficient transmission design option. This was done to maintain 
consistent design options for each EL for all ACF equipment classes.
    Further discussion of DOE's methodology for determining baseline 
efficiency and EL 1 can be found in chapter 5 of the NOPR TSD.
c. Selection of Efficiency Levels
    In this section, DOE discusses comments it received on its ACF 
efficiency analysis in the October 2022 NODA and describes the 
efficiency analysis methodology it used for this NOPR. As discussed in 
section IV.C.1.b, DOE typically uses either an efficiency-level 
approach, a design-option approach, or a combination of the two for its 
efficiency analysis. In this NOPR, DOE used a combination efficiency-
level and design-option approach for its analysis of ACFs. DOE used the 
efficiency-level approach to determine the baseline and aerodynamic 
redesign ELs and used the design-option approach to gap fill 
intermediate ELs. For the design-option approach, DOE used the 
efficiencies determined for the baseline design options and more-
efficient design options to assign incremental efficiency gains for 
each EL.
General Approach and Related Comments
    In the October 2022 NODA, DOE evaluated more-efficient motors and 
aerodynamic redesign as options for increasing ACF efficiency. 87 FR 
62038, 62048. DOE did not conduct a formal screening analysis in the 
October 2022 NODA; however, as discussed in section IV.B, DOE conducted 
a formal screening analysis for this NOPR, and screened in the 
following design options for ACFs:
    <bullet> Aerodynamic redesign (improved housing design, reduced 
manufacturing tolerances, addition of appurtenances, improved impeller 
design, addition of guide vanes, impeller topology);
    <bullet> Increased impeller diameter;
    <bullet> More-efficient transmissions (belt drive and direct 
drive); and
    <bullet> More-efficient motors.
    DOE did not evaluate the efficiency impacts of all these design 
options in the engineering analysis for ACFs. Specifically, DOE did not 
consider the efficiency impacts of increased impeller diameter since 
DOE defined equipment classes based on diameter in section IV.A.1.b. 
Therefore, when developing the proposed ELs, DOE only considered more-
efficient transmissions, more-efficient motors, and aerodynamic 
redesign as design options for its analysis of ACFs in this NOPR. More-
efficient transmissions were associated with EL 0 and EL 1, which were 
discussed in section IV.C.2.b.
    Regarding motors, DOE evaluated multiple motor options for ACFs in 
the October 2022 NODA, specifically split-phase motors at baseline, PSC 
1 motors at EL 1, PSC 2 motors at EL 2, and ECMs at EL 3. 87 FR 62038, 
62048. PSC 1 motors were defined as basic PSC motors, while PSC 2 
motors were defined as ``more efficient PSC motors''. Id. In this NOPR, 
DOE refers to basic PSC motors as ``low-efficiency PSC motors'' and 
refers to more-efficient PSC motors as ``high-efficiency PSC motors.'' 
In the October 2022 NODA, DOE also assumed that airflow, pressure, 
motor speed, and motor inrush current remained constant when replacing 
a less-efficient motor with a more-efficient motor and requested 
feedback on these assumptions. 87 FR 62038, 62049.
    In response, AMCA commented that, provided the shaft speed does not 
change much, the fan affinity laws can be used to predict airflow and 
total pressure. However, AMCA added that there can be discrepancies 
between the torque required by the load and the torque produced by the 
motor for low-power motors. AMCA further stated that, given the very 
low starting torque

[[Page 3775]]

of ACFs, inrush current is likely insignificant for ACF motors. (AMCA, 
No. 132 at p. 9) NEMA stated that while motor performance can be 
optimized, changing the motor may impact other aspects of fan 
performance. NEMA specifically stated that more-efficient motors will 
typically have higher speeds, which may require a redesign of the fan. 
(NEMA, No. 125 at p. 5) AMCA also stated that motors with higher 
rotational speeds will generally be more efficient. (AMCA, No. 132 at 
pp. 16-17) NEMA commented that changing the efficiencies of motors used 
for ACFs could require the use of a larger, heavier motor and could 
therefore require other design changes to the fan. (NEMA, No. 125 at p. 
2) AMCA also stated that replacing a motor with a more-efficient motor 
may result in the need for aerodynamic redesign or redesign of the 
mounting and supports of an ACF because of differences in motor size, 
shape, or weight. (AMCA, No. 132 at p. 12)
    DOE investigated the issue of higher-efficiency motors having 
higher speeds in the December 2023 ESEMs NOPR TSD.\64\ For the typical 
motor types and sizes used in ACF applications,\65\ DOE found only a 
0.5-percent to 0.7-percent increase from the minimum full-load speed to 
the maximum full-load speed. Given the relatively small speed changes 
between ESEMs with different efficiencies, DOE has tentatively 
concluded that increases in motor speed associated with transitioning 
to more-efficient motors would be insignificant and would not require 
additional changes to fan design.
---------------------------------------------------------------------------

    \64\ The ESEMs NOPR TSD can be found at www.regulations.gov/document/EERE-2020-BT-STD-0007-0056.
    \65\ DOE's review of the ACF market indicated that low-torque, 
6-pole, air-over ESEMs are the most commonly used motor types for 
ACFs. Table 5.4.2 of the December 2023 ESEM NOPR TSD shows the full-
load speeds for these motors at different efficiency levels.
---------------------------------------------------------------------------

    DOE requests feedback on whether using a more efficient motor would 
require an ACF redesign. Additionally, DOE requests feedback on what 
percentage of motor speed change would require an ACF redesign.
    Regarding stakeholder feedback that ACFs may need to be redesigned 
to accommodate differences in motor size or shape when changing to 
more-efficient motors, DOE expects this type of redesign could be done 
with minimal efficiency impact because it expects that only motor 
supports would be redesigned. As discussed in section IV.C.2.d, DOE 
found that there is sufficient space for an increase in motor volume 
without needing to redesign other fan components, such as housing or 
safety guards. Consequently, DOE assumed that the only redesign 
required for an ACF when switching to a larger motor would be to 
increase the weight of the motor supports to accommodate an increase 
motor weight. Therefore, DOE assumed that when changing to a more-
efficient motor, the only significant impact to the efficiency of an 
ACF was the efficiency gained from the motor.
    Additionally, AMCA commented in response to the October 2022 NODA 
that motor nameplate information is generally not very relevant for 
ACFs because ACF manufacturers often use motors in power ranges outside 
those listed on motor nameplates. AMCA stated that operating motors 
above their nameplate load may provide the best material efficiency and 
that this is possible for ACFs because motors are very well ventilated 
when used for ACFs. AMCA also stated that the use of a flatter pitch 
blade may not load a fan to its listed motor horsepower, while a 
steeper pitch blade may load the motor past its listed horsepower. 
(AMCA, No. 132 at pp. 6-8) Further, AMCA stated that motor nameplate 
efficiencies depend on the number of phases and the synchronous speed 
of the motors and that the actual motor efficiency would be different 
since motors are used at higher power ratings than their nameplate 
power ratings for ACFs. (AMCA, No. 132 at pp. 16-17)
    In consideration of AMCA's comments, DOE analyzed confidential ESEM 
testing data to examine how motor efficiency is impacted when motors 
are operated at loads above their nameplate rating. DOE compared the 
efficiencies of motors tested at nameplate load, 115 percent of 
nameplate load, and 125 percent of nameplate load. Through its 
analysis, DOE found that, on average, motor efficiency increased by a 
percent change of 1.01 percent for motors tested at 115 percent of 
nameplate load and motor efficiency increased by a percent change of 
1.23 percent for motors tested at 125 percent of nameplate load. DOE 
notes that these percentages represent percentage changes, rather than 
nominal changes in motor efficiency. For example, a 0.25 hp motor might 
have an efficiency of 72.84 percent when tested at 100 percent load 
compared to an efficiency of 73.54 percent when tested at 115 percent 
load, representing a percentage increase in efficiency of 0.96 percent 
(i.e., [73.54-72.84]/72.84 = 0.96%). The positive percentage change 
found for motors tested at both 115 percent and 125 percent of rated 
load indicates that, up to 125 percent rated load, efficiency generally 
increases for motors operated at loads above their nameplate rating. 
Hence, representations of motor efficiency calculated at nameplate load 
may provide a more conservative estimate of motor efficiency. For the 
motors that exhibited a decrease in efficiency at 125 percent of rated 
load, DOE further investigated the percentage change in motor 
efficiency. For these motors, the average percentage change in motor 
efficiency remained under 1.5 percent for motors tested at both 115 
percent and 125 percent of their rated load, with a maximum percentage 
change in efficiency of 2.3 percent. Since the average percentage 
change in motor efficiency from the rated efficiency is small when 
motors are operated at above their rated loads, DOE has tentatively 
determined that motor efficiencies calculated at rated load represent 
adequate estimates of true motor efficiency, even if those motors are 
operated above their rated loads.
    As discussed in section IV.A.3, DOE considered split-phase motors, 
low-efficiency PSC motors, high-efficiency PSC motors, and ECMs in its 
October 2022 NODA analysis. 87 FR 62038, 62048. DOE has since reviewed 
its updated ACF database in response to comments from AMCA and NEMA 
about motors used in ACFs. Based on the distribution of motor types in 
the database, DOE tentatively concluded that very few ACFs use shaded-
pole, split-phase, or capacitor start/capacitor run motors. Rather, DOE 
found that the most common motors used in ACFs are PSC motors, and that 
some ACFs utilize polyphase motors and ECMs. Specific percentages of 
ACFs in the updated ACF database with each motor type can be found in 
Chapter 5 of the NOPR TSD.
    Furthermore, in the October 2022 NODA, DOE requested comment on 
whether ACFs with single-phase motors and polyphase motors would be 
used for different utilities or have different efficiencies because of 
their end-use applications. 87 FR 62038, 62045. In response, NEMA 
stated that three-phase motors typically have slightly higher 
efficiencies than single-phase motors but added that if only a single-
phase power supply is available, a three-phase motor could not be used 
in place of a single-phase motor. NEMA added that at higher motor 
powers (1.5 hp and above), three-phase motors tend to be equally as or 
slightly less expensive than single-phase motors. (NEMA, No. 125 at p. 
4). DOE's review of motor literature and testing data for motors used 
in ACFs indicated that polyphase motors are generally more efficient 
than PSC motors, as stated by NEMA.

[[Page 3776]]

Additionally, DOE acknowledges that, as NEMA stated, in situations 
where only single-phase power is available, a polyphase motor could not 
be used in place of a single-phase motor without the use of additional 
electronics, such as a phase converter. As such, DOE did not consider a 
change from PSC motor to polyphase motor as a design option for 
improving efficiency. Additionally, as discussed above, the majority of 
the ACFs in DOE's updated ACF database utilize PSC motors; therefore, 
DOE used PSC motors to generally model the efficiencies of induction 
motors used in ACFs. DOE notes that this approach provides conservative 
estimates of induction motor efficiency relative to an approach that 
includes polyphase motor efficiencies since polyphase motors are 
generally more efficient than PSC motors. DOE considered low-efficiency 
PSC motors and high-efficiency PSC motors as induction motor design 
options. Additionally, DOE considered ECMs as a motor design option 
since they are the most efficient type of motor used in ACFs.
Determination of Efficiency Levels
    As discussed in section IV.C.2.b, DOE considered low-efficiency PSC 
motors and belt-drive transmissions as baseline design options and 
considered direct-drive transmissions as the design option for EL 1.
    DOE received feedback during confidential manufacturer interviews 
that ACF manufacturers were more likely to improve the efficiency of a 
motor before performing an aerodynamic redesign. Therefore, DOE 
considered a high-efficiency PSC motor as the design option for EL 2, 
prior to considering aerodynamic redesign. DOE modeled the efficiency 
gain associated with changing from a low-efficiency PSC motor to a 
high-efficiency PSC motor. DOE determined the efficacy for EL 2 for all 
equipment classes by estimating efficiencies for low-efficiency PSC 
motors and high-efficiency PSC motors, determining the efficiency delta 
between them, and applying that efficiency delta to EL 1. In the 
October 2022 NODA, DOE estimated the efficiencies of low-efficiency PSC 
motors and high-efficiency PSC motors using DOE's database of catalog 
motor data (``motors database''). 87 FR 62038, 62049. DOE associated 
low-efficiency PSC motors with EL 1 and high-efficiency PSC motors with 
EL 2 in the October 2022 NODA analysis. DOE estimated the increase in 
FEI from EL 1 to EL 2 by applying the percent increase in efficiency 
from a low-efficiency PSC motor to a high-efficiency PSC motor directly 
to the EL 1 FEI value. DOE requested comment on its determined 
efficiency gains when replacing a low-efficiency PSC motor with a high-
efficiency PSC motor and whether catalog performance data for PSC 
motors were representative of the performance of motors used in ACFs. 
Id.
    In response, NEEA commented that it agreed with DOE's approach to 
model the efficiency improvements for the overall fan as equal to the 
motor efficiency improvements when only the motor is changed and 
nothing else, such as the duty point, motor speed, drive type, etc. 
(NEEA, No. 129 at p. 3) Greenheck expressed concern that the motor 
efficiencies used by DOE in its analysis may not have been accurate and 
stated that Greenheck could not confirm the accuracy of the 
efficiencies used since the motor database was not included with the 
supplementary information. Greenheck also requested clarity on which 
motors were included in DOE's analyses of low-efficiency PSC and high-
efficiency PSC motors. Specifically, Greenheck stated motors that DOE 
deemed low-efficiency PSC motors should be analyzed as a separate 
dataset from high-efficiency PSC motors, rather than determining low-
efficiency PSC motor performance from the average efficiency of all PSC 
motors. (Greenheck, No. 122 at p. 2) AMCA commented that determining 
general values for the change in efficiency between one motor type and 
another is difficult to do with confidence because motors with the same 
topology and power rating can have different efficiencies. (AMCA, No. 
132 at p. 8-9) NEMA commented that the efficiencies of fan motors are 
often not quantified and that it is incorrect to assume that all ACFs 
use low-efficiency motors. (NEMA, No. 125 at p. 3) NEMA added that the 
source of DOE's ESEM catalog data is unclear, given that most motor 
manufacturers do not publish performance information for the fractional 
horsepower, single-phase motors that DOE assumed were used for ACFs in 
its October 2022 NODA analysis. NEMA further stated that catalog motors 
typically meet or exceed the ratings listed for them in catalogs. 
(NEMA, No. 125 at p. 3)
    In response to stakeholder feedback, DOE adjusted its methodology 
for determining efficiencies associated with low-efficiency PSC motors 
and high-efficiency PSC motors in this NOPR. In the October 2022 NODA, 
DOE determined low-efficiency PSC motor efficiency from the average of 
all air-over PSC motors in the motors database. 87 FR 62038, 62049. For 
this NOPR, DOE instead determined low-efficiency PSC motor efficiency 
from the minimum efficiency of all 6-pole, fan-specific motors in the 
motors database. The use of the minimum efficiency, rather than the 
average efficiency, produced a more conservative estimate for low-
efficiency PSC motor efficiency. DOE analyzed 6-pole motors 
specifically because DOE's review of the ACF market indicated that 6-
pole motors are most common for ACFs. DOE determined low-efficiency PSC 
motor efficiencies at all motor powers in its updated ACF database and 
calculated a weighted average efficiency using the distribution of 
motor powers for each representative unit. Regarding Greenheck and 
NEMA's concerns about the accuracy of the motor data in the motors 
database, DOE acknowledges that the motors in the database are 
unregulated and therefore the data may be inaccurate. However, DOE 
notes that it received no additional information on ACF motor 
efficiencies from stakeholders that it could use instead of the 
information in the motors database. Regarding NEMA's concerns about the 
source of the PSC motor data in the motors database, DOE notes that the 
information it compiled from the database for fan-specific, 6-pole PSC 
motors consisted of published catalog data from four different motor 
brands. In response to AMCA's concerns about variations in motor 
efficiency with the same topology and power rating, DOE acknowledges 
that motors with the same topology and power rating can have different 
efficiencies. Therefore, DOE used weighted-average motor efficiencies 
in this NOPR analysis, which allowed DOE to consider the effects of a 
wide range of motor efficiencies across many power ratings for a 
particular motor topology.
    Unlike low-efficiency PSC motors, DOE did not use the motors 
database to determine efficiencies for high-efficiency PSC motors in 
this NOPR. As part of the electric motors rulemaking, stakeholders made 
a joint recommendation for the efficiencies at which they believe the 
standards for ESEMs should be set. (Docket No. EERE-2020-BT-STD-0007, 
Joint Stakeholders, No. 38 at p. 6, Table 2) The joint recommendation 
represented the motors industry, energy efficiency organizations and 
utilities (collectively, ``the Electric Motors Working Group'') and 
addressed energy conservation standards for high-torque, medium-torque, 
low-torque, and polyphase ESEMs that are 0.25-3 hp and polyphase, and 
air-over ESEMs. In reference to this ongoing rulemaking, DOE has 
tentatively defined its high-efficiency PSC motor efficiencies using 
the efficiencies recommended by the

[[Page 3777]]

ESEM Joint Stakeholders. DOE used the average of the recommended 
efficiencies for enclosed and open 6-pole PSC motors since DOE's review 
of the ACF market indicated that both enclosed and open motors are used 
for ACFs. DOE then calculated weighted-average high-efficiency PSC 
motor efficiencies using the average recommended efficiencies at 
different motor powers for each representative unit. DOE then 
determined the percent difference in efficiency between high-efficiency 
PSC motors and low-efficiency PSC motors.
    DOE evaluated the relationship between motor efficiency and fan 
efficacy and determined that motor efficiency and fan efficacy are 
directly proportional. Therefore, the percent increase in efficacy 
associated with changing to a more efficient motor is equal to the 
percent increase in motor efficiency. Further details of this analysis 
can be found in chapter 5 of the NOPR TSD. DOE applied the percent 
increase in motor efficiency when transitioning from a low-efficiency 
PSC motor to a high-efficiency PSC motor to EL 1 to determine EL 2 for 
each representative unit.
    DOE recognizes that if it sets a standard at the recommended ESEM 
efficiencies, high-efficiency PSC motors would effectively become the 
baseline motor for ACFs. DOE performed a sensitivity analysis to 
evaluate the impact of setting ESEM standards at the recommended 
efficiencies on its ACF analysis. DOE found that, given the small 
number of shipments at EL 0 and EL 1 for ACFs, if EL 2 were set as the 
baseline EL, there would be a minimal impact on proposed ACF standards 
due to the low shipments below EL2 (see IV.F.8). DOE notes that if it 
sets a standard in the ESEM rulemaking at the recommended ESEM levels, 
DOE may consider using EL2 proposed in this NOPR as baseline for ACFs 
in a future final rule.
    In response to the October 2022 NODA, NEEA commented that DOE's 
assumption that the least-efficient fans in the BESS Labs combined 
database used the least-efficient motors may be incorrect, since these 
fans could instead have non-motor-related performance features that 
caused them to have low efficiencies. NEEA added that this could cause 
non-representative ELs in DOE's analysis since some of DOE's ELs are 
based on motor efficiency increases. (NEEA, No. 129 at p. 2) DOE notes 
that information on the specific motor models integrated into ACFs, 
including motor efficiency, is not often publicly available. DOE also 
notes that it requested quantitative efficiency data on ACF motors in 
the October 2022 NODA, and it has not received any quantitative 
information on motor efficiency from stakeholders. 87 FR 62038, 62063. 
As discussed in section IV.A.2.b, DOE's dataset now includes catalog 
data in addition to the BESS Labs combined database. Therefore, as 
discussed in section IV.C.2.b, DOE expects the baseline efficacies that 
it used in this analysis to be more representative of the least 
efficient ACFs on the market than the baseline used in the October 2022 
NODA. Additionally, as previously discussed, DOE updated its 
methodology for determining motor efficiencies for low-efficiency and 
high-efficiency PSC motors. Given these adjustments, DOE expects that 
the EL 2 efficacies are representative of ACFs with high-efficiency PSC 
motors.
    In the October 2022 NODA, DOE considered ECMs as the design option 
for EL 3 and considered aerodynamic redesign as the design option for 
EL 4. In response, the CA IOUs commented that DOE should consider 
aerodynamic efficiency improvements at ELs lower than max-tech because 
they expect that manufacturers would consider aerodynamic redesigns 
before switching to ECMs. The CA IOUs also recommended that DOE 
consider intermediate aerodynamic redesign levels rather than a single 
``maximum'' option. (CA IOUs, No. 127 at p. 2) The Efficiency Advocates 
recommended that DOE consider more ELs in its efficiency analysis to 
better represent the range of ACF efficiencies presented in its 
analysis, and that DOE specifically consider aerodynamic redesign. The 
Efficiency Advocates stated that additional ELs could be used to bridge 
the large gap between EL 3 and EL 4 in the October 2022 NODA. 
(Efficiency Advocates, No. 126 at p. 2)
    In response to this feedback, DOE did not consider ECMs as a design 
option immediately after considering high-efficiency PSC motors in this 
NOPR; rather, DOE evaluated three aerodynamic redesign ELs--EL 3, EL 4, 
and EL 5--and considered ECMs as the max-tech design option at EL 6. 
DOE assumed that more complex aerodynamic redesign would be needed for 
EL 4 compared to EL 3 and for EL 5 compared to EL 4.
    In response to the October 2022 NODA, NEEA stated that the wide 
distribution of efficiencies in the BESS Labs combined database was 
likely due to factors other than variation in motor efficiency since 
the database consists of fans that use the same kind of motor (PSC). 
DOE infers from this comment that variations in ACF efficiency in the 
updated ACF database, which, like the BESS Labs combined database, 
contained many ACFs with PSC motors, can largely be attributed to 
differences in aerodynamic efficiency between fans. Therefore, although 
DOE could not relate specific design options to a given efficacy for 
its three aerodynamic redesign levels, DOE defined aerodynamic redesign 
levels using an efficiency-level approach from its updated ACF 
database. Since DOE anticipated that more complex redesigns would be 
required at EL 4 than EL 3, DOE defined EL 3 as 33 percent of the way 
between EL 2 and EL 4 for all equipment classes.
    DOE took different approaches for establishing EL 4 for axial ACFs 
and housed centrifugal ACFs. For axial ACFs, DOE referenced 
agricultural fan efficiency incentive programs to set the efficacies at 
EL 4. All agricultural fan efficiency incentive programs that DOE found 
use units of thrust per kilowatt (``thrust/kW'') to define minimum 
performance targets to qualify for the incentives. DOE converted these 
targets into units of CFM/W. Details of this conversion can be found in 
chapter 5 of the NOPR TSD. As discussed in section IV.C.2.a of this 
NOPR, ACF performance targets are defined by diameter. To be consistent 
with its lowest-diameter equipment class, DOE averaged the incentive 
program performance targets for the 12-in. to less than 24-in. diameter 
range and the 24-in. to less than 36-in. diameter range to estimate EL 
4 for the 24-in. axial ACF representative unit. DOE used the 
performance targets for the 36-in. to 48-in. diameter range and 48-in. 
or greater diameter range to estimate EL 4 for the 36-in. axial ACF and 
52-in. axial ACF representative units, respectively.
    For housed centrifugal ACFs, DOE could not use the agricultural fan 
efficiency incentive programs to define EL 4 because housed centrifugal 
ACFs are not used in agricultural applications. Since DOE assumed that 
more complex redesigns would be required at EL 5 than EL 4, DOE also 
assumed that the efficiency gain between EL 5 and EL 4 would be greater 
than the efficiency gain between EL 4 and EL 3. To reflect this 
assumption, DOE defined EL 4 as halfway between EL 2 and EL 5 for 
housed centrifugal ACFs.
    DOE defined EL 5 for each equipment class based on the maximum 
efficacies in the updated ACF database. DOE used the maximum efficacies 
in the updated ACF database to define EL 5 since DOE found that the 
maximum efficacy ACFs in the updated ACF database did not have ECMs. 
Therefore, these ACFs did not correspond to the max-tech level, and DOE 
instead assumed that these ACFs utilized highly efficient

[[Page 3778]]

aerodynamic designs to achieve high efficacies. As discussed in section 
IV.A.2.b, DOE removed some high-efficacy outliers from the ACF database 
prior to determining the maximum efficacies for EL5.
    As discussed previously, DOE considered an ACF with an ECM and a 
highly efficient aerodynamic design to be the max-tech design option. 
DOE's research indicated that ECMs are the most efficient type of motor 
used in ACFs, and, as indicated in the CA IOUs' comment on aerodynamic 
redesign, ACF manufacturers may consider implementing aerodynamic 
redesign prior to switching to an ECM. To determine the max-tech 
efficiency, DOE applied an incremental efficiency gain associated with 
changing from a high-efficiency PSC motor to an ECM to EL 5 for each 
equipment class.
    In the October 2022 NODA, DOE used a database of dedicated-purpose 
pool pump (``DPPP'') motors to determine efficiencies for ECMs and 
high-efficiency PSC motors and the efficiency gain expected when 
switching from a high-efficiency PSC motor to an ECM. 87 FR 62038, 
62050. DOE requested comment on its use of DPPP motors for comparing 
efficiencies of PSC motors and ECMs. Id. In response, NEMA commented 
that DPPP motor efficiency levels should not be used to compare PSC to 
ECM motor efficiency. NEMA stated that the DPPP efficiency regulations 
define system (motor and pump) efficiency levels and not standalone 
motor efficiencies. NEMA also stated that it had concerns with applying 
a market like DPPP, which has a dedicated purpose and experiences less 
variety of designs and manufacturers, to the much more diverse market 
of fans and blowers. (NEMA, No. 125 at p. 5)
    In response to NEMA's concerns about its use of DPPP motors to 
model the efficiencies of ECMs, DOE adjusted its methodology for 
determining ECM efficiencies. To determine the efficiencies of ECMs, 
DOE first considered the motor efficiencies specified in IEC 60034-30-
1:2014. The motor efficiencies defined in the IE code are intended to 
serve as reference points for governments to use when defining 
efficiency standards. DOE understands that the current IE 1 through IE 
4 efficiencies defined in IEC 60034-30-1:2014 are intended to represent 
induction motor efficiencies. DOE also understands that, should a 
higher IE motor efficiency, IE 5, be defined in a future standard, the 
IE 5 efficiencies would likely align with ECM efficiencies. DOE used 
theoretical IE 5 efficiencies to estimate the efficiencies of ECMs and 
assumed that the efficiencies included the effects of ECM controllers. 
The IE 1 through IE 4 levels defined in IEC 60034-30-1:2014 are based 
on a 20-percent reduction in power losses going from one IE level to 
the next. For example, IE 4-level efficiency is determined from IE 3-
level efficiency by assuming a 20-percent reduction in power losses. 
Therefore, DOE estimated IE 5 efficiency by assuming a 20-percent 
reduction in power losses from the IE 4 efficiency. DOE determined the 
percent difference between the estimated IE 5 efficiency and the 
estimated high-efficiency PSC motor efficiency. As discussed 
previously, DOE determined that a percent increase in motor efficiency 
corresponds to an equal percent increase in efficacy. Therefore, DOE 
applied the percent increase in motor efficiency when transitioning 
from a high-efficiency PSC motor to an ECM to EL 5 to determine EL 6. 
Further details on the methodology DOE used to determine the efficacies 
for each EL can be found in chapter 5 of the NOPR TSD. The efficacies 
determined for each EL and representative unit and design options 
associated with each EL are shown in Table IV-13.
[GRAPHIC] [TIFF OMITTED] TP19JA24.034

    As discussed in section V.C.1.b, DOE notes that the standards it is 
proposing for axial ACFs are discrete efficacy values in CFM/W. This 
approach aligns with the method used by agricultural fan efficiency 
incentive programs, where performance targets are specified for certain 
diameter ranges. However, DOE notes that setting a standard for 
efficacy in this way may not fully incorporate the effect of diameter 
on the ACF efficacy. Setting a standard using this approach could also 
make it easier for larger diameter fans to meet the standard and more 
difficult for smaller diameter fans to meet the standard. DOE 
recognizes that there is generally a linear relationship between 
efficacy in CFM/W and fan diameter. DOE notes that it is additionally 
considering setting efficacy standards for axial ACFs as a linear 
function of diameter, similar to the approach used for ceiling fans 
(see 10 CFR 430.32(s)(1)). To establish a linear equation for efficacy 
as a function of diameter, DOE may consider in the final rule, for 
example, plotting efficacies for each representative unit versus the 
representative unit diameters and determining a best-fit line through

[[Page 3779]]

these points. The efficacy standard would then change continuously as a 
function of diameter. While this approach would not align with the 
approach used by agricultural fan efficiency incentive programs, it 
might better incorporate the effect of diameter when setting standards 
for ACFs, specifically for ACFs with diameters at the periphery of the 
diameter range.
    DOE requests feedback on whether setting an ACF standard using 
discrete efficacy values over a defined diameter range appropriately 
represents the differences in efficacy between axial ACFs with 
different diameters, and if not, would a linear equation for efficacy 
as a function of diameter be appropriate.
Input Power Estimation
    In addition to determining efficacy values associated with each EL, 
DOE also developed estimates of input power associated with each EL. 
These input power estimates were used in the LCC and PBP analyses, 
discussed in section IV.F. For each representative unit, DOE developed 
input power versus efficacy curves based on the data in the updated ACF 
database and then estimated the input powers associated with each 
efficiency level. Further details on DOE's methodology for estimating 
input powers are discussed in chapter 5 of the NOPR TSD.
d. Cost Analysis
    In this section, DOE discusses its approach to estimating MPCs for 
ACFs in this NOPR and discusses comments relating to its cost analysis 
in the October 2022 NODA. As discussed in section IV.C.1.d, the cost 
analysis portion of the engineering analysis is conducted using 
physical teardowns, catalog teardowns, price surveys, or a combination 
of these approaches. In the case of ACFs, DOE conducted its analysis 
using physical teardowns, which involve deconstructing equipment and 
recording every part and material used to make them. The resulting bill 
of materials (``BOM'') provided the basis for DOE's MPC estimates. DOE 
builds these MPCs based on the cumulative estimated cost of materials, 
labor, depreciation, and overhead for each equipment. Further details 
on these cost inputs can be found in chapter 5 of the NOPR TSD.
    To support the October 2022 NODA, DOE estimated the MPCs of 
unhoused and housed ACFs across all efficiency levels and 
representative diameters using data gathered from teardowns of nine 
ACFs. 87 FR 62038, 62052. In the October 2022 NODA, DOE assumed that 
all ACFs were manufactured in China and that all materials and parts 
were sourced from China. DOE used the BOMs developed for each ACF and 
catalog teardowns to estimate MPCs for baseline ACFs. DOE then used 
incremental MPCs estimated for each design option to estimate MPCs for 
higher efficiency levels. Id.
    DOE made several updates to its MPC estimation approach pertaining 
to axial ACFs in this NOPR. First, DOE adjusted how it considered ACF 
housings compared to the October 2022 NODA. As discussed in section 
IV.A.1.b, DOE considered air circulating axial panel fans, box fans, 
cylindrical ACFs, and unhoused ACFHs under the axial ACFs class. To 
account for the different housing configurations used in these four 
subcategories, DOE developed separate MPC estimates for housed ACFs 
with panel housing, housed ACFs with cylindrical housing, and unhoused 
ACFHs. DOE assumed that the costs of box housing and panel housing were 
comparable; therefore, DOE did not generate separate MPC estimates for 
ACFs with box housing. DOE averaged the MPCs of air circulating axial 
panel fans (and box fans), cylindrical ACFs, and unhoused ACFHs to 
estimate an overall MPC for axial ACFs. DOE did not include the cost of 
mounting gear, casters, or wheels in its MPC estimates for any 
equipment class because these features do not affect the efficacy of an 
ACF. Second, based on information received during confidential 
manufacturer interviews and further review of the ACF market, DOE 
updated its assumptions about manufacturing location and the source of 
purchased parts for this NOPR. Specifically, DOE concluded that most 
ACFs are made in the United States and that most ACF manufacturers 
source parts from suppliers in the United States and abroad. DOE 
understands that there are variations between OEMs in the ACF industry 
and chose production factors and modeling methods to reflect the range 
of OEMs. Further details on the development of the MPC estimates for 
axial ACFs can be found in chapter 5 of the NOPR TSD.
    DOE did not evaluate housed centrifugal ACFs in the October 2022 
NODA. To develop the MPC estimates for housed centrifugal ACFs, DOE 
performed teardowns on three housed centrifugal ACFs and created BOMs 
for each. DOE assumed that all housed centrifugal ACFs are manufactured 
in China and that all parts were purchased in China based on its review 
of the housed centrifugal market. DOE used these BOMs and catalog 
teardowns to estimate MPCs for housed centrifugal ACFs. Further details 
of the development of the MPC estimates for housed centrifugal ACFs can 
be found in chapter 5 of the NOPR TSD.
    In the October 2022 NODA, DOE assumed that motors included in ACFs 
are purchased parts and determined the incremental MPCs associated with 
changing from a split-phase motor to a low-efficiency PSC motor, high-
efficiency PSC motor, or ECM using data in its internal parts database. 
87 FR 62038, 62053. DOE did not have sufficient pricing information for 
split-phase motors, so DOE approximated the split-phase motor MPC using 
prices for shaded-pole motors for the October 2022 NODA. Id. DOE 
estimated low-efficiency PSC motor MPCs by developing a best-fit line 
for motor price as a function of motor power and used this line to 
estimate low-efficiency PSC motor MPCs at the representative motor 
powers. DOE estimated high-efficiency PSC motor MPCs by determining the 
95th percentile PSC motor MPC of the data it had available for each 
representative motor power and establishing a best-fit line for the 
95th percentile MPCs as a function of motor power. DOE estimated ECM 
MPCs by establishing a best-fit line for the MPCs of ECMs as a function 
of motor power. 87 FR 62038, 62053. Id.
    In response to the October 2022 NODA, NEMA commented that DOE's 
estimated motor costs were lower than actual motor costs. NEMA further 
stated that the cost of motors for commercial applications would 
generally be lower than those for industrial applications. (NEMA, No. 
125 at p. 6) In response to this feedback, DOE reevaluated its motor 
costs for this NOPR. DOE's research indicates that most ACFs are sold 
in higher volumes, which suggests a commercial market, rather than an 
industrial market. In general, DOE finds that industrial equipment is 
sold in lower volumes and is manufactured for specific applications, 
and DOE has not observed that ACFs are typically sold or manufactured 
in this way. Therefore, DOE did not consider a separate MPC for 
industrial ACFs in this NOPR. DOE reviewed market information for fan 
motors and determined current fan motor sales prices. As such, DOE 
believes that its updated motor costs are more representative of the 
current fan motor market than those estimated in the October 2022 NODA.
    In this NOPR, DOE also reevaluated how it estimated motor costs. 
For both low-efficiency PSC motors and high-efficiency PSC motors, DOE 
identified specific PSC fan motors and used the costs of these motors 
to estimate MPCs. Rather than using a single motor cost, DOE determined 
a weighted-average motor cost at each hp in its updated

[[Page 3780]]

ACF database. As discussed in section IV.C.2.c, DOE determined the 
percentage of motor hp values in the updated ACF database for each 
representative unit. DOE used these percentages and the MPCs determined 
for each motor type to calculate the weighted-average motor MPCs for 
each representative unit. Further details of DOE's modeling of ACF 
motor costs can be found in chapter 5 of the NOPR TSD.
    Additionally, as discussed in section IV.C.2.c of this NOPR, DOE 
received feedback from NEMA and AMCA that changing to a more-efficient 
motor could also require changes to fan design. Specifically, NEMA 
commented that changing ACF motor efficiencies could require the use of 
a larger, heavier motor and could therefore require other design 
changes to the fan. (NEMA, No. 125 at p. 2) AMCA stated that replacing 
a motor with a more-efficient motor may result in the need for 
aerodynamic redesign or redesign of a fan's mounting and supports 
because of differences in motor size, shape, or weight. (AMCA, No. 132 
at p. 12)
    To evaluate these concerns, DOE estimated costs to redesign an ACF 
if a larger motor replaced a smaller motor. DOE evaluated the effects 
of motor volume and motor weight when considering a change from a 
smaller motor to a larger motor. DOE found during ACF teardowns that 
there is sufficient space for an increase in motor volume without 
needing to redesign other fan components, such as housing or safety 
guards. Therefore, DOE assumed that the only redesign required for an 
ACF when switching to a larger motor would be to increase the weight of 
the motor supports to accommodate an increased motor weight, which is 
consistent with what DOE has observed in teardowns. DOE used data 
gathered during ACF teardowns to approximate a relationship between 
motor weight and the cost of motor support materials. DOE used this 
relationship to estimate the increase in cost that would be expected 
for a given increase in motor weight. DOE found that even for a 100-
percent increase in motor weight, which DOE believes is highly 
conservative, motor support costs increased fan MPC by 1.5 percent or 
less. Therefore, DOE has tentatively concluded that additional material 
costs would be minimal if a manufacturer incorporated a heavier motor 
into an ACF.
    For this NOPR, DOE evaluated belt drives and low-efficiency PSC 
motors as the baseline design options, as discussed in section 
IV.C.2.c. To determine the baseline costs, DOE first determined the 
cost of a baseline ACF without a motor or transmission (``bare-shaft 
ACF'') for each representative unit. Then, DOE added the costs 
determined for a belt drive and a low-efficiency PSC motor to the base-
shaft ACF to calculate the MPC of the baseline ACF for each 
representative unit. DOE did not find a significant difference in MPC 
between belt drives associated with different motor hp, so DOE chose a 
single belt drive cost for each representative unit. Further details on 
belt drive costs and baseline MPCs can be found in chapter 5 of the 
NOPR TSD.
    For this NOPR, DOE assigned a direct-drive transmission as the 
design option for EL 1. DOE assumed that a change from a belt-drive 
transmission to a direct-drive transmission would involve the removal 
of the belt drive with no other adjustments to the ACF. Therefore, for 
the 36-in. and 52-in. axial ACF representative units, DOE estimated the 
cost associated with this design option by subtracting the belt drive 
MPC from the baseline MPC. For the 24-in. axial ACF and housed 
centrifugal ACF representative units, DOE set the EL 1 MPC equal to the 
baseline MPC.
    DOE assigned a high-efficiency PSC motor as the ACF design option 
for EL 2 in this NOPR. For all equipment classes, DOE determined the EL 
2 MPC by adding the estimated cost difference between a high-efficiency 
PSC motor and a low-efficiency PSC motor to the EL 1 MPC. The MPCs DOE 
estimated for low-efficiency PSC motors and high-efficiency PSC motors 
are included in chapter 5 of the NOPR TSD.
    DOE associated EL 3, EL 4, and EL 5 in this NOPR with three 
different levels of aerodynamic redesign. In the October 2022 NODA, DOE 
defined a single aerodynamic redesign level at max-tech. DOE assumed 
that the redesign, reengineering, and new equipment that could be 
required for the aerodynamic redesign would result in a significant 
one-time conversion cost, such that aerodynamic redesigns would have a 
significantly greater impact on conversion costs than they would on 
MPCs. Therefore, DOE assumed that the change in MPC associated with the 
aerodynamic redesign was negligible compared to the conversion costs 
incurred by the manufacturer to implement this redesign. In this NOPR, 
DOE assumed that MPCs for EL 3, EL 4, and EL 5 were equal to the MPC 
for EL 2 for all equipment classes. DOE assumed that the complexity of 
ACF redesign would increase as ELs increase; therefore, DOE estimated 
that manufacturer investment in engineer time and equipment would 
increase with each EL. Information on DOE's estimated conversion costs 
can be found in section IV.J.2.c of this NOPR and in chapter 12 of the 
NOPR TSD.
    DOE defined an ECM as the design option for EL 6. For all equipment 
classes, DOE determined the EL 6 MPC by adding the estimated cost delta 
between an ECM and a high-efficiency PSC motor to the EL 5 MPC. The 
MPCs DOE estimated for high-efficiency PSC motors and ECMs can be found 
in chapter 5 of the NOPR TSD.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a multiplier (the manufacturer markup) to the MPC. 
The resulting manufacturer selling price (``MSP'') is the price at 
which the manufacturer distributes a unit into commerce. DOE developed 
an average manufacturer markup by examining the annual Securities and 
Exchange Commission (SEC) 10-K reports filed by publicly traded 
manufacturers primarily engaged in air circulating fan manufacturing. 
DOE then adjusted these manufacturer markups based on feedback 
manufacturers during interviews. DOE used a manufacturer markup of 1.5 
in this NOPR analysis. The manufacturer markups used in this NOPR are 
discussed in more detail in section IV.J.2.a of this document and in 
chapter 12 of the NOPR TSD. The MSPs determined for ACFs are shown in 
Table IV-14.

[[Page 3781]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.035

3. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of FEI versus MSP (in 
dollars) for GFBs or efficacy versus MSP for ACFs.
    For GFBs, as discussed in section IV.C.1.d, DOE developed baseline 
MSP versus diameter curves and incremental costs for each design option 
for each equipment class. DOE used these correlations to estimate the 
MSP at each EL for each equipment class at all nominal impeller 
diameters. As such, each equipment class has multiple MSP versus FEI 
curves representing the range of impeller diameters that exist on the 
market. As discussed in section IV.C.1.b, the FEIs at each EL remain 
constant for each equipment class, regardless of impeller diameter. 
These FEIs were developed by determining the FEIs for the baseline 
equipment and implementing design options above baseline until all 
available design options were employed (i.e., at the max-tech level). 
In contrast to the ACF analysis which used MPCs, DOE directly estimated 
MSPs for GFBs using the AMCA sales database and manufacturer fan 
selection software.
    For ACFs, DOE developed curves for each representative unit. The 
methodology for developing the curves started with determining the 
efficacy for baseline equipment and the MPCs for this equipment. Above 
the baseline, DOE implemented design options until all available design 
options were employed (i.e., at the max-tech level). To convert from 
MPCs to MSPs, DOE applied manufacturer markups as described in section 
0.
    Table IV-15 provides example cost-efficiency results from the GFB 
engineering analysis for the axial inline equipment class. Results are 
provided at an impeller diameter of 15 in. and an impeller diameter of 
48 in.; however, as noted previously, DOE applied the same relative 
increases in MSP to obtain results at all impeller diameters for GFBs.
    Table IV-16 contains example cost-efficiency results from the ACF 
engineering analysis for the 24-in. representative unit. As noted 
previously, ACF results were not scaled to all impeller diameters. 
Rather, the cost-efficiency results in Table IV-16 are relevant to all 
ACFs with an impeller diameter greater than or equal to 12 in. and less 
than 36 in.
    See chapter 5 of the NOPR TSD for additional detail on the 
engineering analysis and appendix 5A of the NOPR TSD for complete cost-
efficiency results.
[GRAPHIC] [TIFF OMITTED] TP19JA24.036


[[Page 3782]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.037

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analysis and in the manufacturer impact analysis. At each step 
in the distribution channel, companies mark up the price of the product 
to cover business costs and profit margin.
    For GFBs, the main parties in the distribution chain are OEMs, 
distributors (including manufacturer in-house distributors), and 
contractors. DOE distinguished fan manufacturers in-house by OEMs from 
other fans and blowers and identified the distribution channels and 
associated fraction of shipments (i.e., percentage of sales going 
through each channel) by equipment class.
    For ACFs, the main parties in the distribution chain distributors 
(including ACF manufacturer in-house distributors) and contractors. In 
the October 2022 NODA, DOE identified the distribution channels and 
fraction of shipments associated with each channel based on feedback 
from manufacturer interviews. 87 FR 62038, 62054. DOE did not receive 
any comments on these channels and relied on the same distribution 
channels for this NOPR. In addition, as discussed in section IV.F.5 of 
this document, DOE included a motor or belt replacement as potential 
repairs for ACFs. Therefore, DOE additionally identified distribution 
channels associated with the purchase of a replacement motor or belt.
    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
equipment with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental 
markup is typically less than the baseline markup and is designed to 
maintain similar per-unit operating profit before and after new or 
amended standards.\66\
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    \66\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in reasonably competitive markets, it 
is unlikely that standards would lead to a sustainable increase in 
profitability in the long run.
---------------------------------------------------------------------------

    DOE relied on economic data from the U.S. Census Bureau as well as 
data from RS Means \67\ to estimate average baseline and incremental 
markups.
---------------------------------------------------------------------------

    \67\ RS Means Electrical Cost Data 2023. Available at: 
www.rsmeans.com.
---------------------------------------------------------------------------

    Chapter 6 of the NOPR TSD provides details on DOE's development of 
markups for fans and blowers.
    DOE seeks comment on the distribution channels identified for GFBs 
and ACFs and fraction of sales that go through each of these channels.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of fans and blowers at different efficiencies in 
representative applications, and to assess the energy savings potential 
of increased fan and blower efficiency. The energy use analysis 
estimates the range of energy use of fans and blowers in the field 
(i.e., as they are actually used by consumers). The energy use analysis 
provides the basis for other analyses DOE performed, particularly 
assessments of the energy savings and the savings in consumer operating 
costs that could result from adoption of amended or new standards.
    To characterize variability and uncertainty, the energy use is 
calculated for a representative sample of fan and blower consumers. 
This method of analysis, referred to as a Monte Carlo method, is 
explained in more detail in section IV.F of this document. Results of 
the energy use analysis for each equipment class group or 
representative unit were derived from a sample of 10,000 consumers. 
This section presents DOE's approach to develop consumer samples and 
energy use inputs that DOE applied in the energy use analysis.
1. General Fans and Blowers
    For GFBs, annual energy use depends on the annual hours of 
operation, operating pressure and airflow, and load profile. It 
includes the electricity consumed by the motor driving the fan, as well 
as losses related to any belts and motor controller (e.g., variable 
speed drive or ``VFD'') included in the fan.
Sample of Consumers
    DOE developed a consumer sample to represent consumers of GFBs in 
the commercial and industrial sectors. DOE used the sample to determine 
fan and blower annual energy consumption as well as to conduct the LCC 
and PBP analyses.
    To develop this sample, DOE used 2012 sales data from AMCA 
corresponding to 92,287 units sold

[[Page 3783]]

(``2012 AMCA sales data'').\68\ The data included information on the 
design operating flow, operating pressure, and shaft input power for 
which each fan was purchased and representative of fans sold as 
standalone equipment (i.e., not incorporated in another equipment). In 
addition, to represent fans sold incorporated in other equipment (i.e., 
embedded fans manufactured in-house by OEMs or ``OEM fans''), DOE used 
data specific to HVAC equipment in which these fans are used to 
characterize the fan impeller topology (i.e., category code) typically 
used in HVAC equipment and in the scope of this analysis to identify 
the range of operating flow, pressure, and shaft input power specific 
to these fans. Based on this information, DOE identified fan models 
from the 2012 AMCA sales data with the same equipment class, category 
code and shaft input power. DOE used these models to develop a sample 
representative of OEM fans. DOE then used sales data for the whole U.S. 
market to develop weights for each fan model and develop the fan 
consumer sample (where each consumer is assigned with a fan model and 
associated fan equipment class, category code, power bin, design 
operating flow, operating pressure, and shaft input power). 
Specifically, DOE developed the weights such that for each equipment 
class, the sample included the same proportions of GFBs by market 
segment (i.e., fans sold as standalone equipment and OEM fans), 
category code, and power bin as in the total U.S. market.
---------------------------------------------------------------------------

    \68\ Air Movement and Control Association (AMCA). 2012 Detailed 
Confidential Fan Sales Data from 17 Manufacturers. November 2014.
---------------------------------------------------------------------------

    In addition, each consumer in the sample was assigned a sector and 
a configuration (i.e., direct or belt driven and with or without VFD). 
The sector determines the field use characteristics, such as annual 
operating hours, load profile, and equipment lifetimes as well as the 
economic parameters (i.e., electricity prices and discount rates). To 
estimate the percentage of consumers in the industrial and commercial 
sectors, DOE primarily relied on data from the DOE-AMO report ``U.S. 
Industrial and Commercial Motor System Market Assessment Report Volume 
1: Characteristics of the Installed Base'' (``MSMA report'').\69\ To 
estimate the percentage of consumers that operate a fan with or without 
belts, and with or without VFDs, DOE relied on information from 
manufacturer interviews.
---------------------------------------------------------------------------

    \69\ Prakash Rao et al., ``U.S. Industrial and Commercial Motor 
System Market Assessment Report Volume 1: Characteristics of the 
Installed Base,'' January 12, 2021. Available at: doi.org/10.2172/1760267.
---------------------------------------------------------------------------

Annual Operating Hours
    To develop distributions of annual operating hours, DOE relied on 
information from the MSMA report, which provides distributions of 
annual operating hours for fans used in the commercial and industrial 
sector.
Load Profiles
    DOE relied on the design flow and pressure, associated shaft input 
power, and fan configuration information of each fan in the sample to 
characterize the operating flow and pressure and associated shaft input 
power. DOE further relied on information from manufacturer interviews 
to estimate the share of fans that operate at constant load or at 
variable load by equipment class.\70\ Based on this information, DOE 
estimated the percentage of fans operating at variable load as shown in 
Table IV-17.
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    \70\ DOE also reviewed information from the MSMA report. 
However, the information provided in the MSMA report did not 
differentiate fans by equipment class, and DOE therefore relied on 
the information collected during manufacturer interviews instead.
[GRAPHIC] [TIFF OMITTED] TP19JA24.038

    For fans operating at constant load, DOE reviewed information from 
the MSMA report which indicates that the majority of constant load fans 
operate at or above 75 percent of the motor full load.\71\ This 
indicates that constant load fans primarily operate near the design 
point. Therefore, in this NOPR, for both the commercial and industrial 
sectors, DOE assumed that all constant load fans operate at the design 
point.\72\
---------------------------------------------------------------------------

    \71\ See: motors.lbl.gov/analyze/kb-0q19q1M.
    \72\ Based on typical motor sizing practices, which suggest a 
motor horsepower equal to 1.2 (i.e., the design fan shaft input 
power), DOE believes that the design point represents 1/1.2 = 83 
percent of the motor full load. The 1.2 sizing factor is based on 
input from the Working Group (Docket No. EERE-2013-BT-STD-0006; No. 
179, Recommendation #10 at p. 6).
---------------------------------------------------------------------------

    For fans used at variable load, in the commercial sector, DOE 
relied on information previously provided by AHRI to develop a variable 
load profile (Docket No. EERE-2013-BT-STD-0006, AHRI, No. 129, at p. 
2). In the industrial sector, DOE did not find any data to characterize 
the typical load profile and given the wide range of possible 
applications, DOE assumed equal weights at each of the considered load 
points.\73\ DOE has tentatively determined that while DOE has not found 
data to characterize the field operating loads of GFBs used in the 
industrial sector, using a weighted-average across multiple load points 
and weighting all those points equally is a more representative load 
profile when compared to calculating the efficiency at a single point.
---------------------------------------------------------------------------

    \73\ The load profile is represented by four load points defined 
as 25, 50, 75, and 100 percent of the design flow as well as the 
percentage annual operating hours spent at each of these points 
(i.e., weights).

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[[Page 3784]]

    NEEA commented that the assumptions made for the load profiles 
presented in the 2016 NODA LCC are outdated and that DOE should collect 
additional information on load profiles for fans and blowers.\74\ NEEA 
recommended that DOE collect end-user data, use information on fan 
loading information from the MSMA report, or reach out to fan operation 
professionals in order to update DOE's load profile assumptions. (NEEA, 
No. 129 at p. 7) DOE reviewed the energy use data provided in the MSMA 
report. However, DOE notes that the load fraction provided in the MSMA 
report are in terms of average fraction of motor full load output power 
and are not expressed in terms of percentage time spent at a given 
percentage of design flow.\75\ Therefore, DOE could not use this 
information to develop the load profiles for variable load fans. In 
addition, DOE did not receive any data on load profile in response to 
the February 2022 RFI.\76\ Instead, as previously stated, in this NOPR, 
for fans used in the commercial sector with VFDs, DOE relied on 
information previously provided by AHRI to develop a variable load 
profile in the commercial sector (Docket No. EERE-2013-BT-STD-0006, 
AHRI, No. 129, at p. 2). In the industrial sector, as stated 
previously, DOE did not find any information to help characterize the 
load profile and assumed equal weights at each of the considered load 
points.
---------------------------------------------------------------------------

    \74\ NEEA cited: 2016 NODA Life-Cycle Cost (LCC) and Payback 
Period (PBP) Analyses Spreadsheet, Tab ``Sectors and Applications,'' 
Notes cell B49. Available at: www.regulations.gov/document/EERE-2013-BT-STD-0006-0190.
    \75\ See for example: motors.lbl.gov/analyze/3-0819.
    \76\ DOE notes that although the February 2022 RFI did not 
specifically request feedback on such load profiles, DOE stated that 
it received written comments from the public on any subject within 
the scope of this document (including those topics not specifically 
raised in the RFI), as well as the submission of data and other 
relevant information. 87 FR 7048.
---------------------------------------------------------------------------

    In response to the October 2022 NODA, NEEA commented that DOE 
should account for different power load relationships associated with 
different fan control methods. NEEA stated that fans can operate below 
100 percent of the design flow. NEEA noted that DOE captured this 
operation in its 2016 NODA analysis through the use of load 
profiles.\77\ NEEA noted that in its previous annual energy use 
calculation, DOE relied on the affinity laws as representative of the 
power load relationship for all fans, regardless of the control method. 
NEEA added that while the installation of variable speed control can 
dramatically reduce a fan's energy consumption, in DOE's analysis its 
power load relationship (and therefore energy use) is assumed to be 
equal to that of the same fan operating with a more consumptive control 
strategy. NEEA commented that using the fan laws is an unreasonable 
proxy for other power load relationships. Instead, NEEA commented that 
various equipment and appurtenances allow fans to meet reduced flow 
rates, and the relationship between the required flow and a fan's power 
draw is unique to each equipment or ``control method'' (e.g., the use 
of outlet vanes, disc throttle, inlet vanes, and controllable pitch 
blades). NEEA provided further examples of such relationships and 
associated references.\78\ NEEA added that the installation of a drive 
is often considered an energy efficiency opportunity for fan systems. 
NEEA stated that the installation of VFDs has been identified as the 
measure with the largest savings opportunity for industrial fans and 
the second largest savings for commercial fans.\79\ NEEA commented that 
the savings associated with installing a VFD are directly related to a 
more efficient power-load relationship, and that assuming all load 
control methods follow the fan laws would understate the energy use of 
fans without VFDs. Therefore, NEEA commented that DOE should account 
for the different power-load relationships associated with different 
load control methods and applying different power-load relationships 
based on the distribution of flow control methods seen in the market. 
In addition, NEEA recommended that DOE consider the power-load 
relationship for fans operating without a load control method by 
developing ``representative'' fan performance curves to model the 
energy consumption of fans that do not have load control. NEEA 
recommended that DOE develop representative fan curves, similar to 
those developed for the energy use analysis in the December 2015 Pumps 
Final Rule,\80\ which would enable DOE to account for fan-specific 
performance. NEEA noted that this performance curve method was used in 
DOE's first NODA \81\ but was removed in the second NODA.\82\ Lastly, 
NEEA recommended that DOE utilize published power load equations to 
determine energy uses for fans with non-VFD controls.\83\ (NEEA, No. 
129 at pp. 4-7)
---------------------------------------------------------------------------

    \77\ NEEA cited the November 2016 NODA Life-Cycle Cost (LCC) and 
Payback Period (PBP) Analyses Spreadsheet. Available at: 
www.regulations.gov/document/EERE-2013-BT-STD-0006-0190.
    \78\ Improving Fan System Performance: A Sourcebook for 
Industry, Figure 2-20, Page 43. May 2014. Available at: 
www.energy.gov/sites/default/files/2014/05/f16/fan_sourcebook.pdf; 
and The Uniform Methods Project: Methods for Determining Energy 
Efficiency Savings for Specific Measures. Chapter 18: Variable 
Frequency Drive Evaluation Protocol, Table 1, Page 12. Available at: 
www.nrel.gov/docs/fy17osti/68574.pdf.
    \79\ NEEA cited: U.S. Industrial and Commercial Motor System 
Market Assessment Report Volume 3: Energy Saving Opportunity, 7/
2022, Figure 17 and Figure 18. Available at: eta-publications.lbl.gov/sites/default/files/u.s._industrial_and_commercial_motor_system_market_assessment_report_volume_3_energy_saving_opportunity_p_rao.pdf.
    \80\ NEEA referenced: 2015-12-30 Final Rule Technical Support 
Document: Energy Efficiency Program for Consumer Products and 
Commercial and Industrial Equipment: Pumps. NEEA commented that 
section 7.2.1.3 outlined the process to develop representative 
performance curves. Available at: www.regulations.gov/document/EERE-2011-BT-STD-0031-0056.
    \81\ NEEA cited: 2014-12-03 NODA Life-Cycle Cost (LCC) 
Spreadsheet. Available at: www.regulations.gov/document/EERE-2013-BT-STD-0006-0034.
    \82\ See: 2015-04-21 NODA Life-Cycle Cost (LCC) Spreadsheet. 
Available at: www.regulations.gov/document/EERE-2013-BT-STD-0006-0060.
    \83\ NEEA referenced this study: The Uniform Methods Project: 
Methods for Determining Energy Efficiency Savings for Specific 
Measures. Chapter 18: Variable Frequency Drive Evaluation Protocol, 
Table 1, Page 12. Available at: www.nrel.gov/docs/fy17osti/68574.pdf.
---------------------------------------------------------------------------

    As noted by NEEA, different categories of controls result in 
different energy savings, which do not always follow the fan affinity 
laws. However, based on the MSMA report, DOE estimates that the 
majority of fans do not have load control (88 percent), and that the 
majority of fans with load control utilize VFDs (9 percent), while 1 
percent of fans with load control rely on other categories of controls 
and another 1 percent of fans had an unknown configuration.\84\ 
Therefore, in this NOPR, for fans with load control (and operating at 
variable load) DOE only considered VFDs as the primary load control 
equipment and applied the affinity laws when calculating the resulting 
savings. For fans without load control and operating at constant load, 
as stated earlier, DOE believes the majority of these fans operate near 
the design point. In addition, although DOE developed information on 
typical fan curves as part of previous analysis as noted by NEEA, the 
AMCA data did not provide sufficient information to relate the design 
point to a location on the fan curve. Therefore, for constant load 
fans, DOE was unable to utilize this information in combination with 
the 2012 AMCA data to estimate the energy use at a reduced flow and 
thus assumed operation at the design point.\85\
---------------------------------------------------------------------------

    \84\ See: motors.lbl.gov/analyze/4b-0j0Bd0.
    \85\ As noted by NEAA, DOE updated its methodology between its 
first NODA and second NODA in order to enable the utilization of the 
AMCA 2012 data which represented thousands of fan selection data. 
While the first NODA relied on representative units and 
representative fans curves, as well as confidential data from a 
single manufacturer to develop distributions of operating points, 
the second NODA relies on fan selection data and sales data from 17 
manufacturers to inform the LCC sample and location of the operating 
points.

---------------------------------------------------------------------------

[[Page 3785]]

Drive Components
    The fan energy use calculation includes motor, VFD (if present) and 
transmission (i.e., belt) losses. To represent the performance of the 
motor and belts, DOE used the mathematical models from the DOE test 
procedure (See 87 FR 27312) which assumes the motor is compliant with 
the upcoming DOE standard for electric motors at 10 CFR 431.25 and 
characterizes belt efficiency based on a model published in AMCA 214-21 
as referenced in the DOE test procedure.\86\ To represent the 
performance of the motor combined with a VFD, DOE used the mathematical 
models from section 6.4 of AMCA 214-21 which is representative of 
typical motor and VFD combinations, as referenced in the DOE test 
procedure. DOE further relied on information from manufacturer 
interviews to estimate the share of belt-driven fans.
---------------------------------------------------------------------------

    \86\ ANSI/AMCA Standard 214-21 ``Test Procedure for Calculating 
Fan Energy Index (FEI) for Commercial and Industrial Fans and 
Blowers.''
---------------------------------------------------------------------------

2. Air-Circulating Fans
    DOE calculated the energy use of ACFs by combining ACF input power 
consumption from the engineering analysis with annual operating hours. 
For each consumer in the sample, DOE associates a value of ACF annual 
operating hours drawn from statistical distributions as described in 
the remainder of this section.
Sample of Consumers
    In the October 2022 NODA, DOE included commercial, industrial, and 
agricultural applications in the energy use analysis of ACFs with input 
power greater than or equal to 125 W. 87 FR 62038, 62056. DOE did not 
receive any comments on this approach. Accordingly, in the NOPR, DOE 
created a sample of 10,000 consumers for each representative unit to 
represent the range of air-circulating fan energy use in the 
commercial, industrial, and agricultural sectors.
Annual Operating Hours
    In the October 2022 NODA, DOE estimated that air circulating fans 
with input power greater than or equal to 125 W operate, on average, 12 
hours per day, consistent with the hours of use estimated for large-
diameter ceiling fans in the Ceiling Fan Preliminary Analysis.\87\ To 
represent a range of possible operating hours around this 
representative value, DOE relied on a uniform distribution between 6 
hours per day and 18 hours per day (assuming a uniform distribution of 
operating hours due to the limited availability of information). 87 FR 
62038, 62056-62057
---------------------------------------------------------------------------

    \87\ See section 7.4.2 of Chapter 7 of the Ceiling Fan 
Preliminary Analysis Technical Support Document. Available at: 
www.regulations.gov/document/EERE-2021-BT-STD-0011-0015.
---------------------------------------------------------------------------

    In response to the October 2022 NODA, ebm-papst stated that the 
usages of agricultural fans, residential fans, commercial fans, and 
basket fans used for distribution transformers are all very different. 
(ebm-papst, No. 8 at p. 4) AMCA commented that ACFs and ceiling fans in 
commercial and industrial buildings serve similar functions during 
warmer months, which is to provide a low-energy method for cooling. 
AMCA added however that ACFs are often not used during cooler months, 
while ceiling fans are either used in a reversed direction mode or run 
at a lower speed. Therefore, only ceiling fan usage during warmer 
months can be used as a proxy for ACF usage, and the annual operating 
hours of ceiling fans will be greater than those of ACFs. AMCA added 
that ACFs used for horticulture applications may have different usage 
hours than that of other ACFs or ceiling fans. (AMCA, No. 132 at p. 13)
    DOE established the annual operating hours as the product of the 
daily operating hours and the number of operating days per year. In 
line with the information presented in the October 2022 NODA, for all 
ACFs except centrifugal housed ACFs, DOE assumed average daily 
operating hours of 12 hours per day. To reflect the variability in 
usage by application as noted by ebm-papst, DOE relied on a uniform 
distribution between 6 and 18 hours per day. For centrifugal housed 
ACFs, DOE relied on lower operating hours as these fans are primarily 
used for carpet drying applications and are less likely to operate 12 
hours per day on average. DOE did not receive any feedback on daily 
operating hours and assumed average daily operating hours of 6 hours 
per day. To represent a range of possible operating hours around this 
representative value, DOE relied on a uniform distribution between 0 
hours per day and 12 hours per day.
    With the exception of centrifugal housed ACFs, ACFs are primarily 
used for cooling purposes in the commercial sector (e.g., to cool 
people in loading docks, warehouses, gyms, etc.), in the industrial 
sector, (e.g., to cool people in factory workstations, etc.), and in 
the agricultural sector (e.g., to reduce livestock heat stress). To 
establish the number of annual operating days for ACFs other than 
centrifugal housed ACFS, and to reflect AMCA's note that these ACFs are 
not used in cooler months, DOE relied on weather data to estimate a 
distribution of annual operating days for ACFs. While some ACFs may 
also be used for non-cooling purposes,\88\ DOE did not find any data to 
establish the market share of such applications and assumed all ACFs 
are used for cooling purposes, as this is the primary application of 
ACFs. Based on input from manufacturer interviews, DOE further 
estimated that 20 percent of ACFs are used in the commercial sector, 20 
percent in the industrial sector, and 60 percent in the agricultural 
sector. In the case of centrifugal housed ACFs, which are primarily 
used for carpet drying, DOE assumed these are exclusively used in the 
commercial sector and throughout the year.
---------------------------------------------------------------------------

    \88\ This include fans that are also used for cooling and may be 
left on during cooler months as they are also used for non-cooling 
applications (e.g., ACFs used for reducing foul odors/manure gases/
moisture/dust, drying, cooling machinery).
---------------------------------------------------------------------------

Input Power
    In the October 2022 NODA, DOE described that DOE may consider 
calculating the energy use by combining air circulating fan input power 
consumption in each mode (e.g., high speed, medium speed, low speed) 
from the engineering analysis with operating hours spent in each mode 
and assuming an equal amount of time spent at each tested speed. 87 FR 
62038, 62055-62057. Consistent with the May 2023 TP Final Rule, DOE 
estimates that these fans are primarily used at high speed and assumed 
operation at high speed only.
    Chapter 7 of the NOPR TSD provides details on DOE's energy use 
analysis for fans and blowers.
    DOE seeks comment on the overall methodology and inputs used to 
estimate GFBs and ACFs energy use. Specifically, for GFBs, DOE seeks 
feedback on the methodology and assumptions used to determine the 
operating point(s) both for constant and variable load fans. For ACFs, 
DOE requests feedback on the average daily operating hours, annual days 
of operation by sector and application, and input power assumptions. In 
addition, DOE requests feedback on the market share of GFBs and ACFs by 
sector (i.e., commercial, industrial, and agricultural).

[[Page 3786]]

F. Life-Cycle Cost and Payback Period Analyses

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
fans and blowers. The effect of new or amended energy conservation 
standards on individual consumers usually involves a reduction in 
operating costs and an increase in purchase cost. DOE used the 
following two metrics to measure consumer impacts:
    <bullet> The LCC is the total consumer expense of the equipment 
over the life of that equipment, consisting of total installed cost 
(manufacturer selling price, distribution chain markups, sales tax, and 
installation costs) plus operating costs (expenses for energy use, 
maintenance, and repair). To compute the operating costs, DOE discounts 
future operating costs to the time of purchase and sums them over the 
lifetime of the equipment.
    <bullet> The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of more efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of fans and blowers in the absence of 
new or amended energy conservation standards. The PBP for a given 
efficiency level is also measured relative to the no-new-standards case 
efficiency distribution.
    For each considered TSL in each equipment class, DOE calculated the 
LCC and PBP for a nationally representative set of consumers. As stated 
previously, DOE developed consumer samples from a variety of data 
sources as described in section IV.F of this document. For each sample 
consumer, DOE determined the energy consumption for the fans and 
blowers and the appropriate energy price. By developing a 
representative sample of consumers, the analysis captured the 
variability in energy consumption and energy prices associated with the 
use of fans and blowers.
    Inputs to the calculation of total installed cost include the cost 
of the equipment--which includes MPCs, manufacturer markups (including 
the additional manufacturer conversion cost markups where appropriate), 
retailer and distributor markups, and sales taxes--and installation 
costs. Inputs to the calculation of operating expenses include annual 
energy consumption, energy prices and price projections, repair and 
maintenance costs, equipment lifetimes, and discount rates. DOE created 
distributions of values for equipment lifetime, discount rates, and 
sales taxes, with probabilities attached to each value, to account for 
their uncertainty and variability.
    The computer model DOE uses to calculate the LCC relies on a Monte 
Carlo simulation to incorporate uncertainty and variability into the 
analysis. The Monte Carlo simulations randomly sample input values from 
the probability distributions and fan and blower user samples. The 
model calculates the LCC for equipment at each efficiency level for 
10,000 consumers per simulation run and equipment class. The analytical 
results include a distribution of 10,000 data points showing the range 
of LCC savings for a given efficiency level relative to the no-new-
standards case efficiency distribution. In performing an iteration of 
the Monte Carlo simulation for a given consumer, equipment efficiency 
is chosen based on its probability. If the chosen equipment efficiency 
is greater than or equal to the efficiency of the standard level under 
consideration, the LCC calculation reveals that a consumer is not 
impacted by the standard level. By accounting for consumers who already 
purchase more efficient equipment, DOE avoids overstating the potential 
benefits from increasing equipment efficiency.
    DOE calculated the LCC and PBP for consumers of fans and blowers as 
if each were to purchase new equipment in the expected year of required 
compliance with new or amended standards. New standards would apply to 
fans and blowers manufactured 5 years after the date on which any new 
standard is published. (42 U.S.C 6316(a); 42 U.S.C. 6295(l)(2)) At this 
time, DOE estimates publication of a final rule in the second half of 
2024. Therefore, for the purposes of its analysis, DOE used 2030 as the 
first full year of compliance with any new standards for fans and 
blowers.
    Table IV-18 Summary of Inputs and Methods for the LCC and PBP 
Analysis* summarizes the approach and data DOE used to derive inputs to 
the LCC and PBP calculations. The subsections that follow provide 
further discussion. Details of the spreadsheet model, and of all the 
inputs to the LCC and PBP analyses, are contained in chapter 8 of the 
NOPR TSD and its appendices.

[[Page 3787]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.039

    In response to the October 2022 NODA, AMCA commented that DOE 
should refer to interviews with individual manufacturers for feedback 
on the inputs and considered methods used for the LCC and PBP analyses. 
(AMCA, No. 132 at p. 14) As noted throughout this section, DOE relied 
on input from manufacturer interviews where available.
1. Equipment Cost
    To calculate equipment costs, DOE multiplied the MSPs developed in 
the engineering analysis by the distribution channel markups described 
previously (along with sales taxes). DOE used different markups for 
baseline equipment and higher-efficiency equipment because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency equipment. Further, as described in section IV.C of this 
document, at ELs with associated manufacturer conversion costs, DOE 
applied a manufacturer conversion markup when calculating the equipment 
price of re-designed units.
    Economic literature and historical data suggest that the real costs 
of many products may trend downward over time according to ``learning'' 
or ``experience'' curves. Experience curve analysis implicitly includes 
factors such as efficiencies in labor, capital investment, automation, 
materials prices, distribution, and economies of scale at an industry-
wide level.
    For GFBs, to develop an equipment price trend for the NOPR, DOE 
derived an inflation-adjusted index of the Producer Price Index (PPI) 
for industrial and commercial fans and blowers equipment over the 
period 2003-2022.\89\ These data show a general price index increase 
from 2003 through 2009, a slower growth trend over the period 2009-
2020, and a high increase since 2020. However, the outbreak of COVID-19 
pandemic caused immense uncertainties in global supply chain and 
international trade resulting in price surges across all sectors since 
2020. DOE believes that the extent to which these macroeconomic trends 
will continue in the future is very uncertain. Therefore, DOE used a 
constant price assumption as the default trend to project future fan 
prices. Thus, for GFBs, prices projected for the LCC and PBP analysis 
are equal to the 2022 values for each efficiency level in each 
equipment class.
---------------------------------------------------------------------------

    \89\ Series ID PCU3334133334132. Available at: www.bls.gov/ppi/.
---------------------------------------------------------------------------

    For ACFs, DOE did not find PPI data specific to ACFs, and instead, 
DOE adopted a component-based approach to develop a price trend by 
identifying ACF components most likely to undergo a price variation 
over the forecast period. Using this approach, the price trend only 
applies to the cost of the component and not to the total cost of the 
ACF. For EL0 through EL5, which are efficiency levels that assume AC 
induction motors, DOE determined that ACF motors are the most likely 
component to undergo price variation over time and analyzed long-term 
trends in the integral and fractional horsepower motors PPI series.\90\ 
The deflated price index for integral and fractional horsepower motors 
was found to align with the copper, steel, and aluminum deflated price 
indices. DOE believes that the extent to which these commodity price 
trends will continue in the future is very uncertain and therefore does 
not project commodity prices. In addition, the deflated price index for 
fractional horsepower motors was mostly flat during the entire period 
from 1967 to 2020. Therefore, DOE relied on a constant price assumption 
as the default price factor index to project future ACF prices at EL 0 
through EL 5. At EL 6, which assumes an ECM motor, DOE did not find any 
historical data specifically regarding ECM motors. For its analysis, 
DOE assumed that the circuitry and electronic controls associated with 
ECM motors would potentially be the most affected by price trends 
driven by the larger electronics industry as a whole. DOE obtained PPI 
data on ``Semiconductors and related

[[Page 3788]]

device manufacturing'' \91\ between 1967 and 2022 to estimate the 
historic price trend in electronic components. These data show a price 
decline over the entire period. Therefore, DOE applied a decreasing 
price trend for the controls portion of the ECM price. See chapter 8 
for more details on the price trends.
---------------------------------------------------------------------------

    \90\ Series ID PCU3353123353123 and PCU3353123353121. Available 
at: www.bls.gov/ppi/.
    \91\ Series ID: PCU334413334413. Available at www.bls.gov/ppi/.
---------------------------------------------------------------------------

    DOE requests feedback on the price trends developed for GFBs and 
ACFs.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment.
    For GFBs, DOE found no evidence that installation costs would be 
impacted with increased efficiency levels and did not include 
installation costs in its analysis, except at efficiency levels where 
an increase in size is assumed (i.e., for PRVs). In this case, DOE 
incorporated higher installation (i.e., shipping) costs due to the 
change in size.
    For ACFs, DOE stated in the October 2022 NODA that it found no 
evidence that installation costs would be impacted with increased 
efficiency levels and, as a result, DOE was not planning on including 
installation costs in the LCC. 87 FR 62038, 62058. DOE did not receive 
any comments to the October 2022 NODA related to installation costs and 
continued with this approach for ACFs.
    DOE requests feedback on the installation costs developed for GFBs 
and on whether installation costs of ACFs may increase at higher ELs.
3. Annual Energy Consumption
    For each sampled consumer, DOE determined the energy consumption 
for a fan at different efficiency levels using the approach described 
previously in section IV.E of this document.
4. Energy Prices
    Because marginal electricity prices more accurately capture the 
incremental savings associated with a change in energy use from higher 
efficiency, they provide a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the equipment 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2022 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kilowatt-hour costs to the customer as charged by 
investor-owned utilities. For the commercial and industrial sector, DOE 
calculated electricity prices using the methodology described in 
Coughlin and Beraki (2019).\92\
---------------------------------------------------------------------------

    \92\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. Available at: ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region, and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis. For fans 
and blowers, DOE considered sector-specific electricity prices. See 
chapter 8 of the NOPR TSD for details.
    To estimate energy prices in future years, DOE multiplied the 2022 
energy prices by the projection of annual average price changes from 
the Reference case in AEO2023, which has an end year of 2050.\93\ To 
estimate price trends after 2050, the 2050 prices were held constant.
---------------------------------------------------------------------------

    \93\ EIA. Annual Energy Outlook 2023 with Projections to 2050. 
Washington, DC. Available at: www.eia.gov/forecasts/aeo/ (last 
accessed June 6, 2023).
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing equipment 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the equipment. Typically, 
small incremental increases in equipment efficiency entail no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency equipment.
    For GFBs, DOE found no evidence that maintenance and repair costs 
would be impacted with increased efficiency levels. Therefore, because 
DOE expresses results in terms of LCC savings, DOE did not account for 
maintenance and repair costs in the LCC.
    For ACFs, in the October 2022 NODA, DOE stated that it did not find 
any information supporting changes in maintenance costs as a function 
of efficiency. 87 FR 62038, 62058. DOE did not receive any comments in 
response to the October 2022 NODA related to maintenance costs; DOE 
continues to believe these do not vary by efficiency and did not 
include maintenance costs in its analysis.
    In the October 2022 NODA, DOE identified the motor replacement as a 
potential repair for ACFs. DOE requested feedback on its assumptions 
about repair practices of ACFs. 87 FR 62038, 62058.
    In response, AMCA commented that belt replacement could be the only 
significant maintenance or repair necessary for ACFs. AMCA added that 
DOE should reference manufacturer interviews for further information. 
AMCA added that ACFs are often used in environments with harsher 
conditions than other fans and experience higher temperatures, higher 
moisture content, higher particulate concentrations, and more power 
source fluctuations than do other fans. Because of this, AMCA stated 
that ACF repairs and replacements are more frequent than for other 
fans. (AMCA, No. 132 at pp. 14-15)
    For ACFs, DOE found no evidence that maintenance costs would be 
impacted with increased efficiency levels and did not include 
maintenance costs in its analysis. However, DOE did include repair 
costs associated with belt repair at EL 0, which represents belt driven 
ACFs as appropriate. In addition, although stakeholder feedback did not 
indicate the possibility of a motor repair for ACFs, DOE identified 
several ACF manufacturers offering replacement motors. DOE assumed such 
repair is not frequent as it was not identified as a potential repair 
by stakeholders. Therefore, DOE assumed that only 5 percent of ACFs 
include a motor repair and estimated the repair costs associated with 
motor replacement. In order to calculate these repair costs, DOE relied 
on inputs from the engineering analysis.
    DOE requests feedback on whether the maintenance and repair costs 
of GFBs may increase at higher ELs. Specifically, DOE requests comments 
on the frequency of motor replacements for ACFs. DOE also requests 
comments on whether the maintenance and repair costs of ACFs may 
increase at higher ELs and on the repair costs developed for ACFs.
6. Equipment Lifetime
    For GFBs, in the NODA DOE used average lifetimes of 30 years in the 
industrial sector based on input from a subject matter expert, and 15 
years in the commercial sector based on the expected lifetimes of HVAC 
equipment. Across all sectors and equipment classes, the average 
lifetime for GFBs is 16 years. To characterize the range of possible 
lifetimes, DOE developed Weibull distributions of equipment lifetimes.

[[Page 3789]]

    For ACFs, in the October 2022 NODA, DOE stated that it did not find 
lifetime data specific to ACFs and was considering using 30 years, 
similar to GFBs lifetimes in a previous DOE analysis. (November 2016 
NODA)
    In response to the October 2022 NODA, AMCA commented that DOE 
should assume a lifetime of 10 years instead of 30, because ACFs often 
are used in non-conditioned spaces or agricultural environments that 
expose them to dust, debris, moisture, and other debilitating factors. 
In addition, AMCA stated that in a previous report,\94\ DOE estimated 
average lifetimes of fractional (i.e., less than 1 horsepower) electric 
motors to 10 to 15 years. AMCA added that ACFs are typically used in 
areas without air conditioning and experience higher air temperatures, 
higher humidity, higher concentrations of particulate matter in the 
air, and greater fluctuations in power quality, compared to fans in 
buildings with full HVAC systems and tight envelopes. For these 
reasons, AMCA stated that it is unlikely for an ACF to have a lifetime 
of 30 years. Instead, AMCA recommended using a value of 10 years, which 
is the lower end of the motor life expectancy in the DOE report. (AMCA, 
No. 132 at pp. 2, 18-19)
---------------------------------------------------------------------------

    \94\ AMCA referenced the following study: 1980. ``Classification 
and evaluation of electric motors and pumps.'' United States. 
Available at: doi.org/10.2172/6719781.
---------------------------------------------------------------------------

    In this analysis, as suggested by AMCA, DOE relied on separate 
lifetimes for ACFs and GFBs. DOE considered two separate lifetimes for 
ACFs depending on whether the lifetime included a motor replacement or 
not. For ACFs that do not include a motor replacement, DOE assumed the 
average lifetime was equal to the estimated average motor lifetime of 6 
years based on input from manufacturer interviews. DOE believes this 
value is more representative of ACF motor lifetimes as it is more 
recent and specific to the ACFs compared to the estimate provided by 
AMCA, which relied on a general motor and pump study published in 1980. 
For ACFs that include a motor replacement, DOE assumed an average 
lifetime of 12 years (i.e., twice the motor lifetime). DOE further 
assumed 5 percent of ACFs have a motor repair (see section IV.F.5 of 
this document), while 95 percent of ACFs do not, resulting in an 
overall average lifetime of 6.3 years. To characterize the range of 
possible lifetimes, DOE developed Weibull distributions of equipment 
lifetimes.
    DOE requests comments on the average lifetime estimates used for 
GFBs and ACFs.
7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
for consumers to estimate the present value of future operating cost 
savings. DOE estimated a distribution of discount rates for fans and 
blowers based on the opportunity cost of consumer funds.
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\95\ The LCC analysis estimates net present value over the 
lifetime of the product, so the appropriate discount rate will reflect 
the general opportunity cost of household funds, taking this time scale 
into account. Given the long-time horizon modeled in the LCC analysis, 
the application of a marginal interest rate associated with an initial 
source of funds is inaccurate. Regardless of the method of purchase, 
consumers are expected to continue to rebalance their debt and asset 
holdings over the LCC analysis period, based on the restrictions 
consumers face in their debt payment requirements and the relative size 
of the interest rates available on debts and assets. DOE estimates the 
aggregate impact of this rebalancing using the historical distribution 
of debts and assets.
---------------------------------------------------------------------------

    \95\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    To establish commercial, industrial, and agricultural discount 
rates for fans and blowers, DOE estimated the weighted-average cost of 
capital using data from Damodaran Online.\96\ The weighted-average 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 firm 
of equity and debt financing. DOE estimated the cost of equity using 
the capital asset pricing model, which assumes that the cost of equity 
for a particular company is proportional to the systematic risk faced 
by that company. The average discount rates in the commercial, 
industrial, and agricultural sectors are 6.77, 7.25, and 7.15 percent, 
respectively.
---------------------------------------------------------------------------

    \96\ Damodaran Online, Data Page: Costs of Capital by Industry 
Sector (2021). Available at: pages.stern.nyu.edu/~adamodar/(last 
accessed April 22, 2022).
---------------------------------------------------------------------------

    DOE did not receive any comments related to discount rates.
    See chapter 8 of the NOPR TSD for further details on the 
development of discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without new energy conservation 
standards).
    To estimate the energy efficiency distribution of GFBs for 2030, 
DOE relied on the 2012 AMCA sales data from the sample (see section 
IV.E.1 of this document). DOE notes that since 2012, the ASHRAE 
Standard 90.1-2010 Energy Standard for Buildings Except Low-Rise 
Residential Building (``ASHRAE Standard 90.1'') includes limits on the 
FEI of certain fans and has been adopted in some States.\97\ In 
addition, the California Energy Commission recently finalized reporting 
requirements to promote fan selections at duty points with FEI ratings 
greater than or equal to 1.00.\98\ However, DOE reviewed recent 
manufacturer catalogs and found that the market has not changed 
significantly since 2012 (see detailed discussion in section IV.A.2.a 
of this document). Therefore, in this NOPR, DOE relied on the 2012 
efficiency distributions to characterize the no-new-standards case in 
2030. The estimated market shares for the no-new-standards case for 
GFBs are shown in Table IV-19.
---------------------------------------------------------------------------

    \97\ See 2020 Florida Building Code, Energy Conservation, 7th 
edition--Section C403.2.12.3 Fan Efficiency, effective December 31, 
2020; 2021 Oregon Efficiency Specialty Code (OEESC): The 2021 OEESC, 
based on ASHRAE Standard 90.1-2019, effective April 1, 2021.
    \98\ These requirements take effect in November 2023. See 
www.energy.ca.gov/rules-and-regulations/appliance-efficiency-regulations-title-20/appliance-efficiency-proceedings-11.

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[[Page 3790]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.040

    In the October 2022 NODA, DOE stated that it would rely on 
information from the BESS Labs dataset to develop efficiency 
distribution and that it would randomly assign an equipment efficiency 
to each consumer drawn from the consumer samples. 87 FR 62038, 62060. 
DOE did not receive any comments on this topic.
    For ACFs, DOE collected model performance data from the BESS Labs 
database as well as information from manufacturer catalogs. As noted in 
section IV.A.1.a, the BESS Labs database contains fans with higher 
efficiencies than the overall ACF market and is not representative of 
the ACF market as a whole. DOE collected catalog data from manufacturer 
and distributor websites to supplement the BESS Labs database. DOE 
relied on the performance data from both datasets establish the no-new-
standards case efficiency distribution of ACFs in 2030 and used a 
weighted average when calculating the overall efficiency distributions 
to reflect that fact that the models in the BESS Labs database are 
representative of the top of the market in terms of efficiency.\99\ DOE 
did not find historical performance data for ACFs and assumed the 
efficiency distribution would remain the same over time. The resulting 
market shares for the no-new-standards case for ACFs are shown in Table 
IV-20.
---------------------------------------------------------------------------

    \99\ Specifically, to reflect that the BESS data is not 
representative of the majority of the ACF market, DOE assumed that a 
quarter of ACFs are represented by the BESS labs data and applied a 
weight of 0.25 to the BESS Labs database and a weight of 0.75 to the 
catalog data collected from manufacturer and distributor websites.
[GRAPHIC] [TIFF OMITTED] TP19JA24.041

    See chapter 8 of the NOPR TSD for further information on the 
derivation of the efficiency distributions.
    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the fans and blowers 
purchased by each sample consumer in the no-new-standards case. The 
resulting percentage shares within the sample match the market shares 
in the efficiency distributions.
    DOE requests feedback and information on the no-new-standards case 
efficiency distributions used to characterize the market of GFBs and 
ACFs. DOE requests information to support any efficiency trends over 
time for GFBs and ACFs.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more-
efficient equipment, compared to the no-new-standards case equipment, 
through energy cost savings. Payback periods that exceed the life of 
the equipment mean that the increased total installed cost is not 
recovered in reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the equipment and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing equipment complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C

[[Page 3791]]

6316(a); 42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency 
level, DOE determined the value of the first year's energy savings by 
calculating the energy savings in accordance with the applicable DOE 
test procedure, and multiplying those savings by the average energy 
price projection for the year in which compliance with the standards 
would be required.

G. Shipments Analysis

    DOE uses projections of annual equipment shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\100\ 
The shipments model takes an accounting approach, tracking market 
shares of each equipment class and the vintage of units in the stock. 
Stock accounting uses equipment shipments as inputs to estimate the age 
distribution of in-service equipment stocks for all years. The age 
distribution of in-service equipment stocks is a key input to 
calculations of both the NES and NPV, because operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \100\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

1. General Fans and Blowers
    DOE first estimated total shipments in the base year. For fans sold 
as a standalone equipment by equipment class, DOE relied on the 
estimate in the November 2016 NODA, which relied on a market research 
report,\101\ and AMCA confidential sales data from 2012. To estimate 
the shipments of fans sold incorporated in other equipment (``OEM 
fans''), DOE first identified HVAC equipment that incorporate the 
embedded fans in the scope of analysis (i.e., HVAC equipment not listed 
in Table III-1). DOE then determined the average quantity of fans used 
in each of the identified HVAC equipment and estimated the total number 
of HVAC fans as the product of HVAC equipment sales and average number 
of fans per equipment. The OEM fan shipments in scope were then 
calculated by subtracting the estimated number of standalone fans 
purchased by OEMs from the total number of fans in HVAC equipment, to 
avoid double counting. See chapter 9 for more details.
---------------------------------------------------------------------------

    \101\ IHS Technology (March 2014), Fans and Blowers, World.
---------------------------------------------------------------------------

    AHRI provided feedback on shipments values published in the 
November 2016 NODA. Specifically, AHRI disagreed with DOE's estimate of 
air handling units and estimated the shipments to be 65,000 units per 
year. AHRI further commented that 75 percent of these units have 
variable air volume (``VAV'') capability, and that 60-70% of those are 
equipped with variable speed drives; AHRI questioned whether DOE 
accounted for this in its energy use analysis. Finally, AHRI commented 
that they identified approximately 40 percent of air handling units 
with either a return or an exhaust fan, as opposed to 50 percent 
assumed in the November 2016 NODA. (AHRI, No. 130 at pp. 7-8)
    DOE reviewed the information provided by AHRI and agrees with the 
more recent shipments estimate of 65,000 units per year. In addition, 
DOE accounted for variable load operation in its energy use analysis as 
described in section IV.E.1 of this document. However, DOE did not 
estimate the percentage of VAV units by HVAC equipment but by GFBs 
equipment class (up to 65 percent depending on the equipment class). 
Finally, for this NOPR, DOE estimated the percentage of air handling 
units with either a return or an exhaust fan as 30 percent based on 
more recent input from manufacturer interviews.
    AHRI disagreed with DOE's estimate of panel fans per air-cooled 
water chiller and the number of air-cooled water chillers shipped. AHRI 
stated that the average number of panel fans per unit is seven instead 
of the DOE estimate of 14 in the November 2016 NODA. AHRI also stated 
that the number of air-cooled chillers shipped is 26,000 per year. 
(AHRI, No. 130 at pp. 9-10)
    DOE reviewed the information provided by AHRI as well as additional 
information from previous comments estimating average annual shipments 
of air-cooled chillers to 27,000 units per year based on the U.S. 
Census MA35M/MA333M series.\102\ DOE agrees with the more recent 
shipments estimate of 26,000-27,000 units per year and 7 fans per unit 
for air-cooled water chillers. As such, DOE relied on this estimate 
(27,000) rather than on the values published in the November 2016 NODA.
---------------------------------------------------------------------------

    \102\ See: AHRI data, CEC Docket 17-AAER-06, TN#221201-1, p.10 
https://efiling.energy.ca.gov/GetDocument.aspx?tn=221201-1&DocumentContentId=26700.
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    AHRI disagreed with DOE's estimate of commercial unitary air 
conditioners and heat pumps with and without return/exhaust fans. AHRI 
stated that less than 10 percent of units under 240,000 Btu/h have 
return/exhaust fans and about 70 percent of units over 240,000 Btu/h 
have return/exhaust fans. AHRI also commented that 80 percent of units 
over 240,000 Btu/h have variable speed drives and VAVs. AHRI commented 
that these estimates were based on a survey of its members. (AHRI, No. 
130 at p. 9)
    DOE reviewed the information provided by AHRI and agrees with the 
more recent percentage values to estimate the fraction of units with a 
return or exhaust fan. As such DOE relied on these estimates rather 
than on the values published in the November 2016 NODA to estimate the 
number of fans per unit in commercial unitary air conditioners and heat 
pumps.
    To project shipments of fans in the industrial sector, DOE assumed 
in the no-new-standards case that the long-term growth of fan shipments 
will be driven by long-term growth of fixed investments in equipment 
including fans, which follow the same trend as the gross domestic 
product (``GDP''). DOE relied on fixed investment data from the Bureau 
of Economic Analysis and AEO2023 forecast of GDP through 2050 to inform 
its shipments projection. For the commercial sector, DOE projected 
shipments using AEO2023 projections of commercial floor space. In 2030, 
DOE estimates the total shipments of GFBs to 1.38 million units.
    DOE also derived high and low shipments projections based on 
AEO2023 economic growth scenarios.
    DOE further assumed that standards would have a negligible impact 
on fan shipments and applied a zero price-elasticity under standards 
cases. It is likely that following a standard, rather than foregoing a 
fan purchase under a standards case, a consumer might simply switch 
brands or fans to purchase a fan that is best suited for their 
application. As a result, DOE used the same shipments projections in 
the standards case as in the no-new-standards case.
    DOE requests feedback on the methodology and inputs used to project 
shipments of GFBs in the no-new-standards case. DOE requests comments 
and feedback on the potential impact of standards on GFB shipments and 
information to help quantify these impacts.
2. Air Circulating Fans
    In the October 2022 NODA, DOE estimated total shipments of ACFs to 
over 2 million using information from manufacturer interviews 
indicating shipments estimates of 494,950 units of unhoused air 
circulating fan heads and 255,100 units of cylindrical air circulating 
fans and applying expansion factors to determine the shipments of other 
categories of ACFs included in the scope. 87 FR 62038, 62061. DOE did 
not

[[Page 3792]]

receive any feedback or information on shipments in response to the 
October 2022 NODA.
    For this NOPR, DOE reviewed the information from manufacturer 
interviews and has determined that the shipments estimates provided 
were for the total market of axial ACFs (rather than specific to 
unhoused air circulating fan heads and cylindrical air circulating fans 
only, as previously determined). In addition, DOE estimated that housed 
centrifugal ACFs represent one percent of the total ACF market based on 
the small number of manufacturers identified in the catalog data 
collected by DOE from manufacturer and distributor websites.
    In the October 2022 NODA, DOE estimated that shipments of ACFs 
follow similar trends as shipments of large-diameter ceiling fans. 
Therefore, DOE stated that it was considering projecting shipments of 
air circulating fans with input power greater than or equal to 125 W 
based on the growth rates projected for shipments of large-diameter 
ceiling fans.\103\ 87 FR 62038, 62061. In response to the October 2022 
NODA, ebm-papst suggested that the growth of indoor horticulture, a 
need for farm animal cooling due to climate change, and a need for 
auxiliary cooling on distribution transformers due to electrification, 
as well as climate change could all be reasons for possible growth in 
the ACFs market. (ebm-papst, No. 8 at p. 4)
---------------------------------------------------------------------------

    \103\ See docket No. EERE-2021-BT-STD-0011-0015.
---------------------------------------------------------------------------

    DOE agrees with the qualitative comment from ebm-papst regarding 
the potential causes for future ACF market growth. However, DOE notes 
that this information does not allow for a quantitative estimation of 
projected shipments. DOE did not receive any additional feedback on 
this approach and applied this methodology in the NOPR. In 2030, DOE 
estimates the total shipments of fans to be 1.30 million units.
    DOE requests feedback on the methodology and inputs used to 
estimate and project shipments of ACFs in the no-new-standards case. 
DOE requests comments and feedback on the potential impact of standards 
on ACF shipments and information to help quantify these impacts.

H. National Impact Analysis

    The NIA assesses the national energy savings (``NES'') and the NPV 
from a national perspective of total consumer costs and savings that 
would be expected to result from new or amended standards at specific 
efficiency levels.\104\ (``Consumer'' in this context refers to 
consumers of the equipment being regulated.) DOE calculates the NES and 
NPV for the potential standard levels considered based on projections 
of annual equipment shipments, along with the annual energy consumption 
and total installed cost data from the energy use and LCC analyses. For 
the present analysis, DOE projected the energy savings, operating cost 
savings, equipment costs, and NPV of consumer benefits over the 
lifetime of fans and blowers sold from 2030 through 2059.\105\
---------------------------------------------------------------------------

    \104\ The NIA accounts for impacts in the 50 States and U.S. 
territories.
    \105\ Because the anticipated compliance date is late in the 
year, for analytical purposes, DOE conducted the analysis for 
shipments from 2030 through 2059.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
equipment class in the absence of new or amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each equipment class if DOE 
adopted new or amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of equipment with efficiencies greater than the standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each TSL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV-21 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

[[Page 3793]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.042

1. Equipment Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.8 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered equipment classes for the first full year of anticipated 
compliance with an amended or new standard. To project the trend in 
efficiency absent amended standards for GFBs and ACFS over the entire 
shipments projection period, DOE assumed a constant efficiency trend. 
The approach is further described in chapter 10 of the NOPR TSD.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the first full year that 
standards are assumed to become effective (2030). In this scenario, the 
market shares of equipment in the no-new-standards case that do not 
meet the standard under consideration would ``roll up'' to meet the new 
standard level, and the market share of equipment above the standard 
would remain unchanged.
    To develop standards case efficiency trends after 2030, DOE assumed 
a constant efficiency trend, similar to the no-new standards case.
2. National Energy Savings
    The national energy savings analysis involves a comparison of 
national energy consumption of the considered equipment between each 
potential standards case (``TSL'') and the case with no new or amended 
energy conservation standards. DOE calculated the national energy 
consumption by multiplying the number of units (stock) of each 
equipment (by vintage or age) by the unit energy consumption (also by 
vintage). DOE calculated annual NES based on the difference in national 
energy consumption for the no-new standards case and for each higher 
efficiency standard case. DOE estimated energy consumption and savings 
based on site energy and converted the electricity consumption and 
savings to primary energy (i.e., the energy consumed by power plants to 
generate site electricity) using annual conversion factors derived from 
AEO2023. Cumulative energy savings are the sum of the NES for each year 
over the timeframe of the analysis.
    Use of higher-efficiency equipment is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the equipment due to the increase in efficiency. For example, when a 
consumer realizes that a more efficient fan used for cooling will lower 
the electricity bill, that person may opt for increased comfort in the 
building by using the equipment more, thereby negating a portion of the 
energy savings. In commercial buildings, however, the person owning the 
equipment (i.e., the building owner) is usually not the person 
operating the equipment (i.e., the renter). Because the operator 
usually does not own the equipment, that person will not have the 
operating cost information necessary to influence how they operate the 
equipment. Therefore, DOE believes that a rebound effect is unlikely to 
occur in commercial buildings. In the industrial and agricultural 
sectors, DOE believes that fans are likely to be operated whenever 
needed for the required application, so a rebound effect is also 
unlikely to occur in the industrial and agricultural sectors. 
Therefore, DOE did not apply a rebound effect for fans and blowers.
    DOE requests comment and data regarding the potential increase in 
utilization of GFBs and ACFs due to any increase in efficiency.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use 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 (Aug. 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \106\ 
that EIA uses to prepare its

[[Page 3794]]

Annual Energy Outlook. The FFC factors incorporate losses in production 
and delivery in the case of natural gas (including fugitive emissions) 
and additional energy used to produce and deliver the various fuels 
used by power plants. The approach used for deriving FFC measures of 
energy use and emissions is described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------

    \106\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at: www.eia.gov/forecasts/aeo/index.cfm (last accessed 
April 4, 2023).
---------------------------------------------------------------------------

3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are (1) total annual installed cost, (2) total 
annual operating costs (energy costs and repair and maintenance costs), 
and (3) a discount factor to calculate the present value of costs and 
savings. DOE calculates net savings each year as the difference between 
the no-new-standards case and each standards case in terms of total 
savings in operating costs versus total increases in installed costs. 
DOE calculates operating cost savings over the lifetime of each 
equipment shipped during the projection period.
    As discussed in section IV.F.1 of this document, DOE developed 
price trends for GFBs and ACFs based on historical PPI data. DOE 
applied the same trends to project prices for each equipment class at 
each considered efficiency level.
    For GFBs, DOE applied constant equipment price trends. For ACFs, 
DOE also applied a constant price trend except for ACFs at EL6 where a 
declining price trend was used. By 2059, which is the end date of the 
projection period, the average ACF price at EL6 is projected to drop 14 
percent relative to 2022. DOE's projection of product prices is 
described in appendix 10C of the NOPR TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different product price 
projections on the consumer NPV for the considered TSLs for GFBs and 
ACFs. In addition to the default price trend, DOE considered two 
product price sensitivity cases: (1) a high price decline case based on 
historical PPI data and (2) a low price decline case based on the 
AEO2023 ``deflator--industrial equipment'' forecast for GFBs and 
historical PPI data for ACFs. The derivation of these price trends and 
the results of these sensitivity cases are described in appendix 10C of 
the NOPR TSD.
    The energy cost savings are calculated using the estimated energy 
savings in each year and the projected price of the appropriate form of 
energy. To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the projection of annual national-
average commercial and industrial energy price changes in the Reference 
case from AEO2023, which has an end year of 2050. To estimate price 
trends after 2050, the 2050 price was used for all years. As part of 
the NIA, DOE also analyzed scenarios that used inputs from variants of 
the AEO2023 Reference case that have lower and higher economic growth. 
Those cases have lower and higher energy price trends compared to the 
Reference case. NIA results based on these cases are presented in 
appendix 10C of the NOPR TSD.
    In addition, for ACFs, the NPV calculation also includes the total 
repair costs which are calculated based on the outputs from the life-
cycle analysis.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent 
and a 7-percent real discount rate. DOE uses these discount rates in 
accordance with guidance provided by the Office of Management and 
Budget (``OMB'') to Federal agencies on the development of regulatory 
analysis.\107\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \107\ Office of Management and Budget. Circular A-4: Regulatory 
Analysis. September 17, 2003. Section E. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels. For this NOPR, DOE analyzed 
the impacts of the considered standard levels on small businesses. DOE 
used the LCC and PBP spreadsheet model to estimate the impacts of the 
considered efficiency levels on these subgroups, and used inputs 
specific to that subgroup. Chapter 11 in the NOPR TSD describes the 
consumer subgroup analysis.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new 
energy conservation standards on manufacturers of fans and blowers and 
to estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (``R&D'') and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how new energy conservation 
standards might affect manufacturing employment, capacity, and 
competition, as well as how standards contribute to overall regulatory 
burden. Finally, the MIA serves to identify any disproportionate 
impacts on manufacturer subgroups, including small business 
manufacturers.
    The quantitative part of the MIA primarily relies on the GRIM, an 
industry cash flow model with inputs specific to this rulemaking. The 
key GRIM inputs include data on the industry cost structure, unit 
production costs, equipment shipments, manufacturer markups, and 
investments in R&D and manufacturing capital required to produce 
compliant equipment. The key GRIM outputs are the INPV, which is the 
sum of industry annual cash flows over the analysis period, discounted 
using the industry-weighted average cost of capital, and the impact on 
domestic manufacturing employment. The model uses standard accounting 
principles to estimate the impacts of new energy conservation standards 
on a given industry by comparing changes in INPV and domestic 
manufacturing employment between a no-new-standards case and the 
various standards cases (i.e., TSLs). To capture the uncertainty 
relating to manufacturer pricing strategies following new standards, 
the GRIM estimates a range of possible impacts under different markup 
scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA

[[Page 3795]]

considers such factors as a potential standard's impact on 
manufacturing capacity, competition within the industry, the cumulative 
impact of other DOE and non-DOE regulations, and impacts on 
manufacturer subgroups. 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 fan and blower 
manufacturing industry based on the market and technology assessment, 
preliminary manufacturer interviews, and publicly available 
information. This included a top-down analysis of fan and blower 
manufacturers that DOE used to derive preliminary financial inputs for 
the GRIM (e.g., revenues; materials, labor, overhead, and depreciation 
expenses; selling, general, and administrative expenses (``SG&A''); and 
R&D expenses). DOE also used public sources of information to further 
calibrate its initial characterization of the fan and blower 
manufacturing industry, including company filings of form 10-K from the 
SEC,\108\ corporate annual reports, the U.S. Census Bureau's Economic 
Census,\109\ and reports from D&B Hoovers.\110\
---------------------------------------------------------------------------

    \108\ See www.sec.gov/edgar.
    \109\ See www.census.gov/programs-surveys/asm/data/tables.html.
    \110\ See app.avention.com.
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash flow 
analysis to quantify the potential impacts of new energy conservation 
standards. The GRIM uses several factors to determine a series of 
annual cash flows starting with the announcement of the standard and 
extending over a 30-year period following the compliance date of the 
standard. These factors include annual expected revenues, costs of 
sales, SG&A and R&D expenses, taxes, and capital expenditures. In 
general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of fans and blowers in order to develop 
other key GRIM inputs, including capital and product conversion costs, 
and to gather additional information on the anticipated effects of 
energy conservation standards on revenues, direct employment, capital 
assets, industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative 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.J.3 of this document for a 
description of the key issues raised by manufacturers during the 
interviews. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by new energy 
conservation standards or that may not be accurately represented by the 
average cost assumptions used to develop the industry cash flow 
analysis. Such manufacturer subgroups may include small business 
manufacturers, low-volume manufacturers (``LVMs''), niche players, and/
or manufacturers exhibiting a cost structure that largely differs from 
the industry average. DOE identified one subgroup for a separate impact 
analysis: small business manufacturers. The small business subgroup is 
discussed in section VI.B, ``Review under the Regulatory Flexibility 
Act'' and in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
energy conservation standards that result in a higher or lower industry 
value. The GRIM uses a standard, annual discounted cash flow analysis 
that incorporates manufacturer costs, markups, shipments, and industry 
financial information as inputs. The GRIM models changes in costs, 
distribution of shipments, investments, and manufacturer margins that 
could result from new energy conservation standards. The GRIM 
spreadsheet uses the inputs to arrive at a series of annual cash flows, 
beginning in 2024 (the base year of the analysis) and continuing to 
2059. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during this period. For manufacturers of fans and blowers, 
DOE used a real discount rate of 11.4 percent, which was derived from 
industry financials and then modified according to feedback received 
during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the new 
energy conservation standards on manufacturers. As discussed 
previously, DOE developed critical GRIM inputs using a number of 
sources, including publicly available data, results of the engineering 
analysis, and information gathered from industry stakeholders during 
the course of manufacturer interviews and subsequent Working Group 
meetings. The GRIM results are presented in section V.B.2. Additional 
details about the GRIM, the discount rate, and other financial 
parameters can be found in chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry.
    For GFBs, DOE developed baseline MSP versus diameter curves and 
incremental costs for each design option for each equipment class. DOE 
used these correlations to estimate the MSP at each EL for each 
equipment class at all nominal impeller diameters. As such, each 
equipment class has multiple MSP versus FEI curves representing the 
range of impeller diameters that exist on the market. For ACFs, DOE 
developed curves for each representative unit. The methodology for 
developing the curves started with determining the efficiency for 
baseline equipment and the MPCs for this equipment. Above the baseline, 
DOE implemented design options until all available design options were 
employed (i.e., at the max-tech level).
    For a complete description of the MPCs, see chapter 5 of the NOPR 
TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments 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 projections derived from the 
shipments analysis from 2024 (the base year) to 2059 (the end year of 
the analysis period). See chapter 9 of the NOPR TSD for additional 
details.
c. Product and Capital Conversion Costs
    New energy conservation standards could cause manufacturers to 
incur conversion costs to bring their production facilities and 
equipment designs into compliance. DOE evaluated the level of 
conversion-related

[[Page 3796]]

expenditures that would be needed to comply with each considered 
efficiency level in each equipment class. 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 equipment designs comply with 
new energy conservation standards. Capital conversion costs are 
investments in property, plant, and equipment necessary to adapt or 
change existing production facilities such that new compliant equipment 
designs can be fabricated and assembled.
    In response to the October 2022 NODA, AMCA commented that DOE 
should conduct interviews with individual manufacturers to gather 
information regarding potential conversion costs for fan and blower 
manufacturers. (AMCA, No. 132 at p. 12) DOE conducted manufacturer 
interviews with several interested parties, including several fan and 
blower manufacturers, after the publication of the October 2022 NODA 
and prior to conducting this NOPR analysis. The results and methodology 
for estimating conversion costs are described in this section.
    DOE used a bottom-up cost estimate to arrive at a total product 
conversion cost at each EL for all equipment classes. DOE first 
estimated the number of unique basic models for each equipment class 
and at each EL using the AMCA sales database for GFBs and the updated 
ACF database for ACFs. Next, DOE estimated the percentage of models 
that would not meet each analyzed EL based on information from the 
appropriate database. DOE also estimated the percentage of failing 
models that are assumed to be redesigned at each analyzed EL. DOE then 
estimated the amount of engineering time needed to redesign and test a 
single non-compliant basic model into a compliant model and the time 
necessary to conduct additional air, sound, and certification testing 
once the model is redesigned. DOE used data from the U.S. Bureau of 
Labor Statistics \111\ (``BLS'') to estimate the total hourly employer 
compensation to conduct the redesign and to conduct testing. DOE based 
the number of hours associated with a per model redesign and per model 
testing estimates on information received during manufacturer 
interviews. DOE estimated that longer per model redesign engineering 
hours would be required to achieve higher ELs, since more engineering 
resources would be required to achieve higher ELs. However, DOE assumed 
the same per model testing cost for all ELs, since DOE did not assume 
the testing cost will increase at higher ELs. Lastly, DOE multiplied 
the per model redesign (for each EL) and per model testing costs by the 
number models that are estimated to be redesigned at each EL.
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    \111\ See www.bls.gov/oes/current/oes_stru.htm and www.bls.gov/bls/news-release/ecec.htm#current.
---------------------------------------------------------------------------

    DOE estimated the capital conversion costs based on information 
received during manufacturer interviews. During manufacturer 
interviews, manufacturers provided estimates on the percentage of total 
conversion costs that would be associated with the purchasing on 
equipment and machinery (capital conversion costs) and the percentage 
of total conversion costs that would be associated with engineering 
resources to conduct redesigns and testing (product conversion costs). 
In addition to assuming increased product costs at higher ELs, DOE also 
assumed that the ratio of product conversion costs to capital 
conversion costs would decrease at higher ELs (i.e., higher ELs are 
expected to have higher capital conversion costs since manufacturers 
would be expected to increase investments in new tooling and 
potentially different production processes). In sum, DOE used these 
percentage estimates provided during manufacturer interviews and the 
product conversion cost estimates previously described to estimate the 
total capital conversion costs for each equipment class at each 
analyzed EL.
    CA IOUs stated that some ACF manufacturers purchase the impellors 
that they use rather than design and manufacture them in-house. 
Therefore, CA IOUs stated purchasing more efficient impeller designs 
may be possible without significant design and capital costs. (CA IOUs, 
No. 127 at p.3) DOE conducted manufacturer interviews with a variety of 
ACF manufacturers. The cost estimates included in this analysis assume 
that ACF manufacturers produce their impellors in-house. While some ACF 
manufacturers might purchase impellors from another company, whatever 
company that is manufacturing the more efficient impellors is will 
incur additional product and capital conversion costs and those costs 
will likely be passed on to their customers. Section IV.J.2.d discusses 
how an increase in product and capital conversion costs (regardless of 
if an impellor manufacturer or an ACF manufacturer incurs them) could 
result in an increased ACF MSP that is incorporated into all down-
stream and consumer analyses.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion cost 
figures used in the GRIM can be found in section V.B.2 of this 
document. For additional information on the estimated capital and 
product conversion costs, see chapter 12 of the NOPR TSD.
d. Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied non-production cost markups to the 
MPCs estimated in the engineering analysis for ACFs at each equipment 
class and efficiency level. For GFBs, the engineering analysis 
estimated the MSPs. Therefore, the MIA did not calculate the MSPs for 
GFBs using the MPCs. Instead, the MIA estimated the MPC by dividing the 
MSPs, which were estimated in the engineering analysis, by a 
manufacturer markup. For GFBs, DOE estimated a manufacturer markup of 
1.35 for all equipment classes in the no-new-standards case. This 
corresponds to a manufacturer gross margin percentage of approximately 
25.9 percent. For ACFs, DOE estimated a manufacturer markup of 1.50 for 
all equipment classes in the no-new-standards case. This corresponds to 
a manufacturer gross margin percentage of approximately 33.3 percent. 
DOE estimated these manufacturers markups based on information obtained 
during manufacturer interviews. Modifying these manufacturer markups in 
the standards case yields different sets of impacts on manufacturers. 
For the MIA, DOE modeled two standards-case markup scenarios to 
represent uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of new 
energy conservation standards: (1) a conversion cost recovery markup 
scenario; and (2) a preservation of operating profit markup scenario. 
These scenarios lead to different manufacturer markup values that, when 
applied to the MPCs, result in varying revenue and cash flow impacts.
    Under the conversion cost recovery markup scenario, DOE modeled a 
scenario in which manufacturers increase their markups in response to 
new energy conservation standards. For

[[Page 3797]]

ELs that DOE's engineering analysis assumed would require an 
aerodynamic redesign, the engineering analysis assumed there is no 
increase in the MPCs (for the ELs that are assumed would require an 
aerodynamic redesign). However, DOE did assume that fan and blower 
manufacturers will incur conversion costs to redesign non-compliant 
models. Therefore, DOE modeled a manufacturer markup scenario in which 
fan and blower manufacturers attempt to recover the investments they 
must make to conduct these aerodynamic redesigns through an increase in 
their manufacturer markup. Therefore, in the standards cases, the 
manufacturer markup of models that would need to be re-designed is 
larger than the manufacturer markup used in the no-new-standards case. 
DOE calibrated these manufacturer markups, in the standards case 
conversion cost recovery scenario, for each equipment class at each EL 
to cause the manufacturer INPV in the standards cases to be 
approximately equal to the manufacturer INPV in the no-new-standards 
case. In this markup scenario, manufacturers earn additional revenue in 
the standards cases after the compliance date that offsets the 
conversion costs that were incurred prior to the compliance date. This 
represents the upper-bound of manufacturer profitability, as in this 
manufacturer markup scenario as measured by INPV, fan and blower 
manufacturers are able to fully recover their conversion costs by the 
end of the 30-year analysis period.
    Under the preservation of operating profit markup scenario, DOE 
modeled a markup scenario where manufacturers are not able to increase 
their per-unit operating profit in proportion to increases in MPCs. 
Under this scenario, as the MPCs increase, manufacturers reduce their 
markups (on a percentage basis) to a level that maintains the no-new-
standards operating profit (in absolute dollars). The implicit 
assumption behind this manufacturer markup scenario is that the 
industry can only maintain its operating profit in absolute dollars 
after compliance with new standards. Therefore, the percentage of the 
operating margin is reduced between the no-new-standards case and the 
analyzed standards cases. 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 as in the no-new-standards 
case. This manufacturer markup scenario represents the lower bound to 
industry profitability under new energy conservation standards.
    A comparison of industry financial impacts under the two 
manufacturer markup scenarios is presented in section V.B.2.a of this 
document.
3. Manufacturer Interviews
    DOE interviewed a variety of fan and blower manufacturers prior to 
conducting this NOPR analysis. During these interviews, DOE asked 
manufacturers to describe their major concerns regarding this 
rulemaking. The following section highlights manufacturer concerns that 
helped inform the projected potential impacts of a new standard on the 
industry. Manufacturer interviews are conducted under non-disclosure 
agreements (``NDAs''), so DOE does not document these discussions in 
the same way that it does public comments in the comment summaries and 
DOE's responses throughout the rest of this document.
Embedded Fans
    Several fan and blower manufacturers stated that they are concerned 
that including fans and blowers that are embedded in other products or 
equipment already regulated by DOE creates redundant regulations. 
Additionally, manufacturers stated that the electricity used by the fan 
or blower in these systems is a relatively insignificant portion of the 
energy consumed by the entire system. Lastly, manufacturers stated that 
increasing the efficiency of a fan or blower used in a product or 
equipment already regulated by DOE could limit the effectiveness of a 
future energy conservation standard on the performance of those 
products or equipment covered by DOE.
    DOE is proposing to exclude fans and blowers that are embedded in 
specific types of equipment. Table III-1 lists the embedded fans and 
blowers that are excluded from the scope of this energy conservation 
standards rulemaking.
Testing Costs and Burden
    Several fan and blower manufacturers stated that a concern that 
compliance with energy conservation standards would require fan and 
blower manufacturers to test all covered fans and blowers. 
Manufacturers specifically are concerned that the legacy testing data 
that they have already conducted for the AMCA certification testing 
program would need to be re-tested to demonstrate compliance with a DOE 
energy conservation standard. As stated in the May 2023 TP Final Rule, 
DOE understands that manufacturers of fans and blowers likely have 
historical test data which were developed with methods consistent with 
the DOE test procedure adopted in the May 2023 Final Rule, and does not 
expect manufacturers to regenerate all of the historical test data 
unless the rating resulting from the historical methods would no longer 
be valid. 88 FR 27312, 27378.
    Additionally, manufacturers were concerned that requiring a test 
sample of two fans or blowers would be overly burdensome for 
manufacturers to comply with an energy conservation standard. As stated 
in the May 2023 TP Final Rule ``DOE believe it is appropriate to allow 
a minimum of one unit for fans and blowers other than air circulating 
fans'' to be tested to comply with any DOE energy conservation 
standard. 88 FR 27312, 27378.
    Lastly, some manufacturers were concerned that if DOE did not allow 
the use of an alternative energy determination method (``AEDM'') to 
determine fan performance, manufacturers would have to physically test 
all covered fans and blowers. Manufacturers stated that physically 
testing every fan and blower would place a larger and costly testing 
burden on manufacturers. As stated in the May 2023 TP Final Rule, ``DOE 
allows the use of an AEDM in lieu of testing to determine fan 
performance, which would mitigate the potential cost associated with 
having to physically test units.'' 88 FR 27312, 27372.
4. Discussion of MIA Comments
    AHRI stated that for end-use products (i.e., a product or equipment 
that has a fan or blower embedded in it) testing must take place 
following internal component swaps or cabinet redesigns. This testing 
could include seismic and wind load testing for HVAC equipment 
installed exterior to the building; electric heat, safety, refrigerant, 
and sound testing for heating equipment; and transportation, vibration, 
and sound testing for most end-use products. AHRI stated that testing 
lab availability is limited at this time, given the wide-ranging 
changes in refrigerant and safety standards requirements, and standards 
that result in a redesign to accommodate a new fan will impact 
virtually every model of HVACR product on the market. (AHRI, No. 130 at 
pp. 5-6) DOE acknowledges that end-use products may have to be re-test 
if the current fan that they use does not meet the adopted energy 
conservation standards. However, DOE's engineering analysis primarily 
examined replacement fans and blowers with the same diameter and would 
not require a cabinet redesign for an end-use product.

[[Page 3798]]

    AHRI stated that there is a significant monetary impact for OEMs 
for a fan swap, as a significant amount of re-testing and potential re-
certification would need to be conducted for a fan swap, even if the 
size of the cabinet does not change. AHRI stated that based on a review 
of their AHRI Certification Program they identified approximately 6,000 
basic models that have a covered fan embedded in these end-use 
products. AHRI continued by stating they estimate it would cost 
approximately $300,000 for each end-use product basic model that would 
be required to incorporate a new fan if the existing fan used in their 
end-use product does not comply with DOE's energy conservation 
standards for that fan. (AHRI, No. 130 at p. 6-7) DOE acknowledges that 
OEMs may incur re-testing and re-certification costs if the fan used in 
their equipment does not meet the adopted energy conservation standard 
for fans. The MIA for this rulemaking specifically examines the 
conversion costs that fan and blower manufacturers would incur due to 
the analyzed energy conservation standards for fans and blowers in 
comparison to the revenue and free cash fan and blower manufacturers 
receive. The OEM testing and certification costs were not included in 
the MIA, and neither were the OEM revenues and free cash flows, as 
these costs and revenue are not specific to fan and blower 
manufacturers.
    MIAQ also stated that redesign of the end-use product to 
accommodate a new fan will result in retesting and possible 
recertification and model number changes for end-use products, which 
will be a massive, costly, and time-consuming undertaking (and could 
even cause a disruption in the market) as there would be changes to 
electrical, physical, or functional characteristics of the end-use 
product that affect energy consumption/efficiency. (MIAQ, No. 124 at 
pp. 2-3) DOE is proposing to exclude fans that are embedded in 
commercial HVAC equipment that is already covered by DOE energy 
conservation standards as well as a variety of other products. The full 
list of embedded fans proposed for exclusion from the scope of this 
energy conservation standards rulemaking can be found in Table III-1.
    DOE requests comment on the number of end-use product (i.e., a 
product or equipment that has a fan or blower embedded in it) basic 
models that would not be excluded by the list of products or equipment 
listed in Table III-1.
    MIAQ and AHRI stated that it was not realistic to expect 
manufacturers to comply with any energy conservation standards within 
180 days. (MIAQ, No. 124 at p. 2-3; AHRI, No. 130 at p. 5) DOE notes 
that the May 2023 TP Final Rule stated that beginning 180 days after 
the publication of the May 2023 TP Final Rule, any representations made 
with respect to energy use or efficiency of fans or blowers must be 
made based on testing in accordance with the May 2023 TP Final Rule. 
Neither the May 2023 TP Final Rule nor this NOPR requires that fan and 
blower manufacturers meet a minimum energy conservation standard 180 
days after the publication of the May 2023 TP Final Rule. Compliance 
with any energy conservation standards would not be required until 5 
years after publication of the energy conservation standard final rule.
    AHRI expressed concern about unfair advantage given to imported 
HVAC products that may not need to comply with components regulations. 
AHRI stated that imported HVAC products with embedded fans are excluded 
from the fan and blower energy conservation standard, but fans 
assembled into similar equipment manufactured domestically would be 
subject to DOE energy conservation standards (AHRI, No. 130, at p. 4) 
DOE is proposing to require fans and blowers that are imported in HVAC 
products to comply with the energy conservation standards established 
in this rulemaking as long as those products or equipment are not 
listed in Table III-1. This is the same requirement that applies to 
fans and blowers that are assembled into the same equipment 
manufactured domestically.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO<INF>2</INF>, NO<INF>X</INF>, SO<INF>2</INF>, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH<INF>4</INF> and 
N<INF>2</INF>O, as well as the reductions to emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extracting, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO<INF>2</INF>, 
NO<INF>X</INF>, SO<INF>2</INF>, and Hg uses emissions factors intended 
to represent the marginal impacts of the change in electricity 
consumption associated with amended or new standards. The methodology 
is based on results published for the AEO, including a set of side 
cases that implement a variety of efficiency-related policies. The 
methodology is described in appendix 13A of the NOPR TSD. The analysis 
presented in this notice uses projections from AEO2023. Power sector 
emissions of CH<INF>4</INF> and N<INF>2</INF>O from fuel combustion are 
estimated using Emission Factors for Greenhouse Gas Inventories 
published by the Environmental Protection Agency (EPA).\112\
---------------------------------------------------------------------------

    \112\ Available at: www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12, 
2021).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH<INF>4</INF> and CO<INF>2</INF>, are estimated based on the 
methodology described in chapter 15 of the NOPR TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2023 generally represents current 
legislation and environmental regulations, including recent government 
actions, that were in place at the time of preparation of AEO2023, 
including the emissions control programs discussed in the following 
paragraphs.\113\
---------------------------------------------------------------------------

    \113\ For further information, see the Assumptions to AEO2023 
report that sets forth the major assumptions used to generate the 
projections in the Annual Energy Outlook. Available at: www.eia.gov/outlooks/aeo/assumptions/ (last accessed February 6, 2023).
---------------------------------------------------------------------------

    SO<INF>2</INF> emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO<INF>2</INF> for affected EGUs in the 48 contiguous States and 
the District of Columbia (DC). (42 U.S.C. 7651 et seq.) SO<INF>2</INF> 
emissions from numerous States in the eastern half of the United States 
are also limited under the Cross-State Air Pollution Rule (``CSAPR''). 
76 FR 48208 (Aug. 8, 2011). CSAPR requires these States to reduce 
certain emissions, including annual SO<INF>2</INF> emissions, and

[[Page 3799]]

went into effect as of January 1, 2015.\114\ AEO2023 incorporates 
implementation of CSAPR, including the update to the CSAPR ozone season 
program emission budgets and target dates issued in 2016. 81 FR 74504 
(Oct. 26, 2016). Compliance with CSAPR is flexible among EGUs and is 
enforced through the use of tradable emissions allowances. Under 
existing EPA regulations, any excess SO<INF>2</INF> emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO<INF>2</INF> emissions by another regulated EGU.
---------------------------------------------------------------------------

    \114\ CSAPR requires States to address annual emissions of 
SO<INF>2</INF> and NO<INF>X</INF>, precursors to the formation of 
fine particulate matter (PM<INF>2.5</INF>) pollution, in order to 
address the interstate transport of pollution with respect to the 
1997 and 2006 PM<INF>2.5</INF> National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain States to address 
the ozone season (May-September) emissions of NO<INF>X</INF>, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five States in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule).
---------------------------------------------------------------------------

    However, beginning in 2016, SO<INF>2</INF> emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants. 77 FR 9304 (Feb. 16, 2012). In the MATS final rule, EPA 
established a standard for hydrogen chloride as a surrogate for acid 
gas hazardous air pollutants (``HAP''), and also established a standard 
for SO<INF>2</INF> (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, SO<INF>2</INF> emissions are 
being reduced as a result of the control technologies installed on 
coal-fired power plants to comply with the MATS requirements for acid 
gas. In order to continue operating, coal power plants must have either 
flue gas desulfurization or dry sorbent injection systems installed. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO<INF>2</INF> emissions. Because of the emissions reductions 
under the MATS, it is unlikely that excess SO<INF>2</INF> emissions 
allowances resulting from the lower electricity demand would be needed 
or used to permit offsetting increases in SO<INF>2</INF> emissions by 
another regulated EGU. Therefore, energy conservation standards that 
decrease electricity generation would generally reduce SO<INF>2</INF> 
emissions. DOE estimated SO<INF>2</INF> emissions reduction using 
emissions factors based on AEO2023.
    CSAPR also established limits on NO<INF>X</INF> emissions for 
numerous States in the eastern half of the United States. Energy 
conservation standards would have little effect on NO<INF>X</INF> 
emissions in those States covered by CSAPR emissions limits if excess 
NO<INF>X</INF> emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NO<INF>X</INF> emissions from other EGUs. In such case, NO<INF>X</INF> 
emissions would remain near the limit even if electricity generation 
goes down. A different case could possibly result, depending on the 
configuration of the power sector in the different regions and the need 
for allowances, such that NO<INF>X</INF> emissions might not remain at 
the limit in the case of lower electricity demand. In this case, energy 
conservation standards might reduce NO<INF>X</INF> emissions in covered 
States. Despite this possibility, DOE has chosen to be conservative in 
its analysis and has maintained the assumption that standards will not 
reduce NO<INF>X</INF> emissions in States covered by CSAPR. Energy 
conservation standards would be expected to reduce NO<INF>X</INF> 
emissions in the States not covered by CSAPR. DOE used AEO2023 data to 
derive NO<INF>X</INF> emissions factors for the group of States not 
covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this proposed rule, for the purpose 
of complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO<INF>2</INF>, CH<INF>4</INF>, N<INF>2</INF>O, NO<INF>X</INF>, and 
SO<INF>2</INF> 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 consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
the projection period for each TSL. This section summarizes the basis 
for the values used for monetizing the emissions benefits and presents 
the values considered in this NOPR.
    To monetize the benefits of reducing GHG emissions, this analysis 
uses the interim estimates presented in the Technical Support Document: 
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates 
Under Executive Order 13990 published in February 2021 by the IWG.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO<INF>2</INF>, CH<INF>4</INF>, and N<INF>2</INF>O by using a 
measure of the SC of each pollutant (e.g., SC-CO<INF>2</INF>). These 
estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as recommended by applicable Executive orders, and DOE would 
reach the same conclusion presented in this proposed rulemaking in the 
absence of the social cost of greenhouse gases. That is, the social 
costs of greenhouse gases, whether measured using the February 2021 
interim estimates presented by the Interagency Working Group on the 
Social Cost of Greenhouse Gases or by another means, did not affect the 
rule ultimately proposed by DOE.
    DOE estimated the global social benefits of CO<INF>2</INF>, 
CH<INF>4</INF>, and N<INF>2</INF>O reductions using SC-GHG values that 
were based on the interim values presented in the Technical Support 
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim 
Estimates under Executive Order 13990, published in February 2021 by 
the IWG. The SC-GHGs is the monetary value of the net harm to society 
associated with a marginal increase in emissions in a given year, or 
the benefit of avoiding that increase. In principle, SC-GHGs includes 
the value of all climate change impacts, including (but not limited to) 
changes in net agricultural productivity, human health effects, 
property damage from increased flood risk and natural disasters, 
disruption of energy systems, risk of conflict, environmental 
migration, and the value of ecosystem services. The SC-GHGs therefore 
reflects the societal value of reducing emissions of the gas in 
question by one metric ton. The SC-GHGs is the theoretically 
appropriate value to use in conducting benefit-cost analyses of 
policies that affect CO<INF>2</INF>, N<INF>2</INF>O and CH<INF>4</INF> 
emissions. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees that the interim SC-GHG estimates 
represent the most appropriate estimate of the SC-GHG until revised

[[Page 3800]]

estimates have been developed reflecting the latest, peer-reviewed 
science.
    The SC-GHGs estimates presented here were developed over many 
years, using transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, the IWG, which included the DOE and 
other executive branch agencies and offices, was established to ensure 
that agencies were using the best available science and to promote 
consistency in the social cost of carbon (SC-CO<INF>2</INF>) values 
used across agencies. The IWG published SC-CO<INF>2</INF> estimates in 
2010 that were developed from an ensemble of three widely cited 
integrated assessment models (IAMs) that estimate global climate 
damages using highly aggregated representations of climate processes 
and the global economy combined into a single modeling framework. The 
three IAMs were run using a common set of input assumptions in each 
model for future population, economic, and CO<INF>2</INF> emissions 
growth, as well as equilibrium climate sensitivity--a measure of the 
globally averaged temperature response to increased atmospheric 
CO<INF>2</INF> concentrations. These estimates were updated in 2013 
based on new versions of each IAM. In August 2016, the IWG published 
estimates of the social cost of methane (SC-CH<INF>4</INF>) and nitrous 
oxide (SC-N<INF>2</INF>O) using methodologies that are consistent with 
the methodology underlying the SC-CO<INF>2</INF> estimates. The 
modeling approach that extends the IWG SC-CO<INF>2</INF> methodology to 
non-CO<INF>2</INF> GHGs has undergone multiple stages of peer review. 
The SC-CH<INF>4</INF> and SC-N<INF>2</INF>O estimates were developed by 
Marten et al.\115\ and underwent a standard double-blind peer review 
process prior to journal publication. In 2015, as part of the response 
to public comments received to a 2013 solicitation for comments on the 
SC-CO<INF>2</INF> estimates, the IWG announced a National Academies of 
Sciences, Engineering, and Medicine review of the SC-CO<INF>2</INF> 
estimates to offer advice on how to approach future updates to ensure 
that the estimates continue to reflect the best available science and 
methodologies. In January 2017, the National Academies released their 
final report, Valuing Climate Damages: Updating Estimation of the 
Social Cost of Carbon Dioxide, and recommended specific criteria for 
future updates to the SC-CO<INF>2</INF> estimates, a modeling framework 
to satisfy the specified criteria, and both near-term updates and 
longer-term research needs pertaining to various components of the 
estimation process (National Academies, 2017).\116\ Shortly thereafter, 
in March 2017, President Trump issued Executive Order 13783, which 
disbanded the IWG, withdrew the previous TSDs, and directed agencies to 
ensure SC-CO<INF>2</INF> estimates used in regulatory analyses are 
consistent with the guidance contained in OMB's Circular A-4, 
``including with respect to the consideration of domestic versus 
international impacts and the consideration of appropriate discount 
rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses following 
E.O. 13783 used SC-GHG estimates that attempted to focus on the U.S.-
specific share of climate change damages as estimated by the models and 
were calculated using two discount rates recommended by Circular A-4, 3 
percent and 7 percent. All other methodological decisions and model 
versions used in SC-GHG calculations remained the same as those used by 
the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------

    \115\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold, 
and A. Wolverton. Incremental CH4 and N2O mitigation benefits 
consistent with the US Government's SC-CO<INF>2</INF> estimates. 
Climate Policy. 2015. 15(2): pp. 272-298.
    \116\ National Academies of Sciences, Engineering, and Medicine. 
Valuing Climate Damages: Updating Estimation of the Social Cost of 
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations of the National Academies (2017). The IWG was tasked 
with first reviewing the SC-GHG estimates currently used in Federal 
analyses and publishing interim estimates within 30 days of the E.O. 
that reflect the full impact of GHG emissions, including by taking 
global damages into account. The interim SC-GHG estimates published in 
February 2021 are used here to estimate the climate benefits for this 
proposed rulemaking. The E.O. instructs the IWG to update the interim 
SC-GHG estimates by January 2022 taking into consideration the advice 
of the National Academies of Science, Engineering, and Medicine as 
reported in Valuing Climate Damages: Updating Estimation of the Social 
Cost of Carbon Dioxide (2017) and other recent scientific literature. 
The February 2021 SC-GHG TSD provides a complete discussion of the 
IWG's initial review conducted under E.O. 13990. In particular, the IWG 
found that the SC-GHG estimates used under E.O. 13783 fail to reflect 
the full impact of GHG emissions in multiple ways.
    First, the IWG found that the SC-GHG estimates used under E.O. 
13783 fail to fully capture many climate impacts that affect the 
welfare of U.S. citizens and residents, and those impacts are better 
reflected by global measures of the SC-GHG. Examples of omitted effects 
from the E.O. 13783 estimates include direct effects on U.S. citizens, 
assets, and investments located abroad; supply chains, U.S. military 
assets and interests abroad, and tourism; and spillover pathways such 
as economic and political destabilization and global migration that can 
lead to adverse impacts on U.S. national security, public health, and 
humanitarian concerns. In addition, assessing the benefits of U.S. GHG 
mitigation activities requires consideration of how those actions may 
affect mitigation activities by other countries, as those international 
mitigation actions will provide a benefit to U.S. citizens and 
residents by mitigating climate impacts that affect U.S. citizens and 
residents. A wide range of scientific and economic experts have 
emphasized the issue of reciprocity as support for considering global 
damages of GHG emissions. If the United States does not consider 
impacts on other countries, it is difficult to convince other countries 
to consider the impacts of their emissions on the United States. The 
only way to achieve an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the United States and its 
citizens--is for all countries to base their policies on global 
estimates of damages. As a member of the IWG involved in the 
development of the February 2021 SC-GHG TSD, DOE agrees with this 
assessment and, therefore, in this proposed rule DOE centers attention 
on a global measure of SC-GHG. This approach is the same as that taken 
in DOE regulatory analyses from 2012 through 2016. A robust estimate of 
climate damages that accrue only to U.S. citizens and residents does 
not currently exist in the literature. As explained in the February 
2021 TSD, existing estimates are both incomplete and an underestimate 
of total damages that accrue to the citizens and residents of the U.S. 
because they do not fully capture the regional interactions and 
spillovers discussed above, nor do they include all of the important 
physical, ecological, and economic impacts of climate change recognized 
in the climate change literature. As noted in the February 2021 SC-GHG 
TSD, the

[[Page 3801]]

IWG will continue to review developments in the literature, including 
more robust methodologies for estimating a U.S.-specific SC-GHG value, 
and explore ways to better inform the public of the full range of 
carbon impacts. As a member of the IWG, DOE will continue to follow 
developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies (2017) and the economic literature, the IWG continued to 
conclude that the consumption rate of interest is the theoretically 
appropriate discount rate in an intergenerational context \117\ and 
recommended that discount rate uncertainty and relevant aspects of 
intergenerational ethical considerations be accounted for in selecting 
future discount rates.
---------------------------------------------------------------------------

    \117\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. Available at: www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last 
accessed April 15, 2022); Interagency Working Group on Social Cost 
of Carbon. Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. 2013. 
Available at: www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact (last accessed April 15, 2022); 
Interagency Working Group on Social Cost of Greenhouse Gases, United 
States Government. Technical Support Document: Technical Update on 
the Social Cost of Carbon for Regulatory Impact Analysis-Under 
Executive Order 12866. August 2016. Available at: www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last 
accessed January 18, 2022); Interagency Working Group on Social Cost 
of Greenhouse Gases, United States Government. Addendum to Technical 
Support Document on Social Cost of Carbon for Regulatory Impact 
Analysis under Executive Order 12866: Application of the Methodology 
to Estimate the Social Cost of Methane and the Social Cost of 
Nitrous Oxide. August 2016. Available at: www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last 
accessed January 18, 2022).
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3 percent and 7 percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits . . . at 
a lower rate than for intragenerational analysis.'' In the 2015 
Response to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE concludes that a 7% discount rate 
is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented in this analysis.
    To calculate the present and annualized values of climate benefits, 
DOE uses the same discount rate as the rate used to discount the value 
of damages from future GHG emissions, for internal consistency. That 
approach to discounting follows the same approach that the February 
2021 SC-GHG TSD recommends ``to ensure internal consistency--i.e., 
future damages from climate change using the SC-GHG at 2.5 percent 
should be discounted to the base year of the analysis using the same 
2.5 percent rate.'' DOE has also consulted the National Academies' 2017 
recommendations on how SC-GHG estimates can ``be combined in RIAs with 
other cost and benefits estimates that may use different discount 
rates.'' The National Academies reviewed several options, including 
``presenting all discount rate combinations of other costs and benefits 
with [SC-GHG] estimates.'' As a member of the IWG involved in the 
development of the February 2021 SC-GHG TSD, DOE agrees with the above 
assessment and will continue to follow developments in the literature 
pertaining to this issue. While the IWG works to assess how best to 
incorporate the latest, peer-reviewed science to develop an updated set 
of SC-GHG estimates, it set the interim estimates to be the most recent 
estimates developed by the IWG prior to the group being disbanded in 
2017. The estimates rely on the same models and harmonized inputs and 
are calculated using a range of discount rates. As explained in the 
February 2021 SC-GHG TSD, the IWG has recommended that agencies revert 
to the same set of four values drawn from the SC-GHG distributions 
based on three discount rates as were used in regulatory analyses 
between 2010 and 2016 and were subject to public comment. For each 
discount rate, the IWG combined the distributions across models and 
socioeconomic emissions scenarios (applying equal weight to each) and 
then selected a set of four values recommended for use in benefit-cost 
analyses: an average value resulting from the model runs for each of 
three discount rates (2.5 percent, 3 percent, and 5 percent), plus a 
fourth value, selected as the 95th percentile of estimates based on a 3 
percent discount rate. The fourth value was included to provide 
information on potentially higher-than-expected economic impacts from 
climate change. As explained in the February 2021 SC-GHG TSD, and DOE 
agrees, this update reflects the immediate need to have an operational 
SC-GHG for use in regulatory benefit-cost analyses and other 
applications that is developed using a transparent process, peer-
reviewed methodologies, and the science available at the time of that 
process. Those estimates were subject to public comment in the context 
of dozens of proposed rulemakings as well as in a dedicated public 
comment period in 2013.
    There are a number of limitations and uncertainties associated with 
the SC-GHG estimates. First, the current scientific and economic 
understanding of discounting approaches suggests discount rates 
appropriate for intergenerational analysis in the context of climate 
change are likely to be less than 3 percent, near 2 percent or 
lower.\118\ Second, the IAMs used to produce these interim estimates do 
not include all of the important physical, ecological, and economic 
impacts of climate change recognized in the climate change literature 
and the science underlying their ``damage functions'' (i.e., the core 
parts of the IAMs that map global mean temperature changes and other 
physical impacts of climate change into economic (both market and 
nonmarket) damages) lags behind the most recent research. For

[[Page 3802]]

example, limitations include the incomplete treatment of catastrophic 
and non-catastrophic impacts in the integrated assessment models, their 
incomplete treatment of adaptation and technological change, the 
incomplete way in which inter-regional and intersectoral linkages are 
modeled, uncertainty in the extrapolation of damages to high 
temperatures, and inadequate representation of the relationship between 
the discount rate and uncertainty in economic growth over long-time 
horizons. Likewise, the socioeconomic and emissions scenarios used as 
inputs to the models do not reflect new information from the last 
decade of scenario generation or the full range of projections. The 
modeling limitations do not all work in the same direction in terms of 
their influence on the SC-CO<INF>2</INF> estimates. However, as 
discussed in the February 2021 TSD, the IWG has recommended that, taken 
together, the limitations suggest that the interim SC-GHG estimates 
used in this proposed rule likely underestimate the damages from GHG 
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------

    \118\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at: 
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO<INF>2</INF>, SC-N<INF>2</INF>O, and 
SC-CH<INF>4</INF> values used for this NOPR are discussed in the 
following sections, and the results of DOE's analyses estimating the 
benefits of the reductions in emissions of these GHGs are presented in 
section IV.L.1.a of this document.
a. Social Cost of Carbon
    The SC-CO<INF>2</INF> values used for this NOPR were based on the 
values presented for the IWG's February 2021 TSD. Table IV shows the 
updated sets of SC-CO<INF>2</INF> estimates from the IWG's TSD in 5-
year increments from 2020 to 2050. The full set of annual values that 
DOE used is presented in appendix 14-A of the NOPR TSD. For purposes of 
capturing the uncertainties involved in regulatory impact analysis, DOE 
has determined it is appropriate include all four sets of SC-
CO<INF>2</INF> values, as recommended by the IWG.\119\
---------------------------------------------------------------------------

    \119\ For example, the February 2021 TSD discusses how the 
understanding of discounting approaches suggests that discount rates 
appropriate for intergenerational analysis in the context of climate 
change may be lower than 3 percent.
[GRAPHIC] [TIFF OMITTED] TP19JA24.043

    For 2051 to 2070, DOE used SC-CO<INF>2</INF> estimates published by 
EPA, adjusted to 2020$.\120\ These estimates are based on methods, 
assumptions, and parameters identical to the 2020-2050 estimates 
published by the IWG (which were based on EPA modeling). DOE expects 
additional climate benefits to accrue for any longer-life fans and 
blowers after 2070, but a lack of available SC-CO<INF>2</INF> estimates 
for emissions years beyond 2070 prevents DOE from monetizing these 
potential benefits in this analysis.
---------------------------------------------------------------------------

    \120\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at: https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed January 13, 2023).
---------------------------------------------------------------------------

    DOE multiplied the CO<INF>2</INF> emissions reduction estimated for 
each year by the SC-CO<INF>2</INF> value for that year in each of the 
four cases. DOE adjusted the values to 2022 dollars using the implicit 
price deflator for gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. 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 SC-
CO<INF>2</INF> values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH<INF>4</INF> and SC-N<INF>2</INF>O values used for this 
NOPR were based on the values developed for the February 2021 TSD. 
Table IV-23 shows the updated sets of SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O estimates from the latest interagency update in 5-year 
increments from 2020 to 2050. The full set of annual values used is 
presented in appendix 14-A of the NOPR TSD. To capture the 
uncertainties involved in regulatory impact analysis, DOE has 
determined it is appropriate to include all four sets of SC-
CH<INF>4</INF> and SC-N<INF>2</INF>O values, as recommended by the IWG. 
DOE derived values after 2050 using the approach described above for 
the SC-CO<INF>2</INF>.

[[Page 3803]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.044

    DOE multiplied the CH<INF>4</INF> and N<INF>2</INF>O emissions 
reduction estimated for each year by the SC-CH<INF>4</INF> and SC-
N<INF>2</INF>O estimates for that year in each of the cases. DOE 
adjusted the values to 2022 dollars using the implicit price deflator 
for gross domestic product (``GDP'') from the Bureau of Economic 
Analysis. To calculate a present value of the stream of monetary 
values, DOE discounted the values in each of the cases using the 
specific discount rate that had been used to obtain the SC-
CH<INF>4</INF> and SC-N<INF>2</INF>O estimates in each case.
2. Monetization of Other Emissions Impacts
    For the NOPR, DOE estimated the monetized value of NO<INF>X</INF> 
and SO<INF>2</INF> emissions reductions from electricity generation 
using the latest benefit per ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\121\ DOE used EPA's values 
for PM<INF>2.5</INF>-related benefits associated with NO<INF>X</INF> 
and SO<INF>2</INF> and for ozone-related benefits associated with 
NO<INF>X</INF> for 2025, 2030, and 2040, calculated with discount rates 
of 3 percent and 7 percent. DOE used linear interpolation to define 
values for the years not given in the 2025 to 2040 period; for years 
beyond 2040 the values are held constant. DOE combined the EPA benefit 
per ton estimates with regional information on electricity consumption 
and emissions to define weighted-average national values for 
NO<INF>X</INF> and SO<INF>2</INF> as a function of sector (see appendix 
14B of the NOPR TSD). DOE multiplied the site emissions reduction (in 
tons) in each year by the associated $/ton values, and then discounted 
each series using discount rates of 3 percent and 7 percent as 
appropriate.
---------------------------------------------------------------------------

    \121\ See Estimating the Benefit per Ton of Reducing PM2.5 
Precursors from 21 Sectors. Available at: www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2023. NEMS produces the AEO Reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption and emissions in the 
AEO2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
NOPR TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new or 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts from new or 
amended energy conservation standards include both direct and indirect 
impacts. Direct employment impacts are any changes in the number of 
employees of manufacturers of the equipment subject to standards, their 
suppliers, and related service firms. The MIA addresses those impacts. 
Indirect employment impacts are changes in national employment that 
occur due to the shift in expenditures and capital investment caused by 
the purchase and operation of more efficient appliances. Indirect 
employment impacts from standards consist of the net jobs created or 
eliminated in the national economy, other than in the manufacturing 
sector being regulated, caused by (1) reduced spending by consumers on 
energy, (2) reduced spending on new energy supply by the utility 
industry, (3) increased consumer spending on the equipment to which the 
new standards apply and other goods and services, and (4) the effects 
of those three factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\122\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic

[[Page 3804]]

activity from a less labor-intensive sector (i.e., the utility sector) 
to more labor-intensive sectors (e.g., the retail and service sectors). 
Thus, the BLS data suggest that net national employment may increase 
due to shifts in economic activity resulting from energy conservation 
standards.
---------------------------------------------------------------------------

    \122\ See U.S. Department of Commerce-Bureau of Economic 
Analysis. Regional Multipliers: A User Handbook for the Regional 
Input-Output Modeling System (RIMS II). 1997. U.S. Government 
Printing Office: Washington, DC. Available at: https://apps.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed March 27, 
2023).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this NOPR using an input/output model of the U.S. 
economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\123\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer-based I-O model 
containing structural coefficients that characterize economic flows 
among 187 sectors most relevant to industrial, commercial, and 
residential building energy use.
---------------------------------------------------------------------------

    \123\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may overestimate actual job impacts over the long 
run for this rule. Therefore, DOE used ImSET only to generate results 
for near-term timeframes (2034), where these uncertainties are reduced. 
For more details on the employment impact analysis, see chapter 16 of 
the NOPR TSD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for GFBs 
and ACFs. It addresses the TSLs examined by DOE, the projected impacts 
of each of these levels if adopted as energy conservation standards for 
GFBs and ACFs, and the standards levels that DOE is proposing to adopt 
in this NOPR. Additional details regarding DOE's analyses are contained 
in the NOPR TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential standards for 
products and equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the equipment classes, to the 
extent that there are such interactions, and market cross elasticity 
from consumer purchasing decisions that may change when different 
standard levels are set.
    For GFBs, in the analysis conducted for this NOPR, DOE analyzed the 
benefits and burdens of 6 TSLs. DOE developed TSLs that combine 
efficiency levels for each analyzed equipment class.
    Table V-1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential new energy conservation standards 
for GFBs. TSL 6 represents the max-tech energy efficiency for all 
product classes. TSL 5 represents the highest efficiency level with 
positive LCC savings. TSL 4 is an intermediate level consisting of the 
next level below TSL 5 with positive LCC savings. TSL 3 is an 
intermediate level consisting of the same level as TSL 4 or in the next 
level below TSL 4 with positive LCC savings and above TSL 2, where 
available. TSL 2 represents a combination of efficiency levels that 
correspond to a FEI of 1 across all equipment classes as required in 
ASHRAE 90.1, except for Axial Power Roof Ventilator--Exhaust, where it 
is set one efficiency level lower due to negative LCC savings at the EL 
corresponding to a FEI value of 1 (EL 5). TSL 1 represents combination 
of efficiency levels that corresponds to one efficiency level below the 
efficiency level corresponding to a FEI value of 1.
[GRAPHIC] [TIFF OMITTED] TP19JA24.045

    DOE constructed the TSLs for this NOPR to include ELs 
representative of ELs with similar characteristics (i.e., using similar 
technologies and/or efficiencies, and having roughly comparable 
equipment availability). The use of representative ELs provided for 
greater distinction between the TSLs. DOE did not consider ELs for 
which the average LCC savings were negative other than for TSL 6 (max-
tech). While representative ELs were included in the TSLs, DOE 
considered all efficiency levels as part of its analysis.\124\
---------------------------------------------------------------------------

    \124\ Efficiency levels that were analyzed for this NOPR are 
discussed in section IV.C of this document. Results by efficiency 
level are presented in NOPR TSD chapter 8.

---------------------------------------------------------------------------

[[Page 3805]]

    For ACFs, in the analysis conducted for this NOPR, DOE analyzed the 
benefits and burdens of six TSLs. DOE developed TSLs that combine 
efficiency levels for each analyzed equipment class.
    Table V-2 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential new energy conservation standards 
for ACFs. TSL 6 represents the max-tech energy efficiency for all 
equipment classes. TSL 5 represents a level corresponding to EL 5 for 
all axial ACFs and EL 3 for housed centrifugal ACFs. It represents the 
highest EL below max-tech with positive LCC savings. TSL 4 is 
constructed with the same efficiency level EL 4 for all axial ACFs and 
represents EL 0 for housed centrifugal ACFs. Similarly, TSL 3 through 
TSL 1 represent levels corresponding to EL 3 through EL 1 for all axial 
ACFs and EL 0 for housed centrifugal ACFs.
[GRAPHIC] [TIFF OMITTED] TP19JA24.046

    DOE constructed the TSLs for this NOPR to include ELs 
representative of ELs with similar characteristics (i.e., using similar 
technologies within similar equipment classes). DOE did not consider EL 
1 through EL 2 for housed centrifugal ACFs as the average LCC savings 
are negative at these levels for this equipment class. While 
representative ELs were included in the TSLs, DOE considered all 
efficiency levels as part of its analysis.\125\
---------------------------------------------------------------------------

    \125\ Efficiency levels that were analyzed for this NOPR are 
discussed in section IV.C.1.b of this document. Results by 
efficiency level are presented in NOPR TSD chapters 8.
---------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on fan and blower consumers by 
looking at the effects that potential new standards at each TSL would 
have on the LCC and PBP. DOE also examined the impacts of potential 
standards on selected consumer subgroups. These analyses are discussed 
in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency equipment affects consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., product price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses equipment lifetime and a discount rate. Chapter 8 of the NOPR TSD 
provides detailed information on the LCC and PBP analyses.
    Table V-3 through Table V-20 show the LCC and PBP results for the 
TSLs considered for each equipment class for GFBs. Table V-21 through 
Table V-28 show the LCC and PBP results for the TSLs considered for 
each equipment class for ACFs. The simple payback and other impacts are 
measured relative to the efficiency distribution in the no-new-
standards case in the compliance year (see section IV.F.8 of this 
document). Because the average LCC savings refer only to consumers who 
are affected by a standard at a given TSL, the average savings are 
greater than the difference between the average LCC in the no-new-
standards case and the average LCC at each TSL. The savings refer only 
to consumers who are affected by a standard at a given TSL. Those who 
already purchase equipment with efficiency at or above a given TSL are 
not affected. Consumers for whom the LCC increases at a given TSL 
experience a net cost.
BILLING CODE 6450-01-P
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b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on small businesses. Table V-29 and Table V-30 compare 
the average LCC savings and PBP at each efficiency level for the 
consumer subgroup with similar metrics for the entire consumer sample 
for GFBs and ACFs, respectively. In most cases, the average LCC savings 
and PBP for small businesses at the considered TSLs are not 
substantially different from the average for all consumers. Chapter 11 
of

[[Page 3815]]

the NOPR TSD presents the complete LCC and PBP results for the 
subgroup.
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c. Rebuttable Presumption Payback
    As discussed in section III.F.2, EPCA establishes a rebuttable 
presumption that an energy conservation standard is economically 
justified if the increased purchase cost for equipment that meets the 
standard is less than three times the value of the first-year energy 
savings resulting from the standard. In calculating a rebuttable 
presumption payback period for each of the considered TSLs, DOE used 
discrete values and, as required by EPCA, based the energy use 
calculation on the DOE test procedure for fans and blowers. In 
contrast, the PBPs presented in section V.B.1.a were calculated using 
distributions that reflect the range of energy use in the field.
    Table V-31 and Table V-32 present the rebuttable-presumption 
payback periods for the considered TSLs for GFBs and ACFs. While DOE 
examined the rebuttable-presumption criterion, it considered whether 
the standard levels considered for the NOPR are economically justified 
through a more detailed analysis of the economic impacts of those 
levels, pursuant to 42 U.S.C 6316(a); 42 U.S.C. 6295(o)(2)(B)(i), that 
considers the full range of impacts to the consumer, manufacturer, 
Nation, and environment. The results of that analysis serve as the 
basis for DOE to definitively evaluate the economic justification for a 
potential standard level, thereby supporting or rebutting

[[Page 3819]]

the results of any preliminary determination of economic justification.
[GRAPHIC] [TIFF OMITTED] TP19JA24.077

[GRAPHIC] [TIFF OMITTED] TP19JA24.078

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new energy 
conservation standards on manufacturers of fans and blowers. The 
following section describes the expected impacts on manufacturers at 
each considered TSL. Chapter 12 of the NOPR TSD explains the analysis 
in further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from new standards. 
The following tables summarize the estimated financial impacts 
(represented by changes in INPV) of potential new energy conservation 
standards on manufacturers of fans and blowers, as well as the 
conversion costs that DOE estimates manufacturers of fans and blowers 
would incur at each TSL. DOE analyzes the potential impacts on INPV 
separately for ACFs and GFBs. To evaluate the range of cash flow 
impacts on the fan and blower industry, DOE modeled two manufacturer 
markup scenarios using different assumptions that correspond to the 
range of anticipated market responses to new energy conservation 
standards: (1) the conversion cost recovery markup scenario and (2) the 
preservation of operating profit markup scenario.
    To assess the less severe end of the range of potential impacts, 
DOE modeled a conversion cost recovery markup scenario in which 
manufacturers are able to increase their manufacturer markups in 
response to new energy conservation standards. To assess the more 
severe end of the range of potential impacts, DOE modeled a 
preservation of operating profit markup scenario in which manufacturers 
are not able to maintain their original manufacturer markup, used in 
the no-new-standards case, in the standards cases. Instead, 
manufacturers maintain the same operating profit (in absolute dollars) 
in the standards cases as in the no-new-standards case, despite higher 
MPCs.
    Each of the modeled manufacturer markup scenarios results in a 
unique set of cash flows and corresponding industry values at the given 
TSLs for each group of fan and blower manufacturers. In the following 
discussion, the INPV results refer to the difference in industry value 
between the no-new-standards case and each standards case resulting 
from the sum of discounted cash flows from 2024 through 2059. To 
provide perspective on the short-run cash flow impact, DOE includes in 
the discussion of results a comparison of free cash flow between the 
no-new-standards case and the standards case at each TSL in the year 
before new standards take effect.
    DOE presents the range in INPV for GFB manufacturers in Table V-33 
and Table V-34 and the range in INPV for ACF manufacturers in Table V-
36 and Table V-37.

[[Page 3820]]

General Fans and Blowers
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BILLING CODE 6450-01-C
    At TSL 6, for GFB manufacturers, DOE estimates the impacts on INPV 
will range from -$2,287 million to $40 million, which represents a 
change of -46.4 percent to 0.8 percent, respectively. At TSL 6, 
industry free cash flow decreases to -$1,132 million, which represents 
a decrease of approximately 336 percent, compared to the no-new-
standards case value of $480 million in 2029, the year before the 
modeled compliance year. The negative cash flow in the years leading up 
to the modeled compliance date implies that most, if not all, GFB 
manufacturers will need to borrow funds in order to make the 
investments necessary to comply with standards. This has the potential 
to significantly alter the market dynamics as some smaller 
manufacturers may not be able to secure this funding and could exit the 
market as a result of standards set at TSL 6.
    TSL 6 would set energy conservation standards at max-tech for all 
GFBs. DOE estimates that approximately 4 percent of the GFB shipments 
would already meet the efficiency levels required at TSL 6 in 2030, in 
the no-new-standards case. Therefore, DOE estimates that manufacturers 
would have to redesign models representing approximately 96 percent of 
GFB shipments by the estimated compliance date. It is unclear if most 
GFB manufacturers would have the engineering capacity to complete the 
necessary redesigns within the 5-year compliance period. If 
manufacturers require more than 5 years to redesign their non-compliant 
GFB models, they will likely prioritize redesigns based on sales 
volume, which could result in customers not being able to obtain 
compliant GFBs covering the duty points that they require.
    At TSL 6, DOE expects GFB manufacturers to incur approximately $698 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant GFB models.

[[Page 3821]]

Additionally, GFB manufacturers would incur approximately $3,052 
million in capital conversion costs to purchase new tooling and 
equipment necessary to produce compliant GFB models to meet these 
energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 6, the 
$3,750 million in conversion costs are fully recovered, over the 30-
year analysis period, causing INPV at TSL 6 to remain approximately 
equal to the no-new-standards case INPV in this conversion cost 
recovery scenario. Given the large size of the conversion costs, 
approximately 1.3 times the sum of the annual free cash flows over the 
years between the estimated final rule announcement date and the 
estimated standards year (i.e., the time period that these conversion 
costs would be incurred), it is highly unlikely that the GFB market 
will accept the large increases in the MSPs that would be needed for 
GFB manufacturers to fully recover these conversion costs, making the 
MSPs that result from this manufacturer markup scenario less likely to 
be obtained by manufacturers. This represents the upper-bound, or 
least-severe impact, on manufacturer profitability and is the 
manufacturer markup scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increases by approximately 2.2 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $3,750 million in conversion costs incurred by manufacturers cause 
a significantly negative change in INPV at TSL 6 in this preservation 
of operating profit scenario. This represents the lower-bound, or most 
severe impact, on manufacturer profitability.
    At TSL 5, for GFB manufacturers, DOE estimates the impacts on INPV 
will range from -$1,263 million to $11 million, which represents a 
change of -25.6 percent to 0.2 percent, respectively. At TSL 5, 
industry free cash flow decreases to -$407 million, which represents a 
decrease of approximately 185 percent, compared to the no-new-standards 
case value of $480 million in 2029, the year before the modeled 
compliance year. The negative cash flow in the years leading up to the 
modeled compliance date implies that most, if not all, GFB 
manufacturers will need to borrow funds in order to make the 
investments necessary to comply with standards. This has the potential 
to significantly alter the market dynamics as some smaller 
manufacturers may not be able to secure this funding and could exit the 
market as a result of standards set at TSL 5.
    TSL 5 would set energy conservation standards for axial inline fans 
at EL 4; axial panel fans at EL 5; centrifugal housed fans at EL 5; 
centrifugal inline fans at EL 6; centrifugal unhoused fans at EL 5; 
axial PRVs at EL 4; centrifugal PRV exhaust fans at EL 4; centrifugal 
PRV supply fans at EL 6; and radial housed fans at EL 5. DOE estimates 
that approximately 7 percent of the GFB shipments would already meet or 
exceed the efficiency levels required at TSL 5 in 2030, in the no-new-
standards case. Therefore, DOE estimates that manufacturers would have 
to redesign models representing approximately 93 percent of GFB 
shipments by the estimated compliance date. It is unclear if most GFB 
manufacturers would have the engineering capacity to complete the 
necessary redesigns within the 5-year compliance period. If 
manufacturers require more than 5 years to redesign their non-compliant 
GFB models, they will likely prioritize redesigns based on sales 
volume, which could result in customers not being able to obtain 
compliant GFBs covering the duty points that they require.
    At TSL 5, DOE expects GFB manufacturers to incur approximately $435 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant GFB models. Additionally, GFB manufacturers would 
incur approximately $1,640 million in capital conversion costs to 
purchase new tooling and equipment necessary to produce compliant GFB 
models to meet these energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 5, the 
$2,075 million in conversion costs are fully recovered causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. Given the large size of the 
conversion costs, approximately 90 percent of the sum of the annual 
free cash flows over the years between the estimated final rule 
announcement date and the estimated standards year (i.e., the time 
period that these conversion costs would be incurred), it is unlikely 
that the GFB market will accept the large increases in the MSPs that 
would be needed for GFB manufacturers to fully recover these conversion 
costs, making the MSPs that result from this manufacturer markup 
scenario less likely to be obtained by manufacturers. This represents 
the upper-bound, or least-severe impact, on manufacturer profitability 
and is the manufacturer markup scenario used in all down-stream 
consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increases by approximately 2.2 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $2,075 million in conversion costs incurred by manufacturers cause 
a significantly negative change in INPV at TSL 5 in this preservation 
of operating profit scenario. This represents the lower-bound, or most 
severe impact, on manufacturer profitability.
    At TSL 4, for GFB manufacturers, DOE estimates the impacts on INPV 
will range from -$455 million to $1 million, which represents a change 
of -9.2 percent to less than 0.1 percent, respectively. At TSL 4, 
industry free cash flow decreases to $161 million, which represents a 
decrease of approximately 66.4 percent, compared to the no-new-
standards case value of $480 million in 2029, the year before the 
modeled compliance year.
    TSL 4 would set energy conservation standards for axial inline fans 
at EL 3; axial panel fans at EL 4; centrifugal housed fans at EL 4; 
centrifugal inline fans at EL 5; centrifugal unhoused fans at EL 4; 
axial PRVs at EL 4; centrifugal PRV exhaust fans at EL 4; centrifugal 
PRV supply fans at EL 5; and radial housed fans at EL 4. DOE estimates 
that approximately 25 percent of the GFB shipments would already meet 
or exceed the efficiency levels required at TSL 4 in 2030, in the no-
new-standards case. Therefore, DOE estimates that manufacturers would 
have to redesign models representing approximately 75 percent of GFB 
shipments by the estimated compliance date.
    At TSL 4, DOE expects GFB manufacturers to incur approximately $260 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant GFB models. Additionally, GFB manufacturers would

[[Page 3822]]

incur approximately $510 million in capital conversion costs to 
purchase new tooling and equipment necessary to produce compliant GFB 
models to meet these energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 4, the 
$770 million in conversion costs are fully recovered causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. At TSL 4, conversion costs represent 
approximately 33 percent of the sum of the annual free cash flows over 
the years between the estimated final rule announcement date and the 
estimated standards year (i.e., the time period that these conversion 
costs would be incurred). It is possible that the GFB market will not 
accept the full increase in the MSPs that would be needed for GFB 
manufacturers to fully recover these conversion costs. This represents 
the upper-bound, or least-severe impact, on manufacturer profitability 
and is the manufacturer markup scenario used in all down-stream 
consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increases by approximately 1.1 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $770 million in conversion costs incurred by manufacturers cause a 
moderately negative change in INPV at TSL 4 in this preservation of 
operating profit scenario. This represents the lower-bound, or most 
severe impact, on manufacturer profitability.
    At TSL 3, for GFB manufacturers, DOE estimates the impacts on INPV 
will range from -$238 million to $1 million, which represents a change 
of -4.8 percent to less than 0.1 percent, respectively. At TSL 3, 
industry free cash flow decreases to $316 million, which represents a 
decrease of approximately 34.3 percent, compared to the no-new-
standards case value of $480 million in 2029, the year before the 
modeled compliance year.
    TSL 3 would set energy conservation standards for axial inline fans 
at EL 3; axial panel fans at EL 3; centrifugal housed fans at EL 3; 
centrifugal inline fans at EL 4; centrifugal unhoused fans at EL 3; 
axial PRVs at EL 4; centrifugal PRV exhaust fans at EL 4; centrifugal 
PRV supply fans at EL 5; and radial housed fans at EL 4. DOE estimates 
that approximately 60 percent of the GFB shipments would already meet 
or exceed the efficiency levels required at TSL 3 in 2030, in the no-
new-standards case. Therefore, DOE estimates that manufacturers would 
have to redesign models representing approximately 40 percent of GFB 
shipments by the estimated compliance date.
    At TSL 3, DOE expects GFB manufacturers to incur approximately $154 
million in product conversion costs to redesign all non-compliant GFB 
models. Additionally, GFB manufacturers would incur approximately $248 
million in capital conversion costs to purchase new tooling and 
equipment necessary to produce compliant GFB models to meet these 
energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 3, the 
$402 million in conversion costs are fully recovered, causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. This represents the upper-bound, or 
least-severe impact, on manufacturer profitability and is the 
manufacturer markup scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increases by approximately 1.1 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $402 million in conversion costs incurred by manufacturers cause a 
negative change in INPV at TSL 3 in this preservation of operating 
profit scenario. This represents the lower-bound, or most severe 
impact, on manufacturer profitability.
    At TSL 2, for GFB manufacturers, DOE estimates the impacts on INPV 
will range from -$87 million to $5 million, which represents a change 
of -1.8 percent to 0.1 percent, respectively. At TSL 2, industry free 
cash flow decreases to $420 million, which represents a decrease of 
approximately 12.4 percent, compared to the no-new-standards case value 
of $480 million in 2029, the year before the modeled compliance year.
    TSL 2 would set energy conservation standards for axial inline fans 
at EL 2; axial panel fans at EL 2; centrifugal housed fans at EL 2; 
centrifugal inline fans at EL 3; centrifugal unhoused fans at EL 1; 
axial PRVs at EL 4; centrifugal PRV exhaust fans at EL 4; centrifugal 
PRV supply fans at EL 4; and radial housed fans at EL 3. DOE estimates 
that approximately 85 percent of the GFB shipments would already meet 
or exceed the efficiency levels required at TSL 2 in 2030, in the no-
new-standards case. Therefore, DOE estimates that manufacturers would 
have to redesign models representing approximately 15 percent of GFB 
shipments by the estimated compliance date.
    At TSL 2, DOE expects GFB manufacturers to incur approximately $62 
million in product conversion costs to redesign all non-compliant GFB 
models. Additionally, GFB manufacturers would incur approximately $86 
million in capital conversion costs to purchase new tooling and 
equipment necessary to produce compliant GFB models to meet these 
energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 2, the 
$147 million in conversion costs are fully recovered causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. This represents the upper-bound, or 
least-severe impact, on manufacturer profitability and is the 
manufacturer markup scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increases by approximately 0.6 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $147 million in conversion costs incurred by manufacturers cause a 
slight negative change in INPV at TSL 2 in this preservation of 
operating profit scenario. This represents the lower-bound, or most 
severe impact, on manufacturer profitability.
    At TSL 1, for GFB manufacturers, DOE estimates the impacts on INPV 
will range from -$28 million to $13 million,

[[Page 3823]]

which represents a change of -0.6 percent to 0.3 percent, respectively. 
At TSL 1, industry free cash flow decreases to $463 million, which 
represents a decrease of approximately 3.6 percent, compared to the no-
new-standards case value of $480 million in 2029, the year before the 
modeled compliance year.
    TSL 1 would set energy conservation standards for axial inline fans 
at EL 1; axial panel fans at EL 1; centrifugal housed fans at EL 1; 
centrifugal inline fans at EL 2; centrifugal unhoused fans at EL 1; 
axial PRVs at EL 4; centrifugal PRV exhaust fans at EL 3; centrifugal 
PRV supply fans at EL 3; and radial housed fans at EL 2. DOE estimates 
that approximately 91 percent of the GFB shipments would already meet 
or exceed the efficiency levels required at TSL 1 in 2030, in the no-
new-standards case. Therefore, DOE estimates that manufacturers would 
have to redesign models representing approximately 9 percent of GFB 
shipments by the estimated compliance date.
    At TSL 1, DOE expects GFB manufacturers to incur approximately $20 
million in product conversion costs to redesign all non-compliant GFB 
models. Additionally, GFB manufacturers would incur approximately $23 
million in capital conversion costs to purchase new tooling and 
equipment necessary to produce compliant GFB models to meet these 
energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 1, the $43 
million in conversion costs are fully recovered causing INPV to remain 
approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. This represents the upper-bound, or 
least-severe impact, on manufacturer profitability and is the 
manufacturer markup scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increases by approximately 0.6 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $43 million in conversion costs incurred by manufacturers cause a 
very slight negative change in INPV at TSL 1 in this preservation of 
operating profit scenario. This represents the lower-bound, or most 
severe impact, on manufacturer profitability.
Air Circulating Fans
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    At TSL 6, for ACF manufacturers, DOE estimates the impacts on INPV 
will range from -$734 million to $3 million, which represents a change 
of -113.1 percent to 0.5 percent, respectively. At TSL 6, industry free 
cash flow decreases to -$456 million, which represents a decrease of 
approximately 999 percent, compared to the no-new-standards case value 
of $51 million in 2029, the year before the modeled compliance year. 
The negative cash flow in the years leading up to the modeled 
compliance date implies that most, if not all, ACF manufacturers will 
need to borrow funds in order to make the investments necessary to 
comply with standards. This has the potential to significantly alter 
the market dynamics as some smaller manufacturers may not be able to 
secure this funding and could exit the market as a result of standards 
set at TSL 6.
    TSL 6 would set energy conservation standards at max-tech for all 
ACFs. DOE estimates that approximately 1 percent of the ACF shipments 
would already meet the efficiency levels required at TSL 6 in 2030, in 
the no-new-standards case. Therefore, DOE estimates that manufacturers 
would have to redesign models representing approximately 99 percent of 
ACF shipments by the estimated compliance date. It is unclear if most 
ACF manufacturers would have the engineering capacity to complete the 
necessary redesigns within the 5-year compliance period. If 
manufacturers require more than 5 years to redesign their non-compliant 
ACF models, they will likely prioritize redesigns based on sales 
volume, which could result in customers not being able to obtain 
compliant ACFs covering the duty points that they require.
    At TSL 6, DOE expects ACF manufacturers to incur approximately $239 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant ACF models. Additionally, ACF manufacturers would 
incur approximately $928 million in capital conversion costs to 
purchase new tooling and equipment necessary to produce compliant ACF 
models to meet these energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 6, the 
$1,167 million in conversion costs are fully recovered causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. Given the large size of the 
conversion costs, over 5 times the sum of the annual free cash flows 
over the years between the estimated final rule announcement date and 
the estimated standards year (i.e., the time period that these 
conversion costs would be incurred), it is unlikely that the ACF market 
will accept the large increases in the MSPs that would be needed for 
ACF manufacturers to fully recover these conversion costs, making the 
MSPs that result from this manufacturer markup scenario less likely to 
be obtained by manufacturers. This represents the upper-bound, or 
least-severe impact, on manufacturer profitability and is the 
manufacturer markup scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. In this scenario, 
the shipment weighted average MPC increase by approximately 4.7 
percent, causing a reduction in the manufacturer margin after the 
analyzed compliance year. This reduction in the manufacturer margin and 
the $1,167 million in conversion costs incurred by manufacturers cause 
an extremely negative change in INPV at TSL 6 in this preservation of 
operating profit scenario. This represents the lower-bound, or most 
severe impact, on manufacturer profitability.
    At TSL 5, for ACF manufacturers, DOE estimates the impacts on INPV 
will range from -$633 million to $3 million, which represents a change 
of -97.5 percent to 0.5 percent, respectively. At TSL 5, industry free 
cash flow decreases to -$400 million, which represents a decrease of 
approximately 889 percent, compared to the no-new-standards case value 
of $51 million in 2029, the year before the modeled compliance year. 
The negative cash flow in the years leading up to the modeled 
compliance date implies that most, if not all, ACF manufacturers will 
need to borrow funds in order to make the investments necessary to 
comply with standards. This has the potential to significantly alter 
the market dynamics as some smaller manufacturers may not be able to 
secure this funding and could exit the market as a result of standards 
set at TSL 5.
    TSL 5 would set energy conservation standards at EL 5 for all ACFs, 
except housed centrifugal ACFs which are set at EL 3. DOE estimates 
that approximately 4 percent of the ACF shipments would already meet or 
exceed the efficiency levels required at

[[Page 3825]]

TSL 5 in 2030, in the no-new-standards case. Therefore, DOE estimates 
that manufacturers would have to redesign models representing 
approximately 96 percent of ACF shipments by the estimated compliance 
date. It is unclear if most ACF manufacturers would have the 
engineering capacity to complete the necessary redesigns within the 5-
year compliance period. If manufacturers require more than 5 years to 
redesign their non-compliant ACF models, they will likely prioritize 
redesigns based on sales volume, which could result in customers not 
being able to obtain compliant ACFs covering the duty points that they 
require.
    At TSL 5, DOE expects ACF manufacturers to incur approximately $214 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant ACF models. Additionally, ACF manufacturers would 
incur approximately $829 million in capital conversion costs to 
purchase new tooling and equipment necessary to produce compliant ACF 
models to meet these energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 5, the 
$1,043 million in conversion costs are fully recovered causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. Given the large size of the 
conversion costs, over 4.5 times the sum of the annual free cash flows 
over the years between the estimated final rule announcement date and 
the estimated standards year (i.e., the time period that these 
conversion costs would be incurred), it is unlikely that the ACF market 
will accept the large increases in the MSPs that would be needed for 
ACF manufacturers to fully recover these conversion costs, making the 
MSPs that result from this manufacturer markup scenario less likely to 
be obtained by manufacturers. This represents the upper-bound, or 
least-severe impact, on manufacturer profitability and is the 
manufacturer markup scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. The $1,043 million 
in conversion costs incurred by manufacturers cause a significantly 
negative change in INPV at TSL 5 in this preservation of operating 
profit scenario. This represents the lower-bound, or most severe 
impact, on manufacturer profitability.
    At TSL 4, for ACF manufacturers, DOE estimates the impacts on INPV 
will range from -$71 million to no change, which represents a maximum 
possible change of -10.9 percent. At TSL 4, industry free cash flow 
decreases to $1 million, which represents a decrease of approximately 
99.0 percent, compared to the no-new-standards case value of $51 
million in 2029, the year before the modeled compliance year.
    TSL 4 would set energy conservation standards at EL 4 for all ACFs, 
except housed centrifugal ACFs which would not have any energy 
conservation standard. DOE estimates that approximately 36 percent of 
the ACF shipments would already meet or exceed the efficiency levels 
required at TSL 4 in 2030, in the no-new-standards case. Therefore, DOE 
estimates that manufacturers would have to redesign models representing 
approximately 64 percent of ACF shipments by the estimated compliance 
date.
    At TSL 4, DOE expects ACF manufacturers to incur approximately $27 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant ACF models. Additionally, ACF manufacturers would 
incur approximately $91 million in capital conversion costs to purchase 
new tooling and equipment necessary to produce compliant ACF models to 
meet these energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 4, the 
$118 million in conversion costs are fully recovered causing INPV to 
remain approximately equal to the no-new-standards case INPV in this 
conversion cost recovery scenario. At TSL 4, conversion costs represent 
approximately 50 percent of the sum of the annual free cash flows over 
the years between the estimated final rule announcement date and the 
estimated standards year (i.e., the time period that these conversion 
costs would be incurred). It is possible that the ACF market will not 
accept the full increase in the MSPs that would be needed for ACF 
manufacturers to fully recover these conversion costs. This represents 
the upper-bound, or least-severe impact, on manufacturer profitability 
and is the manufacturer markup scenario used in all down-stream 
consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. The $118 million in 
conversion costs incurred by manufacturers cause a moderately negative 
change in INPV at TSL 4 in this preservation of operating profit 
scenario. This represents the lower-bound, or most severe impact, on 
manufacturer profitability.
    At TSL 3, for ACF manufacturers, DOE estimates the impacts on INPV 
will range from -$4 million to no change, which represents a maximum 
change of -0.6 percent. At TSL 3, industry free cash flow decreases to 
$48 million, which represents a decrease of approximately 6.2 percent, 
compared to the no-new-standards case value of $51 million in 2029, the 
year before the modeled compliance year.
    TSL 3 would set energy conservation standards at EL 3 for all ACFs, 
except housed centrifugal ACFs which would not have any energy 
conservation standard. DOE estimates that approximately 84 percent of 
the ACF shipments would already meet or exceed the efficiency levels 
required at TSL 3 in 2030, in the no-new-standards case. Therefore, DOE 
estimates that manufacturers would have to redesign models representing 
approximately 16 percent of ACF shipments by the estimated compliance 
date.
    At TSL 3, DOE expects ACF manufacturers to incur approximately $1.9 
million in product conversion costs to conduct aerodynamic redesigns 
for non-compliant ACF models. Additionally, ACF manufacturers would 
incur approximately $5.5 million in capital conversion costs to 
purchase new tooling and equipment necessary to produce compliant ACF 
models to meet these energy conservation standards.
    In the conversion cost recovery markup scenario, manufacturers 
increase their manufacturer markups to fully recover the conversion 
costs they incur to redesign non-compliant equipment. At TSL 3, the 
$7.4 million in conversion costs are fully recovered causing INPV to 
remain equal to the no-new-standards case INPV in this conversion cost 
recovery scenario. This represents the upper-bound, or least-severe 
impact, on manufacturer profitability and is the manufacturer markup 
scenario used in all down-stream consumer analyses.
    Under the preservation of operating profit scenario, manufacturers 
earn the same per-unit operating profit as would be earned in the no-
new-standards case, but manufacturers do not earn additional profit 
from their investments or potentially higher MPCs. The $7.4 million in 
conversion costs incurred by

[[Page 3826]]

manufacturers cause a slight negative change in INPV at TSL 3 in this 
preservation of operating profit scenario. This represents the lower-
bound, or most severe impact, on manufacturer profitability.
    At TSL 2, for ACF manufacturers, DOE estimates there will be no 
substantive change to INPV. At TSL 2, industry free cash flow sightly 
decreases by approximately 0.1 percent in 2029, the year before the 
modeled compliance year.
    TSL 2 would set energy conservation standards at EL 2 for all ACFs, 
except housed centrifugal ACFs which would not have any energy 
conservation standard. DOE estimates that approximately 96 percent of 
the ACF shipments would already meet or exceed the efficiency levels 
required at TSL 2 in 2030, in the no-new-standards case. Therefore, DOE 
estimates that manufacturers would have to redesign models representing 
approximately 4 percent of ACF shipments by the estimated compliance 
date.
    At TSL 2, DOE expects ACF manufacturers to incur approximately $0.2 
million in product conversion costs to redesign the few non-compliant 
ACF models. DOE estimates that ACF manufacturers would not incur any 
capital conversion costs, as manufacturers already have the tooling and 
production equipment necessary to produce ACF models that meet these 
energy conservation standards.
    The conversion costs incurred by manufacturers, which are 
relatively minor due to the majority of shipments already meeting the 
energy conservation standards, and changes in MPCs at TSL 2 are not 
severe enough to have a significant impact on ACF manufacturers in 
either of the manufacturer markup scenarios.
    At TSL 1, for ACF manufacturers, DOE estimates the impacts on INPV 
will range from no change to an increase of $0.5 million, which 
represents a maximum change of 0.1 percent. At TSL 1, industry free 
cash flow sightly decreases by less than 0.1 percent in 2029, the year 
before the modeled compliance year.
    TSL 1 would set energy conservation standards at EL 1 for all ACFs, 
except housed centrifugal ACFs which would not have any energy 
conservation standard. DOE estimates that approximately 96 percent of 
the ACF shipments would already meet or exceed the efficiency levels 
required at TSL 1 in 2030, in the no-new-standards case. Therefore, DOE 
estimates that manufacturers would have to redesign models representing 
approximately 4 percent of ACF shipments by the estimated compliance 
date.
    At TSL 1, DOE expects ACF manufacturers to incur approximately $0.1 
million in product conversion costs to redesign the few non-compliant 
ACF models. DOE estimates that ACF manufacturers would not incur any 
capital conversion costs, as manufacturers already have the tooling and 
production equipment necessary to produce ACF models that meet these 
energy conservation standards.
    The conversion costs incurred by manufacturers, which are 
relatively minor due to the majority of shipments already meeting the 
energy conservation standards, and the change in MPCs at TSL 1 are not 
severe enough to have a significant impact on ACF manufacturers in 
either of the manufacturer markup scenarios.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of new energy 
conservation standards on direct employment in the fan and blower 
industry, DOE used the GRIM to estimate the domestic labor expenditures 
and number of direct employees in the no-new-standards case and in each 
of the standards cases during the analysis period.
    Production employees are those who are directly involved in 
fabricating and assembling equipment within manufacturer facility. 
Workers performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are 
included as production labor, as well as line supervisors.
    DOE used the GRIM to calculate the number of production employees 
from labor expenditures. DOE used statistical data from the U.S. Census 
Bureau's 2021 Annual Survey of Manufacturers \126\ (``ASM'') and the 
results of the engineering analysis to calculate industry-wide labor 
expenditures. Labor expenditures related to product manufacturing 
depend on the labor intensity of the product, the sales volume, and an 
assumption that wages remain fixed in real terms over time. 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.
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    \126\ See www.census.gov/programs-surveys/asm/data/tables.html.
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    Non-production employees account for those workers that are not 
directly engaged in the manufacturing of the covered equipment. This 
could include sales, human resources, engineering, and management. DOE 
estimated non-production employment levels by multiplying the number of 
fan and blower production workers by a scaling factor. The scaling 
factor is calculated by taking the ratio of the total number of 
employees, and the total production workers associated with the 
industry North American Industry Classification System (``NAICS'') code 
333413, which covers fan and blower manufacturing.
    Using the GRIM, DOE estimates that there would be approximately 
13,819 domestic production workers, and 6,091 non-production workers 
for GFBs in 2030 in the absence of new energy conservation standards. 
DOE estimates that there would be approximately 648 domestic production 
workers and 286 non-production workers for ACFs in 2030 in the absence 
of new energy conservation standards. Table V-39 shows the range of the 
impacts of energy conservation standards on U.S. production of GFBs and 
Table V-40 shows the range of the impacts of energy conservation 
standards on U.S. production of ACFs.

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    The direct employment impacts shown in Table V-39 and Table V-40 
represent the potential changes in direct employment that could result 
following the compliance date for GFBs and ACFs. Employment could 
increase or decrease due to the labor content of the various equipment 
being manufactured domestically that meet the analyzed standards or if 
manufacturers decided to move production facilities abroad because of 
new standards. At one end of the range, DOE assumes that all 
manufacturers continue to manufacture the same scope of equipment 
domestically after new standards are required. However, since the labor 
content of GFBs and ACFs vary by efficiency level, this can either 
result in an increase or decrease in domestic employment, even if all 
domestic production remains in the U.S.
    The lower end of the range assumes that some domestic manufacturing 
either is eliminated or moves abroad due to the analyzed new standards. 
DOE assumes that for TSL 1 and TSL 2 ACF and GFB manufacturers already 
have the tooling and production equipment necessary to produce ACF and 
GFB models that meet these energy conservation standards, making it 
unlikely that manufacturers would move any domestic product abroad at 
these analyzed TSLs. At TSL 3 through TSL 6, DOE conservatively 
estimates that some domestic manufacturing could move abroad as these 
TSLs require manufacturers to make larger investments in production 
equipment that could cause some manufacturers to consider moving 
production facilities to a lower-labor cost country.
c. Impacts on Manufacturing Capacity
    During manufacturer interviews most manufacturers stated that any 
standards set at max-tech would severely disrupt manufacturing 
capacity. Many fan and blower manufacturers do not offer any GFB or ACF 
models that would meet these max-tech efficiency levels. Based on the 
shipments analysis used in the NIA, DOE estimates that approximately 4 
percent of all GFB shipments and approximately 1 percent of ACF 
shipments will meet max-tech efficiency levels, in the no-new-standards 
case in 2030, the modeled compliance year of new energy conservation 
standards. Manufacturers stated that they do not have the necessary 
engineers that would be required to convert models that represent 
approximately 96 percent of GFB shipments and approximately 99 percent 
of ACF shipments into compliant models.
    Additionally, most manufacturers stated they would not be able to 
provide a full portfolio of fans and blower, covering their current 
offering of operating pressure and airflow ranges, for any equipment 
class that required max-tech efficiency levels. Most manufacturers 
stated that they do not currently have the machinery, technology, or 
engineering resources to manufacture these fans and blowers. 
Additionally, the few manufacturers that do have the capability of 
producing max-tech fans and blowers are not able to produce these fans 
and blowers for all necessary operating pressures and airflows that the 
market requires and in the volumes that would fulfill the entire fan 
and blower markets. Lastly, most

[[Page 3828]]

manufacturers stated that they would not be able to ramp up those 
production volumes over the five-year compliance period.
    For fan and blower manufacturers to either completely redesign 
their fan and blower production lines to be capable of producing max-
tech fans and blowers or to significantly expand their limited max-tech 
fan and blower production lines to meet larger production volumes would 
require a massive retooling and engineering effort, which would take 
more than the five-year compliance period.
    DOE estimates there is a strong likelihood of manufacturer capacity 
constraints for any equipment classes that require max-tech efficiency 
levels.
d. Impacts on Subgroups of Manufacturers
    As discussed in section IV.J.1 of this document, using average cost 
assumptions to develop an industry cash flow estimate may not be 
adequate for assessing differential impacts among manufacturer 
subgroups. Small manufacturers, niche manufacturers, and manufacturers 
exhibiting a cost structure substantially different from the industry 
average could be affected disproportionately. DOE used the results of 
the industry characterization to group manufacturers exhibiting similar 
characteristics. Consequently, DOE considered three manufacturer 
subgroups in the MIA: GFB manufacturers, ACF manufacturers, and small 
manufacturers as a subgroup for a separate impact analysis. DOE 
discussed the potential impacts on GFB manufacturers and ACF 
manufacturers separately in sections V.B.2.a and V.B.2.b.
    For the small business subgroup analysis, DOE applied the small 
business size standards published by the Small Business Administration 
(``SBA'') to determine whether a company is considered a small 
business. The size standards are codified at 13 CFR part 121. To be 
categorized as a small business under NAICS code 333413, ``industrial 
and commercial fan and blower and air purification equipment 
manufacturing,'' a fan and blower manufacturer and its affiliates may 
employ a maximum of 500 employees. The 500-employee threshold includes 
all employees in a business's parent company and any other 
subsidiaries. For a discussion of the impacts on the small manufacturer 
subgroup, see the Regulatory Flexibility Analysis in section VI.B.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the equipment-specific 
regulatory actions of other Federal agencies that affect the 
manufacturers of a covered product or equipment. While any one 
regulation may not impose a significant burden on manufacturers, the 
combined effects of several existing or impending regulations may have 
serious consequences for some manufacturers, groups of manufacturers, 
or an entire industry. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial 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.
    DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of fans and blowers associated with 
multiple DOE standards or product-specific regulatory actions of other 
Federal agencies.
    DOE evaluates product-specific regulations that will take effect 
approximately 3 years before or after the estimated 2030 compliance 
date of any new energy conservation standards for fans and blowers. 
This information is presented in Table V-41.
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[[Page 3829]]


    MIAQ and AHRI expressed concerns about the HVAC industry burden of 
multiple DOE energy conservation standards and safety standards being 
passed in close succession, requiring significant retesting to be 
performed on equipment. (MIAQ, No. 124 at p. 3-4) and (AHRI, No. 130 at 
p.13-14) DOE conducts a cumulative regulatory burden on the 
manufactures of the products or equipment that is being regulated, so 
for this rulemaking that is a cumulative regulatory burden on fan and 
blower manufacturers. Table V-41 lists other products or equipment that 
fan and blower manufacturers make that also have a potential DOE energy 
conservation standard required within 3 years of the compliance date 
for this rulemaking, modeled to be 2030. Additionally, Table III-1 
listed products and equipment, including several HVAC equipment that if 
they have a fan embedded in the equipment, the fans would be excluded 
for this energy conservation standard, if finalized as proposed.
3. National Impact Analysis
    This section presents DOE's estimates of the national energy 
savings and the NPV of consumer benefits that would result from each of 
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential standards 
for fans and blowers, DOE compared their energy consumption under the 
no-new-standards case to their anticipated energy consumption under 
each TSL. The savings are measured over the entire lifetime of products 
purchased in the 30-year period that begins in the first full year of 
anticipated compliance with new standards (2030-2059). Table V-42 and 
Table V-43 present DOE's projections of the national energy savings for 
each TSL considered for GFBs and ACFs. The savings were calculated 
using the approach described in section IV.H of this document.
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    OMB Circular A-4 \127\ 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 9 years, 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.\128\ The review timeframe established in EPCA is generally 
not synchronized with the equipment lifetime, equipment manufacturing 
cycles, or other factors specific to fans and blowers. Thus, such 
results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodologies. NES 
sensitivity analysis results based on a 9-year analytical period are 
presented in Table V-44 and Table V-45 for GFBs and ACFs. The impacts 
are counted over the lifetime of equipment purchased in 2030-2038.
---------------------------------------------------------------------------

    \127\ Office of Management and Budget. Circular A-4: Regulatory 
Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
    \128\ EPCA requires DOE to review its standards at least once 
every 6 years, 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. While adding 
a 6-year review to the 3-year compliance period adds up 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 yield to the 6-
year backstop. 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 products, the compliance period is 5 years 
rather than 3 years.

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b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for fans and 
blowers. In accordance with OMB's guidelines on regulatory 
analysis,\129\ DOE calculated NPV using both a 7-percent and a 3-
percent real discount rate. Table V-46 and Table V-47 show the consumer 
NPV results with impacts counted over the lifetime of equipment 
purchased in 2030-2059 for GFBs and ACFs.
---------------------------------------------------------------------------

    \129\ Office of Management and Budget. Circular A-4: Regulatory 
Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
[GRAPHIC] [TIFF OMITTED] TP19JA24.092

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    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V-48 and Table V-49 for GFBs and ACFs. 
The impacts are counted over the lifetime of products purchased in 
2030-2038. As mentioned previously, such results are presented for 
informational purposes only and are not indicative of any change in 
DOE's analytical methodology or decision criteria.

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    The previous results reflect the use of a default trend to estimate 
the change in price for fans and blowers over the analysis period (see 
section IV.F.1 of this document). DOE also conducted a sensitivity 
analysis that considered one scenario with a lower rate of price 
decline than the reference case and one scenario with a higher rate of 
price decline than the reference case. The results of these alternative 
cases are presented in appendix 10C of the NOPR TSD. In the high-price-
decline case, the NPV of consumer benefits is higher than in the 
default case. In the low-price-decline case, the NPV of consumer 
benefits is lower than in the default case.
c. Indirect Impacts on Employment
    It is estimated that new energy conservation standards for fans and 
blowers would reduce energy expenditures for consumers of those 
products, with the resulting net savings being redirected to other 
forms of economic activity. These expected shifts in spending and 
economic activity could affect the demand for labor. As described in 
section IV.N of this document, DOE used an input/output model of the 
U.S. economy to estimate indirect employment impacts of the TSLs that 
DOE considered. There are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term timeframes 
(2030-2035), where these uncertainties are reduced.
    The results suggest that the proposed standards would be likely to 
have a negligible impact on the net demand for labor in the economy. 
The net change in jobs is so small that it would be imperceptible in 
national labor statistics and might be offset by other, unanticipated 
effects on employment. Chapter 16 of the NOPR TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As discussed in section III.F.1.d of this document, DOE has 
tentatively concluded that the standards proposed in this NOPR would 
not lessen the utility or performance of the fans and blowers under 
consideration in this rulemaking. Manufacturers of these equipment 
currently offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new or amended standards. As discussed in section 
III.F.1.e, the Attorney General determines the impact, if any, of any 
lessening of competition likely to result from a proposed standard, and 
transmits such determination in writing to the Secretary, together with 
an analysis of the nature and extent of such impact. To assist the 
Attorney General in making this determination, DOE has provided DOJ 
with copies of this NOPR and the accompanying NOPR TSD for review. DOE 
will consider DOJ's comments on the proposed rule in determining 
whether to proceed to a final rule. DOE will publish and respond to 
DOJ's comments in that document. DOE invites comment from the public 
regarding the competitive impacts that are likely to result from this 
proposed rule. In addition, stakeholders may also provide comments 
separately to DOJ regarding these potential impacts. See the ADDRESSES 
section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 in the NOPR TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for fans and blowers is expected to yield environmental 
benefits in the form of reduced emissions of certain air pollutants and 
greenhouse gases. Table V-50 and Table V-51 provide DOE's estimate of 
cumulative emissions reductions expected to result from the TSLs 
considered in this rulemaking for GFBs and ACFs, respectively. The 
emissions were calculated using the multipliers discussed in section 
IV.K of this document. DOE reports annual emissions reductions for each 
TSL in chapter 13 of the NOPR TSD.
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[[Page 3833]]


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    As part of the analysis for this rulemaking, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO<INF>2</INF> 
that DOE estimated for each of the considered TSLs for GFBs and AFCs. 
Section IV.L of this document discusses the SC-CO<INF>2</INF> values 
that DOE used. Table V-52 and Table V-53 present the value of 
CO<INF>2</INF> emissions reduction at each TSL for each of the SC-
CO<INF>2</INF> cases for GFBs and ACFs, respectively. The time-series 
of annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.
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    As discussed in section IV.L.2, DOE estimated the climate benefits 
likely to result from the reduced emissions of methane and 
N<INF>2</INF>O that DOE estimated for each of the considered TSLs for 
GFBs and ACFs. Table V-54 and Table V-55 present the value of the 
CH<INF>4</INF> emissions reduction at each TSL for GFBs and ACFs, 
respectively, and Table V-56 and Table V-57 present the value of the 
N<INF>2</INF>O emissions reduction at each TSL for GFBs and ACFs, 
respectively. The time-series of annual values is presented for the 
proposed TSL in chapter 14 of the NOPR TSD.
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    DOE is well aware that scientific and economic knowledge continues 
to evolve rapidly about the contribution of CO<INF>2</INF> and other 
GHG emissions to changes in the future global climate and the potential 
resulting damages to the global and U.S. economy. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO<INF>2</INF> and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes that the proposed standards would be economically justified 
even without inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the health benefits 
associated with NO<INF>X</INF> and SO<INF>2</INF> emissions reductions 
anticipated to result from the considered TSLs for GFBs and ACFs. The 
dollar-per-ton values that DOE used are discussed in section IV.L of 
this document. Table V-58 and Table V-59 present the present value for 
NO<INF>X</INF> emissions reduction for each TSL calculated using 7-
percent and 3-percent discount rates, for GFBs and ACFs, respectively; 
and Table V-60 and Table V-61 present similar results for 
SO<INF>2</INF> emissions reductions for GFBs and ACFs, respectively. 
The results in these tables reflect application of EPA's low dollar-
per-ton values, which DOE used to be conservative. The time-series of 
annual values is presented for the proposed TSL in chapter 14 of the 
NOPR TSD.
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    Not all the public health and environmental benefits from the 
reduction of greenhouse gases, NO<INF>X</INF>, and SO<INF>2</INF> are 
captured in the values above, and additional unquantified benefits from 
the reductions of those pollutants as well as from the reduction of 
direct PM and other co-pollutants may be significant. DOE has not 
included monetary benefits of the reduction of Hg emissions because the 
amount of reduction is very small.
7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C 6216(a); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) No other factors were considered in this 
analysis.
8. Summary of Economic Impacts
    Table V-62 and Table V-63 presents the NPV values that result from 
adding the estimates of the potential economic benefits resulting from 
reduced GHG and NO<INF>X</INF> and SO<INF>2</INF> emissions to the NPV 
of consumer benefits calculated for each TSL considered in this 
rulemaking, for GFBs and ACFs, respectively. The consumer benefits are 
domestic U.S. monetary savings that occur as a result of purchasing the 
covered GFBs and ACFs, and are measured for the lifetime of equipment 
shipped in 2030-2059. The climate benefits associated with reduced GHG 
emissions resulting from the adopted standards are global benefits, and 
are also calculated based on the lifetime of GFBs and ACFs shipped in 
2030-2059.

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[GRAPHIC] [TIFF OMITTED] TP19JA24.109

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered equipment 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6316(a); 42 U.S.C. 
6295(o)(2)(A)) In determining whether a standard is economically 
justified, the Secretary must determine whether the benefits of the 
standard exceed its burdens by, to the greatest extent practicable, 
considering the seven statutory factors discussed previously. (42 
U.S.C. 6316(a); 42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard 
must also result in significant conservation of energy. (42 U.S.C. 
6316(a); 42 U.S.C. 6295(o)(3)(B))
    For this NOPR, DOE considered the impacts of new standards for GFBs 
and ACFs at each TSL, beginning with the max-tech feasible level, to 
determine whether that level was economically justified. Where the max-
tech level was not justified, DOE then considered the next most 
efficient level and undertook the same evaluation until it reached the 
highest efficiency level that is both technologically feasible and 
economically justified and saves a significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section 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 economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
1. Benefits and Burdens of TSLs Considered for Fans and Blowers 
Standards
a. General Fans and Blowers
    Table V-64 and Table V-65 summarize the quantitative impacts 
estimated for each TSL for GFBs. The national impacts are measured over 
the lifetime of GFBs purchased in the 30-year period that begins in the 
anticipated first full year of compliance with new standards (2030-
2059). The energy savings, emissions reductions, and value of emissions 
reductions refer to full-fuel-cycle results. The efficiency levels 
contained in each TSL are described in section V.A of this document.
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    DOE first considered TSL 6, which represents the max-tech 
efficiency levels. At TSL 6, DOE expects all equipment classes would 
require the highest tier aerodynamic redesign.
    TSL 6 would save an estimated 25.3 quads of full-fuel cycle energy, 
an amount DOE considers significant. Under TSL 6, the NPV of consumer 
benefit would be $15.8 billion using a discount rate of 7 percent, and 
$49.3 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 6 are 439.4 Mt of 
CO<INF>2</INF>, 134.1 thousand tons of SO<INF>2</INF>, 827.9 thousand 
tons of NO<INF>X</INF>, 0.9 tons of Hg, 3,811.3 thousand tons of 
CH<INF>4</INF>, and 4.2 thousand tons of N<INF>2</INF>O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 6 is $21.4 billion. The estimated monetary value of the health 
benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> emissions at 
TSL 6 is $14.8 billion using a 7-percent discount rate and $42.4 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 6 is $52.0 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 6 is $113.2 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 6, for the largest equipment classes, which are represented 
by axial panel fans, centrifugal housed fans, and centrifugal unhoused 
fans--which together represent approximately 85 percent of annual 
shipments--there is a life-cycle cost savings of $1,902, $2,398, and 
$2,004 and a payback period of 2.5 years, 3.1 years, and 1.0 years, 
respectively. For these equipment classes, the fraction of customers 
experiencing a net LCC cost is 29.9 percent, 41.5 percent, and 13.7 
percent due to increases in total installed cost of $618, $1,090 and 
$215, respectively. The life-cycle costs savings are negative for axial 
inline fans, axial PRV, and centrifugal PRV exhaust, and equal to -
$2,169, -$9,470, and -$1,992. For these equipment classes the payback 
is 17.9, 32.9 and 22.8 years and the fraction of customers experiencing 
a net LCC cost is 79.4 percent, 89.0 percent, and 84.7 percent. The 
life-cycle costs savings for centrifugal inline, centrifugal PRV 
supply, and radial housed fans are positive and equal to $335, $1,126, 
and $5,391, respectively. For these equipment classes the payback is 
9.1, 2.8, and 2.2 years and the fraction of customers experiencing a 
net LCC cost is 66.7 percent, 32.3 percent, and 24.4 percent. At TSL 6, 
the shipments-weighted average LCC is equal to $1,751, the payback 
period is equal to 3.8 and the fraction of customers experiencing a net 
LCC cost is 32.8 percent.
    At TSL 6, the projected change in INPV ranges from a decrease of 
$2,287 million to an increase of $40 million, which corresponds to a 
decrease of 46.4 percent and an increase of 0.8 percent, respectively. 
DOE estimates that

[[Page 3841]]

industry must invest $3,750 million to conduct aerodynamic redesigns on 
all equipment classes to comply with standards set at TSL 6. An 
investment of $3,750 million in conversion costs represents 
approximately 1.3 times the sum of the annual free cash flows over the 
years between the estimated final rule announcement date and the 
estimated standards year (i.e., the time period that these conversion 
costs would be incurred) and represents over 75 percent of the entire 
no-new-standards case INPV over the 30-year analysis period.\130\
---------------------------------------------------------------------------

    \130\ The sum of annual free cash flows is estimated to be 
$2,348 million for 2025-2029 in the no-new-standards case and the 
no-new-standards case INPV is estimated to be $4,935 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be 
$480 million in 2029, the year before the modeled compliance date. At 
TSL 6, the estimated free cash flow is -$1,132 million in 2029. This 
represents a decrease in free cash flow of 336 percent, or a decrease 
of $1,612 million, in 2029. A negative free cash flow implies that 
most, if not all, manufacturers will need to borrow substantial funds 
to be able to make investments necessary to comply with energy 
conservation standards at TSL 6. The extremely large drop in free cash 
flows could cause some GFB manufacturers to discontinue certain 
products offerings and shift their resources to other business units 
not impacted by this rule, even though recovery may be possible over 
the 30-year analysis period. DOE is concerned about the uncertainty of 
the market that may exists at TSL 6 if manufacturers choose not to 
maintain their full product offerings in response to the investments 
needed to support TSL 6. Additionally, most small businesses will 
struggle to secure this funding, due to their size and the uncertainty 
of recovering their investments. At TSL 6, models representing 4 
percent of all GFB shipments are estimated to meet the efficiency 
requirements at this TSL in the no-new-standards case by 2030, the 
modeled compliance year. Therefore, models representing 96 percent of 
all GFB shipments will need be remodeled in the 5-year compliance 
period.
    Manufacturers are unlikely to have the engineering capacity to 
conduct this massive redesign effort in 5 years. Instead, they will 
likely prioritize redesigns based on sales volume, which could leave 
market gaps in equipment offered by manufacturers and even the entire 
industry. The resulting market gaps in equipment offerings could result 
in sub-optimal selection of fan duty points (airflow, pressure, speed 
combination) for some applications, potentially leading to a reduction 
in the estimated energy savings, and estimated consumer benefits, at 
this TSL. Most small businesses will be at a competitive disadvantage 
at this TSL because they have less technical and financial resources 
and the capital investments required will be spread over fewer units.
    The Secretary tentatively concludes that at TSL 6 for GFBs, the 
benefits of energy savings, positive NPV of consumer benefits, emission 
reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the economic burden on many 
consumers, and the impacts on manufacturers, including the extremely 
large conversion costs (representing approximately 1.3 times the sum of 
the annual free cash flows during the time period that these conversion 
costs will be incurred and are approximately equal to 75 percent of the 
entire no-new-standards case INPV), profitability impacts that could 
result in a large reduction in INPV (up to a decrease of 46.4 percent), 
the large negative free cash flows in the years leading up to the 
compliance date (annual free cash flow is estimated to be -$1,132 
million in the year before the compliance date), the lack of 
manufacturers currently offering equipment meeting the efficiency 
levels required at this TSL (models representing 96 percent of 
shipments will need to be redesigned to meet this TSL), including most 
small businesses, and the likelihood of the significant disruption in 
the GFB market. Due to the limited amount of engineering resources each 
manufacturer has, it is unclear if most manufacturers will be able to 
redesign models representing on average 96 percent of their GFB 
shipments covered by this rulemaking in the 5-year compliance period. 
Consequently, the Secretary has tentatively concluded that TSL 6 is not 
economically justified.
    DOE then considered TSL 5, which represents a combination of the 
highest efficiency levels resulting in positive life-cycle costs 
savings. At TSL 5, DOE expects all equipment classes, except for axial 
PRVs, would require an aerodynamic redesign. Axial panel, centrifugal 
housed, centrifugal inline, centrifugal unhoused, centrifugal PRV 
supply, and radial housed fans would all require the highest tier 
aerodynamic redesign. Axial inline and centrifugal PRV exhaust fans 
would require the second to highest tier aerodynamic redesign. Axial 
PRV fans would require two size increases in diameter.
    TSL 5 would save an estimated 23.7 quads of energy, an amount DOE 
considers significant. Under TSL 5, the NPV of consumer benefit would 
be $19.2 billion using a discount rate of 7 percent, and $54.8 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 411.5 Mt of 
CO<INF>2</INF>, 125.6 thousand tons of SO<INF>2</INF>, 775.1 thousand 
tons of NO<INF>X</INF>, 0.9 tons of Hg, 3,567.0 thousand tons of 
CH<INF>4</INF>, and 3.9 thousand tons of N<INF>2</INF>O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 5 is $20.2 billion. The estimated monetary value of the health 
benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> emissions at 
TSL 5 is $14.0 billion using a 7-percent discount rate and $39.9 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 5 is $53.4 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 5 is $115.0 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 5, for the largest equipment classes (which are represented 
by axial panel fans, centrifugal housed fans, and centrifugal unhoused 
fans) the standards are set at the max-tech EL as with TSL 6. There is 
a life-cycle cost savings of $1,902, $2,398, and $2,004 and a payback 
period of 2.5 years, 3.1 years, and 1.0 years, respectively. For these 
equipment classes, the fraction of customers experiencing a net LCC 
cost is 29.9 percent, 41.5 percent, and 13.7 percent due to increases 
in total installed cost of $618, $1,090 and $215, respectively. The 
life-cycle costs savings for axial inline, centrifugal inline, and 
radial housed fans are positive and equal to $670, $335, and $5,391, 
respectively. For these equipment classes the payback is 9.8, 9.1, and 
2.2 years and the fraction of customers experiencing a net LCC cost is 
51.3 percent, 66.7 percent, and 24.4 percent. The life-cycle costs 
savings for axial PRVs, centrifugal PRV exhaust, and centrifugal PRV 
supply fans are positive and equal to $945, $154, and $1,126, 
respectively. For these equipment classes the payback is 7.0, 8.9, and 
2.8 years and the fraction of customers

[[Page 3842]]

experiencing a net LCC cost is 14.3 percent, 25.8 percent, and 32.3 
percent. At TSL5, the shipments-weighted average LCC is equal to 
$2,030, the payback period is equal to 2.9 and the fraction of 
customers experiencing a net LCC cost is 30.2 percent.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$1,263 million to an increase of $11 million, which corresponds to a 
decrease of 25.6 percent and an increase of 0.2 percent, respectively. 
DOE estimates that industry must invest $2,075 million to conduct 
aerodynamic redesigns on all equipment classes except axial PRVs and to 
increase the diameter by two sizes for axial PRVs to comply with 
standards set at TSL 5. An investment of $2,075 million in conversion 
costs represents approximately 90 percent of the sum of the annual free 
cash flows over the years between the estimated final rule announcement 
date and the estimated standards year (i.e., the time period that these 
conversion costs would be incurred) and represents over 42 percent of 
the entire no-new-standards case INPV over the 30-year analysis 
period.\131\
---------------------------------------------------------------------------

    \131\ The sum of annual free cash flows is estimated to be 
$2,348 million for 2025-2029 in the no-new-standards case and the 
no-new-standards case INPV is estimated to be $4,935 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be 
$480 million in 2029, the year before the modeled compliance date. At 
TSL 5, the estimated free cash flow is -$407 million in 2029. This 
represents a decrease in free cash flow of 185 percent, or a decrease 
of $887 million, in 2029. A negative free cash flow implies that most, 
if not all, manufacturers will need to borrow substantial funds to be 
able to make investments necessary to comply with energy conservation 
standards at TSL 5. The large drop in free cash flows could cause some 
GFB manufacturers to exit the GFB market entirely, even though recovery 
may be possible over the 30-year analysis period. Additionally, most 
small businesses will struggle to secure this funding due to their size 
and the uncertainty of recovering their investments. At TSL 5, models 
representing 7 percent of all GFB shipments are estimated to meet or 
exceed the efficiency requirements at this TSL in the no-new-standards 
case by 2030, the modeled compliance year. Therefore, models 
representing 93 percent of all GFB shipments will need to be remodeled 
in the 5-year compliance period.
    Manufacturers are unlikely to have the engineering capacity to 
conduct this massive redesign effort in 5 years. Instead, they will 
likely prioritize redesigns based on sales volume, which could leave 
market gaps in equipment offered by manufacturers and even the entire 
industry. The resulting market gaps in equipment offerings could result 
in sub-optimal selection of fan duty points (airflow, pressure, speed 
combination) for some applications, potentially leading to a reduction 
in the estimated energy savings, and estimated consumer benefits, at 
this TSL. Most small businesses will be at a competitive disadvantage 
at this TSL because they have less technical and financial resources 
and the capital investments required will be spread over fewer units.
    The Secretary tentatively concludes that at TSL 5 for GFBs, the 
benefits of energy savings, the economic benefits on many consumers, 
positive NPV of consumer benefits, emission reductions, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the impacts on manufacturers, including the extremely 
large conversion costs (representing approximately 90 percent of the 
sum of the annual free cash flows during the time period these 
conversion costs will be incurred and are approximately equal to 42 
percent of the entire no-new-standards case INPV), profitability margin 
impacts that could result in a large reduction in INPV (up to a 
decrease of 25.6 percent), the large negative free cash flows in the 
years leading up to the compliance date (annual free cash flow is 
estimated to be -$407 million in the year before the compliance date), 
the lack of manufacturers currently offering equipment meeting the 
efficiency levels required at this TSL (models representing 93 percent 
of all GFB shipments will need to be redesigned to meet this TSL), 
including most small businesses, and the likelihood of the significant 
disruption in the GFB market. Due to the limited amount of engineering 
resources each manufacturer has, it is unclear if most manufacturers 
will be able to redesign models representing on average 93 percent of 
their GFB shipments covered by this rulemaking in the 5-year compliance 
period. Consequently, the Secretary has tentatively concluded that TSL 
5 is not economically justified.
    DOE then considered TSL 4, which represents an intermediate level 
that is one efficiency level below TSL 5 for each equipment class. At 
TSL 4, DOE expects all equipment classes, except for axial PRVs, would 
require an aerodynamic redesign. Axial panel, centrifugal housed, 
centrifugal inline, centrifugal unhoused, centrifugal PRV supply, and 
radial housed fans would all require the second highest tier 
aerodynamic redesign. Axial inline fans would require the lowest tier 
aerodynamic redesign. Centrifugal PRV exhaust fans would require the 
second to lowest tier aerodynamic redesign. Axial PRV fans would 
require one size increase in diameter.
    TSL 4 would save an estimated 13.8 quads of energy, an amount DOE 
considers significant. Under TSL 4, the NPV of consumer benefit would 
be $13.7 billion using a discount rate of 7 percent, and $36.9 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 239.4 Mt of 
CO<INF>2</INF>, 73.1 thousand tons of SO<INF>2</INF>, 450.9 thousand 
tons of NO<INF>X</INF>, 0.5 tons of Hg, 2,073.9 thousand tons of 
CH<INF>4</INF>, and 2.3 thousand tons of N<INF>2</INF>O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $11.9 billion. The estimated monetary value of the health 
benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> emissions at 
TSL 5 is $8.2 billion using a 7-percent discount rate and $23.4 billion 
using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $33.8 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $72.2 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 4, for the largest equipment classes which are represented 
by axial panel fans, centrifugal housed fans, and centrifugal unhoused 
fans; there is a life-cycle cost savings of $1,702, $2,423, and $1,170; 
and a payback period of 1.7 years, 0.6 years, and 1.2 years, 
respectively. For these equipment classes, the fraction of customers 
experiencing a net LCC cost is 19.5 percent, 12.9 percent, and 10.5 
percent due to increases in total installed cost of $293, $134 and 
$135, respectively. The life-cycle costs savings for axial inline, 
centrifugal inline, and radial housed fans are positive and equal to 
$550, $955, and $3,714, respectively. For these equipment classes the 
payback is 9.6, 6.1, and 1.7 years and the fraction of customers 
experiencing a net LCC cost is 23.6 percent, 49.2 percent, and

[[Page 3843]]

13.3 percent. The life-cycle costs savings for axial PRVs, centrifugal 
PRV exhaust, and centrifugal PRV supply fans are positive and equal to 
$945, $154, and $973, respectively. For these equipment classes the 
payback is 7.0, 8.9, and 1.7 years and the fraction of customers 
experiencing a net LCC cost is 14.3 percent, 25.8 percent, and 24.9 
percent At TSL 4, the shipment-weighted average LCC is equal to $1,694, 
the payback period is equal to 1.8 and the fraction of customers 
experiencing a net LCC cost is 15.7 percent.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$455 million to an increase of $1 million, which corresponds to a 
decrease of 9.2 percent and an increase of less than 0.1 percent, 
respectively. DOE estimates that industry must invest $770 million to 
comply with standards set at TSL 4. An investment of $770 million in 
conversion costs represents approximately 33 percent of the sum of the 
annual free cash flows over the years between the estimated final rule 
announcement date and the estimated standards year (i.e., the time 
period that these conversion costs would be incurred) and represents 
over 15 percent of the entire no-new-standards case INPV over the 30-
year analysis period.\132\
---------------------------------------------------------------------------

    \132\ The sum of annual free cash flows is estimated to be 
$2,348 million for 2025-2029 in the no-new-standards case and the 
no-new-standards case INPV is estimated to be $4,935 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be 
$480 million in 2029, the year before the modeled compliance date. At 
TSL 4, the estimated free cash flow is $161 million in 2029. This 
represents a decrease in free cash flow of 66.4 percent, or a decrease 
of $319 million, in 2029. Annual cash flows remain positive for all 
years leading up to the modeled compliance date. At TSL 4, models 
representing 25 percent of all GFB shipments are estimated to meet or 
exceed the efficiency requirements at this TSL in the no-new-standards 
case by 2030, the modeled compliance year. Therefore, models 
representing 75 percent of all GFB shipments will need to be remodeled 
in the 5-year compliance period. DOE estimates that while this 
represents a significant redesign effort, most GFB manufacturers will 
have the engineering capacity to complete these redesigns in a 5-year 
compliance period.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has tentatively concluded that a standard set at 
TSL 4 for GFBs would be economically justified. At this TSL, the 
average LCC savings for all GFB equipment class consumers is positive. 
An estimated 15.7 percent of consumers experience a net cost. The FFC 
national energy savings are significant and the NPV of consumer 
benefits is positive using both a 3-percent and 7-percent discount 
rate. Notably, the benefits to consumers vastly outweigh the cost to 
manufacturers. At TSL 4, the NPV of consumer benefits, even measured at 
the more conservative discount rate of 7 percent is over 30 times 
higher than the maximum estimated manufacturers' loss in INPV. The 
standard levels at TSL 4 are economically justified even without 
weighing the estimated monetary value of emissions reductions. When 
those emissions reductions are included--representing $11.9 billion in 
climate benefits (associated with the average SC-GHG at a 3-percent 
discount rate), and $23.4 billion (using a 3-percent discount rate) or 
$8.2 billion (using a 7-percent discount rate) in health benefits--the 
rationale for setting standards at TSL 4 for GFBs is further 
strengthened. Additionally, the impact to manufacturers is 
significantly reduced at TSL 4. While manufacturers have to invest $770 
million to comply with standards at TSL 4, annual free cash flows 
remain positive for all years leading up to the compliance date. 
Lastly, DOE estimates that most GFB manufacturers will have the 
engineering capacity to complete these redesigns in a 5-year compliance 
period.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
While DOE recognizes that TSL 4 is not the TSL that maximizes net 
monetized benefits, DOE has weighed other non-quantified and non-
monetized factors in accordance with EPCA in reaching this 
determination. DOE notes that as compared to TSL 5 and TSL 6, TSL 4 has 
significantly smaller percentages of GFBs consumers experiencing a net 
cost, a lower simple payback period, a lower maximum decrease in INPV, 
lower manufacturer conversion costs, and significantly less likelihood 
of a major disruption to the GFB market, as DOE does not anticipate 
gaps in GFB equipment offerings at TSL 4.
    Although DOE considered proposed new standard levels for GFBs by 
grouping the efficiency levels for each equipment class into TSLs, DOE 
evaluates all analyzed efficiency levels in its analysis. For all 
equipment classes, TSL 4 represents the maximum energy savings that 
does not result in significant negative economic impacts to GFB 
manufacturers. At TSL 4 conversion costs are estimated to be $770 
million, significantly less than at TSL 5 ($2,075 million) and at TSL 6 
($3,750 million). At TSL 4 conversion costs represent a significantly 
smaller size of the sum of GFB manufacturers' annual free cash flows 
for 2025 to 2029 (33 percent), than at TSL 5 (90 percent) and at TSL 6 
(130 percent) and a significantly smaller portion of GFB manufacturers' 
no-new-standards case INPV (15 percent), than at TSL 5 (42 percent) and 
at TSL 6 (75 percent). At TSL 4, GFB manufacturers will have to 
redesign a significantly smaller portion of their GFB models to meet 
the ELs set at TSL 4 (models representing 75 percent of all GFB 
shipments), than at TSL 5 (93 percent) and at TSL 6 (96 percent). 
Lastly, GFB manufacturers' free cash flow remains positive at TSL 4 for 
all years leading up to the compliance date. Whereas at TSL 5 annual 
free cash flow is estimated to be -$407 million and at TSL 6 annual 
free cash flow is estimated to be -$1,132 million in 2029, the year 
before the modeled compliance year. The ELs at the proposed TSL result 
in average positive LCC savings for all equipment classes, 
significantly reduce the number of consumers experiencing a net cost, 
and reduce the decrease in INPV and conversion costs to the point where 
DOE has concluded they are economically justified, as discussed for TSL 
4 in the preceding paragraphs.
    Therefore, based on the previous considerations, DOE proposes to 
adopt the energy conservation standards for GFBs at TSL 4. The proposed 
energy conservation standards for GFBs, which are expressed as FEI 
values, are shown in Table V-66.
BILLING CODE 6450-01-P

[[Page 3844]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.113

[GRAPHIC] [TIFF OMITTED] TP19JA24.114


[[Page 3845]]


    DOE is proposing an FEI level of 0.85 (EL4) for axial PRVs. In 
section IV.C.1.b, DOE developed the MSP-efficiency relationship based 
on data from the AMCA sales database as well as performance data from 
manufacturer fan selection software and performance data provided from 
confidential manufacturer interviews. From its analysis, DOE estimated 
that EL4 for axial PRVs would be achieved by implementing two impeller 
diameter increases. Based on the MSP-efficiency results, EL4 for axial 
PRVs is the highest level with positive life-cycle costs savings. 
Furthermore, as discussed in section IV.C.1.b, ASHRAE 90.1-2022 set an 
FEI target of 1.00 for all fans within the scope of that standard, 
which includes axial PRVs. CEC requires manufacturers to report fan 
operating boundaries that result in operation at a FEI of greater than 
or equal to 1.00 for all fans within the scope of that rulemaking, 
which includes axial PRVs. DOE also notes that, based on its shipments 
analysis, 50-percent of axial PRVs have an FEI of at least 1.00. 
Additionally, based on its review of the market, DOE has found that 
most manufacturers offer models of APRVs that have an FEI of at least 
1.00 at a range of diameters. Based on this, DOE expects that the 
market is already shifting towards an FEI of 1.00 for axial PRVs and 
that this level may not be unduly burdensome for manufacturers to 
achieve.
    DOE requests comment on the proposed standard level for axial PRVs, 
including the design options and costs, as well as the burdens and 
benefits associated with this level and the industry standards/
California regulations FEI level of 1.00.
b. Air Circulating Fans
    Table V-68 and Table V-69 summarize the quantitative impacts 
estimated for each TSL for ACFs. The national impacts are measured over 
the lifetime of ACFs purchased in the 30-year period that begins in the 
anticipated first full year of compliance with new standards (2030-
2059). The energy savings, emissions reductions, and value of emissions 
reductions refer to full-fuel-cycle results. The efficiency levels 
contained in each TSL are described in section V.A of this document.

[[Page 3846]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.115


[[Page 3847]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.116

BILLING CODE 6450-01-C
    DOE first considered TSL 6, which represents the max-tech 
efficiency levels. At TSL 6, DOE expects all equipment classes would 
require an

[[Page 3848]]

ECM. TSL 6 would save an estimated 7.2 quads of energy, an amount DOE 
considers significant. Under TSL 6, the NPV of consumer benefit would 
be $5.7 billion using a discount rate of 7 percent, and $14.5 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 6 are 125.8 Mt of 
CO<INF>2</INF>, 31.5 thousand tons of SO<INF>2</INF>, 237.2 thousand 
tons of NO<INF>X</INF>, 0.2 tons of Hg, 1,100.4 thousand tons of 
CH<INF>4</INF>, and 1.0 thousand tons of N<INF>2</INF>O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 6 is $7.1 billion. The estimated monetary value of the health 
benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> emissions at 
TSL 6 is $5.0 billion using a 7-percent discount rate and $13.1 billion 
using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 6 is $17.7 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 6 is $34.7 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 6, for the largest equipment classes, which are represented 
by ACF1, ACF2, and ACF3--which together represent approximately 99 
percent of annual shipments--there is a life-cycle cost savings of 
$126, $346, and $630 and a payback period of 3.1 years, 1.9 years, and 
1.4 years, respectively. For these equipment classes, the fraction of 
customers experiencing a net LCC cost is 45.1 percent, 23.6 percent, 
and 11.3 percent due to increases in total installed cost of $187, $201 
and $222, respectively. For the remaining equipment class (ACF4), the 
average LCC savings are -$1,210, a majority of consumers (99.7 percent) 
would experience a net cost and the payback period is 25.0 years.
    At TSL 6, the projected change in INPV ranges from a decrease of 
$734 million to an increase of $3 million, which corresponds to 
decreases of 113.1 percent and an increase of 0.5 percent, 
respectively. DOE estimates that industry must invest $1,167 million to 
conduct aerodynamic redesigns on all equipment classes and to implement 
ECMs for all equipment classes to comply with standards set at TSL 6. 
An investment of $1,167 million in conversion costs represents over 5 
times the sum of the annual free cash flows over the years between the 
estimated final rule announcement date and the estimated standards year 
(i.e., the time period that these conversion costs would be incurred) 
and represents approximately 1.8 times the entire no-new-standards case 
INPV over the 30-year analysis period.\133\
---------------------------------------------------------------------------

    \133\ The sum of annual free cash flows is estimated to be $227 
million for 2025-2029 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $649 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be $51 
million in 2029, the year before the modeled compliance date. At TSL 6, 
the estimated free cash flow is -$456 million in 2029. This represents 
a decrease in free cash flow of 999 percent, or a decrease of $507 
million, in 2029. A negative free cash flow implies that most, if not 
all, manufacturers will need to borrow substantial funds to be able to 
make investments necessary to comply with energy conservation standards 
at TSL 6. The extremely large drop in free cash flows could cause some 
ACF manufacturers to exit the ACF market entirely, even though recovery 
may be possible over the 30-year analysis period. Additionally, most 
small businesses will struggle to secure this funding, due to their 
size and the uncertainty of recovering their investments. At TSL 6, 
models representing 1 percent of all ACF shipments are estimated to 
meet the efficiency requirements at this TSL in the no-new-standards 
case by 2030, the modeled compliance year. Therefore, models 
representing 99 percent of all ACF shipments will need to be remodeled 
in the 5-year compliance period.
    Manufacturers are unlikely to have the engineering capacity to 
conduct this massive redesign effort in 5 years. Instead, they will 
likely prioritize redesigns based on sales volume, which could leave 
market gaps in equipment offered by manufacturers and even the entire 
industry. The resulting market gaps in equipment offerings could result 
in sub-optimal selection of fan duty points (airflow, pressure, speed 
combination) for some applications, potentially leading to a reduction 
in the estimated energy savings, and estimated consumer benefits, at 
this TSL. Most small businesses will be at a competitive disadvantage 
at this TSL because they have less technical and financial resources 
and the capital investments required will be spread over fewer units.
    The Secretary tentatively concludes that at TSL 6 for ACFs, the 
benefits of energy savings, the economic benefits on many consumers, 
positive NPV of consumer benefits, emission reductions, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the impacts on manufacturers, including the extremely 
large conversion costs (representing approximately 5 times the sum of 
the annual free cash flows during the time period that these conversion 
costs will be incurred and are approximately equal to 1.8 times the 
entire no-new-standards case INPV), profitability impacts that could 
result in a large reduction in INPV (up to a decrease of 113.1 
percent), the large negative free cash flows in the years leading up to 
the compliance date (annual free cash flow is estimated to be -$456 
million in the year before the compliance date), the lack of 
manufacturers currently offering equipment meeting the efficiency 
levels required at TSL 6 (models representing 99 percent of all ACF 
shipments will need to be redesigned to meet this TSL), including most 
small businesses, and the likelihood of the significant disruption in 
the ACF market. Due to the limited amount of engineering resources each 
manufacturer has, it is unclear if most manufacturers will be able to 
redesign models representing on average 99 percent of their ACF 
shipments covered by this rulemaking in the 5-year compliance period. 
Consequently, the Secretary has tentatively concluded that TSL 6 is not 
economically justified.
    DOE then considered TSL 5, which represents the highest EL below 
max-tech with positive LCC savings and is a combination of efficiency 
level 5 for axial ACFs and efficiency level 3 for housed centrifugal 
ACFs. At TSL 5, DOE expects that axial ACFs would require the highest 
tier of aerodynamic redesign and housed centrifugal ACFs would require 
the lowest tier of aerodynamic redesign. TSL 5 would save an estimated 
6.5 quads of energy, an amount DOE considers significant. Under TSL 5, 
the NPV of consumer benefit would be $5.2 billion using a discount rate 
of 7 percent, and $13.1 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 112.6 Mt of 
CO<INF>2</INF>, 28.2 thousand tons of SO<INF>2</INF>, 212.2 thousand 
tons of NO<INF>X</INF>, 0.2 tons of Hg, 984.6 thousand tons of 
CH<INF>4</INF>, and 0.9 thousand tons of N<INF>2</INF>O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated

[[Page 3849]]

with the average SC-GHG at a 3-percent discount rate) at TSL 5 is $6.3 
billion. The estimated monetary value of the health benefits from 
reduced SO<INF>2</INF> and NO<INF>X</INF> emissions at TSL 5 is $4.5 
billion using a 7-percent discount rate and $11.7 billion using a 3-
percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 5 is $16.0 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 5 is $31.1 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 5, for the largest equipment classes, which are represented 
by ACF1, ACF2, and ACF3--which together represent approximately 99 
percent of annual shipments--there is a life-cycle cost savings of 
$141, $341, and $613 and a payback period of 2.8 years, 1.6 years, and 
1.1 years, respectively. For these equipment classes, the fraction of 
customers experiencing a net LCC cost is 40.4 percent, 22.7 percent, 
and 9.3 percent due to increases in total installed cost of $148, $156 
and $155, respectively. For the remaining equipment class (ACF4), the 
average LCC savings are $18 and 14.1 percent of consumers would 
experience a net cost and the payback period is 4.8 years.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$633 million to an increase of $3 million, which corresponds to a 
decrease of 97.5 percent and an increase of 0.5 percent, respectively. 
DOE estimates that industry must invest $1,043 million to conduct 
significant aerodynamic redesigns for non-compliant axial ACFs and 
minor aerodynamic redesign for non-compliant housed centrifugal ACFs to 
comply with standards set at TSL 5. An investment of $1,043 million in 
conversion costs represents over 4.5 times the sum of the annual free 
cash flows over the years between the estimated final rule announcement 
date and the estimated standards year (i.e., the time period that these 
conversion costs would be incurred) and represents approximately 1.6 
times the entire no-new-standards case INPV over the 30-year analysis 
period.\134\
---------------------------------------------------------------------------

    \134\ The sum of annual free cash flows is estimated to be $227 
million for 2025-2029 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $649 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be $51 
million in 2029, the year before the modeled compliance date. At TSL 5, 
the estimated free cash flow is -$400 million in 2029. This represents 
a decrease in free cash flow of 889 percent, or a decrease of $451 
million, in 2029. A negative free cash flow implies that most, if not 
all, manufacturers will need to borrow substantial funds to be able to 
make investments necessary to comply with energy conservation standards 
at TSL 5. The large drop in free cash flows could cause some ACF 
manufacturers to exit the ACF market entirely, even though recovery may 
be possible over the 30-year analysis period. Additionally, most small 
businesses will struggle to secure this funding, due to their size and 
the uncertainty of recovering their investments. At TSL 5, models 
representing 4 percent of all ACF shipments are estimated to meet or 
exceed the efficiency requirements at this TSL in the no-new-standards 
case by 2030, the modeled compliance year. Therefore, models 
representing 96 percent of all ACF shipments will need to be remodeled 
in the 5-year compliance period.
    Manufacturers are unlikely to have the engineering capacity to 
conduct this massive redesign effort in 5 years. Instead, they will 
likely prioritize redesigns based on sales volume, which could leave 
market gaps in equipment offered by manufacturers and even the entire 
industry. The resulting market gaps in equipment offerings could result 
in sub-optimal selection of fan duty points (airflow, pressure, speed 
combination) for some applications, potentially leading to a reduction 
in the estimated energy savings, and estimated consumer benefits, at 
this TSL. Most small businesses will be at a competitive disadvantage 
at this TSL because they have less technical and financial resources 
and the capital investments required will be spread over fewer units.
    The Secretary tentatively concludes that at TSL 5 for ACFs, the 
benefits of energy savings, the economic benefits on many consumers, 
positive NPV of consumer benefits, emission reductions, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the impacts on manufacturers, including the extremely 
large conversion costs (representing approximately 4.5 times the sum of 
the annual free cash flows during the time period that these conversion 
costs will be incurred and are approximately equal to 1.6 times the 
entire no-new-standards case INPV), profitability impacts that could 
result in a large reduction in INPV (up to a decrease of 97.5 percent), 
the large negative free cash flows in the years leading up to the 
compliance date (annual free cash flow is estimated to be -$400 million 
in the year before the compliance date), the lack of manufacturers 
currently offering equipment meeting the efficiency levels required at 
TSL 5 (models representing 96 percent of all ACF shipments will need to 
be redesigned to meet this TSL), including most small businesses, and 
the likelihood of the significant disruption in the ACF market. Due to 
the limited amount of engineering resources each manufacturer has, it 
is unclear if most manufacturers will be able to redesign models 
representing on average 96 percent of their ACF shipments covered by 
this rulemaking in the 5-year compliance period. Consequently, the 
Secretary has tentatively concluded that TSL 5 is not economically 
justified.
    DOE then considered TSL 4, which represents efficiency level 4 for 
axial ACFs and efficiency level 0 for housed centrifugal ACFs (no new 
standards for housed centrifugal ACFs). DOE expects that the second 
highest tier of aerodynamic redesign would be required for axial ACFs 
at TSL 4 would save an estimated 4.5 quads of energy, an amount DOE 
considers significant. Under TSL 4, the NPV of consumer benefit would 
be $5.3 billion using a discount rate of 7 percent, and $12.6 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 78.5 Mt of 
CO<INF>2</INF>, 19.7 thousand tons of SO<INF>2</INF>, 148.0 thousand 
tons of NO<INF>X</INF>, 0.1 tons of Hg, 686.7 thousand tons of 
CH<INF>4</INF>, and 0.6 thousand tons of N<INF>2</INF>O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $4.4 billion. The estimated monetary value of the health 
benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> emissions at 
TSL 4 is $3.1 billion using a 7-percent discount rate and $8.2 billion 
using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO<INF>2</INF> and NO<INF>X</INF> 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $12.8 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $25.2 billion. The estimated total 
NPV is provided for

[[Page 3850]]

additional information, however DOE primarily relies upon the NPV of 
consumer benefits when determining whether a proposed standard level is 
economically justified.
    At TSL 4, for the largest equipment classes, which are represented 
by ACF1, ACF2, and ACF3--which together represent approximately 99 
percent of annual shipments--there is a life-cycle cost savings of 
$327, $478, and $668 and a payback period of 0.5 years, 0.2 years, and 
0.1 years, respectively. For these equipment classes, the fraction of 
customers experiencing a net LCC cost is 0.2 percent, 0 percent, and 0 
percent due to increases in total installed cost of $16, $14, and $15, 
respectively. For the remaining equipment class (ACF4), the considered 
TSL would not set any energy conservation standards.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$71 million to an increase of less than $0.1 million, which correspond 
to a decrease of 10.9 percent and an increase of less than 0.1 percent, 
respectively. DOE estimates that industry must invest $118.1 million to 
implement the second highest tier of aerodynamic redesign for axial 
ACFs to comply with standards set at TSL 4. An investment of $118.1 
million in conversion costs represents approximately 50 percent of the 
sum of the annual free cash flows over the years between the estimated 
final rule announcement date and the estimated standards year (i.e., 
the time period that these conversion costs would be incurred) and 
represents over 18 percent of the entire no-new-standards case INPV 
over the 30-year analysis period.\135\
---------------------------------------------------------------------------

    \135\ The sum of annual free cash flows is estimated to be $227 
million for 2025-2029 in the no-new-standards case and the no-new-
standards case INPV is estimated to be $649 million.
---------------------------------------------------------------------------

    In the no-new-standards case, free cash flow is estimated to be $51 
million in 2029, the year before the modeled compliance date. At TSL 4, 
the estimated free cash flow is $1 million in 2029. This represents a 
decrease in free cash flow of 99.0 percent, or a decrease of $50.2 
million, in 2029. Annual cash flows remain positive for all years 
leading up to the modeled compliance date. At TSL 4, models 
representing 36 percent of all ACF shipments are estimated to meet or 
exceed the efficiency requirements at this TSL in the no-new-standards 
case by 2030, the modeled compliance year. Therefore, models 
representing 64 percent of all ACF shipments will need to be remodeled 
in the 5-year compliance period. DOE estimates that while this 
represents a significant redesign effort, most ACF manufacturers will 
have the engineering capacity to complete these redesigns in a 5-year 
compliance period.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has tentatively concluded that at a standard set 
at TSL 4 for ACFs would be economically justified. While DOE recognizes 
that TSL 4 is not the TSL that maximizes net monetized benefits, DOE 
has weighed other non-quantified and non-monetized factors in 
accordance with EPCA in reaching this determination. At this TSL, the 
average LCC savings for all ACF consumers are positive. An estimated 
0.1 percent of consumers experience a net cost. The FFC national energy 
savings are significant and the NPV of consumer benefits is positive 
using both a 3-percent and 7-percent discount rate. Notably, the 
benefits to consumers vastly outweigh the cost to manufacturers. At TSL 
4, the NPV of consumer benefits, even measured at the more conservative 
discount rate of 7 percent is over 74 times higher than the maximum 
estimated manufacturers' loss in INPV. The standard levels at TSL 4 are 
economically justified even without weighing the estimated monetary 
value of emissions reductions. When those emissions reductions are 
included--representing $4.4 billion in climate benefits (associated 
with the average SC-GHG at a 3-percent discount rate), and $8.2 billion 
(using a 3-percent discount rate) or $3.1 billion (using a 7-percent 
discount rate) in health benefits--the rationale for setting standards 
at TSL 4 for ACFs is further strengthened. Additionally, the impact to 
manufacturers is significantly reduced at TSL 4. While manufacturers 
have to invest $118.1 million to comply with standards at TSL 4, annual 
free cash flows remain positive for all years leading up to the 
compliance date. Lastly, DOE estimates that most ACF manufacturers will 
have the engineering capacity to complete these redesigns in a 5-year 
compliance period.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
Although DOE has not conducted a comparative analysis to select the 
proposed energy conservation standards, DOE notes that as compared to 
TSL 5 and TSL 6, TSL 4 has higher average LCC savings, significantly 
smaller percentages of GFBs consumers experiencing a net cost, a lower 
simple payback period, a lower maximum decrease in INPV, lower 
manufacturer conversion costs, and significantly less likelihood of a 
major disruption to the ACF market, as DOE does not anticipate gaps in 
ACF equipment offerings at TSL 4.
    Although DOE considered proposed new standard levels for ACFs by 
grouping the efficiency levels for each equipment class into TSLs, DOE 
evaluates all analyzed efficiency levels in its analysis. For all 
equipment classes, TSL 4 represents the maximum energy savings that 
does not result in significant negative economic impacts to ACF 
manufacturers. At TSL 4 conversion costs are estimated to be $118.1 
million, significantly less than at TSL 5 ($1,043 million) and at TSL 6 
($1,167 million). At TSL 4 conversion costs represent a significantly 
smaller size of the sum of ACF manufacturers' annual free cash flows 
for 2025 to 2029 (50 percent), than at TSL 5 (450 percent) and at TSL 6 
(500 percent) and a significantly smaller portion of ACF manufacturers' 
no-new-standards case INPV (18 percent), than at TSL 5 (161 percent) 
and at TSL 6 (180 percent). At TSL 4, ACF manufacturers will have to 
redesign a significantly smaller portion of their ACF models to meet 
the ELs set at TSL 4 (models representing 64 percent of all ACF 
shipments), than at TSL 5 (96 percent) and at TSL 6 (99 percent). 
Lastly, ACF manufacturers' free cash flow remains positive at TSL 4 for 
all years leading up to the compliance date. Whereas at TSL 5 annual 
free cash flow is estimated to be -$400 million and at TSL 6 annual 
free cash flow is estimated to be -$456 million in 2029, the year 
before the modeled compliance year. The ELs at the proposed TSL result 
in average positive LCC savings for all equipment classes, 
significantly reduce the number of consumers experiencing a net cost, 
and reduce the decrease in INPV and conversion costs to the point where 
DOE has concluded they are economically justified, as discussed for TSL 
4 in the preceding paragraphs.
    Therefore, based on the previous considerations, DOE proposes to 
adopt the energy conservation standards for ACFs at TSL 4. The proposed 
new energy conservation standards for ACFs,

[[Page 3851]]

which are expressed as efficacy in CFM/W, are shown in Table V-70.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP19JA24.117

    Table V-71 summarizes the quantitative impacts estimated at the 
proposed TSLs for GFBs and ACFs. The quantitative impacts estimated for 
each TSL for GFBs and ACFs are discussed in sections V.C.1.a and 
V.C.1.b and of this document.

[[Page 3852]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.118


[[Page 3853]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.119

2. Annualized Benefits and Costs of the Proposed Standards
    This section presents the combined results for GFBs and ACFs. 
Specific results for GFBs and ACFs are also discussed in section 
V.C.2.a and V.C.2.b, respectively.
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022 dollars) 
of the benefits from operating products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in product purchase costs, and (2) the 
annualized monetary value of the climate and health benefits from 
emission reductions.
    Table V-72 shows the annualized values for GFBs and ACFs under TSL 
4, expressed in 2022 dollars. The results under the primary estimate 
are as follows.
    Using a 7 percent discount rate for consumer benefits and costs and 
health benefits from reduced NO<INF>X</INF> and SO<INF>2</INF> 
emissions, and the 3 percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards 
proposed in this rule is $360 million per year in increased equipment 
costs, while the estimated annual benefits are $2,506 million in 
reduced equipment operating costs, $963 million in monetized climate 
benefits, and $1,285 million in monetized health benefits. In this 
case, the monetized net benefit would amount to $4,394 million per 
year.
    Using a 3 percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards is $374 million per year in 
increased equipment costs, while the estimated annual benefits are 
$3,302 million in reduced operating costs, $963 million in monetized 
climate benefits, and $1,869 million in monetized health benefits. In 
this case, the monetized net benefit would amount to $5,760 million per 
year.

[[Page 3854]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.120


[[Page 3855]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.121

a. General Fans and Blowers
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022 dollars) 
of the benefits from operating products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in product purchase costs, and (2) the 
annualized monetary value of the climate and health benefits from 
emission reductions.
    Table V-73 shows the annualized values for GFBs under TSL 4, 
expressed in 2022 dollars. The results under the primary estimate are 
as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for GFBs is $329 million per year in increased 
equipment costs, while the estimated annual benefits are $1,880 million 
from reduced equipment operating costs, $703 million in climate 
benefits, and $932 million in health benefits. In this case, the net 
benefit amounts to $3,185 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards for GFBs is $340 million per 
year in increased equipment costs, while the estimated annual benefits 
are $2,524 million in reduced operating costs, $703 million in 
monetized climate benefits, and $1,384 million from in monetized health 
benefits. In this case, the net benefit amounts to $4,271 million per 
year.

[[Page 3856]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.122


[[Page 3857]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.123

b. Air Circulating Fans
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022 dollars) 
of the benefits from operating products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in product purchase costs, and (2) the 
annualized monetary value of the climate and health benefits from 
emission reductions.
    Table V-74 shows the annualized values for ACFs under TSL 4, 
expressed in 2022 dollars. The results under the primary estimate are 
as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NO<INF>X</INF> and SO<INF>2</INF> reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
proposed standards for ACFs is $31 million per year in increased 
equipment costs, while the estimated annual benefits are $626 million 
from reduced equipment operating costs, $261 million from GHG 
reductions, and $353 million from reduced NO<INF>X</INF> and 
SO<INF>2</INF> emissions. In this case, the net benefit amounts to 
$1,209 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the proposed standards for ACFs is $34 million per 
year in increased equipment costs, while the estimated annual benefits 
are $778 million in reduced operating costs, $261 million in monetized 
climate benefits, and $485 million in monetized health benefits. In 
this case, the net benefit amounts to $1,489 million per year.

[[Page 3858]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.124


[[Page 3859]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.125

BILLING CODE 6450-01-C

D. Reporting, Certification, and Sampling Plan

    Manufacturers, including importers, must use equipment-specific 
certification templates to certify compliance to DOE. For fans and 
blowers, the certification template reflects the general certification 
requirements specified at 10 CFR 429.12 and the product-specific 
requirements specified at 10 CFR 429.69. DOE is not proposing to amend 
the product-specific certification requirements for this equipment. DOE 
may consider certification reporting requirements for GFBs in a 
separate rulemaking.

E. Representations and Enforcement Provisions

1. Representations for General Fans and Blowers
    In the May 2023 TP Final Rule, DOE summarized stakeholder comments 
related to FEI representations at compliant and non-compliant duty 
points. DOE stated that it was not establishing energy conservation 
standards for fans and blowers and therefore, the May 2023 TP final 
rule would not result in any compliant or non-compliant operating 
points. DOE further stated that it would consider representations and 
any issues related to compliance with any potential energy conservation 
standard in a separate energy conservation standards rulemaking. 88 FR 
27312, 27369.
    In response to the October 2022 NODA, the CA IOUs recommended that 
DOE consider allowing representations at all duty points for fans 
designed for low-pressure, space-constrained applications. (CA IOUs, 
No. 127 at pp. 6-7) The CA IOUs stated that for a low-pressure 
application fan to meet an energy conservation standard, a consumer 
would have to either increase the diameter of the fan, which would 
result in a costly redesign of the system, or the consumer would have 
to replace the non-compliant fan with a compliant fan of the same 
diameter running at a higher pressure, which could result in greater 
power consumption of the system. Id. Furthermore, the CA IOUs 
encouraged DOE to discuss the issue of whether to allow the publication 
of non-compliant, low-pressure duty points with manufacturers. Id.
    Damas and Boldt commented that they disagree with DOE's proposal to 
restrict the publication of fan and blower performance data at duty 
points that do not comply with a proposed energy conservation standard 
and recommended that DOE instead require that any non-compliant duty 
points be highlighted. (Damas and Boldt, No. 131 at pp. 1, 5) They 
provided several example scenarios where a fan may be selected for use 
that is outside its compliant range: space-constrained low-flow high-
pressure applications, space-constrained low-pressure applications, 
retrofitted systems, VAV systems that require operation over a wide 
range of duty points, systems with pressure consuming elements that may 
vary in their pressure consumption such that a fan must be selected for 
a worst case scenario instead of an average use scenario, and 
situations where the system that a fan is operating in changes. (Damas 
and Boldt, No. 131 at pp. 2-4) Furthermore, Damas and Boldt commented 
that they are concerned that designers may artificially increase the 
pressure consumption of a system by closing dampers to allow the fan to 
operate at a compliant duty point, which could ultimately increase 
energy consumption. (Damas and Boldt, No. 131 at pp. 3-4) Additionally, 
Damas and Boldt stated that there may be safety issues when a fan 
operates near its highest efficiency duty point, which is often near 
the unstable region of a fan. (Damas and Boldt, No. 131 at p. 4) Damas 
and Boldt commented that system engineers need full fan

[[Page 3860]]

performance data to ensure that a system design does not push the fan 
into its unstable operating region. Id.
    As discussed in detail in section IV.C.1, DOE evaluated improved 
efficiency options while maintaining constant diameter and duty point 
(i.e., air flow and operating pressures remained constant as efficiency 
increased); therefore, DOE has tentatively concluded that a compliant 
fan of the same equipment class, diameter, and duty point would be 
available.
    As discussed in section III.C.1 of this document, the FEI metric is 
evaluated at each duty point as specified by the manufacturer as 
required by the DOE test procedure. If adopted, the proposed energy 
conservation standards would have to be met at each duty point at which 
the fan is sold.
    Consistent with stakeholder feedback from the CA IOUs and Damas and 
Boldt, DOE recognizes that not allowing representations of a fan's 
entire performance map could result in increased energy consumption or 
potential unintended consequences. Therefore, DOE proposes that a 
manufacturer could make representations at non-compliant duty points 
provided representations include a disclaimer; however, the 
manufacturer would be responsible for ensuring that the fan is not sold 
and selected at the non-compliant duty points. To ensure this, a 
manufacturer could, for example: (1) choose to make representations of 
non-compliant duty points and identify those duty points as non-
compliant, but would need to know the duty point(s) for which the fan 
was selected and sold; or (2) choose to only make representations at 
compliant duty points in the case where the manufacturer does not know 
the duty point(s) for which the fan is selected and sold.
    In accordance with 42 U.S.C. 6295(r), energy conservation standards 
may include any requirement which the Secretary determines is necessary 
to assure that each covered product to which such standard applies 
meets the required minimum level of energy efficiency. As such, to 
assure that each GFB to which the proposed standard would apply meets 
the required FEI specified in such standard, and in accordance with 42 
U.S.C. 6295(r), DOE proposes to additionally require that all 
representations at non-compliant duty points would be (1) identified by 
the following disclaimer: ``Sale at these duty points violates 
Department of Energy Regulations under EPCA'' in all capital letters, 
red, and bold font; and (2) grayed out in any graphs or tables in which 
they are included.
2. Enforcement Provisions for General Fans and Blowers
    Subpart C of 10 CFR part 429 establishes enforcement provisions 
applicable to covered products and covered equipment, including fans 
and blowers. General enforcement provisions are established in 10 CFR 
429.110. Various provisions in 10 CFR 429.110 specify when DOE may test 
for enforcement, how DOE will obtain units for enforcement testing, 
where selected units will be tested, and how DOE will determine basic 
model compliance, both in general and for specific products and 
equipment. DOE is proposing to add specific enforcement testing 
provisions for GFBs at 10 CFR 429.110(e).
    As previously stated, the FEI metric would be evaluated at each 
duty point as specified by the manufacturer and, if adopted, the 
proposed energy conservation standards would have to be met at each 
duty point at which the fan is sold. Therefore, while DOE requires GFBs 
to follow the basic model structure outlined in the May 2023 TP Final 
Rule, DOE proposes that GFB compliance will be determined by duty point 
offered for sale. In other words, if DOE finds that one or more duty 
point(s) certified as compliant by a manufacturer is not compliant with 
proposed energy conservation standards, if adopted, the basic model 
would be considered non-compliant.
    Pursuant to 10.CFR 429.104, DOE may, at any time, test a basic 
model to assess whether the basic model is in compliance with the 
applicable energy conservation standard(s). If DOE has reason to 
believe that a basic model is not in compliance it may test for 
enforcement pursuant to 10 CFR 429.110. To verify compliance of GFBs, 
DOE proposes to add the following enforcement testing approach at 10 
CFR 429.110(e).
    When conducting assessment and enforcement testing, DOE proposes to 
test each basic model according to the DOE test procedure, using the 
test method specified by the manufacturer submitted in their 
certification report (i.e., based on section 6.1, 6.2, 6.3 or 6.4 of 
AMCA 214-21) pursuant to 10 CFR 429.69. When conducting enforcement 
testing, DOE proposes that it may choose to test either one fan at 
multiple duty points or multiple fans at one or more duty points to 
evaluate compliance of a certified basic model at each certified duty 
point.
a. Testing a Single Fan at Multiple Duty Points
    When testing a single fan at multiple duty points, DOE proposes to 
first determine either bhp or FEP, dependent on the test method 
specified by the manufacturer, for the range of certified airflow, 
pressure, and speed (duty points) according to appendix A of subpart J 
to 10 CFR part 431. DOE acknowledges that it may not be feasible to 
exactly replicate the measurements at the certified duty points, or 
within the certified range of duty points; therefore, DOE will verify 
that, at a given speed, the airflow at which the test is being 
conducted is within 5-percent of the certified airflow and the pressure 
is within between P x (1-0.05)\2\ and where P is the certified static 
or total pressure. If DOE is unable to verify some or all certified 
duty points (i.e., the fan is unable to perform at airflows and 
pressures at a given speed that are within the prescribed margin of the 
certified airflows and pressures), the certified rating cannot be used 
to determine compliance. DOE will consider the certified rating to be 
invalid and DOE will rely on the measured duty point (i.e., measured 
flow and pressure at the given speed) to determine compliance. If DOE 
is able to verify the certified duty points (i.e., DOE is able to test 
the fan at airflows and pressures at a given speed that are within the 
prescribed margin of the certified airflows and pressures), DOE will 
convert the tested bhp or FEP at the tested airflow to the certified 
airflow and use the converted bhp or FEP calculate the corresponding 
FEI at each certified duty point, in accordance with the DOE test 
procedure. To convert the tested bhp or FEP at the tested airflow to 
the certified airflow DOE will use the following equations:
    For fan shaft power:
    [GRAPHIC] [TIFF OMITTED] TP19JA24.126
    

[[Page 3861]]


    For fan electrical power:
    [GRAPHIC] [TIFF OMITTED] TP19JA24.127
    
    DOE proposes that if the FEI calculated at the certified or 
measured duty point is greater than or equal to the minimum required 
FEI, then testing would be complete and DOE would consider the 
certified duty point to be compliant. If the FEI calculated at a 
certified or measured duty point is less than the minimum required FEI, 
DOE may make a determination of noncompliance based on that single test 
or may select no more than three additional identical model numbers and 
evaluate (a) specific duty point(s) according to the procedure just 
described to further determine whether (a) specific duty point(s) is/
are compliant based on the average FEI of all units tested when 
multiple units are tested.
    DOE also proposes to add the provisions related to the verification 
of duty points at 10 CFR 429.134.
b. Testing Multiple Fans at One or Several Duty Points
    If the FEI calculated at a certified or measured duty point is less 
than the minimum required FEI, DOE may make a determination of 
noncompliance based on that single test or may select no more than 
three additional units of a certified basic model for testing. For each 
of the units tested, if the duty point can be verified, DOE proposes to 
then follow the approach described in the preceding paragraph, to 
determine the converted FEP or bhp and the associated FEI at certified 
duty point(s). Similarly, DOE proposes to determine compliance at each 
duty point using the average FEI for each certified duty point. If the 
duty point(s) cannot be verified, DOE proposes to use the same approach 
as in the sampling provisions (see 10 CFR 429.69) to determine the 
average FEP or bhp and the associated average FEI at measured duty 
point(s).
3. Enforcement Provisions for Air Circulating Fans
    For air circulating fans, DOE proposes to follow the general 
enforcement testing provisions at 10 CFR 429.110.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and 
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879 
(April 11, 2023), requires agencies, to the extent permitted by law, 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 E.O. 13563 
requires agencies to use the best available techniques to quantify 
anticipated present and future benefits and costs as accurately as 
possible. In its guidance, the Office of Information and Regulatory 
Affairs (``OIRA'') in the Office of Management and Budget (``OMB'') 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, 
this proposed regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this proposed regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 
12866, DOE has provided to OIRA an assessment, including the underlying 
analysis, of benefits and costs anticipated from the proposed 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation why the planned regulatory action is preferable to the 
identified potential alternatives. These assessments are summarized in 
this preamble and further detail can be found in the technical support 
document for this proposed rulemaking. Finally, in accordance with 5 
U.S.C. 553(b)(4), a summary of this proposed rule may be found at 
www.regulations.gov/docket/EERE-2020-BT-STD-0007.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
for any rule that by law must be proposed for public comment, 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 E.O. 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 website (www.energy.gov/gc/office-general-counsel). DOE has 
prepared the following IRFA for the industrial equipment that is the 
subject of this rulemaking.

[[Page 3862]]

1. Description of Reasons Why Action Is Being Considered
    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. EPCA specifies 
the types of industrial equipment that can be classified as covered in 
addition to the equipment enumerated in 42 U.S.C. 6311(1). This 
industrial equipment includes fans and blowers. (42 U.S.C. 
6311(2)(B)(ii) and (iii)) DOE is undertaking this NOPR pursuant to its 
obligations under EPCA to propose standards for covered industrial 
equipment.
2. Objectives of, and Legal Basis for, Rule
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including fans and blowers. 
Any new or amended standard for a covered product must be designed to 
achieve the maximum improvement in energy efficiency that the Secretary 
of Energy determines is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B))
3. Description on Estimated Number of Small Entities Regulated
    For manufacturers of fans and blowers, 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. (See 13 CFR part 121.) The 
size standards are listed by North American Industry Classification 
System (``NAICS'') code and industry description and are available at 
www.sba.gov/document/support-table-size-standards. Manufacturing of 
fans and blowers is classified under NAICS 335220, ``Industrial and 
Commercial Fan and Blower and Air Purification Equipment 
Manufacturing.'' The SBA sets a threshold of 500 employees or fewer for 
an entity to be considered as a small business for this category.
    DOE conducted a focused inquiry of the companies that could be 
small businesses that manufacture fans and blowers covered by this 
rulemaking. DOE used data from the AMCA sales database; from the BESS 
Labs database; and from ENERGY STAR's certified product database to 
create a list of companies that potentially sell fans and blowers 
covered by this rulemaking. Additionally, DOE received feedback from 
interested parties in response to previous stages of this rulemaking. 
DOE contacted select companies on its list, as necessary, to determine 
whether they met the SBA's definition of a fan and blower small 
business. DOE screened out companies that did not offer equipment 
covered by this rulemaking, did not meet the definition of a ``small 
business,'' or are foreign owned and operated.
    Using these data sources, DOE identified 91 manufacturers of fans 
and blowers. DOE then referenced D&B Hoovers reports,\136\ as well as 
the online presence of identified businesses in order to determine 
whether they might the criteria of a small business. 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 and 
operated. Additionally, DOE filters out businesses that do not directly 
produce fans and blowers, but instead relabel fans and blowers or 
integrate them into a different product.
---------------------------------------------------------------------------

    \136\ D&B Hoovers reports require a subscription to D&B Hoovers 
and can be accessed at: app.dnbhoovers.com.
---------------------------------------------------------------------------

    From these sources, DOE identified 46 unique businesses 
manufacturing at least one covered fan or blower product family and 
that also fall under SBA's employee threshold for this rulemaking. Of 
the 46 small businesses, 41 manufacture at least one model of a covered 
GFB and 15 of these small businesses additionally manufacture at least 
one model of a covered ACF. Lastly, there are five small businesses 
that only manufacture ACF models (and do not manufacture any GFB 
models).
    DOE requests comment on the number of small business OEMs 
identified that manufacture fans and blowers covered by this 
rulemaking.
4. Description and Estimate of Compliance Requirements Including 
Differences in Cost, if Any, for Different Groups of Small Entities
    In section IV.J.2.c of this NOPR, DOE reviews the methodology used 
to calculate conversion costs, this is further elaborated in chapter 12 
of the NOPR TSD. DOE used the same methodology to estimate per small 
business conversion costs as with the broader industry--developing 
estimates of the number of product families for each small business 
using their websites and product catalogs. DOE was also able to find 
revenue estimates for each small business identified.
    Across the identified small businesses, DOE identified 457 covered 
GFB product families and 97 ACF product families. DOE evaluated how 
many of each type for each small business would be compliant with TSL 4 
based on the shipments analysis efficiency level estimates. Then, DOE 
assumed that all non-compliant product families would be redesigned and 
calculated the appropriate conversion costs. DOE estimates that the 
total cost to all small businesses to redesign GFB product families 
would be approximately $233.0 million and to redesign ACF would be an 
additional $29.1 million. DOE provides estimates of conversion costs 
for each small business in the following tables for small businesses 
that manufacture both GFBs and ACFs, GFBs only, and ACFs only.
BILLING CODE 6450-01-P

[[Page 3863]]

[GRAPHIC] [TIFF OMITTED] TP19JA24.128


[[Page 3864]]


[GRAPHIC] [TIFF OMITTED] TP19JA24.129

[GRAPHIC] [TIFF OMITTED] TP19JA24.130

BILLING CODE 6450-01-C
    Costs as a percentage of revenue vary significantly across the 
small businesses. For small manufacturers that make both GFBs and ACFs, 
median costs as a percentage of revenue are 10.8 percent. For small 
manufacturers that only make GFBs, median costs as a percentage of 
revenue are 5.3 percent. For small businesses that only make ACFs, most 
small businesses are expected to incur zero redesign costs, the highest 
cost estimated represents 6.9 percent of the affected small business' 
compliance period revenue. Small businesses that experience high 
conversion costs as a percentage of revenue will likely need to seek 
outside capital to finance redesign efforts and or prioritize 
redesigning product families based on sales volume.
    DOE requests comment on the estimated small business costs and how 
those may differ from the costs incurred by larger manufacturers.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any other rules or regulations that duplicate, 
overlap, or conflict with the rule being considered today.
6. Significant Alternatives to the Rule
    The discussion in the previous section analyzes impacts on small 
businesses that would result from DOE's proposed rule, represented by 
TSL 4. In reviewing alternatives to the proposed rule, DOE examined 
energy conservation standards set at lower efficiency levels. While 
selecting TSLs 1, 2, or 3 would reduce the possible impacts on small 
businesses, it would come at the expense of a significant

[[Page 3865]]

reduction in energy savings and consumer NPV.
    For GFBs, TSL 1 achieves 88 percent lower energy savings and 90 
percent lower consumer net benefits compared to the energy savings and 
consumer net benefits at TSL 4. TSL 2 achieves 78 percent lower energy 
savings and 80 percent lower consumer net benefits compared to the 
energy savings and consumer net benefits at TSL 4. TSL 3 achieves 44 
percent lower energy savings and 49 percent lower consumer net benefits 
compared to the energy savings and consumer net benefits at TSL 4.
    For ACFs, TSL 1 achieves 98 percent lower energy savings and 96 
percent lower consumer net benefits compared to the energy savings and 
consumer net benefits at TSL 4. TSL 2 achieves 96 percent lower energy 
savings and 94 percent lower consumer net benefits compared to the 
energy savings and consumer net benefits at TSL 4. TSL 3 achieves 73 
percent lower energy savings and 71 percent lower consumer net benefits 
compared to the energy savings and consumer net benefits at TSL 4.
    Based on the presented discussion, establishing standards at TSL 4 
for GFBs and for ACFs balances the benefits of the energy savings and 
consumer benefits with the potential burdens placed on manufacturers 
and small businesses better than alternate standard levels. 
Accordingly, DOE does not propose one of the other TSLs considered in 
the analysis, or the other policy alternatives examined as part of the 
regulatory impact analysis and included in chapter 17 of the NOPR TSD.

C. Review Under the Paperwork Reduction Act

    Under the procedures established by the Paperwork Reduction Act of 
1995 (``PRA''), a person is not required to respond to a collection of 
information by a Federal agency unless that collection of information 
displays a currently valid OMB Control Number.
    OMB Control Number 1910-1400, Compliance Statement Energy/Water 
Conservation Standards for Appliances, is currently valid and assigned 
to the certification reporting requirements applicable to covered 
equipment, including fans and blowers.
    DOE's certification and compliance activities ensure accurate and 
comprehensive information about the energy and water use 
characteristics of covered products and covered equipment sold in the 
United States. Manufacturers of all covered products and covered 
equipment must submit a certification report before a basic model is 
distributed in commerce, annually thereafter, and if the basic model is 
redesigned in such a manner to increase the consumption or decrease the 
efficiency of the basic model such that the certified rating is no 
longer supported by the test data. Additionally, manufacturers must 
report when production of a basic model has ceased and is no longer 
offered for sale as part of the next annual certification report 
following such cessation. DOE requires the manufacturer of any covered 
product or covered equipment to establish, maintain, and retain the 
records of certification reports, of the underlying test data for all 
certification testing, and of any other testing conducted to satisfy 
the requirements of part 429, part 430, and/or part 431. Certification 
reports provide DOE and consumers with comprehensive, up-to-date 
efficiency information and support effective enforcement.
    Certification data would be required for fans and blowers were this 
NOPR to be finalized as proposed; however, DOE is not proposing 
certification or reporting requirements for fans and blowers in this 
NOPR. Instead, DOE may consider proposals to establish certification 
requirements and reporting for fans and blowers under a separate 
rulemaking regarding appliance and equipment certification. DOE will 
address changes to OMB Control Number 1910-1400 at that time, as 
necessary.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for rulemakings that establish energy 
conservation standards for consumer products or industrial equipment. 
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this 
rulemaking qualifies for categorical exclusion B5.1 because it is a 
rulemaking that establishes energy conservation standards for consumer 
products or industrial equipment, none of the exceptions identified in 
categorical exclusion B5.1(b) apply, no extraordinary circumstances 
exist that require further environmental analysis, and it otherwise 
meets the requirements for application of a categorical exclusion. See 
10 CFR 1021.410. DOE will complete its NEPA review before issuing the 
final rule.

E. Review Under Executive Order 13132

    E.O. 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. DOE has examined this proposed rule and has 
tentatively determined that it would not have a substantial direct 
effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. EPCA governs 
and prescribes Federal preemption of State regulations as to energy 
conservation for the equipment that are the subject of this 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. 6316(a) 
and (b); 42 U.S.C. 6297) Therefore, 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 E.O. 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, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to

[[Page 3866]]

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 E.O. 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, section 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 them. 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 www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    Although this proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more in any one year by the private sector. Such expenditures may 
include: (1) investment in research and development and in capital 
expenditures by fans and blowers manufacturers in the years between the 
final rule and the compliance date for the new standards and (2) 
incremental additional expenditures by consumers to purchase higher-
efficiency fans and blowers, 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 Executive Order 12866. This 
SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this 
proposed rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the 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 6316(a); 
42 U.S.C. 6295(m), this proposed rule would establish energy 
conservation standards for fans and blowers that are designed to 
achieve the maximum improvement in energy efficiency that DOE has 
determined to be both technologically feasible and economically 
justified, as required by 42 U.S.C 6316(a); 42 U.S.C. 6295(o)(2)(A) and 
(o)(3)(B). A full discussion of the alternatives considered by DOE is 
presented in chapter 17 of the NOPR TSD for this 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

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15, 
1988), DOE has determined that this proposed rule 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 information 
quality 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). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this 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

    E.O. 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.

[[Page 3867]]

    DOE has tentatively concluded that this regulatory action, which 
proposes energy conservation standards for fans and blowers, 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 this proposed rule.

L. Information Quality

    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 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and has prepared a report describing that peer 
review.\137\ 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. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged with the National Academy of 
Sciences to review DOE's analytical methodologies to ascertain whether 
modifications are needed to improve DOE's analyses. DOE is in the 
process of evaluating the resulting report.\138\
---------------------------------------------------------------------------

    \137\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed December 5, 2023).
    \138\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
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M. Description of Materials Incorporated by Reference

    In this NOPR, DOE proposes to incorporate by reference the 
following test standards published by the IEC.
    IEC 61800-9-2:2023 specifies test methods to determine the 
efficiency of motor controllers as well as the efficiency of motor and 
motor controller combinations. It also establishes efficiency 
classifications for this equipment.
    IEC TS 60034-30-2:2016 establishes efficiency classifications for 
motors driven by motor controllers.
    IEC TS 60034-31:2021 provides a guideline of technical and 
economical aspects for the application of energy-efficient electric AC 
motors and example calculations.
    IEC 61800-9-2:2023, IEC TS 60034-30-2:2016, and IEC TS 60034-
31:2021 are available for purchase from the International 
Electrotechnical Committee (IEC), Central Office, 3, rue de 
Varemb[eacute], P.O. Box 131, CH-1211 GENEVA 20, Switzerland; + 41 22 
919 02 11; webstore.iec.ch.
    The following standards appear in the amendatory text of this 
document and have already been approved for the locations in which they 
appear: AMCA 210-16, AMCA 214-21, and ISO 5801:2017.

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 document. If 
you plan to attend the public meeting, please notify the Appliance and 
Equipment Standards staff at (202) 287-1445 or 
<a href="/cdn-cgi/l/email-protection#165766667a7f7778757349456277787277647265494663747a7f75495b7373627f7871655673733872797338717960"><span class="__cf_email__" data-cfemail="622312120e0b030c01073d3116030c06031006113d3217000e0b013d2f0707160b0c05112207074c060d074c050d14">[email protected]</span></a>.
    Please note that foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures which require advance 
notice prior to attendance at the public meeting. If a foreign national 
wishes to participate in the public meeting, please inform DOE of this 
fact as soon as possible by contacting Ms. Regina Washington at (202) 
586-1214 or by email (<a href="/cdn-cgi/l/email-protection#6d3f080a04030c433a0c1e0504030a1902032d080843090208430a021b"><span class="__cf_email__" data-cfemail="84d6e1e3edeae5aad3e5f7ecedeae3f0ebeac4e1e1aae0ebe1aae3ebf2">[email protected]</span></a>) so that the 
necessary procedures can be completed.
    DOE requires visitors to have laptops and other devices, such as 
tablets, checked upon entry into the Forrestal Building. Any person 
wishing to bring these devices into the building will be required to 
obtain a property pass. Visitors should avoid bringing these devices, 
or allow an extra 45 minutes to check in. Please report to the 
visitor's desk to have devices checked before proceeding through 
security.
    Due to the REAL ID Act implemented by the Department of Homeland 
Security (``DHS''), there have been recent changes regarding ID 
requirements for individuals wishing to enter Federal buildings from 
specific States and U.S. territories. DHS maintains an updated website 
identifying the State and territory driver's licenses that currently 
are acceptable for entry into DOE facilities at www.dhs.gov/real-id-enforcement-brief. A driver's license from a State or territory 
identified as not compliant by DHS will not be accepted for building 
entry and one of the alternate forms of ID listed below will be 
required. Acceptable alternate forms of Photo-ID include U.S. Passport 
or Passport Card; an Enhanced Driver's License or Enhanced ID-Card 
issued by States and territories as identified on the DHS website 
(Enhanced licenses issued by these States and territories are clearly 
marked Enhanced or Enhanced Driver's License); a military ID or other 
Federal government-issued Photo-ID card.
    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 website at www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=51. Participants 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 document. The request and advance copy of statements must be 
received at least one week before the public meeting and are to be 
emailed. Please include a telephone number to enable DOE staff to make 
follow-up contact, if needed.

[[Page 3868]]

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. There shall not be discussion of proprietary 
information, costs or prices, market share, or other commercial matters 
regulated by U.S. anti-trust laws. After the public meeting, interested 
parties may submit further comments on the proceedings, as well as on 
any aspect of the proposed rulemaking, until the end of the comment 
period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present a general overview of the topics addressed in 
this proposed rulemaking, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this proposed 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. 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 previous 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 document and will be accessible on the DOE website. 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 document.
    Submitting comments via www.regulations.gov. The 
www.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 www.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 www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through www.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 www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.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 postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible, in which case it is not necessary to submit printed copies. 
No telefacsimiles (``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. Pursuant 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 two well-marked 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. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    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

[[Page 3869]]

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) DOE requests comment on its proposed clarification for fans 
that create a vacuum. Specifically, DOE requests comment on whether 
fans that are manufactured and marketed exclusively to create a vacuum 
of 30 inches water gauge or greater could also be used in positive 
pressure applications. Additionally, DOE requests information on the 
applications in which a fan not manufactured or marketed exclusively 
for creating a vacuum would be used to create a vacuum of 30 inches 
water gauge or greater.
    (2) DOE requests comments and feedback on the proposed methodology 
and calculation of motor and motor controller losses as well as 
potentially using an alternative calculation based on adjusted AMCA 
214-21 equations.
    (3) DOE requests comment on whether there are specific fans that 
meet the axial ACF definition that provide utility substantially 
different from the utility provided from other axial ACFs and that 
would impact energy use. If so, DOE requests information on how the 
utility of these fans differs from other axial ACFs and requests data 
showing the differences in energy use due to differences in utility 
between these fans and other axial ACFs.
    (4) DOE requests comment on its understanding that the diameter 
increase design option could be applied to non-embedded, non-space-
constrained equipment classes.
    (5) DOE requests comment on whether the FEI increases associated 
with an impeller diameter increase for centrifugal PRVs and for axial 
PRVs are realistic. Specifically, DOE requests comment on whether it is 
realistic for axial PRVs to have a FEI increase that is 3 times greater 
than that for centrifugal PRVs when starting at the same initial 
diameter. Additionally, DOE requests comment on the factors that may 
impact how much an impeller diameter increase impacts a FEI increase.
    (6) DOE requests comment on the ordering and implementation of 
design options for centrifugal PRV exhaust and supply fans and axial 
PRV fans.
    (7) DOE requests comment on its approach for estimating the 
industry-wide conversion costs that may be necessary to redesign fans 
with forward-curved impellers to meet higher FEI values. Specifically, 
DOE is interested in the costs associated with any capital equipment, 
research and development, or additional labor that would be required to 
design more efficient fans with forward-curved impellers. DOE 
additionally requests comment and data on the percentage of forward-
curved impellers that manufacturers would expect to maintain as a 
forward-curved impeller relative to those expected to transition to a 
backward-inclined or airfoil impeller.
    (8) DOE requests comment on the equations developed to calculate 
the credit for determining the FEI standard for GFBs sold with a motor 
controller and with an FEPact less than 20 kW and on potentially using 
an alternative credit calculation based on the proposed equations in 
section III.C.1.b of this document. Additionally, DOE requests comment 
on its use of a constant value, and its proposed value, of the credit 
applied for determining the FEI standard for GFBs with a motor 
controller and an FEPact of greater than or equal for 20 kW.
    (9) DOE requests comments on whether it should apply a correction 
factor to the analyzed efficiency levels to account for the tolerance 
allowed in AMCA 211-22 and if so, DOE requests comment on the 
appropriate correction factor. DOE requests comment on the potential 
revised levels as presented in Table IV-12. Additionally, DOE requests 
comments on whether it should continue to evaluate an FEI of 1.00 for 
all fan classes if it updates the databases used in its analysis to 
consider the tolerance allowed in AMCA 211-22.
    (10) Additionally, DOE does not anticipate that the efficiency 
levels captured in Table IV-12 would impact the cost, energy, and 
economic analyses presented in this document. As such, DOE considers 
the results of these analyses presented throughout this document 
applicable to the efficiency levels with a 5% tolerance allowance. DOE 
seeks comment on the analyses as applied to the efficiency levels in 
Table IV-12.
    (11) DOE requests comment on its method to use both the AMCA sales 
database and sales data pulled from manufacturer fan selection data to 
estimate MSP. DOE also requests comment on the use of the MSP approach 
for its cost analysis for GFBs or whether an MPC-based approach would 
be appropriate. If interested parties believe an MPC-based approach 
would be more appropriate, DOE requests MPC data for the equipment 
classes and efficiency levels analyzed, which may be confidentially 
submitted to DOE using the confidential business information label.
    (12) DOE requests feedback on whether using a more efficient motor 
would require an ACF redesign. Additionally, DOE requests feedback on 
what percentage of motor speed change would require an ACF redesign.
    (13) DOE requests feedback on whether setting an ACF standard using 
discrete efficacy values over a defined diameter range appropriately 
represents the differences in efficacy between axial ACFs with 
different diameters, and if not, would a linear equation for efficacy 
as a function of diameter be appropriate.
    (14) DOE seeks comment on the distribution channels identified for 
GFBs and ACFs and fraction of sales that go through each of these 
channels.
    (15) DOE seeks comment on the overall methodology and inputs used 
to estimate GFBs and ACFs energy use. Specifically, for GFBs, DOE seeks 
feedback on the methodology and assumptions used to determine the 
operating point(s) both for constant and variable load fans. For ACFs, 
DOE requests feedback on the average daily operating hours, annual days 
of operation by sector and application, and input power assumptions. In 
addition, DOE requests feedback on the market share of GFBs and ACFs by 
sector (i.e., commercial, industrial, and agricultural).
    (16) DOE requests feedback on the price trends developed for GFBs 
and ACFs.
    (17) DOE requests feedback on the installation costs developed for 
GFBs and on whether installation costs of ACFs may increase at higher 
ELs.
    (18) DOE requests feedback on whether the maintenance and repair 
costs of GFBs may increase at higher ELs. Specifically, DOE requests 
comments on the frequency of motor replacements for ACFs. DOE also 
requests comments on whether the maintenance and repair costs of ACFs 
may increase at higher ELs and on the repair costs developed for ACFs.
    (19) DOE requests comments on the average lifetime estimates used 
for GFBs and ACFs.
    (20) DOE requests feedback and information on the no-new-standards 
case efficiency distributions used to characterize the market of GFBs 
and ACFs. DOE requests information to support any efficiency trends 
over time for GFBs and ACFs.
    (21) DOE requests feedback on the methodology and inputs used to 
project shipments of GFBs in the no-new-standards case. DOE requests 
comments and feedback on the potential impact of standards on GFB 
shipments and

[[Page 3870]]

information to help quantify these impacts.
    (22) DOE requests feedback on the methodology and inputs used to 
estimate and project shipments of ACFs in the no-new-standards case. 
DOE requests comments and feedback on the potential impact of standards 
on ACF shipments and information to help quantify these impacts.
    (23) DOE requests comment and data regarding the potential increase 
in utilization of GFBs and ACFs due to any increase in efficiency.
    (24) DOE requests comment on the number of end-use product (i.e., a 
product or equipment that has a fan or blower embedded in it) basic 
models that would not be excluded by the list of products or equipment 
listed in Table III-1.
    (25) DOE requests information regarding the impact of cumulative 
regulatory burden on manufacturers of fans and blowers associated with 
multiple DOE standards or product-specific regulatory actions of other 
Federal agencies.
    (26) DOE requests comment on the proposed standard level for axial 
PRVs, including the design options and costs, as well as the burdens 
and benefits associated with this level and the industry standards/
California regulations FEI level of 1.00.
    (27) DOE requests comment on the number of small business OEMs 
identified that manufacture fans and blowers covered by this proposed 
rulemaking.
    (28) DOE requests comment on the estimated small business costs and 
how those may differ from the costs incurred by larger manufacturers.
    Additionally, DOE welcomes comments on other issues relevant to the 
conduct of this rulemaking that may not specifically be identified in 
this document.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and announcement of public meeting.

List of Subjects

10 CFR Part 429

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Reporting and 
recordkeeping requirements.

10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation test procedures, Incorporation by 
reference, Reporting and recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on December 
28, 2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary 
for Energy Efficiency and Renewable Energy, pursuant to delegated 
authority from the Secretary of Energy. That document with the original 
signature and date is maintained by DOE. For administrative purposes 
only, and in compliance with requirements of the Office of the Federal 
Register, the undersigned DOE Federal Register Liaison Officer has been 
authorized to sign and submit the document in electronic format for 
publication, as an official document of the Department of Energy. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

    Signed in Washington, DC, on December 29, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
parts 429 and 431 of chapter II, subchapter D, of title 10 of the Code 
of Federal Regulations, as set forth below:

PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER 
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 429 continues to read as follows:

    Authority: 42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
2. Amend Sec.  429.69 by adding paragraph (a)(3) to read as follows:


Sec.  429.69   Fans and blowers.

    (a) * * *
    (3) Required Disclaimer at Non-Compliant Duty Points. 
Representation of fan performance at duty points with FEI that are not 
compliant with the energy conservation standards at Sec.  431.175 of 
this chapter is allowed and must be identified by the following 
disclaimer: ``Sale at these duty points violates Department of Energy 
Regulations under EPCA'' in red and bold font; and (2) duty points must 
be grayed out in any graphs or tables in which they are included.
* * * * *
0
3. Amend Sec.  429.110 by redesignating paragraphs (e)(7), (8), and (9) 
as paragraphs (e)(8), (9), and (10), respectively, and adding a new 
paragraph (e)(7) to read as follows:


Sec.  429.110  Enforcement testing.

* * * * *
    (e) * * *
    (7) For fans and blowers other than air circulating fans, DOE will 
use an initial sample of one unit to determine compliance at each duty 
point for which the fan basic model is distributed in commerce. If one 
or more duty points is determined to be non-compliant, the fan basic 
model is determined to be non-compliant.
    (i) When testing a single unit, DOE will first determine either fan 
shaft input power or FEP, dependent on the test method specified by the 
manufacturer, for the range of certified duty points according to 
appendix A to subpart J of part 431 of this chapter. For each point in 
the certified operating range (i.e., each certified duty point), DOE 
will conduct a verification of the duty points as described in Sec.  
429.134(bb)(2) and determine the FEI at the certified duty point or at 
the measured duty point. If the FEI calculated at the certified or 
measured duty point is greater than or equal to the minimum required 
FEI, then testing is complete and the certified or measured duty point 
is compliant. If the FEI calculated at a certified or measured duty 
point is less than the minimum required FEI, DOE may select additional 
units to test in accordance with this paragraph (e)(7)(ii) of this 
section.
    (ii) When testing more than one unit, DOE will select no more than 
three additional units of a certified basic model for testing and test 
each one at one or several duty points within the range of certified 
duty points. For each unit and at each certified duty point, DOE will 
conduct a verification of the duty points as described in Sec.  
429.134(bb)(2) and determine the FEI at the certified duty point or at 
the measured duty point. In the case where the certified duty point can 
be verified, DOE will calculate the average FEI of all units tested for 
each certified duty point. If the duty point cannot be verified, DOE 
will follow the sampling procedures at Sec.  429.69 to determine the 
average FEI of all units tested at the measured duty point. If the 
average FEI calculated at the certified or measured duty point is 
greater than or equal to the minimum required FEI, then testing is 
complete and the certified or measured duty point is compliant. If the 
average FEI calculated at a certified or measured duty point is less 
than the minimum required FEI, then testing is complete

[[Page 3871]]

and the certified or measured duty point is not compliant.
* * * * *
0
4. Amend Sec.  429.134 by adding paragraph (gg) to read as follows:


Sec.  429.134  Product-specific enforcement provisions.

* * * * *
    (gg) Fans and blowers. (1) Testing. For fans and blowers other than 
air circulating fans, DOE will test each fan or blower basic model 
according to the test method specified by the manufacturer (i.e., based 
on the method listed in table 1 to appendix A to subpart J of part 431 
of this chapter).
    (2) Verification of duty points. For fans and blowers other than 
air circulating fans, at a given speed within the certified operating 
range, the pressure and flow of a duty point in the certified range of 
operation (i.e., certified duty point) will be determined in accordance 
with appendix A to subpart J of part 431 of this chapter. At a given 
speed, the certified duty point will be considered valid only if the 
measured airflow is within five percent of the certified airflow and 
the measured static or total pressure is between P x (1-0.05)\2\ and P 
x (1 + 0.05)\2\ where P is the certified static or total pressure.
    (i)(A) If the certified duty point is found to be valid, the 
certified duty point will be used as the basis for determining 
compliance. DOE will convert the measured fan shaft power or FEP at the 
measured airflow to the certified airflow using the following 
equations:
    For fan shaft power:
    [GRAPHIC] [TIFF OMITTED] TP19JA24.131
    
    For fan electrical power:
    [GRAPHIC] [TIFF OMITTED] TP19JA24.132
    
    (B) DOE will use the converted fan shaft power or FEP to calculate 
the corresponding FEI at the certified duty point, in accordance with 
the DOE test procedure.
    (ii) If the certified duty point is found to be invalid, the 
measured flow and pressure will be used as the basis for determining 
compliance. DOE will use the measured fan shaft power or FEP to 
calculate the corresponding FEI at the measured duty point, in 
accordance with the DOE test procedure.

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
5. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
6. Amend Sec.  431.172 by adding in alphabetical order definitions for 
``Axial air circulating fan'', ``Axial power roof ventilator'', 
``Centrifugal power roof ventilator--exhaust'', ``Centrifugal power 
roof ventilator--supply'', ``Diameter'', ``Fan housing'', ``Mixed flow 
impeller'', and ``Radial impeller'' to read as follows:


Sec.  431.172  Definitions.

* * * * *
    Axial air circulating fan means an air circulating fan with an 
axial impeller that is either housed or unhoused.
* * * * *
    Axial power roof ventilator means a PRV with an axial impeller that 
either supplies or exhausts air to a building where the inlet and 
outlet are not typically ducted.
* * * * *
    Centrifugal power roof ventilator--exhaust means a PRV with a 
centrifugal or mixed-flow impeller that exhausts air from a building 
and which is typically mounted on a roof or a wall.
    Centrifugal power roof ventilator--supply means a PRV with a 
centrifugal or mixed-flow impeller that supplies air to a building and 
which is typically mounted on a roof or a wall.
* * * * *
    Diameter means the impeller diameter of a fan, which is twice the 
measured radial distance between the tip of one of the impeller blades 
of a fan to the center axis of its impeller hub.
* * * * *
    Fan housing means any fan component(s) that direct(s) airflow into 
or away from the impeller and/or provide protection for the internal 
components of a fan or blower that is not an air circulating fan. A 
housing may serve as a fan's structure.
* * * * *
    Mixed flow impeller means an impeller featuring construction 
characteristics between those of an axial and centrifugal impeller. A 
mixed-flow impeller has a fan flow angle greater than 20 degrees and 
less than 70 degrees. Airflow enters axially through a single inlet and 
exits with combined axial and radial directions at a mean diameter 
greater than the inlet.
* * * * *
    Radial impeller means a form of centrifugal impeller with several 
blades extending radially from a central hub. Airflow enters axially 
through a single inlet and exits radially at the impeller periphery 
into a housing with impeller blades; the blades are positioned so their 
outward direction is perpendicular within 25 degrees to the axis of 
rotation. Impellers can have a back plate and/or shroud.
* * * * *
0
7. Amend Sec.  431.173 by redesignating paragraphs (c) and (d) as 
paragraphs (d) and (e), respectively, and adding a new paragraph (c) to 
read as follows:


Sec.  431.173   Materials incorporated by reference.

* * * * *
    (c) IEC. International Electrotechnical Committee, Central Office, 
3, rue de Varemb[eacute], P.O. Box 131, CH-1211 GENEVA 20, Switzerland; 
+ 41 22 919 02 11; webstore.iec.ch.

[[Page 3872]]

    (1) IEC 61800-9-2:2023, Adjustable speed electrical power drive 
systems (PDS)--Part 9-2: Ecodesign for motor systems--Energy efficiency 
determination and classification, Edition 2.0, 2023-10; IBR approved 
for appendix A to this subpart.
    (2) IEC TS 60034-30-2:2016, Rotating electrical machines--Part 30-
2: Efficiency classes of variable speed AC motors (IE-code), Edition 
1.0, 2016-12; IBR approved for appendix A to this subpart.
    (3) IEC TS 60034-31:2021, Rotating electrical machines--Part 31: 
Selection of energy-efficient motors including variable speed 
applications--Application guidelines, Edition 2.0, 2021-03; IBR 
approved for appendix A to this subpart.
* * * * *
0
8. Section 431.175 is added to read as follows:


Sec.  431.175   Energy conservation standards and compliance dates.

    (a) Each fan and blower, other than an air circulating fan 
manufactured starting on [DATE FIVE YEARS AFTER DATE OF PUBLICATION OF 
FINAL RULE] that is subject to the test procedure in Sec.  431.174(a), 
must have a FEI value at each duty point for which the fan is 
distributed in commerce, that is equal or greater than the value in 
table 1 of this section. The manufacturer is responsible for ensuring 
that each fan and blower, other than an air circulating fan 
manufactured starting on [DATE FIVE YEARS AFTER DATE OF PUBLICATION OF 
FINAL RULE] that is subject to the test procedure in Sec.  431.174(a), 
is sold and selected at compliant duty points.

  Table 1 to Paragraph (a)--Energy Conservation Standards for Fans and Blowers Other Than Air Circulating Fans
----------------------------------------------------------------------------------------------------------------
             Equipment class               With or without motor controller        Fan energy index (FEI) *
----------------------------------------------------------------------------------------------------------------
Axial Inline............................  Without...........................  1.18 * A.
Axial Panel.............................  Without...........................  1.48 * A.
Axial Power Roof Ventilator.............  Without...........................  0.85 * A.
Centrifugal Housed......................  Without...........................  1.31 * A.
Centrifugal Unhoused....................  Without...........................  1.35 * A.
Centrifugal Inline......................  Without...........................  1.28 * A
Radial Housed...........................  Without...........................  1.17 * A.
Centrifugal Power Roof Ventilator--       Without...........................  1.00 * A.
 Exhaust.
Centrifugal Power Roof Ventilator--       Without...........................  1.19 * A.
 Supply.
Axial Inline............................  With..............................  1.18 * A * B.
Axial Panel.............................  With..............................  1.48 * A * B.
Axial Power Roof Ventilator.............  With..............................  0.85 * A * B.
Centrifugal Housed......................  With..............................  1.31 * A * B.
Centrifugal Unhoused....................  With..............................  1.35 * A * B.
Centrifugal Inline......................  With..............................  1.28 * A * B.
Radial Housed...........................  With..............................  1.17 * A * B.
Centrifugal Power Roof Ventilator--       With..............................  1.00 * A * B.
 Exhaust.
Centrifugal Power Roof Ventilator--       With..............................  1.19 * A * B.
 Supply.
----------------------------------------------------------------------------------------------------------------
* A is a constant representing an adjustment in FEI for motor hp, which can be found in table 2 of this section.
  B is a constant representing an adjustment in FEI for motor controllers, which can be found in table 2 of this
  section.

  [GRAPHIC] [TIFF OMITTED] TP19JA24.133
  

[[Page 3873]]


                                          Table 3 to Paragraph (a)--2014 Motor Efficiency Values, [eta]mtr,2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Nominal full-load efficiency (%)
                                                                 ---------------------------------------------------------------------------------------
          Motor horsepower/standard kilowatt equivalent                  2 Pole                4 Pole                6 Pole                8 Pole
                                                                 ---------------------------------------------------------------------------------------
                                                                   Enclosed     Open     Enclosed     Open     Enclosed     Open     Enclosed     Open
--------------------------------------------------------------------------------------------------------------------------------------------------------
100/75..........................................................       94.1       93.6       95.4       95.4       95.0       95.0       93.6       94.1
125/95..........................................................       95.0       94.1       95.4       95.4       95.0       95.0       94.1       94.1
150/110.........................................................       95.0       94.1       95.8       95.8       95.8       95.4       94.1       94.1
200/150.........................................................       95.4       95.0       96.2       95.8       95.8       95.4       94.5       94.1
250/186.........................................................       95.8       95.0       96.2       95.8       95.8       95.8       95.0       95.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (b) Each air circulating fan manufactured starting on [DATE FIVE 
YEARS AFTER DATE OF PUBLICATION OF FINAL RULE] that is subject to the 
test procedure in Sec.  431.174(b), must have an efficacy value in CFM/
W at maximum speed that is equal or greater than the value in table 4 
to this paragraph (b).

     Table 4 to Paragraph (b)--Energy Conservation Standards for Air
                            Circulating Fans
------------------------------------------------------------------------
                                              Efficacy at maximum speed
             Equipment class *                         (CFM/W)
------------------------------------------------------------------------
Axial Air Circulating Fans; 12'' <= D <                             12.2
 36''......................................
Axial Air Circulating Fans; 36'' <= D <                             17.3
 48''......................................
Axial Air Circulating Fans; 48'' <= D......                         21.5
Housed Centrifugal ACFs....................                          N/A
------------------------------------------------------------------------
* D: diameter in inches.
N/A means not applicable as DOE is not proposing to set a standard for
  this equipment class.

0
9. Amend appendix A to subpart J of part 431 by:
0
a. Revising the section 0 introductory text and paragraph 0.2.(h);
0
b. Redesignating section 0.3 as 0.6;
0
c. Adding new section 0.3, and sections 0.4 and 0.5;
0
d. Revising section 2.2.1;
0
e. Redesignating section 2.6 as 2.7; and
0
f. Adding new section 2.6.
    The revisions and additions read as follows:

Appendix A to Subpart J of Part 431--Uniform Test Method for the 
Measurement of Energy Consumption of Fans and Blowers Other Than Air 
Circulating Fans

* * * * *
    0. Incorporation by reference.
    In Sec.  431.173, DOE incorporated by reference the entire 
standard for AMCA 210-16, AMCA 214-21, IEC 61800-9-2:2023, IEC TS 
60034-30-2:2016, IEC TS 60034-31:2021, and ISO 5801:2017; however, 
only enumerated provisions of those documents are applicable as 
follows. In cases where there is a conflict, the language of this 
appendix takes precedence over those documents.
* * * * *
    0.2 * * *
    (h) Section 6.4, ``Fans with Polyphase Regulated Motor'' as 
referenced in sections 2.2 and 2.6 of this appendix;
* * * * *
    0.3 IEC 61800-9-2:2023:
    (a) Section 6.2 as referenced in section 2.6.2.2 of this 
appendix;
    (b) Table A.1 as referenced in section 2.6.2.2 of this appendix; 
and
    (c) Table E.4 as referenced in 2.6.1.2.1. of this appendix; and
    (d) Section F.2.1 as referenced in section 2.6.2.2 of this 
appendix.
    0.4 IEC TS 60034-30-2:2016:
    (a) Section 4.7 as referenced in section 2.6.1.2.2 of this 
appendix; and
    (b) Table 4 as referenced in section 2.6.1.2.2 of this appendix.
    0.5 IEC TS 60034-31:2021:
    (a) Section A.3 as referenced in section 2.6.1.2.1 of this 
appendix; and
* * * * *
    2. * * *
    2.2 * * *
    2.2.1. General. The fan electrical power (FEPact) in kilowatts 
must be determined at every duty point specified by the manufacturer 
in accordance with one of the test methods listed in table 1, and 
the following sections of AMCA 214-21: Section 2, ``References 
(Normative)''; Section 7, ``Testing,'' including the provisions of 
AMCA 210-16 and ISO 5801:2017 as referenced by Section 7 and 
implicated by sections 2.2.2 and 2.2.3 of this appendix; Section 
8.1, ``Laboratory Measurement Only'' (as applicable); and Annex J, 
``Other data and calculations to be retained.'' In addition, the 
provisions in this appendix apply.

                                 Table 1 to Appendix A to Subpart J of Part 431
----------------------------------------------------------------------------------------------------------------
                                 Motor  controller     Transmission                        Applicable section(s)
             Driver                   present?        configuration?      Test method         of AMCA 214-21
----------------------------------------------------------------------------------------------------------------
Electric motor.................  Yes or No........  Any..............  Wire-to-air......  6.1 ``Wire-to-Air
                                                                                           Testing at the
                                                                                           Required Duty
                                                                                           Point''.
Electric motor.................  Yes or No........  Any..............  Calculation based  6.2 ``Calculated
                                                                        on Wire-to-air     Ratings Based on Wire
                                                                        testing.           to Air Testing''
                                                                                           (references Section
                                                                                           8.2.3, ``Calculation
                                                                                           to other speeds and
                                                                                           densities for wire-to-
                                                                                           air testing,'' and
                                                                                           Annex G, ''Wire-to-
                                                                                           Air Measurement--
                                                                                           Calculation to Other
                                                                                           Speeds and Densities
                                                                                           (Normative)'').

[[Page 3874]]

 
Regulated polyphase motor......  Yes or No........  Direct drive, V-   Shaft-to-air.....  6.4 ``Fans with
                                                     belt drive,                           Polyphase Regulated
                                                     flexible                              Motors,'' *
                                                     coupling or                           (references Annex D,
                                                     synchronous belt                      ``Motor Performance
                                                     drive.                                Constants
                                                                                           (Normative)'').
None or non-electric...........  No...............  None.............  Shaft-to-air.....  Section 6.3, ``Bare
                                                                                           Shaft Fans''.
Regulated polyphase motor......  No...............  Direct drive, V-   Calculation based  Section 8.2.1, ``Fan
                                                     belt drive,        on Shaft-to-air    laws and other
                                                     flexible           testing.           calculation methods
                                                     coupling or                           for shaft-to-air
                                                     synchronous belt                      testing'' (references
                                                     drive.                                Annex D, ``Motor
                                                                                           Performance Constants
                                                                                           (Normative),'' Annex
                                                                                           E, ``Calculation
                                                                                           Methods for Fans
                                                                                           Tested Shaft-to-
                                                                                           Air,'' and Annex K,
                                                                                           ``Proportionality and
                                                                                           Dimensional
                                                                                           Requirements
                                                                                           (Normative)'').
None or non-electric...........  No...............  None.............  Calculation based  Section 8.2.1, ``Fan
                                                                        on Shaft-to-air    laws and other
                                                                        testing.           calculation methods
                                                                                           for shaft-to-air
                                                                                           testing'' (references
                                                                                           Annex E,
                                                                                           ``Calculation Methods
                                                                                           for Fans Tested Shaft-
                                                                                           to-Air,'' and Annex
                                                                                           K, ``Proportionality
                                                                                           and Dimensional
                                                                                           Requirements
                                                                                           (Normative)'').
----------------------------------------------------------------------------------------------------------------
* With the modifications in section 2.6 of this appendix.

    Testing must be performed in accordance with the required test 
configuration listed in table 7.1 of AMCA 214-21. The following 
values must be determined in accordance with this appendix at each 
duty point specified by the manufacturer: fan airflow in cubic feet 
per minute; fan air density; fan total pressure in inches of water 
gauge for fans using a total pressure basis FEI in accordance with 
table 7.1 of AMCA 214-21; fan static pressure in inches of water 
gauge for fans using a static pressure basis FEI in accordance with 
table 7.1 of AMCA 214-21; fan speed in revolutions per minute; and 
fan shaft input power in horsepower for fans tested in accordance 
with sections 6.3 or 6.4 of AMCA 214-21.
    In addition, if applying the equations in section E.2 of annex E 
of AMCA 214-21 for compressible flows, the compressibility 
coefficients must be included in the equations as applicable.
    All measurements must be recorded at the resolution of the test 
instrumentation and calculations must be rounded to the number of 
significant digits present at the resolution of the test 
instrumentation.
    In cases where there is a conflict, the provisions in AMCA 214-
21 take precedence over AMCA 210-16 and ISO 5801:2017. In addition, 
the provisions in this appendix apply.
* * * * *
    2.6. Calculation based on Shaft-to-air testing for Fans with 
Motors and Motor Controllers. The provisions of section 6.4 of AMCA 
214-21 apply except that the instructions in section 6.4.2.4.1 of 
AMCA 214-21 are replaced by section 2.6.1 of this appendix, and the 
instructions in section 6.4.2.4.2. of AMCA 214-21 are replaced by 
section 2.6.2 of this appendix.
    2.6.1 Motor efficiency if used in combination with a VFD. This 
section replaces section 6.4.2.4.1 of AMCA 214-21 and provides 
methods to calculate the efficiency of the motor if it is combined 
with a VFD.
    2.6.1.1 Motor efficiency Calculation, if used in combination 
with a VFD. The efficiency of the motor if it is combined with a VFD 
is calculated as follows:
[GRAPHIC] [TIFF OMITTED] TP19JA24.134

Where:

hmtr',act is the actual motor efficiency if used in combination with 
a VFD.
Lm is the is motor load ratio calculated per section 6.4.2.4.1.3 of 
AMCA 214-21
p'L are the relative losses of a motor of if used in combination 
with a VFD that that exactly meets the applicable standards at Sec.  
431.25 per section 2.6.1.2. of this appendix.

    2.6.1.2. Relative losses of the actual motor if used in 
combination with a VFD. This section provides the methods to 
calculate the relative losses P'L of a motor that exactly meets the 
applicable standards at Sec.  431.25, if used in combination with a 
VFD:
[GRAPHIC] [TIFF OMITTED] TP19JA24.135

Where:

pL(n,T) are the relative losses of an IE3 motor if used in 
combination with a VFD calculated per section 2.6.1.2.1 of this 
appendix.
hr nominal full load efficiency per section 6.4.2.4.1.1 of AMCA 214-
21
hIE3 is nominal full load efficiency of an IE3 motor per section 
2.6.1.2.2. of this appendix.

    2.6.1.2.1. Relative losses of an IE3 motor if used in 
combination with a VFD. The relative losses of an IE3 motor if used 
in combination with a VFD, pL(n,T) are based on the actual motor 
nameplate rated speed and the motor nameplate output power and must 
be calculated per section A.3 of IEC TS 60034-31:2021, using the 
coefficients in table E.4 of IEC 61800-9-2:2023. If the motor 
nameplate output power value is not shown in table E.4 of IEC 61800-
9-2:2023, the instructions in section 6.4.2.4.1.1 of AMCA 214-21 
must be used.
    The calculation of pL(n,T) relies on the relative speed (n) and 
relative torque (T) values which are determined for each duty point 
as follows:
[GRAPHIC] [TIFF OMITTED] TP19JA24.136

    And:
    [GRAPHIC] [TIFF OMITTED] TP19JA24.137
    
Where:

hact is the fan speed in revolutions per minute at the given duty 
point;
hr is the nameplate nominal rated speed of the actual motor 
revolutions per minute; and
Lm is the motor load ratio calculated per section 6.4.2.4.1.3 of 
AMCA 214-21.

    2.6.1.2.2. Nominal full load efficiency of an IE3 motor. The 
nominal full load efficiency of an IE3 motor must be determined per 
section 4.7 of IEC TS 60034-30-2:2016 and is based on the actual 
motor nameplate rated speed and the motor nameplate output

[[Page 3875]]

power. If the motor nameplate output power value is not shown in 
table 4 of IEC TS 60034-30-2:2016, the instructions in section 
6.4.2.4.1.1 of AMCA 214-21 must be used.
    2.6.2 VFD efficiency at the required motor electrical power 
input. This section replaces section 6.4.2.4.2 of AMCA 214-21 and 
provides methods to calculate the efficiency of the VFD at the 
required motor electrical power input. A single VFD may operate one 
or many motors.
    2.6.2.1 VFD efficiency calculation. The efficiency of the VFD at 
the required motor electrical power input is calculated as follows: 
[GRAPHIC] [TIFF OMITTED] TP19JA24.138

Where:

hVFD is the VFD efficiency at the required motor electrical power 
input;
Lc is the is VFD load ratio calculated per section 6.4.2.4.2.2 of 
AMCA 214-21; and
pVFD,L(f, iq) are the relative losses of a VFD at IE2 levels per 
section 2.6.2.2 of this appendix.

    2.6.2.2. Relative losses of a VFD at IE2 levels. The relative 
losses of an IE2 VFD, hVFD,L(f, iq) are inter- or extrapolated from 
the relative losses in table A.1 of IEC 61800-9-2:2023, adapted for 
IE2 in accordance with section 6.2 of IEC 61800-9-2:2023. The 
calculations must follow the two-dimensional linear inter- or 
extrapolation from neighboring loss points in accordance with 
section F.2.1 of IEC 61800-9-2:2023. In addition, the relative 
losses of an IE2 VFD, pVFD,L(f, iq), are based on the actual VFD 
nameplate rated output power. If the motor nameplate output power 
value is not shown in table A.1 of IEC 61800-9-2:2023, the 
instructions in section 6.4.2.4.1.1 of AMCA 214-21 must be used.
    The calculation of pVFD,L(f, iq) relies on the relative motor 
frequency (f) and relative torque current (iq) values which are 
determined for each duty point as follows:

f = n

    And:
    [GRAPHIC] [TIFF OMITTED] TP19JA24.139
    
Where:

n is the relative speed per section 2.6.1.2.1. of this appendix;
T is the relative torque per section 2.6.1.2.1. of this appendix;
Hmo is motor nameplate output power; and
Hco is rated power output of the VFD.
* * * * *
[FR Doc. 2023-28976 Filed 1-18-24; 8:45 am]
BILLING CODE 6450-01-P


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