```

[Federal Register Volume 79, Number 51 (Monday, March 17, 2014)]
[Proposed Rules]
[Pages 14845-14950]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05566]

[[Page 14845]]

Vol. 79

Monday,

No. 51

March 17, 2014

Part IV

Department of Energy

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

10 CFR Part 431

 Energy Conservation Program: Energy Conservation Standards for 
Automatic Commercial Ice Makers; Proposed Rule

Federal Register / Vol. 79 , No. 51 / Monday, March 17, 2014 / 
Proposed Rules

[[Page 14846]]

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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket Number EERE-2010-BT-STD-0037]
RIN 1904-AC39

Energy Conservation Program: Energy Conservation Standards for 
Automatic Commercial Ice Makers

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

ACTION: Notice of proposed rulemaking and public meeting.

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

SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
automatic commercial ice makers (ACIM). EPCA also requires the U.S. 
Department of Energy (DOE) to determine whether more-stringent, amended 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this notice, DOE 
proposes amended energy conservation standards for automatic commercial 
ice makers. The notice of proposed rulemaking also announces a public 
meeting to receive comment on these proposed standards and associated 
analyses and results.

DATES: DOE will accept comments, data, and information regarding this 
notice of proposed rulemaking (NOPR) before and after the public 
meeting, but no later than May 16, 2014. See section VII, ``Public 
Participation,'' for details.
    DOE will hold a public meeting on Monday, April 14, 2014, from 9 
a.m. to 4 p.m., in Washington, DC. The meeting will also be broadcast 
as a webinar. See section VII, ``Public Participation,'' for webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW., 
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at 
(202) 586-2945. Persons can attend the public meeting via webinar. For 
more information, refer to section VII, ``Public Participation.''
    Any comments submitted must identify the NOPR for Energy 
Conservation Standards for Automatic Commercial Ice Makers and provide 
docket number EERE-2010-BT-STD-0037 and/or regulatory information 
number (RIN) 1904-AC39. Comments may be submitted using any of the 
following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: ACIM-2010-STD-0037@ee.doe.gov. Include the docket number 
and/or RIN in the subject line of the message.
    3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building 
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., 
Washington, DC 20585-0121. If possible, please submit all items on a 
CD. It is not necessary to include printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by email to 
Chad_S_Whiteman@omb.eop.gov.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VII of this document 
(Public Participation).
    Docket: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at regulations.gov. All 
documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    The link to the docket Web page is the following: 
www.regulations.gov/#!docketBrowser;rpp=25;po=0;D=EERE-2010-BT-STD-
0037. This Web page will contain a link to the docket for this proposed 
rule on the regulations.gov site. The regulations.gov Web page will 
contain simple instructions on how to access all documents, including 
public comments, in the docket. See section VII for further information 
on how to submit comments through www.regulations.gov.
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact Ms. Brenda Edwards at (202) 586-2945 or by email: 
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: Mr. John Cymbalsky, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Program, EE-2B, 1000 Independence Avenue SW., Washington, 
DC 20585-0121. Telephone: (202) 287-1692. Email: automatic_commercial_ice_makers@ee.doe.gov.
    Mr. Ari Altman, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 287-6307. Email: Ari.Altman@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule
    A. Benefits and Costs to Customers
    B. Impact on Manufacturers
    C. National Benefits
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Automatic Commercial Ice 
Makers
III. General Discussion
    A. List of Equipment Class Abbreviations
    B. Test Procedures
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Energy and Water Savings
    1. Determination of Savings
    2. Significance of Savings
    E. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Commercial Customers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Equipment
    e. Impact of Any Lessening of Competition
    f. Need of the Nation To Conserve Energy
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Comments
    A. General Rulemaking Issues
    1. Statutory Authority
    2. Test Procedures
    3. Need for and Scope of Rulemaking
    B. Market and Technology Assessment
    1. Equipment Classes
    a. Cabinet Size
    b. Large-Capacity Batch Ice Makers
    c. Efficiency/Harvest Capacity Relationship
    d. Continuous Ice Maker Equipment Classes
    e. Remote Condensing Unit Classes for Equipment With and Without 
Remote Compressors
    f. Remote to Rack Equipment
    g. Ice Makers Covered by the Energy Policy Act of 2005

[[Page 14847]]

    h. Regulation of Potable Water Use
    2. Technology Assessment
    a. Reduced Potable Water Flow for Continuous Type Ice Makers
    b. Alternative Refrigerants
    C. Screening Analysis
    a. Tube Evaporator Design
    b. Low Thermal Mass Evaporator Design
    c. Drain Water Heat Exchanger
    d. Design Options That Necessitate Increased Cabinet Size
    e. Microchannel Heat Exchangers
    f. Smart Technologies
    g. Screening Analysis: General Comments
    D. Engineering Analysis
    1. Representative Equipment for Analysis
    2. Efficiency Levels
    a. Baseline Efficiency Levels
    b. Incremental Efficiency Levels
    c. IMH-A-Large-B Treatment
    d. Maximum Available Efficiency Equipment
    e. Maximum Technologically Feasible Efficiency Levels
    f. Comment Discussion
    3. Design Options
    a. Improved Condenser Performance in Batch Equipment
    b. Harvest Capacity Oversizing
    c. Open-Loop Condensing Water Designs
    d. Condenser Water Flow
    e. Compressors
    4. Development of the Cost-Efficiency Relationship
    a. Manufacturing Cost
    b. Energy Consumption Model
    c. Retail Cost Review
    d. Design, Development, and Testing Costs
    e. Empirical-Based Analysis
    f. Revision of Preliminary Engineering Analysis
    E. Markups Analysis
    F. Energy Use Analysis
    G. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation, Maintenance, and Repair Costs
    a. Installation Costs
    b. Repair and Maintenance Costs
    3. Annual Energy and Water Consumption
    4. Energy Prices
    5. Energy Price Projections
    6. Water Prices
    7. Discount Rates
    8. Lifetime
    9. Compliance Date of Standards
    10. Base-Case and Standards-Case Efficiency Distributions
    11. Inputs to Payback Period Analysis
    12. Rebuttable Presumption Payback Period
    H. National Impact Analysis--National Energy Savings and Net 
Present Value
    1. Shipments
    2. Forecasted Efficiency in the Base Case and Standards Cases
    3. National Energy Savings
    4. Net Present Value of Customer Benefit
    I. Customer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model
    a. Government Regulatory Impact Model Key Inputs
    b. Government Regulatory Impact Model Scenarios
    3. Discussion of Comments
    a. Impact to Suppliers, Distributors, Dealers, and Contractors
    b. ENERGY STAR
    c. Cumulative Regulatory Burden
    d. Small Manufacturers
    4. Manufacturer Interviews
    a. Price Sensitivity
    b. Enforcement
    c. Reliability Impacts
    d. Impact on Innovation
    K. Emissions Analysis
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    M. Utility Impact Analysis
    N. Employment Impact Analysis
    O. Regulatory Impact Analysis
V. Analytical Results
    A. Trial Standard Levels
    1. Trial Standard Level Formulation Process and Criteria
    2. Trial Standard Level Equations
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Commercial Customers
    a. Life-Cycle Cost and Payback Period
    b. Life-Cycle Cost Subgroup Analysis
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Impacts on Direct Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Amount and Significance of Energy Savings
    b. Net Present Value of Customer Costs and Benefits
    c. Water Savings
    d. Employment Impacts
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    C. Proposed Standard
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    4. Significant Alternatives to the Rule
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
    1. Standards Compliance Dates
    2. Utilization Factors
    3. Baseline Efficiency
    4. Screening Analysis
    DOE considered whether design options were technologically 
feasible; practicable to manufacture, install, or service; had 
adverse impacts on product utility or product availability; or had 
adverse impacts on health or safety. See Section IV.C of today's 
NOPR and chapter 4 of the NOPR TSD for further discussion of the 
screening analysis.
    5. Maximum Technologically Feasible Levels
    DOE seeks comments on the Maximum Technologically Feasible 
levels proposed in Table III.2 and Table III.3 of today's notice. 
More discussion on this topic can be found in Section IV.D.2.e of 
today's NOPR.
    6. Markups To Determine Price
    7. Equipment Life
    8. Installation Costs
    9. Open- Versus Closed-Loop Installations
    10. Ice Maker Shipments by Type of Equipment
    11. Intermittency of Manufacturer R&D and Impact of Standards
    12. INPV Results and Impact of Standards
    13. Small Businesses
    14. Consumer Utility and Performance
    15. Analysis Period
    16. Social Cost of Carbon
    17. Remote to Rack Equipment
    18. Design Options Associated With Each TSL
    19. Standard Levels for Batch-Type Ice Makers Over 2,500 lbs 
Ice/24 Hours
VIII. Approval of the Office of the Secretary

I. Summary of the Proposed Rule

    Title III, Part C \1\ of the Energy Policy and Conservation Act of 
1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6311-6317, as 
codified), established the Energy Conservation Program for Certain 
Industrial Equipment, a program covering certain industrial 
equipment,\2\ which includes the focus of this proposed rule: automatic 
commercial ice makers.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
---------------------------------------------------------------------------

    Pursuant to EPCA, any new or amended energy conservation standard 
that DOE prescribes for the covered

[[Page 14848]]

equipment, such as automatic commercial ice makers, shall be designed 
to achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified and would result in 
significant conservation of energy. (42 U.S.C. 6295(o)(2)(A) and 
(3)(B); 6313(d)(4))
    In accordance with these and other statutory criteria discussed in 
this proposed rule, DOE proposes amended conservation standards for 
automatic commercial ice makers,\3\ and new standards for covered 
equipment not yet subject to energy conservation standards. The 
proposed standards, which consist of maximum allowable energy usage 
values per 100 lb of ice production, are shown in Table I.1 and Table 
I.2. Standards shown on Table I.1 for batch type ice makers represent 
an amendment to existing standards set for cube type ice makers by EPCA 
in 42 U.S.C. 6313(d)(1). Table I.1 also shows new standards for cube 
type ice makers with expanded harvest capacities up to 4,000 pounds of 
ice per 24 hour period (lb ice/24 hours) and an explicit coverage of 
other types of batch machines, such as tube type ice makers. Table I.2 
provides proposed standards for continuous type ice-making machines, 
which are not covered by DOE's existing standards. The proposed 
standards include, for applicable equipment classes, maximum condenser 
water usage values in gallons per 100 lb of ice production. If adopted, 
the proposed standards would apply to all equipment manufactured in, or 
imported into, the United States, beginning 3 years after the 
publication date of the final rule. (42 U.S.C. 6313(d)(2)(B)(i) and 
(3)(C)(i))
---------------------------------------------------------------------------

    \3\ EPCA as amended by the Energy Policy Act of 2005 (EPACT 
2005) established maximum energy use and maximum condenser water use 
standards for cube type automatic commercial ice makers with harvest 
capacities between 50 and 2,500 lb/24 hours. In this rulemaking, DOE 
proposes amending the legislated energy use standards for these 
automatic commercial ice maker types. DOE did not, however, consider 
amendment to the existing condenser water use standards for 
equipment with existing condenser water standards. In the 
preliminary TSD, DOE indicated that the ice maker standards 
primarily focus on energy use, and that DOE is not bound by EPCA to 
evaluate reductions in the condenser water use in automatic 
commercial ice makers, and may in fact consider increases in 
condenser water use, if this is a cost-effective way to improve 
energy efficiency. Section 0 of today's NOPR contains more 
information on DOE's analysis of condenser water use.

                            Table I.1--Proposed Energy Conservation Standards for Batch Type Automatic Commercial Ice Makers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Rated harvest rate  lb ice/24   Maximum energy use kilowatt-   Maximum condenser water use
         Equipment type                Type of cooling                   hours                 hours (kWh)/100 lb ice *          gal/100 lb ice **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head.................  Water...................  =500 and =1,436 and =2,500 and =450 and =875 and =2,210 and = 2,500 and =1,000 and =934 and =200 and =2,500 and =175 and 24   Maximum  energy use  kWh/100  Maximum  condenser  water use
         Equipment type               Type of  cooling                   hours                         lb ice *                   gal/100 lb ice **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head.................  Water...................  =900 and =2,500 and =700 and =850 and =850 and =900 and =2,500 and =700 and 2), 8.7 thousand tons of nitrogen oxides 
(NOX), 0.3 thousand tons of nitrous oxide (N2O), 
75.8 thousand tons of methane (CH4) and 0.02 tons of mercury 
(Hg),\9\ and 21 thousand tons of sulfur dioxide (SO2) based 
on energy savings from equipment purchased over the period from 2018-
2047.\10\
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    \8\ A metric ton is equivalent to 1.1 U.S. short tons. Results 
for NOX, Hg, and SO2 are presented in short 
tons.
    \9\ DOE calculates emissions reductions relative to the Annual 
Energy Outlook 2013 (AEO2013) Reference Case, which generally 
represents current legislation and environmental regulations for 
which implementing regulations were available as of December 31, 
2012.
    \10\ DOE also estimated CO2 and CO2 
equivalent (CO2eq) emissions that occur through 2030 
(CO2eq includes greenhouse gases such as CH4 
and N2O). The estimated emissions reductions through 2030 
are 5.8 million metric tons CO2, 576 thousand tons 
CO2eq for CH4, and 25 thousand tons 
CO2eq for N2O.
---------------------------------------------------------------------------

    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed and recently updated by an 
interagency process.\11\ The derivation of the SCC value is discussed 
in section IV.L. DOE estimates the net present monetary value of the 
CO2 emissions reduction is between $0.102 and $1.426 
billion, expressed in 2012$ and discounted to 2013. DOE also estimates 
the net present monetary value of the NOX emissions 
reduction, expressed in 2012$ and discounted to 2013, is between $0.54 
and $5.53 million at a 7-percent discount rate, and between $1.71 and 
$17.56 million at a 3-percent discount rate.\12\
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    \11\ http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
    \12\ DOE is currently investigating valuation of avoided Hg and 
SO2 emissions.
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    Table I.4 summarizes the national economic costs and benefits 
expected to result from today's proposed standards for automatic 
commercial ice makers.

      Table I.4--Summary of National Economic Benefits and Costs of Proposed Automatic Commercial Ice Maker
                                             Conservation Standards
----------------------------------------------------------------------------------------------------------------
                                                                                Present value     Discount rate
                                  Category                                      million 2012$       (percent)
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings......................................................               982                 7
                                                                                         2,114                 3
CO[ihel2] Reduction Monetized Value ($11.8/t case) *........................               102                 5
CO[ihel2] Reduction Monetized Value ($39.7/t case) *........................               463                 3
CO[ihel2] Reduction Monetized Value ($61.2/t case) *........................               733               2.5
CO[ihel2] Reduction Monetized Value ($117/t case) *.........................             1,426                 3
NOX Reduction Monetized Value ($2,639/t case) **............................                 3                 7
                                                                                            10                 3
Total Benefits [dagger], [dagger][dagger]...................................             1,448                 7
                                                                                         2,587                 3
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Installed Costs.................................................               191                 7
                                                                                           364                 3
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
Including CO[ihel2] and NOX Reduction Monetized Value.......................             1,257                 7
                                                                                         2,223                 3
----------------------------------------------------------------------------------------------------------------
* The CO[ihel2] values represent global monetized values of the SCC, in 2012$, in year 2015 under several
  scenarios of the updated SCC values. The values of $11.8, $39.7, and $61.2 per metric ton (t) are the averages
  of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The
  value of $117.0/t represents the 95th percentile of the SCC distribution calculated using a 3-percent discount
  rate. The SCC time series used by DOE incorporate an escalation factor.
** The value represents the average of the low and high NOX values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and the 7-percent cases are derived using the series
  corresponding to SCC value of $39.7/t.
[dagger][dagger] DOE estimates reductions in sulfur dioxide, mercury, methane and nitrous oxide emissions, but
  is not currently monetizing these reductions. Thus, these impacts are excluded from the total benefits.

    The benefits and costs of today's proposed standards, for automatic 
commercial ice makers sold in 2018-2047, can also be expressed in terms 
of annualized values. The annualized monetary values are the sum of (1) 
the annualized national economic value of the benefits from the 
operation of equipment that meets the proposed standards (consisting 
primarily of operating cost savings from using less energy and water, 
minus increases in equipment installed cost, which is another way of 
representing customer NPV); and (2) the annualized monetary value of 
the benefits of emission reductions, including CO2 emission 
reductions.\13\
---------------------------------------------------------------------------

    \13\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of 3 and 7 percent for all 
costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.5. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2018 through 2047) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.

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[[Page 14851]]

    Although combining the values of operating savings and 
CO2 emission reductions provides a useful perspective, two 
issues should be considered. First, the national operating savings are 
domestic U.S. customer monetary savings that occur as a result of 
market transactions, while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO2 savings are performed with different methods 
that use different time frames for analysis. The national operating 
cost savings is measured over the lifetimes of automatic commercial ice 
makers shipped from 2018 to 2047. The SCC values, on the other hand, 
reflect the present value of some future climate-related impacts 
resulting from the emission of 1 ton of CO2 in each year. 
These impacts continue well beyond 2100.
    Estimates of annualized benefits and costs of the proposed 
standards are shown in Table I.5. (All monetary values below are 
expressed in 2012$.) Table I.5 shows the primary, low net benefits, and 
high net benefits scenarios. The primary estimate is the estimate in 
which the operating cost savings were calculated using the Annual 
Energy Outlook 2013 (AEO2013) Reference Case forecast of future 
electricity prices. The low net benefits estimate and the high net 
benefits estimate are based on the low and high electricity price 
scenarios from the AEO2013 forecast, respectively.\14\ Using a 7-
percent discount rate for benefits and costs, the cost in the primary 
estimate of the standards proposed in this rule is $20 million per year 
in increased equipment costs. (Note that DOE used a 3-percent discount 
rate along with the corresponding SCC series value of $39.7/ton in 
2012$ to calculate the monetized value of CO2 emissions 
reductions.) The annualized benefits are $104 million per year in 
reduced equipment operating costs, $27 million in CO2 
reductions, and $0.32 million in reduced NOX emissions. In 
this case, the annualized net benefit amounts to $110 million. At a 3-
percent discount rate for all benefits and costs, the cost in the 
primary estimate of the amended standards proposed in this notice is 
$21 million per year in increased equipment costs. The benefits are 
$121 million per year in reduced operating costs, $27 million in 
CO2 reductions, and $0.55 million in reduced NOX 
emissions. In this case, the net benefit amounts to $128 million per 
year.
---------------------------------------------------------------------------

    \14\ The AEO2013 scenarios used are the ``High Economics'' and 
``Low Economics'' scenarios.
---------------------------------------------------------------------------

    DOE also calculated the low net benefits and high net benefits 
estimates by calculating the operating cost savings and shipments at 
the AEO2013 low economic growth case and high economic growth case 
scenarios, respectively. The low and high benefits for incremental 
installed costs were derived using the low and high price learning 
scenarios. The net benefits and costs for low and high net benefits 
estimates were calculated in the same manner as the primary estimate by 
using the corresponding values of operating cost savings and 
incremental installed costs.

       Table I.5--Annualized Benefits and Costs of Proposed Standards for Automatic Commercial Ice Makers
----------------------------------------------------------------------------------------------------------------
                                                                                   Low net          High net
                                           Discount  rate        Primary          benefits          benefits
                                              (percent)        estimate *        estimate *        estimate *
                                                              million 2012$     million 2012$     million 2012$
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings..................                 7               104                98               112
                                                         3               121               113               132
CO[ihel2] Reduction Monetized Value                      5                 8                 8                 8
 ($11.8/t case) **......................
CO[ihel2] Reduction Monetized Value                      3                27                26                27
 ($39.7/t case) **......................
CO[ihel2] Reduction Monetized Value                    2.5                39                38                40
 ($61.2/t case) **......................
CO[ihel2] Reduction Monetized Value                      3                82                80                84
 ($117/t case) **.......................
NOX Reduction Monetized Value (at $2,639/                7              0.32              0.31              0.33
 t case) **.............................
                                                         3              0.55              0.53              0.58
Total Benefits (Operating Cost Savings,                  7               131               124               139
 CO[ihel2] Reduction and NOX Reduction)
 [dagger]...............................
                                                         3               149               139               160
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Total Incremental Installed Costs.......                 7                20                21                20
                                                         3                21                22                20
----------------------------------------------------------------------------------------------------------------
                                             Net Benefits Less Costs
----------------------------------------------------------------------------------------------------------------
Total Benefits Less Incremental Costs...                 7               110               103               120
                                                         3               128               118               140
----------------------------------------------------------------------------------------------------------------
* The primary, low, and high estimates utilize forecasts of energy prices from the AEO2013 Reference Case, Low
  Economic Growth Case, and High Economic Growth Case, respectively.
** The CO[ihel2] values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios
  of the updated SCC values. The values of $11.8, $39.7, and $61.2 per ton are the averages of SCC distributions
  calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of $117.0 per
  ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. See
  section IV.L for details. For NOX, an average value ($2,639) of the low ($468) and high ($4,809) values was
  used.
[dagger] Total monetary benefits for both the 3-percent and 7-percent cases utilize the central estimate of
  social cost of NOX and CO[ihel2] emissions calculated at a 3-percent discount rate (averaged across three
  integrated assessment models) , which is equal to $39.7/ton (in 2012$).

[[Page 14852]]

    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 significant 
conservation of energy (42 U.S.C. 6295(o)(2)(B) and 6313(d)(4)) DOE 
further notes that technologies used to achieve these standard levels 
are already commercially available for the equipment classes covered by 
this notice. Based on the analyses described above, DOE has tentatively 
concluded that the benefits of the proposed standards to the Nation 
(energy savings, positive NPV of customer benefits, customer LCC 
savings, and emission reductions) would outweigh the burdens (loss of 
INPV for manufacturers and LCC increases for some customers).
    DOE also considered more-stringent energy use levels as trial 
standard levels (TSLs), and is still considering them in this 
rulemaking. However, DOE has tentatively concluded that the potential 
burdens of the more-stringent energy use levels would outweigh the 
projected benefits. Based on consideration of the public comments DOE 
receives in response to this proposed rule and related information 
collected and analyzed during the course of this rulemaking effort, DOE 
may adopt energy use levels presented in this notice that are either 
higher or lower than the proposed standards, or some combination of 
level(s) that incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposal, as well as some of the relevant historical 
background related to the establishment of standards for automatic 
commercial ice makers.

A. Authority

    Title III, Part C of EPCA,\15\ Public Law 94-163 (42 U.S.C. 6311-
6317, as codified), established the Energy Conservation Program for 
Certain Industrial Equipment, a program covering certain industrial 
equipment, which includes the subject of this rulemaking: Automatic 
commercial ice makers.\16\
---------------------------------------------------------------------------

    \15\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \16\ All references to EPCA in this document refer to the 
statute as amended through the American Energy Manufacturing 
Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 
2012).
---------------------------------------------------------------------------

    EPCA prescribed energy conservation standards for automatic 
commercial ice makers that produce cube type ice with capacities 
between 50 and 2,500 lb ice/24 hours. (42 U.S.C. 6313(d)(1)) EPCA 
requires DOE to review these standards and determine, by January 1, 
2015, whether amending the applicable standards is technically feasible 
and economically justified. (42 U.S.C. 6313(d)(3)(A)) If amended 
standards are technically feasible and economically justified, DOE must 
issue a final rule by the same date. (42 U.S.C. 6313(d)(3)(B)) 
Additionally, EPCA granted DOE the authority to conduct rulemakings to 
establish new standards for automatic commercial ice makers not covered 
by 42 U.S.C. 6313(d)(1)), and DOE is using that authority in this 
rulemaking. (42 U.S.C. 6313(d)(2)(A))
    Pursuant to EPCA, DOE's energy conservation program for covered 
equipment generally consists of four parts: (1) Testing; (2) labeling; 
(3) the establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. Subject to certain criteria 
and conditions, DOE is required to develop test procedures to measure 
the energy efficiency, energy use, or estimated annual operating cost 
of each type or class of covered equipment. (42 U.S.C. 6314) 
Manufacturers of covered equipment must use the prescribed DOE test 
procedure as the basis for certifying to DOE that their equipment 
complies with the applicable energy conservation standards adopted 
under EPCA. Similarly, DOE must use these test procedures to determine 
whether that equipment complies with standards adopted pursuant to 
EPCA. (42 U.S.C. 6295(s)) Manufacturers, when making representations to 
the public regarding the energy use or efficiency of that equipment, 
must use the prescribed DOE test procedure as the basis for such 
representations. (42 U.S.C. 6314(d)) The DOE test procedures for 
automatic commercial ice makers currently appear at title 10 of the 
Code of Federal Regulations (CFR) part 431, subpart H.
    DOE must follow specific statutory criteria for prescribing amended 
standards for covered equipment. As indicated above, any amended 
standard for covered equipment must be designed to achieve the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A) and 6313(d)(4)) 
Furthermore, DOE may not adopt any standard that would not result in 
the significant conservation of energy. (42 U.S.C. 6295(o)(3) and 
6313(d)(4)) DOE also may not prescribe a standard: (1) For certain 
industrial equipment, including automatic commercial ice makers, if no 
test procedure has been established for the product; or (2) if DOE 
determines by rule that the proposed standard is not technologically 
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B) and 
6313(d)(4)) In deciding whether a proposed standard is economically 
justified, DOE must determine whether the benefits of the standard 
exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i) and 6313(d)(4)) DOE 
must make this determination after receiving comments on the proposed 
standard, and by considering, to the greatest extent practicable, the 
following seven factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered equipment in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered equipment that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
equipment likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the U.S. Attorney General (Attorney General), that is likely 
to result from the imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6313(d)(4))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of covered 
equipment. (42 U.S.C. 6295(o)(1) and 6313(d)(4)) Also, the Secretary 
may not prescribe an amended or new standard if interested persons have 
established by a preponderance of the evidence that the standard is 
likely to result in the unavailability in the United States of any 
covered product type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6295(o)(4) and 6313(d)(4))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified

[[Page 14853]]

if the Secretary finds that the additional cost to the consumer of 
purchasing a product complying with an energy conservation standard 
level will be less than three times the value of the energy savings 
during the first year that the consumer will receive as a result of the 
standard, as calculated under the applicable test procedure. (See 42 
U.S.C. 6295(o)(2)(B)(iii) and 6313(d)(4)) Section III.E.2 presents 
additional discussion about rebuttable presumption payback period 
(RPBP).
    Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when 
promulgating a standard for a type or class of covered equipment. DOE 
must specify a different standard level than that which applies 
generally to such type or class of equipment for any group of covered 
products that has the same function or intended use if DOE determines 
that products within such group (A) consume a different kind of energy 
from that consumed by other covered equipment within such type (or 
class); or (B) have a capacity or other performance-related feature 
that other equipment within such type (or class) do not have and such 
feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) 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. 6295(q)(2))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c) and 6316(f)) 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 42 U.S.C. 6297(d) and 6316(f).
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011. 76 FR 3821 (Jan. 21, 2011). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. 58 FR 51735 (Oct. 4, 1993). To 
the extent permitted by law, agencies are required by Executive Order 
13563 to: (1) Propose or adopt a regulation only upon a reasoned 
determination that its benefits justify its costs (recognizing that 
some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. 76 FR 3821 
(Jan. 21, 2011).
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs (OIRA) has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. 76 FR 3821 (Jan. 21, 2011). For the 
reasons stated in the preamble, DOE believes that this NOPR is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, benefits justify costs and that net 
benefits are maximized.
    Consistent with Executive Order 13563, and the range of impacts 
analyzed in this rulemaking, the standards proposed herein by DOE 
achieves maximum net benefits.

B. Background

1. Current Standards
    In a final rule published on October 18, 2005, DOE adopted the 
energy conservation standards and water conservation standards 
prescribed by EPCA in 42 U.S.C. 6313(d)(1) for certain automatic 
commercial ice makers manufactured on or after January 1, 2010. 70 FR 
at 60407, 60415-16. These standards consist of maximum energy use and 
maximum condenser water use to produce 100 pounds of ice for automatic 
commercial ice makers with harvest rates between 50 and 2,500 lb ice/24 
hours. These standards appear at 10 CFR part 431, subpart H, Automatic 
Commercial Ice Makers. Table II.1 presents DOE's current energy 
conservation standards for automatic commercial ice makers.

               Table II.1--Automatic Commercial Ice Makers Standards Prescribed by EPCA--Compliance Required Beginning on January 1, 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Maximum energy use kWh/100 lb  Maximum condenser water use *
         Equipment type                Type of cooling       Harvest rate lb ice/24 hours                ice                       gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head.................  Water...................  =500 and =1,436                         4.0                            200-0.022H.
                                  Air.....................  =450                           6.89-0.0011H                   Not Applicable.
Remote Condensing (but not        Air.....................  =1,000                         5.10                           Not Applicable.
Remote Condensing and Remote      Air.....................  =934                           5.30                           Not Applicable.
Self-Contained..................  Water...................  =200                           7.60                           191-0.0315H.
                                  Air.....................  =175                           9.80                           Not Applicable.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: 42 U.S.C. 6313(d).
* Water use is for the condenser only and does not include potable water used to make ice.

[[Page 14854]]

 
** H = harvest rate in pounds per 24 hours, indicating the water or energy use for a given harvest rate.

2. History of Standards Rulemaking for Automatic Commercial Ice Makers
    As stated above, EPCA prescribes energy conservation standards and 
water conservation standards for certain cube type automatic commercial 
ice makers with harvest rates between 50 and 2,500 lb ice/24 hours: 
Self-contained ice makers and ice-making heads (IMHs) using air or 
water for cooling and ice makers with remote condensing with or without 
a remote compressor. Compliance with these standards was required as of 
January 1, 2010. (42 U.S.C. 6313(d)(1)) DOE adopted these standards and 
placed them under 10 CFR part 431, subpart H, Automatic Commercial Ice 
Makers.
    In addition, EPCA requires DOE to conduct a rulemaking to determine 
whether to amend the standards established under 42 U.S.C. 6313(d)(1), 
and if DOE determines that amendment is warranted, DOE must also issue 
a final rule establishing such amended standards by January 1, 2015. 
(42 U.S.C. 6313(d)(3)(A))
    Furthermore, EPCA granted DOE authority to set standards for 
additional types of automatic commercial ice makers that are not 
covered in 42 U.S.C. 6313(d)(1). (42 U.S.C. 6313(d)(2)(A)) While not 
enumerated in EPCA, additional types of automatic commercial ice makers 
DOE identified as candidates for standards to be established in this 
rulemaking include flake and nugget, as well as batch type ice makers 
that are not included in the EPCA definition of cube type ice makers.
    To satisfy its requirement to conduct a rulemaking, DOE initiated 
the current rulemaking on November 4, 2010 by publishing on its Web 
site its ``Rulemaking Framework for Automatic Commercial Ice Makers.'' 
(The Framework document is available at: www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0037-0024.)
    DOE also published a notice in the Federal Register announcing the 
availability of the Framework document, as well as a public meeting to 
discuss the document. The notice also solicited comment on the matters 
raised in the document. 75 FR 70852 (Nov. 19, 2010). The Framework 
document described the procedural and analytical approaches that DOE 
anticipated using to evaluate amended standards for automatic 
commercial ice makers, and identified various issues to be resolved in 
the rulemaking.
    DOE held the Framework public meeting on December 16, 2010, at 
which it: (1) Presented the contents of the Framework document; (2) 
described the analyses it planned to conduct during the rulemaking; (3) 
sought comments from interested parties on these subjects; and (4) in 
general, sought to inform interested parties about, and facilitate 
their involvement in, the rulemaking. Major issues discussed at the 
public meeting included: (1) The scope of coverage for the rulemaking; 
(2) equipment classes; (3) analytical approaches and methods used in 
the rulemaking; (4) impacts of standards and burden on manufacturers; 
(5) technology options; (6) distribution channels, shipments, and end 
users; (7) impacts of outside regulations; and (8) environmental 
issues. At the meeting and during the comment period on the Framework 
document, DOE received many comments that helped it identify and 
resolve issues pertaining to automatic commercial ice makers relevant 
to this rulemaking. These comments are discussed in subsequent sections 
of this notice.
    DOE then gathered additional information and performed preliminary 
analyses to help review standards for this equipment. This process 
culminated in DOE publishing a notice of another public meeting (the 
January 2012 notice) to discuss and receive comments regarding the 
tools and methods DOE used in performing its preliminary analysis, as 
well as the analyses results. 77 FR 3404 (Jan. 24, 2012). DOE also 
invited written comments on these subjects and announced the 
availability on its Web site of a preliminary analysis technical 
support document (preliminary analysis TSD). Id. (The preliminary 
analysis TSD is available at: www.regulations.gov/#!documentDetail;D=EERE-2010-BT-STD-0037-0026.) Finally, DOE sought 
comments concerning other relevant issues that could affect amended 
standards for automatic commercial ice makers, or that DOE should 
address in this NOPR. Id.
    The preliminary analysis TSD provided an overview of DOE's review 
of the standards for automatic commercial ice makers, discussed the 
comments DOE received in response to the Framework document, and 
addressed issues including the scope of coverage of the rulemaking. The 
document also described the analytical framework that DOE used (and 
continues to use) in considering amended standards for automatic 
commercial ice makers, including a description of the methodology, the 
analytical tools, and the relationships between the various analyses 
that are part of this rulemaking. Additionally, the preliminary 
analysis TSD presented in detail each analysis that DOE had performed 
for this equipment up to that point, including descriptions of inputs, 
sources, methodologies, and results. These analyses were as follows:
     A market and technology assessment addressed the scope of 
this rulemaking, identified existing and potential new equipment 
classes for automatic commercial ice makers, characterized the markets 
for this equipment, and reviewed techniques and approaches for 
improving its efficiency;
     A screening analysis reviewed technology options to 
improve the efficiency of automatic commercial ice makers, and weighed 
these options against DOE's four prescribed screening criteria;
     An engineering analysis estimated the manufacturer selling 
prices (MSPs) associated with more energy-efficient automatic 
commercial ice makers;
     An energy and water use analysis developed the annual 
energy and water usage values for economic analysis of automatic 
commercial ice makers;
     A markups analysis converted estimated MSPs derived from 
the engineering analysis to customer purchase prices;
     A life-cycle cost analysis calculated, for individual 
customers, the discounted savings in operating costs throughout the 
estimated average life of automatic commercial ice makers, compared to 
any increase in installed costs likely to result directly from the 
imposition of a given standard;
     A payback period analysis estimated the amount of time it 
would take customers to recover the higher purchase price of more 
energy-efficient equipment through lower operating costs;
     A shipments analysis estimated shipments of automatic 
commercial ice makers over the time period examined in the analysis;
     A national impact analysis (NIA) assessed the national 
energy savings (NES), and the national NPV of total customer costs and 
savings, expected to result from specific, potential energy 
conservation standards for automatic commercial ice makers; and
     A preliminary manufacturer impact analysis (MIA) took the 
initial steps in evaluating the potential effects on

[[Page 14855]]

manufacturers of amended efficiency standards.
    The public meeting announced in the January 2012 notice took place 
on February 16, 2012 (February 2012 preliminary analysis public 
meeting). At the February 2012 preliminary analysis public meeting, DOE 
presented the methodologies and results of the analyses set forth in 
the preliminary analysis TSD. Interested parties provided comments on 
the following issues: (1) Equipment classes; (2) technology options; 
(3) energy modeling and validation of engineering models; (4) cost 
modeling; (5) market information, including distribution channels and 
distribution markups; (6) efficiency levels; (7) life-cycle costs to 
customers, including installation, repair and maintenance costs, and 
water and wastewater prices; and (8) historical shipments. The comments 
received since publication of the January 2012 notice, including those 
received at the February 2012 preliminary analysis public meeting, have 
contributed to DOE's proposed resolution of the issues in this 
rulemaking as they pertain to automatic commercial ice makers. This 
NOPR responds to the issues raised by the comments. (A parenthetical 
reference at the end of a quotation or paraphrase provides the location 
of the item in the public record.)

III. General Discussion

A. List of Equipment Class Abbreviations

    In this notice, equipment class names are frequently abbreviated. 
The abbreviations are shown on Table III.1.

                               Table III.1--List of Equipment Class Abbreviations
----------------------------------------------------------------------------------------------------------------
                                                                     Rated harvest rate lb ice/
        Abbreviation             Equipment type      Condenser type           24 hours               Ice type
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...............  Ice-Making Head.....  Water..........  =500 and =1,436 and =450 and =875 and =1,000 and =934 and =200 and =175 and =900 and =700 and =850 and =850 and =900 and =700 and 24 hours. In this notice,
  DOE is proposing to divide this into two classes, which could either be considered ``Large'' and ``Very
  Large'' or ``Medium'' and ``Large.'' In the LCC and NIA modeling, this was denoted as B-1 and B-2. The rated
  harvest rate break point shown above is based on TSL 3 results.

B. Test Procedures

    On December 8, 2006, DOE published a final rule in which it adopted 
Air-Conditioning and Refrigeration Institute (ARI) Standard 810-2003, 
``Performance Rating of Automatic Commercial Ice Makers,'' with a 
revised method for calculating energy use, as the DOE test procedure 
for this equipment. The DOE rule included a clarification to the energy 
use rate equation to specify that the energy use be calculated using 
the entire mass of ice produced during the testing period, normalized 
to 100 lb of ice produced. 71 FR 71340, 71350 (Dec. 8, 2006). ARI 
Standard 810-2003 requires performance tests to be conducted according 
to the American National Standards Institute (ANSI)/American Society of 
Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) 
Standard 29-1988 (reaffirmed 2005), ``Method of Testing

[[Page 14856]]

Automatic Ice Makers.'' The DOE test procedure incorporated by 
reference the ANSI/ASHRAE Standard 29-1988 (Reaffirmed 2005) as the 
method of test.
    On January 11, 2012, DOE published a test procedure final rule 
(2012 test procedure final rule) in which it adopted several amendments 
to the DOE test procedure. This included an amendment to incorporate by 
reference Air-Conditioning, Heating, and Refrigeration Institute (AHRI) 
Standard 810-2007, which amends ARI Standard 810-2003 to expand the 
capacity range of covered equipment, provide definitions and specific 
test procedures for batch and continuous type ice makers, and provide a 
definition for ice hardness factor, as the DOE test procedure for this 
equipment. 77 FR 1591 (Jan. 11, 2012). In March 2011, AHRI published 
Addendum 1 to Standard 810-2007, which revised the definition of 
``potable water use rate'' and added new definitions for ``purge or 
dump water'' and ``harvest water.'' DOE's 2012 test procedure final 
rule incorporated this addendum to the AHRI Standard. The 2012 test 
procedure final rule also included an amendment to incorporate by 
reference the updated ANSI/ASHRAE Standard 29-2009. Id.
    In addition, the 2012 test procedure final rule included several 
amendments designed to address issues that were not accounted for by 
the previous DOE test procedure. 77 FR at 1593 (Jan. 11, 2012). First, 
DOE expanded the scope of the test procedure to include equipment with 
capacities from 50 to 4,000 lb ice/24 hours.\17\ DOE also adopted 
amendments to provide test methods for continuous type ice makers and 
to standardize the measurement of energy and water use for continuous 
type ice makers with respect to ice hardness. In the 2012 test 
procedure final rule, DOE also clarified the test method and reporting 
requirements for remote condensing automatic commercial ice makers 
designed for connection to remote compressor racks. Finally, the 2012 
test procedure final rule discontinued the use of the clarified energy 
use rate calculation and instead required energy-use to be calculated 
per 100 lb of ice as specified in ANSI/ASHRAE Standard 29-2009. The 
2012 test procedure final rule became effective on February 10, 2012, 
and the changes set forth in the final rule became mandatory for 
equipment testing starting January 7, 2013. 77 FR at 1593 (Jan. 11, 
2012).
---------------------------------------------------------------------------

    \17\ EPCA defines automatic commercial ice maker in 42 U.S.C. 
6311(19) as ``a factory-made assembly (not necessarily shipped in 1 
package) that--(1) Consists of a condensing unit and ice-making 
section operating as an integrated unit, with means for making and 
harvesting ice; and (2) May include means for storing ice, 
dispensing ice, or storing and dispensing ice.'' This definition 
includes commercial ice-making equipment up to 4,000 lb ice/24 
hours, though DOE had not previously established test procedures and 
standards for units with the capacity between 2,500 and 4,000 lb 
ice/24 hours. While 42 U.S.C. 6313(d)(1) explicitly sets standards 
for cube type ice makers up to 2,500 lb ice/24 hours, 6313(d)(2) 
provides authority to set standards for other equipment types--all 
of which are covered by the EPCA definition of an automatic 
commercial ice maker.
---------------------------------------------------------------------------

    The test procedure amendments established in the 2012 test 
procedure final rule are required to be used in conjunction with any 
new standards promulgated as a result of this standards rulemaking. Use 
of the amended test procedure to demonstrate compliance with DOE energy 
conservation standards or for representations with respect to energy 
consumption of automatic commercial ice makers is required on the 
compliance date of any energy conservation standards established as 
part of this rulemaking, and on January 7, 2013 for the energy 
conservation standards set in the Energy Policy Act of 2005 (EPACT 
2005). 77 FR at 1593 (Jan. 11, 2012).

C. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis, 
which it bases on information that it has gathered on all current 
technology options and prototype designs that could improve the 
efficiency of the products or equipment that are the subject of the 
rulemaking. As the first step in such analysis, DOE develops a list of 
design options for consideration, in consultation with manufacturers, 
design engineers, and other interested parties. DOE then determines 
which of these options for improving efficiency are technologically 
feasible. DOE considers a design option to be technologically feasible 
if it is used by the relevant industry or if a working prototype has 
been developed. Technologies incorporated in commercially available 
equipment or in working prototypes will be considered technologically 
feasible. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(i) 
Although DOE considers technologies that are proprietary, it will not 
consider efficiency levels that can only be reached through the use of 
proprietary technologies (i.e., a unique pathway), which could allow a 
single manufacturer to monopolize or control the market.
    Once DOE has determined that particular design options are 
technologically feasible, it further evaluates each of these design 
options in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(4)(ii)-
(iv) Chapter 4 of the NOPR TSD discusses the results of the screening 
analyses for automatic commercial ice makers. Specifically, it presents 
the designs DOE considered, those it screened out, and those that are 
the bases for the TSLs in this rulemaking.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt (or not adopt) an amended or new energy 
conservation standard for a type or class of covered equipment such as 
automatic commercial ice makers, it determines the maximum improvement 
in energy efficiency that is technologically feasible for such 
equipment. (See 42 U.S.C. 6295(p)(1) and 6313(d)(4)) Accordingly, in 
the preliminary analysis, DOE determined the maximum technologically 
feasible (``max-tech'') improvements in energy efficiency for automatic 
commercial ice makers in the engineering analysis using the design 
parameters that passed the screening analysis. See chapter 5 of the 
NOPR TSD for the results of the analyses, and a list of technologies 
included in max-tech equipment.
    As indicated previously, whether efficiency levels exist or can be 
achieved in commonly used equipment is not relevant to whether they are 
max-tech levels. DOE considers technologies to be technologically 
feasible if they are incorporated in any currently available equipment 
or working prototypes. Hence, a max-tech level results from the 
combination of design options predicted to result in the highest 
efficiency level possible for an equipment class, with such design 
options consisting of technologies already incorporated in commercial 
equipment or working prototypes. DOE notes that it reevaluated the 
efficiency levels, including the max-tech levels, when it updated its 
results for this NOPR. Table III.2 and Table III.3 show the max-tech 
levels determined in the engineering analysis for batch and continuous 
type automatic commercial ice makers, respectively.

[[Page 14857]]

 Table III.2--Max-Tech Levels for Batch Automatic Commercial Ice Makers
------------------------------------------------------------------------
                                                      Energy use lower
                 Equipment type *                       than baseline
------------------------------------------------------------------------
IMH-W-Small-B.....................................  30%.
IMH-W-Med-B.......................................  22%.
IMH-W-Large-B.....................................  17% (at 1,500 lb ice/
                                                     24 hours) 16% (at
                                                     2,600 lb ice/24
                                                     hours).
IMH-A-Small-B.....................................  33%.
IMH-A-Large-B.....................................  33% (at 800 lb ice/
                                                     24 hours) 21% (at
                                                     1,500 lb ice/24
                                                     hours).
RCU-Small-B.......................................  Not analyzed--
                                                     similar to IMH-A.-
                                                     Large-B (1500).
RCU-Large-B.......................................  21% (at 1,500 lb ice/
                                                     24 hours) 21% (at
                                                     2,400 lb ice/24
                                                     hours).
SCU-W-Small-B.....................................  Not analyzed--
                                                     similar to SCU-A-
                                                     Large-B.
SCU-W-Large-B.....................................  35%.
SCU-A-Small-B.....................................  41%.
SCU-A-Large-B.....................................  36%.
------------------------------------------------------------------------
* IMH is ice-making head; RCU is remote condensing unit; SCU is self-
  contained unit; W is water-cooled; A is air-cooled; Small refers to
  the lowest harvest category; Med refers to the Medium category (water-
  cooled IMH only); Large refers to the large size category; RCU units
  were modeled as one with line losses used to distinguish standards.
** For equipment classes that were not analyzed, DOE did not develop
  specific cost-efficiency curves but attributed the curve (and maximum
  technology point) from one of the analyzed equipment classes.

  Table III.3--Max-Tech Levels for Continuous Automatic Commercial Ice
                                 Makers
------------------------------------------------------------------------
                                                      Energy use lower
                  Equipment type                        than baseline
------------------------------------------------------------------------
IMH-W-Small-C.....................................  Not analyzed--
                                                     similar to IMH-A-
                                                     Large-C (820).
IMH-W-Large-C.....................................  Not analyzed at
                                                     1,000 lb/day--
                                                     similar to IMH-A-
                                                     Large-C (820) Not
                                                     analyzed at 1,800
                                                     lb/day--similar to
                                                     IMH-A-Large-C
                                                     (820).
IMH-A-Small-C.....................................  25.3%.
IMH-A-Large-C.....................................  17% (at 820 lb ice/
                                                     24 hours) Not
                                                     analyzed at 1,800
                                                     lb/day--similar to
                                                     IMH-A-Large-C
                                                     (820).
RCU-Small-C.......................................  Not analyzed--
                                                     similar to IMH-A-
                                                     Large-C (820).
RCU-Large-C.......................................  Not analyzed--
                                                     similar to IMH-A-
                                                     Large-C (820).
SCU-W-Small-C.....................................  Not analyzed--
                                                     similar to SCU-A-
                                                     Small-C.
SCU-W-Large-C *...................................  No units available.
SCU-A-Small-C.....................................  24%.
SCU-A-Large-C *...................................  No units available.
------------------------------------------------------------------------
* DOE's investigation of equipment on the market revealed that there are
  no existing products in either of these two equipment classes (as
  defined in this NOPR).
** For equipment classes that were not analyzed, DOE did not develop
  specific cost-efficiency curves but attributed the curve (and maximum
  technology point) from one of the analyzed equipment classes.

D. Energy and Water Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from automatic 
commercial ice makers purchased in the 30-year period that begins in 
the year of compliance with amended and new standards (2018-2047). The 
savings are measured over the entire lifetime of equipment purchased in 
the 30-year period. DOE quantified the energy savings attributable to 
each TSL as the difference in energy consumption between each standards 
case and the base case. The base case represents a projection of energy 
consumption in the absence of amended mandatory efficiency standards, 
and considers market forces and policies that affect demand for more-
efficient equipment.
    DOE used its NIA spreadsheet model to estimate energy savings from 
amended standards for the equipment that are the subject of this 
rulemaking. The NIA spreadsheet model (described in section IV.H of 
this notice) calculates energy savings in site energy, which is the 
energy directly consumed by equipment at the locations where they are 
used.
    Because automatic commercial ice makers use water, water savings 
were quantified in the same way as energy savings.
    For electricity, DOE reports national energy savings in terms of 
the savings in energy that is used to generate and transmit the site 
electricity. To convert this quantity, DOE derives annual conversion 
factors from the model used to prepare the Energy Information 
Administration's (EIA's) Annual Energy Outlook.
    DOE has also begun to estimate full-fuel-cycle (FFC) energy 
savings. 76 FR 51282 (Aug. 18, 2011). The FFC metric includes the 
energy consumed in extracting, processing, and transporting primary 
fuels, and thus presents a more complete picture of the impacts of 
efficiency standards. DOE's approach is based on calculation of an FFC 
multiplier for each of the fuels used by covered equipment.
2. Significance of Savings
    As noted above, 42 U.S.C. 6295(o)(3)(B) prevents DOE from adopting 
a standard for a covered product unless such standard would result in 
``significant'' energy savings. Although the term ``significant'' is 
not defined in the Act, the U.S. Court of Appeals, in Natural Resources 
Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), 
indicated that Congress intended ``significant'' energy savings in this 
context to be savings that were not ``genuinely trivial.'' The 
estimated energy savings in the 30-year analysis period for the TSLs 
(presented in section V.A) are nontrivial, and, therefore, DOE 
considers them ``significant'' within the meaning of section 325 of 
EPCA.

E. Economic Justification

1. Specific Criteria
    EPCA provides seven factors to be evaluated in determining whether 
a potential energy conservation standard is economically justified. (42 
U.S.C. 6295(o)(2)(B)(i) and 6313(d)(4)) The following sections 
generally discuss how DOE is addressing each of those seven factors in 
this rulemaking. For further details and the results of DOE's

[[Page 14858]]

analyses pertaining to economic justification, see sections IV and V of 
today's rulemaking.
a. Economic Impact on Manufacturers and Commercial Customers
    In determining the impacts of an amended standard on manufacturers, 
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 INPV, which values the industry 
on the basis of expected future cash flows; cash flows by year; changes 
in revenue and income; and 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 a detailed description of the methodology used to assess the 
economic impact on manufacturers, see section IV.J of this rulemaking. 
For results, see section V.B.2 of this rulemaking. Additionally, 
chapter 12 of the NOPR TSD contains a detailed description of the 
methodology and discussion of the results.
    For individual customers,\18\ measures of economic impact include 
the changes in LCC and the PBP associated with new or amended 
standards. The LCC, which is specified separately in EPCA as one of the 
seven factors to be considered in determining the economic 
justification for a new or amended standard, 42 U.S.C. 
6295(o)(2)(B)(i)(II), is discussed in the following section. For 
customers in the aggregate, DOE also calculates the national net 
present value of the economic impacts applicable to a particular 
rulemaking. For a description of the methodology used for assessing the 
economic impact on customers, see sections IV.G and IV.H; for results, 
see sections V.B.1 and V.B.2 of this rulemaking. Additionally, chapters 
8 and 10 and the associated appendices of the NOPR TSD contain a 
detailed description of the methodology and discussion of the results. 
For a description of the methodology used to assess the economic impact 
on manufacturers, see section IV.J; for results, see section V.B.2 of 
this rulemaking. Additionally, chapter 12 of the NOPR TSD contains a 
detailed description of the methodology and discussion of the results.
---------------------------------------------------------------------------

    \18\ Customers, or consumers, in the case of commercial and 
industrial equipment, are considered to be the businesses that 
purchase or lease the equipment or may be responsible for the cost 
of operating the equipment.
---------------------------------------------------------------------------

b. Life-Cycle Costs
    The LCC is the sum of the purchase price of equipment (including 
its installation) and the operating costs (including energy, water, 
maintenance, and repair expenditures) discounted over the lifetime of 
the equipment. The LCC savings for the considered efficiency levels are 
calculated relative to a base case that reflects projected market 
trends in the absence of new or amended standards. The LCC analysis 
requires a variety of inputs, such as product prices, product energy 
and water consumption, energy and water prices, maintenance and repair 
costs, product lifetime, and consumer discount rates. For its analysis, 
DOE assumes that consumers will purchase the considered equipment in 
the first year of compliance with amended standards.
    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. DOE identifies the 
percentage of customers estimated to receive LCC savings, or experience 
an LCC increase, in addition to the average LCC savings associated with 
a particular standard level. DOE also evaluates the LCC impacts of 
potential standards on identifiable subgroups of customers that may be 
affected disproportionately by a national standard. For the results of 
DOE's analyses related to the LCC, see section V.B.1 of this rulemaking 
and chapter 8 of the NOPR TSD; for LCC impacts on identifiable 
subgroups, see section V.B.1 of this notice and chapter 11 of the NOPR 
TSD.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for imposing 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. 6295(o)(2)(B)(i)(III) and 
6313(d)(4)) As discussed in section VI.B.3, DOE uses the NIA 
spreadsheet to project energy savings.
d. Lessening of Utility or Performance of Equipment
    In establishing classes of equipment, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
standards that would not lessen the utility or performance of the 
equipment under consideration. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 
6313(d)(4)) The standards proposed in today's rulemaking will not 
reduce the utility or performance of the equipment considered in the 
rulemaking. For DOE's analyses related to the potential impact of 
amended standards on equipment utility and performance, see section 
V.B.4 of this rulemaking and chapter 4 of the NOPR TSD.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from the imposition of a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V)) It directs the Attorney General to make such 
determination, 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. 6295(o)(2)(B)(ii)) DOE will transmit a copy of today's proposed 
rule to the Attorney General with a request that the Department of 
Justice (DOJ) provide its determination on this issue. DOE will address 
the Attorney General's determination in the final rule.
f. Need of the Nation To Conserve Energy
    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. 
(42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(e)(1))
    The proposed standards also are likely to result in environmental 
benefits in the form of reduced emissions of air pollutants and 
greenhouse gases (GHGs) associated with energy production. DOE reports 
the emissions impacts from today's standards, and from each TSL it 
considered, in sections IV.K, IV.L and V.B.6 of this rulemaking. DOE 
also

[[Page 14859]]

reports estimates of the economic value of emissions reductions 
resulting from the considered TSLs.
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a new 
or amended standard is economically justified, to consider any other 
factors that the Secretary deems to be relevant. (42 U.S.C. 
6295(o)(2)(B)(i)(VII) and 6316(e)(1)) In developing this proposed rule, 
DOE has also considered the comments submitted by interested parties. 
For the results of DOE's analyses related to other factors, see section 
V.B.7 of this rulemaking.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6313(d)(4), EPCA 
provides for a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
customer of equipment that meets the new or amended standard level is 
less than three times the value of the first year's energy savings 
resulting from the standard, as calculated under the applicable DOE 
test procedure. DOE's LCC and PBP analysis generates values used to 
calculate the effects that proposed energy conservation standards would 
have on the PBP for customers. These analyses include, but are not 
limited to, the 3-year PBP contemplated under the rebuttable 
presumption test. In addition, DOE routinely conducts an economic 
analysis that considers the full range of impacts to the customer, 
manufacturer, the Nation, and environment, as required under 42 U.S.C. 
6295(o)(2)(B)(i) and 6313(d)(4). The results of these analyses 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 economic justification). The 
rebuttable presumption payback calculation is discussed in section 
IV.G.12 of this rulemaking and chapter 8 of the NOPR TSD.

IV. Methodology and Discussion of Comments

A. General Rulemaking Issues

    During the February 2012 preliminary analysis public meeting and in 
subsequent written comments, stakeholders provided input regarding 
general issues pertinent to the rulemaking, such as issues of scope of 
coverage and DOE's authority in setting standards. These issues are 
discussed in this section.
1. Statutory Authority
    In the preliminary analysis, DOE stated its position that EPCA 
prevents the setting of both energy performance standards and 
prescriptive design requirements (see chapter 2 of the preliminary 
analysis TSD). DOE also stated its intent to amend the energy 
performance standards for automatic commercial ice makers, and not to 
set prescriptive design requirements at this time (see chapter 2 of the 
preliminary analysis TSD).
2. Test Procedures
    As discussed in section III.A, DOE published a test procedure final 
rule in January 2012 (2012 test procedure final rule). 77 FR 1591 (Jan. 
11, 2012). All automatic commercial ice makers covered by DOE energy 
conservation standards promulgated as a result of this energy 
conservation standards rulemaking will be required to use the 2012 test 
procedures to demonstrate compliance beginning on the compliance date 
set at the conclusion of this rulemaking. 77 FR at 1593 (Jan. 11, 
2012). The standards can be found at title 10 CFR part 431, subpart H 
(or, alternatively, 10 CFR 431.134).
    Since the publication of the 2012 test procedure final rule, DOE 
has received several inquiries from interested parties regarding proper 
conduct of the DOE test procedure. Specifically, interested parties 
inquired regarding the appropriate use of baffles and automatic purge 
water controls during the DOE test procedure. On January 28, 2013, DOE 
published draft guidance documents to address the issues regarding 
baffles \19\ and automatic purge water controls \20\ and provided an 
opportunity for interested parties to comment on those interpretations 
of the DOE test procedure for automatic commercial ice makers. The 
comment period for those guidance documents extended until February 28, 
2013. DOE will publish a final guidance document and responses to all 
comments received on the DOE Appliance and Commercial Equipment 
Standards Web site (www1.eere.energy.gov/guidance/default.aspx?pid=2&spid=1). However, DOE notes that these guidance 
documents serve only to clarify existing test procedure requirements, 
as established in the 2012 test procedure final rule, and do not alter 
the DOE test procedure.
---------------------------------------------------------------------------

    \19\ http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/acim_baffles_faq_2013-9-24final.pdf.
    \20\ http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/acim_purge_faq_2013-9-25final.pdf.
---------------------------------------------------------------------------

    DOE's test procedures are set in separate rulemaking processes. 
However, as part of the automatic commercial ice maker energy 
conservation standards rulemaking, DOE did receive two comments related 
to the test procedures. Howe noted that measuring potable water use is 
important because de-scaling is crucial for maintaining the efficiency 
and utility of automatic commercial ice makers. Howe also recommended 
that DOE obtain information from additional manufacturers on the 
relationship between potable water use and automatic commercial ice 
maker performance. (Howe, No. 51 at p. 2) \21\
---------------------------------------------------------------------------

    \21\ A notation in this form provides a reference for 
information that is in the docket of DOE's ``Energy Conservation 
Program for Certain Commercial and Industrial Equipment: Energy 
Conservation Standards for Automatic Commercial Ice Makers'' (Docket 
No. EERE-2010-BT-STD-0037), which is maintained at 
www.regulations.gov. This notation indicates that the statement 
preceding the reference is document number 51 in the docket for the 
automatic commercial ice makers energy conservation standards 
rulemaking, and appears at page 2 of that document.
---------------------------------------------------------------------------

    The People's Republic of China (China) noted that there are 
differences among test processes for refrigeration products issued by 
different bodies in the U.S. China stated that different test 
procedures may lead to different results for one product, and it will 
affect the judgment of compliance. Therefore, China suggested that the 
U.S. government unify the test procedure. (China, No. 55 at p. 3)
    As noted earlier, the 2012 test procedure final rule was published 
on January 11, 2012, and the energy conservation standards will be 
based on this test procedure. 77 FR at 1593. With regard to Howe's 
comment, in the final rule, DOE elected to not require measurement of 
potable water. Since DOE is not setting potable water limits for 
automatic commercial ice makers, requiring manufacturers to measure 
potable water use would be an unnecessary expense. With regard to 
China's comment, DOE has no authority regarding adjustment of the test 
procedures of other organizations. Also, if there is any uncertainty 
regarding how to conduct the test, manufacturers and others may request 
clarification from DOE. By updating the test procedure to reflect 
current AHRI and ANSI/ASHRAE standards, DOE expects any differences of 
the type noted by China will be minimized.
3. Need for and Scope of Rulemaking
    At the February 2012 preliminary analysis public meeting and in 
written

[[Page 14860]]

comments, DOE received comments about the need for the rulemaking. 
Hoshizaki suggested DOE not adjust the energy standards for automatic 
commercial ice makers regulated under EPACT 2005, arguing that 
tightening the regulations that were just released 2 years ago would 
negatively impact both manufacturers and end users. (Hoshizaki, No. 53 
at p. 3) AHRI opined that, because the full effects of the EPACT 2005 
standards will not be known until at least 2013, DOE should only 
consider the previously uncovered continuous and high-capacity batch 
type ice makers in this rulemaking. (AHRI, No. 49 at p. 3)
    Scotsman asked whether the upcoming rulemaking would cover products 
that both make and dispense ice. (Scotsman, Public Meeting Transcript, 
No. 42 at p. 26) \22\
---------------------------------------------------------------------------

    \22\ A notation in the form ``Scotsman, Public Meeting 
Transcript, No. 42 at p. 26'' identifies a comment that DOE has 
received during a public meeting and has included in the docket of 
this rulemaking at www.regulations.gov. This particular notation 
refers to a comment: (1) Submitted by Scotsman; (2) transcribed from 
the public meeting in document number 42 of the docket, and (3) 
appearing on page 26 of that document.
---------------------------------------------------------------------------

    In response to the comments about the need for starting this 
rulemaking, DOE notes that under EPACT 2005, DOE must review the 
existing standards and, if justified, develop amended standards by 
January 1, 2015. Thus, DOE commenced the rulemaking to ensure 
compliance with the statutory deadline. During the rulemaking, DOE 
considered alternatives to this rulemaking in the regulatory impact 
analysis; this analysis is described in Section IV.O of today's NOPR. 
As for covering products that make and dispense ice, the scope of the 
rulemaking is ice-making products. While the 42 U.S.C. 6311(19) 
definition of automatic commercial ice maker stated an ice maker may or 
may not include a means for dispensing or storing ice, not all ice 
makers do include such ancillary equipment. As discussed in the 
preliminary analysis TSD, section 2.2.4.2, DOE determined that 
promulgating standards to regulate the energy usage of dispensers and 
storage bins may have an unintended impact on customer choices when 
choosing between models that include or do not include such ancillary 
equipment. By regulating energy usage of ancillary equipment, DOE could 
disincentivize the manufacturing of such equipment. If, and to the 
extent that, ice dispensing equipment use electricity, such electricity 
usage is not covered by this rulemaking.

B. Market and Technology Assessment

    When beginning an energy conservation standards rulemaking, DOE 
develops information that provides an overall picture of the market for 
the equipment concerned, including the purpose of the equipment, the 
industry structure, and market characteristics. This activity includes 
both quantitative and qualitative assessments based primarily on 
publicly available information (e.g., manufacturer specification 
sheets, industry publications) and data submitted by manufacturers, 
trade associations, and other stakeholders. The subjects addressed in 
the market and technology assessment for this rulemaking include: (1) 
Quantities and types of equipment sold and offered for sale; (2) retail 
market trends; (3) equipment covered by the rulemaking; (4) equipment 
classes; (5) manufacturers; (6) regulatory requirements and non-
regulatory programs (such as rebate programs and tax credits); and (7) 
technologies that could improve the energy efficiency of the equipment 
under examination. DOE researched manufacturers of automatic commercial 
ice makers and made a particular effort to identify and characterize 
small business manufacturers. See chapter 3 of the NOPR TSD for further 
discussion of the market and technology assessment.
1. Equipment Classes
    In evaluating and establishing energy conservation standards, DOE 
generally divides covered equipment into classes by the type of energy 
used, or by capacity or another performance-related feature that 
justifies a different standard for equipment having such a feature. (42 
U.S.C. 6295(q) and 6313(d)(4)) In deciding whether a feature justifies 
a different standard, DOE must consider factors such as the utility of 
the feature to users. Id. DOE normally establishes different energy 
conservation standards for different equipment classes based on these 
criteria.
    Automatic commercial ice makers are divided into equipment classes 
based on physical characteristics that affect commercial application, 
equipment utility, and equipment efficiency. These equipment classes 
are based on the following criteria:

 Ice-making process
    [cir] ``Batch'' icemakers that operate on a cyclical basis, 
alternating between periods of ice production and ice harvesting
    [cir] ``Continuous'' icemakers that can produce and harvest ice 
simultaneously
 Equipment configuration
    [cir] Ice-making head (a single-package ice-making assembly that 
does not include an ice storage bin)
    [cir] Remote condensing
[ssquf] With remote compressor (compressor packaged with the condenser)
[ssquf] Without remote compressor (compressor packaged with the 
evaporator)
    [cir] Self-contained (with storage bin included)
 Condenser cooling
    [cir] Air-cooled
    [cir] Water-cooled
 Capacity range

    Table IV.1 shows the 25 automatic commercial ice maker equipment 
classes that DOE is including in the scope of this rulemaking. The 
capacity ranges for the continuous units have changed from the 
preliminary analysis.

                          Table IV.1--Automatic Commercial Ice Maker Equipment Classes
----------------------------------------------------------------------------------------------------------------
                                                                      Type of
       Type of ice maker                 Equipment type              condenser      Rated harvest rate lb ice/24
                                                                      cooling                  hours
----------------------------------------------------------------------------------------------------------------
                                Ice-Making Head................  Water...........  >=50 and =500 and =1,436 and =50 and =450 and =50 and =1,000 and =50 and =934 and =50 and =200 and =50 and =175 and =50 and =900 and =50 and =700 and =50 and =850 and =50 and =850 and =50 and =900 and =50 and =700 and 24 
hours. This includes tube ice makers and other batch type ice machines 
(if any) that produce ice that does not fit the definition of cube type 
ice. To help clarify this issue, DOE now refers to all batch automatic 
commercial ice makers as ``batch type ice makers,'' regardless of the 
shape of the ice pieces that they produce. 77 FR 1591 (Jan. 11, 2012).
    During the February 2012 preliminary analysis public meeting and in 
subsequent written comments, a number of stakeholders addressed issues 
related to proposed equipment classes and the inclusion of certain 
types of equipment in the analysis. These topics are discussed in this 
section.
a. Cabinet Size
    Currently, DOE does not consider physical size as a criterion for 
setting equipment classes.
    Several stakeholders commented on the size standardization of ice 
makers. Scotsman commented that most ice makers are built in standard 
widths of 22, 30, and 48 inches and standard depths between 24 and 28 
inches, although heights may vary slightly depending on the machine. 
(Scotsman, Public Meeting Transcript, No. 42 at p. 61) Manitowoc noted 
that the reason for this standardization is that most ice storage bins 
have standard sizes based on ice-making capacity, and the footprint of 
the ice maker on top needs to be the same as the footprint of the 
storage bin in order for them to fit together. Hence, according to 
Manitowoc, the industry has developed common sizes that have 
facilitated ice maker installations and replacements. (Manitowoc, 
Public Meeting Transcript, No. 42 at pp. 91-92) Howe countered that, 
contrary to the assertions of other stakeholders, there are no 
``standard'' ice maker dimensions. (Howe, No. 51 at pp. 1-2)
    Earthjustice commented that it may be helpful to use cabinet size 
as an additional criterion for defining equipment classes because the 
existing standard sizes of ice makers affect their efficiency and their 
utility to the consumer, both of which are factors that DOE typically 
considers in identifying equipment classes. (Earthjustice, Public 
Meeting Transcript, No. 42 at pp. 90-91)
    However, Manitowoc commented that it manufactures ice makers in 
different cabinet sizes that deliver the same ice-making capacity, 
explaining that this facilitates flexible installation decisions but 
could complicate efforts to define equipment classes by cabinet size. 
(Manitowoc, Public Meeting Transcript, No. 42 at p. 91)
    The Appliance Standards Awareness Project (ASAP) commented that it 
would be helpful to see a size analysis that would elucidate the 
effects of size on utility to the customer and potential energy 
savings. (ASAP, Public Meeting Transcript, No. 42 at pp. 73-74)
    As noted by Manitowoc and Scotsman, there are standard sizes for

[[Page 14862]]

ice makers. DOE's review of product literature supports these claims, 
in contrast to Howe's assertion that there are no standard sizes. 
However, not all customers face size constraints.
    DOE notes that a reason to consider separate equipment classes 
based on physical dimensions is to address differences in energy 
efficiency. An important size-related factor that can affect the 
efficiency of an ice maker is the size of its heat exchangers (i.e., 
the evaporator and condenser).\23\ A larger evaporator can make more 
ice per freeze cycle. Hence, for a given harvest capacity rate, the 
cycle can be allowed to take longer, thus reducing the required heat 
transfer rate per evaporator surface. The reduced heat transfer rate 
can be provided by a lower temperature differential between the ice and 
the refrigerant. Likewise, as the surface area of a condenser 
increases, the temperature differential between the refrigerant and the 
cooling medium (either air or water) decreases. These design changes 
can lead to higher evaporating temperature and lower condensing 
temperature, which both reduce the pressure differential between the 
compressor suction and discharge ports, which reduces the amount of 
electrical power necessary to compress the vapor, thus reducing energy 
consumption of the ice maker.
---------------------------------------------------------------------------

    \23\ Other examples are use of some higher-efficiency 
compressors, which can be physically larger, and packaging of drain 
water heat exchangers within the equipment package.
---------------------------------------------------------------------------

    To address size limitations and to save energy, DOE could consider 
Earthjustice's recommendation to use size as a criterion in setting 
equipment classes. To do so, DOE could establish parallel sets of 
equipment classes--size-constrained classes (in which physical size 
would be limited to a prescribed maximum) and non-size-constrained 
classes (for which there would be no size restrictions). In the size-
constrained classes, DOE's ability to set stricter energy usage limits 
would be limited by the constraint that the physical size of the unit 
cannot be increased. In the non-size-constrained classes, additional 
energy savings could be achieved by setting standards that increase the 
physical size of the unit as well as making the units more efficient. 
Accounting for size constraints is important in the automatic 
commercial ice maker industry because replacement sales comprise a 
majority of sales and equipment must be able to fit into the same space 
as the unit it replaces, and fit on existing ice storage bins, as 
described above. For opportunities in which physical size is not 
critical, non-size-constrained equipment classes could save energy 
relative to the size-constrained units. If DOE decided not to establish 
separate equipment classes for space-constrained equipment, it may not 
be reasonable for DOE to consider design options that significantly 
increase physical size of the equipment, which would limit potential 
efficiency gains and/or make them more costly, thus likely resulting in 
less stringent standards for size-limited equipment classes.
    Previous DOE rulemakings provide ample precedent for creating 
space-constrained equipment classes. For instance, DOE developed space-
constrained equipment classes for packaged terminal air conditioners 
and through-the-wall air conditioners, both of which represent 
industries in which replacement comprises a majority of sales. 10 CFR 
430.32
    To determine whether space constraint is an issue (i.e., whether 
efficiency and physical size are direct functions of one another), DOE 
followed ASAP's suggestion and prepared an analysis of the size and 
efficiency of automatic commercial ice makers. Using publicly available 
manufacturer information, DOE collected size \24\ data for 
approximately 600 ice makers and mapped it to efficiency information 
listed in the AHRI database. After plotting and analyzing this data, 
DOE determined that, although there is a correlation between size and 
efficiency in automatic commercial ice makers, this correlation is not 
conclusive.
---------------------------------------------------------------------------

    \24\ Size is expressed in terms of volume, calculated by 
multiplying unit width by unit depth and by unit height (width x 
depth x height).
---------------------------------------------------------------------------

    Table IV.2 displays sample results of this size analysis, 
presenting information for two different large, air-cooled IMH batch 
type ice makers at each of several selected harvest capacities. In many 
cases, the larger equipment is more efficient. For example, among the 
ice makers that can produce 1,500 lb ice/24 hours, the 28 ft\3\ 
products have total energy consumption values that are lower than the 
current energy consumption standard by greater than >20 percent, while 
the 19 ft\3\ products have total energy consumption values that are 
only 6 percent below the standard. In other cases, the data do not 
support this trend. For example, among the 800 lb ice/24 hour ice 
makers, the 17 ft\3\ products are less efficient than the 11 ft\3\ 
products. Finally, in cases such as the 1,430 lb ice/24 hour machines, 
there are also products with the same harvest capacity and volume that 
nonetheless have different efficiencies. Therefore, it is difficult to 
draw a decisive conclusion from this data.

Table IV.2--Relationship between Volume and Efficiency for Large IMH Air-
                         Cooled Batch Ice Makers
------------------------------------------------------------------------
                                                              % Below
                                                             baseline
   Rated harvest rate lb ice/24 hours      Volume ft \3\    energy use
                                                             (percent)
------------------------------------------------------------------------
500.....................................             9.1             3.2
                                                    12.4             2.2
800.....................................            10.8            13.5
                                                    16.8             3.5
1,150...................................            18.0            13.5
                                                    20.8            18.1
1,430...................................            20.1             3.0
                                                    20.1             4.6
1,530...................................            19.3             6.0
                                                    27.7            21.3
------------------------------------------------------------------------

    Manitowoc noted during the February 2012 preliminary analysis 
public meeting that it produces units with the same harvest rate in 
different size chassis sizes, and that these units have very similar 
features. (Manitowoc, Public Meeting Transcript, No. 42 at p. 91) DOE, 
in its analysis, has noted that some manufacturers have achieved higher 
efficiencies for ice makers in smaller sizes (at constant harvest 
rates). Based on this information, DOE believes that size does affect 
efficiency levels (as it allows for large heat exchangers), but it is 
not the definitive factor in determining efficiency for ice makers.
    Therefore, DOE has determined that separate equipment classes for 
size-constrained units are not warranted. DOE notes that there is not a 
strong correlation between product size and product efficiency that 
supports separate equipment classes. Furthermore, DOE believes that 
adding additional classes for size-constrained units complicates the 
equipment class structure and analysis but does not improve the 
rulemaking or standards.
b. Large-Capacity Batch Ice Makers
    In the November 2010 Framework document for this rulemaking, DOE 
requested comments on whether coverage should be expanded from the 
current covered capacity range of 50 to 2,500 lb ice/24 hours to 
include ice makers producing up to 10,000 lb ice/24 hours. All 
commenters agreed with expanding the harvest capacity coverage, and all 
but one of the commenters supported or accepted an upper harvest 
capacity cap of 4,000 lb ice/24 hours, which would be consistent with 
the current test procedure, AHRI Standard 810-2007. Most commenters 
categorized ice makers with harvest

[[Page 14863]]

capacities above 4,000 lb ice/24 hours as industrial rather than 
commercial. To be consistent with the majority of these comments, DOE 
proposed during the preliminary analysis to set the upper harvest 
capacity limit to 4,000 lb ice/24 hours, even though there are few ice 
makers currently produced with capacities ranging from 2,500 to 4,000 
lb ice/24 hours. 77 FR 3405 (Jan. 24, 2012) Since the publication of 
the preliminary analysis, DOE revised the test procedure, with the 
final rule published in January 2012, to include all batch and 
continuous type ice makers with capacities between 50 and 4,000 lb ice/
24 hours. 77 FR 1591, 1613-14 (Jan. 11, 2012). In the 2012 test 
procedure final rule, DOE noted that 4,000 lb ice/24 hours represented 
a reasonable limit for commercial ice makers, as larger-sized ice 
makers were generally used for industrial applications and testing 
machines up to 4,000 lb was consistent with AHRI 810-2007. 77 FR 1591 
(Jan. 11, 2012). Therefore, because DOE now has a procedure for testing 
ice makers with capacities up to 4,000 lb ice/24 hours, DOE proposes in 
this NOPR to set efficiency standards that include all ice makers in 
this extended capacity range.
    In written comments after the publication of the preliminary 
analysis, AHRI and Manitowoc both recommended that DOE refrain from 
regulating products with capacities above 2,500 lb ice/24 hours if 
there are not enough high-capacity batch machines available for DOE to 
analyze. (AHRI, No. 49 at pp. 3-4; Manitowoc, No. 54 at p. 3)
    DOE acknowledges that there are currently few automatic commercial 
ice makers with harvest capacities above 2,500 lb ice/24 hours. 
However, DOE already has a precedent of setting standards for harvest 
capacity ranges in which there are no products available. There are 
currently no IMH air-cooled ice makers on the market with harvest 
capacities above 1,650 lb ice/24 hours, yet EPACT 2005 amended EPCA to 
set standards for this equipment class of ice makers with harvest 
capacities up to 2,500 lb ice/24 hours. Because it is possible that 
batch-type ice makers with harvest capacities from 2,500 to 4,000 lb 
ice/24 hours will be manufactured in the future, DOE does not find it 
unreasonable to set standards in this rulemaking for batch type ice 
makers with harvest capacities in the range up to 4,000 lb ice/24 
hours. Therefore, DOE maintains its position to include large-capacity 
batch type ice makers in the scope of this rulemaking. However, DOE 
requests comment and data on the viability of the proposed standard 
levels selected for batch-type ice makers with harvest capacities from 
2,500 to 4,000 lb ice/24 hours. The proposed standard levels are 
discussed in Section V.A.2 of today's NOPR.
c. Efficiency/Harvest Capacity Relationship
    In the current energy conservation standards, DOE uses discrete 
harvest capacity breakpoints to differentiate cube machine classes, and 
DOE proposes to do the same with new classes for continuous machines.
    In reviewing industry literature, DOE found that compressor 
efficiency increases over a range of harvest rate capacities and then 
tends to flatten out at the higher capacities. This trend is 
illustrated in Table IV.3, which displays the capacities and energy 
efficiency ratios (EERs) of one family of reciprocating compressors. As 
shown in this table, the EERs of compressors in this family level off 
to between 6.5 and 7.2 British thermal units per watt-hour (Btu/Wh) at 
capacities beyond 14,300 Btu per hour.

         Table IV.3--Relationship of Compressor Capacity to EER
------------------------------------------------------------------------
          Capacity Btu/hr                         EER Btu/Wh
------------------------------------------------------------------------
                    7,970                                  5.8
                    8,440                                  5.1
                    8,840                                  6.0
                    9,870                                  6.2
                   10,200                                  5.5
                   10,900                                  6.3
                   11,300                                  5.5
                   12,400                                  7.0
                   12,900                                  6.0
                   14,100                                  5.9
                   14,300                                  6.5
                   14,900                                  6.6
                   18,100                                  7.0
                   18,300                                  6.5
                   18,600                                  6.6
                   19,600                                  5.6
                   22,200                                  6.5
                   22,500                                  7.2
                   24,300                                  7.1
                   24,600                                  6.6
                   26,000                                  6.5
                   29,300                                  6.7
                   29,600                                  6.6
                   30,500                                  6.7
                   31,300                                  6.9
                   34,400                                  6.7
                   36,700                                  6.7
                   42,200                                  6.8
------------------------------------------------------------------------

    Due primarily to the compressor trends discussed above, ice maker 
energy usage also varies as products increase in cooling capacity. Ice 
maker energy use (in kilowatt-hours per 100 lb of ice) decreases as the 
harvest rate increases in all products, but because the compressor 
trends do not continue indefinitely, the ice maker energy usage becomes 
constant at larger harvest rates. The point at which usage becomes 
constant for ice makers varies by equipment type.
    DOE has traditionally used a piecewise linear approach \25\ to 
depict the standard levels, with the breakpoints defining the harvest 
capacity rate limits of different equipment classes. Thus, for the 
current energy conservation standards for batch type equipment, the 
maximum allowable energy use declines as harvest capacity increases for 
the smallest harvest capacity rate equipment classes. In contrast, for 
most of the larger harvest capacity rate equipment classes, the maximum 
allowable energy use is a constant. The one exception is the large IMH 
air-cooled equipment class, where the maximum allowable energy use 
continues to decrease as harvest capacity rate increases. DOE believes 
that its piecewise energy consumption limits facilitate the simple 
calculation of energy standards while accurately depicting the complex 
relationship between capacity and efficiency.
---------------------------------------------------------------------------

    \25\ A piecewise function is a mathematical relationship where 
the relationship between the independent variable and dependent 
variable varies over the inspected range. Different functions are 
used to describe this relationship for each discrete interval where 
this relationship is defined. The piecewise function is a way of 
expressing the full relationship (http://mathworld.wolfram.com/PiecewiseFunction.html).
---------------------------------------------------------------------------

    Several stakeholders commented on DOE's decision to set piecewise 
efficiency levels according to harvest capacity. At the February 2012 
preliminary analysis public meeting, the Northwest Power and 
Conservation Council (NPCC) questioned whether setting standards by 
capacity range would create discontinuous breakpoints in efficiency 
requirements that would drive manufacturers to seek one level of 
capacity over another to take advantage of a more favorable standard. 
(NPCC, Public Meeting Transcript, No. 42 at p. 22) In written comments, 
the Northwest Energy Efficiency Alliance (NEEA), NPCC, and the 
California Investor-Owned Utilities (CA IOUs) recommended that DOE 
imitate ENERGY STAR[supreg] and use a single equation for each 
equipment class to define energy consumption standards as a function of 
harvest rate, rather than having multiple efficiency standards for 
different harvest capacity bins. (NEEA/NPCC, No. 50 at p. 2; CA IOUs, 
No. 56 at p. 2) CA IOUs added that, if DOE elects to continue 
distinguishing equipment classes based on harvest capacity breakpoints, 
it should explain

[[Page 14864]]

its reasoning for doing so. (CA IOUs, No. 56 at p. 3)
    The newly finalized ENERGY STAR specification eliminates 
discontinuities by using one equation for IMH and self-contained cube 
equipment as well as all three continuous equipment types, while 
achieving something similar to the asymptotic relationship mentioned by 
Manitowoc. The ENERGY STAR specification accomplishes this with 
equations that are more complex than those currently embodied in DOE's 
cube ice machine standards, which have simple ``intercept and slope'' 
or ``fixed and variable'' components. For example, DOE's current energy 
consumption limit for small IMH air-cooled equipment is as follows:

Maximum Energy Usage (kWh) 24 hours)

    The April 30, 2012 ENERGY STAR specification for the same equipment 
is:

Maximum Energy Usage (kWh) -\0.298\
    By means of a more complicated formula, the ENERGY STAR 
specification creates a continuous curve while still respecting the 
asymptotic relationship between efficiency and harvest capacity.
    Manitowoc commented that it was not particularly important where 
the DOE places capacity breakpoints for different equipment classes as 
long as the breakpoints respect the asymptotic relationships between 
size and efficiency. Manitowoc also asked that there not be any real 
discontinuities at these breakpoints or discrepancies from the industry 
mean efficiency/capacity relationships. (Manitowoc, Public Meeting 
Transcript, No. 42 at pp. 25-26) CA IOUs similarly requested that DOE 
base its harvest capacity breakpoints on an investigation of the 
market, rather than automatically using pre-existing breakpoints, and 
added that any new equipment classes generated by resetting these 
breakpoints must not allow backsliding. (CA IOUs, No. 56 at p. 3)
    The issue raised by NPCC and echoed by Manitowoc is that the 
equations used in the standards can cause points of discontinuity where 
rating equipment at slightly different capacity levels provides a 
benefit to the manufacturer in terms of allowable energy usage. In the 
current standards for IMH water-cooled units, one discontinuity exists 
at 500 lb ice/24 hours, the breakpoint between the small and medium 
harvest capacity rate equipment classes, where there is a 0.1 kWh/100 
lb energy use gap, representing 2.0 percent of the 5.04 kWh/100 lb 
maximum allowable energy use at this harvest capacity rate. However, 
eliminating this type of gap in the energy conservation standards would 
not require departure from a piecewise linear representation of maximum 
allowable energy use.
    Fitting a curve as was done to create the ENERGY STAR limits would 
be more complicated than creating a new standard that mirrors the 
existing usage limit structure. It would also be more difficult for 
customers, such as restaurant owners, who buy ice makers and need to 
make sense of the standards because the ENERGY STAR equation requires a 
calculator or a spreadsheet, and, DOE believes, leads to more questions 
and complexity.
    The single equation approach also runs somewhat contrary to the 
comments received from manufacturers. With the single equation provided 
by ENERGY STAR, energy usage limits for large machines continue to 
decline to zero (albeit at diminishing rates). The manufacturer 
comments cited in the discussion of large machines above provided 
several reasons that, at very high capacities, design constraints cause 
these products to have constant energy usage across different harvest 
capacities. This means that, at a certain point, efficiency tends to 
become more constant as harvest capacity changes, as is embodied in the 
current standards. The single equation approach would make it more 
difficult for the DOE standards to reflect this trend in the market.
    DOE has decided to continue structuring the equipment classes by 
utilizing multiple harvest rate sizes rather than moving to a single 
equation approach. By continuing to use multiple size classes, DOE will 
have greater flexibility to adequately address the efficiencies of 
large equipment classes. The risk of exploiting the system at size 
class break points can be mitigated by carefully developing standards. 
Moreover, DOE proposes amending the baseline energy standards to 
eliminate existing discontinuities at harvest capacity breakpoints. 
Note that under the DOE test procedure and specifically the updated 
ANSI/ASHRAE Standard 29-2009 that was incorporated by reference in that 
rule, harvest rates are to be determined at the time of test, and are 
not based on manufacturer specifications. (10 CFR 431.134) Furthermore, 
in EPACT 2005, Congress directed DOE to monitor whether manufacturers 
reduce harvest rates below tested values for the purpose of bringing 
non-complying equipment into compliance. (42 U.S.C. 6316(f)(4)(A)) DOE 
therefore intends to carefully assess whether such manipulation occurs 
as a result of any final rule using distinct break points.
    AHRI Standard 810-2007, as referenced by the DOE test procedure, 
states that the energy consumption rate of ice makers should be rounded 
to the nearest 0.1 kWh. By considering the standard levels using this 
rounding convention, the only existing discontinuity in DOE's standards 
for batch type ice makers occurs at the breakpoint of 500 lb/24 hr 
between the IMH-W-Small-B and IMH-W-Medium-B equipment classes. In its 
analysis, DOE adjusted the baseline energy level for the IMH-W-Small-B 
equipment class to 7.79-0.0055H from 7.80-0.0055H. This 0.01 change 
eliminates the discontinuity at this breakpoint, as seen in Table IV.4. 
In setting up TSLs, DOE sought to ensure that no discontinuities 
existed between equipment classes.

           Table IV.4--Current Standard and DOE Engineering Baseline for IMH-W-Small-B Equipment Type
----------------------------------------------------------------------------------------------------------------
                                            Current baseline (7.80-
             Equipment type                         0.0055H)                  New baseline (7.79-0.0055H)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...........................  5.1 (rounded from 5.050)...  5.0 (rounded from 5.040).
IMH-W-Medium-B..........................  5.0 (rounded from 5.030)...  5.0 (rounded from 5.030).
----------------------------------------------------------------------------------------------------------------

[[Page 14865]]

d. Continuous Ice Maker Equipment Classes
    The EPACT 2005 amendments to EPCA did not set standards for 
continuous type ice makers. At the February 2012 preliminary analysis 
public meeting, DOE presented NES results (see section IV.H.3 of this 
notice) that indicated the continuous equipment type accounted for 
approximately 0.03 quads of savings potential over the 30-year analysis 
period. The savings levels are low primarily because continuous type 
ice-making machines represent only 16 percent of automatic commercial 
ice maker shipments, of which only two equipment classes (IMH air-
cooled small and self-contained air-cooled small equipment) represent 
three-quarters of shipments.
    At the February 2012 preliminary analysis public meeting and in 
written comments, AHRI and Scotsman both questioned the need to 
regulate continuous type ice makers, noting that the preliminary 
results of DOE's national impact analysis show negligible NES (rounding 
to 0.000 quads) for most continuous type equipment classes. (AHRI, No. 
49 at pp. 1-2; Scotsman, No. 46 at p. 5; Scotsman, Public Meeting 
Transcript, No. 42 at p. 105)
    AHRI and Scotsman questioned the need to include continuous remote 
condensing units (RCUs) with remote compressors as equipment classes, 
noting that these are niche products that represent a very small 
portion of the overall market. AHRI added that their minimal projected 
energy savings and low shipment volume would not justify the cost of 
testing and certifying these products to DOE. (AHRI, No. 49 at p. 3; 
Scotsman, No. 46 at p. 2)
    Pursuant to EPCA, DOE is required to set new or amended energy 
conservation standards for automatic commercial ice makers to: (1) 
Achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified; and (2) result in 
significant conservation of energy. (42 U.S.C. 6295(o)(2)(A) and 
(o)(3)(B); 6313(d)(4)) The EPCA language does not require DOE to 
determine the significance of savings at the individual equipment class 
level in order to justify setting standards for all equipment classes 
of an equipment type
    DOE has decided to regulate all automatic commercial ice maker 
equipment classes. This will bring two important automatic commercial 
ice maker classes (self-contained, air-cooled small continuous and IMH 
air-cooled small continuous) under regulation. Regulating all equipment 
classes will create a consistent approach for regulating continuous 
type equipment as was done for batch type equipment.
e. Remote Condensing Unit Classes for Equipment With and Without Remote 
Compressors
    The current standard levels differentiate between remote condensers 
with compressors in the condenser cabinet and remote condensers without 
remote compressors. DOE requested comment on whether to retain these 
equipment classes as separate groups. (DOE, Public Meeting 
Presentation, No. 7 at p. 30)
    Numerous stakeholders expressed their support for DOE's 
differentiation of RCUs into two separate classes based on the location 
of their compressors. Manitowoc raised the issue at the public meeting, 
noting that locating the compressor remotely has a measurable impact on 
the overall efficiency of an ice maker. (Manitowoc, Public Meeting 
Transcript, No. 42 at pp. 24-25) Scotsman added that these two classes 
of RCUs perform at different efficiencies in the field and provide 
different utility to the customer, thus justifying their separation 
into separate equipment classes. (Scotsman, Public Meeting Transcript, 
No. 42 at p. 45 and No. 46 at p. 2) NPCC expressed agreement with 
Scotsman's comment on the issue. (NPCC, Public Meeting Transcript, No. 
42 at p. 45)
    Based on DOE's review of these comments and data arising from the 
analyses, DOE believes the location of the compressor provides 
different customer utility, and that each equipment class experiences 
different energy usage trends due to suction line losses. DOE did not 
receive any information indicating that these equipment classes should 
not be kept separate. Therefore, DOE will continue to categorize RCUs 
with and without remote compressors into separate equipment classes.
f. Remote to Rack Equipment
    In the preliminary analysis, DOE found that some high-capacity RCU-
RC-Large-C ice makers are solely designed to be used with compressor 
racks and the racks' associated condensers. A compressor rack is 
typically used with supermarket refrigeration equipment and consists of 
several compressors joined in a parallel arrangement to service several 
refrigeration products at once. One related issue is that the 
manufacturers of these automatic commercial ice makers do not provide 
for sale a condensing unit that could be paired with them as an 
alternative option. DOE noted that these units do not meet the 
statutory definition of ice makers, which states that an ice maker 
``consists of a condensing unit and ice-making section operating as an 
integrated unit, with means for making and harvesting ice.'' (42 U.S.C. 
6311(19)(A)) Hence, DOE determined during the preliminary analysis that 
rack-only RCUs are not defined as ice makers under the statute and thus 
should not be included in this rulemaking.
    Howe recommended that DOE include remote to rack ice makers in the 
rulemaking because such units already represent a significant fraction 
of annual ice maker shipments and will become even more significant 
once the covered capacity range expands to 4,000 lb ice/24 hours. 
(Howe, No. 51 at p. 4) Conversely, Scotsman commented that continuous 
RCUs with remote compressors comprise a very tiny piece of the overall 
automatic commercial ice maker market and thus questioned the need to 
establish equipment classes for these products. Scotsman added that 
these RCUs are difficult to test \26\ because they are designed to be 
connected to supermarket rack systems. (Scotsman, No. 46 at p. 2)
---------------------------------------------------------------------------

    \26\ The current and recently completed DOE test procedures do 
not provide test procedures for this type of equipment.
---------------------------------------------------------------------------

    Earthjustice observed that DOE has not explained why it believes 
that ice makers designed for use with remote condenser rack systems do 
not consist of ``a condensing unit and ice-making section operating as 
an integrated unit, with means for making and harvesting ice,'' as 
automatic commercial ice makers are defined. Earthjustice argued that 
such ice makers use the same basic components, including both a 
condensing unit and an ice-making section. Moreover, Earthjustice 
continued, the two components are directly connected, and their 
integration is not nullified by the fact that other equipment may also 
be connected to the supermarket rack. Earthjustice added that DOE has 
long regulated split system residential and commercial air conditioners 
despite the fact that the outdoor and indoor components are frequently 
made by different firms. (Earthjustice, No. 47 at p. 5)
    Given the small market share of large continuous RCU remote 
compressor equipment (0.35 percent), DOE finds that Scotsman's claim is 
credible in that continuous, rack-only equipment comprises only a 
fraction of the 0.35 percent, and thus a tiny piece of the overall 
market.

[[Page 14866]]

    The Earthjustice comment drawing a parallel to split system 
residential air conditioners overlooks key distinctions. Residential 
equipment may pair components from different manufacturers, but only 
one manufacturer is responsible for the certification.\27\ Supermarket 
racks simultaneously serve multiple units of equipment (including 
commercial refrigerators and freezers, walk-in coolers and freezers, 
ice makers, air conditioners, and heat pumps), so there is no way to 
hold one manufacturer responsible for certifying its energy 
consumption. Drawing a parallel between these two circumstances is 
therefore not reasonable in that respect.
---------------------------------------------------------------------------

    \27\ Under DOE regulations, it is possible for more than one 
central air conditioner manufacturer to submit certification reports 
for a given condensing unit. 10 CFR 429.16 requires manufacturers of 
central air conditioners to certify compliance with the energy 
conservation standards to DOE. Where a coil manufacturer may offer a 
coil for sale to be matched with a condensing unit made by another 
manufacturer (mix-matched combination), the coil manufacturer can 
make representations for condensing unit coil combination, but, 
since the condensing unit manufacturer does not offer for sale the 
mixed-matched combination, only the coil manufacturer offering the 
combination for sale is responsible for certification of that 
combination.
---------------------------------------------------------------------------

    Therefore, DOE decided to maintain its position not to cover rack-
only RCU units in this standards rulemaking. DOE does request comment 
and supporting data on the overall market share of these units and any 
expected market trends.
g. Ice Makers Covered by the Energy Policy Act of 2005
    Of the 25 equipment classes that DOE is considering in this 
rulemaking, 13 are already covered under energy conservation standards 
that were set for cube type ice makers as part of EPACT 2005. Current 
automatic commercial ice maker standards covering cube type ice makers 
took effect on January 1, 2010. Under the requirements of EPCA, DOE 
must review and make a determination as to whether amendments to the 
standards are technologically and economically justified by January 1, 
2015. (42 U.S.C. 6313(d)(3)(A))
    In written comments, AHRI opined that, because the full effects of 
the EPACT 2005 ruling will not be known until at least 2013, DOE should 
only consider the previously uncovered continuous and high-capacity 
batch type ice makers in this rulemaking. (AHRI, No. 49 at p. 3) 
Similarly, Hoshizaki asked DOE not to adjust the energy standards for 
automatic commercial ice makers that are currently covered, arguing 
that tightening the regulations that were just released two years ago 
would negatively impact both manufacturers and end users. (Hoshizaki, 
No. 53 at p. 3)
    DOE is required by statute to review the standards and, if amended 
standards are technologically feasible and economically justified, to 
issue a rule to amend the standards. (42 U.S.C. 6313(d)(3)(A))
    Manufacturers have asserted that the automatic commercial ice maker 
industry is a small component of the commercial refrigeration industry, 
and that given their size they have little or no influence with the 
manufacturers of major components such as compressors. (Manitowoc, 
Public Meeting Transcript, No. 42 at pp. 14-15) Manufacturers noted 
that they are generally restricted to design options available to 
larger customers. (Manitowoc, Public Meeting Transcript, No. 42 at pp. 
15)
    Consistent with the comments from manufacturers, DOE's engineering 
analysis included design options that are viable for automatic 
commercial ice makers. Most of the design options are extensively used 
in existing products, and a few design options (brushless DC motors) 
are available but rarely implemented in this equipment. Chapter 5 of 
the NOPR TSD contains further details of the analysis for each design 
option used.
    DOE has alternatives with respect to the date that new standards 
would take effect. EPCA requires that the amended standards established 
in this rulemaking must apply to equipment that is manufactured on or 
after 3 years after the final rule is published in the Federal Register 
unless DOE determines, by rule, that a 3-year period is inadequate, in 
which case DOE may extend the compliance date for that standard by an 
additional 2 years. (42 U.S.C. 6313(d)(3)(C))
    For the NOPR analyses, DOE assumed a 3-year period to prepare for 
compliance. DOE requests comments on whether a January 1, 2018 
effective date provides an inadequate period for compliance and what 
economic impacts would be mitigated by a later effective date.
    DOE also requests comment on whether the 3-year period is adequate 
for manufacturers to obtain more efficient components from suppliers to 
meet proposed revisions of standards.
h. Regulation of Potable Water Use
    Under EPACT 2005, water used for ice--referred to as potable 
water--was not regulated for automatic commercial ice makers.
    The amount of potable water used varies significantly among batch 
type automatic commercial ice makers (i.e., cube, tube, or cracked ice 
machines). Continuous type ice makers (i.e., flake and nugget machines) 
convert essentially all of the potable water to ice, using roughly 12 
gallons of water to make 100 lb of ice. Batch type ice makers use an 
additional 3 to 38 gallons of water in the process of making 100 lb of 
ice. This additional water is referred to as ``dump or purge water'' 
and is used to cleanse the evaporator of impurities that could 
interfere with the ice-making process.
    The Alliance for Water Efficiency (Alliance), the Natural Resources 
Defense Council (NRDC), and CA IOUs proposed that DOE regulate the 
water use of automatic commercial ice makers. (Alliance, No. 45 at pp. 
3-4; NRDC, No. 48 at p. 2; CA IOUs, No. 56 at p. 6) The Alliance noted 
that the potable water lost from purging represents a waste of the 
energy required to pump, treat, deliver, and dispose of this water on a 
national scale. This embedded energy use, the Alliance argued, gives 
DOE justification to include water efficiency standards along with its 
energy efficiency standards for automatic commercial ice makers. The 
Alliance recommended that DOE analyze technical data from real ice 
makers in order to accurately determine the minimum potable purge water 
rate required to prevent scaling. The Alliance also observed that the 
huge variation in potable water use among ice makers of similar 
capacities suggests that some ice makers may be purging water at 
excessive rates in order to overcome poor maintenance practices and 
schedules, which is not a justifiable excuse in the opinion of the 
Alliance. (Alliance, No. 45 at pp. 3-4) CA IOUs also recommended that 
DOE consider establishing potable water use limits, especially because 
the ENERGY STAR program already includes such limits. (CA IOUs, No. 56 
at p. 6)
    In response to comments from the Alliance, NRDC, and CA IOUs, DOE 
was not given a specific mandate by Congress to regulate potable water. 
EPCA, as amended, explicitly gives DOE the authority to regulate water 
use in showerheads, faucets, water closets, and urinals (42 U.S.C. 
6291(6), 6295(j) and (k)), clothes washers (42 U.S.C. 6295(g)(9)(B)), 
dishwashers (42 U.S.C. 6295(g)(10)(B)), commercial clothes washers (42 
U.S.C. 6313(e)), and batch (cube) commercial ice makers. (42 U.S.C. 
6313(d)) With respect to batch commercial ice makers (cube type 
machines), however, Congress explicitly set standards in EPACT 2005 
only for condenser water use, which appear at 42 U.S.C. 6313(d)(1), and 
noted in a footnote to the table that potable water

[[Page 14867]]

use was not included.\28\ Congress thereby recognized both types of 
water, and did not provide direction to DOE with respect to potable 
water standards. This ambiguity gives the DOE considerable discretion 
to regulate or not regulate potable water. The U.S. Supreme Court has 
determined that, when legislative intent is ambiguous, a government 
agency may use its discretion in interpreting the meaning of a statute, 
so long as the interpretation is reasonable.\29\ In the case of ice 
makers, EPACT 2005 is ambiguous on the subject of whether DOE must 
regulate water usage for purposes other than condenser water usage in 
cube-making machines, so DOE therefore has chosen to use its discretion 
not to mandate a standard in this case. DOE instead considered potable 
water use reduction in batch-type ice makers as a design option for 
reducing energy use. DOE notes that the ENERGY STAR program has 
implemented potable water consumption requirements.
---------------------------------------------------------------------------

    \28\ Footnote to table at 42 U.S.C. 6313(d)(1).
    \29\ Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 
545 U.S. 967, 986 (2005) (quoting Chevron U.S.A. Inc. v. Natural 
Res. Def. Council, Inc., 467 U.S. 837, 845 (1984)).
---------------------------------------------------------------------------

    Hoshizaki commented that potable water use varies from place to 
place, depending on water quality, and added that the market is already 
dictated to use less water. (Hoshizaki, Public Meeting Transcript, No. 
42 at p. 73) AHRI added that limiting potable water use would decrease 
ice clarity and increase scaling, which would subsequently increase the 
overall energy use of the ice maker. Therefore, AHRI and Hoshizaki both 
recommended against establishing maximum potable water use standards in 
this rulemaking because of the reduced utility and efficiency that it 
would cause. (AHRI, No. 49 at pp. 2-3; Hoshizaki, No. 53 at p. 1)
    The Hoshizaki and AHRI comments suggest that DOE intends to 
implement potable water use standards, but this is not the case. 
Rather, DOE is simply suggesting that reduction of potable water use is 
a viable technology option that satisfies the screening analysis 
criteria, as long as reductions are not excessive. This approach does 
not establish potable water use maximums since manufacturers are not 
required to use this design option in order to meet efficiency 
standards. Scotsman noted that the ENERGY STAR program has limited 
potable water use in ice makers to 25 gallons per 100 lb of ice and 
that the program is moving toward a new standard of 20 gallons per 100 
lb of ice, which it believes to be the minimum levels for avoiding 
machine performance issues. Scotsman recommended that DOE refer to 
these ENERGY STAR standards in determining new potable water use 
limits. (Scotsman, Public Meeting Transcript, No. 42 at pp. 64-65 and 
No. 46 at p. 5) Manitowoc agreed with Scotsman and added that the new 
20 gallons per 100 lb metric was developed with the aid of 
manufacturers and that further reducing potable water use could impact 
the long-term reliability of its machines. Therefore, Manitowoc stated 
that 20 gallons per 100 lb is the lowest water use limit with which it 
would be comfortable. (Manitowoc, Public Meeting Transcript, No. 42 at 
pp. 65-66)
    However, Manitowoc also commented that potable water use is a 
variable in the design process that manufacturers have already 
optimized to satisfy a number of competing factors. Manitowoc argued 
that, although reducing potable water use would improve machine 
efficiency up to a point, it would also decrease reliability and 
increase the required frequency for cleaning due to scaling. Manitowoc 
stated that the design limits for potable water use often depend on 
proprietary design elements; therefore, it would be difficult to set 
reasonable potable water use standards that were fair to all companies, 
in Manitowoc's opinion. (Manitowoc, No. 54 at p. 3)
    Howe noted that measuring potable water use is important because 
de-scaling is crucial for maintaining the efficiency and utility of 
automatic commercial ice makers. Howe also recommended that DOE obtain 
information from additional manufacturers on the relationship between 
potable water use and ice maker performance. (Howe, No. 51 at p. 2)
    DOE has implemented in the analysis the recommendations of several 
stakeholders that 20 gallons per 100 lb of ice is a reasonable lower 
limit on potable water use for batch type ice makers, especially 
considering that there are numerous batch type ice machines that have 
potable water use at this level or lower. For example, in implementing 
batch water control as a design option, DOE is limiting the reduction 
in potable water use to 20 gallons per 100 lb. This should not be 
confused with the establishment of a standard--this limit affects the 
extent to which a specific design option saves energy by placing a 
floor under the potable water usage. Though NRDC claims that reducing 
potable water use beyond this level would be feasible and beneficial, 
it has not identified specific designs with significantly less potable 
water use, nor has it provided data to show that long-term field use of 
such equipment is viable. Chapter 5 of the NOPR TSD contains more 
information about this analysis.
2. Technology Assessment
    As part of the market and technology assessment, DOE developed a 
comprehensive list of technologies to improve the energy efficiency of 
automatic commercial ice makers, shown in Table IV.5. Chapter 3 of the 
NOPR TSD contains a detailed description of each technology that DOE 
identified. DOE only considered in its analysis technologies that would 
impact the efficiency rating of equipment as tested under the DOE test 
procedure. The technologies identified by DOE were carried through to 
the screening analysis and are discussed in section IV.C.

[[Page 14868]]

                       Table IV.5--Technology Options for Automatic Commercial Ice Makers
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Technology options                                           Batch ice                 ConNotesus
                                                                makers       ice makers
----------------------------------------------------------------------------------------------------------------
Compressor....................  Improved compressor            [radic]          [radic]
                                 efficiency.
                                Part load operation...         [radic]          [radic]
Condenser.....................  Increased surface area         [radic]          [radic]
                                Enhanced fin surfaces.         [radic]          [radic]   Air-cooled only.
                                Increased air flow....         [radic]          [radic]   Air-cooled only.
                                Increased water flow..         [radic]          [radic]   Water-cooled only.
                                Brazed plate condenser         [radic]          [radic]   Water-cooled only.
                                Microchannel condenser         [radic]          [radic]
Fans and Fan Motors...........  Higher efficiency              [radic]          [radic]   Air-cooled only.
                                 condenser fans and
                                 fan motors.
Other Motors..................  Improved auger motor    ...............         [radic]
                                 efficiency.
                                Improved pump motor            [radic]
                                 efficiency.
Controls......................  Smart Technologies....         [radic]          [radic]
Evaporator....................  Design options which           [radic]
                                 reduce energy loss
                                 due to evaporator
                                 thermal cycling.
                                Design options which           [radic]
                                 reduce harvest
                                 meltage or reduce
                                 harvest time.
                                Larger evaporator              [radic]          [radic]
                                 surface area.
                                Tube evaporator                [radic]
                                 configuration.
Insulation....................  Improved insulating            [radic]          [radic]
                                 material and/or
                                 thicker insulation
                                 around the evaporator
                                 compartment.
Refrigeration Line............  Larger diameter                [radic]          [radic]   RCUs with remote
                                 suction line.                                             compressor.
Potable Water.................  Reduced potable water          [radic]
                                 flow.
                                Drain water thermal            [radic]
                                 exchange.
----------------------------------------------------------------------------------------------------------------

a. Reduced Potable Water Flow for Continuous Type Ice Makers
    Howe questioned why the list of design options for continuous type 
ice makers did not include reduced potable water flow, considering that 
such machines can have clean or flush cycles. (Howe, Public Meeting 
Transcript, No. 42 at pp. 30-31)
    DOE notes that some continuous machines may include controls or 
design options that may reduce potable water flow. Therefore, DOE has 
included reduced potable water flow for continuous machines as one of 
its design options.
    DOE also notes that the test procedure for continuous type ice 
makers calls for three 14.4-minute long measurements of ice-making 
production and energy use. The flushing cycles in continuous type ice 
makers typically do not occur within these measurement periods and the 
water used for flushing is not captured in the energy use metric; 
hence, because the engineering analysis cannot evaluate an improvement 
that occurs outside of the test procedure, this aspect of equipment 
operation was screened out in the screening analysis.
b. Alternative Refrigerants
    Scotsman asked whether hydrocarbon refrigerants were considered as 
a design option. (Scotsman, Public Meeting Transcript, No. 42 at p. 32) 
Manitowoc responded that hydrocarbon refrigerants should not be 
considered in the analysis because they have not been approved for use 
by the U.S. Environmental Protection Agency's (EPA's) Significant New 
Alternatives Policy (SNAP). (Manitowoc, Public Meeting Transcript, No. 
42 at p. 32) AHRI added that refrigerants that are used as alternatives 
to chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) must 
be approved by both the EPA and the SNAP program. AHRI noted that, 
although some hydrocarbon refrigerants were approved for use in 
residential refrigerators and some commercial refrigerated display 
cases, they have not been approved for ice makers. (AHRI, Public 
Meeting Transcript, No. 42 at pp. 32-33)
    Manitowoc observed that future legislation may require the use of 
refrigerants that, based on their current status, have the potential to 
decrease the energy efficiency of ice makers. (Manitowoc, Public 
Meeting Transcript, No. 42 at p. 33)
    As indicated by AHRI, hydrocarbon refrigerants have not yet been 
approved by the EPA SNAP program and hence cannot be considered as a 
technology option in DOE's analysis. DOE also notes that, while it is 
possible that hydrofluorocarbon (HFC) refrigerants currently used in 
automatic commercial ice makers may be restricted by future 
legislation, DOE cannot speculate on such future laws and can only 
consider in its rulemakings laws that have been enacted. This is 
consistent with past DOE rulings, such as in the 2011 direct final rule 
for room air conditioners. 76 FR 22454 (April 21, 2011). To the extent 
that there has been experience within the industry, domestically or 
internationally, with the use of alternative low-GWP refrigerants, DOE 
requests any available information, specifically cost and efficiency 
information relating to use of alternative refrigerants. DOE 
acknowledges that there are government-wide efforts to reduce emissions 
of HFCs, and such actions are being pursued both through international 
diplomacy as well as domestic actions. DOE, in concert with other 
relevant agencies, will continue to work with industry and other 
stakeholders to identify safer and more sustainable alternatives to 
HFCs while evaluating energy efficiency standards for this equipment.

C. Screening Analysis

    In the technology assessment section of this NOPR, DOE presents an 
initial

[[Page 14869]]

list of technologies that can improve the energy efficiency of 
automatic commercial ice makers. The purpose of the screening analysis 
is to evaluate the technologies that improve equipment efficiency to 
determine which of these technologies is suitable for further 
consideration in its analyses. To do this, DOE uses four screening 
criteria--design options will be removed from consideration if they are 
not technologically feasible; are not practicable to manufacture, 
install, or service; have adverse impacts on product utility or product 
availability; or have adverse impacts on health or safety. 10 CFR part 
430, subpart C, appendix A, sections (4)(a)(4) and (5)(b) See chapter 4 
of the NOPR TSD for further discussion of the screening analysis. 
Additional screening criteria include whether a design option is 
expected to save energy or whether savings can be measured (using the 
prescribed test procedure), and whether an option is a proprietary 
technology or whether it is widely available to all manufacturers. 
Table IV.6 shows the EPCA criteria and additional criteria used in this 
screening analysis, and the design options evaluated using the 
screening criteria.
    In the NOPR phase, DOE made several changes to the treatment of 
design options from the preliminary analysis approach. These changes 
included:
     Adding a design option to allow for growth of the unit to 
increase the size of the condenser and/or evaporator;
     Adjusting assumptions regarding maximum compressor EER 
levels based on additional research and confidential input from 
manufacturers;
     Adjusting potable water consumption rates for batch type 
ice makers subject to a floor that represents the lowest potable water 
consumption rate that would be expected to flush out dissolved solid 
reliably;
     Adding a design option to allow condenser growth in water-
cooled condensers; and
     Adding a drain water heat exchanger design option.
    [GRAPHIC] [TIFF OMITTED] TP17MR14.001
    

[[Page 14870]]

    Table IV.7 contains the list of technologies that remained after 
the screening analysis.

            Table IV.7--Technology Options for Automatic Commercial Ice Makers That Were Screened In
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Technology options                                           Batch ice                 ConNotesus
                                                                makers       ice makers
----------------------------------------------------------------------------------------------------------------
Compressor....................  Improved compressor            [radic]          [radic]
                                 efficiency.
Condenser.....................  Increased surface area         [radic]          [radic]
                                Increased air flow....         [radic]          [radic]   Air-cooled only.
                                Increased water flow..         [radic]          [radic]   Water-cooled only.
Fans and Fan Motors...........  Higher efficiency              [radic]          [radic]   Air-cooled only.
                                 condenser fans and
                                 fan motors.
Other Motors..................  Improved auger motor    ...............         [radic]
                                 efficiency.
                                Improved pump motor            [radic]
                                 efficiency.
Evaporator....................  Larger evaporator              [radic]          [radic]
                                 surface area.
Potable Water.................  Reduced potable water          [radic]
                                 flow.
                                Drain water thermal            [radic]
                                 exchange.
----------------------------------------------------------------------------------------------------------------

a. Tube Evaporator Design
    Among the technologies that DOE considered were tube evaporators 
that use a vertical shell and tube configuration in which refrigerant 
evaporates on the outer surfaces of the tubes inside the shell, and the 
freezing water flows vertically inside the tubes to create long ice 
tubes that are cut into smaller pieces during the harvest process. Some 
of the largest automatic commercial ice makers in the RCU-NRC-Large-B 
and the IMH-W-Large-B equipment classes use this technology. However, 
DOE concluded that implementation of this technology for smaller 
capacity ice makers would significantly impact equipment utility, due 
to the greater weight and size of these designs, and to the altered ice 
shape. DOE noted that available tube icemakers (for capacities around 
1,500 lb ice/24 hours and 2,200 lb ice/24 hours) were 150 to 200 
percent heavier than comparable cube ice makers. Based on the impacts 
to utility of this technology, DOE screened out tube evaporators from 
consideration in this analysis.
b. Low Thermal Mass Evaporator Design
    DOE's preliminary analysis did not consider low thermal mass 
evaporator designs. Reducing evaporator thermal mass of batch type ice 
makers reduces the heat that must be removed from the evaporator after 
the harvest cycle, and thus decreases refrigeration system energy use. 
DOE indicated during the preliminary analysis that it was concerned 
about the potential proprietary status of such evaporator designs, 
since DOE is aware of only one manufacturer that produces equipment 
with such evaporators. DOE requested comment on the proprietary status 
of low-thermal-mass evaporator designs in general, and the design used 
by the cited manufacturer (Hoshizaki) in particular.
    Scotsman commented that Hoshizaki has recently patented or 
attempted to patent modifications to improve evaporator efficiency and 
noted that using such evaporator designs would be difficult for other 
manufacturers because it would require an expensive and risky redesign 
of entire product lines. (Scotsman, Public Meeting Transcript, No. 42 
at pp. 35-36; Scotsman, No. 46 at pp. 2-3) However, Manitowoc observed 
that, although intellectual property is certainly a concern, there may 
be ways to implement this low thermal mass evaporator technology 
without exactly duplicating Hoshizaki's designs. (Manitowoc, Public 
Meeting Transcript, No. 42 at p. 36)
    Hoshizaki commented that its batch type evaporators do indeed 
contain intellectual property in past and future designs, adding that 
the tooling costs for manufacturing these evaporators would be too 
expensive for competing manufacturers to replicate. (Hoshizaki, No. 53 
at p. 2)
    AHRI recommended that DOE eliminate proprietary designs from 
consideration and limit its analysis to technologies that are available 
to all manufacturers in the ice maker industry. (AHRI, No. 49 at p. 4)
    Manitowoc commented that, in addition to the obvious legal issues 
associated with favoring a proprietary design held by a single 
manufacturer, DOE's analysis tools are also incapable of predicting the 
potential benefit of low thermal mass evaporators, which are difficult 
to model accurately. (Manitowoc, Public Meeting Transcript, No. 42 at 
pp. 36-37 and No. 54 at p. 3) Manitowoc also warned that the impact of 
this technology on one ice maker should not simply be extrapolated to 
other machines and that oversimplification of this analysis would 
affect the predicted efficiency benefits of each technology level. 
(Manitowoc, Public Meeting Transcript, No. 42 at pp. 36-37) Manitowoc 
added that customers are very loyal to the style of ice that they get 
from its machines and that all manufacturers keep customer loyalty in 
mind when designing their evaporators. Consequently, Manitowoc 
expressed concern that a new evaporator design could force 
manufacturers to change the style of their ice, which could drive down 
sales and result in a low overall payback despite the improved energy 
performance, and therefore Manitowoc concluded that DOE should not 
establish higher efficiency levels based on this design option. 
(Manitowoc, Public Meeting Transcript, No. 42 at pp. 36-37 and No. 54 
at p. 3)
    On the basis of its proprietary status, DOE concludes that its 
initial decision to screen out low-thermal-mass evaporator technology 
was appropriate. Thus, DOE has screened out this technology in its NOPR 
analysis.
c. Drain Water Heat Exchanger
    Batch ice makers can benefit from drain water thermal exchange that 
cools the potable water supply entering the sump, thereby reducing the 
energy required to cool down and freeze the water. Technological 
feasibility is demonstrated by one commercially available drain water 
thermal heat exchanger that is currently sold only for aftermarket 
installation. This product is designed to be installed externally to 
the

[[Page 14871]]

ice maker, and both drain water and supply water are piped through the 
device.\30\
---------------------------------------------------------------------------

    \30\ A.J. Antunes and Co. Vizion Product Catalog. (Last accessed 
May 18, 2013.) www.ajantunes.com/VIZION/VIZIONProductCatalog/tabid/229/ProdID/481/CatID/280/language/en-US/Default.aspx>
---------------------------------------------------------------------------

    In the preliminary analysis, DOE considered whether such a 
component could be considered to be part of an ice maker as defined in 
EPCA. The EPCA definition for automatic commercial ice makers states 
that the ice maker consists of a condensing unit and ice-making section 
operating as an integral unit, with means for making and harvesting 
ice. (42 U.S.C. 6311(19)) The definition allows that the ice maker may 
include means for storing ice, dispensing ice, or storing and 
dispensing ice. None of the subcomponents of the ice maker listed in 
the definition could be interpreted as referring to heat exchangers for 
drain water thermal exchange. DOE notes that an ice maker can still 
make ice without a drain water heat exchanger; hence, the drain water 
heat exchanger cannot be considered an integral part of the equipment. 
For these reasons, DOE concluded during the preliminary analysis that 
external drain water heat exchangers, the only configuration of this 
technology for which technological feasibility is demonstrated, should 
be screened out, and requested comments on this approach.
    NPCC asserted that DOE should consider drain water thermal exchange 
as a technology option. NPCC proposed that reducing the inlet water 
temperature could enable an ice maker to maintain the same capacity 
without increasing the overall size of the unit. Although NPCC does not 
manufacture ice makers, it acknowledged having seen this technology 
implemented in other applications, such as water heating, without 
reducing capacity or increasing overall size. (NPCC, Public Meeting 
Transcript, No. 42 at pp. 37-38)
    Earthjustice commented that DOE's rationale for screening out drain 
water thermal heat exchangers was defective on both legal and factual 
grounds. In the preliminary analysis TSD, DOE suggested that externally 
mounted drain water heat exchangers would fall outside EPCA's 
definition of automatic commercial ice makers, and that DOE therefore 
had no authority to consider them in this rulemaking. Earthjustice 
argued that this reading twists the statutory definition's role in 
identifying which products constitute the ``automatic commercial ice 
makers'' subject to efficiency standards into a ``Dos and Don'ts'' list 
from Congress as to which elements of ice makers DOE may examine when 
amending the standards that Congress enacted. Congress adopted 
standards that apply to the ice maker as a whole, and Earthjustice 
asserted that there is therefore no basis to conclude that EPCA 
intended to prohibit DOE from looking holistically at this equipment 
when amending the statutory standards. Earthjustice added that, if 
every technological innovation that improved the efficiency of a 
covered product needed to be specifically mentioned in the statute's 
definition of the product, there would be no need for a screening 
analysis. Earthjustice also noted that, in previous rulemakings, DOE 
consistently recognized that components that improve the efficiency of 
covered products merit consideration in the DOE's analyses, 
notwithstanding that they may be unnecessary to the basic function 
performed by the product, not referred to in the statutory definition 
applicable to the product, or external to the case or envelope of the 
device. Finally, Earthjustice commented that DOE's assertion that 
internally mounted drain heat exchangers would necessarily increase 
cabinet size is not true for all ice maker models. Moreover, 
Earthjustice stated, DOE has not considered options such as 
microchannel heat exchangers, which would increase both machine 
efficiency as well as available cabinet space within the ice maker. 
(Earthjustice, No. 47 at pp. 1-4)
    DOE has reconsidered its preliminary suggestion that external drain 
water heat exchangers cannot be considered part of an ice maker simply 
because they are not specifically mentioned in the EPCA definition, now 
concluding that they can be considered as a design option and to be 
part of a basic model ice maker, assuming that the drain water heat 
exchanger is sold and shipped with the unit and that the installation 
and operating instructions clearly reinforce this inclusion by 
detailing the installation requirements for the heat exchanger.
    Thus, DOE is including this technology as a design option. As NPCC 
noted, externally mounted drain water heat exchangers would provide 
energy savings by using ``waste'' water to cool the incoming potable 
water supply, thus reducing the amount of energy necessary to freeze 
the water into ice. Whereas internal heat exchangers may require 
increased cabinet size to fit within the ice maker, allowing external 
heat exchangers as a design option would prevent size increase.
    DOE has concluded that drain water heat exchangers, both internally 
mounted and externally mounted, are design options that can increase 
the energy efficiency of automatic commercial ice makers. The current 
test procedures would give manufacturers credit for efficiency 
improvement of drain water heat exchangers, including externally 
mounted drain water heat exchangers as long as they are provided with 
the machine and the installation instructions for the machine indicate 
that the heat exchangers are part of the machine and must be installed 
as part of the overall installation.
d. Design Options That Necessitate Increased Cabinet Size
    Some of the design options considered by DOE in its technology 
assessment could require an increased cabinet size. Examples of such 
design options include increasing the surface area of the evaporator or 
condenser, or both. Larger heat exchangers would enable the refrigerant 
circuit to operate with an increased evaporating temperature and a 
decreased condensing temperature, thus reducing the temperature lift 
imposed on the refrigeration system and hence the compressor power 
input. In some cases the added refrigerant charge associated with 
increasing heat exchanger size could also necessitate the installation 
of a refrigerant receiver to ensure proper refrigerant charge 
management in all operating conditions for which the unit is designed, 
thus increasing the need for larger cabinet size.
    In the preliminary analysis, DOE did not consider design options 
that increase cabinet size, and it requested comment on this approach. 
(DOE, Public Meeting Presentation, No. 29 at p. 35)
    Earthjustice observed that this issue, in which certain design 
options necessitate larger products and therefore larger installation 
costs, is common in rulemakings. Despite the potential difficulties 
that increased size could pose for ice maker manufacturers and 
customers, Earthjustice commented that the preliminary analysis is not 
necessarily the stage of the rulemaking in which such design options 
should be ruled out. (Earthjustice, Public Meeting Transcript, No. 42 
at pp. 46-47)
    At the February 2012 preliminary analysis public meeting, Manitowoc 
pointed out that the size of ice makers is severely limited in certain 
applications, which would make it difficult for manufacturers to 
implement design changes that reduce energy but require an increase in 
size. Manitowoc warned that DOE should not assume that all ice maker 
manufacturers can increase the sizes of their ice machines to meet 
standards. In many cases,

[[Page 14872]]

according to Manitowoc, increasing the size may result in higher 
installation costs, which are not considered in DOE's analysis. 
Manitowoc and AHRI both noted that a high percentage of the ice machine 
business involves replacing old units and that the size of new ice 
makers is therefore dictated by the size of the products being 
replaced. (Manitowoc, Public Meeting Transcript, No. 42 at pp. 57-59 
and No. 54 at p. 2; AHRI, No. 49 at p. 2) AHRI also commented that 
customers continue to demand smaller ice machines as the space used to 
house them competes against more ``usable'' spaces, such as hotel 
rooms. Hoshizaki agreed that the industry was moving toward smaller ice 
makers and also recommended that DOE limit cabinet size. Consequently, 
Manitowoc, AHRI, and Hoshizaki all commented that DOE should not 
consider design options that increase cabinet size in its analysis. 
(Manitowoc, No. 54 at p. 2; AHRI, No. 49 at p. 2; Hoshizaki, No. 53 at 
p. 1)
    Scotsman commented that, for products at the top of the capacity 
range within a given standard cabinet size, manufacturers cannot 
increase the size of internal components such as air-cooled condensers 
without increasing the machines' cabinet size. This would make the 
machines less competitive because they would no longer physically fit 
in certain applications, according to Scotsman. (Scotsman, Public 
Meeting Transcript, No. 42 at pp. 87-88) Moreover, Scotsman noted that 
assessing the impact of a technology on one type of machine and 
applying it to other types can be difficult and inaccurate. For 
example, while increasing condenser area could be simple for a 300-lb 
machine, it may require retooling several parts, in addition to 
increasing cabinet size and thus also increasing overall costs, to make 
the same condenser growth fit in a 600-lb machine. (Scotsman, No. 46 at 
p. 2) Finally, Scotsman stated that increasing the size of ice makers 
will cause cabinet costs to increase. (Scotsman, Public Meeting 
Transcript, No. 42 at p. 64) Therefore, Scotsman agreed with its fellow 
manufacturers that DOE should avoid design options requiring cabinet 
size increases. (Scotsman, No. 46 at p. 4)
    Manitowoc commented that it is rare for manufacturers to have data 
regarding available space, ventilation, or other variables regarding 
the final installation of their products. Moreover, Manitowoc added 
that forcing an ice maker with larger cabinet size into an existing 
space that is too small for it would exacerbate condenser air 
recirculation, which decreases its efficiency and reliability. 
(Manitowoc, Public Meeting Transcript, No. 42 at pp. 62-63)
    However, Scotsman also commented that an ice maker's energy use 
typically decreases as its size increases, meaning that it may be more 
efficient to use an oversized machine than one that has been downsized. 
(Scotsman, Public Meeting Transcript, No. 42 at pp. 61-62)
    Howe commented that the physical size of an automatic commercial 
ice maker has no effect on its efficiency or its run time. According to 
Howe, the run time of ice makers is a function of their productive 
capacity as well as the size of their ice storage bins, because ice 
production automatically ceases when the bin is full. Howe added that 
regulating the physical size of ice makers may limit the use of new, 
more efficient technologies in the future. Therefore, Howe urged DOE 
not to consider limiting the physical size of ice makers. (Howe, No. 51 
at pp. 1-2)
    NEEA/NPCC also urged DOE not to consider limiting ice maker cabinet 
size in the rulemaking. NEEA/NPCC pointed out that, although improving 
the efficiency of an ice maker may require increasing the size of its 
components, many ice makers have sufficient room in their cabinets to 
accommodate such size increases. According to NEEA/NPCC, advanced 
evaporator designs could be used to meet efficiency and capacity 
requirements for ice makers whose evaporators already require the full 
cabinet size. (NEEA/NPCC, No. 50 at p. 2)
    CA IOUs agreed that DOE should not screen out design options that 
would require an increase in cabinet size. CA IOUs referred to a 
limited field study whose results indicated to CA IOUs that larger ice-
making equipment may be accommodated in most situations. CA IOUs added 
that there is no evidence as to whether there may be another space in 
installation locations that could accommodate a larger ice maker. 
Therefore, CA IOUs asserted that, in the absence of a survey or field 
study that shows size constraints to be an issue, DOE should not use 
size to screen out design options. (CA IOUs, No. 56 at p. 3)
    Based on these comments from stakeholders, DOE understands that 
automatic commercial ice makers are often used in applications where 
space is very limited. DOE has not received any data supporting or 
refuting the characterization that installation locations may be able 
to accommodate larger icemakers.
    Although CA IOUs cited a study indicating that installation 
locations may be able to accommodate larger ice makers,\31\ the sample 
size of this study is extremely small and is not necessarily 
representative of the entire automatic commercial ice maker market. The 
study does not present any findings on the size constraints and 
allowances seen in the inspected products, and the pictures themselves 
are inconclusive. DOE believes it would be difficult to support any 
size-based conclusions using this study.
---------------------------------------------------------------------------

    \31\ Karas, A. A Field Study to Characterize Water And Energy 
Use of Commercial Ice-Cube Machines and Quantify Savings Potential. 
December 2007. Fisher-Nickel, Inc., San Ramon, CA. 
www.fishnick.com/publications/fieldstudies/Ice_Machine_Field_Study.pdf>
---------------------------------------------------------------------------

    Particularly because replacements comprise such a large portion of 
the ice maker industry, ice makers affected by the proposed standard 
must maintain traditional standard widths and depths. Allowing design 
options that necessitate physical size increases may push certain 
capacity units beyond their current standard dimensions and would thus 
force the use of lower-capacity machines in replacement applications, 
which would significantly reduce equipment utility.
    On the other hand, screening out size-increasing design options 
would eliminate from consideration technologies that could 
significantly reduce the energy consumption of automatic commercial ice 
makers.
    Consideration of design options that increase the size of ice 
makers is strongly related to consideration of size-constrained design 
options. DOE notes that, while stakeholders have pointed out that many 
automatic ice maker applications are space-constrained, as described in 
section IV.B.1.a, DOE does not have access to sufficiently-detailed 
data that would either indicate what percentage of applications could 
not allow size increase, or be the basis to set size limits for space-
constrained classes. Thus, DOE has also decided not to create size-
constrained equipment classes.
    DOE also notes that there are a wide range of product sizes within 
most equipment classes, and that DOE must seek out the most-efficient 
configurations. DOE noted that the equipment it purchased for reverse 
engineering inspections reflected a general trend that more-efficient 
units were often larger, had larger condensers, and in some cases had 
larger evaporators. Based on DOE's market study and equipment 
inspections, larger chassis sizes appeared often to be a means of 
achieving higher efficiencies.
    Thus, DOE is including this package-size-increasing technologies as 
design options in the NOPR analysis. DOE only

[[Page 14873]]

applied these design options for those equipment classes where the 
representative baseline unit had space to grow relative to the largest 
units on the market. The equipment growth allowed for larger heat 
exchangers to increase equipment efficiency.
    For equipment classes with remote condensers, DOE only applied this 
design option to the condenser package, and not to the ice-making head 
that is placed indoors. In general, DOE only considered increasing the 
size of the evaporator whenever the product inspections (see section 
IV.D.4.e) indicated that it was needed to increase efficiency.
    In addition, DOE recognizes that space constraints are more 
critical for SCU units; hence, DOE did not consider package size growth 
for SCU equipment classes.
    Table IV.8 indicates for which analyzed equipment classes DOE 
considered chassis growing design options.

            Table IV.8--Analyzed Equipment Classes Where DOE Analyzed Size-Increasing Design Options
----------------------------------------------------------------------------------------------------------------
                                                 Rated harvest rate lb ice/24       Used design options that
                      Unit                                   hours                      increased size?
----------------------------------------------------------------------------------------------------------------
IMH-A-Small-B..................................                           300  Yes.
IMH-A-Large-B (med)............................                           800  Yes.
IMH-A-Large-B (large)..........................                         1,500  No.
IMH-W-Small-B..................................                           300  Yes.
IMH-W-Med-B....................................                           850  No.
IMH-W-Large-B..................................                         2,600  No.
RCU-XXX-Large-B (med)..........................                         1,500  For the remote condenser, but not
                                                                                for the ice-making head.
RCU-XXX-Large-B (large)........................                         2,400  For the remote condenser, but not
                                                                                for the ice-making head.
SCU-A-Small-B..................................                           110  No.
SCU-A-Large-B..................................                           200  No.
SCU-W-Large-B..................................                           300  No.
IMH-A-Small-C..................................                           310  No.
IMH-A-Large-C (med)............................                           820  No.
SCU-A-Small-C..................................                           110  No.
----------------------------------------------------------------------------------------------------------------

    Table IV.9 shows the size increases that DOE considered in the 
analysis. DOE only considered these size increases when a unit existed 
on the market that was larger than the baseline unit. DOE based the new 
chassis sizes on the sizes of current units on the market.

                                   Table IV.9--Description of Size Increase Design Options in the Engineering Analysis
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                          Volume cubic
         Equipment class               Equipment type         Size descriptor     Height inches      Width inches       Depth inches          feet
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-A-Small-B...................  IMH.....................  Baseline..........               16.5                30               24.5              7.02
                                                            Growth............               21.5                30               24.5              9.14
IMH-A-Large-B (Med).............  IMH.....................  Baseline..........               26                  30               24               10.83
                                                            Growth............               29                  30               24               12.08
IMH-W-Small-B...................  IMH.....................  Baseline..........               20                  30               24                8.33
                                                            Growth............               23.5                30               23.5              9.59
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Further information on this analysis is available in chapter 5 of 
the NOPR TSD.
e. Microchannel Heat Exchangers
    NEEA/NPCC, ASAP, and Earthjustice all recommended that DOE include 
microchannel heat exchanger technology in its examination of design 
options for improving condenser and evaporator efficiency. NEEA/NPCC 
noted that this technology has been used in heat exchangers for air 
handling equipment for years and it would allow for increased 
efficiency or greater ice production capacity. (NEEA/NPCC, No. 50 at p. 
2) ASAP commented that, although it is not aware of ice makers on the 
market that incorporate microchannel heat exchangers, ice maker 
manufacturers who have tested prototype units that implement this 
technology have noticed significant efficiency improvements. (ASAP, No. 
52 at p. 1) Finally, Earthjustice noted that microchannel heat 
exchanger technology would increase both machine efficiency and 
available cabinet space within the ice maker. (Earthjustice, No. 47 at 
pp. 1-4)
    DOE has not found evidence that this technology is cost-effective. 
Moreover, through discussions with manufacturers, DOE has learned of no 
instances of energy savings associated with the use of microchannel 
heat exchangers in ice makers. Manufacturers also noted that the 
reduced refrigerant charge associated with microchannel heat exchangers 
can be detrimental to the harvest performance of batch type ice makers, 
as there is not enough charge to transfer heat to the evaporator from 
the condenser.
    DOE contacted microchannel manufacturers to determine whether there 
were savings associated with use of microchannel heat exchangers in 
automatic commercial ice makers. These microchannel manufacturers noted 
that investigation of microchannel was driven by space constraints 
rather than efficiency.
    Because the potential for energy savings is inconclusive, based on 
DOE analysis as well as feedback from manufacturers and heat exchanger 
suppliers, and based on the potential utility considerations associated 
with compromised harvest performance in batch type ice makers 
associated with this heat exchanger technology's reduced refrigerant 
charge, DOE

[[Page 14874]]

screened out microchannel heat exchangers as a design option in this 
rulemaking.
f. Smart Technologies
    CA IOUs recommended that DOE also consider including ``smart'' 
technologies as design options that will go beyond simple energy 
savings by capturing demand reductions as well. To support this 
proposition, CA IOUs referenced a study showing that, for automatic 
commercial ice-making equipment, there are 450 megawatts of demand 
reduction potential in California alone, indicating a significant 
nationwide possibility for reducing the energy demand associated with 
ice makers. If DOE does not include ``smart'' technologies as design 
options, CA IOUs instead asked that DOE comment on whether states will 
be allowed to implement such design option requirements for ice-making 
equipment. (CA IOUs, No. 56 at pp. 5-6)
    While there may be energy demand benefits associated with use of 
``smart technologies'' in ice makers in that they reduce energy demand 
(e.g., shift the refrigeration system operation to a time of utility 
lower demand), DOE is not aware of any commercialized products or 
prototypes that also demonstrate improved energy efficiency in 
automatic commercial ice makers. Demand savings alone do not impact 
energy efficiency, and DOE cannot consider technologies that do not 
offer energy savings as measured by the test procedure. Since the scope 
of this rulemaking is to consider energy conservation standards that 
increase the energy efficiency of automatic commercial ice makers, not 
how they operate, for example, in relation to utility demand, this 
technology option has been screened out because it does not save energy 
as measured by the test procedure.
g. Screening Analysis: General Comments
    Howe suggested that DOE gather information on a wider variety of 
design types of both batch and continuous type ice makers before 
completing its analyses, noting that DOE may have prematurely screened 
out design options simply because they had adverse effects on the ice 
makers within the small range of design parameters for which DOE 
collected data. (Howe, No. 51 at p. 4)
    Howe has not provided specific examples of technologies that it has 
claimed that DOE prematurely screened out, so DOE is not in a position 
to respond. During the NOPR analysis, DOE analyzed additional units and 
accounted for this additional data in its engineering analysis. DOE 
considered a wide range of design types for ice makers, and screened 
out technologies as described in section IV.D.

D. Engineering Analysis

    The engineering analysis determines the manufacturing costs of 
achieving increased efficiency or decreased energy consumption. DOE 
historically has used the following three methodologies to generate the 
manufacturing costs needed for its engineering analyses: (1) The 
design-option approach, which provides the incremental costs of adding 
to a baseline model design options that will improve its efficiency; 
(2) the efficiency level approach, which provides the relative costs of 
achieving increases in energy efficiency levels, without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data as to costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels.
    As discussed in the Framework document and preliminary analysis, 
DOE conducted the engineering analyses for this rulemaking using a 
combined efficiency level/design option/reverse engineering approach to 
developing cost-efficiency curves for automatic commercial ice makers. 
DOE established efficiency levels defined as percent energy use lower 
than that of baseline efficiency products. DOE's analysis is based on 
the efficiency improvements associated with groups of design options. 
Also, DOE developed manufacturing cost models based on reverse 
engineering of products to develop a baseline manufacturer production 
cost (MPC) and to support calculation of the incremental costs 
associated with improvement of efficiency.
    DOE selected a set of 25 equipment classes to analyze directly in 
the engineering analysis. To develop the analytically derived cost-
efficiency curves, DOE collected information from various sources on 
the manufacturing cost and energy use reduction characteristics of each 
of the design options. DOE reviewed product literature, tested and 
conducted reverse engineering of 39 ice makers, and interviewed 
component vendors of compressors and fan motors. DOE also conducted 
interviews with manufacturers during the preliminary analysis. 
Additional details of the engineering analysis are available in chapter 
5 of the NOPR TSD and a copy of the engineering questionnaire is 
reproduced in appendix 12A of the NOPR TSD.
    Cost information from the vendor interviews and discussions with 
manufacturers provided input to the manufacturing cost model. DOE 
determined incremental costs associated with specific design options 
from both vendor information and the cost model. DOE modeled energy use 
reduction using the FREEZE program, which was developed in the 1990s 
and upgraded as part of the preliminary analysis. The reverse 
engineering, vendor interviews, and manufacturer interviews provided 
input for the energy analysis. The final incremental cost estimates and 
the energy modeling results together constitute the energy efficiency 
curves presented in the NOPR TSD chapter 5.
    DOE also considered conducting the engineering analysis using an 
efficiency level approach based on rated and/or measured energy use and 
manufacturing cost estimates based on reverse engineering data. DOE 
completed efficiency level analyses for several equipment classes but 
concluded that this approach was not viable, because the analysis 
suggested that cost would be reduced for higher efficiency designs for 
several of the equipment classes. This analysis is discussed in section 
IV.D.4.e and in chapter 5 of the NOPR TSD.
1. Representative Equipment for Analysis
    In performing its engineering analysis, DOE selected representative 
units for 12 equipment class to serve as analysis points in the 
development of cost-efficiency curves. In selecting these units, DOE 
selected models that were generally representative of the typical 
offerings produced within the given equipment class. DOE sought to 
select models having features and technologies typically found in the 
minimum efficiency equipment currently available on the market, but 
selected some models having features and technologies typically found 
in the highest efficiency equipment currently available on the market.
2. Efficiency Levels
a. Baseline Efficiency Levels
    EPCA, as amended by the EPACT 2005, prescribed the following 
standards for batch type ice makers, shown in Table IV.10, effective 
January 1, 2010. (42 U.S.C. 6313(d)(1)) For the engineering analysis, 
DOE used the existing batch type equipment standards as the baseline 
efficiency level for the

[[Page 14875]]

equipment types under consideration in this rulemaking. Also, DOE 
applied the standards for equipment with harvest capacities up to 2,500 
lb ice/24 hours as baseline efficiency levels for the larger batch type 
equipment with harvest capacities between 2,500 and 4,000 lb ice/24 
hours, which are currently not regulated. DOE applied two exceptions to 
this approach, as discussed below.
    For the IMH-W-Small-B equipment class, DOE slightly adjusted the 
baseline energy use level to close a gap between the IMH-W-Small-B and 
the IMH-W-Medium-B equipment classes. For equipment in the IMH-A-Large-
B equipment class with harvest capacity above 2,500 lb ice per 24 
hours, DOE chose a baseline efficiency level equal to the current 
standard level at the 2,500 lb ice per 24 hours capacity. In its 
analysis, DOE is treating the constant portion of the IMH-A-Large-B 
equipment class as a separate equipment class, IMH-A-Extended-B. 
Section IV.C contains more details of these adjustments.
    DOE is not proposing adjustment of maximum condenser water use 
standards for batch type ice makers. First, DOE's authority does not 
extend to regulation of water use, except as explicitly provided by 
EPCA. Second, DOE determined that increasing condenser water use 
standards to allow for more water flow in order to reduce energy use is 
not cost-effective. The details of this analysis are available in 
chapter 5 of the NOPR TSD.
    For water-cooled batch equipment with harvest capacity less than 
2,500 lb ice per 24 hours, the baseline condenser water use is equal to 
the current condenser water use standards for this equipment.
    For water-cooled equipment with harvest capacity greater than 2,500 
lb ice per 24 hours, DOE proposes to set maximum condenser water 
standards equal to the current standard level for the same type of 
equipment with a harvest capacity of 2,500 lb ice per 24 hours--the 
proposed standard level would not continue to drop as harvest capacity 
increases, as it does for equipment with harvest capacity less than 
2,500 lb ice per 24 hours.

                          Table IV.10--Baseline Efficiency Levels for Batch Ice Makers
----------------------------------------------------------------------------------------------------------------
                                                                                               Maximum condenser
         Equipment type            Type of cooling   Rated harvest rate   Maximum energy use   water use *  gal/
                                                       lb ice/24 hours      kWh/100 lb ice        100 lb ice
----------------------------------------------------------------------------------------------------------------
Ice-Making Head.................  Water............  =500 and =1,436...........  4.0................  145.
                                  Air..............  =450 and =2,500...........  4.1................  Not Applicable.
Remote Condensing (but not        Air..............  =1,000...........  5.10...............  Not Applicable.
Remote Condensing and Remote      Air..............  =934.............  5.30...............  Not Applicable.
Self-Contained..................  Water............  =200.............  7.60...............  For =2,500: 112.
                                  Air..............  =175.............  9.80...............  Not Applicable.
----------------------------------------------------------------------------------------------------------------
* Water use is for the condenser only and does not include potable water used to make ice.
** H = rated harvest rate in pounds per 24 hours, indicating the water or energy use for a given rated harvest
  rate. Source: 42 U.S.C. 6313(d).
[dagger] There is a gap between the existing IMH-W-Small-B standard and the IMH-W-Medium-B standard. The
  baseline equation for the IMH-W-Small-B equipment class was adjusted from 7.8--0.0055*H to 7.79--0.0055*H to
  close this gap.

    Currently there are no DOE energy standards for continuous type ice 
makers. During the preliminary analysis, DOE developed baseline 
efficiency levels using energy use data available from several sources, 
as discussed in chapter 3 of the preliminary TSD. DOE chose baseline 
efficiency levels that would be met by nearly all ice makers 
represented in the databases. Also, because energy use reported at the 
time DOE was preparing the preliminary analysis did not include the 
hardness adjustment prescribed by the new test procedure,\32\ DOE made 
these adjustments to the data. At that time, hardness data was also not 
generally available for ice makers; therefore, DOE used assumptions of 
0.7 ice hardness for flake ice makers and 0.85 for nugget ice makers to 
make the hardness adjustments, thus estimating energy use as it would 
be measured by the new test procedure. 77 FR 3404 (Jan. 24, 2012). DOE 
selected harvest capacity break points (harvest capacities at which the 
slopes of the trial baseline efficiency levels change) for all but the 
self-contained equipment classes consistent with those selected by the 
Consortium for Energy Efficiency (CEE) for their new Tier 2 efficiency 
level for flake ice makers. Note that DOE did not also adopt the CEE 
energy use levels for any of its incremental efficiency levels because 
the CEE energy use levels do not incorporate adjustment of the measured 
energy use based on ice hardness.
---------------------------------------------------------------------------

    \32\ Ice hardness is a term used for ice produced by continuous 
type ice makers, describing what percentage of the output is hard 
ice (as compared to water).
---------------------------------------------------------------------------

    For the NOPR analysis, DOE used newly available information 
published in the AHRI Directory of Certified Product Performance, the 
California Energy Commission, the ENERGY STAR program, and vendor Web 
sites, to update its icemaker ratings database (``DOE icemaker ratings 
database''). In 2012, AHRI published equipment ratings for many 
continuous type ice makers, including ice hardness factors calculated 
as prescribed by ASHRAE 29-2009, which is incorporated by reference in 
the new DOE test procedure. DOE recreated its database for continuous 
type ice makers based on the available AHRI data, considering only the 
ice makers for which AHRI ratings for ice hardness were available. DOE 
also adjusted the harvest capacity break points for the continuous 
equipment classes based on the new data.
    The baseline efficiency levels for continuous type ice makers are 
presented in Table IV.11. They are

[[Page 14876]]

compared with the ice maker energy use data in chapter 3 of the NOPR 
TSD. For the remote condensing equipment, the large-capacity remote 
compressor and large-capacity non-remote compressor classes have been 
separated and are different by 0.2 kWh/100 lb, identical to the batch 
equipment differential. This differential is also discussed briefly in 
section IV.B.1.e. DOE requests comments on the development of 
efficiency levels for continuous type ice makers and whether the 
selected levels appropriately represent baseline equipment.

               Table IV.11--Baseline Efficiency Levels for Continuous Ice Maker Equipment Classes
----------------------------------------------------------------------------------------------------------------
                                                                                               Maximum condenser
         Equipment type            Type of cooling    Rated harvest rate  Maximum energy use   water use * gal/
                                                       lb ice/24 hours     kWh/100 lb ice *       100 lb ice
----------------------------------------------------------------------------------------------------------------
Ice-Making Head.................  Water............  Small (=900)......  5.1...............  2,500:
                                                                                               116.
                                  Air..............  Small (=700)......  6.6...............  Not Applicable.
Remote Condensing (Remote         Air..............  Small (=850)......  6.3...............  Not Applicable.
Remote Condensing (Non-remote     Air..............  Small (=850)......  6.1...............  Not Applicable.
Self-Contained..................  Water............  Small (=900)......  6.1...............  2,500:
                                                                                               90.
                                  Air..............  Small (=700)......  7.1...............  Not Applicable.
----------------------------------------------------------------------------------------------------------------
* H = rated harvest rate in lb ice/24 hours.

b. Incremental Efficiency Levels
    For each of the nine analyzed batch type ice-making equipment 
classes, DOE established a series of incremental efficiency levels for 
which it has developed incremental cost data and quantified the cost-
efficiency relationship. DOE chose a set of analyzed equipment classes 
that would be representative of all batch type ice-making equipment 
classes, and grouped non-analyzed equipment classes with analyzed 
equipment classes accordingly in the downstream analysis. Table IV.12 
shows the selected incremental efficiency levels.
    For the IMH-A-Large-B equipment class, DOE is adopting its 
suggested approach from the preliminary analysis meeting. (DOE, 
Preliminary Analysis Public Meeting Presentation, No. 42 at p. 29) As 
part of this approach, DOE is treating the largest units as an extended 
equipment class (IMH-A-Extended-B), basing the analysis for this 
equipment class on the analysis for a 1,500 lb ice/24 hour IMH-A-Large-
B unit. When setting TSLs, DOE is considering the 800 lb ice/24 hour 
IMH-A-Large-B analysis separately from the 1,500 lb ice/24 hour 
analysis.

                Table IV.12--Incremental Efficiency Levels for Batch Ice Maker Equipment Classes
----------------------------------------------------------------------------------------------------------------
                                Rated harvest
       Equipment type *         rate lb ice/24         EL 2 **         EL 3 (%)   EL 4 (%)   EL 5 (%)   EL 6 (%)
                                    hours
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................  =500 and        10%.................         15         20  .........  .........
                                =1,436........  10%.................         15         20  .........  .........
IMH-A-Small-B................  =450..........  10% (E-STAR                  15         20         25  .........
                                                 [dagger]).
RCU-NRC-Small-B ***..........  =1,000........  9% (E-STAR [dagger])         15         20  .........  .........
RCU-RC-B.....................  =934..........  9% (E-STAR [dagger])         15         20  .........  .........
SCU-W-Small-B ***............  =200..........  7%..................         15         20         25         30
SCU-A-Small-B................  =175..........  7% (E-STAR [dagger])         15         20         25         30
----------------------------------------------------------------------------------------------------------------
* See Table III.1 for a description of these abbreviations.
** EL = efficiency level; EL 1 is the baseline efficiency level, while EL 2 through EL 6 represent increased
  efficiency levels.
*** These equipment classes were not directly analyzed.
[dagger] New ENERGY STAR levels became effective on February 1, 2013. These levels represent the ENERGY STAR
  levels prior to February 1, 2013.
[Dagger] The IMH-A-Large-B levels were analyzed at the 800 lb ice/24 hour size and the 1,500 lb ice/24 hour
  size, and the 1,500 lb ice/24 hour size were used to set standards for the new IMH-A-Extended-B class.

    For each of the three analyzed continuous type ice maker equipment 
classes, DOE established a series of incremental efficiency levels, for 
which it has developed incremental cost data and quantified the cost-
efficiency relationship. DOE chose a set of analyzed equipment classes 
that would be representative of all continuous type ice-making 
equipment classes, and grouped non-analyzed equipment classes with 
analyzed equipment classes accordingly in the downstream analysis, as 
discussed in section V.A.1. Table IV.13 shows the selected incremental 
efficiency levels. The efficiency levels are defined by the percent 
energy use less than the baseline energy use.

[[Page 14877]]

                           Table IV.13--Selected Incremental Efficiency Levels for Continuous Type Ice Maker Equipment Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Rated harvest
                    Equipment type *                      rate lb ice/24    EL 2 ** (%)      EL 3 (%)        EL 4 (%)        EL 5 (%)        EL 6 (%)
                                                               hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-C...........................................            =900  ..............  ..............  ..............  ..............  ..............
IMH-A-Small-C...........................................            =700              10              15              20              25              30
                                                                         -------------------------------------------------------------------------------
RCU-Small-C.............................................            =850                                   Not Analyzed.
SCU-W-Small-C...........................................            =900                        No existing products on the market.
                                                                         -------------------------------------------------------------------------------
SCU-A-Small-C...........................................            =700                        No existing products on the market.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* See Table III.1 for a description of these abbreviations.
** EL 1 is the baseline efficiency level, while EL 2 through EL 6 represent increased efficiency levels.

    DOE selected the efficiency levels for the continuous type ice 
makers based on the levels proposed in the preliminary analysis.
c. IMH-A-Large-B Treatment
    The current DOE energy conservation standard for large air-cooled 
IMH cube type ice makers is represented by an equation for which 
maximum allowable energy usage decreases linearly as harvest rate 
increases from 450 to 2,500 lb ice/24 hours. Extending the current IMH-
A-Large-B equation to the 4,000 lb ice/24 hours range would result in 
efficiency levels in the newly covered range (between 2,500 lb/day and 
4,000 lb/day) that may not be technically feasible. For example, at 
4,000 lb ice/24 hours, the specified baseline energy use would be 2.49 
kWh/100 lb, a value far below the energy consumption of existing IMH-A-
Large-B ice makers (e.g., it is 39 percent lower than the lowest rating 
for IMH-A-Large-B equipment of which DOE is aware, 4.1 kWh/100 lb). In 
the preliminary analysis, DOE proposed establishing baseline and 
incremental efficiency levels for this equipment class that maintain a 
constant level of energy use at higher harvest capacities, with 
exceptions in certain harvest capacity ranges to avoid backsliding. For 
example, for efficiency level 2, DOE proposed that (a) between 1,600 
and 2,080 lb ice/24 hours, the maximum energy use would be independent 
of harvest capacity, as is the case for all other high-harvest-capacity 
equipment classes, (b) between 2,080 lb ice/24 hours, the maximum 
energy usage would be calculated according to the current standard to 
avoid EPCA anti-backsliding provisions, and (c) between 2,500 and 4,000 
lb ice/24 hours, the maximum energy use would remain constant. DOE 
presented this approach in the preliminary analysis and requested 
comment on it; DOE did not receive any comments on this approach.
    Hence, DOE is proposing to use the approach it outlined in the 
preliminary analysis meeting for the IMH-A-Large-B equipment class 
(DOE, Preliminary Analysis Public Meeting Presentation, No. at p. 29). 
Further, DOE proposes to separate capacity ranges of this class into 
ranges designated IMH-A-B and IMH-A-Extended-B, the first for equipment 
with harvest capacity less than 1,500 lb ice/24 hours and the second 
with greater harvest capacity. The proposed IMH-A-B efficiency levels 
would be constant between 800 and 1,500 lb ice/24 hours. Each proposed 
IMH-A-Extended-B efficiency level would start at an energy use that is 
equal to that of one of IMH-A-B efficiency levels. Its energy use would 
remain constant at this level within its lower range of harvest 
capacity rates, but would follow the current DOE standard between the 
harvest capacity for which the constant level equals the current DOE 
standard and 2,500 lb ice/24 hours. Beyond 2,500 lb ice/24 hours, it 
would remain constant from 2,500 to 4,000 lb ice/24 hours.
d. Maximum Available Efficiency Equipment
    For the NOPR analysis, DOE considered the most-efficient equipment 
available on the market, known as maximum available equipment. In some 
cases, the maximum available equipment uses technology options that DOE 
chose to screen out for its analysis. Hence, DOE also identified 
maximum available equipment without screened technologies (see the 
discussion of the engineering analysis in section IV.D.2.f). The 
technologies that are used in some maximum available equipment that 
were screened out include low thermal-mass evaporators and tube 
evaporators for batch type ice makers.
    Efficiency levels for maximum available equipment in the batch type 
ice-making equipment classes are tabulated in Table V.16. This 
information is based on DOE's icemaker ratings database (also see data 
in chapter 3 of the NOPR TSD). The efficiency levels are represented as 
an energy use percentage reduction compared to the energy use of 
baseline-efficiency equipment, the selection of which is discussed in 
section IV.D.2.a.

 Table IV.14--Efficiency Levels for Maximum Available Equipment in Batch
                       Ice Maker Equipment Classes
------------------------------------------------------------------------
            Equipment class               Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-B..........................  24.5%.
IMH-W-Med-B............................  22.4%.
IMH-W-Large-B..........................  7.5% (at 1,500 lb ice/24
                                          hours).
                                         8.3% (at 2,600 lb ice/24
                                          hours).
IMH-A-Small-B..........................  23.6%.
IMH-A-Large-B..........................  20.7% (at 800 lb ice/24 hours).
                                         21.3% (at 1,500 lb ice/24
                                          hours).
RCU-Small-B............................  24.6%.
RCU-Large-B............................  40.2% (at 1,500 lb ice/24
                                          hours).
                                         26.7% (at 2,400 lb ice/24
                                          hours).
SCU-W-Small-B..........................  22.5%.
SCU-W-Large-B..........................  27.6%.
SCU-A-Small-B..........................  35.8%.
SCU-A-Large-B..........................  29.6%.*
------------------------------------------------------------------------
* This is the second highest rated product; the highest rated product is
  also a dispenser unit.

[[Page 14878]]

    Efficiency levels for maximum available equipment in the continuous 
type ice-making equipment classes are tabulated in Table IV.15. This 
information is based on a survey of product databases and manufacturer 
Web sites (also see data in chapter 3 of the TSD). The efficiency 
levels are represented as an energy use percentage reduction compared 
to the energy use of baseline-efficiency equipment, the selection for 
which is discussed in section IV.D.2.a. DOE used the maximum available 
efficiency levels to calibrate its engineering analysis against current 
equipment.

   Table IV.15--Efficiency Levels for Maximum Available Equipment for
               Continuous Type Ice Maker Equipment Classes
------------------------------------------------------------------------
            Equipment class               Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-C..........................  16.5%.
IMH-W-Large-C..........................  12.2% (at 1,000 lb ice/24
                                          hours).
                                         8.6% (at 1,800 lb ice/24
                                          hours).
IMH-A-Small-C..........................  25.3%.
IMH-A-Large-C..........................  8.1% (at 820 lb ice/24 hours).
                                         17.0% (at 1,500 lb ice/24
                                          hours).
RCU-Small-C............................  18.4%.
RCU-Large-C............................  18.5%.
SCU-W-Small-C..........................  18.7%.*
SCU-W-Large-C..........................  No equipment on the market.*
SCU-A-Small-C..........................  24.4%.
SCU-A-Large-C..........................  No equipment on the market.*
------------------------------------------------------------------------
* DOE's inspection of currently available equipment revealed that there
  are no available products in the defined SCU-W-Large-C and SCU-A-Large-
  C equipment classes at this time.

e. Maximum Technologically Feasible Efficiency Levels
    When DOE proposes to adopt (or not adopt) an amended or new energy 
conservation standard for a type or class of covered equipment such as 
automatic commercial ice makers, it determines the maximum improvement 
in energy efficiency that is technologically feasible for such 
equipment. (See 42 U.S.C. 6295(p)(1) and 6313(d)(4)) Accordingly, in 
the preliminary analysis, DOE determined the maximum technologically 
feasible (``max-tech'') improvements in energy efficiency for automatic 
commercial ice makers in the engineering analysis using energy modeling 
and the design options that passed the screening analysis. As part of 
the NOPR analysis, DOE modified its energy use analysis. In addition, 
DOE considered a different range of design options. Evaluation of 
maximum technological feasibility was again based on energy modeling, 
but DOE compared energy modeling results with maximum available without 
screened technologies to ensure consistency of results with actual 
designs at that level. See chapter 5 of the NOPR TSD for the results of 
the analyses, and a list of technologies included in max-tech 
equipment.
    The max-tech efficiency levels represent equipment combining all of 
the design options. However, they are not generally attained by 
existing equipment--this is largely due to the consideration of design 
options seldom used in commercially available equipment because they 
are not considered to be cost-effective by manufacturers, such as 
brushless DC motors and drain water heat exchangers. DOE does not 
screen out design options based on cost-effectiveness.
    Table III.2 and Table III.3 show the max-tech levels determined in 
the engineering analysis for batch and continuous type automatic 
commercial ice makers, respectively.

 Table IV.16--Max-Tech Levels for Batch Automatic Commercial Ice Makers
------------------------------------------------------------------------
            Equipment type *              Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-B..........................  30%.
IMH-W-Med-B............................  22%.
IMH-W-Large-B..........................  17% (at 1,500 lb ice/24 hours).
                                         16% (at 2,600 lb ice/24 hours).
IMH-A-Small-B..........................  33%.
IMH-A-Large-B..........................  33% (at 800 lb ice/24 hours).
                                         21% (at 1,500 lb ice/24 hours).
RCU-Small-B............................  Not analyzed.
RCU-Large-B............................  21% (at 1,500 lb ice/24 hours).
                                         21% (at 2,400 lb ice/24 hours).
SCU-W-Small-B..........................  Not analyzed.
SCU-W-Large-B..........................  35%.
SCU-A-Small-B..........................  41%.
SCU-A-Large-B..........................  36%.
------------------------------------------------------------------------
* IMH is ice-making head; RCU is remote condensing unit; SCU is self-
  contained unit; W is water-cooled; A is air-cooled; Small refers to
  the lowest harvest category; Med refers to the Medium category (water-
  cooled IMH only); Large refers to the large size category; RCU units
  were modeled as one with line losses used to distinguish standards.

  Table IV.17--Max-Tech Levels for Continuous Automatic Commercial Ice
                                 Makers
------------------------------------------------------------------------
             Equipment type               Energy use lower than baseline
------------------------------------------------------------------------
IMH-W-Small-C..........................  Not analyzed.
IMH-W-Large-C..........................  Not analyzed.
IMH-A-Small-C..........................  25.3%.
IMH-A-Large-C..........................  17% (at 820 lb ice/24 hours).
RCU-Small-C............................  Not analyzed.
RCU-Large-C............................  Not analyzed.
SCU-W-Small-C..........................  Not analyzed.
SCU-W-Large-C.*                          No units available.
SCU-A-Small-C..........................  24%.
SCU-A-Large-C.*                          No units available.
------------------------------------------------------------------------
* DOE's investigation of equipment on the market revealed that there are
  no existing products in either of these two equipment classes (as
  defined in this NOPR).

f. Comment Discussion

Impact of the Variability of Ice Hardness Measurements on Efficiency 
Levels for Continuous Type Ice Maker Equipment

    Manitowoc noted that there are no industry standards for the 
calorimetric values of different types of ice and cautioned that DOE's 
assumptions for these calorimetric values may invalidate its analysis 
of manufacturer-supplied data. (Manitowoc, Public Meeting Transcript, 
No. 42 at pp. 51-52) Hoshizaki recommended that ice hardness have one 
standard that incorporates all continuous type ice maker data and added 
that DOE should readdress the baseline for continuous type ice-making 
equipment after taking AHRI's 2012 ice hardness verification testing 
into account. (Hoshizaki, No. 53 at p. 1)
    Howe recommended that DOE supplement its data on continuous type 
ice makers by including results from tests using the current test 
procedure, adding that information on continuous type ice makers has 
changed drastically as of late. (Howe, No. 51 at p. 2)
    DOE notes that some of these comments were made before AHRI had 
completed verification testing work that is mentioned by Hoshizaki. DOE 
updated its database over the course of 2012, as many of the continuous 
type ice maker data in AHRI's database were updated, and hardness data 
was provided. DOE has primarily used this data, supplemented by DOE 
test data (including hardness test data) to evaluate the energy 
consumption characteristics of continuous type ice-making equipment and 
to set efficiency levels.
    DOE notes that, consistent with Hoshizaki's suggestion, the 
proposed

[[Page 14879]]

standards for continuous type ice makers use one metric that combines 
ice quality and energy usage. In addition, DOE has not proposed use of 
the Canadian efficiency levels for continuous type ice makers. The 
proposed efficiency levels for continuous type ice makers are discussed 
in sections IV.D.2.a and IV.D.2.b.

Correlation of Efficiency Levels With Design Options

    Manitowoc expressed confusion over the relationship between the 
efficiency levels and the technology options that go into those 
efficiency levels. Therefore, Manitowoc requested that DOE provide 
additional information to explain which technology options were 
associated with each efficiency level. (Manitowoc, Public Meeting 
Transcript, No. 42 at p. 51)
    Manitowoc pointed out that one of the SCU-air-cooled models used 
for the max-available efficiency level is actually a combined ice 
machine and hotel dispenser, and as such is not a representative 
example of the SCU category, which generally consists of undercounter 
designs. Manitowoc further stated that its larger size would allow the 
model to achieve higher efficiencies than would normally be possible 
for the majority of SCU air-cooled models. Therefore, Manitowoc 
commented, this model should not be used to justify the max-available 
efficiency attainable for this category of ice makers. (Manitowoc, No. 
54 at pp. 2-3)
    In response to Manitowoc's comment regarding the relationship of 
design options and efficiency levels, DOE provided additional 
information in the automatic commercial ice maker docket, as a 
supporting and related material document \33\ (DOE, Preliminary 
Analysis Presentation Supplementary Engineering Data, No. 43). The data 
in this document reflects the preliminary engineering analysis. For the 
NOPR analysis, the relationship between design options and efficiency 
levels has changed due to changes made to the design options 
considered, assumptions, and analysis approach. The new information is 
detailed in sections IV.D.4.a (cost model adjustments) and IV.D.4.f 
(energy model adjustments) and in the NOPR TSD chapter 5.
---------------------------------------------------------------------------

    \33\ See www.regulations.gov/#!documentDetail;D=EERE-2010-BT-
STD-0037-0043. After the February 2012 preliminary analysis public 
meeting, DOE published cost-efficiency curves showing the 
relationship of efficiency levels to design options for each 
directly analyzed equipment class.
---------------------------------------------------------------------------

    DOE notes that Manitowoc is correct in its observation that one of 
the max-available SCU models from the preliminary analysis is not 
representative of the undercounter units that make up the majority of 
the SCU category. DOE had intended to avoid inclusion of oversize SCU 
models that are not suitable for undercounter design in its 
establishment of maximum technology for SCU equipment classes. DOE has 
reviewed the maximum technology designations and has removed all ice 
maker-dispenser combinations from consideration in its analysis.

RCU Class Efficiency Level Differential

    In its preliminary engineering analysis, DOE concluded that the 0.2 
kWh per 100 lb ice differential in maximum allowable energy use for 
large-sized batch RCU ice makers with remote compressors as compared 
with those with compressors in the ice-making heads is appropriate, 
both for batch and continuous type ice makers. (DOE, Preliminary 
Analysis Public Meeting Presentation, No. 29 at p. 30) DOE requested 
comment on this conclusion.
    Manitowoc confirmed that the 0.2 kWh per 100 lb of ice difference 
in energy use between these two classes of RCUs seemed valid and that 
it was reasonable to continue using this value while developing the new 
standards. (Manitowoc, Public Meeting Transcript, No. 42 at p. 44 and 
No. 54 at p. 3) CA IOUs stated that its analysis of product data 
indicates that RCUs with and without dedicated remote compressors do 
not consume significantly different levels of energy. CA IOUs thus 
suggested that DOE continue to look at product performance data and 
customer utility in order to determine whether separate equipment 
classes and efficiency levels are necessary for these two types of RCU 
units. (CA IOUs, No. 56 at p. 2)
    Consistent with the comment from Manitowoc, DOE plans to continue 
using this differential of 0.2 kWh per 100 lb of ice to differentiate 
between RCUs with and without remote compressors.

Batch Efficiency Levels for High-Capacity Ice Maker

    DOE has established baseline and incremental efficiency levels for 
large-capacity ice makers in the newly extended capacity between 2,500 
and 4,000 lb ice/24 hours.
    AHRI noted that the current efficiency standard for high-capacity 
batch machines was established based on the performance of ice makers 
available in the marketplace and that extending this efficiency level 
to ice makers with capacities exceeding 2,500 lb ice/24 hours may not 
be appropriate. AHRI recommended that DOE either select and analyze 
products in this capacity range or refrain from regulating these 
products if there are not actually enough high-capacity batch machines 
available for DOE to analyze. (AHRI, No. 49 at pp. 3-4)
    Manitowoc stated that efficiency curves are typically flat for 
icemakers with capacities above 2,000 to 2,500 lb ice/24 hours and 
noted that this phenomenon is driven mainly by trends in compressor 
efficiencies, which have decreasing efficiency gains above a certain 
size. Additionally, Manitowoc commented that it tends to use multiple 
evaporators for large-capacity machines, rather than making new 
evaporators for every size, so its overall evaporator performance also 
does not improve significantly over a certain size. (Manitowoc, Public 
Meeting Transcript, No. 42 at pp. 48-49)
    However, Manitowoc also commented that DOE did not adequately 
analyze the efficiency of ice machines in the 2,000 to 4,000 lb ice/24 
hour capacity range. Manitowoc suggested that it is likely that, above 
a certain capacity, DOE will find that the relative benefit of some 
design options to be lower due to the relatively higher efficiency of 
the baseline components already in use. (Manitowoc, No. 54 at p. 3)
    Howe commented that most high-capacity ice makers are inherently 
more efficient than their lower-capacity counterparts and thus cannot 
be expected to achieve the same incremental efficiency gains. Howe 
added that, if incremental efficiency gains do indeed vary 
significantly by harvest capacity, equipment class definitions may need 
to change. (Howe, No. 51 at pp. 2-3)
    Hoshizaki recommended that DOE make equipment plots for high-
capacity batch models in order to compare existing models against the 
proposed efficiency levels. (Hoshizaki, No. 53 at p. 2)
    Hoshizaki commented that DOE needs to analyze the available data 
for all eligible RCU models rather than just relying on software 
assumptions to inform its analysis. Hoshizaki added that there is not 
enough data available for DOE to adequately assess high-capacity 
(>2,500 lb ice/24 hours) RCU energy use and recommended that 
manufacturers provide input to DOE regarding these high-capacity units. 
(Hoshizaki, No. 53 at p. 1)
    In response to AHRI, DOE reiterates that there is precedence for 
setting standards for capacity ranges for which equipment is not being 
sold, including

[[Page 14880]]

when DOE adopted standards for air-cooled IMH cube type ice makers up 
to 2,500 lb ice/24 hours, even though no such equipment is manufactured 
with capacities above 1,650 lb ice/24 hours. DOE simply is extending 
the capacity range of the standard for consistency with the 
applicability of the test procedure. DOE notes that it has proposed 
efficiency levels for the larger ice makers that, to the extent 
possible, do not change as a function of harvest capacity. Manitowoc's 
comments suggest that larger-capacity ice machines would have 
comparable efficiency level as compared with lower-capacity machines, 
and Howe's comments suggest that larger-capacity ice machines are 
inherently more efficient. Hence, the constant energy use efficiency 
level would be appropriate. The commenters did not highlight any other 
specific factors that would suggest that the constant energy use 
approach is inappropriate. Examination of the limited available data 
showing rated energy use as a function of harvest capacity certainly 
supports the approach, even though there is much less data to consider 
that at the lower capacity levels.
    In response to Manitowoc's comment regarding analysis of batch type 
ice makers in the 2,000 to 4,000 lb ice/24 hours harvest capacity 
range, DOE notes that it has conducted analysis for three of these 
products--given the limited number of such products available, this 
likely represents a greater percentage of the available products than 
DOE evaluated at lower-harvest-capacity rates. Because, as mentioned by 
Manitowoc, efficiency characteristics of the components of ice makers 
such as compressors and evaporators no longer improve as capacity 
increases, it is reasonable to expect that ice maker efficiency will 
also remain constant at high-harvest-capacity rates. For this reason, 
it is appropriate to represent performance of the full harvest capacity 
range with the available ice makers of the highest harvest capacities, 
as DOE has done.
    In response to Howe's comment, DOE has not considered reductions in 
efficiency at constant kilowatt-hours per 100 lb ice levels across the 
harvest capacity range. Instead, DOE has considered reductions in 
energy use in terms of percentages of baseline energy use. Hence, the 
energy use reductions associated with the incremental efficiency levels 
would be significantly less for a large-harvest-capacity ice maker with 
an already inherently low energy use than it would for a lower-harvest-
capacity ice maker. Further, if the larger-capacity ice makers are 
inherently more efficient, as Howe contends, DOE's approach using 
efficiency levels that do not vary with capacity should not be overly 
aggressive, i.e. setting efficiency levels too stringently.
    With respect to Hoshizaki's recommendation regarding examination of 
efficiency plots, DOE has reviewed energy use data for all products for 
which such data is available. The maximum efficiency levels considered 
in the analysis are not generally attained by existing equipment--this 
is largely due to the consideration of design options often considered 
not to be cost-effective by manufacturers, such as brushless DC motors 
and drain water heat exchangers. However, DOE's analysis results 
compared well to the maximum available without screened technologies 
efficiency level.
    In response to the second comment from Hoshizaki, DOE notes that 
the analysis for high-capacity units considered several pieces of 
information, including available performance rating data of the AHRI 
database and confidential interviews with manufacturers. A significant 
amount of the information obtained from manufacturers in confidential 
interviews was obtained during the NOPR phase, in part in response to 
preliminary analysis phase comments, such as the Hoshizaki comment, 
recommending some information exchange. In addition, DOE purchased and 
conducted reverse engineering on the largest-capacity batch and 
continuous type ice makers made by the manufacturers that comprise 90 
percent or greater share of the ice maker market. DOE also conducted 
energy testing on a few of these ice makers. DOE believes that its 
analysis of RCU equipment is representative of the large-capacity 
equipment classes. Additional information on the teardown analysis is 
available in chapter 5 of the NOPR TSD.

Discrepancies Between Maximum Technology Levels and Most-Efficient 
Equipment Available in the Marketplace

    NPCC, ASAP, and NEEA/NPCC commented on the max-tech efficiency 
levels (i.e., least energy consumptive level) and that, in some cases, 
max-tech levels were less efficient than the most-efficient level on 
the marketplace (i.e., ``max-available'' energy level). NPCC further 
commented that DOE should indicate whether this discrepancy is due to 
technologies that were screened out. NEEA/NPCC pointed to products in a 
Natural Resources Canada (NRCan) database that surpassed DOE's max-tech 
levels. (NPCC, Public Meeting Transcript, No. 42 at pp. 45-46; ASAP, 
Public Meeting Transcript, No. 42 at p. 50; NEEA/NPCC, No. 50 at pp. 2-
4) NPCC also recommended that DOE investigate whether there are 
superior technologies on the market that were not being analyzed simply 
because of the way max-tech is defined. NPCC added that the process by 
which design options are screened out should be very deliberate. (NPCC, 
Public Meeting Transcript, No. 42 at pp. 53-54)
    Scotsman noted that, even within a single equipment class, maximum 
technology levels will differ among models. For example, although DOE 
is considering compressor upgrade as a design option, many ice maker 
units are already using the most-efficient compressor suitable to their 
respective applications. Scotsman added that the analytical model used 
to calculate energy use for max-tech levels had not been validated and 
was thus unreliable. (Scotsman, No. 46 at p. 4)
    DOE acknowledges that there are units on the market that surpass 
the max-tech levels it proposed for the preliminary analysis. In some 
cases maximum available efficiency units include technologies that DOE 
had decided not to consider. For example, some max-tech units utilize 
proprietary technologies that are not available to the majority of 
manufacturers and were screened out in the screening analysis. Due to 
these differences, DOE's max-tech efficiency levels did not always 
exceed the max-available levels found on the market. Because they are 
representative of the whole market, DOE's max-tech levels must take 
into account issues with proprietary technologies as well as utility 
issues stemming from certain technologies (such as chassis size 
increases or ice cube shapes).
    In the NOPR phase, DOE made several changes to the preliminary 
analysis. These changes included:
     Adding a design option to allow for growth of the unit to 
increase the size of the condenser and/or evaporator;
     adjusting assumptions regarding maximum compressor EER 
levels based on additional research and confidential input from 
manufacturers;
     adjusting potable water consumption rates for batch type 
ice makers subject to a floor that represents the lowest potable water 
consumption rate that would be expected to flush out dissolved solid 
reliably;
     adding a design option to allow condenser growth in water-
cooled condensers; and
     adding a drain water heat exchanger design option.
    These changes have led to new max-tech levels. These levels are 
compared

[[Page 14881]]

to the most-efficient levels available on the market in Table IV.18. 
The levels are also compared with the most-efficient levels available 
that do not use technologies that DOE screened out in the screening 
analysis (called ``max available without screened technologies''). 
Specifically, for batch type ice makers, the differences between these 
two max available market levels are that the max using analyzed 
technologies levels do not consider (a) low-thermal-mass evaporators, 
and (b) tube ice evaporators. The new max-tech levels all exceed the 
``max available without screened technologies'' efficiency levels. DOE 
also notes that this discrepancy only existed for batch units, as DOE 
did not screen out any continuous unit technologies in its engineering 
analysis.
    DOE considered max-tech and max-available levels as part of its 
analysis. The max-tech levels for batch and continuous type ice makers 
are discussed in section IV.D.2.e. In addition to comparing the max-
tech, ``most efficient on market'', and the ``max available without 
screened technologies'' efficiency levels for batch type ice makers. 
Table IV.18 provides brief explanations for the differences between 
max-available and max-tech levels. More details regarding the design 
options that correlate with the different efficiency levels are 
provided in the NOPR TSD. DOE requests comments on the max-tech levels 
identified in today's NOPR, the max available and max available without 
screened technologies levels, and the reasons cited for the max tech/
max available differences.

                   Table IV.18--Comparison of Levels for Batch Automatic Commercial Ice Makers
----------------------------------------------------------------------------------------------------------------
                                                                                               Reason for gap
                                                           Max-available                        between max-
                                                              without       Max-available     available and max
          Equipment class              Max-tech level         screened           (%)          available without
                                                            technologies                          screened
                                                                (%)                             technologies
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.....................  30%.................             22.0             24.5  Proprietary
                                                                                             technology.
IMH-W-Med-B.......................  22%.................             15.7             22.4  Proprietary
                                                                                             technology.
IMH-W-Large-B.....................  16% (at 2,600 lb ice/             8.3             22.5  Proprietary
                                     24 hours).                                              technology and
                                                                                             utility issues.
IMH-A-Small-B.....................  33%.................             23.6             23.6  No gap.
IMH-A-Large-B.....................  33% (at 800 lb ice/              20.7             21.3  proprietary
                                     24 hours).                                              technology.
                                    21% (at 1,500 lb ice/
                                     24 hours).
RCU-NRC-Small-B...................  Not analyzed........             24.6             24.6  No gap.
RCU-NRC-Large-B...................  21% (at 1,500 lb ice/            15.7             40.2  Proprietary
                                     24 hours).                                              technology and
                                    21% (at 2,400 lb ice/                                    utility issues.
                                     24 hours).
RCU-RC-Small-B....................  Not directly                     19.0             19.0  No gap.
                                     analyzed.
RCU-RC-Large-B....................  Not directly                     15.1             15.1  No gap.
                                     analyzed.
SCU-W-Small-B.....................  Not directly                     22.2             22.5  Proprietary
                                     analyzed.                                               technology.
SCU-W-Large-B.....................  35%.................             27.6             32.9  Proprietary
                                                                                             technology.
SCU-A-Small-B.....................  41%.................             27.4             35.8  Proprietary
                                                                                             technology.
SCU-A-Large-B.....................  36%.................             29.6             33.4  Proprietary
                                                                                             technology.
----------------------------------------------------------------------------------------------------------------

Baseline Efficiency Levels for Currently Unregulated Ice Makers

    For continuous and high-capacity batch type ice makers, AHRI 
recommended that DOE derive its baseline efficiency levels from 
machines that are currently on the market, for which AHRI's new 
directory of certified products could be a useful information source. 
AHRI cautioned, however, that its certification program was new and 
that it expected the data to change after completion of its 2012 test 
program. (AHRI, No. 49 at p. 3)
    Manitowoc asserted that, while EPACT 2005 is the correct baseline 
efficiency level for batch equipment, continuous type ice machines do 
not have sufficient history under any alternative certification 
programs and therefore require careful review and analysis by DOE prior 
to setting efficiency levels. (Manitowoc, No. 54 at p. 3)
    Hoshizaki asserted that DOE should not use Canadian levels for 
continuous type ice makers and instead suggested that DOE use 
efficiency levels developed for machines that are currently on the 
market. (Hoshizaki, No. 53 at p. 1)
    In the preliminary analysis, DOE proposed a set of equations to 
represent baseline efficiency levels for the 12 continuous equipment 
classes. 77 FR 3404 (Jan. 24, 2012). The equations were developed based 
on publicly available information of continuous type ice maker energy 
use for products on the market. As there was no source of ice quality 
data for most of these products to allow calculation of the energy use 
consistent with the new test procedure, which calls for adjustment of 
the rating to account for ice hardness, DOE made these adjustments 
using ice hardness equal to 0.85 for nugget ice makers and 0.8 for 
flake ice makers. Further details of this analysis are available in the 
preliminary analysis TSD.
    DOE revised its development of continuous type ice maker efficiency 
levels for the NOPR, based on data for continuous type ice machines 
that was available on the AHRI database Web site as of October 11, 
2012. The database now contains ratings for ice quality, which DOE 
incorporated into its analysis. DOE's analyses consider higher max tech 
levels than the max available levels, as represented by the AHRI data, 
because the analysis considers use of design options, such as higher 
efficiency permanent magnet motors, which are not used in the majority 
of existing ice makers. DOE's continuous baseline levels for the NOPR 
analysis are presented in Table IV.11.
    DOE has taken advantage of the new information for continuous type 
ice makers that has become available on the AHRI Web site to support 
its selection of efficiency levels for these equipment classes.

General Methodology

    Howe asked that DOE further clarify the methodology it used to 
establish efficiency and technology levels, especially for equipment 
classes in which there are few models available. Howe also asked 
whether DOE considered the refrigerating conditions used to produce ice 
or the typical efficiency levels associated with the refrigeration 
system. (Howe, No. 51 at p. 3)
    DOE does not have sufficient resources to thoroughly analyze all

[[Page 14882]]

equipment classes. Hence, the analyses for some classes are used to 
represent other classes. The analysis prioritized those classes for 
which shipments and the number of models available are high. The energy 
model used to support the analysis, which is described in the NOPR TSD, 
considers the refrigerating conditions used to produce ice and the 
capacity and power input of the equipment's refrigerant compressors 
when operating at these conditions.
3. Design Options
    After conducting the screening analysis and removing from 
consideration the technologies described above, DOE included the 
remaining technologies as design options in the NOPR engineering 
analysis. These technologies are listed in Table IV.19, with indication 
of the equipment classes to which they apply.
[GRAPHIC] [TIFF OMITTED] TP17MR14.003

a. Improved Condenser Performance in Batch Equipment

    During the preliminary analysis, DOE considered size increase for 
the condenser to reduce condensing temperature and compressor power 
input. DOE requested comment on use of this design option and on the 
difficulty of implementing it in ice makers with size constraints.
    AHRI commented that most condensers are already optimized and 
occasionally oversized; therefore, further increasing condenser area 
would not have any efficiency benefits and could instead necessitate 
increased cabinet size. (AHRI, No. 49 at p. 2)
    Manitowoc commented that the outdoor condensers of RCUs can more 
easily accommodate size increases than the condensers incorporated into 
IMH equipment. However, Manitowoc also noted that increasing the size 
of the condenser coil in order to improve efficiency would necessitate 
an increased level of refrigerant. Manitowoc stated that this could 
require the installation of a larger receiver in the ice-making head, 
which may be difficult due to size constraints. (Manitowoc, Public 
Meeting Transcript, No. 42 at p. 59)
    Manitowoc added that increasing the size of the condenser while 
maintaining a constant evaporator size can also interfere with the 
ability of the ice machine to properly make ice over the full range of 
ambient conditions. Manitowoc stated that DOE's analysis is only 
concerned with performance at 90[emsp14][deg]F air/70[emsp14][deg]F 
water testing conditions, but that real ice makers have to work in air 
temperatures ranging from 50 to 110[emsp14][deg]F and water 
temperatures from 40 to 90[emsp14][deg]F. As air temperature drops, 
Manitowoc stated, unless special refrigerant management devices are 
employed, a larger condenser will be forced to store more refrigerant 
at a lower temperature. This will prevent batch type ice machines from 
being able to harvest ice at low ambient temperatures, according to 
Manitowoc. (Manitowoc, No. 54 at p. 2) Similarly, Scotsman commented 
that increasing the efficiency of the freeze cycle will lengthen the 
harvest process and minimize overall energy savings. (Scotsman, Public 
Meeting Transcript, No. 42 at pp. 59-60) Scotsman asserted that DOE's 
analysis of condenser surface area must include this impact on the 
batch harvest cycle. (Scotsman, No. 46 at p. 3)
    Hoshizaki commented that manufacturers would need more time to 
evaluate the implications of using larger water-cooled condensers on a 
closed-loop system. Although larger condensers would increase the 
efficiency of heat transfer, Hoshizaki opined that this benefit must be 
compared with the increased final cost to the consumer as well as the 
potential need to increase cabinet size. (Hoshizaki, No. 53 at p. 2)
    In response to Manitowoc's written comments, DOE has considered 
data obtained through testing of water-cooled units, as well as data 
provided by manufacturers on expected efficiency increases versus 
condenser growths.
    DOE notes that the key concerns expressed in Hoshizaki's comment 
relate to the potential need to increase cabinet size and the concern 
about whether the larger condenser (and perhaps cabinet) is cost-
justified. As discussed in section IV.C.d, DOE has considered a modest 
size increase for the ice-making head for some ice maker equipment 
classes. Answering the question of whether condenser size increase 
within these modest allowances for cabinet size increase is cost-
effective is a key goal of the DOE analyses--the potential that the 
approach is not cost-effective is not a relevant argument for screening 
out this technology.

[[Page 14883]]

    In response to Scotsman and Manitowoc's written comments, DOE 
conducted testing to assess the correlation of batch type ice maker 
efficiency level with condensing temperature and has used this 
information, which accounts for the increase in harvest energy use 
associated with lower condensing temperature, to adjust its analyses. 
DOE tested a water-cooled batch unit using different water-flow 
settings; the results are shown in Table IV.20. DOE notes that these 
test results indicate that there are energy benefits from increasing 
condenser area, even though harvest cycle energy use increases. The 
results show that the increase in harvest cycle energy use represents a 
loss of 15 percent of the gain that would have been achieved if harvest 
energy use had not increased. DOE used these test results to adjust the 
modeled harvest energy when condenser improvement such as size increase 
was applied as a design option. These analyses are described in chapter 
5 of the NOPR TSD.

                                    Table IV.20--Condenser Water Test Results
----------------------------------------------------------------------------------------------------------------
                                                                  Test setting 1
                         Test attribute                              (factory-    Test setting 2  Test setting 3
                                                                     setting)
----------------------------------------------------------------------------------------------------------------
Condensing Temperature [deg]F...................................              97             107             111
Ice Harvest Rate lb ice/24 hours................................             375             361             355
Energy Consumption kWh/100 lb ice...............................            4.67            5.13            5.28
Average Harvest Time (s)........................................             104              81              73
Average Harvest Energy Wh.......................................            21.2            17.9            17.0
Average Harvest Energy per Ice kWh/100 lb.......................            0.53            0.44            0.42
Percent of Savings Lost due to Harvest Energy Increase..........             15%             12%             N/A
----------------------------------------------------------------------------------------------------------------

    DOE inspected baseline and high-efficiency units, including 
condenser sizes typical of each. For equipment classes for which DOE 
inspected high-efficiency units, DOE considered maximum condenser sizes 
consistent with the inspected units. For equipment classes where DOE 
did not have such information, DOE considered maximum condenser sizes 
consistent with the range of chassis sizes of commercially available 
equipment of the given class and harvest capacity. DOE notes that none 
of the evaluated IMH or SCU equipment has receivers, thus indicating 
that they would not be needed for the range of condenser sizes DOE 
considered in its analysis for these equipment classes. DOE also 
considered whether a larger remote condenser would require installation 
of a larger receiver, and talked with receiver manufacturers about 
receiver sizing. DOE did not seek to increase receiver sizes for any of 
the models analyzed.
    In response to comments by AHRI and Manitowoc, DOE studied the 
condensing temperatures of tested units to set limits for available 
efficiency improvement. DOE in its analyses considered only condenser 
changes that resulted in condensing temperatures within the range of 
those observed in the tested ice makers for comparable equipment 
classes (for instance DOE used different minimum condensing 
temperatures for air-cooled and water-cooled equipment). These analyses 
are described in chapter 5 of the NOPR TSD.
b. Harvest Capacity Oversizing
    NPCC noted that many ice makers may be oversized for their 
particular applications, suggesting that there would be little 
compromise of customer utility if the capacity available for a given 
ice maker chassis size decreased as a result of design changes that 
increased their efficiency. (NPCC, Public Meeting Transcript, No. 42 at 
pp. 60-61)
    Manitowoc countered that its customers are very aware of how much 
ice they need and that they consequently size machines for peak demand 
days, rather than average use. Manitowoc added that it is very 
important that customers not shut down on days with high demand, such 
as the 4th of July. (Manitowoc, Public Meeting Transcript, No. 42 at p. 
63)
    DOE did not investigate potential down-sizing of equipment, instead 
relying on information regarding commercially available units as the 
basis for consideration of what sizes are acceptable for given capacity 
levels.
c. Open-Loop Condensing Water Designs
    Open-loop cooling systems use condenser cooling water only once 
before disposing of it, whereas closed-loop (single-pass) systems 
repeatedly recirculate cooling water. In closed loops, the water is 
cooled in a cooling tower and recirculated to accept heat from the 
automatic commercial ice maker condenser again. Alternatively, the 
water passes through another heat exchanger where the heat is removed 
and used in another piece of equipment, such as a space or water 
heater, before cycling back to the ice maker condenser. Although some 
condenser water may still be lost to evaporation in cooling towers, 
closed-loop systems still have negligible condenser water disposal or 
consumption compared to open-loop systems.
    The Alliance expressed strong opposition to open-loop condenser 
water cooling for automatic commercial ice makers, arguing that such 
technology is obsolete and excessively wastes water and energy. The 
Alliance noted that more energy-efficient technologies such as air 
cooling, remote condensing, and closed-loop water-cooling systems have 
made single-pass water cooling unnecessary. Therefore, the Alliance 
urged DOE to disallow all ice makers that can be installed and operated 
with a single-pass cooling system. (Alliance, No. 45 at pp. 3-4)
    DOE recognizes that open-loop water-cooling systems use 
significantly more water than other condenser cooling technologies. 
However, DOE determined after the Framework public meeting that its 
rulemaking authority extends only to the manufacturing of equipment and 
not to the installation or usage of equipment. Thus, DOE has no 
authority to mandate that dual-use water-cooled machines (those that 
can be used in either closed-loop or open-loop configurations) be used 
with closed-loop systems. Furthermore, DOE is not aware of any 
potential design requirements it could impose that would effectively 
prohibit open-loop cooling systems for water-cooled ice makers. Even if 
a design requirement could be effective in this regard, DOE can only 
adopt either a prescriptive design requirement or a performance 
standard for commercial equipment. (42 U.S.C. 6311(18)) The focus of 
this rulemaking is an equipment performance standard. Due to the nature

[[Page 14884]]

of this rulemaking, DOE is not considering any prescriptive design 
requirements, and open-loop cooling systems therefore remain a viable 
option for manufacturers of water-cooled ice makers who want to reduce 
their water consumption.
d. Condenser Water Flow
    EPACT 2005 prescribes maximum condenser water use levels for water-
cooled cube type automatic commercial ice makers. (42 U.S.C. 6313(d)) 
\34\ For units not currently covered by the standard (continuous 
machines of all harvest rates and batch machines with harvest rates 
exceeding 2,500 lb ice/24 hours), there currently are no limits on 
condenser water use.
---------------------------------------------------------------------------

    \34\ The table in 42 U.S.C. 6313(d)(1) states maximum energy and 
condenser water usage limits for cube-type ice machines producing 
between 50 and 2,500 lb of ice per 24 hour period (lb ice/24 hours). 
A footnote to the table states explicitly the water limits are for 
water used in the condenser and not potable water used to make ice.
---------------------------------------------------------------------------

    In this rulemaking, DOE considered using higher condenser water 
flow rates as a design option for water-cooled ice makers.
    In chapter 2 of the preliminary TSD, DOE indicated that the ice 
maker standards primarily focus on energy use, and that DOE is not 
bound by EPCA to comprehensively evaluate and propose reductions in the 
maximum condenser water consumption levels, and likewise has the option 
to allow increases in condenser water use, if this is a cost-effective 
way to improve energy efficiency.
    DOE did not analyze potential changes in condenser water use 
standards during the preliminary analysis. However, it did propose an 
approach for balancing energy use and condenser water use in the 
engineering analysis in a way that maintains the rulemaking's focus on 
energy use reduction while appropriately considering the cost 
implications of changing condenser water use. DOE proposed using 
appropriate representative values for water and energy costs, product 
lifetime, and discount rates to calculate a representative LCC for 
baseline and modified design configurations as part of the engineering 
analysis. In this way, the engineering analysis would develop a 
relationship between energy efficiency and manufacturing cost as is 
customary in engineering analyses (i.e., the cost-efficiency curves), 
but the ordering of different design configurations in this curve would 
be based on minimizing the representative LCC calculated for the 
candidate design configurations at each successive efficiency level. 
Using this proposed analytical approach, an energy-saving increase in 
condenser water use would be expected to be cost-effective when the 
remaining design options, which do not change water use, have greater 
LCC increases than the option of increasing condenser water use. This 
approach would avoid the complexity of developing several cost curves 
representing multiple condenser water use levels and determining in the 
downstream analyses the efficiency levels at which increasing condenser 
water use would be appropriate. During the preliminary analysis, DOE 
requested comment on this approach for addressing condenser water use.
    AHRI commented that water-cooled ice makers are already efficient 
products and that reducing condenser water consumption could 
significantly increase their energy use. AHRI and Scotsman both 
cautioned that DOE must consider the impact that lower condensing 
temperatures could have on the harvest rate of batch type ice makers 
and ensure that product utility is not diminished by implementing new 
condenser water use standards. (AHRI, No. 49 at p. 4; Scotsman, Public 
Meeting Transcript, No. 42 at p. 70)
    In the public meeting discussions, Manitowoc suggested that DOE 
consider decreasing the allowable condenser water use, which could be a 
more economical approach if water costs increase. (Manitowoc, Public 
Meeting Transcript, No. 42 at pp. 70-72) However, Manitowoc also noted 
in its written comments that condenser water use is carefully managed 
to ensure that ice makers can harvest ice under worst-case conditions 
and maintain water velocities within specified limits in order to avoid 
erosion. Manitowoc expressed doubt about the ability of DOE's energy 
model to accurately predict the effects of these variables, and for 
this reason, Manitowoc strongly discouraged introducing condenser water 
use standards. (Manitowoc, No. 54 at pp. 3-4)
    DOE stated that EPCA's anti-backsliding provision in section 
325(o)(1), which lists specific products for which DOE is forbidden 
from prescribing amended standards that increase the maximum allowable 
water use, does not include ice makers. However, Earthjustice asserted 
that DOE lacks the authority to relax condenser water limits for water-
cooled ice makers. Earthjustice argued that the failure of section 
325(o)(1) to specifically call out ice maker condenser water use as a 
metric that is subject to the statute's prohibition against the 
relaxation of a standard is not determinative. On the contrary, 
Earthjustice maintained that the plain language of EPCA shows that 
Congress intended to apply the anti-backsliding provision to ice 
makers. Earthjustice commented that section 342(d)(4) requires DOE to 
adopt standards for ice-makers ``at the maximum level that is 
technically feasible and economically justified, as provided in 
[section 325(o) and (p)].'' (42 U.S.C. 6313(d)(4)) Earthjustice stated 
that, by referencing all of section 325(o), the statute pulls in each 
of the distinct provisions of that subsection, including, among other 
things, the anti-backsliding provision, the statutory factors governing 
economic justification, and the prohibition on adopting a standard that 
eliminates certain performance characteristics. By applying all of 
section 325(o) to ice-makers, section 342(d)(4) had already made the 
anti-backsliding provision applicable to condenser water use, according 
to Earthjustice. Finally, Earthjustice stated that even if DOE 
concludes that the plain language of EPCA is not clear on this point, 
the only reasonable interpretation is that Congress did not intend to 
grant DOE the authority to relax the condenser water use standards for 
ice makers. Earthjustice added that the anti-backsliding provision is 
one of EPCA's most powerful tools to improve the energy and water 
efficiency of appliances and commercial equipment, and Congress would 
presumably speak clearly if it intended to withhold its application to 
a specific product. (Earthjustice, No. 47 at pp. 4-5)
    Scotsman commented that balancing condenser water use with energy 
use was a reasonable analytical approach. (Scotsman, No. 46 at p. 3) 
Scotsman added that including condenser water usage in the overall 
energy use of a machine would also impact continuous type ice machines 
by affecting ice hardness. (Scotsman, Public Meeting Transcript, No. 42 
at p. 70)
    The Alliance argued that water use and energy use cannot be 
compared on a simple price basis because of key differences between the 
two resources. While energy comes from multiple sources and is a 
commodity whose prices fluctuate based on supply and demand, fresh 
water is in limited supply, the Alliance stated. Hence, water prices 
are heavily regulated and based on the cost of treatment and delivery, 
which is less directly affected by supply and demand, according to the 
Alliance. Therefore, the Alliance recommended that DOE consider the 
marginal costs of alternative water sources, such as desalination, in 
its analyses to properly account for all

[[Page 14885]]

water costs as applied to water-cooled condensers. (Alliance, No. 45 at 
p. 4)
    In response to Earthjustice's comment, DOE maintains its position 
from the preliminary analysis that the anti-backsliding provision of 
EPCA (42 U.S.C. 6313(d)(4)) does not apply to condenser water use in 
batch-type automatic commercial ice makers. While EPCA's anti-
backsliding provision (42 U.S.C. 6295(o)) applies to consumer products, 
42 U.S.C. 6313(d)(4) makes the backsliding provision applicable to 
automatic commercial ice makers. However, 42 U.S.C. Sec. 6295(o)(1) 
anti-backsliding provisions apply to water in only a limited set of 
residential appliances and fixtures. Under 42 U.S.C. Sec. 6295(o)(1), 
``the Secretary may not prescribe any amended standard which increases 
the maximum allowable energy use, or, in the case of showerheads, 
faucets, water closets, or urinals, water use, or decreases the minimum 
required energy efficiency, of a covered product.'' This provision 
links automatic commercial ice makers to the energy efficiency anti-
backsliding provision as a covered product, and does not include 
automatic commercial ice makers among the products covered by the water 
efficiency anti-backsliding provision. Thus, this section of EPCA 
prohibits DOE from amending any standard in such a way as to decrease 
minimum energy efficiency for any covered automatic commercial ice 
maker equipment class. It does not, however, prohibit an increase in 
water use in any products other than those enumerated in the statute, 
and nothing in 6313(d)(4) expands the specific list of equipment or 
appliances to which the water anti-backsliding applies. Therefore, an 
increase in condenser water use would not be considered backsliding 
under the statute. Nevertheless, the proposals do not include increases 
in condenser water use.
    Noting that condenser water standards are already in place for 
batch type ice makers, DOE has decided to consider an increase in 
condenser water use as a design option to improve energy efficiency for 
all water-cooled ice makers. Acknowledging the concerns of stakeholders 
such as AHRI, Manitowoc, and Scotsman, DOE recognizes that such an 
approach must consider the cost-effectiveness of this design option 
based on the end-user's water cost. DOE does not believe that the 
contemplated changes would diminish product utility, because an 
increase in the maximum allowed condenser water use would increase the 
flexibility of manufacturers to meet the condenser water use standard. 
Manufacturers would obviously not be required to increase condenser 
water use, especially if such a design decision would negatively impact 
the energy use or harvest rate of their ice makers.
    In response to Manitowoc's observation that water velocities must 
be maintained within specified limits in order to avoid erosion, DOE 
conducted an analysis to determine whether current levels of water use 
in water-cooled condensers are close to exceeding these limits. DOE has 
learned from manufacturers of water-cooled condensers that water flow 
rates generally should not exceed 3.5 gallons per minute per nominal 
ton of condenser cooling capacity (gpm per ton).\35\ DOE's analysis of 
test data for batch machines shows that the maximum condenser water 
flow rate occurs shortly after harvest, and that there is some room for 
increase of condenser water flow rate with the 3.5 gpm per ton limit. 
DOE considered some increase of condenser water flow for batch type 
units that did not already operate at this limit at the start of the 
freeze cycle. Unlike batch type ice makers, whose condenser loads spike 
shortly after the harvest cycle, continuous type ice makers typically 
operate in steady-state. DOE's testing shows that flow rates in 
continuous type ice makers are therefore far from the maximum levels 
recommended to prevent erosion. However, DOE notes that it did not 
perform direct analysis on any water-cooled continuous equipment 
classes.
---------------------------------------------------------------------------

    \35\ Personal communication with Piyush Desai at Packless 
Industries on May 16, 2012.
---------------------------------------------------------------------------

    As the manufacturers and AHRI point out, DOE must be careful in the 
analysis of condenser water to ensure that the complex relationship 
between condenser water and machine energy usage are modeled correctly. 
However, balancing energy use and condenser water use following the 
approach outlined above greatly simplifies an otherwise highly complex, 
three-dimensional analysis of design options, condenser water use 
levels, and efficiency. This analysis approach helped DOE determine 
whether increasing condenser water limits could cost-effectively save 
electricity.
    DOE tested three water-cooled ice makers with varying condensing 
water flow to evaluate the potential for energy savings and the cost-
effectiveness of using this approach. The results of this evaluation 
for a batch type ice maker are shown in Table IV.21. The analysis 
assumed that in the field half of the ice makers would be used in open 
systems and half in closed-loop systems, which significantly reduce 
water flow, as documented in chapter 5 of the NOPR TSD.

                              Table IV.21--Test Data for a Water-Cooled Batch Unit
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Condensing Temperature, [deg]F..................................              97             107             111
Harvest Capacity, lb/24 hr......................................             375             361             355
Energy Consumption, kWh/100 lb..................................            4.67            5.13            5.28
LCC Operating Cost, $/100 lb....................................           $1.75           $1.38           $1.32
Condenser Water Use, gal/100 lb.................................           165.4           106.5            94.1
----------------------------------------------------------------------------------------------------------------

    The analysis shows that increasing condenser water flow is not a 
cost-effective way to reduce energy use. This was demonstrated also for 
the two continuous type ice makers that were tested. As a result, DOE 
did not comprehensively evaluate this approach for all water-cooled 
equipment classes in its engineering analysis. Additional details are 
available in chapter 5 of the NOPR TSD.
e. Compressors
    Scotsman commented that the high-EER compressors in DOE's analysis 
may not be feasible for ice makers, particularly batch type ice makers, 
in which liquid refrigerant can often enter the compressor during the 
harvest process. Scotsman noted that the design changes used by 
compressor manufacturers to improve EER can reduce reliability, for 
instance placing the compressor suction line closer to the suction 
intake within the shell, which can cause liquid refrigerant to impinge 
on the suction valve during harvest and rapidly lead to compressor 
failure.

[[Page 14886]]

(Scotsman, No. 46 at p. 5) Manitowoc echoed Scotsman's second point, 
indicating that a direct suction compressor would allow liquid to enter 
the compressor cylinder and damage the valve system. (Manitowoc, No. 54 
at p. 2)
    In response to these comments, DOE consulted with manufacturers 
regarding which compressors are appropriate for ice makers. DOE removed 
from its analysis those compressors that manufacturers have indicated 
are unsuitable for use in ice makers. As part of the NOPR analyses, DOE 
also considered additional compressors of compressor lines that 
manufacturers indicated are acceptable. The impact of these changes in 
the analysis on the predicted potential efficiency improvement 
associated with use of higher efficiency compressors varied by 
equipment class. Additional details are available in chapter 5 of the 
NOPR TSD.
f. Limitations on Available Design Options
    Manitowoc commented that the small size of the ice maker industry 
makes it difficult for ice maker manufacturers to implement new 
technologies or influence the component (e.g., compressor or motor) 
suppliers that they depend on for efficiency gains. Manitowoc noted 
that, compared to other appliance industries, ice maker sales volumes 
do not drive component suppliers to make design changes, so ice maker 
manufacturers are limited to those changes that suppliers will 
implement for larger customers. Furthermore, Manitowoc noted that, 
rather than being independent appliances, ice makers are typically part 
of a larger equipment chain for delivering food service products, which 
places them under physical constraints and causes their technology 
changes to have broader impacts on the entire food delivery industry. 
(Manitowoc, Public Meeting Transcript, No. 42 at pp. 14-15)
    For the NOPR analyses, DOE has used design options that are 
commercially available. Many of these technologies are found in ice 
makers that were inspected, and a few are available from component 
manufacturers. DOE has taken care to ensure that those design options 
identified do apply to these products.
     For example, DOE has removed from its analysis any 
compressors that may potentially interfere with ice maker operation 
(based on their design).
     DOE has also included an option to increase chassis sizes 
(in order to grow internal components such as heat exchangers), but 
limited chassis growth design options to only cover the modest levels 
suggested by the available equipment offerings
    Further information on DOE's analyses is contained in sections 
IV.D.4.e and IV.D.4.f.
4. Development of the Cost-Efficiency Relationship
    In this rulemaking, DOE has adopted a combined efficiency level/
design option/reverse engineering approach to developing cost-
efficiency curves. To support this effort, DOE developed manufacturing 
cost models based heavily on reverse engineering of products to develop 
a baseline MPC. DOE estimated the energy use of different design 
configurations using an energy model whose input data was based on 
reverse engineering, automatic commercial ice maker performance 
ratings, and test data. DOE combined the manufacturing cost and energy 
modeling to develop cost-efficiency curves for automatic commercial ice 
maker equipment based on baseline-efficiency equipment selected to 
represent their equipment classes. Next, DOE derived manufacturer 
markups using publicly available automatic commercial ice maker 
industry financial data, in conjunction with manufacturer feedback. The 
markups were used to convert the MPC-based cost-efficiency curves into 
MSP-based curves. Details of these analyses developed for the 
preliminary analysis were presented in the preliminary analysis TSD and 
in a supplementary data publication posted on the rulemaking Web site.
    Stakeholder comments regarding DOE's preliminary engineering 
analyses addressed the following broad areas:
    1. Estimated costs in many cases were lower than manufacturers' 
actual costs.
    2. Estimated efficiency benefits of many modeled design options 
were greater than the actual benefits, according to manufacturers' 
experience with equipment development.
    3. DOE should validate its energy use model based on comparison 
with actual equipment test data.
    4. DOE should validate its cost-efficiency analysis by 
investigating the relationship of efficiency with retail prices for ice 
makers.
    5. The incremental costs in the engineering analysis should take 
into consideration the design, development, and testing costs 
associated with new designs.
    These topics are addressed in greater detail in the sections below.
a. Manufacturing Cost
    Manitowoc requested that DOE provide more information on the inputs 
and methodology behind calculating the MPCs for each efficiency level. 
(Manitowoc, Public Meeting Transcript, No. 42 at pp. 76-77) Manitowoc, 
Scotsman, and AHRI all asserted that it is important for DOE to 
accurately assess the potential incremental costs associated with each 
efficiency level, since they will drive the decisions in this 
rulemaking. (Manitowoc, Public Meeting Transcript, No. 42 at pp. 170-
171 and No. 54 at p. 1; Scotsman, Public Meeting Transcript, No. 42 at 
p. 173; AHRI, No. 49 at p. 6)
    Regarding the accuracy of DOE's cost model, Manitowoc commented 
that some of the incremental costs between efficiency levels were 
incorrect. Manitowoc added that, while it could not provide its bill of 
materials, it would be willing to give DOE guidance regarding the 
actual costs of implementing technology design changes at realistic 
volumes. (Manitowoc, Public Meeting Transcript, No. 42 at pp. 80-81) 
Scotsman agreed with Manitowoc that the table of incremental costs was 
optimistic at best and added that changing one component in an ice 
maker will often require also changing other components, further 
affecting incremental costs. (Scotsman, Public Meeting Transcript, No. 
42 at p. 85)
    Specifically, Manitowoc, Scotsman, and AHRI each stated the belief 
that DOE has underestimated the incremental costs of its proposed 
design options. (Manitowoc, No. 54 at p. 1; Scotsman, No. 46 at p. 5; 
AHRI, No. 49 at p. 6) For example, DOE estimated that the incremental 
cost of using an electronically commutated motor (ECM) in place of a 
shaded pole motor would be $13, whereas Scotsman's supplier quoted an 
incremental cost of $35 for this same design option. Scotsman added 
that, because the ice maker industry is relatively low-volume, ice 
maker manufacturers face large cost premiums for component 
technologies. (Scotsman, No. 46 at p. 5) AHRI noted that DOE assumed 
that an 8 percent increase in compressor efficiency would cost only $9. 
However, AHRI asserted that most compressors currently used in ice 
makers are already mechanically optimized and could therefore achieve 
greater efficiency only by switching to permanent magnet motors, which 
would cost seven times more than DOE's incremental cost estimate. AHRI 
cautioned that DOE should not assume that information it derived for 
other rulemakings is automatically applicable to ice makers. AHRI also 
opined that DOE drastically underestimated the cost of increasing 
condenser surface area. (AHRI, No. 49 at p. 2) Finally, Manitowoc 
commented that DOE's cost

[[Page 14887]]

estimates for ECM versions of the fan motors and pumps were 
unrealistically low. (Manitowoc, No. 54 at p. 2)
    In response to Manitowoc's first comment, DOE has provided 
additional information correlating efficiency levels and design options 
in this NOPR and its accompanying TSD. The TSD details the design 
option changes and associated costs, calculated for each efficiency 
level for the equipment analyzed.
    In response to the comments by Manitowoc, Scotsman, and AHRI, DOE 
had received very limited feedback from manufacturers regarding cost 
estimates to support its preliminary engineering analysis. During the 
NOPR phase of this rulemaking, DOE emphasized the need to obtain 
relevant information from stakeholders by extending the comment period 
by 40 days and welcoming comment on specific details presented in the 
TSD regarding technology options and costs. Moreover, DOE's contractor 
again worked directly with manufacturers under non-disclosure 
agreements in order to obtain additional cost information.
    DOE has significantly revised its component cost estimates for the 
engineering analysis for the NOPR phase based on the additional 
information obtained, both in discussions with manufacturers and in 
stakeholder comments. DOE used the detailed feedback that it solicited 
from manufacturers to update its cost estimates for all ice maker 
components, significantly increasing its estimates of nearly all of 
these costs. Additional details on the adjusted component costs are 
available in chapter 5 of the NOPR TSD.
b. Energy Consumption Model
    The energy consumption model calculates the energy consumption of 
automatic commercial ice makers in kilowatt-hours per 100 lb of ice 
based on detailed description of equipment design. The DOE analysis for 
a given equipment class and capacity applied the model for a variety of 
design configurations representing different performance levels. The 
analysis starts with a baseline design, subsequently assessing the 
differing energy consumption for incrementally more-efficient equipment 
designs that utilize increasing numbers of design options. The results 
of the energy consumption model are paired with the cost model results 
to produce the points on the cost-efficiency curves, which correspond 
to specific equipment configurations. After the publication of the 
preliminary analysis, DOE received numerous stakeholder comments 
regarding the methodology and results of the energy consumption model.
    Manitowoc and Howe both commented that DOE's models significantly 
overstated the efficiency gains associated with many of the design 
options. (Howe, No. 51 at p. 3; Manitowoc, No. 54 at p. 2) As an 
example, Howe pointed out that using a more efficient fan may not have 
a significant impact on the overall efficiency of the ice maker, since 
the fan represents a small fraction of its overall energy use. (Howe, 
No. 51 at p. 3) Manitowoc added that its own tests on actual ice 
machines under controlled conditions resulted in lower performance 
gains than those predicted by the DOE models. (Manitowoc, No. 54 at p. 
2)
    Manitowoc commented that it would like to have more information on 
the models used in DOE's engineering analysis. In particular, Manitowoc 
stated that it would like to learn more about the FREEZE model, since 
it is difficult to model the process of freezing water into ice and 
even more difficult to model ice harvesting. Manitowoc noted that this 
model will drive DOE's estimation of energy efficiency and that it is 
important for manufacturers to understand the impacts of the model 
before new standards take effect, especially if new efficiency levels 
take manufacturers to technology levels far beyond their level of 
experience. (Manitowoc, Public Meeting Transcript, No. 42 at pp. 171-
173)
    Manitowoc also commented that the FREEZE model is limited by its 
inability to model the harvest portion of the batch cycle. Manitowoc 
stated that, although the harvest portion is shorter in duration than 
the freeze portion, it represents a significant fraction of energy 
consumption due to the higher energy input to the compressor and the 
additional energy required to cool the evaporator after each harvest. 
Manitowoc added that many changes that improve the freeze operation 
efficiency, such as increasing condenser area, also reduce harvest 
operation efficiency. Manitowoc expounded on this example by noting 
that the increased condenser surface area reduces the design 
temperature of the refrigerant, which results in lower energy available 
during the harvest cycle, which in turn results in slower harvest times 
and an overall increase in energy during the harvest cycle. Manitowoc 
commented that DOE's FREEZE model is unable to account for such 
behavior. (Manitowoc, No. 54 at pp. 1-2)
    Scotsman and Hoshizaki both commented that the energy model will be 
incomplete until it has been validated with real test results of 
different technology design options. (Scotsman, Public Meeting 
Transcript, No. 42 at pp. 173-174) Hoshizaki asserted that DOE should 
not use the FREEZE model in the analyses until it has been validated. 
(Hoshizaki, No. 53 at p. 1)
    Scotsman inquired whether DOE intends to validate its cost-
efficiency model by implementing these design changes on actual 
machines and evaluating their subsequent energy performance. (Scotsman, 
Public Meeting Transcript, No. 42 at pp. 85-86)
    In response to comments by Manitowoc, Howe, and Scotsman, DOE has 
made changes to the energy modeling based on feedback received from the 
manufacturers under non-disclosure agreements. To address concerns by 
Manitowoc that the FREEZE model did not adequately model the effects of 
increased condenser size on the harvesting energy, DOE also performed 
testing of a water-cooled condenser batch unit, and used the test data 
to develop a relationship between condensing temperatures and harvest 
energy. DOE did note that lower condensing temperatures did result in 
lower overall energy consumption, but higher harvest energy 
consumption.

                              Table IV.22--Test Data for a Water-Cooled Batch Unit
----------------------------------------------------------------------------------------------------------------
             Test level                         Units                    1               2               3
----------------------------------------------------------------------------------------------------------------
Condenser Temperature..............  [deg]F.....................           97.36          107.47          111.36
Ice Harvest........................  lb/24 hr...................             375             361             355
Overall Energy Consumption.........  kWh/100 lb.................            4.67            5.13            5.28
Average Harvest Energy Consumption.  Wh.........................           21.21           17.86           17.03
LCC Operating Cost.................  $/100 lb...................           $1.75           $1.38           $1.32
Condenser Water Use................  gal/100 lb.................           165.4           106.5            94.1
----------------------------------------------------------------------------------------------------------------

[[Page 14888]]

    Further information on DOE's engineering analysis and energy model 
adjustments is contained in sections IV.D.4.e and IV.D.4.f.
c. Retail Cost Review
    AHRI and Hoshizaki both questioned the accuracy of DOE's 
incremental cost-efficiency analysis. AHRI and Hoshizaki recommended 
that DOE validate it by comparing its results with actual retail 
prices. (AHRI, Public Meeting Transcript, No. 42 at pp. 78-80, 82-83, 
174-175, and No. 49 at p. 6; Hoshizaki, Public Meeting Transcript, No. 
42 at p. 84 and No. 53 at p. 1).
    In response to AHRI's and Hoshizaki's request for cost validation, 
DOE prepared a price analysis for automatic commercial ice makers to 
evaluate the correlation of price with higher ice maker efficiency. DOE 
collected list price information from publicly available automatic 
commercial ice maker manufacturer price sheets for 470 ice makers. DOE 
collected other information relevant to the analysis appropriate 
sources, including equipment dimensions, harvest capacity, ENERGY STAR 
qualification, and energy use. For equipment classes for which there 
were data available for more than 20 ice makers, price and ice harvest 
rate were shown to have a strong linear correlation, with R-squared 
values ranging from 0.63 to 0.84. This result indicates that customers 
pay more for higher-capacity ice makers.
    While an initial evaluation of price trends with efficiency 
suggested that prices are higher for higher efficiency ice makers, 
subsequent analysis suggests that this trend can be attributed to the 
trend for reduction in energy use for higher harvest capacity and the 
aforementioned relationship between price and harvest capacity. For the 
equipment classes for which there were sufficient ice makers to 
analyze, DOE determined the best-fit linear relationship predicting 
price as a function of ice harvest rate. DOE then evaluated the 
relationship between each ice maker's price differential (i.e., the 
difference between its price and the best-fit linear function), 
expressed as a percentage of the predicted price, with the ice maker's 
energy consumption rate (in kWh/100 lb ice), developing best-fit linear 
relationships for these trends. DOE noted that the linear relationships 
showed either no growth or very small growth in price as energy 
consumption increased. These results indicate that there is no 
correlation between higher efficiency and higher retail prices for ice 
machines. However, DOE did not conclude, based on this analysis, that 
there would be no costs associated with improving equipment 
efficiency--rather, it concluded that retail prices are not a reliable 
indicator of these costs. Additional information on this analysis can 
be found in chapter 3 of the NOPR TSD.
d. Design, Development, and Testing Costs
    Hoshizaki commented that DOE's incremental cost-efficiency analysis 
must include all aspects of design changes, including the additional 
design time, testing, and increased labor, when calculating incremental 
costs. Hoshizaki added that manufacturers could help DOE by reviewing 
the actual costs associated with redesigning their machines to meet the 
2010 DOE energy standards as well as ENERGY STAR standards. Hoshizaki 
expressed its willingness to collaborate with DOE and AHRI. (Hoshizaki, 
No. 53 at p. 3)
    DOE incorporates the cost of additional design time, testing, 
labor, and tooling into its manufacturer impacts analysis, as described 
in section IV.J. During the NOPR analyses, DOE and its contractors 
contacted manufacturers and obtained related costs under non-disclosure 
agreements. More information on these analyses is available in section 
IV.J.
e. Empirical-Based Analysis
    In response to comments from Scotsman and Hoshizaki about the 
validity of the energy model, DOE investigated using an empirical 
efficiency level approach for the engineering analysis rather than the 
approach combining energy modeling and manufacturing cost modeling that 
was used in the preliminary analysis. DOE performed this analysis for 
eight batch equipment classes and three continuous equipment classes. 
The alternative approach was to develop the cost-efficiency curves 
based on rated or tested automatic commercial ice makers energy use 
levels and costs estimated using the manufacturing cost model with 
updates from manufacturer discussions, as described in section 
IV.D.4.a. To support the empirical analysis, DOE purchased and tested 
20 additional ice makers, giving DOE a total of 39 ice makers for 
evaluation.
    Table IV.23 shows the resulting costs for equipment classes that 
were analyzed using the empirical approach and the energy modeling 
approach. The incremental cost of reaching a 15 percent below baseline 
efficiency level is listed below. In 7 out of 9 equipment classes, the 
energy modeling approach result was far more conservative (i.e., 
resulted in higher incremental cost estimates) than the empirical 
approach result; DOE estimated a negative cost-efficiency relationship 
in five of these cases for the empirical approach.

Table IV.23--Comparison of NOPR and Empirical Analysis Approaches at the
                          15% Efficiency Level
------------------------------------------------------------------------
                                          15% EL             15% E
                                     Incremental cost   Incremental cost
                                      from empirical       from NOPR
                                         approach      (energy modeling)
------------------------------------------------------------------------
IMH-A-Small-B.....................              $4.88             $45.00
IMH-A-Large-B.....................            (32.32)              39.00
IMH-W-Small-B.....................           (102.62)              37.00
IMH-W-Medium-B....................           (543.66)              53.00
RCU-NRC-Small-B...................               4.70               * NA
RCU-NRC-Large-B...................             166.03             198.00
SCU-A-Large-B.....................           (106.45)              40.00
SCU-A-Small-B.....................              47.41              32.00
IMH-A-C...........................              74.60              46.00
RCU-NRC-C.........................           (354.91)               * NA
SCU-A-C...........................           (244.80)              28.00
------------------------------------------------------------------------
* The NOPR analysis did not directly analyze this equipment class.

[[Page 14889]]

    DOE compared the results of the empirical analysis and the results 
of the energy modeling, and concluded that the energy modeling results 
provided a better and more consistent forecast in the ability of 
manufacturers to reach certain efficiency levels. While the analyses 
rigorously account for the cost differences in key components that 
affect energy use, the costs to achieve higher efficiency levels range 
from higher than the NOPR estimates to very low to negative. DOE is 
concerned that, while the calculated cost differences may accurately 
reflect actual cost differences between the chosen pairs of models, the 
results may be very dependent on the details associated with the 
specific model selections, and may vary depending on the units that are 
selected. DOE's empirical analysis does indicate that the energy 
modeling approach does not underestimate the cost-efficiency steps 
required to reach higher efficiencies. DOE believes that careful 
calibration of the energy model combined with reassessment of the cost 
model can result in accurate cost-efficiency curves.
    Thus, DOE decided to proceed with the energy modeling approach as 
the main basis for the engineering analysis. DOE has addressed many of 
the stakeholder comments as it updated the energy modeling analysis. 
The details of the energy modeling approach are described in the next 
section, section IV.D.4.f.
    Additional details and results of the empirical analysis are 
available in chapter 5 of the NOPR TSD. DOE believes that the results 
of the empirical analyses support the results of DOE's design option 
analysis.
f. Revision of Preliminary Engineering Analysis
    After investigation of and rejection of an empirical efficiency 
level analysis approach, DOE instead developed the NOPR engineering 
analysis by updating the preliminary engineering analysis. This 
included making adjustments to the manufacturing cost model as 
described in section IV.D.4.a. It also included adjustments to energy 
modeling.
    The design options considered in the analysis changed, as the 
discussion of the updated screening analysis details in section IV.C.
    DOE also made several changes to the FREEZE energy model used to 
estimate energy use of different ice maker design configurations. To 
address the concerns raised by Manitowoc and Howe, DOE adjusted its 
energy models based on input received in manufacturers' public and 
confidential comments and discussions DOE's contractor conducted under 
non-disclosure agreements. These changes included:
     Adjustment of the compressor coefficients for batch type 
ice makers;
     using data from tests of ice makers to model the increase 
of harvest energy as condensing temperature decreases for batch type 
ice makers;
     developing an approach based on test data to determine the 
condensing temperature reductions associated with use of larger water-
cooled condensers;
     limiting adjustments to the potable water use of batch 
products to a minimum of 20 gallons per 100 lb (or the starting potable 
water use level, if lower)
     incorporating energy use reduction for drain water heat 
exchangers used in batch equipment.
    Finally, for the max-tech design options that extended beyond what 
was typically found in commercially available products (such as 
permanent magnet motors and drain water heat exchangers) that could not 
be calibrated against existing units, DOE relied on testing and 
literature to properly account for the energy savings of these units.
    For drain water heat exchangers, DOE performed testing of a batch 
type ice maker with a commercially available drain water heat 
exchanger, and used the test results to calibrate the energy savings 
obtained from this technology for each equipment class where it was 
applied.
    DOE used motor efficiency ratings discussed in the preliminary 
analysis and verified with stakeholders to scale the motor use of each 
component using permanent magnet motors. During the NOPR analyses, 
DOE's energy model was calibrated to properly account for the energy 
consumption of each component, and for energy reductions resulting in 
jumps to PSC technologies. Increases in the efficiency of the motor 
components can then be expressed as reductions in the energy 
consumption of these components.
    DOE calibrated the efficiency gains calculated by the energy model 
against the design options and test results gathered during the 
empirical analysis investigation. DOE used this comparison to determine 
the suite of design options that should be found at the appropriate 
high-efficiency level, and calibrated the results of the energy against 
the inspected results.
    For example, DOE inspected a pair of IMH-A-Small-B automatic 
commercial ice makers with measured efficiency levels of 2.2 percent 
below baseline and 17.5 percent below baseline, and noted the following 
changes between units:
     Increases in both the evaporator face area and condenser 
volume, and an increase in the chassis size to accommodate these 
growths,
     an increase in condenser fan size and a change from an SPM 
motor to a PSC motor, and
     an increase in compressor EER.
    In the energy model, DOE separated out each of the different design 
options and considered separately, ordering them in order of cost-
efficiency. For this equipment class, DOE had the following design 
options to increase efficiency from baseline to 23.5 percent below 
baseline, as shown in Table IV.24.

                Table IV.24--IMH-A-Small-B Design Options
------------------------------------------------------------------------
         % Below baseline                      Design option
------------------------------------------------------------------------
0.00.............................  Baseline.
6.22.............................  Increase compressor EER from 4.86 EER
                                    to 5.25 EER.
7.71.............................  Increase condenser width (no chassis
                                    size increase).
20.52............................  Increase Evaporator Area (with
                                    chassis size increase).
23.51............................  Switch to PSC Condenser Fan Motor.
------------------------------------------------------------------------

    In some instances, DOE considered slightly different design 
options, especially when DOE's analysis found that more efficient 
compressor options were available. For example, the maximum compressor 
EER used in the energy modeling analysis was more efficient than the 
inspected unit compressor EER. This is the reason this suite of design 
options reaches higher efficiencies. DOE did not consider chassis sizes 
larger than those available on the market.
    DOE believes that these changes help ensure that the energy model 
results accurately reflect technology behavior in the market. Further 
details on the analyses are available in chapter 5 of the NOPR TSD.

E. Markups Analysis

    DOE applies multipliers called ``markups'' to the MSP to calculate 
the customer purchase price of the analyzed equipment. These markups 
are in addition to the manufacturer markup (discussed in section 
IV.D.4) and are intended to reflect the cost and profit margins 
associated with the distribution and sales of the equipment between the 
manufacturer and customer. DOE identified three major distribution 
channels for automatic commercial ice makers, and markup values were 
calculated for each distribution channel based on industry financial 
data. Table IV.25 shows the three distribution

[[Page 14890]]

channels and the percentage of the shipments each is assumed to 
reflect. The overall markup values were then calculated by weighted-
averaging the individual markups with market share values of the 
distribution channels. See chapter 6 of the NOPR TSD for more details 
on DOE's methodology for markups analysis.

                                 Table IV.25--Distribution Channel Market Shares
----------------------------------------------------------------------------------------------------------------
                                                                                                    Contractor
                                                                     National       Wholesaler       channel:
                                                                      account        channel:       Contractor
                                                                     channel:      Manufacturer    purchase from
                         Analysis phase                            Manufacturer   to distributor    distributor
                                                                     direct to      to customer         for
                                                                   customer  (1-  (2-party)  (%)   installation
                                                                    party)  (%)                   (3-party)  (%)
----------------------------------------------------------------------------------------------------------------
Preliminary Analysis............................................               6              32              62
NOPR............................................................               0              38              62
----------------------------------------------------------------------------------------------------------------

    In general, DOE has found that markup values vary over a wide range 
based on general economic outlook, manufacturer brand value, inventory 
levels, manufacturer rebates to distributors based on sales volume, 
newer versions of the same equipment model introduced into the market 
by the manufacturers, and availability of cheaper or more 
technologically advanced alternatives. Based on market data, DOE 
divided distributor costs into (1) direct cost of equipment sales; (2) 
labor expenses; (3) occupancy expenses; (4) other operating expenses 
(such as depreciation, advertising, and insurance); and (5) profit. DOE 
assumed that, for higher efficiency equipment only, the ``other 
operating costs'' and ``profit'' scale with MSP, while the remaining 
costs stay constant irrespective of equipment efficiency level. Thus, 
DOE applied a baseline markup through which all estimated distribution 
costs are collected as part of the total baseline equipment cost, and 
the baseline markups were applied as multipliers only to the baseline 
MSP. Incremental markups were applied as multipliers only to the MSP 
increments (of higher efficiency equipment compared to baseline) and 
not to the entire MSP. Taken together the two markups are consistent 
with economic behavior in a competitive market--the participants are 
only able to recover costs and a reasonable profit level.
    DOE received a number of comments regarding markups after the 
publication of the preliminary analysis.
    AHRI stated that equipment markups often result in retail prices 
that are lower than what is observed in the market place, and stated 
that DOE should supplement its analysis with a survey or retail sale 
prices. (AHRI, No. 49 at pp. 4-5) Scotsman suggested reviewing 
equipment pricing on the internet because many ice makers are available 
online. (Scotsman, No. 46 at p. 5)
    Scotsman stated that the national account chain is not accurate. 
Scotsman commented that the national account distribution chain 
resembles the wholesaler distribution chain, because an equipment 
supplier is part of the process. The supplier may contract directly 
with the customer but equipment still goes through another party, 
according to Scotsman. (Scotsman, No. 42 at p. 97) Manitowoc agreed 
with Scotsman that the national accounts chain is misrepresented, and 
actually includes a third party to do installation, repair, and 
maintenance. (Manitowoc, No. 42 at pp. 99-100)
    Manitowoc stated that mechanical contractors are typically not part 
of the distribution chain. Manitowoc indicated dealers may in fact 
provide those services, but the model is a little different from the 
model presented. (Manitowoc, No. 42 at p. 102-3)
    Hoshizaki agreed with the analysis of distribution channels. 
(Hoshizaki, No. 53 at p. 2) Manitowoc suggested another distribution 
channel exists: rather than a sale to an end-user, the dealer leases it 
to the customer. (Manitowoc, No. 42 at p. 98) Manitowoc was of the 
opinion that whether the equipment was sold or leased to the customer, 
the end result would be that the ultimate equipment price would not be 
affected. (Manitowoc, No. 42 at p. 99)
    Manitowoc questioned the basic methodology of using a base and 
incremental markup. Manitowoc stated that if it changed a product, it 
would expect the same gross margin on the incremental cost as on the 
base. (Manitowoc, No. 42 at p. 104) Manitowoc stated that entities in 
the distribution chain take the manufacturer's list price and add a 
markup. Manitowoc stated that by using the incremental markup, DOE is 
understating the impact in the market place of adding additional costs 
to raise the efficiency level, and that is not what happens in the 
market, according to Manitowoc. (Manitowoc, No. 42 at p. 105) Manitowoc 
stated that the incremental markup should be the same as the baseline 
markup and that it would be unreasonable to expect that vendors would 
earn a lower margin on additional costs associated with complying by 
the increased minimum efficiency regulations. (Manitowoc, No. 54 at p. 
3)
    With regard to the AHRI, Scotsman, and Manitowoc comments related 
to retail prices surveys or studies to determine if DOE was 
underestimating prices, DOE performed a market price survey, reported 
earlier in the engineering section IV.D.4.c. Previously DOE has not 
performed retail price surveys, believing that scatter in the data--
particularly when internet and non-internet prices are co-mingled--
would cause surveys to provide data of poor value or usefulness. The 
results of the retail price survey performed for the engineering 
analysis supports this belief.
    With regard to the comment that mechanical contractors are 
typically not part of the distribution chain, DOE is using mechanical 
contractor cost information to model a three-party distribution 
channel. Available Census Bureau data as well as comments received at 
the Framework public meeting indicates that a three-party distribution 
channel is common. At present the mechanical contractor cost data is 
the best information available for quantifying the local contractor 
portion of the three-party channel, and DOE used this data for 
developing costs contained in this notice. DOE requests specific data 
or data sources to better categorize the third party costs attributable 
to local dealers or contractors.
    The Scotsman and Manitowoc comments about the national account 
chain being misrepresented indicate that the national account channel 
is basically the same as the wholesaler

[[Page 14891]]

channel. Thus, the 6 percent of shipments initially assigned to the 
national account channel will be combined with the wholesaler channel 
shipments and assessed the wholesaler channel markup. With regard to 
adding another channel for leased equipment, since Manitowoc suggested 
the pricing of equipment in such a hypothetical channel would not 
differ from other equipment, DOE elects to not add an additional 
channel.
    With respect to the comments questioning the use of an incremental 
markup, DOE believes that there is likely an inaccurate comparison 
taking place. In competitive markets, such as the automatic commercial 
ice maker market, the participants are expected to be able to recover 
costs and a reasonable profit, which is what the markups designed and 
used by participants would be expected to do. In the DOE analysis, the 
baseline markup has been calculated to recover all currently existing 
overhead expenses with baseline equipment costs. DOE's analysis focuses 
on changes. Profit margin and other costs that change as MSP changes 
were assigned to incremental markups. Most overhead costs were 
allocated to the base markup because DOE does not expect these costs to 
change because of MSP changes brought on by efficiency standards. DOE 
developed the baseline and incremental markup methodology to ensure all 
overhead costs are fully collected and a reasonable profit margin is 
received and to identify costs that change, and apply such to the 
incremental MSP in the form of incremental markups.

F. Energy Use Analysis

    For the preliminary analysis and for the NOPR, DOE estimated energy 
usage for use in the LCC and NIA models based on the kWh/100 lb ice and 
gal/100 lb ice values developed in the engineering analysis in 
combination with other assumptions. In the preliminary analysis, DOE 
assumed that ice makers on average are used to produce one-half of the 
ice the machines could produce (i.e., a 50 percent capacity factor). 
DOE also assumed that when not making ice, on average ice makers would 
draw 5 watts of power. DOE modeled condenser water usage as ``open-
loop'' installations, or installations where water is used in the 
condenser one time (single pass) and released into the wastewater 
system.
    Several stakeholders agreed with the 50 percent capacity factor 
being reasonable. Scotsman stated that the 50 percent utilization 
factor is relatively close, given the wide spectrum that exists based 
on seasonality and installation location. (Scotsman, Public Meeting 
Transcript, No. 42 at p. 108) AHRI stated that on average, across all 
applications and seasons, the 50 percent utilization factor assumed by 
DOE is appropriate. (AHRI, No. 49 at p. 5) Manitowoc agreed that 50 
percent utilization is a good number to use. (Manitowoc, Public Meeting 
Transcript, No. 42 at p. 110) Hoshizaki, on the other hand, thought 50 
percent was on the low side for the industry, and some business types, 
like 24-hour restaurants, might have much higher usage factors. 
(Hoshizaki, Public Meeting Transcript, No. 42 at p. 111) NPCC expressed 
a desire to have information made available to determine if there is an 
equipment class relationship between the duty cycles and the business 
type, and whether duty cycle is related to the equipment class and/or 
the product capacity. NPCC believed that this may determine whether one 
is more cost-effective to pursue than another. (NPCC, Public Meeting 
Transcript, No. 42 at p. 111)
    For the NOPR, DOE has continued to utilize a 50 percent capacity 
factor, as most commenters believed it to be a reasonable number and 
DOE did not receive utilization data in the comments that would lead it 
to consider alternative capacity factors in the analysis. In response 
to the Hoshizaki comment and in agreement with the NPCC comment, DOE 
requests additional information about reasonable values that could be 
used to vary the assumption by business type.
    Several stakeholders commented on the assumption of an open-loop 
installation for water-cooled condensers. Scotsman commented that the 
majority of ice makers are installed in open-loop configurations. 
Scotsman stated that in some business types like hotels or casinos, 
there will typically be cooling towers and recirculation systems that 
the ice maker can tap into. In smaller locations without that type of a 
resource, it would typically be open loop, according to Scotsman. 
(Scotsman, Public Meeting Transcript, No. 42 at pp. 108-109) Scotsman 
added that single-pass configuration provides a worst-case energy use, 
and is appropriate for this analysis. (Scotsman, No. 46 at p. 3) 
Manitowoc stated that it only knows of installations in casinos or 
other large projects where ice makers are installed on closed loops, 
and suspects that most historical installations are open loop. 
(Manitowoc, No. 42 at p. 110)
    NEEA recommended that DOE investigate the market share of automatic 
commercial ice makers with single-pass condensers, because they use 
substantially more water than those with other condenser 
configurations. (NEEA, Public Meeting Transcript, No, 42 at pp. 165-
166) NPCC stated that some jurisdictions do not permit open-loop 
installations because of water usage. (NPCC, Public Meeting Transcript, 
No. 42 at pp. 109-110)
    Hoshizaki suggested placing water-cooled units in closed-loop 
systems. (Hoshizaki, No. 42 at p. 110) Hoshizaki stated that, in 
certain areas, water-cooled condensers could be the most effective form 
of condensing. (Hoshizaki, No. 53 at p. 2)
    DOE agrees with Hoshizaki's comment that water-cooled condensers 
can be a cost-effective form of condensing. DOE does not envision 
promulgating any rule that would eliminate water-cooled condensers. 
Since DOE's regulatory authority relates to the efficiency of equipment 
manufactured or sold in the U.S. but not to how equipment is installed 
or used, DOE does not plan to promulgate rules mandating use of closed 
loops. DOE is not proposing to perform the research suggested by NEEA 
into the prevalence of open- versus closed-loop installations. It is 
always DOE's objective to model energy usage as accurately as possible, 
so DOE requests stakeholder assistance in quantifying the impact of 
local regulations such as any local regulation potentially forbidding 
an open-loop installation. Scotsman and Manitowoc stated that, 
historically, most installations were likely open-loop, but the 
regulations discussed by NPCC would argue that in the future such is 
less likely to be true. DOE's analyses to date have not included design 
options that would change condenser water usage, a fact that means the 
question of modeling condenser water in the LCC models condenser water 
usage as open- or closed-loop impacts the absolute value of life-cycle 
costs and total national costs of ownership and operation, but not LCC 
savings or increases/decreases in NPV. Given that Scotsman and 
Manitowoc believe that historically most installations have likely been 
open loop, DOE chose to continue to model water usage as an open-loop 
(or single-pass) system.

G. Life-Cycle Cost and Payback Period Analysis

    In response to the requirements of EPCA in (42 U.S.C. 
6295(o)(2)(B)(i) and 6313(d)(4)), DOE conducts LCC and PBP analysis to 
evaluate the economic impacts of potential amended energy conservation 
standards on individual commercial customers--that is, buyers of the 
equipment. This section describes

[[Page 14892]]

the analyses and the spreadsheet model DOE used. NOPR TSD chapter 8 
details the model and all the inputs to the LCC and PBP analyses.
    LCC is defined as the total customer cost over the lifetime of the 
equipment, and consists of installed cost (purchase and installation 
costs) and operating costs (maintenance, repair, water,\36\ and energy 
costs). DOE discounts future operating costs to the time of purchase 
and sums them over the expected lifetime of the unit of equipment. PBP 
is defined as the estimated amount of time it takes customers to 
recover the higher installed costs of more-efficient equipment through 
savings in operating costs. DOE calculates the PBP by dividing the 
increase in installed costs by the savings in annual operating costs. 
DOE measures the changes in LCC and in PBP associated with a given 
energy and water use standard level relative to a base-case forecast of 
equipment energy and water use (or the ``baseline energy and water 
use''). The base-case forecast reflects the market in the absence of 
new or amended energy conservation standards.
---------------------------------------------------------------------------

    \36\ Water costs are the total of water and wastewater costs. 
Wastewater utilities tend to not meter customer wastewater flows, 
and base billings on water commodity billings. For this reason, 
water usage is used as the basis for both water and wastewater 
costs, and the two are aggregated in the LCC and PBP analysis.
---------------------------------------------------------------------------

    The installed cost of equipment to a customer is the sum of the 
equipment purchase price and installation costs. The purchase price 
includes MPC, to which a manufacturer markup (which is assumed to 
include at least a first level of outbound freight cost) is applied to 
obtain the MSP. This value is calculated as part of the engineering 
analysis (chapter 5 of the NOPR TSD). DOE then applies additional 
markups to the equipment to account for the costs associated with the 
distribution channels for the particular type of equipment (chapter 6 
of the NOPR TSD). Installation costs are varied by State depending on 
the prevailing labor rates.
    Operating costs for automatic commercial ice makers are the sum of 
maintenance costs, repair costs, water, and energy costs. These costs 
are incurred over the life of the equipment and therefore are 
discounted to the base year (2018, which is the proposed effective date 
of the amended standards that will be established as part of this 
rulemaking). The sum of the installed cost and the operating cost, 
discounted to reflect the present value, is termed the life-cycle cost 
or LCC.
    Generally, customers incur higher installed costs when they 
purchase higher efficiency equipment, and these cost increments will be 
partially or wholly offset by savings in the operating costs over the 
lifetime of the equipment. Usually, the savings in operating costs are 
due to savings in energy costs because higher efficiency equipment uses 
less energy over the lifetime of the equipment. Often, the LCC of 
higher efficiency equipment is lower compared to lower-efficiency 
equipment.
    The PBP of higher efficiency equipment is obtained by dividing the 
increase in the installed cost by the decrease in annual operating 
cost. For this calculation, DOE uses the first-year operating cost 
decreases as the estimate of the decrease in operating cost, noting 
that some of the repair and maintenance costs used in the analysis are 
annualized estimates of costs. DOE calculates a PBP for each efficiency 
level of each equipment class. In addition to the energy costs 
(calculated using the electricity price forecast for the first year), 
the first-year operating costs also include annualized maintenance and 
repair costs.
    Apart from MSP, installation costs, and maintenance and repair 
costs, other important inputs for the LCC analysis are markups and 
sales tax, equipment energy consumption, electricity prices and future 
price trends, expected equipment lifetime, and discount rates.
    As part of the engineering analysis, design option levels were 
ordered based on increasing efficiency (decreased energy and water 
consumption) and increasing MSP values. DOE developed four to seven 
energy use levels for each equipment class, henceforth referred to as 
``efficiency levels,'' through the analysis of engineering design 
options. For all equipment classes, efficiency levels were set at 
specific intervals--e.g., 10 percent improvement over base energy 
usage, 15 percent improvement, 20 percent improvement. The max-tech 
efficiency level is the only exception. At the max-tech level, the 
efficiency improvement matched the specific levels identified in the 
engineering analysis.
    The base efficiency level (level 1) in each equipment class is the 
least efficient and the least expensive equipment in that class. The 
higher efficiency levels (level 2 and higher) exhibit progressive 
increases in efficiency and cost with the highest efficiency level 
corresponding to the max-tech level. LCC savings and PBP are calculated 
for each selected efficiency level of each equipment class.
    Many inputs for the LCC analysis are estimated from the best 
available data in the market, and in some cases the inputs are 
generally accepted values within the industry. In general, each input 
value has a range of values associated with it. While single 
representative values for each input may yield an output that is the 
most probable value for that output, such an analysis does not give the 
general range of values that can be attributed to a particular output 
value. Therefore, DOE carried out the LCC analysis in the form of Monte 
Carlo simulations \37\ in which certain inputs were expressed as a 
range of values and probability distributions that account for the 
ranges of values that may be typically associated with the respective 
input values. The results or outputs of the LCC analysis are presented 
in the form of mean LCC savings, percentages of customers experiencing 
net savings, net cost and no impact in LCC, and median PBP. For each 
equipment class, 10,000 Monte Carlo simulations were carried out. The 
simulations were conducted using Microsoft Excel and Crystal Ball, a 
commercially available Excel add-in used to carry out Monte Carlo 
simulations.
---------------------------------------------------------------------------

    \37\ Monte Carlo simulation is, generally, a computerized 
mathematical technique that allows for computation of the outputs 
from a mathematical model based on multiple simulations using 
different input values. The input values are varied based on the 
uncertainties inherent to those inputs. The combination of the input 
values of different inputs is carried out in a random fashion to 
simulate the different probable input combinations. The outputs of 
the Monte Carlo simulations reflect the various probable outputs 
that are possible due to the uncertainties in the inputs.
---------------------------------------------------------------------------

    LCC savings and PBP are calculated by comparing the installed costs 
and LCC values of standards-case scenarios against those of base-case 
scenarios. The base-case scenario is the scenario in which equipment is 
assumed to be purchased by customers in the absence of the proposed 
energy conservation standards. Standards-case scenarios are scenarios 
in which equipment is assumed to be purchased by customers after the 
amended energy conservation standards, determined as part of the 
current rulemaking, go into effect. The number of standards-case 
scenarios for an equipment class is equal to one less than the total 
number of efficiency levels in that equipment class because each 
efficiency level above efficiency level 1 represents a potential 
amended standard. Usually, the equipment available in the market will 
have a distribution of efficiencies. Therefore, for both base-case and 
standards-case scenarios, in the LCC analysis, DOE assumed a 
distribution of efficiencies in the market, and the distribution was 
assumed to be spread across all efficiency levels in the LCC analysis 
(see NOPR TSD chapter 10).

[[Page 14893]]

    Recognizing that different types of businesses and industries that 
use automatic commercial ice makers face different energy prices, and 
apply different discount rates to purchase decisions, DOE analyzed 
variability and uncertainty in the LCC and PBP results by performing 
the LCC and PBP calculations for seven types of businesses: (1) Health 
care; (2) lodging; (3) foodservice; (4) retail; (5) education; (6) food 
sales; and (7) offices. Different types of businesses face different 
energy prices and also exhibit differing discount rates that they apply 
to purchase decisions.
    Expected equipment lifetime is another input for which it is 
inappropriate to use a single value for each equipment class. 
Therefore, DOE assumed a distribution of equipment lifetimes that are 
defined by Weibull survival functions.\38\
    Equipment lifetime is a key input for the LCC and PBP analysis. For 
automatic commercial ice maker equipment, there is a general consensus 
among industry stakeholders that the typical equipment lifetime is 
approximately 7 to 10 years with an average of 8.5 years. There was no 
data or comment to suggest that lifetimes are unique to each equipment 
class. Therefore, DOE assumed a distribution of equipment lifetimes 
that is defined by Weibull \39\ survival functions, with an average 
value of 8.5 years.
---------------------------------------------------------------------------

    \39\ Weibull survival function is a continuous probability 
distribution function that is commonly used to approximate the 
distribution of equipment lifetimes.
---------------------------------------------------------------------------

    Another factor influencing the LCC analysis is the State in which 
the automatic commercial ice maker is installed. Inputs that vary based 
on this factor include installation costs, water and energy prices, and 
sales tax (plus the associated distribution chain markups). At the 
national level, the spreadsheets explicitly modeled variability in the 
model inputs for water price, electricity price, and markups using 
probability distributions based on the relative populations in all 
States.
    Detailed descriptions of the methodology used for the LCC analysis, 
along with a discussion of inputs and results, are presented in chapter 
8 and appendices 8A and 8B of the NOPR TSD.
1. Equipment Cost
    To calculate customer equipment costs, DOE multiplied the MSPs 
developed in the engineering analysis by the distribution channel 
markups, described in section IV.E. DOE applied baseline markups to 
baseline MSPs and incremental markups to the MSP increments associated 
with higher efficiency levels.
    In the preliminary analysis, DOE developed a projection of price 
trends for automatic commercial ice maker equipment, indicating that 
based on historical price trends the MSP would be projected to decline 
by 0.4 percent from the 2012 estimation of MSP values through the 2018 
assumed start date of new or amended standards. The preliminary 
analysis also indicated an approximately 1.6 percent decline from the 
MSP values estimated in 2012 to the end of the 30-year NIA analysis 
period used in the preliminary analysis. Price trends generated 
considerable discussion during the LCC presentation at the February 
2012 preliminary analysis public meeting (and nearly all comments 
specific to the NIA were concerning price trends).
    Scotsman stated that it typically sees some increase in costs and 
that it tries to recapture at least some of the increased cost in the 
form of price increases and usually cannot recover all of it. Scotsman 
stated that it does not expect to see prices going down over the years 
and does not think it makes a lot of sense. Scotsman added that for 
household refrigerators and other industries, much of the price 
decrease that has been seen over the years is offshored manufacturing. 
The automatic commercial ice maker manufacturers do not have the scale 
to consider doing that, according to Scotsman. (Scotsman, Public 
Meeting Transcript, No. 42 at pp. 127-128) Scotsman analyzed the 
historical shipments data and provided graphs showing how different the 
forecast would be if a different time period was selected. Scotsman 
suggested that a long-term growth trend of 1.5 percent is most 
realistic. (Scotsman, No. 46 at pp. 6-7)
    NRDC stated that price learning is theoretically expected and 
empirically demonstrated, and that it supported DOE's incorporation of 
price learning in the rulemaking. (NRDC, No. 48 at p. 2)
    AHRI urged DOE to assume that price learning is zero, or in other 
words, to hold MSP constant. AHRI stated that it had performed an 
analysis of the data used by DOE and that it believed that the data did 
not support an assumption of price learning greater than zero. (AHRI, 
No. 49 at p. 5 and exhibit A)
    Manitowoc stated that there is no real basis to expect that the 
manufacturing costs of ice machines will decrease in the future due to 
efficiency gains in production because the ice machine designs are 
mature and the manufacturing processes are stable. Manitowoc added that 
the increase in costs associated with design options is only due to 
higher cost components or higher cost material employed and that the 
annual production volumes do not allow for further investment in 
automation of the manufacturing processes beyond what is already in 
place. (Manitowoc, No. 54 at p. 4)
    As is customary between the preliminary analysis and the NOPR 
phases of a rulemaking, DOE re-examined the data available and updated 
the analyses, in this specific instance, the price trend analysis. At a 
high level, DOE agrees with the NRDC comment that evidence indicates 
price learning is theoretically expected. In response to the AHRI, 
Manitowoc, and Scotsman comments that the data do not support the price 
trends, DOE re-examined the data used in the analysis, and re-analyzed 
price trends with updated data. In the preliminary analysis, DOE used a 
Producer Price Index (PPI) that included air-conditioning, 
refrigeration, and forced air heating equipment. For the NOPR, DOE was 
able to identify a PPI that was a subset of the PPI used for the 
preliminary analysis. The subset includes only commercial refrigeration 
and related equipment, and excludes unrelated equipment. Using this PPI 
for the automatic commercial ice maker price trends analysis yields a 
price decline of roughly 1.6 percent over the period of 2012 (the year 
for which MSP was estimated) through 2047.
2. Installation, Maintenance, and Repair Costs
a. Installation Costs
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. The installation 
costs may vary from one equipment class to another, but they typically 
do not vary among efficiency levels within an equipment class. Most 
automatic commercial ice makers are installed in fairly standard 
configurations. For its preliminary analysis, DOE tentatively concluded 
that the engineering design options do not impact the installation cost 
within an equipment class. DOE therefore assumed that the installation 
cost for automatic commercial ice makers does not vary among efficiency 
levels within an equipment class. Costs that do not vary with 
efficiency levels do not impact the LCC, PBP, or NIA results. In the 
preliminary analysis, DOE estimated the installation cost as a fixed 
percentage of the total MSP for the baseline efficiency level for a 
given equipment class, set at 10 percent.

[[Page 14894]]

    Manitowoc agreed with DOE's assumption that installation costs 
generally would be unaffected by moving to the higher efficiency level. 
However, Manitowoc pointed out that some efficiency differences may 
cause variation in installation costs. Manitowoc further explained that 
many remote condensers require a crane for installation; therefore, 
bigger condensers of automatic commercial ice maker equipment with 
higher efficiency levels might result in higher rental and labor costs 
associated with the installation. (Manitowoc, Public Meeting 
Transcript, No. 42 at p. 136) In its written comments to DOE, Manitowoc 
further clarified that higher efficiency equipment would not incur 
additional installation costs unless the size of the equipment 
increases in such a way as to exceed the industry norms. (Manitowoc, 
No. 54 at p. 4) However, Hoshizaki indicated installation costs will 
increase with higher levels of energy efficiency due to special 
installation requirements for the new machine and possible changes to 
the structure that might be required. Furthermore, AHRI commented that 
it is incorrect for DOE to assume that changes in installation will be 
negligible for more-efficient equipment. (AHRI, No. 49 at p. 5)
    Scotsman pointed out that if the technology were assumed to involve 
a drain water heat exchange, the installation costs would increase. 
(Scotsman, No. 46 at p. 3)
    In responses to the comments above, DOE further evaluated the costs 
associated with installation and revised the installation cost 
estimation methods. For the NOPR, DOE estimated material and labor cost 
to install equipment based on RS Means cost estimation data \40\ and on 
telephone conservations with contractors. Estimated installation costs 
vary by equipment class and by State. DOE decided to continue to assume 
installation cost will be constant for all efficiency levels within an 
equipment class.
---------------------------------------------------------------------------

    \40\ RS Means Company, Inc. 2013 RS Means Electrical Cost Data. 
2013. Kingston, MA.
---------------------------------------------------------------------------

    In response to Manitowoc's comment that greater equipment size 
might result in higher rental and labor costs, DOE notes that while the 
initial decision to avoid equipment size increases in the engineering 
analysis was eliminated, DOE attempted to minimize equipment size 
increases. Thus, proposed standard levels should not add significantly 
to labor and crane rental costs. Nor does DOE believe the size 
increases would require structural changes as hypothesized by 
Hoshizaki. In response to the Manitowoc and Scotsman comments about 
drain water heat exchanger installation costs, DOE notes the 
promotional material of drain water heat exchanger manufacturers 
indicate the units can be installed with four additional water 
attachments, a level of effort that would likely not add to the cost of 
installations. Finally, in response to Hoshizaki's general statement 
that higher efficiency levels will impose specialized installation 
requirements, a review of the design options included in the DOE 
engineering analysis did not reveal any options likely to impose 
specific cost increases. To better respond to the Hoshizaki comment, 
DOE requests specificity--which design options will impose increases in 
installation costs and what would the magnitude of such cost increases 
be?
b. Repair and Maintenance Costs
    The repair cost is the average annual cost to the customer for 
replacing or repairing components in the automatic commercial ice maker 
that have failed. In the preliminary analysis, DOE approximated the 
repair cost as a 3-percent fixed percentage of the total baseline MSP 
for each equipment class and assumed that repair costs were constant 
within an equipment class for all efficiency levels.
    Maintenance costs are associated with maintaining the proper 
operation of the equipment. The maintenance cost does not include the 
costs associated with the replacement or repair of components that have 
failed, which are included as repair costs. In the preliminary 
analysis, DOE applied a 3-percent preventative maintenance cost that 
remains constant across all equipment efficiency levels because data 
were not available to indicate how maintenance costs vary with 
equipment levels.
    Scotsman stated that, in general, whenever new technology is 
introduced, failure rates increase. Scotsman stated that when the 
failures occur during the warranty period, the cost falls on 
manufacturers. Ice makers stress components in ways that they are not 
stressed in steady-state machines, according to Scotsman, so even with 
well-known technologies it is not known how their failure rates will 
fare in ice makers. In addition, Scotsman commented that if the 
technology was assumed to involve a drain water heat exchanger, the 
maintenance cost would increase. (Scotsman, No. 46 at pp. 3-4) 
Likewise, Hoshizaki stated that repair costs are relative to each 
machine and that it is difficult to compute a standard average. 
Manufacturers are still working to analyze the effects of the 2010 
standards on repair costs, according to Hoshizaki. (Hoshizaki, No. 46 
at pp. 3-4)
    Manitowoc commented that the repair costs will be affected by the 
efficiency levels. Manitowoc stated that is has specific concerns about 
some components such as motors. Manitowoc pointed out that ECM motors 
might enhance the energy efficiencies, but these motors are probably 
less reliable than standard permanent split capacitor motors because 
ECM motors have more parts. Manitowoc further stated that, in general, 
more parts increase the chances that a component will fail, which in 
turn potentially increases the repair costs. (Manitowoc, Public Meeting 
Transcript, No. 42 at p. 136) In addition, Scotsman stated that 
modeling repair cost as a percentage of baseline costs would understate 
repair cost. Also using the example of an ECM fan motor, Scotsman 
explained that ECM motor has an incremental cost of $35 to install; 
however, when it needs to be replaced, it is considerably more costly 
than the replacement of the motors that are currently used on the 
market. Additionally, Scotsman also noted the ECM fan motor has more 
parts than the current motors that are commonly applied in the market, 
making it likely to fail more often. Therefore, according to Scotsman, 
ECM fan motors might require higher average annual repair costs than 
current motors used in the baseline units. (Scotsman, No. 46 at pp. 3-
4) Hoshizaki pointed out higher water and energy efficiency level may 
increase maintenance costs. Hoshizaki elaborated that equipment with 
lower water usage and improved electrical efficiencies might need more 
frequent maintenance such as cleaning. (Hoshizaki, No. 53 at p. 2)
    In addition, Howe commented on the impact of new standards on 
repairing and maintenance costs. Howe stated that the modification of 
new ice makers will cause increased repair and maintenance costs due to 
the need to educate service personnel. The percentage of the baseline 
costs will increase, according to Howe. (Howe, No. 51 at p. 4)
    In response to these comments, DOE evaluated how repair and 
maintenance costs were estimated and revised the methodology. For 
repair costs, DOE examined the major components of ice makers and 
identified expected failure rates for each component. For those 
components for which available information indicates a failure might 
occur within the expected 8.5-year equipment life, DOE estimated repair 
or replacement costs. Under this methodology, repair and replacement 
costs are based on the original

[[Page 14895]]

equipment costs, so the more expensive the components are, the greater 
the expected repair or replacement cost. For design options modeled in 
the engineering analysis, DOE estimated repair costs and if they were 
different than the baseline cost, the repair costs were either 
increased or decreased accordingly. (Although theoretically possible, 
in the case of the ice maker analysis, repair costs did not decrease 
with efficiency levels for any equipment class.) Thus, consistent with 
Hoshizaki's comment about the difficulty of estimating one standard 
average, DOE now estimates different repair and replacement costs for 
all equipment classes.
    DOE's revision to the repair cost methodology is consistent with 
the Manitowoc, Hoshizaki, Scotsman, and Howe comments that repair costs 
should increase with efficiency level. Consistent with the Manitowoc 
and Scotsman comments, DOE assumed that ECM fan motors would increase 
repair costs relative to the baseline. In response to Scotsman's 
comments about drain water heat exchangers, DOE notes that manufacturer 
literature indicates an expected useful life greater than 8.5 years, so 
no replacement was assumed for this component.
    In the NOPR analyses, DOE estimated material and labor costs for 
preventative maintenance based on RS Means cost estimation data and on 
telephone conservations with contractors. DOE assumed maintenance cost 
would remain constant for all efficiency levels within an equipment 
class. In response to Hoshizaki's comment about the impact of reduced 
water usage on maintenance, the DOE analyses for 7 of 12 primary 
equipment classes did not involve changes to water usage. In the 
remaining 5 (batch) equipment classes, DOE's analysis did not assume 
potable water usage would be reduced below 20 gallons per 100 lb ice--a 
level manufacturers indicated was a point below which maintenance costs 
would increase. (Scotsman, Public Meeting Transcript, No. 42 at p. 64; 
Manitowoc, Public Meeting Transcript, No. 42 at p. 65) Thus, for the 
NOPR, DOE assumes that maintenance costs will not vary by efficiency 
level.
3. Annual Energy and Water Consumption
    Chapter 7 of the NOPR TSD details DOE's analysis of annual energy 
and water usage at various efficiency levels of automatic commercial 
ice makers. Annual energy and water consumption inputs by automatic 
commercial ice maker equipment class are based on the engineering 
analysis estimates of kilowatt-hours of electricity per 100 lb ice and 
gallons of water per 100 lb ice, translated to annual kilowatt-hours 
and gallons in the energy and water use analysis (chapter 7 of the NOPR 
TSD). The development of energy and water usage inputs is discussed in 
section IV.G.6 along with public input and DOE's response to the public 
input.
4. Energy Prices
    DOE calculated average commercial electricity prices using the EIA 
Form EIA-826 data obtained online from the ``Database: Sales 
(consumption), revenue, prices & customers'' Web page.\41\ The EIA data 
reports average commercial sector retail prices calculated as total 
revenues from commercial sales divided by total commercial energy sales 
in kilowatt-hours, by State and for the nation. DOE received no 
recommendations or suggestions regarding this set of assumptions at the 
February 2012 preliminary analysis public meeting or in written 
comments.
---------------------------------------------------------------------------

    \41\ U.S. Energy Information Administration. Sales and revenue 
data by state, monthly back to 1990 (Form EIA-826). (Last accessed 
June 26, 2013). www.eia.gov/electricity/data.cfm#sales
---------------------------------------------------------------------------

5. Energy Price Projections
    To estimate energy prices in future years for the preliminary 
analysis TSD, DOE multiplied the average regional energy prices 
described above by the forecast of annual average commercial energy 
price indices developed in the Reference Case from AEO2013.\42\ AEO2013 
forecasted prices through 2040. To estimate the price trends after 
2040, DOE assumed the same average annual rate of change in prices as 
exhibited by the forecast over the 2031 to 2040 period. DOE received no 
recommendations or suggestions regarding this set of assumptions at the 
February 2012 preliminary analysis public meeting or in written 
comments.
---------------------------------------------------------------------------

    \42\ The spreadsheet tool that DOE used to conduct the LCC and 
PBP analyses allows users to select price forecasts from either 
AEO's High Economic Growth or Low Economic Growth Cases. Users can 
thereby estimate the sensitivity of the LCC and PBP results to 
different energy price forecasts.
---------------------------------------------------------------------------

6. Water Prices
    To estimate water prices in future years for the preliminary 
analysis TSD, DOE used price data from the 2008,\43\ 2010,\44\ and 2012 
American Water Works Water (AWWA) and Wastewater Surveys.\45\ The AWWA 
2012 survey was the primary data set. No data exists to disaggregate 
water prices for individual business types, so DOE varied prices by 
state only and not by business type within a state. For each state, DOE 
combined all individual utility observations within the state to 
develop one value for each state for water and wastewater service. 
Since water and wastewater billings are frequently tied to the same 
metered commodity values, DOE combined the prices for water and 
wastewater into one total dollars per 1,000 gallons figure. DOE used 
the Consumer Price Index (CPI) data for water-related consumption 
(1973-2012) \46\ in developing a real growth rate for water and 
wastewater price forecasts.
---------------------------------------------------------------------------

    \43\ American Water Works Association. 2008 Water and Wastewater 
Rate Survey. 2009. Denver, CO. Report No. 54004.
    \44\ American Water Works Association. 2010 Water and Wastewater 
Rate Survey. 2011. Denver, CO. Report No. 54006.
    \45\ American Water Works Association. 2012 Water and Wastewater 
Rate Survey. 2013. Denver, CO. Report No. 54008.
    \46\ The Bureau of Labor Statistics defines CPI as a measure of 
the average change over time in the prices paid by urban consumers 
for a market basket of consumer goods and services. For more 
information see www.bls.gov/cpi/home.htm.
---------------------------------------------------------------------------

    During the public meeting and in written comments, stakeholders 
commented on the water prices DOE used in its LCC analysis. NPCC stated 
that water and wastewater price escalation has been systematically 
higher than the CPI. Further, NPCC pointed out that EPA's water-related 
regulations governed by the Clean Water Act might level out the 
escalation rates once the regulations' requirements were satisfied, 
even though NPCC does not anticipate the escalation rates will diminish 
much. Given the impact of EPA's latest water-related regulations was 
not completed, NPCC then raised the question whether DOE should use 
both a higher escalation rate and CPI in its analysis. NPCC then 
suggested using a higher escalated rate in the analysis for a short-run 
period until the effective date of EPA's latest water-related 
regulations and move to the CPI for the longer term analysis starting 
with the effective date of EPA's relevant regulations. (NPCC, Public 
Meeting Transcript, No, 42 at pp. 132-134) In addition, the Alliance 
argued that water use and energy use cannot be compared on a simple 
price basis because of key differences between the two resources. The 
Alliance stated that, first, energy comes from multiple sources and is 
a commodity whose prices fluctuate based on supply and demand. 
Freshwater, on the other hand, is in limited supply and water prices 
are heavily regulated based on the cost of treatment and delivery, 
which is less directly affected by supply and demand, according to the 
Alliance. The Alliance

[[Page 14896]]

further stated that when water demand overcomes the readily available 
fresh water resources in the U.S., the alternative water sources will 
likely require more costly infrastructure and operational changes such 
as desalination to fulfill the demand for fresh water, which is also a 
very energy intensive process. Therefore, the Alliance recommended that 
DOE consider the marginal costs of alternative water sources, such as 
desalination, in its analyses to properly account for all water costs 
as applied to water-cooled condensers. (Alliance, No. 45 at p. 4)
    DOE appreciates the comments that EPA water regulations under the 
Clean Water Act may impact the escalation rate of water price used in 
DOE's analysis and the observation about desalination plants being the 
next source of water available in many localities. With respect to the 
Clean Water Act comment, DOE notes that the Clean Water Act has been in 
existence since 1972. Thus, the water price trends should include the 
impacts of historical costs attributable to the Clean Water Act. 
Throughout that entire period, the CPI for water utility costs grew at 
an average rate of 1.6 percent faster than the total CPI, perhaps 
validating the NPCC point. As for capturing the effects of unknown 
future EPA regulations, DOE considers this a speculative effort, and 
DOE has long adhered to a guiding principle that the analyses avoid 
speculating in this fashion. With respect to the comment about 
desalination and the accompanying suggestion that DOE should use 
marginal water prices, DOE has developed water prices using recent 
water price data, which would include resource costs that underlie the 
provision of water. Looking forward, DOE acknowledges that new water 
resources brought online in future years may differ from those of the 
past, but DOE has not identified a source that carefully and 
systematically forecasts the impact of future developments of this 
nature, as the AEO2013 does in the case of electricity. Thus, to 
attempt to project growth rates for 50 states to capture these resource 
changes would be speculative. Rather than speculate, DOE has updated 
the calculation of State-level water prices with the inclusion of the 
2012 AWWA survey \47\ and additional consumer price index values.
---------------------------------------------------------------------------

    \47\ American Water Works Association. 2012 Water and Wastewater 
Rate Survey. 2013. Denver, CO. Report No. 54008.
---------------------------------------------------------------------------

7. Discount Rates
    The discount rate is the rate at which future expenditures are 
discounted to establish their present value. DOE determined the 
discount rate by estimating the cost of capital for purchasers of 
automatic commercial ice makers. Most purchasers use both debt and 
equity capital to fund investments. Therefore, for most purchasers, the 
discount rate is the weighted average cost of debt and equity 
financing, or the weighted average cost of capital (WACC), less the 
expected inflation.
    To estimate the WACC of automatic commercial ice maker purchasers, 
DOE used a sample of nearly 1,200 companies grouped to be 
representative of operators of each of the commercial business types 
(health care, lodging, foodservice, retail, education, food sales, and 
offices) drawn from a database of 6,177 U.S. companies presented on the 
Damodaran Online Web site.\48\ This database includes most of the 
publicly-traded companies in the United States. The WACC approach for 
determining discount rates accounts for the current tax status of 
individual firms on an overall corporate basis. DOE did not evaluate 
the marginal effects of increased costs, and, thus, depreciation due to 
more expensive equipment, on the overall tax status.
---------------------------------------------------------------------------

    \48\ Damodaran financial data is available at: http://
pages.stern.nyu.edu/~adamodar/ (Last accessed January 31, 2013).
---------------------------------------------------------------------------

    DOE used the final sample of companies to represent purchasers of 
automatic commercial ice makers. For each company in the sample, DOE 
combined company-specific information from the Damodaran Online Web 
site, long-term returns on the Standard & Poor's 500 stock market index 
from the Damodaran Online Web site, nominal long-term Federal 
government bond rates, and long-term inflation to estimate a WACC for 
each firm in the sample.
    For most educational buildings and a portion of the office 
buildings and cafeterias occupied and/or operated by public schools, 
universities, and State and local government agencies, DOE estimated 
the cost of capital based on a 40-year geometric mean of an index of 
long-term tax-exempt municipal bonds (>20 years).49 50 
Federal office space was assumed to use the Federal bond rate, derived 
as the 40-year geometric average of long-term (>10 years) U.S. 
government securities.\51\
---------------------------------------------------------------------------

    \49\ Federal Reserve Bank of St. Louis, State and Local Bonds--
Bond Buyer Go 20-Bond Municipal Bond Index. (Last accessed April 6, 
2012). Annual data for 1973-2011 was available at: http://research.stlouisfed.org/fred2/series/MSLB20/downloaddata?cid=32995).
    \50\ Rate for 2012 calculated from monthly data. Data source: 
U.S. Federal Reserve (Last accessed February 20, 2013) (Available 
at: www.federalreserve.gov/releases/h15/data.htm).
    \51\ Rate calculated with 1973-2012 data. Data source: U.S. 
Federal Reserve (Last accessed February 20, 2013) (Available at: 
www.federalreserve.gov/releases/h15/data.htm).
---------------------------------------------------------------------------

    DOE recognizes that within the business types purchasing automatic 
commercial ice makers there will be small businesses with limited 
access to capital markets. Such businesses tend to be viewed as higher 
risk by lenders and face higher capital costs as a result. To account 
for this, DOE included an additional risk premium for small businesses. 
The premium, 1.9 percent, was developed from information found on the 
Small Business Administration Web site.\52\
---------------------------------------------------------------------------

    \52\ Small Business Administration data on loans between $10,000 
and $99,000 compared to AAA Corporate Rates. http://www.sba.gov/advocacy/7540/6282> Data last accessed on June 10, 2013.
---------------------------------------------------------------------------

    Chapter 8 of the TSD provides more information on the derivation of 
discount rates. The average discount rate by business type is shown on 
Table IV.26.

           Table IV.26--Average Discount Rate by Business Type
------------------------------------------------------------------------
                                                             Average
                     Business type                        discount rate
                                                            (real) (%)
------------------------------------------------------------------------
Health Care............................................              2.7
Lodging................................................              6.8
Foodservice............................................              5.8
Retail.................................................              4.6
Education..............................................              3.0
Food Sales.............................................              5.1
Office.................................................              4.6
------------------------------------------------------------------------

8. Lifetime
    DOE defines lifetime as the age at which typical automatic 
commercial ice maker equipment is retired from service. DOE estimated 
equipment lifetime based on its discussion with industry experts, and 
concluded a typical lifetime of 8.5 years. AHRI agreed with DOE's 
proposed average equipment lifetime of 8.5 years. (Alliance, No. 49 at 
p. 5) Hoshizaki agreed that 8.5 years is a fair assumption for 
commercial cube type ice makers. However, Hoshizaki stated that 
continuous type ice makers might have a shorter life. (Hoshizaki, No. 
53 at p. 2)
    For the NOPR analyses, DOE elected to use an 8.5-year average life 
for all equipment classes. With regard to the Hoshizaki statement that 
continuous type ice makers might have shorter life spans, DOE requests 
specific information to assist in determining whether continuous and 
batch type equipment should be analyzed using differing assumptions for 
equipment

[[Page 14897]]

life. All literature on the subject of ice maker lifetimes reviewed by 
DOE, including comments received during the Framework phase of this 
rulemaking, indicates a 7 to 10 year life, with 8.5 years being a 
reasonable average. DOE therefore is proposing in this NOPR to use 8.5 
years as automatic commercial ice maker lifetime for DOE's LCC analysis 
for covered automatic commercial ice maker equipment, but would welcome 
additional data concerning specific differences between equipment 
classes.
9. Compliance Date of Standards
    EPCA prescribes that DOE must review and determine whether to amend 
performance-based standards for cube type automatic commercial ice 
makers by January 1, 2015. (42 U.S.C. 6313(d)(3)(A)) In addition, EPCA 
requires that the amended standards established in this rulemaking must 
apply to equipment that is manufactured on or after 3 years after the 
final rule is published in the Federal Register unless DOE determines, 
by rule, that a 3-year period is inadequate, in which case DOE may 
extend the compliance date for that standard by an additional 2 years. 
(42 U.S.C. 6313(d)(3)(C)) DOE began this rulemaking with the 
expectation of completing it prior to the January 1, 2015 required 
date, and, therefore, assumed during the preliminary analysis that new 
and amended standards would take effect in 2016. However, for the NOPR 
analyses, based on the January 1, 2015 statutory deadline and giving 
manufacturers 3 years to meet the new and amended standards, DOE 
assumes that the most likely compliance date for the standards set by 
this rulemaking would be January 1, 2018. Therefore, DOE calculated the 
LCC and PBP for automatic commercial ice makers under the assumption 
that compliant equipment would be purchased in 2018, the year when 
compliance with the amended standard is required. DOE requests comments 
on the January 1, 2018 effective date.
10. Base-Case and Standards-Case Efficiency Distributions
    To estimate the share of affected customers who would likely be 
impacted by a standard at a particular efficiency level, DOE's LCC 
analysis considers the projected distribution of efficiencies of 
equipment that customers purchase under the base case (that is, the 
case without new energy efficiency standards). DOE refers to this 
distribution of equipment efficiencies as a base-case efficiency 
distribution.
    DOE's methodology to estimate market shares of each efficiency 
level within each equipment class is based on an analysis of the 
automatic commercial ice makers currently available for purchase by 
customers. DOE analyzed all available models, calculated the percentage 
difference between the baseline energy usage embodied in the ice maker 
rulemaking analyses, and organized the available units by the 
efficiency levels. DOE then calculated the percentage of available 
models falling within each efficiency level bin. This efficiency 
distribution was used in the LCC and other downstream analyses as the 
baseline efficiency distribution.
11. Inputs to Payback Period Analysis
    Payback period is the amount of time it takes the customer to 
recover the higher purchase cost of more energy-efficient equipment as 
a result of lower operating costs. Numerically, the PBP is the ratio of 
the increase in purchase cost to the decrease in annual operating 
expenditures. This type of calculation is known as a ``simple'' PBP 
because it does not take into account changes in operating cost over 
time (i.e., as a result of changing cost of electricity) or the time 
value of money; that is, the calculation is done at an effective 
discount rate of zero percent. PBPs are expressed in years. PBPs 
greater than the life of the equipment mean that the increased total 
installed cost of the more-efficient equipment is not recovered in 
reduced operating costs over the life of the equipment, given the 
conditions specified within the analysis such as electricity prices.
    The inputs to the PBP calculation are the total installed cost to 
the customer of the equipment for each efficiency level and the average 
annual operating expenditures for each efficiency level in the first 
year. The PBP calculation uses the same inputs as the LCC analysis, 
except that discount rates are not used.
12. Rebuttable Presumption Payback Period
    EPCA (42 U.S.C. 6295(o)(2)(B)(iii) and 6313(d)(4)) established a 
rebuttable presumption that a new or amended standards are economically 
justified if the Secretary finds that the additional cost to the 
consumer of purchasing a product complying with an energy conservation 
standard level will be less than three times the value of the energy 
savings during the first year that the consumer will receive as a 
result of the standard, as calculated under the applicable test 
procedure.
    While DOE examined the rebuttable presumption criterion, it 
considered whether the standard levels considered are economically 
justified through a more detailed analysis of the economic impacts of 
these levels pursuant to 42 U.S.C. 6295(o)(2)(B)(iii) 6313(d)(4). The 
results of this analysis served as the basis for DOE to evaluate the 
economic justification for a potential standard level definitively 
(thereby supporting or rebutting the results of any preliminary 
determination of economic justification).

H. National Impact Analysis--National Energy Savings and Net Present 
Value

    The NIA assesses the NES and the NPV of total customer costs and 
savings that would be expected as a result of the amended energy 
conservation standards. The NES and NPV are analyzed at specific 
efficiency levels (i.e., TSL) for each equipment class of automatic 
commercial ice makers. DOE calculates the NES and NPV based on 
projections of annual equipment shipments, along with the annual energy 
consumption and total installed cost data from the LCC analysis. For 
the NOPR analysis, DOE forecasted the energy savings, operating cost 
savings, equipment costs, and NPV of customer benefits for equipment 
sold from 2018 through 2047--the year in which the last standards-
compliant equipment is shipped during the 30-year analysis.
    DOE evaluates the impacts of the amended standards by comparing 
base-case projections with standards-case projections. The base-case 
projections characterize energy use and customer costs for each 
equipment class in the absence of any amended energy conservation 
standards. DOE compares these base-case projections with projections 
characterizing the market for each equipment class if DOE adopted the 
amended standards at each TSL. For the standards cases, DOE assumed a 
``roll-up'' scenario in which equipment at efficiency levels that do 
not meet the standard level under consideration would ``roll up'' to 
the efficiency level that just meets the proposed standard level, and 
equipment already being purchased at efficiency levels at or above the 
proposed standard level would remain unaffected.
    DOE uses a Microsoft Excel spreadsheet model to calculate the 
energy savings and the national customer costs and savings from each 
TSL. The NOPR TSD and other documentation that DOE provides during the 
rulemaking help explain the models and how to use them, and interested 
parties can review DOE's analyses by interacting with these 
spreadsheets. The NIA spreadsheet model uses average values as inputs 
(as opposed to probability distributions of

[[Page 14898]]

key input parameters from a set of possible values).
    For the current analysis, the NIA used projections of energy prices 
and commercial building starts from the AEO2013 Reference Case. In 
addition, DOE analyzed scenarios that used inputs from the AEO2013 Low 
Economic Growth and High Economic Growth Cases. These cases have lower 
and higher energy price trends, respectively, compared to the Reference 
Case. NIA results based on these cases are presented in chapter 10 of 
the NOPR TSD.
    A detailed description of the procedure to calculate NES and NPV, 
and inputs for this analysis, are provided in chapter 10 of the NOPR 
TSD.
1. Shipments
    DOE obtained data from AHRI and U.S. Census Bureau's Current 
Industrial Reports (CIR) to estimate historical shipments for automatic 
commercial ice makers. AHRI provided DOE with automatic commercial ice 
maker shipment data for 2010 describing the distribution of shipments 
by equipment class and by harvest capacity. AHRI's data to DOE also 
included a 11-year history of total shipments from 2000 to 2010. 
Additionally, DOE collected total automatic commercial ice maker 
shipment data for the period of 1973 to 2009 from the CIR. DOE reviewed 
the total shipments in the AHRI and CIR data, and noted that the CIR-
reported shipments were consistently higher than the AHRI-reported 
shipments. DOE considered the possibility that these discrepancies were 
associated with net exports. However, the CIR data presented exports as 
a percentage of total production at a high level of industry 
aggregation, thus making it impossible to identify ice maker exports as 
a percentage of ice maker production. DOE requested input to aid in 
understanding the differences between the AHRI and CIR shipments data. 
DOE identified one source with identifiable export information, the 
North American Association of Food Equipment Manufacturers (NAFEM). 
NAFEM data for two recent calendar years (2007 and 2008) showed 
approximately 20 percent of total ice maker shipments associated with 
food service equipment as exports. Applying a 20 percent export factor 
to the CIR shipments data brought the CIR data into approximate 
agreement with the AHRI data.
    For the preliminary analysis, DOE relied on the CIR shipment 
values, reduced 20 percent for exports. Using adjusted CIR data, DOE 
created a rolling estimate of total existing stock by aggregating 
historical shipments across 8.5-year historical periods. DOE used the 
CIR data to estimate a time series of shipments and total stock for 
1994 to 2006--at the time of the analysis, the last year of data 
available without significant gaps in the data due to disclosure 
limitations. For each year, using shipments, stock, and the estimated 
8.5-year life of the equipment, DOE estimated that, on average, 14 
percent of shipments were for new installations and the remainder for 
replacement of existing stock.
    DOE then combined the historical shipments, disaggregated between 
shipments for new installations and those for replacement of existing 
stock, and the historical stock values with projections of new 
construction activity from AEO2011 to generate a forecast of shipments. 
Stock and shipments were first disaggregated to individual business 
types based on data developed for DOE on commercial ice maker 
stocks.\53\ The business types and share of stock represented by each 
type are shown in Table IV.27. Using a Weibull distribution assuming 
equipment has an average life of 8.5 years and lasts from 5 to 11 
years, DOE developed a 30-year series of replacement ice maker 
shipments. Using the base shipments to new equipment, and year-to-year 
changes in new commercial sector floor space additions from AEO2011, 
DOE estimated shipments for new construction. (For the NOPR, DOE is 
using AEO2013 projections of floor space additions. The AEO2013 floor 
space additions by building type are shown in Table IV.28.) The 
combination of the replacement and new construction shipments yields 
total shipments. The final step was to distribute total sales to 
equipment classes by multiplying the total shipments by percentage 
shares by class. Table IV.29 shows the percentages represented by all 
equipment classes, both the primary classes modeled explicitly in all 
NOPR analyses as well as the secondary classes.
---------------------------------------------------------------------------

    \53\ Navigant Consulting, Inc. Energy Savings Potential and R&D 
Opportunities for Commercial Refrigeration. Final Report, submitted 
to the U.S. Department of Energy. September 23, 2009. Page 41.

       Table IV.27--Business Types Included in Shipments Analysis
------------------------------------------------------------------------
                                                          Building type
                     Building type                        as percent of
                                                            stock (%)
------------------------------------------------------------------------
Health Care............................................                9
Lodging................................................               33
Foodservice............................................               22
Retail.................................................                8
Education..............................................                7
Food Sales.............................................               16
Office.................................................                4
                                                        ----------------
    Total..............................................              100
------------------------------------------------------------------------

                                              Table IV.28--AEO2013 Forecast of New Building Square Footage
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         New construction
                                         ---------------------------------------------------------------------------------------------------------------
                  Year                                                                    million ft \2\
                                         ---------------------------------------------------------------------------------------------------------------
                                            Health care       Lodging       Foodservice       Retail         Education      Food sales        Office
--------------------------------------------------------------------------------------------------------------------------------------------------------
2013....................................              66             147              30             276             247              21             173
2018....................................              67             164              50             424             208              35             409
2020....................................              65             178              48             407             197              33             452
2025....................................              63             181              48             442             169              33             392
2030....................................              71             150              54             508             191              38             273
2035....................................              73             207              56             522             228              39             412
2040....................................              76             190              56             562             252              39             405
Annual Growth Factor, 2031-2040.........            2.4%            2.5%            2.4%            2.5%            1.7%            2.3%            2.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 14899]]

Table IV.29--Percent of Shipped Units of Automatic Commercial Ice Makers
------------------------------------------------------------------------
                                                           Percentage of
                     Equipment class                         shipments
------------------------------------------------------------------------
IMH-W-Small-B...........................................            4.54
IMH-W-Med-B.............................................            2.90
IMH-W-Large-B...........................................            0.48
IMH-A-Small-B...........................................           27.08
IMH-A-Large-B...........................................           16.14
RCU-Small-B.............................................            5.43
RCU-RC/NC-Large-B.......................................            6.08
SCU-W-Small-B...........................................            0.68
SCU-W-Large-B...........................................            0.22
SCU-A-Small-B...........................................           13.85
SCU-A-Large-B...........................................            6.56
IMH-W-Small-C...........................................            0.68
IMH-W-Large-C...........................................            0.17
IMH-A-Small-C...........................................            3.53
IMH-A-Large-C...........................................            1.07
RCU-Small-C.............................................            0.83
RCU-Large-C.............................................            0.87
SCU-W-Small-C...........................................            0.15
SCU-W-Large-C...........................................            0.00
SCU-A-Small-C...........................................            8.75
SCU-A-Large-C...........................................            0.00
                                                         ---------------
    Total...............................................          100.00
------------------------------------------------------------------------
Source: AHRI, 2010 Shipments data submitted to DOE as part of this
  rulemaking.

    Comments related to shipment analysis received during the February 
2012 preliminary analysis public meeting are listed below along with 
DOE's responses to the comments.
    AHRI, in response to DOE's question about inconsistencies between 
AHRI and CIR data, indicated it has found discrepancies and that these 
discrepancies relate to the way manufacturers report to the Census 
Bureau. AHRI stated that some residential ice makers may be lumped into 
the Census Bureau data. AHRI stated that it is confident in its data 
and would trust it as compared to the Census Bureau data. (AHRI, Public 
Meeting Transcript, No. 42 at p. 155) AHRI commented that it believes 
the historical shipments numbers it provided to DOE are more consistent 
in terms of product definitions and other factors than the Census 
Bureau shipments. (AHRI, No. 49 at p. 6) In response to a question by 
NPCC, Manitowoc indicated that while the automatic commercial ice 
makers market was still a little below historical levels, it was 
recovered from 2009. Manitowoc stated the product mix calculated by DOE 
is a ``pretty good'' snapshot, but there are shifts over time between 
batch and continuous types. (Manitowoc, Public Meeting Transcript, No. 
42 at p. 147) Howe recommended using the Census Bureau shipments data 
because it is more encompassing. (Howe, No. 51 at p. 4) Hoshizaki 
stated AHRI shipment data could be skewed by models not sold in AHRI 
model class or manufacturers that do not participate with AHRI, but 
more information is needed to evaluate this issue. (Hoshizaki, No. 53 
at p. 2)
    In response to AHRI's comments about the known consistency of the 
AHRI data versus the less-well-known consistency of the Census Bureau 
data, DOE elected to use the AHRI historical data for the DOE Reference 
Case projections. As noted by Howe and Hoshizaki, the Census Bureau 
data could reflect broader coverage of all manufacturers. Thus, DOE 
configured the NIA model such that consistent scenarios can be modeled 
with either AHRI or Census Bureau data. With respect to the Manitowoc 
comments, DOE appreciates that the product mix represents a good 
snapshot. With respect to changing the mix, DOE requests additional 
data concerning trends, in the absence of which, DOE will by necessity 
hold the product mix static in the forecast.
2. Forecasted Efficiency in the Base Case and Standards Cases
    The method for estimating the market share distribution of 
efficiency levels is presented in section IV.G.10, and a detailed 
description can be found in chapter 10 of the NOPR TSD. To estimate 
efficiency trends in the standards cases, DOE uses a ``roll-up'' 
scenario in its standards rulemakings. Under the roll-up scenario, DOE 
assumes that equipment efficiencies in the base case that do not meet 
the standard level under consideration would ``roll up'' to the 
efficiency level that just meets the proposed standard level and 
equipment already being purchased at efficiencies at or above the 
standard level under consideration would be unaffected. Table IV.30 
shows the shipment-weighted market shares by efficiency level in the 
base-case scenario.

                                       Table IV.30--Shipment-Weighted Market Shares by Efficiency Level, Base Case
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Market share by efficiency level
             Equipment class             ---------------------------------------------------------------------------------------------------------------
                                           Level 1  (%)    Level 2  (%)    Level 3  (%)    Level 4  (%)    Level 5  (%)    Level 6  (%)    Level 7  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...........................            39.1            26.1            23.9            10.9             0.0             0.0  ..............
IMH-W-Med-B.............................            69.0            16.7            11.9             0.0             2.4  ..............  ..............
IMH-W-Large-B
    IMH-W-Large-B-1.....................            71.4             0.0             4.8            23.8  ..............  ..............  ..............
    IMH-W-Large-B-2.....................            33.3            50.0             0.0            16.7  ..............  ..............  ..............
IMH-A-Small-B...........................            37.0            31.5            25.9             5.6             0.0             0.0             0.0
IMH-A-Large-B
    IMH-A-Large-B-1.....................            41.5            43.9             7.3             7.3             0.0             0.0  ..............
    IMH-A-Large-B-2.....................            33.3            26.7            26.7            13.3  ..............  ..............  ..............
RCU-Large-B
    RCU-Large-B-1.......................            42.9            39.3             8.9             0.0             8.9  ..............  ..............
    RCU-Large-B-2.......................            27.3            45.5             9.1             0.0            18.2  ..............  ..............
SCU-W-Large-B...........................            28.6             0.0            14.3             0.0            42.9             0.0            14.3
SCU-A-Small-B...........................            17.1            40.0             5.7            11.4            14.3            11.4             0.0
SCU-A-Large-B...........................            28.6            35.7             0.0             7.1            21.4             7.1             0.0
IMH-A-Small-C...........................            22.9            22.9            14.3             8.6            17.1             2.9            11.4
IMH-A-Large-C...........................            35.0            20.0            15.0            15.0             0.0             5.0            10.0
SCU-A-Small-C...........................            26.7            20.0            16.7            13.3             3.3            20.0  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 14900]]

3. National Energy Savings
    For each year in the forecast period, DOE calculates the NES for 
each TSL by multiplying the stock of equipment affected by the energy 
conservation standards by the estimated per-unit annual energy savings. 
DOE typically considers the impact of a rebound effect, introduced in 
the energy use analysis, in its calculation of NES for a given product. 
A rebound effect occurs when users operate higher efficiency equipment 
more frequently and/or for longer durations, thus offsetting estimated 
energy savings. When a rebound effect occurs, it is generally because 
the users of the equipment perceive it as less costly to use the 
equipment and elect to use it more intensively. In the case of 
automatic commercial ice makers, users of the equipment include 
restaurant wait staff, hotel guests, cafeteria patrons, or hospital 
staff using ice in the treatment of patients. Users of automatic 
commercial ice makers tend to have no perception of the cost of the 
ice, and rather are using the ice to serve a specific need. Given this, 
DOE believes there is no potential for a rebound effect. For the 
preliminary analysis, DOE used a rebound factor of 1, or no effect, for 
automatic commercial ice makers.
    Inputs to the calculation of NES are annual unit energy 
consumption, shipments, equipment stock, and a site-to-source 
conversion factor.
    The annual unit energy consumption is the site energy consumed by 
an automatic commercial ice maker unit in a given year. Using the 
efficiency of units at each efficiency level and the baseline 
efficiency distribution, DOE determined annual forecasted shipment-
weighted average equipment efficiencies that, in turn, enabled 
determination of shipment-weighted annual energy consumption values.
    The automatic commercial ice makers stock in a given year is the 
total number of automatic commercial ice makers shipped from earlier 
years (up to 12 years earlier) that remain in use in that year. The NES 
spreadsheet model keeps track of the total units shipped each year. For 
purposes of the NES and NPV analyses in the NOPR analysis, DOE assumed 
that, based on an 8.5-year average equipment lifetimes, approximately 
12 percent of the existing automatic commercial ice makers are retired 
and replaced in each year. DOE assumes that, for units shipped in 2047, 
any units still remaining at the end of 2055 will be replaced.
    DOE uses a multiplicative factor called ``site-to-source conversion 
factor'' to convert site energy consumption (at the commercial 
building) into primary or source energy consumption (the energy at the 
energy generation site required to convert and deliver the site 
energy). These site-to-source conversion factors account for the energy 
used at power plants to generate electricity and losses in transmission 
and distribution, as well as for natural gas losses from pipeline 
leakage and energy used for pumping. For electricity, the conversion 
factors vary over time due to projected changes in generation sources 
(that is, the power plant types projected to provide electricity to the 
country). The factors that DOE developed are marginal values, which 
represent the response of the system to an incremental decrease in 
consumption associated with amended energy conservation standards.
    In the preliminary analysis, DOE used annual site-to-source 
conversion factors based on the version of the National Energy Modeling 
System (NEMS) that corresponds to AEO2008.\54\ For today's NOPR, DOE 
updated its conversion factors based on the U.S. energy sector modeling 
using the NEMS Building Technologies (NEMS-BT) version that corresponds 
to AEO2013 and which provides national energy forecasts through 2040. 
Within the results of NEMS-BT model runs performed by DOE, a site-to-
source ratio for commercial refrigeration was developed. The site-to-
source ratio was extended beyond 2040 by using growth rates calculated 
at 5-year intervals to extrapolate the trend to 2045, after which it 
was held constant through the end of the analysis period (30-years plus 
the life of equipment).
---------------------------------------------------------------------------

    \54\ In the past for preliminary analysis estimates, DOE 
typically did not perform analyses using NEMS. Rather, DOE relied on 
existing estimates considered appropriate for the analysis. The 
site-to-source values DOE considered most appropriate were those 
used in the prior 2009 commercial refrigeration equipment rulemaking 
final rule.
---------------------------------------------------------------------------

    DOE has historically presented NES in terms of primary energy 
savings. 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 Science, DOE announced 
its intention to use full-fuel-cycle (FFC) measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (August 18, 2011) While DOE stated in that 
notice that it intended to use the Greenhouse Gases, Regulated 
Emissions, and Energy Use in Transportation (GREET) model to conduct 
the analysis, it also said it would review alternative methods, 
including the use of NEMS. After evaluating both models and the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in the Federal Register in which DOE 
explained its determination that NEMS is a more appropriate tool for 
its FFC analysis and its intention to use NEMS for that purpose. 77 FR 
49701 (August 17, 2012). DOE received one comment, which was supportive 
of the use of NEMS for DOE's FFC analysis.\55\
---------------------------------------------------------------------------

    \55\ Docket ID: EERE-2010-BT-NOA0028, comment by Kirk Lundblade.
---------------------------------------------------------------------------

    The approach used for today's NOPR, and the FFC multipliers that 
were applied are described in appendix 10D of the NOPR TSD. NES results 
are presented in both primary and in terms of FFC savings; the savings 
by TSL are summarized in terms of FFC savings in section V.B.3.
4. Net Present Value of Customer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by customers of the automatic commercial ice makers are: 
(1) total annual installed cost; (2) total annual savings in operating 
costs; and (3) a discount factor. DOE calculated net national savings 
for each year as the difference in installation and operating costs 
between the base-case scenario and standards-case scenarios. DOE 
calculated operating cost savings over the life of each piece of 
equipment shipped in the forecast period.
    DOE multiplied monetary values in future years by the discount 
factor to determine the present value of costs and savings. DOE 
estimated national impacts with both a 3-percent and a 7-percent real 
discount rate as the average real rate of return on private investment 
in the U.S. economy. These discount rates are used in accordance with 
the Office of Management and Budget (OMB) guidance to Federal agencies 
on the development of regulatory analysis (OMB Circular A-4, September 
17, 2003), and section E, ``Identifying and Measuring Benefits and 
Costs,'' therein. DOE defined the present year as 2013 for the NOPR 
analysis. The 7-percent real value is an estimate of the average 
before-tax rate of return to private capital in the U.S. economy. The 
3-percent real value represents the ``societal rate of time 
preference,'' which is the rate at which society discounts future 
consumption flows to their present.
    As discussed in IV.G.1, DOE included a projection of price trends 
in the

[[Page 14901]]

preliminary analysis NIA. For the NOPR, DOE reviewed and updated the 
analysis with the result that the projected reference case downward 
trend in prices is quite modest. For the NOPR, DOE also developed high 
and low case price trend projections, as discussed in a NOPR TSD 
appendix to chapter 10.

I. Customer Subgroup Analysis

    In analyzing the potential impact of new or amended standards on 
commercial customers, DOE evaluates the impact on identifiable groups 
(i.e., subgroups) of customers, such as different types of businesses 
that may be disproportionately affected. Based on the data available to 
DOE, automatic commercial ice maker ownership in three building types 
represent over 70 percent of the market: food sales, foodservice, and 
hotels. Based on data from the 2007 U.S. Economic Census and size 
standards set by the U.S. Small Business Administration (SBA), DOE 
determined that a majority of food sales, foodservice and lodging firms 
fall under the definition of small businesses. Small businesses 
typically face a higher cost of capital. In general, the lower the cost 
of electricity and higher the cost of capital, the more likely it is 
that an entity would be disadvantaged by the requirement to purchase 
higher efficiency equipment. Chapter 8 of the NOPR TSD presents the 
electricity price by business type and discount rates by building 
types, respectively, while chapter 11 discusses these topics as they 
specifically relate to small businesses.
    Comparing the foodservice, food sales, and lodging categories, 
foodservice faces the highest energy price, with food sales and lodging 
facing lower and nearly the same energy prices. Lodging faces the 
highest cost of capital. Foodservice faces a higher cost of capital 
than food sales. Given the cost of capital disparity, lodging was 
selected for LCC subgroup analysis. With foodservice facing a higher 
cost of capital, it was selected for subgroup analysis because the 
higher cost of capital should lead foodservice customers to value first 
cost more and future electricity savings less than would be the case 
for food sales customers.
    At the February 2012 preliminary analysis public meeting, DOE asked 
for input on the LCC subgroup analysis, and in particular, about 
appropriate groups for analysis. Manitowoc recommended that DOE look at 
small businesses, such as franchise operations and independent 
proprietor-run establishments. Manitowoc added that while there are 
institutional sectors with longer windows, there are others--``mom and 
pops''--that represent a large part of the market and which may be 
unfairly impacted by new standards because of their short payback 
windows and cash constraints. Manitowoc also indicated it is not just 
restaurants, it is hotels operated by franchisees and in some cases 
even hotel chains. (Manitowoc, Public Meeting Transcript, No. 42 at p. 
169)
    DOE estimated the impact on the identified customer subgroups using 
the LCC spreadsheet model. The standard LCC and PBP analyses (described 
in section IV.G) include various types of businesses that use automatic 
commercial ice makers. For the LCC subgroup analysis, it was assumed 
that the subgroups analyzed do not have access to national purchasing 
accounts or two major capital markets thereby making the discount rates 
higher for these subgroups. Details of the data used for LCC subgroup 
analysis and results are presented in chapter 11 of the NOPR TSD.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the impacts of amended energy 
conservation standards on manufacturers of automatic commercial ice 
makers. The MIA has both quantitative and qualitative aspects and 
includes analyses of forecasted 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 amended 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, in particular, small businesses.
    The quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (GRIM), an industry cash flow model with inputs 
specific to this rulemaking. The key GRIM inputs include data on the 
industry cost structure, unit production costs, product shipments, 
manufacturer markups, and investments in R&D and manufacturing capital 
required to produce compliant products. 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 to domestic manufacturing employment. The model 
estimates the impacts of more-stringent energy conservation standards 
on a given industry by comparing changes in INPV and domestic 
manufacturing employment between a base case and the various TSLs in 
the standards case. To capture the uncertainty relating to manufacturer 
pricing strategy following amended 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 considers such 
factors as manufacturing capacity, competition within the industry, the 
cumulative impact of other DOE and non-DOE regulations, and impacts on 
small business manufacturers. 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 automatic commercial ice 
maker industry. This included a top-down cost analysis of automatic 
commercial ice maker 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 automatic commercial ice maker industry, 
including company Securities and Exchange Commission (SEC) 10-K 
filings, corporate annual reports, the U.S. Census Bureau's Economic 
Census, and reports from Dunn & Bradstreet.
    In Phase 2 of the MIA, DOE prepared a framework industry cash flow 
analysis to quantify the impacts of new and amended 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 effective 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) create a need for increased 
investment; (2) raise production costs per unit; and (3) alter 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 automatic commercial ice makers in order 
to

[[Page 14902]]

develop other key GRIM inputs, including product and capital 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 a representative cross-section of manufacturers. During 
these interviews, DOE discussed engineering, manufacturing, 
procurement, and financial topics to validate assumptions used in the 
GRIM and to identify key issues or concerns. See section IV.J.4 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 amended 
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 manufacturers, low volume 
manufacturers, niche players, and/or manufacturers exhibiting a cost 
structure that largely differs from the industry average.
    DOE identified one subgroup, small manufacturers, for which average 
cost assumptions may not hold. DOE applied the small business size 
standards published by the SBA to determine whether a company is 
considered a small business. 65 FR 30840, May 15, 2000, as amended at 
67 FR 52602, Aug. 13, 2002; 74 FR 46313, Sept. 9, 2009. To be 
categorized as a small business under North American Industry 
Classification System (NAICS) 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing,'' which includes commercial ice maker manufacturing, a 
manufacturer and its affiliates may employ a maximum of 750 employees. 
The 750-employee threshold includes all employees in a business's 
parent company and any other subsidiaries. Based on this 
classification, DOE identified seven manufacturers of automatic 
commercial ice makers that qualify as small businesses. The automatic 
commercial ice maker small manufacturer subgroup is discussed in 
chapter 12 of the NOPR TSD and in section VI.B.1 of this rulemaking.
2. Government Regulatory Impact Model
    DOE uses the GRIM to quantify the changes in industry cash flows 
resulting from new or amended energy conservation standards. The GRIM 
uses manufacturer costs, markups, shipments, and industry financial 
information to arrive at a series of base-case annual cash flows absent 
new or amended standards, beginning with the present year, 2013, and 
continuing through 2047. The GRIM then models changes in costs, 
investments, shipments, and manufacturer margins that may result from 
new or amended energy conservation standards and compares these results 
against those in the base-case forecast of annual cash flows. The 
primary quantitative output of the GRIM is the INPV, which DOE 
calculates by summing the stream of annual discounted cash flows over 
the full analysis period. For manufacturers of automatic commercial ice 
makers, DOE used a real discount rate of 9.2 percent, the weighted 
average cost of capital as derived from industry financials. DOE then 
modified this figure based on feedback received during confidential 
interviews with manufacturers.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the base case and the various 
TSLs. The difference in INPV between the base case and a standards case 
represents the financial impact of the amended standard on 
manufacturers at that particular TSL. As discussed previously, DOE 
collected the necessary information to develop key GRIM inputs from a 
number of sources, including publicly available data and interviews 
with manufacturers (described in the next section). The GRIM results 
are shown in section V.B.2.a. Additional details about the GRIM can be 
found in chapter 12 of the NOPR TSD.
a. Government Regulatory Impact Model Key Inputs

Manufacturer Production Costs

    Manufacturing a higher efficiency product is typically more 
expensive than manufacturing a baseline product due to the use of more 
complex and typically more costly components. The changes in the MPCs 
of the analyzed products can affect the revenues, gross margins, and 
cash flow of the industry, making product cost data key GRIM inputs for 
DOE's analysis.
    For each efficiency level of each equipment class that was directly 
analyzed, DOE used the MPCs developed in the engineering analysis, as 
described in section IV.A.2 and further detailed in chapter 5 of the 
NOPR TSD. For equipment classes that were indirectly analyzed, DOE used 
a composite of MPCs from similar equipment classes, substitute 
component costs, and design options to develop an MPC for each 
efficiency level. For equipment classes that had multiple units 
analyzed, DOE used a weighted average MPC based on the relative 
shipments of products at each efficiency level as the input for the 
GRIM. Additionally, DOE used information from its teardown analysis, 
described in section IV.D, to disaggregate the MPCs into material and 
labor costs. These cost breakdowns and equipment markups were validated 
with manufacturers during manufacturer interviews.

Base-Case Shipments Forecast

    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of 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 forecasts derived from the shipments 
analysis from 2013, the base year, to 2047, the end of the analysis 
period. See chapter 9 of the NOPR TSD for additional details.

Product and Capital Conversion Costs

    Amended energy conservation standards will cause manufacturers to 
incur conversion costs to bring their production facilities and product 
designs into compliance. For the MIA, DOE classified these conversion 
costs into two major groups: (1) product conversion costs and (2) 
capital conversion costs. Product conversion costs include investments 
in research, development, testing, marketing, and other non-capitalized 
costs necessary to make product designs comply with new or amended 
energy conservation standards. Capital conversion costs include 
investments in property, plant, and equipment necessary to adapt or 
change existing production facilities such that new product designs can 
be fabricated and assembled.

Stranded Assets

    If new or amended energy conservation standards require investment 
in new manufacturing capital, there also exists the possibility that 
they will render existing manufacturing capital obsolete. In the case 
that this obsolete manufacturing capital is not fully depreciated at 
the time new or amended standards go into effect, this would result in 
the stranding of these assets, and would necessitate the write-down of 
their residual un-depreciated value.
    DOE used multiple sources of data to evaluate the level of product 
and capital

[[Page 14903]]

conversion costs and stranded assets manufacturers would likely face to 
comply with new or amended energy conservation standards. DOE used 
manufacturer interviews to gather data on the level of investment 
anticipated at each proposed efficiency level and validated these 
assumptions using estimates of capital requirements derived from the 
product teardown analysis and engineering model described in section 
IV.D. These estimates were then aggregated and scaled using information 
gained from industry product databases to derive total industry 
estimates of product and capital conversion costs and to protect 
confidential information.
    In general, DOE assumes that all conversion-related investments 
occur between the year the final rule is published and the year by 
which manufacturers must comply with the new or amended standards. The 
investment figures used in the GRIM can be found in section V.B.2.a of 
this notice. For additional information on the estimated product 
conversion and capital conversion costs, see chapter 12 of the NOPR 
TSD.
b. Government Regulatory Impact Model Scenarios

Markup Scenarios

    As discussed in section IV.D, MSPs include direct manufacturing 
production costs (i.e., labor, material, overhead, and depreciation 
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 manufacturer markups to the MPCs estimated in the 
engineering analysis. Modifying these markups in the standards case 
yields different sets of impacts on manufacturers. For the MIA, DOE 
modeled two standards-case markup scenarios to represent the 
uncertainty regarding the potential impacts on prices and profitability 
for manufacturers following the implementation of amended energy 
conservation standards: (1) A preservation of gross margin percentage 
markup scenario; and (2) a preservation of earnings before interest and 
taxes (EBIT) markup scenario. These scenarios lead to different markups 
values that, when applied to the MPCs, result in varying revenue and 
cash flow impacts.
    Under the preservation of gross margin percentage scenario, DOE 
applied a single, uniform ``gross margin percentage'' markup across all 
efficiency levels. As production costs increase with efficiency, this 
scenario implies that the absolute dollar markup will increase as well. 
Based on publicly available financial information for manufacturers of 
automatic commercial ice makers and comments from manufacturer 
interviews, DOE assumed the industry average markup on production costs 
to be 1.25. Because this markup scenario assumes that manufacturers 
would be able to maintain their gross margin percentage as production 
costs increase in response to an amended energy conservation standard, 
it represents a lower bound of industry impacts (higher industry 
profitability) under an amended energy conservation standard.
    In the preservation of EBIT markup scenario, manufacturer markups 
are calibrated so that EBIT in the year after the compliance date of 
the amended energy conservation standard is the same as in the base 
case. Under this scenario, as the cost of production goes up, 
manufacturers are generally required to reduce the markups on their 
minimally compliant products to maintain a cost competitive offering. 
The implicit assumption behind this scenario is that the industry can 
only maintain EBIT in absolute dollars after compliance with the 
amended standard is required. Therefore, operating margin (as a 
percentage) shrinks in the standards cases. This markup scenario 
represents an upper bound of industry impacts (lower profitability) 
under an amended energy conservation standard.
3. Discussion of Comments
    In response to the February 2012 preliminary analysis public 
meeting, interested parties commented on the assumptions and results of 
the preliminary analysis TSD. Oral and written comments addressed 
several topics, including the impact to suppliers and the distribution 
channel, the importance of the ENERGYSTAR program, cumulative 
regulatory burden, and the impact to small manufacturers.
a. Impact to Suppliers, Distributors, Dealers, and Contractors
    AHRI commented that DOE must perform analyses to assess the impact 
of the rule on component suppliers, distributors, dealers, and 
contractors. Where the MIA serves to assess the impact of amended 
energy conservation standards on manufacturers of automatic commercial 
ice makers; any impact on distributors, dealers, and contractors falls 
outside the scope of this analysis.
    Impacts on component suppliers might arise if manufacturers 
switched to more-efficient components, or if there was a substantial 
reduction of orders following new or amended standards. In public 
comments, manufacturers expressed that given their low production 
volumes, the automatic commercial ice maker manufacturing industry has 
little influence over component suppliers relative to other commercial 
refrigeration equipment industries. It follows that energy conservation 
standards for automatic commercial ice makers would have little impact 
on component suppliers given their marginal contribution to overall 
commercial refrigeration component demand.
b. ENERGY STAR
    Manitowoc commented that it is a very strong supporter of ENERGY 
STAR and that certification is very important to its customers because 
of the potential for utility rebates, Leadership in Energy and 
Environmental Design (LEED) certification, and other reasons. Manitowoc 
expressed concern that, if efficiency standards were raised to the max-
tech level, there would be no more room for an ENERGY STAR category, 
which would be disruptive to the industry.
    DOE acknowledges the importance of the ENERGY STAR program and of 
understanding its interaction with energy efficiency standards. 
However, EPCA requires DOE to establish energy conservation standards 
at the maximum level that is technically feasible and economically 
justified. DOE has found, over time, with other products, as the 
standard level is increased, manufacturers' research results in energy 
efficiency improvements that are regarded by the ENERGY STAR program. 
As such, any standard level below the max-tech level continues to leave 
room for ENERGY STAR rebate programs.
c. Cumulative Regulatory Burden
    AHRI commented on the cumulative regulatory burden associated with 
DOE efficiency standards. AHRI indicated that several legislative and 
regulatory activities should be considered, including legislation 
intended to reduce lead in drinking water and climate change bills that 
may be considered by Congress. (AHRI, No. 49 at p. 4)
    DOE takes into account the cumulative cost of multiple Federal 
regulations on manufacturers in the cumulative regulatory burden 
section of its analysis, which can be found in section V.B.2.e of this 
notice. DOE does not analyze the quantitative impacts of standards that 
have not yet been finalized. Similarly, DOE does not analyze the 
impacts of potential climate change bills because any impacts would

[[Page 14904]]

be speculative in the absence of final legislation.
    AHRI noted that California has regulations to limit GHGs and the 
measures established by the California Air Resources Board (CARB) to 
reduce global warming will reduce the use of refrigerants such as HFCs. 
CARB is currently limiting the in-State use of refrigerants considered 
to have high global warming potential (GWP) in non-residential 
refrigeration systems through its Refrigerant Management Program that 
became effective on January 1, 2011.\56\ According to this new 
regulation, facilities with refrigeration systems that have a 
refrigerant capacity exceeding 50 lb must repair leaks within 14 days 
of detection, maintain on-site records of all leak repairs, and keep 
receipts of all refrigerant purchases. The regulation applies to any 
person or company that installs, services, or disposes of appliances 
with high-GWP refrigerants. Refrigeration systems with a refrigerant 
capacity exceeding 50 lb typically belong to food retail operations 
with remote condensing racks that store refrigerant serving multiple 
commercial refrigeration and ice-making units within a business. 
However, automatic commercial ice makers in food retail establishments 
are usually installed and serviced by refrigeration contractors, not 
manufacturers. As a result, although these CARB regulations apply to 
refrigeration technicians and owners of facilities with refrigeration 
systems, they are unlikely to represent a regulatory burden for 
manufacturers of automatic commercial ice makers.
---------------------------------------------------------------------------

    \56\ See www.arb.ca.gov/cc/reftrack/reftrackrule.html.
---------------------------------------------------------------------------

    The discussion of cumulative regulatory burden on manufacturers of 
automatic commercial ice makers is detailed further in chapter 12 of 
the NOPR TSD.
d. Small Manufacturers
    Howe observed that most high-capacity ice makers are made by small 
manufacturers, and consequently, setting higher efficiency standards 
for high-capacity equipment may be discriminatory against small 
manufacturers. (Howe, No. 51 at p. 2)
    DOE agrees that amended standards may have disproportionate impacts 
on smaller manufacturers. To make this determination, the DOE conducts 
an analysis of impacts on certain manufacturer subgroups including 
small businesses to assess if any impacts prove to be disproportionate. 
The results of this analysis are described further in section VI.B of 
this notice and detailed in chapter 12 of the NOPR TSD.
4. Manufacturer Interviews
    To inform the MIA, DOE interviewed manufacturers with an estimated 
combined market share of 95 percent. The information gathered during 
these interviews enabled DOE to tailor the GRIM to reflect the unique 
financial characteristics of the automatic commercial ice maker 
industry. These confidential interviews provided information that DOE 
used to evaluate the impacts of amended energy conservation standards 
on manufacturer cash flows, manufacturing capacities, and employment 
levels.
    During the manufacturer interviews, DOE asked manufacturers to 
describe their major concerns about this rulemaking. The following 
sections describe the most significant issues identified by 
manufacturers. DOE also includes additional concerns in chapter 12 of 
the NOPR TSD.
a. Price Sensitivity
    All manufacturers interviewed characterized the market for 
automatic commercial ice makers as extremely price sensitive. They hold 
the position that new and amended standards will result in decreased 
profit margins as they will be unable to pass through costs relating to 
standards compliance. They noted that this will be particularly 
troublesome for lower capacity equipment classes (Small SCU and Small 
IMH), which are sold primarily to smaller restaurants and food service 
establishments with limited access to capital. Additionally, they noted 
that distributors tend to be individual proprietors or small franchises 
with limited opportunities to extend financing to their customers. 
Manufacturers went on to report that while energy efficiency is 
important, it is not a feature for which customers would pay a premium.
    One manufacturer also noted that replacement parts represented 70 
percent of sales, and while sales of parts had increased since 2009, 
unit sales had decreased, indicating that customers were holding onto 
units longer. The ability to extend the life of a unit through repairs 
and refurbishment presents a further economic challenge to 
manufacturers facing energy efficiency standards.
b. Enforcement
    Manufacturers characterized the automatic commercial ice maker 
market as a niche market with a high degree of competition. The recent 
entrance of foreign manufacturers has led to a further tightening of 
price competition due to the lower labor costs of these foreign 
manufacturers. Several domestic manufacturers expressed concern about 
the enforcement of an amended energy efficiency standard for automatic 
commercial ice makers produced overseas. Manufacturers believe that 
insufficient enforcement will lead to market distortions, as companies 
that make the necessary investments to meet amended standards would be 
at a distinct pricing disadvantage to unscrupulous competitors, often 
times foreign manufacturers, that do not fully comply. The 
manufacturers requested that DOE take the enforcement action necessary 
to maintain a level playing field and to eliminate non-compliant 
products from the market.
c. Reliability Impacts
    Some manufacturers expressed concerns that future energy 
conservation standards would have an adverse impact on the reliability 
of their products. One manufacturer stated that any time new components 
or designs are introduced, that there is an increase in service calls 
and the mean time between failures drops as they work out the issues. 
This manufacturer went on to emphasize that reliability is the most 
important feature of their products.
d. Impact on Innovation
    Several manufacturers expressed concerns over the imbalance of 
internal engineering resources brought about by the regular revision 
and introduction of energy conservation standards. As energy use has 
become increasingly regulated, manufacturers have had to shift 
engineering and support resources away from other initiatives, 
adversely affecting product innovation outside of energy efficiency. 
One manufacturer reported that a previous round of standards required 
nearly all of the company's engineering resources for between 1 and 2 
years. Where the R&D effort required for compliance is intermittent, 
innovation is impacted without adding to overall employment. DOE 
requests additional comment on the intermittency of R&D efforts 
directed at compliance with energy conservation standards and its 
impact on other research and development resources.

K. Emissions Analysis

    In the emissions analysis, DOE estimates the reduction in power 
sector emissions of CO2, NOX, SO2, and 
Hg from potential energy conservation standards for automatic 
commercial ice makers. In addition, DOE estimates emissions impacts in 
production activities (extracting, processing, and transporting fuels) 
that provide the energy inputs to power plants. These are

[[Page 14905]]

referred to as ``upstream'' emissions. Together, these emissions 
account for the full-fuel-cycle (FFC). In accordance with DOE's FFC 
Statement of Policy (76 FR 51282 (Aug. 18, 2011)), as amended at 77 FR 
49701 (Aug. 17, 2012), the FFC analysis includes impacts on emissions 
of methane (CH4) and nitrous oxide (N2O), both of 
which are recognized as GHGs.
    DOE conducted the emissions analysis using emissions factors that 
were derived from data in AEO2013, supplemented by data from other 
sources. DOE developed separate emissions factors for power sector 
emissions and upstream emissions. The method that DOE used to derive 
emissions factors is described in chapter 13 of the NOPR TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For CH4 and 
N2O, DOE also presents results in terms of units of carbon 
dioxide equivalent (CO2eq). Gases are converted to 
CO2eq by multiplying the physical units by the gas' global 
warming potential (GWP) over a 100 year time horizon. Based on the 
Fourth Assessment Report of the Intergovernmental Panel on Climate 
Change, DOE used GWP values of 25 for CH4 and 298 for 
N2O.
    EIA prepares the AEO using NEMS. Each annual version of NEMS 
incorporates the projected impacts of existing air quality regulations 
on emissions. AEO2013 generally represents current legislation and 
environmental regulations, including recent government actions, for 
which implementing regulations were available as of December 31, 2012.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States and the 
District of Columbia (DC). SO2 emissions from 28 eastern 
States and DC were also limited under the Clean Air Interstate Rule 
(CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance-based 
trading program that operates along with the Title IV program. CAIR was 
remanded to U.S. Environmental Protection Agency (EPA) by the U.S. 
Court of Appeals for the District of Columbia Circuit but it remained 
in effect. See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2011 
EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule 
(CSAPR). 76 FR 48208 (August 8, 2011). On August 21, 2012, the DC 
Circuit issued a decision to vacate CSAPR. See EME Homer City 
Generation, LP v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012). The court 
ordered EPA to continue administering CAIR. The AEO2013 emissions 
factors used for today's NOPR assume that CAIR remains a binding 
regulation through 2040.
    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the adoption of an efficiency standard could be used to permit 
offsetting increases in SO2 emissions by any regulated EGU. 
In past rulemakings, DOE recognized that there was uncertainty about 
the effects of efficiency standards on SO2 emissions covered 
by the existing cap-and-trade system, but it concluded that negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning in 2015, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants. 
77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA established a 
standard for hydrogen chloride as a surrogate for acid gas hazardous 
air pollutants (HAP), and also established a standard for 
SO2 (a non-HAP acid gas) as an alternative equivalent 
surrogate standard for acid gas HAP. The same controls are used to 
reduce HAP and non-HAP acid gas; thus, SO2 emissions will be 
reduced as a result of the control technologies installed on coal-fired 
power plants to comply with the MATS requirements for acid gas. AEO2013 
assumes that, in order to continue operating, coal plants must have 
either flue gas desulfurization or dry sorbent injection systems 
installed by 2015. Both technologies, which are used to reduce acid gas 
emissions, also reduce SO2 emissions. Under the MATS, NEMS 
shows a reduction in SO2 emissions when electricity demand 
decreases (e.g., as a result of energy efficiency standards). Emissions 
will be far below the cap established by CAIR, so it is unlikely that 
excess SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by any regulated EGU. Therefore, 
DOE believes that efficiency standards will reduce SO2 
emissions in 2015 and beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia. Energy conservation standards are 
expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
permit offsetting increases in NOX emissions. However, 
standards would be expected to reduce NOX emissions in the 
States not affected by the caps, so DOE estimated NOX 
emissions reductions from the standards considered in today's NOPR for 
these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. DOE estimated mercury 
emissions reduction using emissions factors based on AEO2013, which 
incorporates the MATS.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this proposed rule, DOE considered 
the estimated monetary benefits from the reduced emissions of 
CO2 and NOX that are expected to result from each 
of the TSLs considered. In order to make this calculation similar to 
the calculation of the NPV of consumer benefit, DOE considered the 
reduced emissions expected to result over the lifetime of equipment 
shipped in the forecast period for each TSL. This section summarizes 
the basis for the monetary values used for each of these emissions and 
presents the values considered in this rulemaking.
    For today's NOPR, DOE is relying on a set of values for the social 
cost of carbon (SCC) that was developed by an interagency process. A 
summary of the basis for these values is provided below, and a more 
detailed description of the methodologies used is provided as an 
appendix to chapter 14 of the TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.

[[Page 14906]]

    Under section 1(b) of Executive Order 12866, agencies must, to the 
extent permitted by law, ``assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs.'' The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide (CO2) emissions, the analyst faces a number 
of serious challenges. A report from the National Research Council \57\ 
points out that any assessment will suffer from uncertainty, 
speculation, and lack of information about (1) future emissions of 
greenhouse gases, (2) the effects of past and future emissions on the 
climate system, (3) the impact of changes in climate on the physical 
and biological environment, and (4) the translation of these 
environmental impacts into economic damages. As a result, any effort to 
quantify and monetize the harms associated with climate change will 
raise serious questions of science, economics, and ethics and should be 
viewed as provisional.
---------------------------------------------------------------------------

    \57\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. National Academies Press: 
Washington, DC (2009).
---------------------------------------------------------------------------

    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Most Federal regulatory actions can 
be expected to have marginal impacts on global emissions. For such 
policies, the agency can estimate the benefits from reduced (or costs 
from increased) emissions in any future year by multiplying the change 
in emissions in that year by the SCC value appropriate for that year. 
The net present value of the benefits can then be calculated by 
multiplying each of these future benefits by an appropriate discount 
factor and summing across all affected years. This approach assumes 
that the marginal damages from increased emissions are constant for 
small departures from the baseline emissions path, an approximation 
that is reasonable for policies that have effects on emissions that are 
small relative to cumulative global carbon dioxide emissions. For 
policies that have a large (non-marginal) impact on global cumulative 
emissions, there is a separate question of whether the SCC is an 
appropriate tool for calculating the benefits of reduced emissions. 
This concern is not applicable to this notice, however.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    Economic analyses for Federal regulations have used a wide range of 
values to estimate the benefits associated with reducing carbon dioxide 
emissions. The model year 2011 Corporate Average Fuel Economy final 
rule, the U.S. Department of Transportation (DOT) used both a 
``domestic'' SCC value of $2 per metric ton of CO2 and a 
``global'' SCC value of $33 per metric ton of CO2 for 2007 
emission reductions (in 2007$), increasing both values at 2.4 percent 
per year. DOT also included a sensitivity analysis at $80 per metric 
ton of CO2.\58\ A 2008 regulation proposed by DOT assumed a 
domestic SCC value of $7 per metric ton of CO2 (in 2006$) 
for 2011 emission reductions (with a range of $0-$14 for sensitivity 
analysis), also increasing at 2.4 percent per year.\59\ A regulation 
for packaged terminal air conditioners and packaged terminal heat pumps 
finalized by DOE in 2008 used a domestic SCC range of $0 to $20 per 
metric ton CO2 for 2007 emission reductions (in 2007$). 73 
FR 58772, 58814 (Oct. 7, 2008) In addition, EPA's 2008 Advance Notice 
of Proposed Rulemaking on Regulating Greenhouse Gas Emissions Under the 
Clean Air Act identified what it described as ``very preliminary'' SCC 
estimates subject to revision. 73 FR 44354 (July 30, 2008). EPA's 
global mean values were $68 and $40 per metric ton CO2 for 
discount rates of approximately 2 percent and 3 percent, respectively 
(in 2006$ for 2007 emissions).
---------------------------------------------------------------------------

    \58\ See Average Fuel Economy Standards Passenger Cars and Light 
Trucks Model Year 2011, 74 FR 14196 (March 30, 2009) (Final Rule); 
Final Environmental Impact Statement Corporate Average Fuel Economy 
Standards, Passenger Cars and Light Trucks, Model Years 2011-2015 at 
3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy).
    \59\ See Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate 
Average Fuel Economy Standards, Passenger Cars and Light Trucks, 
Model Years 2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy)
---------------------------------------------------------------------------

    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specifically, the group considered public comments and further explored

[[Page 14907]]

the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models commonly used to estimate 
the SCC: the FUND, DICE, and PAGE models. These models are frequently 
cited in the peer-reviewed literature, and were used in the last 
assessment of the Intergovernmental Panel on Climate Change. Each model 
was given equal weight in the SCC values that were developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four sets of SCC values for use in 
regulatory analyses. Three sets of values are based on the average SCC 
from the three integrated assessment models, at discount rates of 2.5, 
3, and 5 percent. The fourth set, which represents the 95th percentile 
SCC estimate across all three models at a 3-percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. The values 
grow in real terms over time. Additionally, the interagency group 
determined that a range of values from 7 percent to 23 percent should 
be used to adjust the global SCC to calculate domestic effects, 
although preference is given to consideration of the global benefits of 
reducing CO2 emissions. Table IV.31 presents the values in 
the 2010 interagency group report,\60\ which is reproduced in appendix 
14-A of the NOPR TSD.
---------------------------------------------------------------------------

    \60\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, February 2010. 
www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.>

                     Table IV.31--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                          [2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                         Discount rate (%)
                                                 ---------------------------------------------------------------
                                                         5               3              2.5              3
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................             4.7            21.4            35.1            64.9
2015............................................             5.7            23.8            38.4            72.8
2020............................................             6.8            26.3            41.7            80.7
2025............................................             8.2            29.6            45.9            90.4
2030............................................             9.7            32.8            50.0           100.0
2035............................................            11.2            36.0            54.2           109.7
2040............................................            12.7            39.2            58.4           119.3
2045............................................            14.2            42.1            61.7           127.8
2050............................................            15.7            44.9            65.0           136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's notice were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\61\ Table IV.32 
shows the updated sets of SCC estimates in five year increments from 
2010 to 2050. The full set of annual SCC estimates between 2010 and 
2050 is reported in appendix 14-B of the NOPR TSD. The central value 
that emerges is the average SCC across models at the 3-percent discount 
rate. However, for purposes of capturing the uncertainties involved in 
regulatory impact analysis, the interagency group emphasizes the 
importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \61\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf>

                     Table IV.32--Annual SCC Values From 2013 Interagency Update, 2010-2050
                                     [2007 dollars per metric ton CO[ihel2]]
----------------------------------------------------------------------------------------------------------------
                                                                         Discount rate (%)
                                                 ---------------------------------------------------------------
                                                         5               3              2.5              3
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2010............................................              11              32              51              89
2015............................................              11              37              57             109
2020............................................              12              43              64             128
2025............................................              14              47              69             143
2030............................................              16              52              75             159
2035............................................              19              56              80             175
2040............................................              21              61              86             191

[[Page 14908]]

 
2045............................................              24              66              92             206
2050............................................              26              71              97             220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC. The interagency group intends 
to periodically review and reconsider those estimates to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report adjusted to 2012$ using the Gross Domestic 
Product (GDP) price deflator. For each of the four case of SCC values, 
the values for emissions in 2015 were $11.8, $39.7, $61.2, and $117.0 
per metric ton avoided (values expressed in 2012$). DOE derived values 
after 2050 using the relevant growth rates for the 2040-2050 period in 
the interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
2. Valuation of Other Emissions Reductions
    As noted above, DOE has taken into account how new or amended 
energy conservation standards would reduce NOX emissions in 
those 22 States not affected by emission caps. DOE estimated the 
monetized value of NOX emissions reductions resulting from 
each of the TSLs considered for today's NOPR based on estimates found 
in the relevant scientific literature. Estimates of monetary value for 
reducing NOX from stationary sources range from $468 to 
$4,809 per ton (2012$).\62\ DOE calculated monetary benefits using a 
medium value for NOX emissions of $2,639 per short ton (in 
2012$), and real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------

    \62\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included monetization in the current analysis.

M. Utility Impact Analysis

    In the utility impact analysis, DOE analyzes the changes in 
electric installed capacity and generation that result for each TSL. 
The utility impact analysis uses a variant of NEMS,\63\ which is a 
public domain, multi-sectored, partial equilibrium model of the U.S. 
energy sector. DOE uses a variant of this model, referred to as NEMS-
BT,\64\ to account for selected utility impacts of new or amended 
energy conservation standards. DOE's analysis consists of a comparison 
between model results for the most recent AEO Reference Case and for 
cases in which energy use is decremented to reflect the impact of 
potential standards. The energy savings inputs associated with each TSL 
come from the NIA. Chapter 15 of the NOPR TSD describes the utility 
impact analysis.
---------------------------------------------------------------------------

    \63\ For more information on NEMS, refer to the U.S. Department 
of Energy, Energy Information Administration documentation. A useful 
summary is National Energy Modeling System: An Overview 2003, DOE/
EIA-0581 (2003), March, 2003.
    \64\ DOE/EIA approves use of the name ``NEMS'' to describe only 
an official version of the model without any modification to code or 
data. Because this analysis entails some minor code modifications 
and the model is run under various policy scenarios that are 
variations on DOE/EIA assumptions, DOE refers to it by the name 
``NEMS-BT'' (``BT'' is DOE's Building Technologies Program, under 
whose aegis this work has been performed).
---------------------------------------------------------------------------

N. Employment Impact Analysis

    Employment impacts include direct and indirect impacts. Direct 
employment impacts are any changes in the number of employees of 
manufacturers of the products subject to standards; 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 
jobs created or eliminated in the national economy due to: (1) reduced 
spending by end users on energy; (2) reduced spending on new energy 
supply by the utility industry; (3) increased customer spending on the 
purchase of new products; 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.\65\ There are many reasons for these differences, including 
wage differences and the fact that the utility sector is more capital-
intensive and less

[[Page 14909]]

labor-intensive than other sectors. Energy conservation standards have 
the effect of reducing customer utility bills. Because reduced customer 
expenditures for energy likely lead to increased expenditures in other 
sectors of the economy, the general effect of efficiency standards is 
to shift economic 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, based on the BLS data alone, DOE believes 
net national employment may increase because of shifts in economic 
activity resulting from amended energy conservation standards for 
automatic commercial ice makers.
---------------------------------------------------------------------------

    \65\ See Bureau of Economic Analysis, ``Regional Multipliers: A 
User Handbook for the Regional Input-Output Modeling System (RIMS 
II),'' U.S. Department of Commerce (1992).
---------------------------------------------------------------------------

    For the amended standard levels considered in today's NOPR, DOE 
estimated indirect national employment impacts using an input/output 
model of the U.S. economy called Impact of Sector Energy Technologies 
version 3.1.1 (ImSET).\66\ 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 having structural coefficients that characterize 
economic flows among the 187 sectors. ImSET's national economic I-O 
structure is based on a 2002 U.S. benchmark table, specially aggregated 
to the 187 sectors most relevant to industrial, commercial, and 
residential building energy use. DOE notes that ImSET is not a general 
equilibrium forecasting model, and understands 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 over-estimate 
actual job impacts over the long run. For the NOPR, DOE used ImSET only 
to estimate short-term (through 2022) employment impacts.
---------------------------------------------------------------------------

    \66\ Scott, M.J., O.V. Livingston, P.J. Balducci, J.M. Roop, and 
R.W. Schultz. ImSET 3.1: Impact of Sector Energy Technologies. 2009. 
Pacific Northwest National Laboratory, Richland, WA. Report No. 
PNNL-18412. www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf>
---------------------------------------------------------------------------

    For more details on the employment impact analysis, see chapter 16 
of the NOPR TSD.
    At the February 2012 preliminary analysis public meeting, NPCC 
inquired whether the money saved from low water consumption will be 
moved into the employment impact analysis along with the money saved 
from lower energy consumption. (NPCC, No. 42 at pp. 164 and 165) In 
response, DOE notes that all changes in operations and maintenance 
costs, including water costs, are captured in the employment analysis.
    For more details on the employment impact analysis and its results, 
see chapter 16 of the NOPR TSD and section V.B.3.d of this notice.

O. Regulatory Impact Analysis

    DOE prepared a regulatory impact analysis (RIA) for this 
rulemaking, which is described in chapter 17 of the NOPR TSD. The RIA 
is subject to review by OIRA in the OMB. The RIA consists of (1) a 
statement of the problem addressed by this regulation and the mandate 
for Government action; (2) a description and analysis of policy 
alternatives to this regulation; (3) a qualitative review of the 
potential impacts of the alternatives; and (4) the national economic 
impacts of the proposed standard.
    The RIA assesses the effects of feasible policy alternatives to 
amended automatic commercial ice makers standards and provides a 
comparison of the impacts of the alternatives. DOE evaluated the 
alternatives in terms of their ability to achieve significant energy 
savings at reasonable cost, and compared them to the effectiveness of 
the proposed rule.
    DOE identified the following major policy alternatives for 
achieving increased automatic commercial ice makers efficiency:
     No new regulatory action
     commercial customer tax credits
     commercial customer rebates
     voluntary energy efficiency targets
     bulk government purchases
     early replacement
    DOE qualitatively evaluated each alternative's ability to achieve 
significant energy savings at reasonable cost and compared it to the 
effectiveness of the proposed rule. DOE assumed that each alternative 
policy would induce commercial customers to voluntarily purchase at 
least some higher efficiency equipment at any of the TSLs. In contrast 
to a standard at one of the TSLs, the adoption rate of the alternative 
non-regulatory policy cases may not be 100 percent, which would result 
in lower energy savings than a standard. The following paragraphs 
discuss each policy alternative. (See chapter 17 of the NOPR TSD for 
further details.)
    No new regulatory action: The case in which no regulatory action is 
taken for automatic commercial ice makers constitutes the base-case (or 
no action) scenario. By definition, no new regulatory action yields 
zero energy savings and an NPV of zero dollars.
    Commercial customer tax credits: Customer tax credits are 
considered a viable non-regulatory market transformation program. From 
a customer perspective, the most important difference between rebate 
and tax credit programs is that a rebate can be obtained quickly, 
whereas receipt of tax credits is delayed until income taxes are filed 
or a tax refund is provided by the Internal Revenue Service (IRS). From 
a societal perspective, tax credits (like rebates) do not change the 
installed cost of the equipment, but rather transfer a portion of the 
cost from the customer to taxpayers as a whole. DOE, therefore, assumed 
that equipment costs in the customer tax credits scenario were 
identical to the NIA base case. The change in the NES and NPV is a 
result of the change in the efficiency distributions that results from 
lowering the prices of higher efficiency equipment.
    Commercial customer rebates: Customer rebates cover a portion of 
the difference in incremental product price between products meeting 
baseline efficacy levels and those meeting higher efficiency levels, 
resulting in a higher percentage of customers purchasing more-
efficacious models and decreased aggregated energy use compared to the 
base case. Although the rebate program reduces the total installed cost 
to the customer, it is financed by tax revenues. Therefore, from a 
societal perspective, the installed cost at any efficiency level does 
not change with the rebate program; rather, part of the cost is 
transferred from the customer to taxpayers as a whole. Consequently, 
DOE assumed that equipment costs in the rebates scenario were identical 
to the NIA base case. The change in the NES and NPV is a result of the 
change in the efficiency distributions that results as a consequence of 
lowering the prices of higher efficiency equipment.
    Voluntary energy efficiency targets: While it is possible that 
voluntary programs for equipment would be effective, DOE lacks a 
quantitative basis to determine how effective such a program might be. 
As noted previously, broader economic and social considerations are in 
play than simple economic return to the equipment purchaser. DOE lacks 
the data necessary to quantitatively project the degree to which 
voluntary programs for more expensive, higher efficiency equipment 
would modify the market.
    Bulk government purchases and early replacement incentive programs: 
DOE also considered, but did not analyze, the potential of bulk 
government purchases

[[Page 14910]]

and early replacement incentive programs as alternatives to the 
proposed standards. Bulk government purchases would have a very limited 
impact on improving the overall market efficiency of automatic 
commercial ice makers because they would be a small part of the total 
equipment sold in the market. In the case of replacement incentives, 
several policy options exist to promote early replacement, including a 
direct national program of customer incentives, incentives paid to 
utilities to promote an early replacement program, market promotions 
through equipment manufacturers, and replacement of government-owned 
equipment. In considering early replacements, DOE estimates that the 
energy savings realized through a one-time early replacement of 
existing stock equipment does not result in energy savings commensurate 
to the cost to administer the program. Consequently, DOE did not 
analyze this option in detail.

V. Analytical Results

A. Trial Standard Levels

1. Trial Standard Level Formulation Process and Criteria
    DOE selected between four and seven efficiency levels for all 
equipment classes for analysis. For all equipment classes, the first 
efficiency level is the baseline efficiency level. Based on the results 
of the LCC analysis and NIA, DOE selected five TSLs above the baseline 
level for each equipment class for the NOPR stage of this rulemaking. 
Table V.1 shows the mapping between TSLs and efficiency levels.
    TSL 5 was selected at the max-tech level for all equipment classes.
    TSL 4 was chosen as an intermediate level between the max-tech 
level and the maximum customer NPV level, subject to the requirement 
that the TSL 4 NPV must be positive. ``Customer NPV'' is the NPV of 
future savings obtained from the NIA. It provides a measure of the 
benefits only to the customers of the automatic commercial ice makers, 
and does not account for the net benefits to the Nation. The net 
benefits to the Nation also include monetized values of emissions 
reductions in addition to the customer NPV. Where a sufficient number 
of efficiency levels allow it, TSL 4 is set at least one level below 
max-tech and one level above the efficiency level with the highest NPV. 
In one case, the TSL 4 efficiency level is the maximum NPV level 
because the next higher level had a negative NPV. In cases where the 
maximum NPV efficiency level is the penultimate efficiency level and 
the max-tech level showed a positive NPV the TSL 4 efficiency level is 
also the max-tech level.
    TSL 3 was chosen to represent the group of efficiency levels with 
the highest customer NPV at a 7-percent discount rate.
    TSL 2 was selected to provide intermediate efficiency levels that 
fill the gap between the TSLs 1 and 3. Note that with the number of 
efficiency levels available for each equipment class, there is often 
overlap between TSL levels. Thus, TSL 2 includes levels that overlap 
with both TSLs 1 and 3. The intent of TSL 2 is to provide an 
intermediate level to preclude big jumps in efficiency between TSLs 1 
and 3.
    TSL 1 was set equal to efficiency level 2. In the analysis, 
efficiency level 2 was set equivalent to ENERGY STAR for products rated 
by ENERGY STAR, and an equivalent efficiency improvement for other 
equipment classes.

                                                 Table V.1--Mapping Between TSLs and Efficiency Levels *
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Equipment class                     TSL 1                   TSL 2                  TSL 3                  TSL 4                  TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B......................  Level 2...............  Level 3...............  Level 5..............  Level 5..............  Level 6
IMH-W-Med-B........................  Level 2...............  Level 2...............  Level 3..............  Level 4..............  Level 5
IMH-W-Large-B [dagger]
    IMH-W-Large-B1.................  Level 2...............  Level 2...............  Level 2..............  Level 3..............  Level 4
    IMH-W-Large-B2.................  Level 2...............  Level 2...............  Level 2..............  Level 3..............  Level 4
IMH-A-Small-B......................  Level 2...............  Level 3...............  Level 5..............  Level 6..............  Level 7
IMH-A-Large-B [dagger]
    IMH-A-Large-B1.................  Level 2...............  Level 3...............  Level 5..............  Level 6..............  Level 6
    IMH-A-Large-B2.................  Level 2...............  Level 2...............  Level 3..............  Level 4..............  Level 4
RCU-Large-B [dagger]
    RCU-Large-B1...................  Level 2...............  Level 2...............  Level 3..............  Level 4..............  Level 5
    RCU-Large-B2...................  Level 2...............  Level 2...............  Level 3..............  Level 4..............  Level 5
SCU-W-Large-B......................  Level 2...............  Level 3...............  Level 5..............  Level 6..............  Level 7
SCU-A-Small-B......................  Level 2...............  Level 4...............  Level 6..............  Level 7..............  Level 7
SCU-A-Large-B......................  Level 2...............  Level 4...............  Level 6..............  Level 7..............  Level 7
IMH-A-Small-C......................  Level 2...............  Level 3...............  Level 4..............  Level 5..............  Level 7
IMH-A-Large-C......................  Level 2...............  Level 3...............  Level 5..............  Level 6..............  Level 7
SCU-A-Small-C......................  Level 2...............  Level 3...............  Level 4..............  Level 4..............  Level 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For three large equipment classes--IMH-W-Large-B, IMH-A-Large-B and RCU-Large-B--because the harvest capacity range is so wide DOE analyzed two
  typical models to ensure models at the low and the higher portions of the applicable range were accurately modeled. The smaller of the two is noted as
  B1 and the larger as B2.
[dagger] DOE analyzed impacts for the B1 and B2 typical units and aggregated impacts to the equipment class level.

    Table V.2 illustrates the efficiency improvements incorporated in 
all efficiency levels.

                       Table V.2--Percentage Efficiency Improvement From Baseline by TSL *
----------------------------------------------------------------------------------------------------------------
                Equipment class                   TSL 1 (%)    TSL 2 (%)    TSL 3 (%)    TSL 4 (%)    TSL 5 (%)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................         10.0         15.0         25.0         25.0         29.4

[[Page 14911]]

 
IMH-W-Med-B....................................         10.0         10.0         15.0         20.0         21.3
IMH-W-Large-B..................................         10.0         10.0         10.0         15.0         16.4
    IMH-W-Large-B1.............................         10.0         10.0         10.0         15.0         16.7
    IMH-W-Large-B2.............................         10.0         10.0         10.0         15.0         15.5
IMH-A-Small-B..................................         10.0         15.0         25.0         30.0         31.3
IMH-A-Large-B..................................         10.0         14.2         23.4         28.0         28.0
    IMH-A-Large-B1.............................         10.0         15.0         25.0         29.4         29.4
    IMH-A-Large-B2.............................         10.0         10.0         15.0         20.0         20.0
RCU-Large-B....................................          9.0          9.0         15.0         20.0         20.6
    RCU-Large-B1...............................          9.0          9.0         15.0         20.0         20.6
    RCU-Large-B2...............................          9.0          9.0         15.0         20.0         20.5
SCU-W-Large-B..................................          7.0         15.0         25.0         30.0         30.2
SCU-A-Small-B..................................          7.0         20.0         30.0         39.3         39.3
SCU-A-Large-B..................................          7.0         20.0         30.0         34.9         34.9
IMH-A-Small-C..................................         10.0         15.0         20.0         25.0         31.0
IMH-A-Large-C..................................         10.0         15.0         25.0         30.0         30.2
SCU-A-Small-C..................................          7.0         15.0         20.0         20.0         28.2
----------------------------------------------------------------------------------------------------------------
* Percentage improvements for IMH-W-Large-B, IMH-A-Large-B and RCU-Large-B are a weighted average of the B1 and
  B2 units, using weights provided in TSD chapter 7.

    Table V.3 illustrates the design options associated with each TSL 
level, for each analyzed product class. The design options are 
discussed in Section IV.D.3 of today's NOPR, and in Chapter 5 of the 
NOPR TSD.

                                           Table V.3--Design Options for Analyzed Products Classes at Each TSL
--------------------------------------------------------------------------------------------------------------------------------------------------------
         Equipment class               Baseline              TSL 1               TSL 2               TSL 3               TSL 4               TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Design Options for Each TSL (options are cumulative--TSL5 includes all preceding options)
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...................  No BW Fill, PSC PM  Increase Comp EER,  Same as previous..  Increase Cond, BW   BW Fill, Increase   ECM PM, DWHX.
                                                       Increase Cond.                          Fill.               Evap, ECM PM.
IMH-W-Med-B.....................  BW Fill, PSC PM...  Increase Comp EER.  Same as previous..  Increase Comp EER,  Increase Comp EER,  DWHX.
                                                                                               Increase Cond.      ECM PM, DWHX.
IMH-W-Large-B1..................  BW Fill, PSC PM...  Increase Comp EER,  Same as previous..  Same as previous..  Increase Cond, ECM  DWHX.
                                                       Increase Cond.                                              PM, DWHX.
IMH-W-Large-B2..................  BW Fill, PSC PM...  Increase Comp EER,  Same as previous..  Same as previous..  ECM PM, DWHX......  DWHX.
                                                       Increase Cond.
IMH-A-Small-B...................  BW Fill, PSC PM,    Increase Comp EER,  Increase Evap.....  Increase Evap, PSC  Increase Cond, ECM  DWHX.
                                   SPM FM.             Increase Cond,                          FM, ECM FM,         PM, DWHX.
                                                       Increase Evap.                          Increase Cond.
IMH-A-Large-B1..................  BW Fill, PSC PM,    PSC FM, Comp EER..  Increase Comp EER.  Increase Comp EER,  Increase Cond,      DWHX.
                                   SPM FM.                                                     BW Fill, ECM PM,    DWHX.
                                                                                               ECM FM, Increase
                                                                                               Cond.
IMH-A-Large-B2..................  BW Fill, PSC PM,    Increase Comp EER,  Same as previous..  PSC FM, Increase    ECM FM, ECM PM,     ECM FM, ECM PM,
                                   SPM FM.             PSC FM.                                 Cond.               DWHX.               DWHX.
RCU-Large-B1....................  BW Fill, PSC PM,    Increase Comp EER.  Same as previous..  Increase Comp EER,  ECM FM, Increase    DWHX.
                                   PSC FM.                                                     Increase Cond,      Cond, ECM PM,
                                                                                               ECM FM.             DWHX.
RCU-Large-B2....................  BW Fill, PSC PM,    Increase Comp EER,  Same as previous..  ECM PM Increase     Increase Cond, ECM  DWHX.
                                   PSC FM.             Increase Cond.                          Cond.               FM, DWHX.
SCU-W-Large-B...................  No BW Fill, PSC PM  BW Fill...........  BW Fill, Increase   Increase Cond, ECM  ECM PM, DWHX......  DWHX.
                                                                           Comp EER,           PM.
                                                                           Increase Cond.
SCU-A-Small-B...................  No BW Fill, PSC     PSC FM, Increase    Increase Cond,      Increase Comp EER,  BW Fill, ECM PM,    Same as previous.
                                   PM, SPM FM.         Cond.               Increase Comp EER.  BW Fill.            ECM FM, DWHX.
SCU-A-Large-B...................  No BW Fill, PSC     Increase Comp EER.  Increase Comp EER,  BW Fill, PSC FM,    ECM PM, DWHX......  Same as previous.
                                   PM, SPM FM.                             Increase Cond, BW   ECM FM, ECM PM.
                                                                           Fill.

[[Page 14912]]

 
IMH-A-Small-C...................  PSC AM, SPM FM....  PSC FM, Increase    PSC FM, Increase    Increase Comp EER,  ECM FM, ECM AM....  ECM AM.
                                                       Comp EER.           Comp EER.           Increase Cond,
                                                                                               ECM FM.
IMH-A-Large-C...................  PSC AM, SPM FM....  Increase Cond,      Increase Comp EER.  Increase Comp EER,  ECM FM, ECM AM....  ECM AM.
                                                       Increase Comp EER.                      PSC FM, ECM FM.
SCU-A-Small-C...................  PSC AM, SPM FM....  Increase Cond.....  Increase Cond,      Increase Comp EER,  Same as previous..  ECM FM, ECM AM.
                                                                           Increase Comp EER.  PSC FM.
--------------------------------------------------------------------------------------------------------------------------------------------------------
SPM = Shaded Pole Motor
PSC = Permanent Split Capacitor Motor
ECM = Electronically Commutated Motor
FM = Fan Motor (Air-Cooled Units)
PM = Pump Motor (Batch Units)
AM = Auger Motor (Continuous Units)
BW Fill = Batch Water Fill Option Included
Increase Cond = Increase in Condenser Size
Increase Evap = Increase in Evaporator Size
Increase Comp EER = Increase in Compressor EER
DWHX = Addition of Drainwater Heat Exchanger

    DOE requests comment and data related to the required equipment 
size increases associated with the design options at each TSL levels. 
Chapter 5 of the NOPR TSD contains full descriptions of the design 
options and DOE's analyses for the equipment size increase associated 
with the design options selected. DOE also requests comments and data 
on the efficiency gains associated with each set of design options. 
Chapter 5 of the NOPR TSD contains DOE's analyses of the efficiency 
gains for each design option considered. Finally, DOE requests comment 
and data on any utility impacts associated with each set of design 
options, such as potential ice-style changes.
2. Trial Standard Level Equations
    Table V.4 and Table V.5 translate the TSLs into potential 
standards. In Table V.4, the TSLs are translated into energy 
consumption standards for the directly analyzed (primary) equipment 
classes. Table V.5. provides the equipment class mapping showing which 
of the directly analyzed standards' results were used to extend 
standards to secondary classes. Table V.6 extends the standards to the 
remaining (secondary) equipment classes that have not been analyzed 
directly.

                                     Table V.4--Potential Energy Consumption Standards for Directly Analyzed Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Equipment class                     TSL 1                   TSL 2                  TSL 3                  TSL 4                  TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
IMH-W-Small-B......................  7.01-0.0050H..........  6.62-0.0047H..........  5.84-0.0041H.........  5.84-0.0041H.........  5.49-0.0039H.
IMH-W-Med-B........................  5.04-0.0010H..........  4.65-0.0007H..........  3.88-0.0002H.........  3.98-0.0004H.........  3.63-0.0002H.
IMH-W-Large-B......................  3.6...................  3.6...................  3.6..................  3.4..................  3.3.
IMH-A-Small-B......................  9.23-0.0077H..........  8.74-0.0073H..........  7.70-0.0065H.........  7.18-0.0060H.........  7.05-0.0059H.
IMH-A-Large-B......................  6.20-0.0010H..........  5.86-0.0009H..........  5.17-0.0008H.........  4.82-0.0008H.........  4.74-0.0008H.
IMH-A-Extended-B...................  (>= 2,500 and =1,240 and =875 and =815 and =710 and =1,975 and       4.5; (>=2,210 and      4.2; (>=2,455 and      4.2; (>=2,455 and
                                                              = 2,500) 4.1.         0.0011H; (>= 2,500)    0.0011H; (>= 2,500)    0.0011H; (>= 2,500)
                                                                                      4.1.                   4.1.                   4.1.
RCU-NRC-Large-B....................  4.6...................  4.6...................  4.3..................  4.1..................  4.1.
SCU-W-Large-B......................  7.1...................  6.5...................  5.7..................  5.3..................  5.3.
SCU-A-Small-B......................  16.74-0.0436H.........  14.40-0.0375H.........  12.6-0.0328H.........  10.34-0.0227H........  10.34-0.0227H.
SCU-A-Large-B......................  9.1...................  7.8...................  6.9..................  6.4..................  6.4.
IMH-A-Small-C......................  9.90-0.0057H..........  9.35-0.0053H..........  9.24-0.0061H.........  8.69-0.0058H.........  7.55-0.0042H.
IMH-A-Large-C......................  5.9...................  5.6...................  5.0..................  4.6..................  4.6.
SCU-A-Small-C......................  10.70-0.0058H.........  9.75-0.0053H..........  9.20-0.0050H.........  9.20-0.0050H.........  8.26-0.0045H.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 14913]]

Table V.5--Directly Analyzed Equipment Classes Used To Develop Standards
                          for Secondary Classes
------------------------------------------------------------------------
                                             Directly analyzed product
                                               class associated with
       Secondary  equipment  class              efficiency level for
                                              secondary product class
------------------------------------------------------------------------
RCU-NRC-Small-B..........................  RCU-NRC-Large-B.
RCU-RC-Small-B...........................  RCU-NRC-Large-B.
RCU-RC-Large-B...........................  RCU-NRC-Large-B.
SCU-W-Small-B............................  SCU-W-Large-B.
IMH-W-Small-C............................  IMH-A-Large-C.
IMH-W-Large-C............................  IMH-A-Large-C.
RCU-NRC-Small-C..........................  IMH-A-Large-C.
RCU-NRC-Large-C..........................  IMH-A-Large-C.
RCU-RC-Small-C...........................  IMH-A-Large-C.
RCU-RC-Large-C...........................  IMH-A-Large-C.
SCU-W-Small-C............................  SCU-A-Small-C.
SCU-W-Large-C............................  SCU-A-Small-C.
SCU-A-Large-C............................  SCU-A-Small-C.
------------------------------------------------------------------------

                                         Table V.6--Potential Energy Consumption Standards for Secondary Classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Equipment class                     TSL 1                   TSL 2                  TSL 3                  TSL 4                  TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
RCU-NRC-Small-B....................  8.04-0.0034H..........  8.04-0.0034H..........  7.52-0.0032H.........  7.08-0.0030H.........  7.05-0.0030H.
RCU-RC-Small-B.....................  8.02-0.0034H..........  8.02-0.0034H..........  7.52-0.0032H.........  7.08-0.0030H.........  7.06-0.0030H.
RCU-RC-Large-B.....................  4.8...................  4.8...................  4.5..................  4.3..................  4.3.
SCU-W-Small-B......................  10.60-0.0177H.........  9.69-0.0162H..........  8.55-0.0143H.........  7.98-0.0133H.........  7.96-0.0133H.
IMH-W-Small-C......................  7.29-0.0030H..........  6.86-0.0028H..........  6.08-0.0025H.........  5.67-0.0023H.........  5.65-0.0023H.
IMH-W-Large-C......................  4.6...................  4.3...................  3.8..................  3.6..................  3.6.
RCU-NRC-Small-C....................  9.00-0.0041H..........  8.50-0.0039H..........  7.5-0.0034H..........  7.00-0.0032H.........  6.98-0.0032H.
RCU-NRC-Large-C....................  5.5...................  5.2...................  4.6..................  4.3..................  4.3.
RCU-RC-Small-C.....................  9.18-0.0041H..........  8.67-0.0039H..........  7.65-0.0034H.........  7.14-0.0031H.........  7.12-0.0031H.
RCU-RC-Large-C.....................  5.7...................  5.4...................  4.8..................  4.5..................  4.5.
SCU-W-Small-C......................  8.46-0.0031H..........  7.74-0.0028H..........  7.28-0.0027H.........  7.28-0.0027H.........  6.53-0.0024H.
SCU-W-Large-C......................  5.7...................  5.2...................  4.9..................  4.9..................  4.4.
SCU-A-Large-C......................  6.6...................  6.0...................  5.7..................  5.7..................  5.1.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In developing TSLs, DOE analyzed each equipment class separately, 
and attributed a percentage reduction with each portion of the standard 
curve (small/medium/large). To ensure that the standard curve remained 
connected (no gaps at the breakpoints), DOE developed a method for 
expressing the consumption standards that relied on pivoting the low-
capacity equipment classes about a representative point. DOE was able 
to use the same methodology for most equipment classes, with exceptions 
for IMH-W-B, IMH-A-B, and RCU-RC equipment classes.
    In drawing a relationship between the harvest capacity (lb ice/24 
hours) and the maximum allowed energy usage (kilowatt-hours per 100 lb 
of ice), DOE first took the large-capacity equipment class (which is 
set at a constant value for all equipment types except IMH-A) and 
applied the allocated percentage reduction (percentage reduction 
associated with the TSL for that equipment class). For example, for 
IMH-W-Large-B, the baseline level is set at 4.0. If the TSL allocated a 
10-percent reduction for IMH-W-Large-B, then the next level was set at 
4.0 x (1-10 percent) = 3.6 kWh/100 lb of ice.
    Then, for the small equipment classes, DOE applied the allocated 
percentage reduction at a designated median capacity in that harvest 
rate range. The medium capacity was selected based on shipment levels, 
and where the median fell within the shipments data. For example, if 
the median capacity for the small equipment class was at 300 lb ice/24 
hours, DOE would calculate the baseline energy usage and then apply the 
allocated percentage reduction to obtain a point at 300 lb ice/24 
hours. DOE would then draw a line between the start of the large 
equipment class and this median capacity point to obtain the equation 
for the small equipment class, ensuring that there were no gaps between 
small and large-capacity.
    For the IMH-W-B equipment classes, this equipment type has small, 
medium, and large equipment classes. In this case, for the small 
equipment class, DOE applied the allocated percentage reduction to the 
whole equation. So if the percentage reduction was 10 percent, the new 
equation for the small equipment class would be (1-10 percent) x (7.80 
- 0.0055H) = 7.02 - 0.00495H. DOE would then draw a line between the 
end of the small equipment class and the start of the large equipment 
class, to obtain the equation for the medium equipment class.
    For the IMH-A-B equipment classes, DOE sought to obtain a constant 
efficiency level for the largest equipment classes. This calculation is 
discussed in section IV.B.1.b.
    For the RCU-RC-B and RCU-RC-C equipment classes, DOE simply took 
the standard levels calculated for the large RCU-NRC-B and RCU-NRC-C 
equipment classes, respectively, and subtracted the 0.2 kWh/100 lb of 
ice differential discussed in section IV.B.1.e, to arrive at the 
standard levels. For the small RCU classes, the remote compressor 
standards were developed such that no gap exists at the harvest rate 
breakpoints.
    Using the typical unit size for directly analyzed equipment 
classes, the potential standards shown on Table V.4, DOE estimates 
energy usage for equipment within each class to be as shown on Table 
V.7.

[[Page 14914]]

        Table V.7--Energy Consumption by TSL for the Representative Automatic Commercial Ice Maker Units
----------------------------------------------------------------------------------------------------------------
                                                  Energy consumption of the representative automatic  commercial
                                Representative                      ice maker unit kWh/100 lb
       Equipment class          harvest rate lb ----------------------------------------------------------------
                                 ice/24 hours       TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B................  300.............          5.5          5.2          4.6          4.6          4.3
IMH-W-Med-B..................  850.............          4.2          4.0          3.7          3.6          3.5
IMH-W-Large-B-1..............  1500............          3.6          3.6          3.6          3.4          3.3
IMH-W-Large-B-2..............  2600............          3.6          3.6          3.6          3.4          3.3
IMH-A-Small-B................  300.............          6.9          6.5          5.8          5.4          5.3
IMH-A-Large-B-1..............  800.............          5.4          5.1          4.5          4.2          4.1
IMH-A-Large-B-2..............  1500............          3.7          4.7          4.5          4.2          4.2
RCU-Large-B-1................  1500............          4.6          4.6          4.3          4.1          4.1
RCU-Large-B-2................  2400............          4.6          4.6          4.3          4.1          4.1
SCU-W-Large-B................  300.............          7.1          6.5          5.7          5.3          5.3
SCU-A-Small-B................  110.............         11.9         10.3          9.0          7.8          7.8
SCU-A-Large-B................  200.............          9.1          7.8          6.9          6.4          6.4
IMH-A-Small-C................  310.............          8.1          7.7          7.3          6.9          6.2
IMH-A-Large-C................  820.............          5.9          5.6          5.0          4.6          4.6
SCU-A-Small-C................  110.............         10.1          9.2          8.7          8.7          7.8
----------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Customers
a. Life-Cycle Cost and Payback Period
    Customers affected by new or amended standards usually incur higher 
purchase prices and lower operating costs. DOE evaluates these impacts 
on individual customers by calculating changes in LCC and the PBP 
associated with the TSLs. The results of the LCC analysis for each TSL 
were obtained by comparing the installed and operating costs of the 
equipment in the base-case scenario (scenario with no amended energy 
conservation standards) against the standards-case scenarios at each 
TSL. The energy consumption values for both the base-case and 
standards-case scenarios were calculated based on the DOE test 
procedure conditions specified in the 2012 test procedure final rule, 
which adopts an industry-accepted test method. Using the approach 
described in section IV.G, DOE calculated the LCC savings and PBPs for 
the TSLs considered in this NOPR. The LCC analysis is carried out in 
the form of Monte Carlo simulations. Consequently, the results of LCC 
analysis are distributed over a range of values, as opposed to a single 
deterministic value. DOE presents the mean or median values, as 
appropriate, calculated from the distributions of results.
    Table V.8 through Table V.25 show the results of the LCC analysis 
for each equipment class. Each table presents the results of the LCC 
analysis, including mean LCC, mean LCC savings, median PBP, and 
distribution of customer impacts in the form of percentages of 
customers who experience net cost, no impact, or net benefit.
    Only two equipment classes have negative LCC savings values at TSL 
5: SCU-A-Small-C and IMH-A-Small-C. Negative average LCC savings imply 
that, on average, customers experience an increase in LCC of the 
equipment as a consequence of buying equipment associated with that 
particular TSL. In many cases, the TSL 5 level is not negative, but the 
LCC savings are sharply lower than the TSL 3 levels. For IMH-W-Small-B, 
SCU-W-Large-B, and SCU-A-Small-B, the TSL 5 LCC savings are less than 
one-third the TSL 3 savings. In other cases, such as IMH-W-Large-B2, 
IMH-A-Small-B, SCU-A-Large-B, and IMH-A-Large-C, the TSL 5 LCC savings 
are roughly one-half of the TSL 3 LCC savings or less. All of these 
results indicate the cost increments associated with the max-tech 
design option are high, and the increase in LCC (and corresponding 
decrease in LCC savings) indicates that this design option may result 
in negative customer impacts. TSL 5 is associated with the max-tech 
level for all the equipment classes. Drain water heat exchanger 
technology is the design option associated with the max-tech efficiency 
levels for batch equipment classes. For continuous equipment classes, 
the max-tech design options are auger motors using permanent magnets.
    The mean LCC savings associated with TSL 4 are all positive values 
for all equipment classes. The mean LCC savings at all lower TSL levels 
are also positive. The trend is generally an increase in LCC savings 
for TSL 1 through 3, with LCC savings either remaining constant or 
declining at TSL 4. In three cases, the highest LCC savings are at TSL 
2: IMH-A-Large-B2, RCU-Large-B2, and SCU-A-Large-B. The drop-off in LCC 
savings at TSL 4 is generally associated with the relatively large cost 
for the max-tech design options, the savings for which frequently span 
the last two efficiency levels.
    As described in section IV.H.2, DOE used a ``roll-up'' scenario in 
this rulemaking. Under the roll-up scenario, DOE assumes that the 
market shares of the efficiency levels (in the base case) that do not 
meet the standard level under consideration would be ``rolled up'' into 
(meaning ``added to'') the market share of the efficiency level at the 
standard level under consideration, and the market shares of efficiency 
levels that are above the standard level under consideration would 
remain unaffected. Customers, in the base-case scenario, who buy the 
equipment at or above the TSL under consideration, would be unaffected 
if the amended standard were to be set at that TSL. Customers, in the 
base-case scenario, who buy equipment below the TSL under consideration 
would be affected if the amended standard were to be set at that TSL. 
Among these affected customers, some may benefit from lower LCC of the 
equipment and some may incur net cost due to higher LCC, depending on 
the inputs to LCC analysis such as electricity prices, discount rates, 
installation costs, and markups. DOE's results indicate that, with one 
exception, customers either benefit or are unaffected by setting 
standards at TSLs 1, 2, or 3, and at TSL 4 in the case of SCU-A-Small-
C. Customers either benefit or are unaffected at all 5 TSLs in the case 
of IMH-W-Large-B1. In the case of IMH-W-Small-B, 3 percent of

[[Page 14915]]

customers are projected to experience a net cost at TSL 3. A large 
percentage of customers in batch equipment classes are unaffected by a 
standard set at TSL 1 given the equivalence to ENERGY STAR and the 
prevalence of ENERGY STAR qualifying equipment in those classes. At the 
other end of the range, in almost all cases, a portion of the market 
would experience net costs starting with TSL 4, although generally the 
portion experiencing a net cost is fairly low. At TSL 5, the range is 
wide, with all customers either unaffected or with a net benefit for 
the IMH-W-Large-B1 typical unit at one extreme and 100 percent of 
customers with either a net cost or unaffected for SCU-A-Small-C. In 
the cases of nine of the 18 equipment classes and/or typical unit sizes 
modeled (12 classes plus 3 pairs of typical units for large, batch type 
equipment classes), 20 percent or more of customers would experience a 
net cost at TSL 5. In the other nine cases, the percent of customers 
experiencing a net cost at TSL 5 ranges from 0 to 16 percent, with the 
remaining customers either unaffected or experiencing a net benefit.
    The median PBP values for TSLs 1 through 3 are all less than 2 
years, except for IMH-W-Small-B where the TSL 3 PBP is 2.3 years. The 
median PBP values for TSL 4 range from 1.9 years to 4.8 years.
    PBP values for TSL 5 range from 2.2 years to over 19 years. SCU-A-
Small-C exhibits the longest PBP for TSL 5 at 19.1 years. IMH-A-Small-C 
has a PBP of nearly 7 years, while IMH-W-Small-B has a PBP over 5 
years. IMH-A-Small-B and SCU-A-Small-B both PBPs at or above 4 years 
for TSL 5.

                                                            Table V.8--Summary LCC and PBP Results for IMH-W-Small-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                              median years
                                                                                      cost          cost                       savings     Net cost %    No impact %   Net benefit
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         3,052         2,425        10,862        13,286           199             0            61            39           1.1
2.................................................................         2,884         2,451        10,740        13,191           215             0            35            65           1.3
3.................................................................         2,547         2,614        10,369        12,982           328             3             0            97           2.3
4.................................................................         2,547         2,614        10,369        12,982           328             3             0            97           2.3
5.................................................................         2,400         2,999        10,262        13,261            49            45             0            55           5.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                             Table V.9--Summary LCC and PBP Results for IMH-W-Med-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                              median years
                                                                                      cost          cost                       savings     Net cost %    No impact %   Net benefit
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         6,507         4,241        24,859        29,100           464             0            31            69           0.6
2.................................................................         6,507         4,241        24,859        29,100           464             0            31            69           0.6
3.................................................................         6,147         4,286        24,601        28,887           587             0            14            86           0.9
4.................................................................         5,786         4,656        24,341        28,997           405            15             2            83           3.3
5.................................................................         5,691         4,671        24,272        28,943           460            11             2            87           3.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.10--Summary LCC and PBP Results for IMH-W-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                              median years
                                                                                      cost          cost                       savings     Net cost %    No impact %   Net benefit
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................        11,585         6,243        49,854        56,097           833             0            38            62           0.7
2.................................................................        11,585         6,243        49,854        56,097           833             0            38            62           0.7
3.................................................................        11,585         6,243        49,854        56,097           833             0            38            62           0.7
4.................................................................        10,943         6,813        49,390        56,202           550             8            26            66           3.6
5.................................................................        10,783         6,868        49,274        56,142           582             7            22            71           3.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                           Table V.11--Summary LCC and PBP Results for IMH-W-Large-B1 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                              median years
                                                                                      cost          cost                       savings     Net cost %    No impact %   Net benefit
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         9,877         5,132        42,919        48,051           701             0            29            71           0.7
2.................................................................         9,877         5,132        42,919        48,051           701             0            29            71           0.7
3.................................................................         9,877         5,132        42,919        48,051           701             0            29            71           0.7
4.................................................................         9,329         5,646        42,523        48,170           583             0            29            71           3.7
5.................................................................         9,147         5,717        42,392        48,109           607             0            24            76           3.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 14916]]

                                                           Table V.12--Summary LCC and PBP Results for IMH-W-Large-B2 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                              median years
                                                                                      cost          cost                       savings     Net cost %    No impact %   Net benefit
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................        17,104         9,833        72,254        82,087         1,260             0            67            33           0.6
2.................................................................        17,104         9,833        72,254        82,087         1,260             0            67            33           0.6
3.................................................................        17,104         9,833        72,254        82,087         1,260             0            67            33           0.6
4.................................................................        16,155        10,581        71,569        82,150           442            35            17            48           3.1
5.................................................................        16,067        10,587        71,506        82,093           500            29            17            54           3.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.13--Summary LCC and PBP Results for IMH-A-Small-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         3,806         2,475         9,046        11,521           254             0            63            37           1.1
2.................................................................         3,596         2,506         8,894        11,400           259             0            32            68           1.2
3.................................................................         3,176         2,574         8,601        11,174           396             0             0           100           1.4
4.................................................................         2,965         2,951         8,449        11,400           170            27             0            73           4.3
5.................................................................         2,909         2,964         8,408        11,372           198            22             0            78           4.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.14--Summary LCC and PBP Results for IMH-A-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         8,704         4,179        16,075        20,254           648             0            60            40           0.5
2.................................................................         8,334         4,199        15,813        20,013           633             0            23            77           0.5
3.................................................................         7,482         4,335        15,017        19,352         1,127             0             6            94           0.8
4.................................................................         7,041         4,739        14,703        19,442           994             4             2            94           2.2
5.................................................................         7,041         4,739        14,703        19,442           994             4             2            94           2.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                           Table V.15--Summary LCC and PBP Results for IMH-A-Large-B1 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         7,919         4,119        15,303        19,421           590             0            59            41           0.5
2.................................................................         7,480         4,143        14,993        19,135           572             0            15            85           0.5
3.................................................................         6,603         4,279        14,143        18,421         1,168             0             0           100           0.8
4.................................................................         6,213         4,663        13,865        18,528         1,062             1             0            99           2.1
5.................................................................         6,213         4,663        13,865        18,528         1,062             1             0            99           2.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                           Table V.16--Summary LCC and PBP Results for IMH-A-Large-B2 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................        12,932         4,505        20,234        24,739           960             0            67            33           0.4
2.................................................................        12,932         4,505        20,234        24,739           960             0            67            33           0.4
3.................................................................        12,215         4,641        19,725        24,366           908             0            40            60           0.9
4.................................................................        11,498         5,151        19,217        24,368           627            16            13            70           2.6
5.................................................................        11,498         5,151        19,217        24,368           627            16            13            70           2.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 14917]]

                                                             Table V.17--Summary LCC and PBP Results for RCU-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................        13,205         6,321        16,686        23,007           875             0            58            42           0.4
2.................................................................        13,205         6,321        16,686        23,007           875             0            58            42           0.4
3.................................................................        12,335         6,406        16,063        22,469           983             0            18            82           0.6
4.................................................................        11,611         6,934        15,551        22,485           870             6            10            85           2.4
5.................................................................        11,526         6,968        15,490        22,458           897             5            10            85           2.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.18--Summary LCC and PBP Results for RCU-Large-B1 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................        12,727         6,135        16,214        22,349           847             0            57            43           0.4
2.................................................................        12,727         6,135        16,214        22,349           847             0            57            43           0.4
3.................................................................        11,889         6,214        15,614        21,828           963             0            18            82           0.6
4.................................................................        11,191         6,722        15,119        21,840           857             6             9            85           2.4
5.................................................................        11,108         6,756        15,059        21,815           882             5             9            86           2.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.19--Summary LCC and PBP Results for RCU-Large-B2 Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................        20,349         9,105        23,743        32,847         1,298             0            73            27           0.8
2.................................................................        20,349         9,105        23,743        32,847         1,298             0            73            27           0.8
3.................................................................        19,009         9,283        22,775        32,058         1,277             0            27            73           1.0
4.................................................................        17,892        10,108        22,017        32,124         1,070             7            18            75           2.7
5.................................................................        17,779        10,137        21,935        32,072         1,123             6            18            76           2.7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.20--Summary LCC and PBP Results for SCU-W-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         3,892         3,501        12,082        15,583           483             0            71            29           0.7
2.................................................................         3,559         3,530        11,849        15,379           687             0            71            29           0.8
3.................................................................         3,143         3,596        11,548        15,144           694             0            57            43           1.0
4.................................................................         2,935         3,950        11,398        15,348           143            49            14            36           3.0
5.................................................................         2,925         3,951        11,391        15,342           149            49            14            37           3.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.21--Summary LCC and PBP Results for SCU-A-Small-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         2,419         2,772         7,548        10,321           103             0            83            17           1.4
2.................................................................         2,084         2,821         7,320        10,141           198             0            37            63           1.5
3.................................................................         1,826         2,896         6,979         9,875           396             0            11            89           1.6
4.................................................................         1,585         3,306         6,813        10,119           106            32             0            68           4.8
5.................................................................         1,585         3,306         6,813        10,119           106            32             0            68           4.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 14918]]

                                                            Table V.22--Summary LCC and PBP Results for SCU-A-Large-B Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         3,349         3,243        10,645        13,888           140             0            71            29           1.4
2.................................................................         2,884         3,324        10,105        13,429           522             0            36            64           1.2
3.................................................................         2,526         3,405         9,857        13,262           502             0             7            93           1.5
4.................................................................         2,351         3,758         9,731        13,489           240            34             0            66           3.7
5.................................................................         2,351         3,758         9,731        13,489           240            34             0            66           3.7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.23--Summary LCC and PBP Results for IMH-A-Small-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                               2012$ *                                      %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         4,630         6,644         9,390        16,034           315             0            77            23           0.9
2.................................................................         4,374         6,666         9,212        15,877           314             0            54            46           0.9
3.................................................................         4,118         6,694         9,031        15,726           391             0            40            60           1.0
4.................................................................         3,862         6,913         8,848        15,761           307             8            31            61           2.6
5.................................................................         3,555         7,461         8,789        16,251         (237)            73            11            16           6.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.

                                                            Table V.24--Summary LCC and PBP Results for IMH-A-Large-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                                2012$                                       %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         8,911         5,518        15,462        20,980           660             0            65            35           0.5
2.................................................................         8,417         5,543        15,113        20,656           744             0            45            55           0.5
3.................................................................         7,430         5,630        14,426        20,055         1,026             0            15            85           0.7
4.................................................................         6,936         6,288        14,269        20,557           524            21            15            64           3.2
5.................................................................         6,912         6,289        14,262        20,552           500            21            10            69           3.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                            Table V.25--Summary LCC and PBP Results for SCU-A-Small-C Equipment Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Life-cycle cost, all customers 2012$                    Life-cycle cost savings
                                                                                 --------------------------------------------------------------------------------------------------
                                                                                                                              Affected         % of customers that experience          Payback
                                TSL                                 Energy usage                 Discounted                  customers'  ------------------------------------------    period,
                                                                       kWh/yr       Installed     operating        LCC         average                                                 median
                                                                                      cost          cost                       savings     Net cost  %  No impact  %   Net benefit      years
                                                                                                                               2012$ *                                      %
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................................         2,040         3,603         7,243        10,846            93             0            73            27           1.1
2.................................................................         1,866         3,632         7,127        10,760           140             0            53            47           1.5
3.................................................................         1,758         3,659         7,057        10,717           146             0            37            63           1.9
4.................................................................         1,758         3,659         7,057        10,717           146             0            37            63           1.9
5.................................................................         1,580         4,196         7,099        11,295         (441)            80            20             0          19.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.

b. Life-Cycle Cost Subgroup Analysis
    As described in section IV.I, DOE estimated the impact of amended 
energy conservation standards for automatic commercial ice makers, at 
each TSL, on two customer subgroups--the foodservice sector and the 
lodging sector. For the automatic commercial ice makers, DOE has not 
distinguished between subsectors of the foodservice industry. In other 
words, DOE has been treating it as one sector as opposed to modeling 
limited or full service restaurants and other types of foodservice 
firms separately. Foodservice was chosen as one representative subgroup 
because of the large percentage of the industry represented by family 
or locally owned restaurants. Likewise, lodging was chosen due to the 
large percentage of the industry represented by locally owned, or 
franchisee-owned hotels. DOE carried out two LCC subgroup analyses, one 
each for restaurants and lodging, by using the LCC spreadsheet 
described in chapter 8 of the NOPR, but with certain modifications. The 
input for business type was fixed to the identified subgroup, which 
ensured that the discount rates and electricity price rates associated 
with only that subgroup were selected in the Monte Carlo simulations 
(see chapter 8 of the NOPR TSD). Another major change from the LCC 
analysis was an added assumption that the subgroups do not have access 
to national capital markets, which results in higher discount rates for 
the subgroups. The higher discount rates lead the subgroups valuing 
more highly upfront equipment purchase costs relative to the future 
operating cost savings. The LCC subgroup analysis is described in 
chapter 8 of the NOPR TSD.

[[Page 14919]]

    Table V.26 presents the comparison of mean LCC savings for the 
small business subgroup in foodservice sector with the national average 
values (LCC savings results from chapter 8 of the NOPR TSD). For almost 
all TSLs in all equipment classes, the LCC savings for the small 
business subgroup are lower than the national average values. The 
exception is the TSL 5 result for SCU-A-Small-C. Table V.27 presents 
the percentage change in LCC savings compared to national average 
values. DOE modeled all equipment classes in this analysis, although 
DOE believes it is likely that the very large equipment classes are not 
commonly used in foodservice establishments. For TSLs 1 through 3, the 
differences range from -2 percent to -6 percent. For all but three 
equipment classes in Table V.27, the percentage decrease in LCC savings 
is less than 10 percent for all TSLs. For SCU-W-Large-B, the TSL 4 and 
5 differences were -11 percent. SCU-A-Small-B, the TSL 4 and 5 
differences were -17 percent. For IMH-W-Small-B, the TSL 5 difference 
is -37 percent.
    Table V.28 presents the comparison of median PBPs for the small 
business subgroup in foodservice sector with national median values 
(median PBPs from chapter 8 of the NOPR TSD). The PBP values are 
shorter for the small business subgroup in all cases. This arises 
because the first-year operating cost savings--which are used for 
payback period--are higher leading to a shorter payback, but given 
their higher discount rates, these customers value future savings less, 
leading to lower LCC savings. First-year savings are higher because the 
foodservice electricity prices are higher than the average of all 
classes.
    Table V.29 presents the comparison of mean LCC savings for the 
small business subgroup in lodging sector (hotels and casinos) with the 
national average values (LCC savings results from chapter 8 of the NOPR 
TSD). Table V.30 presents the percentage change in LCC savings of the 
lodging sector customer subgroup to national average values. For 
lodging sector small business, LCC savings are lower across the board. 
For TSLs 1 through 3, the lodging subgroup LCC savings range from 9 to 
13 percent lower. The reason for this is that the energy price for 
lodging is slightly lower than the average of all commercial business 
types (97 percent of the average). This combined with a higher discount 
rate reduces the nominal value of future operating and maintenance 
benefits as well as the present value of the benefits, thus resulting 
in lower LCC savings.
    Table V.31 presents the comparison of median PBPs for small 
business subgroup in the lodging sector with national median values 
(median PBPs from chapter 8 of the NOPR TSD). The PBP values are 
slightly higher in the lodging small business subgroup in all 
instances. As noted above, the energy savings would be lower in nominal 
terms than a national average Thus, the slightly lower median PBP 
appears to be a result of a narrower electricity saving results 
distribution that is close to but below the national average.

 Table V.26--Comparison of Mean LCC Savings for the Foodservice Sector Small Business Subgroup With the National
                                                 Average Values
----------------------------------------------------------------------------------------------------------------
                                                                       Mean LCC savings 2012$ *
         Equipment class               Category      -----------------------------------------------------------
                                                         TSL 1       TSL 2       TSL 3       TSL 4       TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...................  Small Business....        195         210         312         312          31
                                  All Business Types        199         215         328         328          49
IMH-W-Med-B.....................  Small Business....        455         455         575         390         443
                                  All Business Types        464         464         587         405         460
IMH-W-Large-B...................  Small Business....        816         816         816         528         559
                                  All Business Types        833         833         833         550         582
IMH-W-Large-B1..................  Small Business....        687         687         687         561         585
                                  All Business Types        701         701         701         583         607
IMH-W-Large-B2..................  Small Business....      1,233       1,233       1,233         419         476
                                  All Business Types      1,260       1,260       1,260         442         500
IMH-A-Small-B...................  Small Business....        249         253         387         159         185
                                  All Business Types        254         259         396         170         198
IMH-A-Large-B...................  Small Business....        635         621       1,094         956         956
                                  All Business Types        648         633       1,127         994         994
IMH-A-Large-B1..................  Small Business....        578         561       1,132       1,021       1,021
                                  All Business Types        590         572       1,168       1,062       1,062
IMH-A-Large-B2..................  Small Business....        941         941         888         604         604
                                  All Business Types        960         960         908         627         627
RCU-Large-B.....................  Small Business....        858         858         963         843         869
                                  All Business Types        875         875         983         870         897
RCU-Large-B1....................  Small Business....        830         830         944         831         855
                                  All Business Types        847         847         963         857         882
RCU-Large-B2....................  Small Business....      1,270       1,270       1,249       1,032       1,084
                                  All Business Types      1,298       1,298       1,277       1,070       1,123
SCU-W-Large-B...................  Small Business....        455         655         666         126         132
                                  All Business Types        483         687         694         143         149
SCU-A-Small-B...................  Small Business....        100         194         378          88          88
                                  All Business Types        103         198         396         106         106
SCU-A-Large-B...................  Small Business....        137         498         483         219         219
                                  All Business Types        140         522         502         240         240
IMH-A-Small-C...................  Small Business....        308         307         383         296       (238)
                                  All Business Types        315         314         391         307       (237)
IMH-A-Large-C...................  Small Business....        647         729       1,006         512         489
                                  All Business Types        660         744       1,026         524         500
SCU-A-Small-C...................  Small Business....         91         137         143         143       (434)

[[Page 14920]]

 
                                  All Business Types         93         140         146         146       (441)
----------------------------------------------------------------------------------------------------------------
* Values in parenthesis are negative numbers.

Table V.27--Percentage Change in Mean LCC Savings for the Foodservice Sector Small Business Subgroup Compared to
                                            National Average Values *
----------------------------------------------------------------------------------------------------------------
                Equipment class                     TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................         (2%)         (2%)         (5%)         (5%)        (37%)
IMH-W-Med-B....................................         (2%)         (2%)         (2%)         (4%)         (4%)
IMH-W-Large-B..................................         (2%)         (2%)         (2%)         (4%)         (4%)
IMH-W-Large-B1.................................         (2%)         (2%)         (2%)         (4%)         (4%)
IMH-W-Large-B2.................................         (2%)         (2%)         (2%)         (5%)         (5%)
IMH-A-Small-B..................................         (2%)         (2%)         (2%)         (7%)         (6%)
IMH-A-Large-B..................................         (2%)         (2%)         (3%)         (4%)         (4%)
IMH-A-Large-B1.................................         (2%)         (2%)         (3%)         (4%)         (4%)
IMH-A-Large-B2.................................         (2%)         (2%)         (2%)         (4%)         (4%)
RCU-Large-B....................................         (2%)         (2%)         (2%)         (3%)         (3%)
RCU-Large-B1...................................         (2%)         (2%)         (2%)         (3%)         (3%)
RCU-Large-B2...................................         (2%)         (2%)         (2%)         (3%)         (3%)
SCU-W-Large-B..................................         (6%)         (5%)         (4%)        (11%)        (11%)
SCU-A-Small-B..................................         (2%)         (2%)         (5%)        (17%)        (17%)
SCU-A-Large-B..................................         (2%)         (4%)         (4%)         (9%)         (9%)
IMH-A-Small-C..................................         (2%)         (2%)         (2%)         (3%)           0%
IMH-A-Large-C..................................         (2%)         (2%)         (2%)         (2%)         (2%)
SCU-A-Small-C..................................         (2%)         (2%)         (2%)         (2%)           2%
----------------------------------------------------------------------------------------------------------------
* Values in parenthesis are negative numbers. Negative percentage values imply decrease in LCC savings and
  positive percentage values imply increase in LCC savings.

    Table V.28--Comparison of Median Payback Periods for the Foodservice Sector Small Business Subgroup With
                                             National Median Values
----------------------------------------------------------------------------------------------------------------
                                                                        Median payback period  years
          Equipment class                  Category       ------------------------------------------------------
                                                             TSL 1      TSL 2      TSL 3      TSL 4      TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.....................  Small Business.......       1.02       1.20       2.16       2.16       5.14
                                    All Business Types...       1.07       1.26       2.27       2.27       5.42
IMH-W-Med-B.......................  Small Business.......       0.60       0.60       0.81       3.17       3.06
                                    All Business Types...       0.63       0.63       0.85       3.33       3.22
IMH-W-Large-B.....................  Small Business.......       0.65       0.65       0.65       3.42       3.42
                                    All Business Types...       0.69       0.69       0.69       3.59       3.60
IMH-W-Large-B1....................  Small Business.......       0.68       0.68       0.68       3.57       3.59
                                    All Business Types...       0.72       0.72       0.72       3.75       3.77
IMH-W-Large-B2....................  Small Business.......       0.55       0.55       0.55       2.95       2.88
                                    All Business Types...       0.58       0.58       0.58       3.10       3.02
IMH-A-Small-B.....................  Small Business.......       1.02       1.16       1.35       4.11       4.03
                                    All Business Types...       1.07       1.22       1.42       4.32       4.24
IMH-A-Large-B.....................  Small Business.......       0.44       0.47       0.80       2.06       2.06
                                    All Business Types...       0.46       0.49       0.84       2.16       2.16
IMH-A-Large-B1....................  Small Business.......       0.44       0.48       0.78       1.99       1.99
                                    All Business Types...       0.46       0.50       0.82       2.08       2.08
IMH-A-Large-B2....................  Small Business.......       0.40       0.40       0.90       2.45       2.45
                                    All Business Types...       0.42       0.42       0.94       2.58       2.58
RCU-Large-B.......................  Small Business.......       0.39       0.39       0.62       2.27       2.32
                                    All Business Types...       0.41       0.41       0.65       2.39       2.44
RCU-Large-B1......................  Small Business.......       0.37       0.37       0.59       2.25       2.31
                                    All Business Types...       0.38       0.38       0.62       2.37       2.42
RCU-Large-B2......................  Small Business.......       0.72       0.72       0.96       2.57       2.57
                                    All Business Types...       0.75       0.75       1.00       2.70       2.70
SCU-W-Large-B.....................  Small Business.......       0.65       0.73       0.96       2.87       2.86
                                    All Business Types...       0.67       0.76       1.00       3.01       3.00
SCU-A-Small-B.....................  Small Business.......       1.33       1.44       1.48       4.54       4.54
                                    All Business Types...       1.40       1.52       1.56       4.79       4.79
SCU-A-Large-B.....................  Small Business.......       1.29       1.11       1.42       3.54       3.54

[[Page 14921]]

 
                                    All Business Types...       1.37       1.17       1.49       3.72       3.72
IMH-A-Small-C.....................  Small Business.......       0.86       0.86       0.92       2.46       6.38
                                    All Business Types...       0.90       0.90       0.97       2.59       6.83
IMH-A-Large-C.....................  Small Business.......       0.50       0.50       0.65       3.06       3.05
                                    All Business Types...       0.52       0.53       0.69       3.25       3.24
SCU-A-Small-C.....................  Small Business.......       1.08       1.45       1.76       1.76      17.09
                                    All Business Types...       1.13       1.53       1.85       1.85      19.12
----------------------------------------------------------------------------------------------------------------

 Table V.29--Comparison of LCC Savings for the Lodging Sector Small Business Subgroup With the National Average
                                                     Values
----------------------------------------------------------------------------------------------------------------
                                                                         Mean LCC savings  2012$ *
          Equipment class                  Category       ------------------------------------------------------
                                                             TSL 1      TSL 2      TSL 3      TSL 4      TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.....................  Small Business.......        179        192        285        285        (3)
                                    All Business Types...        199        215        328        328         49
IMH-W-Med-B.......................  Small Business.......        421        421        531        334        382
                                    All Business Types...        464        464        587        405        460
IMH-W-Large-B.....................  Small Business.......        756        756        756        449        476
                                    All Business Types...        833        833        833        550        582
IMH-W-Large-B1....................  Small Business.......        635        635        635        484        503
                                    All Business Types...        701        701        701        583        607
IMH-W-Large-B2....................  Small Business.......      1,144      1,144      1,144        338        390
                                    All Business Types...      1,260      1,260      1,260        442        500
IMH-A-Small-B.....................  Small Business.......        229        232        354        115        139
                                    All Business Types...        254        259        396        170        198
IMH-A-Large-B.....................  Small Business.......        589        575      1,018        862        862
                                    All Business Types...        648        633      1,127        994        994
IMH-A-Large-B1....................  Small Business.......        536        520      1,056        926        926
                                    All Business Types...        590        572      1,168      1,062      1,062
IMH-A-Large-B2....................  Small Business.......        873        873        816        521        521
                                    All Business Types...        960        960        908        627        627
RCU-Large-B.......................  Small Business.......        796        796        890        744        766
                                    All Business Types...        875        875        983        870        897
RCU-Large-B1......................  Small Business.......        771        771        873        734        754
                                    All Business Types...        847        847        963        857        882
RCU-Large-B2......................  Small Business.......      1,175      1,175      1,149        891        937
                                    All Business Types...      1,298      1,298      1,277      1,070      1,123
SCU-W-Large-B.....................  Small Business.......        440        624        626         96        102
                                    All Business Types...        483        687        694        143        149
SCU-A-Small-B.....................  Small Business.......         92        177        353         55         55
                                    All Business Types...        103        198        396        106        106
SCU-A-Large-B.....................  Small Business.......        126        470        448        179        179
                                    All Business Types...        140        522        502        240        240
IMH-A-Small-C.....................  Small Business.......        284        283        352        257      (281)
                                    All Business Types...        315        314        391        307      (237)
IMH-A-Large-C.....................  Small Business.......        600        676        929        412        394
                                    All Business Types...        660        744      1,026        524        500
SCU-A-Small-C.....................  Small Business.......         84        125        128        128      (452)
                                    All Business Types...         93        140        146        146      (441)
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.

  Table V.30--Percentage Change in Mean LCC Savings for the Lodging Sector Small Business Subgroup Compared to
                                            National Average Values *
----------------------------------------------------------------------------------------------------------------
                Equipment class                     TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        (10%)        (10%)        (13%)        (13%)       (107%)
IMH-W-Med-B....................................         (9%)         (9%)        (10%)        (18%)        (17%)
IMH-W-Large-B..................................         (9%)         (9%)         (9%)        (18%)        (18%)
IMH-W-Large-B1.................................         (9%)         (9%)         (9%)        (17%)        (17%)
IMH-W-Large-B2.................................         (9%)         (9%)         (9%)        (24%)        (22%)
IMH-A-Small-B..................................        (10%)        (10%)        (11%)        (32%)        (30%)
IMH-A-Large-B..................................         (9%)         (9%)        (10%)        (13%)        (13%)

[[Page 14922]]

 
IMH-A-Large-B1.................................         (9%)         (9%)        (10%)        (13%)        (13%)
IMH-A-Large-B2.................................         (9%)         (9%)        (10%)        (17%)        (17%)
RCU-Large-B....................................         (9%)         (9%)         (9%)        (15%)        (15%)
RCU-Large-B1...................................         (9%)         (9%)         (9%)        (14%)        (15%)
RCU-Large-B2...................................         (9%)         (9%)        (10%)        (17%)        (16%)
SCU-W-Large-B..................................         (9%)         (9%)        (10%)        (33%)        (32%)
SCU-A-Small-B..................................        (11%)        (11%)        (11%)        (49%)        (49%)
SCU-A-Large-B..................................        (10%)        (10%)        (11%)        (25%)        (25%)
IMH-A-Small-C..................................        (10%)        (10%)        (10%)        (16%)        (18%)
IMH-A-Large-C..................................         (9%)         (9%)         (9%)        (21%)        (21%)
SCU-A-Small-C..................................        (10%)        (11%)        (12%)        (12%)         (2%)
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers. Negative percentage values imply decrease in LCC savings and
  positive percentage values imply increase in LCC savings.

    Table V.31--Comparison of Median Payback Periods for the Lodging Sector Small Business Subgroup With the
                                             National Median Values
----------------------------------------------------------------------------------------------------------------
                                                                        Median payback period  years
          Equipment class                  Category       ------------------------------------------------------
                                                             TSL 1      TSL 2      TSL 3      TSL 4      TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.....................  Small Business.......       1.09       1.28       2.27       2.27       5.42
                                    All Business Types...       1.07       1.26       2.27       2.27       5.42
IMH-W-Med-B.......................  Small Business.......       0.64       0.64       0.86       3.38       3.26
                                    All Business Types...       0.63       0.63       0.85       3.33       3.22
IMH-W-Large-B.....................  Small Business.......       0.70       0.70       0.70       3.65       3.65
                                    All Business Types...       0.69       0.69       0.69       3.59       3.60
IMH-W-Large-B1....................  Small Business.......       0.73       0.73       0.73       3.80       3.83
                                    All Business Types...       0.72       0.72       0.72       3.75       3.77
IMH-W-Large-B2....................  Small Business.......       0.58       0.58       0.58       3.14       3.07
                                    All Business Types...       0.58       0.58       0.58       3.10       3.02
IMH-A-Small-B.....................  Small Business.......       1.08       1.24       1.44       4.39       4.30
                                    All Business Types...       1.07       1.22       1.42       4.32       4.24
IMH-A-Large-B.....................  Small Business.......       0.46       0.50       0.85       2.19       2.19
                                    All Business Types...       0.46       0.49       0.84       2.16       2.16
IMH-A-Large-B1....................  Small Business.......       0.47       0.51       0.83       2.11       2.11
                                    All Business Types...       0.46       0.50       0.82       2.08       2.08
IMH-A-Large-B2....................  Small Business.......       0.43       0.43       0.96       2.61       2.61
                                    All Business Types...       0.42       0.42       0.94       2.58       2.58
RCU-Large-B.......................  Small Business.......       0.41       0.41       0.66       2.42       2.48
                                    All Business Types...       0.41       0.41       0.65       2.39       2.44
RCU-Large-B1......................  Small Business.......       0.39       0.39       0.63       2.40       2.46
                                    All Business Types...       0.38       0.38       0.62       2.37       2.42
RCU-Large-B2......................  Small Business.......       0.77       0.77       1.02       2.74       2.74
                                    All Business Types...       0.75       0.75       1.00       2.70       2.70
SCU-W-Large-B.....................  Small Business.......       0.67       0.75       1.01       3.01       3.00
                                    All Business Types...       0.67       0.76       1.00       3.01       3.00
SCU-A-Small-B.....................  Small Business.......       1.42       1.54       1.56       4.79       4.79
                                    All Business Types...       1.40       1.52       1.56       4.79       4.79
SCU-A-Large-B.....................  Small Business.......       1.38       1.17       1.49       3.72       3.72
                                    All Business Types...       1.37       1.17       1.49       3.72       3.72
IMH-A-Small-C.....................  Small Business.......       0.92       0.92       0.99       2.63       6.88
                                    All Business Types...       0.90       0.90       0.97       2.59       6.83
IMH-A-Large-C.....................  Small Business.......       0.53       0.53       0.70       3.28       3.28
                                    All Business Types...       0.52       0.53       0.69       3.25       3.24
SCU-A-Small-C.....................  Small Business.......       1.15       1.55       1.88       1.88      19.13
                                    All Business Types...       1.13       1.53       1.85       1.85      19.12
----------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of automatic commercial ice 
makers. The following section describes the expected impacts on 
manufacturers at each TSL. Chapter 12 of the NOPR TSD explains the 
analysis in further detail.
a. Industry Cash Flow Analysis Results
    The following tables depict the financial impacts (represented by 
changes in INPV) of amended energy conservation standards on 
manufacturers of automatic commercial ice makers as well as the 
conversion costs that DOE estimates manufacturers would incur for all 
equipment classes at each TSL. To evaluate the range of cash flow 
impacts on the commercial ice maker industry, DOE used two different

[[Page 14923]]

markup assumptions to model scenarios that correspond to the range of 
anticipated market responses to new and amended energy conservation 
standards.
    To assess the lower (less severe) end of the range of potential 
impacts, DOE modeled a preservation of gross margin percentage markup 
scenario, in which a uniform ``gross margin percentage'' markup is 
applied across all efficiency levels. In this scenario, DOE assumed 
that a manufacturer's absolute dollar markup would increase as 
production costs increase in the amended energy conservation standards 
case. Manufacturers have indicated that it is optimistic to assume that 
they would be able to maintain the same gross margin percentage markup 
as their production costs increase in response to a new or amended 
energy conservation standard, particularly at higher TSLs.
    To assess the higher (more severe) end of the range of potential 
impacts, DOE modeled the preservation of the EBIT markup scenario, 
which assumes that manufacturers would not be able to preserve the same 
overall gross margin, but instead cut their markup for marginally 
compliant products to maintain a cost competitive product offering and 
keep the same overall level of EBIT as in the base case. The two tables 
below show the range of potential INPV impacts for manufacturers of 
automatic commercial ice makers. The first table reflects the lower 
bound of impacts (higher profitability) and the second represents the 
upper bound of impacts (lower profitability).
    Each scenario results in a unique set of cash flows and 
corresponding industry values at each TSL. In the following discussion, 
the INPV results refer to the sum of discounted cash flows through 
2047, the difference in INPV between the base case and each standards 
case, and the total industry conversion costs required for each 
standards case.

   Table V.32--Manufacturer Impact Analysis for Automatic Commercial Ice Makers--Preservation of Gross Margin
                                          Percentage Markup Scenario *
----------------------------------------------------------------------------------------------------------------
                                                                            Trial standard level
                                    Units       Base case ------------------------------------------------------
                                                               1          2          3          4          5
----------------------------------------------------------------------------------------------------------------
INPV.........................  2012$ Millions.     $101.8      $93.4      $89.0      $80.9      $82.2      $81.9
Change in INPV...............  2012$ Millions.  .........     $(8.4)    $(12.8)    $(20.9)    $(19.6)    $(19.9)
                               (%)............  .........     (8.2)%    (12.6)%    (20.5)%    (19.2)%    (19.5)%
Product Conversion Costs.....  2012$ Millions.  .........      $17.0      $25.4      $38.3      $44.8      $46.9
Capital Conversion Costs.....  2012$ Millions.  .........       $0.4       $1.2       $3.9       $6.4       $7.3
                              ----------------------------------------------------------------------------------
    Total Conversion Costs...  2012$ Millions.  .........      $17.4      $26.6      $42.2      $51.2      $54.2
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.

    Table V.33--Manufacturer Impact Analysis for Automatic Commercial Ice Makers--Preservation of EBIT Markup
                                                   Scenario *
----------------------------------------------------------------------------------------------------------------
                                                                            Trial standard level
                                    Units       Base case ------------------------------------------------------
                                                               1          2          3          4          5
----------------------------------------------------------------------------------------------------------------
INPV.........................  2012$ Millions.     $101.8      $93.1      $88.2      $77.9      $71.3      $69.2
Change in INPV...............  2012$ Millions.  .........     $(8.7)    $(13.6)    $(23.9)    $(30.5)    $(32.6)
                               (%)............  .........     (8.5)%    (13.4)%    (23.5)%    (30.0)%    (32.0)%
Product Conversion Costs.....  2012$ Millions.  .........      $17.0      $25.4      $38.3      $44.8      $46.9
Capital Conversion Costs.....  2012$ Millions.  .........       $0.4       $1.2       $3.9       $6.4       $7.3
                              ----------------------------------------------------------------------------------
    Total Conversion Costs...  2012$ Millions.  .........      $17.4      $26.6      $42.2      $51.2      $54.2
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.

    Beyond impacts on INPV, DOE includes a comparison of free cash flow 
between the base case and the standards case at each TSL in the year 
before amended standards take effect to provide perspective on the 
short-run cash flow impacts in the discussion of the results below.
    At TSL 1, DOE estimates impacts on INPV for manufacturers of 
automatic commercial ice makers to range from -$8.4 million to -$8.7 
million, or a change in INPV of -8.2 percent to -8.5 percent. At this 
TSL, industry free cash flow is estimated to decrease by approximately 
61 percent to $3.3 million, compared to the base-case value of $8.4 
million in the year before the compliance date (2017).
    DOE estimates that approximately 40 percent of all batch commercial 
ice makers and 30 percent of all continuous commercial ice makers on 
the market will require redesign to meet standards at TSL 1. 
Additionally, for both batch and continuous products, the number of 
products requiring redesign at this TSL is commensurate with each 
manufacturer's estimated market share. Twelve manufacturers, including 
three small businesses, produce equipment that complies with the 
efficiency levels specified at TSL 1.
    At TSL 1, the majority of efficiency gains could be made through 
swapping purchased components for higher efficiency equivalents. It is 
expected that very few evaporators and condensers are affected at TSL 
1, leading to very low expected industry capital conversion costs 
totaling only $0.4 million. However, moderate product conversion costs 
of $17.0 million are expected, as redesigned units will require low 
levels of engineering design labor, as well as testing for equipment 
certification.
    At TSL 2, DOE estimates impacts on INPV for manufacturers of 
automatic commercial ice makers to range from -$12.8 million to -$13.6 
million, or a change in INPV of -12.6 percent to -13.4 percent. At this 
TSL, industry free cash flow is estimated to decrease by approximately 
97 percent to $0.2 million, compared to the base-case

[[Page 14924]]

value of $8.4 million in the year before the compliance date (2017).
    At TSL 2, total conversion costs increase to $26.6 million, 53 
percent higher than those incurred by industry at TSL 1. DOE estimates 
that approximately 58 percent of all units on the market will require 
redesign to meet the standards outlined at TSL 2. As with TSL 1, for 
batch and continuous commercial ice makers, the number of products 
requiring redesign at this TSL is largely commensurate with each 
manufacturer's estimated market share. Ten manufacturers, including 
three small businesses, produce equipment that complies with the 
efficiency levels specified at TSL 2.
    The majority of redesigns still rely on switching to higher 
efficiency components, but a limited number of units are expected to 
require more complex system redesigns including the evaporator and 
condenser. The increased, but moderate, complexity of these redesigns 
causes product conversion costs to grow at a slightly higher rate than 
the additional number of units requiring redesign, resulting in 
industry-wide product conversion costs totaling $25.4 million. Capital 
conversion costs continue to remain relatively low at $1.2 million, as 
most design options considered at TSL 2 can be integrated into 
production without changes to manufacturing capital.
    At TSL 3, DOE estimates impacts on INPV for manufacturers of 
automatic commercial ice makers to range from -$20.9 million to -$23.9 
million, or a change in INPV of -20.5 percent to -23.5 percent. At this 
TSL, industry free cash flow is estimated to decrease by approximately 
180 percent to -$6.7 million, compared to the base-case value of $8.4 
million in the year before the compliance date (2017).
    At TSL 3, total conversion costs grow significantly to $42.2 
million, an increase of 59 percent over those incurred by manufacturers 
at TSL 2. DOE estimates that approximately 88 percent of all batch 
products and 75 percent of all continuous products on the market will 
require redesign to meet this TSL. Six of the 12 manufacturers of batch 
equipment currently produce batch commercial ice makers that comply 
with the efficiency levels specified at TSL 3. This includes one small 
business manufacturer. In contrast, all six manufacturers of continuous 
commercial ice makers identified produce products that comply with the 
efficiency levels specified at TSL 3.
    The majority of redesigns necessary to meet the standards at TSL 3 
involve more complex changes to the evaporator and condenser systems. 
These complex redesigns result in product conversion costs increasing 
at a rate higher than simply the additional number of units that 
require redesign. At TSL 3, the resulting industry product conversion 
costs total $38.3 million. Additionally, capital conversion costs jump 
significantly to $3.9 million, as evaporator and condenser redesigns 
spur investments in tooling for both of these components and the 
surrounding enclosure.
    At TSL 4, DOE estimates impacts on INPV for manufacturers of 
automatic commercial ice makers to range from -$19.6 million to -$30.5 
million, or a change in INPV of -19.2 percent to -30.0 percent. At this 
TSL, industry free cash flow is estimated to decrease by approximately 
227 percent to -$10.7 million, compared to the base-case value of $8.4 
million in the year before the compliance date (2017).
    At TSL 4, total conversion costs grow to $51.2 million. Relative to 
the change between TSLs 2 and 3, the increases in conversion costs at 
TSL 4 are smaller as the percentage of batch and continuous units 
requiring redesign grows to 96 percent and 77 percent, respectively. 
These fractions are up from 88 percent and 75 percent, respectively, at 
TSL 3. Only two manufacturers, including one small business 
manufacturer, currently produce batch commercial ice makers that comply 
with the efficiency levels specified at TSL 4. In contrast, all six 
manufacturers of continuous commercial ice makers identified produce 
products that comply with the efficiency levels specified at TSL 4.
    With very few additional units needing redesigns, costs incurred 
are mainly incremental, and account for the increasing complexity of 
condenser and evaporator redesigns. Product conversion costs grow to 
$44.8 million, 17 percent above those at TSL 3. However, the increasing 
complexity of redesign does incur greater capital conversion costs, 
which grow to $6.4 million as additional capital investments are 
required to modify production lines to manufacture these more complex 
designs.
    At TSL 5, DOE estimates impacts on INPV for manufacturers of 
automatic commercial ice makers to range from -$19.9 million to -$32.6 
million, or a change in INPV of -19.5 percent to -32.0 percent. At this 
TSL, industry free cash flow is estimated to decrease by approximately 
243 percent to -$12.0 million, compared to the base-case value of $8.4 
million in the year before the compliance date (2017).
    As with TSL 4, only two manufacturers, including one small business 
manufacturer, currently produce batch commercial ice makers that comply 
with the efficiency levels specified at TSL 5. For manufacturers of 
continuous commercial ice makers, this number drops from six to four. 
As compared to the previous increases in required efficiency between 
TSLs, the changes between TSL 4 and TSL 5 are minimal. As a result, 
total conversion costs grow only slightly, rising 6 percent to $54.2 
million. This consists of $46.9 million in product conversion costs and 
$7.3 million in capital conversion costs.
b. Impacts on Direct Employment
    DOE used the GRIM to estimate the domestic labor expenditures and 
number of domestic production workers in the base case and at each TSL 
from 2013 to 2047. DOE used statistical data from the most recent U.S 
Census Bureau's ``Annual Survey of Manufactures,'' the results of the 
engineering analysis, and interviews with manufacturers to determine 
the inputs necessary to calculate industry-wide labor expenditures and 
domestic employment levels. Labor expenditures for the manufacture of a 
product are a function of the labor intensity of the product, the sales 
volume, and an assumption that wages in real terms remain constant.
    In the GRIM, DOE used the labor content of each product and the 
manufacturing production costs from the engineering analysis to 
estimate the annual labor expenditures in the automatic commercial ice 
maker industry. DOE used information gained through interviews with 
manufacturers to estimate the portion of the total labor expenditures 
that is attributable to domestic labor.
    The production worker estimates in this section cover workers only 
up to the line-supervisor level who are directly involved in 
fabricating and assembling automatic commercial ice makers within an 
original equipment manufacturer (OEM) facility. Workers performing 
services that are closely associated with production operations, such 
as material handling with a forklift, are also included as production 
labor.
    The employment impacts shown in Table V.34 represent the potential 
production employment that could result following new and amended 
energy conservation standards. The upper end of the results in this 
table estimates the total potential increase in the number of 
production workers after amended energy conservation standards. To 
calculate the total potential increase, DOE assumed that manufacturers 
continue to produce the

[[Page 14925]]

same scope of covered products in domestic production facilities and 
domestic production is not shifted to lower-labor-cost countries. 
Because there is a risk of manufacturers evaluating sourcing decisions 
in response to amended energy conservation standards, the lower end of 
the range of employment results in Table V.34 includes the estimated 
total number of U.S. production workers in the industry who could lose 
their jobs if all existing production were moved outside of the United 
States. While the results present a range of employment impacts 
following the compliance date of amended energy conservation standards, 
the discussion below also includes a qualitative discussion of the 
likelihood of negative employment impacts at the various TSLs. Finally, 
the employment impacts shown are independent of the employment impacts 
from the broader U.S. economy, which are documented in chapter 13 of 
the NOPR TSD.
    DOE estimates that in the absence of amended energy conservation 
standards, there would be 268 domestic production workers involved in 
manufacturing automatic commercial ice makers in 2018. Using 2011 
Census Bureau data and interviews with manufacturers, DOE estimates 
that approximately 84 percent of automatic commercial ice makers sold 
in the United States are manufactured domestically. Table V.34 shows 
the range of the impacts of potential amended energy conservation 
standards on U.S. production workers in the automatic commercial ice 
maker industry.

 Table V.34--Potential Changes in the Total Number of Domestic Automatic Commercial Ice Maker Production Workers
                                                     in 2018
----------------------------------------------------------------------------------------------------------------
                                     Base case        1            2            3            4            5
----------------------------------------------------------------------------------------------------------------
Total Number of Domestic                    268          268          268          269          269          269
 Production Workers in 2018
 (without changes in production
 locations).......................
Potential Changes in Domestic       ...........      0-(268)      0-(268)      1-(268)      1-(268)      1-(268)
 Production Workers in 2018 *.....
----------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Values in parentheses are negative numbers.

    All examined TSLs show relatively minor impacts on domestic 
employment levels relative to total industry employment. At all TSLs, 
most of the design options analyzed by DOE do not greatly alter the 
labor content of the final product. For example, the use of higher 
efficiency compressors or fan motors involve one-time changes to the 
final product, but do not significantly change the number of steps 
required for the final assembly. One manufacturer suggested that their 
domestic production employment levels would only change if market 
demand contracted following higher overall prices. However, more than 
one manufacturer suggested that where they already have overseas 
manufacturing capabilities, they would consider moving additional 
manufacturing to those facilities if they felt the need to offset a 
significant rise in materials costs. Provided the changes in materials 
costs do not support the relocation of manufacturing facilities, one 
would expect only modest changes to domestic manufacturing employment 
balancing additional requirements for assembly labor with the effects 
of price elasticity.
c. Impacts on Manufacturing Capacity
    According to the majority of automatic commercial ice maker 
manufacturers interviewed, amended energy conservation standards that 
require modest changes to product efficiency will not significantly 
affect manufacturers' production capacities. Any redesign of automatic 
commercial ice makers would not change the fundamental assembly of the 
equipment, but manufacturers do anticipate some potential for 
additional lead time immediately following standards associated with 
changes in sourcing of higher efficiency components, which may be 
supply constrained.
    One manufacturer cited the possibility of a 3- to 6-month shutdown 
in the event that amended standards were set high enough to require 
retooling of their entire product line. Most of the design options 
being evaluated are already available on the market as product options. 
Thus, DOE believes that short of widespread retooling, manufacturers 
would be able to maintain manufacturing capacity levels and continue to 
meet market demand under amended energy conservation standards.
d. Impacts on Subgroups of Manufacturers
    Small business, low volume, and niche equipment manufacturers, and 
manufacturers exhibiting a cost structure substantially different from 
the industry average could be affected disproportionately. As discussed 
in section IV.J, using average cost assumptions to develop an industry 
cash flow estimate is inadequate to assess differential impacts among 
manufacturer subgroups.
    For automatic commercial ice makers, DOE identified and evaluated 
the impact of amended energy conservation standards on one subgroup: 
small manufacturers. The SBA defines a ``small business'' as having 750 
employees or less for NAICS 333415, ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing,'' which includes ice-making machinery manufacturing. 
Based on this definition, DOE identified seven manufacturers in the 
automatic commercial ice makers industry that are small businesses.
    For a discussion of the impacts on the small manufacturer subgroup, 
see the regulatory flexibility analysis in section VI.B of this notice 
and chapter 12 of the NOPR TSD.
e. Cumulative Regulatory Burden
    While any one regulation may not impose a significant burden on 
manufacturers, the combined effects of recent or impending regulations 
may 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 
equipment efficiency.

[[Page 14926]]

    During previous stages of this rulemaking, DOE identified a number 
of requirements in addition to amended energy conservation standards 
for automatic commercial ice makers. The following section briefly 
addresses comments DOE received with respect to cumulative regulatory 
burden and summarizes other key related concerns that manufacturers 
raised during interviews.
Existing Federal Standards for Automatic Commercial Ice Makers
    Several manufacturers commented that they had made substantial 
investments in order to comply with the previous Federal energy 
conservation standards for batch style automatic commercial ice makers, 
which took effect in January 2010. While DOE acknowledges the 
significant investment on the part of industry, because the proposed 
compliance date for new and amended standards is 2018, there should be 
no direct overlap of compliance costs from either standard. The 
residual financial impact of the previous energy conservation standards 
manifest themselves in the 2018 standards MIA as the prevailing 
industry conditions absent new or amended energy conservation 
standards. This serves as the basis for the base-case INPV.
Certification, Compliance, and Enforcement (CC&E) Rule
    Multiple manufacturers expressed concerns about the burden CC&E 
would impose on the automatic commercial ice maker industry. CC&E 
requires testing and compliance for a wide array of equipment 
offerings. One manufacturer cited the increase in testing burden 
associated with the DOE's new definition of ``basic'' model, which has 
contributed significantly to the number of models considered to be 
basic. Manufacturers worry that testing each variation would present a 
significant testing burden, especially for small business 
manufacturers.
    In addition to costs associated with DOE CC&E requirements, 
manufacturers cited an array of other certifications as being an 
additional and substantial burden. Such certifications include codes 
and standards developed by American Society of Mechanical Engineers 
(ASME), which include standards for compressors, fasteners, flow 
measurement, nuclear, environmental control, piping, pressure vessels, 
pumps, storage tanks, and more.\67\ Other critical certification 
programs for manufacturers of automatic commercial ice makers include 
those of National Sanitation Foundation (NSF), Underwriters 
Laboratories (UL), NRCan, and CEC. A new energy efficiency standard put 
forth by the DOE that requires a complete product redesign will 
necessitate recertification from the above-mentioned programs. 
Manufacturers are concerned about the cumulative testing burden 
associated with such re-certifications.
---------------------------------------------------------------------------

    \67\ Information about ASME codes and standards can be obtained 
at: www.asme.org/kb/standards/standards.
---------------------------------------------------------------------------

    DOE understands that testing and certification requirements may 
have a significant impact on manufacturers, and the CC&E burden is 
identified as a key issue in the MIA. DOE also understands that CC&E 
requirements can be particularly onerous for manufacturers producing 
low volume or highly customized equipment. Regarding other 
certification programs, the DOE again acknowledges the potential burden 
associated with recertification. However, DOE also recognizes that 
these programs are voluntary.
EPA and ENERGY STAR
    Some manufacturers expressed concerns regarding potential conflicts 
with the ENERGY STAR certification program. Manitowoc publicly 
commented that certification by the ENERGY STAR program is very 
important to their customers for a variety of reasons including the 
potential for utility rebates and LEED certification. Manitowoc went on 
to say that if DOE's energy efficiency standard level is raised to the 
max-tech level, there would be no room for the ENERGY STAR 
classification and that this could be highly disruptive to the industry 
(Manitowoc, No. 42 at pp. 15-16). Due to the clear market value of the 
ENERGY STAR program, manufacturers expressed concern about the 
additional testing burdens associated with having to re-certify 
products, or alternatively, having to forfeit market share by offering 
products that are not ENERGY STAR certified.
    DOE realizes that the cumulative effect of several regulations on 
an industry may significantly increase the burden faced by 
manufacturers that need to comply with multiple regulations and 
certification programs from different organizations and levels of 
government. However, DOE notes that certain standards, such as ENERGY 
STAR, are optional for manufacturers.
Other Federal Regulations
    Manufacturers also expressed concerns regarding the additional 
burden caused by other Federal regulations, including the upcoming 
amended energy conservation standards for residential refrigerators and 
freezers, commercial refrigeration equipment, walk-in coolers and 
freezers, miscellaneous residential refrigeration products, and cooking 
products.
    DOE recognizes the additional burden faced by manufacturers that 
produce both automatic commercial ice makers in combination with one or 
many of the above-mentioned products. Companies that produce a wide 
range of regulated equipment may be faced with more capital and 
equipment design development expenditures than competitors with a 
narrower scope of production. DOE does attempt to quantify the 
cumulative burden of Federal energy conservation standards on 
manufacturers in its manufacturer impact analysis (see chapter 12 of 
TSD). However, DOE cannot consider the quantitative impacts of amended 
standards that have not yet been finalized, such as those for walk-in 
coolers and walk-in freezers.
State Regulations
    Relating to the CEC codes and standards, one manufacturer noted 
California's 2020 energy policy goals, including the reduction of 
greenhouse gas emissions to 1990 levels, as a source of additional 
burden for automatic commercial ice maker manufacturers. Manufacturers 
also added that the lead limit guidelines (see, for example, section 4-
101.13(C) of the Food Code 2013) \68\ put forth by the U.S. Food and 
Drug Administration (FDA), and adopted as code by all 50 states,\69\ 
carry associated compliance costs. The levels specified by these 
guidelines have remained unchanged for at least 15 years.
---------------------------------------------------------------------------

    \68\ http://www.fda.gov/Food/GuidanceRegulation/RetailFoodProtection/FoodCode/ucm374275.htm).
    \69\ http://www.fda.gov/downloads/Food/GuidanceRegulation/RetailFoodProtection/FederalStateCooperativePrograms/UCM230336.pdf.
---------------------------------------------------------------------------

International Regulations
    Finally, one manufacturer noted additional burden associated with 
the European Union (EU) Restriction on Hazardous Substances Directive 
(RoHS), which restricts the use of six hazardous materials, including 
lead, mercury, and cadmium, in the manufacture of various types of 
electronic and electrical equipment.\70\
---------------------------------------------------------------------------

    \70\ Information on EU RoHS can be found at: www.bis.gov.uk/nmo/
enforcement/rohs-home.

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

[[Page 14927]]

    DOE discusses these and other requirements, and includes the full 
details of the cumulative regulatory burden analysis, in chapter 12 of 
the NOPR TSD.
3. National Impact Analysis
a. Amount and Significance of Energy Savings
    DOE estimated the NES by calculating the difference in annual 
energy consumption for the base-case scenario and standards-case 
scenario at each TSL for each equipment class and summing up the annual 
energy savings for the automatic commercial ice maker equipment 
purchased during the 30-year 2018 to 2047 analysis period. Energy 
impacts include the 30-year period, plus the life of equipment 
purchased in the last year of the analysis, or roughly 2018 to 2057. 
The energy consumption calculated in the NIA is full-fuel-cycle (FFC) 
energy, which quantifies savings beginning at the source of energy 
production. DOE also reports primary or source energy that takes into 
account losses in the generation and transmission of electricity. FFC 
and primary energy are discussed in section IV.H.
    Table V.35 presents the source NES for all equipment classes at 
each TSL and the sum total of NES for each TSL. Table V.36 presents the 
energy savings at each TSL for each equipment class in the form of 
percentage of the cumulative energy use of the equipment stock in the 
base-case scenario.

          Table V.35--Cumulative National Energy Savings at Source for Equipment Purchased in 2018-2047
----------------------------------------------------------------------------------------------------------------
                                                                       Standard level *, **
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.002        0.004        0.010        0.010        0.013
IMH-W-Med-B....................................        0.006        0.006        0.009        0.013        0.014
IMH-W-Large-B ***..............................        0.001        0.001        0.001        0.002        0.003
    IMH-W-Large-B1.............................        0.001        0.001        0.001        0.002        0.002
    IMH-W-Large-B2.............................        0.000        0.000        0.000        0.001        0.001
IMH-A-Small-B..................................        0.017        0.032        0.076        0.099        0.105
IMH-A-Large-B ***..............................        0.024        0.045        0.095        0.122        0.122
    IMH-A-Large-B1.............................        0.020        0.040        0.086        0.107        0.107
    IMH-A-Large-B2.............................        0.005        0.005        0.009        0.015        0.015
RCU-Large-B ***................................        0.013        0.013        0.030        0.046        0.047
    RCU-Large-B1...............................        0.012        0.012        0.028        0.043        0.045
    RCU-Large-B2...............................        0.001        0.001        0.002        0.003        0.003
SCU-W-Large-B..................................        0.000        0.000        0.000        0.000        0.000
SCU-A-Small-B..................................        0.002        0.013        0.024        0.037        0.037
SCU-A-Large-B..................................        0.002        0.010        0.017        0.022        0.022
IMH-A-Small-C..................................        0.002        0.003        0.005        0.008        0.012
IMH-A-Large-C..................................        0.001        0.003        0.006        0.008        0.008
SCU-A-Small-C..................................        0.001        0.004        0.007        0.007        0.011
                                                ----------------------------------------------------------------
    Total......................................        0.072        0.134        0.281        0.374        0.395
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NES rounds to less than 0.001 quads.
** Numbers may not add to totals due to rounding.
*** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
  denoted by B1 and B2.

  Table V.36--Cumulative Energy Savings by TSL as a Percentage of Cumulative Baseline Energy Usage of Automatic
                              Commercial Ice Maker Equipment Purchased in 2018-2047
----------------------------------------------------------------------------------------------------------------
                                     Base case               TSL savings as percent of baseline usage
          Equipment class              energy   ----------------------------------------------------------------
                                       usage      TSL 1 (%)    TSL 2 (%)    TSL 3 (%)    TSL 4 (%)    TSL 5 (%)
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B.....................        0.062            4            7           16           16           21
IMH-W-Med-B.......................        0.089            6            6           10           15           16
IMH-W-Large-B *...................        0.026            6            6            6            9           10
    IMH-W-Large-B1................        0.017            7            7            7           10           11
    IMH-W-Large-B2................        0.009            3            3            3            7            8
IMH-A-Small-B.....................        0.463            4            7           16           21           23
IMH-A-Large-B *...................        0.635            4            7           15           19           19
    IMH-A-Large-B1................        0.490            4            8           17           22           22
    IMH-A-Large-B2................        0.145            3            3            6           11           11
RCU-Large-B *.....................        0.357            4            4            8           13           13
    RCU-Large-B1..................        0.333            4            4            8           13           13
    RCU-Large-B2..................        0.024            2            2            7           11           11
SCU-W-Large-B.....................        0.003            2            5            9           14           14
SCU-A-Small-B.....................        0.138            1            9           18           27           27
SCU-A-Large-B.....................        0.092            2           10           19           24           24
IMH-A-Small-C.....................        0.068            2            5            8           12           17
IMH-A-Large-C.....................        0.041            4            6           14           19           19
SCU-A-Small-C.....................        0.073            2            6            9            9           16
                                   -----------------------------------------------------------------------------
    Total.........................        2.047            4            7           14           18           19
----------------------------------------------------------------------------------------------------------------
* IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
  denoted by B1 and B2.

[[Page 14928]]

    Table V.37 presents energy savings at each TSL for each equipment 
class with the FFC adjustment. The NES increases from 0.073 quads at 
TSL 1 to 0.401 quads at TSL 5.

  Table V.37--Cumulative National Energy Savings including Full-Fuel-Cycle for Equipment Purchased in 2018-2047
----------------------------------------------------------------------------------------------------------------
                                                                        Standard level ***
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TS L5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.002        0.004        0.010        0.010        0.013
IMH-W-Med-B....................................        0.006        0.006        0.009        0.014        0.015
IMH-W-Large-B ***..............................        0.001        0.001        0.001        0.002        0.003
    IMH-W-Large-B1.............................        0.001        0.001        0.001        0.002        0.002
    IMH-W-Large-B2.............................        0.000        0.000        0.000        0.001        0.001
IMH-A-Small-B..................................        0.017        0.033        0.077        0.100        0.107
IMH-A-Large-B ***..............................        0.025        0.045        0.096        0.124        0.124
    IMH-A-Large-B1.............................        0.020        0.041        0.087        0.108        0.108
    IMH-A-Large-B2.............................        0.005        0.005        0.009        0.016        0.016
RCU-Large-B ***................................        0.013        0.013        0.030        0.046        0.048
    RCU-Large-B1...............................        0.013        0.013        0.029        0.044        0.045
    RCU-Large-B2...............................        0.001        0.001        0.002        0.003        0.003
SCU-W-Large-B..................................        0.000        0.000        0.000        0.000        0.000
SCU-A-Small-B..................................        0.002        0.013        0.025        0.038        0.038
SCU-A-Large-B..................................        0.002        0.010        0.018        0.022        0.022
IMH-A-Small-C..................................        0.002        0.003        0.006        0.008        0.012
IMH-A-Large-C..................................        0.001        0.003        0.006        0.008        0.008
SCU-A-Small-C..................................        0.001        0.004        0.007        0.007        0.012
                                                ----------------------------------------------------------------
    Total......................................        0.073        0.136        0.286        0.380        0.401
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NES rounds to less than 0.001 quads.
** Numbers may not add to totals due to rounding.
*** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
  denoted by B1 and B2.

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. For this rulemaking, DOE undertook 
a sensitivity analysis using 9 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.\71\ 
We would note that the review timeframe established in EPCA generally 
does not overlap with the product lifetime, product manufacturing 
cycles or other factors specific to automatic commercial ice makers. 
Thus, this information is presented for informational purposes only and 
is not indicative of any change in DOE's analytical methodology. The 
NES results based on a 9-year analysis period are presented in Table 
V.38. The impacts are counted over the lifetime of equipment purchased 
in 2018-2026
---------------------------------------------------------------------------

    \71\ For automatic commercial ice makers, DOE is required to 
review standards at least every five years after the effective date 
of any amended standards. (42 U.S.C. 6313(d)(3)(B)) If new standards 
are promulgated, EPCA requires DOE to provide manufacturers a 
minimum of 3 and a maximum of 5 years to comply with the standards. 
(42 U.S.C. 6313(d)(3)(C)) In addition, for certain other types of 
commercial equipment that are not specified in 42 U.S.C. 6311(1)(B)-
(G), EPCA requires DOE to review its standards at least once every 6 
years (42 U.S.C. 6295(m)(1) and 6316(a)), and either a 3-year or a 
5-year period after any new standard is promulgated before 
compliance is required. (42 U.S.C. 6295(m)(4) and 6316(a)) As a 
result, DOE's standards for automatic commercial ice makers can be 
expected to be in effect for 8 to 10 years between compliance dates, 
and its standards governing certain other commercial equipment, the 
period is 9 to 11 years. A 9-year analysis was selected as 
representative of the time between standard revisions.

 Table V.38--National Full-Fuel-Cycle Energy Savings for 9-Year Analysis Period for Equipment Purchased in 2018-
                                                      2026
----------------------------------------------------------------------------------------------------------------
                                                                        Standard level ***
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.001        0.001        0.003        0.003        0.004
IMH-W-Med-B....................................        0.002        0.002        0.003        0.004        0.004
IMH-W-Large-B ***..............................        0.000        0.000        0.000        0.001        0.001
    IMH-W-Large-B1.............................        0.000        0.000        0.000        0.000        0.001
    IMH-W-Large-B2.............................        0.000        0.000        0.000        0.000        0.000
IMH-A-Small-B..................................        0.005        0.009        0.021        0.028        0.029
IMH-A-Large-B ***..............................        0.007        0.012        0.026        0.034        0.034
    IMH-A-Large-B1.............................        0.005        0.011        0.024        0.030        0.030
    IMH-A-Large-B2.............................        0.001        0.001        0.003        0.004        0.004
RCU-Large-B ***................................        0.004        0.004        0.008        0.013        0.013
    RCU-Large-B1...............................        0.003        0.003        0.008        0.012        0.012

[[Page 14929]]

 
    RCU-Large-B2...............................        0.000        0.000        0.000        0.001        0.001
SCU-W-Large-B..................................        0.000        0.000        0.000        0.000        0.000
SCU-A-Small-B..................................        0.000        0.004        0.007        0.010        0.010
SCU-A-Large-B..................................        0.001        0.003        0.005        0.006        0.006
IMH-A-Small-C..................................        0.000        0.001        0.002        0.002        0.003
IMH-A-Large-C..................................        0.000        0.001        0.002        0.002        0.002
SCU-A-Small-C..................................        0.000        0.001        0.002        0.002        0.003
                                                ----------------------------------------------------------------
    Total......................................        0.020        0.037        0.079        0.104        0.110
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NES rounds to less than 0.001 quads.
** Numbers may not add to totals due to rounding.
*** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
  denoted by B1 and B2.

b. Net Present Value of Customer Costs and Benefits
    DOE estimated the cumulative NPV to the Nation of the total savings 
for the customers that would result from potential standards at each 
TSL. In accordance with OMB guidelines on regulatory analysis (OMB 
Circular A-4, section E, September 17, 2003), DOE calculated NPV using 
both a 7-percent and a 3-percent real discount rate. The 7-percent rate 
is an estimate of the average before-tax rate of return on private 
capital in the U.S. economy, and reflects the returns on real estate 
and small business capital, including corporate capital. DOE used this 
discount rate to approximate the opportunity cost of capital in the 
private sector, because recent OMB analysis has found the average rate 
of return on capital to be near this rate. In addition, DOE used the 3-
percent rate to capture the potential effects of amended standards on 
private consumption. This rate represents the rate at which society 
discounts future consumption flows to their present value. It can be 
approximated by the real rate of return on long-term government debt 
(i.e., yield on Treasury notes minus annual rate of change in the CPI), 
which has averaged about 3 percent on a pre-tax basis for the last 30 
years.
    Table V.39 and Table V.40 show the customer NPV results for each of 
the TSLs DOE considered for automatic commercial ice makers at both 7-
percent and 3-percent discount rates. In each case, the impacts cover 
the expected lifetime of equipment purchased from 2018-2047. Detailed 
NPV results are presented in chapter 10 of the NOPR TSD.
    The NPV results at a 7-percent discount rate for TSL 5 were 
negative for three equipment classes and significantly lower than the 
TSL 3 results for several other classes. This is consistent with the 
results of LCC analysis results for TSL 5, which showed significant 
increase in LCC and significantly higher PBPs that were in some cases 
greater than the average equipment lifetimes. Efficiency levels for TSL 
4 were chosen to correspond to the highest efficiency level with a 
positive NPV for all classes at a 7-percent discount rate. Similarly, 
the criteria for choice of efficiency levels for TSL 3, TSL 2, and TSL 
1 were such that the NPV values for all the equipment classes show 
positive values. The criterion for TSL 3 was to select efficiency 
levels with the highest NPV at a 7-percent discount rate. Consequently, 
the total NPV for automatic commercial ice makers was highest for TSL 
3, with a value of $0.791 billion (2012$) at a 7-percent discount rate. 
TSL 4 showed the second highest total NPV, with a value of $0.484 
billion (2012$) at a 7-percent discount rate. TSL 1, TSL 2 and TSL 5 
have a total NPV lower than TSL 3 or 4.

         Table V.39--Net Present Value at a 7-Percent Discount Rate for Equipment Purchased in 2018-2047
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                         Standard level *
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.006        0.011        0.025        0.025      (0.002)
IMH-W-Med-B....................................        0.016        0.016        0.025        0.017        0.019
IMH-W-Large-B **...............................        0.004        0.004        0.004        0.003        0.003
    IMH-W-Large-B1.............................        0.003        0.003        0.003        0.002        0.002
    IMH-W-Large-B2.............................        0.001        0.001        0.001        0.001        0.001
IMH-A-Small-B..................................        0.043        0.080        0.177        0.046        0.058
IMH-A-Large-B **...............................        0.070        0.127        0.297        0.256        0.256
    IMH-A-Large-B1.............................        0.057        0.113        0.274        0.236        0.236
    IMH-A-Large-B2.............................        0.014        0.014        0.023        0.020        0.020
RCU-Large-B **.................................        0.038        0.038        0.082        0.073        0.075
    RCU-Large-B1...............................        0.036        0.036        0.078        0.070        0.072
    RCU-Large-B2...............................        0.002        0.002        0.004        0.004        0.004
SCU-W-Large-B..................................        0.001        0.001        0.001        0.000        0.000
SCU-A-Small-B..................................        0.004        0.029        0.085        0.012        0.012
SCU-A-Large-B..................................        0.004        0.039        0.052        0.021        0.021
IMH-A-Small-C..................................        0.004        0.009        0.014        0.011      (0.018)
IMH-A-Large-C..................................        0.004        0.007        0.016        0.007        0.007

[[Page 14930]]

 
SCU-A-Small-C..................................        0.004        0.009        0.013        0.013      (0.062)
                                                ----------------------------------------------------------------
    Total......................................        0.198        0.368        0.791        0.484        0.370
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2012$). Values in parentheses are negative
  numbers.
** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
  denoted by B1 and B2.

         Table V.40--Net Present Value at a 3-Percent Discount Rate for Equipment Purchased in 2018-2047
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                         Standard level *
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.013        0.023        0.057        0.057        0.010
IMH-W-Med-B....................................        0.034        0.034        0.054        0.042        0.047
IMH-W-Large-B**................................        0.009        0.009        0.009        0.007        0.008
    IMH-W-Large-B1.............................        0.007        0.007        0.007        0.006        0.006
    IMH-W-Large-B2.............................        0.002        0.002        0.002        0.001        0.002
IMH-A-Small-B..................................        0.094        0.176        0.394        0.163        0.190
IMH-A-Large-B**................................        0.152        0.275        0.653        0.596        0.596
    IMH-A-Large-B1.............................        0.123        0.245        0.602        0.546        0.546
    IMH-A-Large-B2.............................        0.030        0.030        0.051        0.050        0.050
RCU-Large-B **.................................        0.081        0.081        0.178        0.174        0.179
    RCU-Large-B1...............................        0.078        0.078        0.169        0.165        0.170
    RCU-Large-B2...............................        0.004        0.004        0.009        0.009        0.009
SCU-W-Large-B..................................        0.001        0.002        0.002        0.001        0.001
SCU-A-Small-B..................................        0.009        0.064        0.190        0.062        0.062
SCU-A-Large-B..................................        0.010        0.086        0.118        0.062        0.062
IMH-A-Small-C..................................        0.009        0.019        0.031        0.027      (0.028)
IMH-A-Large-C..................................        0.009        0.016        0.034        0.018        0.018
SCU-A-Small-C..................................        0.008        0.021        0.030        0.030      (0.114)
                                                ----------------------------------------------------------------
    Total......................................        0.430        0.806        1.751        1.238        1.032
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2012$). Values in parentheses are negative
  numbers.
** IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B results are the sum of the results for the 2 typical units
  denoted by B1 and B2.

    The NPV results based on the aforementioned 9-year analysis period 
are presented in Table V.41 and Table V.42. The impacts are counted 
over the lifetime of equipment purchased in 2018-2026. As mentioned 
previously, this information is presented for informational purposes 
only and is not indicative of any change in DOE's analytical 
methodology or decision criteria.

Table V.41--Net Present Value at a 7-Percent Discount Rate for 9-Year Analysis Period for Equipment Purchased in
                                                    2018-2026
----------------------------------------------------------------------------------------------------------------
                                                                         Standard level *
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.003        0.005        0.012        0.012      (0.001)
IMH-W-Med-B....................................        0.008        0.008        0.012        0.008        0.009
IMH-W-Large-B..................................        0.002        0.002        0.002        0.001        0.002
    IMH-W-Large-B-1............................        0.002        0.002        0.002        0.001        0.001
    IMH-W-Large-B-2............................        0.000        0.000        0.000        0.000        0.000
IMH-A-Small-B..................................        0.021        0.039        0.086        0.023        0.029
IMH-A-Large-B..................................        0.034        0.062        0.143        0.123        0.123
    IMH-A-Large-B-1............................        0.028        0.055        0.132        0.113        0.113
    IMH-A-Large-B-2............................        0.007        0.007        0.011        0.010        0.010
RCU-Large-B....................................        0.018        0.018        0.040        0.036        0.037
    RCU-Large-B-1..............................        0.017        0.017        0.038        0.034        0.035
    RCU-Large-B-2..............................        0.001        0.001        0.002        0.002        0.002
SCU-W-Large-B..................................        0.000        0.000        0.001        0.000        0.000
SCU-A-Small-B..................................        0.002        0.014        0.040        0.005        0.005
SCU-A-Large-B..................................        0.002        0.018        0.025        0.010        0.010
IMH-A-Small-C..................................        0.002        0.004        0.007        0.005      (0.009)

[[Page 14931]]

 
IMH-A-Large-C..................................        0.002        0.004        0.008        0.003        0.003
SCU-A-Small-C..................................        0.002        0.005        0.006        0.006      (0.031)
                                                ----------------------------------------------------------------
    Total......................................        0.096        0.179        0.381        0.233        0.177
----------------------------------------------------------------------------------------------------------------
* A value equal to 0.000 means the NPV rounds to less than $0.001 (2012$). Values in parentheses are negative
  numbers.

Table V.42--Net Present Value at a 3-Percent Discount Rate for 9-Year Analysis Period for Equipment Purchased in
                                                    2018-2026
----------------------------------------------------------------------------------------------------------------
                                                                         Standard level*
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................        0.005        0.008        0.020        0.020        0.003
IMH-W-Med-B....................................        0.012        0.012        0.019        0.015        0.017
IMH-W-Large-B..................................        0.003        0.003        0.003        0.003        0.003
IMH-W-Large-B-1................................        0.002        0.002        0.002        0.002        0.002
IMH-W-Large-B-2................................        0.001        0.001        0.001        0.001        0.001
IMH-A-Small-B..................................        0.034        0.063        0.141        0.058        0.068
IMH-A-Large-B..................................        0.054        0.098        0.230        0.209        0.209
IMH-A-Large-B-1................................        0.044        0.088        0.211        0.191        0.191
IMH-A-Large-B-2................................        0.011        0.011        0.018        0.018        0.018
RCU-Large-B....................................        0.029        0.029        0.064        0.062        0.064
RCU-Large-B-1..................................        0.028        0.028        0.060        0.059        0.061
RCU-Large-B-2..................................        0.001        0.001        0.003        0.003        0.003
SCU-W-Large-B..................................        0.000        0.001        0.001        0.000        0.000
SCU-A-Small-B..................................        0.003        0.023        0.065        0.020        0.020
SCU-A-Large-B..................................        0.003        0.030        0.041        0.021        0.021
IMH-A-Small-C..................................        0.003        0.007        0.011        0.010      (0.010)
IMH-A-Large-C..................................        0.003        0.006        0.012        0.006        0.006
SCU-A-Small-C..................................        0.003        0.007        0.010        0.010      (0.042)
                                                ----------------------------------------------------------------
    Total......................................        0.153        0.287        0.617        0.434        0.359
----------------------------------------------------------------------------------------------------------------
*A value equal to 0.000 means the NPV rounds to less than $0.001 (2012$). Values in parentheses are negative
  numbers.

c. Water Savings
    In analyzing energy-saving design options for batch type ice 
makers, one option had the additional impact of reducing potable water 
usage for some types of batch type ice makers. The potable water 
savings are identified on Table V.43.

                                        Table V.43--Potable Water Savings
----------------------------------------------------------------------------------------------------------------
                                                  National water savings by standard level*\,\** million gallons
                Equipment class                 ----------------------------------------------------------------
                                                    TSL 1        TSL 2        TSL 3        TSL 4        TSL 5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B..................................            0            0        3,699        3,699        3,699
IMH-W-Med-B....................................            0            0            0            0            0
IMH-W-Large-B..................................            0            0            0            0            0
IMH-W-Large-B-1................................            0            0            0            0            0
IMH-W-Large-B-2................................            0            0            0            0            0
IMH-A-Small-B..................................            0            0            0            0            0
IMH-A-Large-B..................................            0            0       20,753       20,753       20,753
IMH-A-Large-B-1................................            0            0       20,753       20,753       20,753
IMH-A-Large-B-2................................            0            0            0            0            0
RCU-063-Large-B................................            0            0            0            0            0
RCU-064-Large-B-1..............................            0            0            0            0            0
RCU-065-Large-B-2..............................            0            0            0            0            0
SCU-W-Large-B..................................          141          141          141          141          141
SCU-A-Small-B..................................            0            0       14,391       14,391       14,391
SCU-A-Large-B..................................            0        6,424        6,424        6,424        6,424
IMH-A-Small-C..................................            0            0            0            0            0
IMH-A-Large-C..................................            0            0            0            0            0
SCU-A-Small-C..................................            0            0            0            0            0
                                                ----------------------------------------------------------------

[[Page 14932]]

 
    Total......................................          141        6,565       45,407       45,407       45,407
----------------------------------------------------------------------------------------------------------------

d. Employment Impacts
    In addition to the direct impacts on manufacturing employment 
discussed in section V.B.2, DOE develops general estimates of the 
indirect employment impacts of proposed standards on the economy. As 
discussed above, DOE expects amended energy conservation standards for 
automatic commercial ice makers to reduce energy bills for commercial 
customers, and the resulting net savings to be redirected to other 
forms of economic activity. DOE also realizes that these shifts in 
spending and economic activity by automatic commercial ice maker owners 
could affect the demand for labor. Thus, indirect employment impacts 
may result from expenditures shifting between goods (the substitution 
effect) and changes in income and overall expenditure levels (the 
income effect) that occur due to the imposition of amended standards. 
These impacts may affect a variety of businesses not directly involved 
in the decision to make, operate, or pay the utility bills for 
automatic commercial ice makers. To estimate these indirect economic 
effects, DOE used an input/output model of the U.S. economy using U.S. 
Department of Commerce, Bureau of Economic Analysis (BEA) and BLS data 
(as described in section IV.N of this notice; see chapter 16 of the 
NOPR TSD for more details).
    In this input/output model, the dollars saved on utility bills from 
more-efficient automatic commercial ice makers are concentrated in 
economic sectors that create more jobs than are lost in electric and 
water utilities sectors when spending is shifted from electricity and/
or water to other products and services. Thus, the proposed amended 
energy conservation standards for automatic commercial ice makers are 
likely to slightly increase the net demand for labor in the economy. 
However, the net increase in jobs might be offset by other, 
unanticipated effects on employment. Neither the BLS data nor the 
input/output model used by DOE includes the quality of jobs. As shown 
in Table V.44, DOE estimates that net indirect employment impacts from 
a proposed automatic commercial ice makers amended standard are small 
relative to the national economy.

             Table V.44--Net Short-Term Change in Employment
------------------------------------------------------------------------
      Trial standard level               2018                2022
------------------------------------------------------------------------
1...............................  19 to 20.........  100 to 101.
2...............................  36 to 40.........  192 to 196.
3...............................  75 to 87.........  431 to 442.
4...............................  44 to 91.........  506 to 552.
5...............................  34 to 90.........  518 to 572.
------------------------------------------------------------------------

4. Impact on Utility or Performance of Equipment
    In performing the engineering analysis, DOE considers design 
options that would not lessen the utility or performance of the 
individual classes of equipment. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 
6316(e)(1)) As presented in the screening analysis (chapter 4 of the 
NOPR TSD), DOE eliminates from consideration any design options that 
reduce the utility of the equipment. For this notice, DOE proposes that 
none of the TSLs considered for automatic commercial ice makers reduce 
the utility or performance of the equipment.
5. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition likely to 
result from amended standards. It directs the Attorney General of the 
United States (Attorney General) to determine in writing the impact, if 
any, of any lessening of competition likely to result from a proposed 
standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) and 6313(d)(4)) To assist the 
Attorney General in making such a determination, DOE provided the DOJ 
with copies of this notice and the TSD for review. During MIA 
interviews, domestic manufacturers indicated that foreign manufacturers 
have begun to enter the automatic commercial ice maker industry, but 
not in significant numbers. Manufacturers also stated that 
consolidation has occurred among automatic commercial ice makers 
manufacturers in recent years. Interviewed manufacturers believe that 
these trends may continue in this market even in the absence of amended 
standards.
    DOE does not believe that amended standards would result in 
domestic firms moving their production facilities outside the United 
States. The majority of automatic commercial ice makers are 
manufactured in the United States and, during interviews, manufacturers 
in general indicated they would modify their existing facilities to 
comply with amended energy conservation standards.
6. Need of the Nation To Conserve Energy
    An improvement in the energy efficiency of the equipment subject to 
today's NOPR is likely to improve the security of the Nation's energy 
system by reducing overall demand for energy. Reduced electricity 
demand may also improve the reliability of the electricity system. As a 
measure of this reduced demand, chapter 15 in the NOPR TSD presents the 
estimated reduction in national generating capacity for the TSLs that 
DOE considered in this rulemaking.
    Energy savings from amended standards for automatic commercial ice 
makers could also produce environmental benefits in the form of reduced 
emissions of air pollutants and GHGs associated with electricity 
production. Table V.45 provides DOE's estimate of cumulative 
CO2, NOX, Hg, N2O, CH4 and 
SO2 emissions reductions projected to result from the TSLs 
considered in this rule. The table includes both power sector emissions 
and upstream emissions. The upstream emissions were calculated using 
the multipliers discussed in section IV.K. DOE reports annual emissions 
reductions for each TSL in chapter 13 of the NOPR TSD.

[[Page 14933]]

                              Table V.45--Summary of Emissions Reduction Estimated for Automatic Commercial Ice Makers TSLs
                                                    [Cumulative for equipment purchased in 2018-2047]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             TSL
                                                                    ------------------------------------------------------------------------------------
                                                                            1                2                3                4                5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Power Sector and Site Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons)....................................            3.50             6.52            13.68            18.19            19.19
NOX (thousand tons)................................................           -0.89            -1.66            -3.49            -4.64            -4.89
Hg (tons)..........................................................            0.01             0.01             0.02             0.03             0.03
N[ihel2]O (thousand tons)..........................................            0.08             0.15             0.31             0.41             0.43
CH[ihel4] (thousand tons)..........................................            0.47             0.88             1.84             2.45             2.58
SO[ihel2] (thousand tons)..........................................            5.31             9.89            20.76            27.60            29.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Upstream Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons)....................................            0.23             0.42             0.89             1.18             1.24
NOX (thousand tons)................................................            3.11             5.80            12.18            16.19            17.08
Hg (tons)..........................................................            0.000            0.000            0.000            0.001            0.001
N[ihel2]O (thousand tons)..........................................            0.00             0.00             0.01             0.01             0.01
CH[ihel4] (thousand tons)..........................................           18.89            35.22            73.93            98.30           103.68
SO[ihel2] (thousand tons)..........................................            0.05             0.09             0.19             0.25             0.27
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Total Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO[ihel2] (million metric tons)....................................            3.72             6.94            14.57            19.37            20.43
NOX (thousand tons)................................................            2.22             4.14             8.69            11.56            12.19
Hg (tons)..........................................................            0.01             0.01             0.02             0.03             0.03
N[ihel2]O (thousand tons)..........................................            0.08             0.15             0.32             0.42             0.45
CH[ihel4] (thousand tons)..........................................           19.36            36.09            75.77           100.75           106.27
SO[ihel2] (thousand tons)..........................................            5.35             9.98            20.95            27.86            29.38
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As part of the analysis for this NOPR, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
and NOX that DOE estimated for each of the TSLs considered. 
As discussed in section IV.L, DOE used values for the SCC developed by 
an interagency process. The interagency group selected four sets of SCC 
values for use in regulatory analyses. Three sets are based on the 
average SCC from three integrated assessment models, at discount rates 
of 2.5 percent, 3 percent, and 5 percent. The fourth set, which 
represents the 95th-percentile SCC estimate across all three models at 
a 3-percent discount rate, is included to represent higher-than-
expected impacts from temperature change further out in the tails of 
the SCC distribution. The four SCC values for CO2 emissions 
reductions in 2015, expressed in 2012$, are $11.8/ton, $39.7/ton, 
$61.2/ton, and $117.0/ton. These values for later years are higher due 
to increasing emissions-related costs as the magnitude of projected 
climate change is expected to increase.
    Table V.46 presents the global value of CO2 emissions 
reductions at each TSL. DOE calculated domestic values as a range from 
7 percent to 23 percent of the global values, and these results are 
presented in chapter 14 of the NOPR TSD.

     Table V.46--Global Present Value of CO[ihel2] Emissions Reduction for Potential Standards for Automatic
                                              Commercial Ice Makers
----------------------------------------------------------------------------------------------------------------
                                                                          SCC Scenario *
                                                 ---------------------------------------------------------------
                       TSL                                                                          3% discount
                                                    5% discount     3% discount    2.5% discount    rate, 95th
                                                   rate, average   rate, average   rate, average    percentile
----------------------------------------------------------------------------------------------------------------
                                                                           million 2012$
----------------------------------------------------------------------------------------------------------------
                                         Power Sector and Site Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................            24.6           111.2           176.2           342.8
2...............................................            45.9           207.3           328.5           639.0
3...............................................            96.3           435.2           689.5         1,341.5
4...............................................           128.0           578.6           916.8         1,783.6
5...............................................           135.1           610.3           967.0         1,881.4
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................             1.5             7.0            11.2            21.7
2...............................................             2.8            13.1            20.8            40.4
3...............................................             6.0            27.5            43.7            84.9
4...............................................             7.9            36.5            58.1           112.8

[[Page 14934]]

 
5...............................................             8.4            38.5            61.3           119.0
----------------------------------------------------------------------------------------------------------------
                                                 Total Emissions
----------------------------------------------------------------------------------------------------------------
1...............................................            26.1           118.2           187.4           364.5
2...............................................            48.7           220.4           349.3           679.5
3...............................................           102.3           462.6           733.2         1,426.3
4...............................................           136.0           615.1           974.9         1,896.4
5...............................................           143.4           648.8         1,028.3         2,000.4
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $11.8, $39.7, $61.2 and
  $117.0 per metric ton (2012$).

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to develop rapidly. Thus, any value placed in 
this NOPR on reducing CO2 emissions is subject to change. 
DOE, together with other Federal agencies, will continue to review 
various methodologies for estimating the monetary value of reductions 
in CO2 and other GHG emissions. This ongoing review will 
consider the comments on this subject that are part of the public 
record for this NOPR and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this NOPR the most 
recent values and analyses resulting from the ongoing interagency 
review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emission reductions 
anticipated to result from amended automatic commercial ice makers 
standards. Table V.47 presents the present value of cumulative 
NOX emissions reductions for each TSL calculated using the 
average dollar-per-ton values and 7-percent and 3-percent discount 
rates.

   Table V.47--Present Value of NOX Emissions Reduction for Potential
              Standards for Automatic Commercial Ice Makers
------------------------------------------------------------------------
                                                        3%         7%
                        TSL                          Discount   Discount
                                                       rate       rate
------------------------------------------------------------------------
                                                        million 2012$
------------------------------------------------------------------------
                    Power Sector and Site Emissions *
------------------------------------------------------------------------
1.................................................       -1.8       -1.3
2.................................................       -3.4       -2.4
3.................................................       -7.2       -5.0
4.................................................       -9.5       -6.6
5.................................................      -10.1       -7.0
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.................................................        4.3        2.1
2.................................................        8.0        3.8
3.................................................       16.8        8.0
4.................................................       22.3       10.7
5.................................................       23.6       11.3
------------------------------------------------------------------------
                             Total Emissions
------------------------------------------------------------------------
1.................................................        2.5        0.8
2.................................................        4.6        1.4
3.................................................        9.6        3.0
4.................................................       12.8        4.0
5.................................................       13.5        4.3
------------------------------------------------------------------------

    The NPV of the monetized benefits associated with emission 
reductions can be viewed as a complement to the NPV of the customer 
savings calculated for each TSL considered in this NOPR. Table V.48 
presents the NPV values that result from adding the estimates of the 
potential economic benefits resulting from reduced CO2 and 
NOX emissions in each of four valuation scenarios to the NPV 
of consumer savings calculated for each TSL considered in this 
rulemaking, at both a 7-percent and a 3-percent discount rate. The 
CO2 values used in the table correspond to the four 
scenarios for the valuation of CO2 emission reductions 
presented in section IV.L.

    Table V.48--Automatic Commercial Ice Makers TSLs: Net Present Value of Customer Savings Combined With Net
                 Present Value of Monetized Benefits From CO[ihel2] and NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
                                                           Consumer NPV at 3% discount rate added with:
                                                 ---------------------------------------------------------------
                                                   SCC Value of    SCC Value of    SCC Value of    SCC Value of
                                                   $11.8/metric    $39.7/metric    $61.2/metric    $117.0/metric
                       TSL                        ton CO[ihel2]*  ton CO[ihel2]*  ton CO[ihel2]*  ton CO[ihel2]*
                                                    and Medium      and Medium      and Medium      and Medium
                                                     Value for       Value for       Value for       Value for
                                                       NOX**           NOX**           NOX**           NOX**
----------------------------------------------------------------------------------------------------------------
                                                                           billion 2012$
----------------------------------------------------------------------------------------------------------------
1...............................................           0.458           0.550           0.620           0.797
2...............................................           0.859           1.031           1.160           1.490
3...............................................           1.863           2.223           2.494           3.187
4...............................................           1.387           1.866           2.226           3.148

[[Page 14935]]

 
5...............................................           1.189           1.694           2.074           3.046
----------------------------------------------------------------------------------------------------------------

 
                                                           Consumer NPV at 7% discount rate added with:
                                                 ---------------------------------------------------------------
                                                   SCC Value of    SCC Value of    SCC Value of    SCC Value of
                                                   $11.8/metric    $39.7/metric    $61.2/metric    $117.0/metric
                       TSL                        ton CO[ihel2]*  ton CO[ihel2]*  ton CO[ihel2]*  ton CO[ihel2]*
                                                    and Medium      and Medium      and Medium      and Medium
                                                     Value for       Value for       Value for       Value for
                                                       NOX**           NOX**           NOX**           NOX**
----------------------------------------------------------------------------------------------------------------
                                                                           billion 2012$
----------------------------------------------------------------------------------------------------------------
1...............................................           0.224           0.317           0.386           0.563
2...............................................           0.418           0.590           0.719           1.049
3...............................................           0.896           1.257           1.527           2.220
4...............................................           0.624           1.103           1.463           2.385
5...............................................           0.518           1.023           1.403           2.375
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2015, in 2012$. The present values have been calculated with
  scenario-consistent discount rates. For NOX emissions, each case uses the medium value, which corresponds to
  $2,639 per ton.

    Although adding the value of customer savings to the values of 
emission reductions provides a valuable perspective, the following 
should be considered: (1) the national customer savings are domestic 
U.S. customer monetary savings found in market transactions, while the 
values of emission reductions are based on estimates of marginal social 
costs, which, in the case of CO2, are based on a global 
value; and (2) the assessments of customer savings and emission-related 
benefits are performed with different computer models, leading to 
different time frames for analysis. For automatic commercial ice 
makers, the present value of national customer savings is measured for 
the period in which units shipped (2018-2047) continue to operate. 
However, the time frames of the benefits associated with the emission 
reductions differ. For example, the value of CO2 emission 
reductions in a given year reflects the present value of all future 
climate-related impacts due to emitting a ton of CO2 in that 
year, out to the year 2100.
7. Other Factors
    EPCA allows the Secretary, in determining whether a proposed 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) 
and 6313(d)(4)) DOE considered LCC impacts on identifiable groups of 
customers, such as customers of different business types, who may be 
disproportionately affected by any amended national energy conservation 
standard level. DOE also considered the reduction in generation 
capacity that could result from the imposition of any amended national 
energy conservation standard level.
    DOE carried out a RIA, as described in the NOPR TSD chapter 17, to 
study the impact of certain non-regulatory alternatives that may 
encourage customers to purchase higher efficiency equipment and, thus, 
achieve NES. The two major alternatives identified by DOE are customer 
rebates and customer tax credits. DOE surveyed the various rebate 
programs available in the United States. Typically, rebates are offered 
for commercial sector businesses that purchase energy-efficient 
automatic commercial ice makers, typically, machines that qualify 
either for ENERGY STAR or CEE certification. Rebates offered range from 
$40 to several hundred dollars, depending on the size and type of ice 
maker. Based on the incremental costs DOE estimated for TSL 1 
(equivalent to the ENERGY STAR targets that were in existence until 
early in 2013), the rebates offered are sufficient to cover the 
incremental costs of meeting the ENERGY STAR levels. Given the range of 
rebates offered, DOE elected to model rebates of equivalent to 60 
percent of the full incremental cost of the upgrades.
    For the tax credits scenario, DOE did not find a suitable program 
to model the scenario. From a consumer perspective, the most important 
difference between rebate and tax credit programs is that a rebate can 
be obtained relatively quickly, whereas receipt of tax credits is 
delayed until income taxes are filed or a tax refund is provided by the 
IRS. As with consumer rebates, DOE assumed that consumer tax credits 
paid 60 percent of the incremental product price, but estimated a 
different response rate. The delay in reimbursement makes tax credits 
less attractive than rebates; consequently, DOE estimated a response 
rate that is 80 percent of that for rebate programs.
    Table V.49 and Table V.50 show the NES and NPV, respectively, for 
the non-regulatory alternatives analyzed. For comparison, the table 
includes the results of the NES and NPV for TSL 3, the proposed energy 
conservation standard. Energy savings are expressed in quads in terms 
of primary or source energy, which includes generation and transmission 
losses from electricity utility sector.

[[Page 14936]]

  Table V.49--Cumulative NES of Non-Regulatory Alternatives Compared to
       the Proposed Standards for Automatic Commercial Ice Makers
------------------------------------------------------------------------
                                                Cumulative Primary NES
            Policy alternatives                         quads
------------------------------------------------------------------------
No new regulatory action...................                        0
Customer tax credits.......................                        0.145
Customer rebates...........................                        0.190
Voluntary energy efficiency targets........                        0
Early replacement..........................                        0
Proposed standards, primary energy (TSL 3).                        0.281
------------------------------------------------------------------------

  Table V.50--Cumulative NPV of Non-Regulatory Alternatives Compared to
       the Proposed Standards for Automatic Commercial Ice Makers
------------------------------------------------------------------------
                                   Cumulative net present value billion
                                                   2012$
       Policy alternatives       ---------------------------------------
                                      7% Discount         3% Discount
------------------------------------------------------------------------
No new regulatory action........               0                   0
Customer tax credits............               0.520               1.011
Customer rebates................               0.678               1.319
Voluntary energy efficiency                    0                   0
 targets........................
Early replacement...............               0                   0
Proposed standards (TSL 3)......               0.791               1.751
------------------------------------------------------------------------

    As shown above, none of the policy alternatives DOE examined would 
achieve close to the amount of energy or monetary savings that could be 
realized under the proposed amended standard. Also, implementing either 
tax credits or customer rebates would incur initial and/or 
administrative costs that were not considered in this analysis.

C. Proposed Standard

    DOE recognizes that when it considers amendments to the standards, 
it is subject to the EPCA requirement that any new or amended energy 
conservation standard for any type (or class) of covered product be 
designed to achieve the maximum improvement in energy efficiency that 
the Secretary determines is technologically feasible and economically 
justified. (42 U.S.C. 6295(o)(2)(A) and 6313(d)(4)) In determining 
whether a proposed standard is economically justified, the Secretary 
must determine whether the benefits of the standard exceed its burdens 
to the greatest extent practicable, in light of the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i) and 
6313(d)(4)) The new or amended standard must also result in a 
significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 
6316(d)(4))
    DOE considered the impacts of standards at each TSL, beginning with 
the maximum technologically feasible level, to determine whether that 
level met the evaluation criteria. If the max-tech level was not 
justified, DOE then considered the next most-efficient level and 
undertook the same evaluation until it reached the highest efficiency 
level that is both technologically feasible and economically justified 
and saves a significant amount of energy.
    DOE discusses the benefits and/or burdens of each TSL in the 
following sections. DOE bases its discussion on quantitative analytical 
results for each TSL including NES, NPV (discounted at 7 and 3 
percent), emission reductions, INPV, LCC, and customers' installed 
price increases. Beyond the quantitative results, DOE also considers 
other burdens and benefits that affect economic justification, 
including how technological feasibility, manufacturer costs, and 
impacts on competition may affect the economic results presented. Table 
V.51, Table V.52, Table V.53 and Table V.54 present a summary of the 
results of DOE's quantitative analysis for each TSL. Results in Table 
V.51 are impacts from equipment purchased in the period from 2018-2047. 
In addition to the quantitative results presented in the tables, DOE 
also considers other burdens and benefits that affect economic 
justification of certain customer subgroups that are disproportionately 
affected by the proposed standards. Section V.B.7 presents the 
estimated impacts of each TSL for these subgroups.

                               Table V.51--Summary of Results for Automatic Commercial Ice Makers TSLs: National Impacts*
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Category                        TSL 1                   TSL 2                  TSL 3                  TSL 4                  TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Cumulative National Energy Savings 2018 through 2047 quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undiscounted values................  0.073.................  0.136.................  0.286................  0.380................  0.401
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Cumulative National Water Savings 2018 through 2047 billion gallons
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undiscounted values................  0.1...................  6.6...................  45.4.................  45.4.................  45.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           Cumulative NPV of Customer Benefits 2018 through 2047 2012$ billion
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate...................  0.430.................  0.806.................  1.751................  1.238................  1.032

[[Page 14937]]

 
7% discount rate...................  0.198.................  0.368.................  0.791................  0.484................  0.370
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Industry Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in Industry NPV (2012$        (8.4) to (8.7)........  (12.8) to (13.6)......  (20.9) to (23.9).....  (19.6) to (30.5).....  (19.9) to (32.6)
 million).
Change in Industry NPV (%).........  (8.2) to (8.5)........  (12.6) to (13.4)......  (20.5) to (23.5).....  (19.2) to (30.0).....  (19.5) to (32.0)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Cumulative Emissions Reductions 2018 through 2047**
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO[ihel2] (MMt)....................  3.72..................  6.94..................  14.57................  19.37................  20.43
NOX (kt)...........................  2.22..................  4.14..................  8.69.................  11.56................  12.19
Hg (t).............................  0.01..................  0.01..................  0.02.................  0.03.................  0.03
N[ihel2]O (kt).....................  0.08..................  0.15..................  0.32.................  0.42.................  0.45
N[ihel2]O (kt CO[ihel2]eq).........  24.28.................  45.26.................  95.01................  126.32...............  133.25
CH[ihel4] (kt).....................  19.36.................  36.09.................  75.77................  100.75...............  106.27
CH[ihel4] (kt CO[ihel2]eq).........  484.06................  902.37................  1894.29..............  2518.64..............  2656.69
SO[ihel2] (kt).....................  5.35..................  9.98..................  20.95................  27.86................  29.38
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Monetary Value of Cumulative Emissions Reductions 2018 through 2047[dagger]
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO[ihel2] (2012$ billion)..........  0.026 to 0.364........  0.049 to 0.679........  0.102 to 1.426.......  0.136 to 1.896.......  0.143 to 2.0
NOX--3% discount rate (2012$         2.5...................  4.6...................  9.6..................  12.8.................  13.5
 million).
NOX--7% discount rate (2012$         0.8...................  1.4...................  3.0..................  4.0..................  4.3
 million).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Change in Indirect Domestic      100 to 101............  192 to 196............  431 to 442...........  506 to 552...........  518 to 572
 Jobs by 2022.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative numbers.
** ``MMt'' stands for million metric tons; ``kt'' stands for kilotons; ``t'' stands for tons. CO[ihel2]eq is the quantity of CO[ihel2] that would have
  the same global warming potential (GWP).
[dagger] Range of the economic value of CO[ihel2] reductions is based on estimates of the global benefit of reduced CO[ihel2] emissions. Economic value
  of NOX reductions is based on estimates at $2,639/ton.

            Table V.52--Summary of Results for Automatic Commercial Ice Makers TSLs: Mean LCC Savings
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                  Standard level
         Equipment class         -------------------------------------------------------------------------------
                                       TSL1            TSL2            TSL3            TSL4            TSL5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...................            $199            $215            $328            $328             $49
IMH-W-Med-B.....................             464             464             587             405             460
IMH-W-Large-B*..................             833             833             833             550             582
    IMH-W-Large-B1..............             701             701             701             583             607
    IMH-W-Large-B2..............           1,260           1,260           1,260             442             500
IMH-A-Small-B...................             254             259             396             170             198
IMH-A-Large-B*..................             648             633           1,127             994             994
    IMH-A-Large-B1..............             590             572           1,168           1,062           1,062
    IMH-A-Large-B2..............             960             960             908             627             627
RCU-Large-B*....................             875             875             983             870             897
    RCU-Large-B1................             847             847             963             857             882
    RCU-Large-B2................           1,298           1,298           1,277           1,070           1,123
SCU-W-Large-B...................             483             687             694             143             149
SCU-A-Small-B...................             103             198             396             106             106
SCU-A-Large-B...................             140             522             502             240             240
IMH-A-Small-C...................             315             314             391             307           (237)
IMH-A-Large-C...................             660             744           1,026             524             500
SCU-A-Small-C...................              93             140             146             146           (441)
----------------------------------------------------------------------------------------------------------------
* LCC results for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are a weighted average of the two sub-equipment
  class level typical units shown on the table, using weights provided in TSD chapter 7.

[[Page 14938]]

         Table V.53--Summary of Results for Automatic Commercial Ice Makers TSLs: Median Payback Period
----------------------------------------------------------------------------------------------------------------
                                                               Standard Level years
         Equipment class         -------------------------------------------------------------------------------
                                       TSL1            TSL2            TSL3            TSL4            TSL5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B...................            1.07            1.26            2.27            2.27            5.42
IMH-W-Med-B.....................            0.63            0.63            0.85            3.33            3.22
IMH-W-Large-B*..................            0.69            0.69            0.69            3.59            3.60
    IMH-W-Large-B1..............            0.72            0.72            0.72            3.75            3.77
    IMH-W-Large-B2..............            0.58            0.58            0.58            3.10            3.02
IMH-A-Small-B...................            1.07            1.22            1.42            4.32            4.24
IMH-A-Large-B*..................            0.46            0.49            0.84            2.16            2.16
    IMH-A-Large-B1..............            0.46            0.50            0.82            2.08            2.08
    IMH-A-Large-B2..............            0.42            0.42            0.94            2.58            2.58
RCU-Large-B*....................            0.41            0.41            0.65            2.39            2.44
    RCU-Large-B1................            0.38            0.38            0.62            2.37            2.42
    RCU-Large-B2................            0.75            0.75            1.00            2.70            2.70
SCU-W-Large-B...................            0.67            0.76            1.00            3.01            3.00
SCU-A-Small-B...................            1.40            1.52            1.56            4.79            4.79
SCU-A-Large-B...................            1.37            1.17            1.49            3.72            3.72
IMH-A-Small-C...................            0.90            0.90            0.97            2.59            6.83
IMH-A-Large-C...................            0.52            0.53            0.69            3.25            3.24
SCU-A-Small-C...................            1.13            1.53            1.85            1.85           19.12
----------------------------------------------------------------------------------------------------------------
* PBP results for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are weighted averages of the results for the two
  sub-equipment class level typical units, using weights provided in TSD chapter 7.

  Table V.54--Summary of Results for Automatic Commercial Ice Maker TSLs: Distribution of Customer LCC Impacts
----------------------------------------------------------------------------------------------------------------
                                                    Standard Level percentage of customers (%)
            Category             -------------------------------------------------------------------------------
                                       TSL1            TSL2            TSL3            TSL4            TSL5
----------------------------------------------------------------------------------------------------------------
IMH-W-Small-B
    Net Cost (%)................             0.0             0.0             3.5             3.5            45.3
    No Impact (%)...............            60.8            34.8             0.0             0.0             0.0
    Net Benefit (%).............            39.2            65.2            96.5            96.5            54.7
IMH-W-Med-B
    Net Cost (%)................             0.0             0.0             0.0            14.9            11.3
    No Impact (%)...............            31.0            31.0            14.3             2.4             2.4
    Net Benefit (%).............            69.0            69.0            85.7            82.7            86.3
IMH-W-Large-B*
    Net Cost (%)................             0.0             0.0             0.0             8.4             7.1
    No Impact (%)...............            37.6            37.6            37.6            25.8            22.1
    Net Benefit (%).............            62.4            62.4            62.4            65.8            70.8
IMH-W-Large-B1
    Net Cost (%)................             0.0             0.0             0.0             0.1             0.2
    No Impact (%)...............            28.6            28.6            28.6            28.6            23.8
    Net Benefit (%).............            71.4            71.4            71.4            71.3            76.0
IMH-W-Large-B2
    Net Cost (%)................             0.0             0.0             0.0            35.2            29.4
    No Impact (%)...............            66.6            66.6            66.6            16.7            16.7
    Net Benefit (%).............            33.4            33.4            33.4            48.1            53.9
IMH-A-Small-B
    Net Cost (%)................             0.0             0.0             0.0            27.0            22.4
    No Impact (%)...............            62.9            31.5             0.0             0.0             0.0
    Net Benefit (%).............            37.1            68.5           100.0            73.0            77.6
IMH-A-Large-B*
    Net Cost (%)................             0.0             0.0             0.0             3.6             3.6
    No Impact (%)...............            59.8            22.8             6.3             2.1             2.1
    Net Benefit (%).............            40.2            77.2            93.7            94.4            94.4
IMH-A-Large-B1
    Net Cost (%)................             0.0             0.0             0.0             1.2             1.2
    No Impact (%)...............            58.6            14.7             0.0             0.0             0.0
    Net Benefit (%).............            41.5            85.4           100.0            98.8            98.8
IMH-A-Large-B2
    Net Cost (%)................             0.0             0.0             0.0            16.5            16.5
    No Impact (%)...............            66.6            66.6            40.0            13.4            13.4
    Net Benefit (%).............            33.4            33.4            60.0            70.2            70.2
RCU-Large-B*
    Net Cost (%)................             0.0             0.0             0.0             5.9             5.2
    No Impact (%)...............            58.1            58.1            18.5             9.5             9.5
    Net Benefit (%).............            41.9            41.9            81.5            84.6            85.3

[[Page 14939]]

 
RCU-Large-B1
    Net Cost (%)................             0.0             0.0             0.0             5.8             5.1
    No Impact (%)...............            57.2            57.2            17.9             9.0             9.0
    Net Benefit (%).............            42.8            42.8            82.1            85.3            85.9
RCU-Large-B2
    Net Cost (%)................             0.0             0.0             0.0             7.1             6.2
    No Impact (%)...............            72.7            72.7            27.3            18.2            18.2
    Net Benefit (%).............            27.3            27.3            72.7            74.7            75.7
SCU-W-Large-B
    Net Cost (%)................             0.0             0.0             0.0            49.3            48.8
    No Impact (%)...............            71.4            71.4            57.2            14.3            14.3
    Net Benefit (%).............            28.6            28.6            42.8            36.4            36.8
SCU-A-Small-B
    Net Cost (%)................             0.0             0.0             0.0            31.8            31.8
    No Impact (%)...............            82.9            37.1            11.5             0.0             0.0
    Net Benefit (%).............            17.1            62.9            88.5            68.2            68.2
SCU-A-Large-B
    Net Cost (%)................             0.0             0.0             0.1            34.3            34.3
    No Impact (%)...............            71.4            35.7             7.2             0.0             0.0
    Net Benefit (%).............            28.6            64.3            92.7            65.7            65.7
IMH-A-Small-C
    Net Cost (%)................             0.0             0.0             0.0             7.9            72.7
    No Impact (%)...............            77.2            54.3            40.0            31.4            11.5
    Net Benefit (%).............            22.8            45.7            60.0            60.7            15.9
IMH-A-Large-C
    Net Cost (%)................             0.0             0.0             0.0            21.3            21.1
    No Impact (%)...............            65.0            45.0            15.0            15.0            10.0
    Net Benefit (%).............            35.0            55.0            85.0            63.7            68.9
SCU-A-Small-C
    Net Cost (%)................             0.0             0.0             0.0             0.0            79.8
    No Impact (%)...............            73.4            53.3            36.7            36.7            20.0
    Net Benefit (%).............            26.6            46.7            63.3            63.3             0.2
----------------------------------------------------------------------------------------------------------------
* LCC results for IMH-W-Large-B, IMH-A-Large-B, and RCU-Large-B are a weighted average of the two sub-equipment
  class level typical units shown on the table.

    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade-off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. This undervaluation suggests that 
regulation that promotes energy efficiency can produce significant net 
private gains (as well as producing social gains by, for example, 
reducing pollution). There is evidence that consumers undervalue future 
energy savings as a result of (1) a lack of information; (2) a lack of 
sufficient salience of the long-term or aggregate benefits; (3) a lack 
of sufficient savings to warrant delaying or altering purchases (e.g., 
an inefficient ventilation fan in a new building or the delayed 
replacement of a water pump); (4) excessive focus on the short term, in 
the form of inconsistent weighting of future energy cost savings 
relative to available returns on other investments; (5) computational 
or other difficulties associated with the evaluation of relevant 
tradeoffs; and (6) a divergence in incentives (e.g., renter versus 
building owner, builder versus home buyer). Other literature indicates 
that with less than perfect foresight and a high degree of uncertainty 
about the future, consumers may trade off these types of investments at 
a higher-than-expected rate between current consumption and uncertain 
future energy cost savings.
    While DOE is not prepared at present to provide a fuller 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an amended energy conservation 
standard, DOE has posted a paper that discusses the issue of consumer 
welfare impacts of appliance energy efficiency standards, and potential 
enhancements to the methodology by which these impacts are defined and 
estimated in the regulatory process.\72\ DOE is committed to developing 
a framework that can support empirical quantitative tools for improved 
assessment of the consumer welfare impacts of appliance standards. DOE 
welcomes comments on information and methods to better assess the 
potential impact of energy conservation standards on consumer choice 
and methods to quantify this impact in its regulatory analysis in 
future rulemakings.
---------------------------------------------------------------------------

    \72\ Sanstad, A. Notes on the Economics of Household Energy 
Consumption and Technology Choice. 2010. Lawrence Berkeley National 
Laboratory, Berkeley, CA. www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf.
---------------------------------------------------------------------------

    TSL 5 corresponds to the max-tech level for all the equipment 
classes and offers the potential for the highest cumulative energy 
savings through the analysis period from 2018 to 2047. The estimated 
energy savings from TSL 5 is 0.401 quads of energy, and potable water 
savings are 45.4 billion gallons. DOE projects a net positive NPV for 
customers valued at $0.370 billion at a 7-percent discount rate. 
Estimated emissions reductions are 20.4 MMt of CO2, up to 
12.2 kt of NOX and 0.03 tons

[[Page 14940]]

of Hg. The CO2 emissions have a value of up to $2.0 billion 
and the NOX emissions have a value of up to $7.8 million at 
a 7-percent discount rate.
    For TSL 5, with the exception of equipment class IMH-A-Small-C and 
SCU-A-Small-C, the mean LCC savings for all equipment classes are 
positive, implying a decrease in LCC, with the decrease ranging from 
$49 for the IMH-W-Small-B equipment class to $945 for the IMH-A-Large-B 
equipment class.\73\ Although the mean LCC decreases indicate a savings 
potential for commercial ice makers as a whole, the results shown on 
Table V.54 indicates a large fraction of customers would experience net 
LCC increases (i.e., LCC costs rather than savings) from adoption of 
TSL 5, with 30 to nearly 80 percent of customers experiencing net LCC 
increases in six equipment classes. As shown on Table V.53, customers 
in 10 equipment classes would experience payback periods of 3 years or 
longer.
---------------------------------------------------------------------------

    \73\ Two of the typical units modeled for the three large batch 
classes have higher savings. For this section of the NOPR, the 
discussion is limited to results for full equipment classes.
---------------------------------------------------------------------------

    At TSL 5, manufacturers may experience a loss of INPV due to large 
investments in product development and manufacturing capital as nearly 
all products will need substantial redesign and existing production 
lines will need to be adapted to produce evaporators and cabinets, 
among other components, for the newly compliant designs. Where these 
designs may differ considerably from those currently available, this 
TSL also presents a significant testing burden. The projected change in 
INPV ranges from a decrease of $32.6 million to a decrease of $19.9 
million depending on the chosen manufacturer markup scenario. The upper 
bound of a $19.9 million decrease in INPV is considered an optimistic 
scenario for manufacturers because it assumes they can maintain the 
same gross margin (as a percentage of revenue) on their sales. DOE 
recognizes the risk of large negative impacts on industry if 
manufacturers' expectations concerning reduced profit margins are 
realized. TSL 5 could reduce the INPV for automatic commercial ice 
makers by up to 32.0 percent if impacts reach the lower bound of the 
range, which represents a scenario in which manufacturers cannot fully 
mark up the increased equipment costs, and therefore cannot maintain 
the same overall gross margins (as a percentage of revenue) they would 
have in the base case.
    In addition to the estimated impacts on INPV, the impacts on 
manufacturing capacity and competition are of concern at TSL 5. While 
more than half of the manufacturers who produce continuous products, 
already offer at least one product that complies with TSL 5, only two 
manufacturers currently produce batch commercial ice makers that comply 
with the efficiency levels specified at TSL 5. This includes one small 
business manufacturer whose niche products have among the very largest 
harvest capacities in their respective equipment classes and are sold 
in small quantities relative to the rest of the industry. In contrast 
to this small business manufacturer, the other manufacturer is 
Hoshizaki, which produces more mainstream batch products and commands 
substantial market share.
    The concentration of current production of batch commercial ice 
makers at TSL 5 presents two issues. Hoshizaki holds intellectual 
property covering the design of the evaporator used in their batch 
equipment, which limits the range of possible alternative paths to 
achieving the efficiency levels for batch equipment specified at TSL 5. 
While the engineering analysis identified other means to achieve these 
high efficiencies, given this limitation on design options, other 
manufacturers expressed significant doubts regarding their ability to 
do so. Further, DOE's analysis indicates that these efficiency levels 
require the use of permanent magnet motors and, for batch equipment, 
drain water heat exchangers. DOE was able to identify only one supplier 
of the latter technology, whose design is patented. In addition, there 
is currently very limited use of permanent magnet motors in commercial 
ice makers; hence, motor suppliers would be required to develop and 
initiate production for a broad range of new motor designs suitable for 
automatic commercial ice makers. These needs could severely impact 
automatic commercial ice maker manufacturers' ability to procure the 
required components in sufficient quantities to supply the market.
    Assuming the other paths to achieving these efficiency levels prove 
fruitful, TSL 5 would still require that every other manufacturer 
retool their entire batch equipment production lines. Further, DOE 
review of the efficiency levels of available equipment shows that only 
13 percent of Hoshizaki's batch products meet the TSL 5 efficiency 
levels, suggesting that the vast majority of their production lines 
would also require redesign and retooling. In confidential interviews, 
one manufacturer cited the possibility of a 3-month to 6-month shutdown 
in the event that amended standards were set high enough to require 
retooling of their entire product line. Compounding this effect across 
the industry could severely impact manufacturing capacity in the 
interim period between the announcement of the standards and the 
compliance date.
    After carefully considering the analysis results and weighing the 
benefits and burdens of TSL 5, DOE finds that at TSL 5, the benefits to 
the Nation in the form of energy savings and emissions reductions plus 
an increase of $0.370 billion in customer NPV are weighed against a 
decrease of up to 32.0 percent in INPV. While most individual customers 
purchasing automatic commercial ice makers built to TSL 5 standards 
would be better off than in the base case, most would face payback 
periods in excess of 3 years. The limited number of manufacturers 
currently producing batch commercial ice makers that meet this 
efficiency level is cause for additional concern. After weighing the 
burdens of TSL 5 against the benefits, DOE finds TSL 5 not to be 
economically justified. DOE does not propose to adopt TSL 5 in this 
rulemaking.
    TSL 4, the next highest efficiency level, corresponds to the 
highest efficiency level with a positive NPV at a 7-percent discount 
rate for all equipment classes. The estimated energy savings from 2018 
to 2047 are 0.380 quads of energy and 45.4 billion gallons of potable 
water--amounts DOE deems significant. At TSL 4, DOE projects an 
increase in customer NPV of $0.484 billion (2012$) at a 7-percent 
discount rate; estimated emissions reductions of 19.4 MMt of 
CO2, 11.6 kt of NOX, and 0.03 tons of Hg. The 
monetary value of these emissions was estimated to be up to $1.9 
billion for CO2 and up to $7.4 million for NOX at 
a 7-percent discount rate.
    At TSL 4, the mean LCC savings are positive for all equipment 
classes. As shown on Table V.52, mean LCC savings vary from $106 for 
SCU-A-Small-B to $945 for IMH-A-Large-B, which implies that, on 
average, customers will experience an LCC benefit. However, as shown on 
Table V.54, for 11 of the 12 classes, at least some fraction of the 
customers will experience net costs. Customers in 3 classes would 
experience net LCC costs of 30 percent or more, with the percentage 
ranging up to 49 percent for one equipment class. Median payback 
periods range from 1.9 years up to 4.8 years, with 7 of the 12 directly 
analyzed classes exhibiting payback periods over 3 years.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$30.5 million to a decrease of $19.6 million.

[[Page 14941]]

The impact on manufacturers at TSL 4 is not significantly different 
from that at TSL 5 as the individual efficiency levels for each 
equipment class at TSL 4 are on average not significantly different 
from those at TSL 5, and in several instances they are the same. DOE 
recognizes the risk of negative impacts at TSL 4 if manufacturers' 
expectations concerning reduced profit margins are realized. If the 
lower bound of -$30.5 million is reached, as DOE expects, TSL 4 could 
result in a net loss of 30.0 percent in INPV for manufacturers of 
automatic commercial ice makers.
    The impacts on manufacturing capacity and competition are of 
concern at TSL 4. While every manufacturer who produces continuous 
equipment offers at least one product that complies with TSL 4, only 
two manufacturers currently produce batch commercial ice makers that 
comply with the efficiency levels specified at TSL 4. This includes one 
small business manufacturer whose niche products have among the very 
largest harvest capacities in their respective equipment classes and 
are sold in small quantities relative to the rest of the industry. In 
contrast to this small business manufacturer, the other manufacturer is 
a larger manufacturer which produces more mainstream batch products and 
commands a substantial market share.
    The concentration of current production at TSL 4 presents two 
issues. One large manufacturer holds intellectual property covering the 
evaporator design used in their batch equipment, which in turn limits 
the range of possible alternative paths to achieving the efficiency 
levels specified at TSL 4. While the engineering analysis identified 
other means to achieve these high efficiencies, given this limitation 
on design options, other manufacturers expressed significant doubts 
regarding their ability to do so. Further, DOE's analysis indicates 
that these efficiency levels require the use of permanent magnet motors 
and, for most batch equipment, drain water heat exchangers. DOE was 
able to identify only one supplier of the latter technology, whose 
design is patented. In addition, there is currently very limited use of 
permanent magnet motors in commercial ice makers; hence, motor 
suppliers would be required to develop and initiate production for a 
broad range of new motor designs suitable for automatic commercial ice 
makers. These needs could severely impact automatic commercial ice 
maker manufacturers' ability to procure the required components in 
sufficient quantities to supply the market.
    Assuming other paths to achieving these efficiency levels prove 
fruitful, TSL 4 would still require that every other manufacturer 
retool their entire batch equipment production lines. As noted above, 
only 2 manufacturers currently produce equipment that meets TSL 4 
efficiency levels, one of which is a large manufacturer. DOE's review 
of the efficiency levels of available equipment shows that only 14 
percent of the large manufacturer's batch products meet the TSL 4 
efficiency levels, suggesting the vast majority of their production 
lines would also require redesign and retooling. In confidential 
interviews, another manufacturer cited the possibility of a 3-month to 
6-month shutdown in the event that amended standards were set high 
enough to require retooling of their entire product line. Compounding 
this effect across the industry could severely impact manufacturing 
capacity in the interim period between the announcement of the 
standards and the compliance date.
    After carefully considering the analysis results and weighing the 
benefits and burdens of TSL 4, DOE finds that at TSL 4, the benefits to 
the Nation in the form of energy savings and emissions reductions plus 
an increase of $0.484 billion in customer NPV are weighed against a 
decrease of up to 30.0 percent in INPV. While most individual customers 
purchasing automatic commercial ice makers built to TSL 4 standards 
would be better off than in the base case, customers in 7 of 12 
equipment classes would face payback periods in excess of 3 years. The 
limited number of manufacturers currently producing batch commercial 
ice makers that meet this efficiency level is cause for additional 
concern. After weighing the burdens of TSL 4 against the benefits, DOE 
finds TSL 4 not to be economically justified. DOE does not propose to 
adopt TSL 4 in this notice.
    At TSL 3, the next highest efficiency level, estimated energy 
savings from 2018 to 2047 are 0.286 quads of primary energy and water 
savings are 45.4 billion gallons--amounts DOE considers significant. 
TSL 3 was defined as the set of efficiencies with the highest NPV for 
each analyzed equipment class. At TSL 3, DOE projects an increase in 
customer NPV of $0.791 billion at a 7-percent discount rate, and an 
increase of $1.751 billion at a 3-percent discount rate. Estimated 
emissions reductions are 14.6 MMt of CO2, up to 8.7 kt of 
NOX and 0.02 tons of Hg at TSL 3. The monetary value of the 
CO2 emissions reductions was estimated to be up to $1.4 
billion at TSL 3, while NOX emission reductions at a 7-
percent discount rate were valued at up to $5.5 million.
    At TSL 3, nearly all customers for all equipment classes are shown 
to experience positive LCC savings. As shown on Table V.54, the percent 
of customers experiencing a net cost rounds to 0 in all but two 
classes--SCU-A-Large-B with 0.1 percent and IMH-W-Small-B with 3.5 
percent of customers exhibiting a net cost. The payback period for IMH-
W-Small-B is 2.3 years, while for all other equipment classes the 
median payback periods are 1.9 years or less. LCC savings range from 
$146 for SCU-A-Small-C to over $1,100 for IMH-A-Large-B.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$23.9 million to a decrease of $20.9 million. The three largest 
manufacturers, who together represent an estimated 95 percent of the 
market, currently produce a combined 38 compliant batch products at TSL 
3. Many of the gains in efficiency needed to meet the standards 
proposed at TSL 3 can be achieved using higher efficiency components as 
opposed to the redesign of systems manufactured in-house and as such 
require little change to existing manufacturing capital. The lack of 
green-field redevelopment or significant recapitalization mitigates the 
risk of disruption to manufacturing capacity in the interim period 
between announcement of the energy conservation standards and the 
compliance date.
    At TSL 3, the monetized CO2 emissions reduction values 
range from $0.102 to $1.426 billion. The monetized CO2 
emissions reduction at $39.7 per ton in 2012$ is $0.463 billion. The 
monetized NOX emissions reductions calculated at an 
intermediate value of $2,639 per ton in 2012$ are $3 million at a 7-
percent discount rate and $9.6 million at a 3-percent rate. These 
monetized emissions reduction values were added to the customer NPV at 
3-percent and 7-percent discount rates to obtain values of $2.223 
billion and 1.257 billion, respectively, at TSL 3. The total customer 
and emissions benefits are highest at TSL 3.
    Nearly all customers are expected to experience net benefits from 
equipment built to TSL 3 levels. The payback periods for TSL 3 are 
expected to be 2.3 years, or less.
    After carefully considering the analysis results and weighing the 
benefits and burdens of TSL 3, DOE believes that setting the standards 
for automatic commercial ice makers at TSL 3 represents the maximum 
improvement in energy efficiency that is technologically feasible and

[[Page 14942]]

economically justified. TSL 3 is technologically feasible because the 
technologies required to achieve these levels already exist in the 
current market and are available from multiple manufacturers. TSL 3 is 
economically justified because the benefits to the Nation in the form 
of energy savings, customer NPV at 3 percent and at 7 percent, and 
emissions reductions outweigh the costs associated with reduced INPV 
and potential effects of reduced manufacturing capacity.
    Therefore, DOE proposes the adoption of amended energy conservation 
standards for automatic commercial ice makers at TSL 3.
    DOE specifically seeks comment on the magnitude of the estimated 
decline in INPV at TSL 3 compared to the baseline, and whether this 
impact could risk industry consolidation. DOE also specifically 
requests comment on whether DOE should adopt TSL 4 or 5 and why., DOE 
may reexamine the proposed level depending on the nature of the 
information it receives during the comment period and adjust its final 
levels in response to that information.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that today's standards address are as follows:
    1. There is a lack of consumer information and/or information 
processing capability about energy efficiency opportunities in the 
automatic commercial ice maker market.
    2. There is asymmetric information (one party to a transaction has 
more and better information than the other) and/or high transactions 
costs (costs of gathering information and effecting exchanges of goods 
and services).
    3. There are external benefits resulting from improved energy 
efficiency of automatic commercial ice makers that are not captured by 
the users of such equipment. These benefits include externalities 
related to environmental protection and energy security that are not 
reflected in energy prices, such as reduced emissions of GHGs.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare an RIA on today's rule and that OIRA in 
OMB review this rule. DOE presented to OIRA for review the draft rule 
and other documents prepared for this rulemaking, including the RIA. 
DOE has included these documents in the rulemaking record. The 
assessments prepared pursuant to Executive Order 12866 can be found in 
the TSD for this rulemaking.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011. 76 FR 3821 (Jan. 21, 2011). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 to: (1) propose or adopt 
a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, ORIA has emphasized that such techniques may include 
identifying changing future compliance costs that might result from 
technological innovation or anticipated behavioral changes. For the 
reasons stated in the preamble, DOE believes that today's NOPR is 
consistent with these principles, including the requirement that, to 
the extent permitted by law, benefits justify costs and that net 
benefits are maximized.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of 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 Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking'' 67 FR 53461 (Aug. 16, 2002), DOE 
published procedures and policies on February 19, 2003 to ensure that 
the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR at 7990. DOE has made 
its procedures and policies available on the Office of the General 
Counsel's Web site (http://energy.gov/gc/downloads/executive-order-13272-consideration-small-entities-agency-rulemaking).
1. Description and Estimated Number of Small Entities Regulated
    For manufacturers of automatic commercial ice makers, the SBA has 
set a size threshold, which defines those entities classified as 
``small businesses'' for the purposes of the statute. DOE used the 
SBA's small business size standards to determine whether any small 
entities would be subject to the requirements of the rule. 65 FR 30836, 
30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (Sept. 5, 2000) 
and codified at 13 CFR part 121. The size standards are listed by NAICS 
code and industry description and are available at: www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
    Manufacturing of automatic commercial ice makers is classified 
under NAICS 333415, ``Air-Conditioning and Warm Air Heating Equipment 
and Commercial and Industrial Refrigeration Equipment Manufacturing,'' 
which includes ice-making machinery manufacturing. The SBA sets a 
threshold of 750 employees or less for an entity to be considered as a 
small business in this category.
    During its market survey, DOE used available public information to 
identify potential small manufacturers. DOE's research involved 
industry trade association membership directories (including AHRI), 
public databases (e.g.,

[[Page 14943]]

AHRI Directory,\74\ the SBA Database \75\), individual company Web 
sites, and market research tools (e.g., Hoovers reports \76\) to create 
a list of companies that manufacture or sell equipment covered by this 
rulemaking. DOE also asked stakeholders and industry representatives if 
they were aware of any other small manufacturers during manufacturer 
interviews and at DOE public meetings. DOE reviewed publicly available 
data and contacted select companies on its list, as necessary, to 
determine whether they met the SBA's definition of a small business 
manufacturer of covered automatic commercial ice makers. DOE screened 
out companies that do not offer equipment covered by this rulemaking, 
do not meet the definition of a ``small business,'' or are foreign-
owned.
---------------------------------------------------------------------------

    \74\ See www.ahridirectory.org/ahriDirectory/pages/home.aspx.
    \75\ See http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm.
    \76\ See www.hoovers.com/.
---------------------------------------------------------------------------

    DOE identified seven small domestic businesses manufacturers of 
automatic commercial ice makers operating in the United States. DOE 
contacted each of these companies, but only one accepted the invitation 
to participate in a confidential manufacturer impact analysis interview 
with DOE contractors.
2. Description and Estimate of Compliance Requirements
    DOE estimates that the seven small domestic manufacturers of 
automatic commercial ice makers identified by DOE account for 
approximately 5 percent of industry shipments. While small business 
manufacturers of automatic commercial ice makers have small overall 
market share, some hold substantial market share in specific equipment 
classes. Several of these smaller firms specialize in producing 
industrial ice machines and the covered equipment they manufacture are 
extensions of existing product lines that fall within the range of 
capacity covered by this rule. Others serve niche markets. Most have 
substantial portions of their business derived from equipment outside 
the scope of this rulemaking, but are still considered small businesses 
based on the SBA limits for number of employees.
    At the proposed level, small business manufacturers of automatic 
commercial ice makers are expected to face negative impacts on INPV 
that are more than three times as severe as those felt by the industry 
at large: A loss of 78.6 percent of INPV for small businesses alone as 
compared to a loss of 23.5 percent for the industry at large. Where 
conversion costs are driven by the number of platforms requiring 
redesign at a particular standard level, small business manufacturers 
may be disproportionately affected. Product conversion costs including 
the investments made to redesign existing equipment to meet new or 
amended standards or to develop entirely new compliant equipment, as 
well as industry certification costs, do not scale with sales volume. 
As small manufacturers' investments are spread over a much lower volume 
of shipments, recovering the cost of upfront investments is 
proportionately more difficult.
    Similarly, capital conversion costs may disproportionately affect 
small business manufacturers of automatic commercial ice makers. 
Capital conversion costs are projected to be highest in the year 
preceding standards as manufacturers retrofit production lines to make 
compliant equipment. In this year, capital conversion costs are 
estimated to represent 97 percent of typical capital expenditures for 
small businesses, as compared to 34 percent for the industry as a 
whole. Where the covered equipment from several small manufacturers are 
adaptations of larger platforms with capacities above the 4,000 lb ice/
24 hour threshold, it may not prove economical for them to retrofit an 
entire production line to meet standards that only affect one product.
    In confidential interviews, manufacturers indicated that many 
design options evaluated in the engineering analysis (e.g., higher 
efficiency motors and compressors) would require them to purchase more 
expensive components. In many industries, small manufacturers typically 
pay higher prices for components due to smaller purchasing volumes 
while their large competitors receive volume discounts. However, this 
effect is diminished for the automatic commercial ice maker 
manufacturing industry for two distinct reasons. One reason relates to 
the fact that the automatic commercial ice maker industry as a whole is 
a low volume industry. In confidential interviews, manufacturers 
indicated that they have little influence over their suppliers, 
suggesting the volume of their component orders is similarly 
insufficient to receive substantial discounts. The second reason 
relates to the fact that, for most small businesses, the equipment 
covered by this rulemaking represents only a fraction of overall 
business. Where small businesses are ordering similar components for 
non-covered equipment, their purchase volumes may not be as low as is 
indicated by the total unit shipments for small businesses. For these 
reasons, it is expected that any volume discount for components enjoyed 
by large manufacturers would not be substantially different from the 
prices paid by small business manufacturers.
    To estimate how small manufacturers would be potentially impacted, 
DOE developed specific small business inputs and scaling factors for 
the GRIM. These inputs were scaled from those used in the whole 
industry GRIM using information about the product portfolios of small 
businesses and the estimated market share of these businesses in each 
equipment class. DOE used this information in the GRIM to estimate the 
annual revenue, EBIT, R&D expense, and capital expenditures for a 
typical small manufacturer and to model the impact on INPV. DOE then 
compared these impacts to those modeled for the industry at large. The 
results are shown on Table VI.1 and Table VI.2.

  Table VI.1--Comparison of Small Business Manufacturers of Automatic Commercial Ice Maker INPV to That of the
                Industry at Large by TSL Under the Preservation of Gross Margin Markup Scenario*
----------------------------------------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
Industry at Large--Impact on              $(8.4)         $(12.8)         $(20.9)         $(19.6)         $(19.9)
 INPV ($2012)...................
Industry at Large--Impact on              (8.2)%         (12.6)%         (20.5)%         (19.2)%         (19.5)%
 INPV (%).......................
Small Businesses--Impact on INPV          $(1.8)          $(2.9)          $(3.9)          $(4.1)          $(4.5)
 ($2012)........................
Small Businesses--Impact on INPV         (35.4)%         (57.0)%         (76.6)%         (80.5)%         (88.4)%
 (%)............................
----------------------------------------------------------------------------------------------------------------
 *Values in parentheses are negative numbers.

[[Page 14944]]

  Table VI.2--Comparison of Small Business Manufacturers of Automatic Commercial Ice Maker INPV to That of the
                     Industry at Large by TSL Under the Preservation of EBIT Markup Scenario
----------------------------------------------------------------------------------------------------------------
                                       TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
Industry at Large--Impact on              $(8.7)         $(13.6)         $(23.9)         $(30.5)         $(32.6)
 INPV ($2012)...................
Industry at Large--Impact on              (8.5)%         (13.4)%         (23.5)%         (30.0)%         (32.0)%
 INPV (%).......................
Small Businesses--Impact on INPV          $(1.8)          $(3.0)          $(4.0)          $(4.6)          $(5.1)
 ($2012)........................
Small Businesses--Impact on INPV         (35.4)%         (58.9)%         (78.6)%         (90.3)%        (100.2)%
 (%)............................
----------------------------------------------------------------------------------------------------------------
 *Values in parentheses are negative numbers.

3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being promulgated today.
4. Significant Alternatives to the Rule
    The primary alternatives to the proposed rule are the other TSLs 
besides the one being considered today, TSL 3. DOE explicitly 
considered the role of manufacturers, including small manufacturers, in 
its selection of TSL 3 rather than TSLs 4 or 5. Though higher TSLs 
result in greater energy savings for the country, they would place 
significant burdens on manufacturers. Chapter 12 of the NOPR TSD 
contains additional information about the impact of this rulemaking on 
manufacturers.
    In addition to the other TSLs being considered, chapter 17 of the 
NOPR TSD and Section V.B.7 include reports on a regulatory impact 
analysis (RIA). For automatic commercial ice makers, the RIA discusses 
the following policy alternatives: (1) No change in standard; (2) 
customer rebates; (3) customer tax credits; (4) manufacturer tax 
credits; and (5) early replacement. While these alternatives may 
mitigate to some varying extent the economic impacts on small entities 
compared to the amended standards, DOE determined that the energy 
savings of these regulatory alternatives could be approximately one-
third to one-half less than the savings that would be expected to 
result from adoption of the amended standard levels. Because of the 
significantly lower savings, DOE rejected these alternatives and 
proposes to adopt the amended standards set forth in this rulemaking.
    However, DOE seeks comment and, in particular, data on the impacts 
of this rulemaking upon small businesses. (See Issue 10 under ``Issues 
on Which DOE Seeks Comment'' in section VII.E of this NOPR.)

C. Review Under the Paperwork Reduction Act

    Manufacturers of automatic commercial ice makers must certify to 
DOE that their equipment comply with any applicable energy conservation 
standards. In certifying compliance, manufacturers must test their 
equipment according to the DOE test procedures for automatic commercial 
ice makers, including any amendments adopted for those test procedures. 
DOE has established regulations for the certification and recordkeeping 
requirements for all covered consumer products and commercial/
industrial equipment, including automatic commercial ice makers. 76 FR 
12422 (March 7, 2011). The collection-of-information requirement for 
the certification and recordkeeping is subject to review and approval 
by OMB under the Paperwork Reduction Act (PRA). This requirement has 
been approved by OMB under OMB Control Number 1910-1400. Public 
reporting burden for the certification is estimated to average 20 hours 
per response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
(42 U.S.C. 4321 et seq.) DOE has determined that the proposed rule fits 
within the category of actions included in Categorical Exclusion (CX) 
B5.1 and otherwise meets the requirements for application of a CX. See 
10 CFR part 1021, appendix B, B5.1(b); 1021.410(b) and appendix B, 
B(1)-(5). The proposed rule fits within the category of actions because 
it is a rulemaking that establishes energy conservation standards for 
consumer products or industrial equipment, and for which none of the 
exceptions identified in CX B5.1(b) apply. Therefore, DOE has made a CX 
determination for this rulemaking, and DOE does not need to prepare an 
Environmental Assessment or Environmental Impact Statement for this 
proposed rule. DOE's CX determination for this proposed rule is 
available at http://energy.gov/nepa/downloads/cx-008014-categorical-exclusion-determination.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR at 13735. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of today's proposed 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity; (2) write regulations to minimize litigation; and (3) 
provide a clear legal standard for affected conduct rather than a 
general

[[Page 14945]]

standard and promote simplification and burden reduction. 61 FR 4729 
(Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically 
requires that Executive agencies make every reasonable effort to ensure 
that the regulation: (1) Clearly specifies the preemptive effect, if 
any; (2) clearly specifies any effect on existing Federal law or 
regulation; (3) provides a clear legal standard for affected conduct 
while promoting simplification and burden reduction; (4) specifies the 
retroactive effect, if any; (5) adequately defines key terms; and (6) 
addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. 
Section 3(c) of Executive Order 12988 requires Executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section 3(b) to determine whether they are met or it is unreasonable to 
meet one or more of them. DOE has completed the required review and 
determined that, to the extent permitted by law, this proposed rule 
meets the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a),(b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR at 12820. DOE's policy 
statement is also available at http://energy.gov/gc/downloads/unfunded-mandates-reform-act-intergovernmental-consultation.
    Although today's proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more on the private sector. Specifically, the proposed rule will 
likely result in a final rule that could require expenditures of $100 
million or more. Such expenditures may include: (1) Investment in 
research and development and in capital expenditures by automatic 
commercial ice makers manufacturers in the years between the final rule 
and the compliance date for the new standards; and (2) incremental 
additional expenditures by customers to purchase higher efficiency 
automatic commercial ice makers, 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. The 
SUPPLEMENTARY INFORMATION section of this NOPR and the ``Regulatory 
Impact Analysis'' section of the NOPR TSD for this proposed rule 
respond to those requirements.
    Under section 205 of UMRA, DOE is obligated to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the proposed rule unless DOE publishes 
an explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(o) 
and 6313(d), this proposed rule would establish energy conservation 
standards for automatic commercial ice makers that are designed to 
achieve the maximum improvement in energy efficiency that DOE has 
determined to be both technologically feasible and economically 
justified. A full discussion of the alternatives considered by DOE is 
presented in the ``Regulatory Impact Analysis'' section of the TSD for 
today's proposed rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights,'' 53 FR 8859 (Mar. 18, 1988), that this regulation would not 
result in any takings that might require compensation under the Fifth 
Amendment to the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to 
review most disseminations of information to the public under 
guidelines established by each agency pursuant to general guidelines 
issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 
2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 
2002). DOE has reviewed today's NOPR under the OMB and DOE guidelines 
and has concluded that it is consistent with applicable policies in 
those guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the

[[Page 14946]]

action and their expected benefits on energy supply, distribution, and 
use.
    DOE has tentatively concluded that today's regulatory action, which 
sets forth proposed energy conservation standards for automatic 
commercial ice makers, is not a significant energy action because the 
proposed standards are not likely to have a significant adverse effect 
on the supply, distribution, or use of energy, nor has it been 
designated as such by the Administrator at OIRA. Accordingly, DOE has 
not prepared a Statement of Energy Effects on the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer-reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the Bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as scientific information the 
agency reasonably can determine will have, or does have, a clear and 
substantial impact on important public policies or private sector 
decisions. 70 FR at 2667 (Jan. 14, 2005).
    In response to OMB's Bulletin, DOE conducted formal in-progress 
peer reviews of the energy conservation standards development process 
and analyses and has prepared a Peer Review Report pertaining to the 
energy conservation standards rulemaking analyses. Generation of this 
report involved a rigorous, formal, and documented evaluation using 
objective criteria and qualified and independent reviewers to make a 
judgment as to the technical/scientific/business merit, the actual or 
anticipated results, and the productivity and management effectiveness 
of programs and/or projects. The ``Energy Conservation Standards 
Rulemaking Peer Review Report,'' dated February 2007, has been 
disseminated and is available at the following Web site: 
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

VII. Public Participation

A. Attendance at the Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this rulemaking. 
If you plan to attend the public meeting, please notify Ms. Brenda 
Edwards at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. Please note 
that foreign nationals visiting DOE Headquarters are subject to advance 
security screening procedures. Any foreign national wishing to 
participate in the meeting should advise DOE as soon as possible by 
contacting Ms. Edwards to initiate the necessary procedures. Please 
also note that those wishing to bring laptops into the Forrestal 
Building will be required to obtain a property pass. Visitors should 
avoid bringing laptops, or allow an extra 45 minutes. Persons can 
attend the public meeting via webinar.
    Webinar registration information, participant instructions, and 
information about the capabilities available to webinar participants 
will be published on DOE's Web site at: www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/29.
    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 notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting, interested parties may 
submit further comments on the proceedings as well as on any aspect of 
the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will allow, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this rulemaking. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this notice.
    Submitting comments via regulations.gov. The regulations.gov Web 
page will require you to provide your name and contact information. 
Your contact information will be viewable to DOE Building Technologies 
staff only. Your contact information will

[[Page 14947]]

not be publicly viewable except for your first and last names, 
organization name (if any), and submitter representative name (if any). 
If your comment is not processed properly because of technical 
difficulties, DOE will use this information to contact you. If DOE 
cannot read your comment due to technical difficulties and cannot 
contact you for clarification, DOE may not be able to consider your 
comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to regulations.gov information for which disclosure 
is restricted by statute, such as trade secrets and commercial or 
financial information (hereinafter referred to as Confidential Business 
Information (CBI)). Comments submitted through regulations.gov cannot 
be claimed as CBI. Comments received through the Web site will waive 
any CBI claims for the information submitted. For information on 
submitting CBI, see the Confidential Business Information section 
below.
    DOE processes submissions made through regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery, or mail also 
will be posted to regulations.gov. If you do not want your personal 
contact information to be publicly viewable, do not include it in your 
comment or any accompanying documents. Instead, provide your contact 
information in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery/courier, please provide all items on a CD, if feasible. It is 
not necessary to submit printed copies. No facsimiles (faxes) will be 
accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
one copy of the document marked confidential including all the 
information believed to be confidential, and one copy of the document 
marked non-confidential with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues.
1. Standards Compliance Dates
    EPCA requires that the amended standards established in this 
rulemaking must apply to equipment that is manufactured on or after 3 
years after the final rule is published in the Federal Register unless 
DOE determines, by rule, that a 3-year period is inadequate, in which 
case DOE may extend the compliance date for that standard by an 
additional 2 years. (42 U.S.C. 6313(d)(3)(C))
    For the NOPR analyses, DOE assumed a 3-year period to prepare for 
compliance. DOE requests comments on the January 1, 2018 effective 
date, and whether a January 1, 2018 effective date provides an 
inadequate period for compliance and what economic impacts would be 
mitigated by a later effective date.
    DOE also requests comment on whether the 3-year period is adequate 
for manufacturers to obtain more efficient components from suppliers to 
meet proposed revisions of standards. More discussion on this topic can 
be found in Section IV.B.1.g of today's NOPR.
2. Utilization Factors
    The utilization factor represents the percent of time that an ice 
maker actively produces ice. Ice maker usage is measured in terms of 
kilowatt-hours per 100 lb/24 hours, whereas subsequent analyses require 
annual energy usage in kilowatt-hours. Thus, a usage factor is required 
to translate the potential energy usage into estimated annual usage. In 
the Framework document, the Department presented a series of factors 
for each type of building that represents an ice maker market segment, 
and all were set to 0.5, meaning all building types would be modeled 
with a utilization factor indicating that equipment runs one-half of 
the time. The Stakeholders pointed out that not all building segments 
should be at 0.5, but DOE did not receive any data or information that 
DOE can use to differentiate the utilization factor by building type. 
DOE requests data for individual building types. More discussion on 
this topic can be found in Section IV.G.3 of today's NOPR.

[[Page 14948]]

3. Baseline Efficiency
    For this notice, DOE chose continuous machine baselines at 
sufficiently high energy use levels that they exclude almost no 
equipment. DOE based the baselines on online data from the AHRI 
database. DOE requests comments on the development of continuous type 
equipment base efficiency levels and on the availability of data on 
which to create continuous machine baselines. More discussion on this 
topic can be found in Section IV.D.2.a of today's NOPR.
4. Screening Analysis
    DOE requests comment on the screening analysis and, specifically, 
the design options DOE screened out of the rulemaking analysis.
    DOE considered whether design options were technologically 
feasible; practicable to manufacture, install, or service; had adverse 
impacts on product utility or product availability; or had adverse 
impacts on health or safety. See Section IV.C of today's NOPR and 
chapter 4 of the NOPR TSD for further discussion of the screening 
analysis.
5. Maximum Technologically Feasible Levels
    DOE seeks comments on the Maximum Technologically Feasible levels 
proposed in Table III.2 and Table III.3 of today's notice. More 
discussion on this topic can be found in Section IV.D.2.e of today's 
NOPR.
6. Markups to Determine Price
    DOE identified three major distribution channels through which 
automatic commercial ice maker equipment is purchased by the end-user: 
(1) Manufacturer to end-user (direct channel); (2) manufacturer to 
wholesale distributor to end-user (wholesaler channel); and (3) 
manufacturer to distributor to dealer or contractor to end-user 
(contractor channel). DOE currently uses mechanical contractor data to 
estimate the contribution of local dealers or contactors to end-user 
prices. DOE requests specific input to improve the cost estimation for 
the local dealer or contractor component of markups. More discussion on 
this topic can be found in Section IV.E of today's NOPR.
7. Equipment Life
    For the NOPR analyses, DOE used an 8.5 years average life for all 
equipment classes, with analyses based on a lifetime distribution 
averaging 8.5 years. (TSD chapter 9 discusses the development of the 
distribution.) In comments on the preliminary analysis, one stakeholder 
stated that continuous machines might have shorter life spans. DOE 
requests specific information to determine whether continuous and batch 
types should be analyzed using different equipment life assumptions, 
and if so, what they would be. More discussion on this topic can be 
found in Section IV.G.8 of today's NOPR.
8. Installation Costs
    Stakeholders commented that higher efficiency equipment would incur 
additional installation costs when compared to the baseline equipment. 
DOE requests specificity with respect to this comment, with specific 
information on design options that will increase installation costs and 
specific information to enable DOE to adjust installation costs 
appropriately. More discussion on this topic can be found in Section 
IV.G.2.a of today's NOPR.
9. Open- Versus Closed-Loop Installations
    Stakeholders commented that some localities in the U.S. have 
instituted local ordinances or laws precluding installation of ice 
makers in open-loop configurations. DOE requests stakeholder assistance 
in quantifying the impact of local regulations on the prevalence of 
open-loop installations. More discussion on this topic can be found in 
Section IV.D.3.c of today's NOPR.
10. Ice Maker Shipments by Type of Equipment
    DOE's shipments forecast is based on a single snapshot of shipments 
by the type of equipment. Stakeholders at the preliminary analysis 
phase suggested that the equipment mix may be changing over time. DOE 
requests additional data concerning shipment trends/forecasts. More 
discussion on this topic can be found in Section IV.H.1 of today's 
NOPR.
11. Intermittency of Manufacturer R&D and Impact of Standards
    One manufacturer reported that a previous round of standards 
required nearly all of the company's engineering resources for between 
1 and 2 years. Where manufacturers may divert existing R&D resources to 
compliance related R&D efforts, DOE requests additional comment on the 
impact on innovation of compliance related R&D efforts. Specifically, 
DOE requests comment on how to quantify this impact on innovation. More 
discussion on this topic can be found in Section IV.J of today's NOPR.
12. INPV Results and Impact of Standards
    Based on weighing of data, DOE is recommending TSL 3 for the new 
and amended automatic commercial ice maker standards. DOE recognizes 
that new and amended standards will have impacts on industry net 
present value results. DOE specifically seeks comment on the magnitude 
of the estimated decline in INPV at TSL 3 compared to the baseline, and 
what impact this may have on manufacturers. More discussion on this 
topic can be found in Section V.B.2 of today's NOPR.
13. Small Businesses
    During the Framework and February 2012 preliminary analysis public 
meetings, DOE received many comments regarding the potential impacts of 
amended energy conservation standards on small business manufacturers 
of automatic commercial ice makers. DOE incorporated this feedback into 
its analyses for the NOPR and has presented its results in this notice 
and the NOPR TSD. However, DOE seeks comment and, in particular, 
additional data, in its efforts to quantify the impacts of this 
rulemaking on small businesses. More discussion on this topic can be 
found in Section IV.J.3.d of today's NOPR.
14. Consumer Utility and Performance
    DOE requests comment on whether there are features or attributes of 
the more energy-efficient automatic commercial ice makers, including 
any potential changes to the evaporator design that would result in 
changes to the ice style or changes in the chassis size, that 
manufacturers would produce to meet the standards in this proposed rule 
that might affect how they would be used by consumers. DOE requests 
comment specifically on how any such effects should be weighed in the 
choice of standards for the automatic commercial ice makers for the 
final rule. More discussion on this topic can be found in Section V.B.3 
of today's NOPR.
15. Analysis Period
    For this rulemaking, DOE analyzed the effects of this proposal 
assuming that the automatic commercial ice makers would be available to 
purchase for 30 years and undertook a sensitivity analysis using 9 
years rather than 30 years of product shipments. The choice of a 30-
year period of shipments is consistent with the DOE analysis for other 
products and commercial equipment. The choice of a 9-year period is a 
proxy for the timeline in EPCA for the review of certain energy

[[Page 14949]]

conservation standards and potential revision of and compliance with 
such revised standards. We are seeking input, information and data on 
whether there are ways to further refine the analytic timeline. More 
discussion on this topic can be found in Section IV.H.1 of today's 
NOPR.
16. Social Cost of Carbon
    DOE solicits comment on the application of the new SCC values used 
to determine the social benefits of CO2 emissions reductions 
over the rulemaking analysis period. (The rulemaking analysis period 
covers from 2018 to 2047 plus the appropriated number of years to 
account for the lifetime of the equipment purchased between 2018 and 
2047.) In particular, the agency solicits comment on the agency's 
derivation of SCC values after 2050 where the agency applied the 
average annual growth rate of the SCC estimates in 2040-2050 associated 
with each of the four sets of values. More discussion on this topic can 
be found in Section IV.L.1 of today's NOPR.
17. Remote to Rack Equipment
    In the preliminary analysis, DOE found that some high-capacity RCU-
RC-Large-C ice makers are solely designed to be used with compressor 
racks and the racks' associated condensers. DOE requests comment and 
supporting data on the overall market share of these units and any 
expected market trends. More discussion on this topic can be found in 
Section IV.B.1.f of today's NOPR.
18. Design Options Associated With Each TSL
    Section V.A.1 of today's NOPR discusses the design options 
associated with each TSL, for each analyzed product class. DOE requests 
comment and data related to the required equipment size increases 
associated with the design options at each TSL levels. Chapter 5 of the 
NOPR TSD contains full descriptions of the design options and DOE's 
analyses for the equipment size increase associated with the design 
options selected. DOE also requests comments and data on the efficiency 
gains associated with each set of design options. Chapter 5 of the NOPR 
TSD contains DOE's analyses of the efficiency gains for each design 
option considered. Finally, DOE requests comment and data on any 
utility impacts associated with each set of design options, such as 
potential ice-style changes.
19. Standard Levels for Batch-Type Ice Makers Over 2,500 lbs Ice/24 
Hours
    DOE requests comment and data on the viability of the proposed 
standard levels selected for batch-type ice makers with harvest 
capacities from 2,500 to 4,000 lb ice/24 hours. The proposed standard 
levels are discussed in Section V.A.2 of today's NOPR, and prior 
comments on standards for batch-type ice makers with harvest capacities 
from 2,500 to 4,000 lb ice/24 hours are discussed in Section IV.B.1.b 
of today's NOPR.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's 
proposed rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Commercial equipment, Imports, 
Intergovernmental relations, Reporting and recordkeeping requirements, 
Small businesses.

    Issued in Washington, DC, on March 7, 2014.
David T. Danielson,
Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.

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

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

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

    Authority:  42 U.S.C. 6291-6317.

0
2. Section 431.136 is revised to read as follows:

Sec.  431.136  Energy conservation standards and their effective dates.

    (a) All basic models of commercial ice makers must be tested for 
performance using the applicable DOE test procedure in Sec.  431.134, 
be compliant with the applicable standards set forth in paragraphs (b) 
through (d) of this section, and be certified to the Department of 
Energy under 10 CFR part 429.
    (b) Each cube type automatic commercial ice maker with capacities 
between 50 and 2,500 pounds per 24-hour period manufactured on or after 
January 1, 2010 and before [DATE THREE YEARS AFTER PUBLICATION OF FINAL 
RULE], shall meet the following standard levels:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Rated harvest rate lb ice/24  Maximum energy use kWh/100 lb  Maximum condenser water use*
          Equipment type                Type of cooling                   hours                           ice                      gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head..................  Water....................  =500 and =1,436                        4.0                            200-0.022H.
                                   Air......................  =450                          6.89-0.0011H                   Not Applicable.
Remote Condensing (but not remote  Air......................  =1,000                        5.1                            Not Applicable.
Remote Condensing and Remote       Air......................  =934                          5.3                            Not Applicable.
Self-Contained...................  Water....................  =200                          7.6                            191-0.0315H.
                                   Air......................  =175                          9.8                            Not Applicable.
--------------------------------------------------------------------------------------------------------------------------------------------------------
 * Water use is for the condenser only and does not include potable water used to make ice.
 ** H = rated harvest rate in pounds per 24 hours, indicating the water or energy use for a given rated harvest rate.
Source: 42 U.S.C. 6313(d).

    (c) Each batch type automatic commercial ice maker with capacities 
between 50 and 4,000 pounds per 24-hour period manufactured on or after 
[DATE THREE YEARS AFTER

[[Page 14950]]

PUBLICATION OF FINAL RULE], shall meet the following standard levels:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Rated harvest rate lb ice/24  Maximum energy use kWh/100 lb     Maximum condenser water
          Equipment type                Type of cooling                   hours                           ice*                  use** gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head..................  Water....................  =500 and =1,436 and =2,500 and =450 and =875 and =2,210 and =2,500 and =1,000 and =934 and =200 and =2,500 and =175 and 24  Maximum energy use kWh/100 lb     Maximum condenser water
          Equipment type                Type of cooling                   hours                           ice*                  use** gal/100 lb ice
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ice-Making Head..................  Water....................  =900 and = 2,500 and 4,000             3.8                            116.
Ice-Making Head..................  Air......................  =700 and =850 and =850 and =900 and =2,500 and =700 and pre>
```