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# GAO U.S. GOVERNMENTACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548



### B-326631

February 10, 2015 The Honorable Lisa Murkowski Chairman The Honorable Maria Cantwell Ranking Member Committee on Energy and Natural Resources United States Senate The Honorable Fred Upton Chairman The Honorable Frank Pallone, Jr. Ranking Member Committee on Energy and Commerce House of Representatives Subject: DepartmentofEnergy: EnergyConsetVation Program: EnergyConsetVation StandardsforAutomatic CommercialIce Makers Pursuantto section 801 (a)(2)(A) oftitle 5, United States Code, this is our report on a major rule promulgated by the Department of Energy (DOE) entitled "Energy Conservation Program: Energy Conservation Standards forAutomatic Commercial Ice Makers" (RIN: 1904-AC39). We received the rule on January28, 2015. It was published in the FederalRegisteras afinal rule on January 28, 2015, with a stated effective date of March 30, 2015. 80 Fed. Reg. 4646. Thefinal rule adopts more-stringent energy conservation standards for some classes of automatic commercial ice makers as well as establishes energy conservation standards for otherclasses ofautomatic commercial ice makers. DOE has determined thatthe amended energy conservation standards for these products would result in significant conservation ofenergy and are technologicallyfeasible and economicallyjustified. Enclosed is our assessment ofDOE's compliancewith the procedural steps required by section 801 (a)(1)(B)(i) through (iv) oftitle 5with respect to the rule. Our review ofthe procedural steps taken indicates that DOE complied with the applicable requirements.

GA0-15-382R

### Ifyou have anyquestions aboutthis report orwish to contact GAO officials responsible forthe evaluation work relating to the subject matterofthe rule, please contact Shirley

### A. Jones, Assistant General Counsel, at (202) 512-8156.

Robert J. Cramer Managing Associate General Counsel Enclosure

cc: Daniel Cohen Assistant General Counsel for Legislation,

Regulation, and Energy Efficiency Departmentof Energy

Page2 GA0-15-382R /,I,•REPORT UNDER 5 U.S.C. 

### § 801(a)(2)(A) ON A MAJOR RULE ISSUED BY THE DEPARTMENT OF ENERGY ENTITLED ENCLOSURE

"ENERGY CONSERVATION PROGRAM: ENERGY CONSERVATION STANDARDS FORAUTOMATIC COMMERCIAL ICE MAKERS" (RIN: 1904-AC39)
(i) Cost-benefit analysis The Department of Energy (DOE) evaluated the benefits and costs to customers, the impact on manufacturers, and the national benefits and costs ofthis final rule. Forcustomers, DOE found thatthe average life-cycle cost (LCC) savings were positive for all equipment classes forwhich customerswere impacted by the newstandards. Using a real discount rate of9.2 percent, DOE estimated thatthe industry net presentvalue (NPV) for manufacturers ofautomatic commercial ice makers is $121.6 million in 2013 dollars. Underthe amended standards, DOE expects that manufacturers may lose up to 12.5 percent oftheir industry NPV, or approximately $15.1 million. DOE estimatesthatthis final rule will result in energysavings of8 percentforautomatic commercial ice makers. The cumulative national NPV oftotal customersavings ofthe amended standardsfor automaticcommercial ice makers in 2013 dollars ranges from $430 million (at a 7 percent discount rate) to $942 million (at a 3 percent discount rate). This NPVexpresses the estimated total value offuture operating cost savings minus the estimated increased installed costs for equipment purchased in the period from 2018-2047, discounted back to 2014. In addition, DOE expects the amended standards to have significant environmental benefits. The energy savings described above are estimated to result in cumulative emission reductions of 10.9 million metrictons of carbon dioxide, 16.2thousand tons ofnitrogen oxides, 0.1 thousand tons ofnitrous oxide, 47.4 thousand tons ofmethane, 0.03 tons ofmercury, and 9.3 thousand tons ofsulfurdioxide based on energy savings from equipment purchased overthe period from 2018-2047. DOE estimates the net present monetary value ofthe carbon dioxide emissions reduction is between $0.08 and $1.11 billion, expressed in 2013 dollars and discounted to 2014. Based on these analyses, DOE found the benefits to the nation ofthe amended standards (energy savings, consumer LCC savings, positive NPVofconsumer benefit, and emission reductions) outweigh the burdens (loss ofindustry NPV and LCC increases for some users of this equipment). DOE has concluded thatthe standards in this final rule represent the maximum improvement in energy efficiency that is both technologically feasible and economicallyjustified and would result in significant conservation ofenergy. (ii) Agency actions relevantto the Regulatory FlexibilityAct (RFA), 5 U.S.C. 

### §§ 603-605, 607, and 609 DOE performed afinal regulatory flexibility analysis on this final rule. This analysis included (1) a description and estimated number ofsmall entities regulated; (2) a description and estimate of compliance requirements; (3) adescription ofany duplication, overlap, and conflictwith other rules and regulations; (4) significant alternatives to the rule; and (5) responses to small business comments and comments from the Office ofAdvocacy.

GA0-15-382R(iiil Agency actions relevant to sections 

### 202-205 ofthe Unfunded Mandates Reform Act of 

### 1995. 2 U.S.C. 

### §§ 1532-1535 DOE has concluded thatthis final rule would likely require expenditures of

### $100 million or more on the private sector. Such expenditures may include: (1) investment in research and development and in capital expenditures by automatic commercial ice maker manufacturers in the years between the final rule and the compliance dateforthe new standards, and (2) incremental additional expenditures by consumers to purchase higher-efficiency automatic commercial ice makers, starting at the compliance date forthe applicable standard. (iv) Other relevant information or requirements under acts and executive orders Administrative Procedure Act, 

### 5 U.S.C. 

### §§ 

### 551 et seq. DOE initiated this rulemaking by publishing on itswebsite "Rulemaking Framework for Automatic Commercial Ice Makers" on November

### 4, 2010. 75 Fed. Reg. 

### 70,852 (Nov. 

### 19, 2010). DOE held public meetings on the framework on December 

### 16, 2010, and February 

### 16, 2012. 75 Fed. Reg. 

### 70,852 (Nov. 

### 19, 2010); 77 Fed. Reg. 

### 3404 (Jan. 

### 24, 2012). DOE also requested and received comments on the framework. On March 

### 17, 2014, DOE published a proposed rule. 

### 79 Fed. Reg. 

### 14,846. DOE held anotherpublic meeting on April 

### 14, 2014, and on September 

### 11, 2014, DOE published a notice ofdata availability. 

### 79 Fed. Reg. 

### 54,215. Paperwork Reduction Act (PRA), 

### 44 U.S.C. 

### §§ 

### 3501-3520 DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including commercial refrigeration equipment. 

### 76 Fed. Reg. 

### 12,422 (Mar. 

### 7, 2011). The collection-of-information requirement for the certification and recordkeeping is subjectto review and approval by the Office of Management and Budget (OMS) underthe Act. This requirement has been approved by OMS underOMS Control Number 

### 1910-1400. Public reporting burden forthe 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. Statutory authorization forthe rule DOE promulgated this final rule underthe authority ofsections 

### 6291 to 

### 6317 oftitle 

### 42, United States Code. Executive Order No. 

### 12,866 (Regulatory Planning and Review) DOE determined thatthis final rule is economically significant underthe Order and presented it to OMS for review. Executive Order No. 

### 13,132 (Federalism) On March 

### 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of regulations. 

### 65 Fed. Reg. 

### 13,735. The Energy Policy and Conservation Act of 

### 1975, as amended, (EPCA) governs and prescribes federal preemption ofstate regulations as to energy conservation forthe products thatare the subject ofthis final 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. DOE determined that no further action is required by the Order. Page 2 GA0-15-382R