March 12, 1999

Office of Hearings and Appeals

COMMENTS

U.S. Department of Energy

1000 Independence Avenue, SW

Washington, DC 20585

Attn: Mr. Fred Brown

Department of Consumer and Business Services

Toll Free: 1-800-221-8035

FAX: (503) 373-7806

Web site: www.cbs.state.or.us/ extemal/ooe/

BY FAX (202-426-1415) AND BY OVERNIGHT DELIVERY

Docket No. VEE-0054:

Comments of the OREGON OFFICE of ENERGY on

Amana Appliances Application for Exception from Refrigerator Standards

Dear Mr. Brown,

On February 18, 1999 Amana Appliances filed with the Department of Energy

(DOE) an Application for Exception (Application) to the energy efficiency standards

for refrigerators, refrigerator-freezers, and freezers that are established in 10 CFR

§ 430.32(a) and that go into effect on July 1, 2001 (the 2001 Standard). Amana's

Application was filed pursuant to 10 CFR Part 1003, Subparts A and B.

The Oregon Office of Energy

The Oregon Office of Energy (OOE) is a state agency responsible for establishing

state energy policy and, as part of the implementation of that policy, working with

DOE to enact and enforce federal energy efficiency standards for appliances,

including refrigerators, refrigerator-freezers, and freezers. The State of Oregon and

the Pacific Northwest have a long history of pursuing cost-effective energy

efficiency to displace more costly and environmentally damaging power generation.

Therefore, OOE has a direct interest in the amount of energy that will be saved by

the federal appliance efficiency standards; any reduction in savings from federal

standards means that additional power generation, with its associated adverse

economic and environmental impacts, will be necessary to meet our region's

electricity needs.

Because of the very limited time available for comment in this docket, there has been no

time to research the specific parts of the record supporting DOE's decision on the July

1, 2001 Refrigerator and Refrigerator/Freezer Standard. That record includes the

Office of Energy

625 Marion St. NE, Suite I

Salem, OR 97301-3742

Phone: (503) 378-4040

IL ia1

 EE-RM-93-801 COMMENT 336

regan Department of Consumer and Business Services 

. . , . ..: -, Office of Energy 

John A. Ki tzhaber, M.D., Governor 

!"-. t. : 625 Marion St. NE, Suite 1 

Salem, OR 97301-3742 

March 12, 1999 

Phone: (503) 378-4040 

Toll Free: 1-800-221-8035 

FAX: (503) 373-7806 

Web site: wwwcbs.state.or.us/external!ooe/ 

Office of Hearings and Appeals 

COMMENTS 

U.S. Department of Energy 

1000 Independence Avenue, SVV 

VVashington, DC 20585 

Attn: Mr. Fred Brown 

BY FAX (202-426-1415) AND BY OVERNIGHT DELIVERY 

Docket No. VEE-0054: 

Comments of the OREGON OFFICE of ENERGY on 

Amana Appliances Application for Exception from Refrigerator Standards 

Dear Mr. Brown, 

On February 18, 1999 Amana Appliances filed with the Department of Energy 

(DOE) an Application for Exception (Application) to the energy efficiency standards 

for refrigerators, refrigerator-freezers, and freezers that are established in 10 CFR 

§ 430.32(a) and that go into effect on July 1, 2001 (the 2001 Standard). Amana's 

Application was filed pursuant to 10 CFR Part 1003, Subparts A and B. 

The Oregon Office of Energy 

The Oregon Office of Energy (OOE) is a state agency responsible for establishing 

state energy policy and, as part of the implementation of that policy, working with 

DOE to enact and enforce federal energy efficiency standards for appliances, 

including refrigerators, refrigerator-freezers, and freezers. The State of Oregon and 

the Pacific Northwest have a long history of pursuing cost-effective energy 

efficiency to displace more costly and environmentally damaging power generation. 

Therefore, OOE has a direct interest in the amount of energy that will be saved by 

the federal appliance efficiency standards; any reduction in savings from federal 

standards means that additional power generation, with its associated adverse 

economic and environmental impacts, will be necessary to meet our region's 

electricity needs. 

Because of the very limited time available for comment in this docket, there has been no 

time to research the specific parts of the record supporting DOE's decision on the July 

1, 2001 Refrigerator and Refrigerator/Freezer Standard. That record includes the 

...o:r: 'C¢ 
Pg 2

Office of Hearings and Appeals

March 12, 1999

Federal Register Notice (10 CFR Part 430, Energy Conservation Program for Consumer

Products: Energy Conservation Standards for Refrigerators, Refrigerator/Freezers and

Freezers; Final Rule), the related Technical Support Document (TSD), and a substantial

public record of workshops, hearings and technical submissions. Our comments here,

while short on specific citations, are based on our first-hand knowledge of that record,

and intensive involvement in the rulemaking at issue. While in many areas we take no

issue with the situation as Amana describes it, we draw vastly different conclusions than

Amana with regard to the appropriateness and cost effectiveness of the'standard, and

the timing of its implementation.

The Amana Appliances Petition

In the "Purpose" section of its narrative, Amana states as its reason for the Application

"the potential unavailability of HFC-245fa" and goes on to cite a section of the DOE

Federal Register notice of the 2001 Standard (10 CFR Part 430, Energy Conservation

Program for Consumer Products: Energy Conservation Standards for Refrigerators,

Refrigerator/Freezers and Freezers; Final Rule, page 23108, column 3). As can be taken

from a reading of this section, it was written with a prospective view of blowing agent

availability and cost, but with a good deal of information in hand with regard to HFC245fa.

A second issue that Amana raises postulates a "competitive disadvantage" situation that

really hasn't to do with the availability of HFC-245fa, but rather asserts a potential harm

to Amana arising from competitors' continuing to use HCFC-141 b after January 1, 2003.

Of course, if Amana's predictions about HFC-245fa availability were to come true, then

competitive disadvantage is largely irrelevant. In other words, these two Amana

arguments are not additive, but rather are mutually exclusive.

The Oregon Office of Energy opposes the granting of the Exception applied for by

Amana. Amana has not demonstrated that it will, in fact, suffer any particular

hardship, burden or inequity as a result of complying with the 2001 Standard, much

less that such injury would be serious, gross or unfair. Amana fails to meet the

criteria for an exception for the following reasons:

1. Amana's arguments concerning the availability and performance of HFC-245fa as

a replacement blowing agent for HCFC-141b are founded entirely on speculation.

Should Allied Signal follow through with its plans to make adequate quantities of the new

blowing agent available at a price near that assumed by DOE in the analyses supporting

the new standard, then the entire foundation of the Application for Exception collapses.

 EE-RM-93-801 COMMENT 336

Pg 2 

Office of Hearings and Appeals 

March 12, 1999 

Federal Register Notice (10 CFR Part 430, Energy Conservation Program for Consumer 

Products: Energy Conservation Standards for Refrigerators, Refrigerator/Freezers and 

Freezers; Final Rule), the related Technical Support Document (TSD), and a substantial 

public record of workshops, hearings and technical submissions. Our comments here, 

while short on specific citations, are based on our first-hand knowledge of that record, 

and intensive involvement in the rulemaking at issue. While in many areas we take no 

issue with the situation as Amana describes it, we draw vastly different conclusions than 

Amana with regard to the appropriateness and cost effectiveness of the'standard, and 

the timing of its implementation. 

The Amana Appliances Petition 

In the "Purpose" section of its narrative, Amana states as its reason for the Application 

"the potential unavailability of HFC-245fa" and goes on to cite a section of the DOE 

Federal Register notice of the 2001 Standard (10 CFR Part 430, Energy Conservation 

Program for Consumer Products: Energy Conservation Standards for Refrigerators, 

Refrigerator/Freezers and Freezers; Final Rule, page 23108, column 3). As can be taken 

from a reading of this section, it was written with a prospective view of blowing agent 

availability and cost, but with a good deal of information in hand with regard to HFC245fa. 

A second issue that Amana raises postulates a "competitive disadvantage" situation that 

really hasn't to do with the availability of HFC-245fa, but rather asserts a potential harm 

to Amana arising from competitors' continuing to use HCFC-141 b after January 1, 2003. 

Of course, if Amana's predictions about HFC-245fa availability were to come true, then 

competitive disadvantage is largely irrelevant. In other words, these two Amana 

arguments are not additive, but rather are mutually exclusive. 

The Oregon Office of Energy opposes the granting of the Exception applied for by 

Amana. Amana has not demonstrated that it will, in fact, suffer any particular 

hardship, burden or inequity as a result of complying with the 2001 Standard, much 

less that such injury would be serious, gross or unfair. Amana fails to meet the 

criteria for an exception for the following reasons: 

1. Amana's arguments concerning the availability and performance of HFC-245fa as 

a replacement blowing agent for HCFC-141b are founded entirely on speculation. 

Should Allied Signal follow through with its plans to make adequate quantities of the new 

blowing agent available at a price near that assumed by DOE in the analyses supporting 

the new standard, then the entire foundation of the Application for Exception collapses. 
Pg 3

Office of Hearings and Appeals

March 12, 1999

a. In a November 5, 1996 letter to Mr. Chuck Samuels of the American Home

Appliance Manufacturers Association (AHAM), Mr. David Weidman of Allied

Signal discusses the prospects of his company's development of HFC-245fa as

an alternative blowing agent to HCFC-141b (copy attached). In the final

paragraph, Mr. Weidman describes the estimated time line for all of the activities

required to bring HFC-245fa to market. Today, all of the toxicity tests alluded to

have been successfully completed, testing for the insulation performance of foam

insulation blown with HFC245fa has been substantial and complete, and the

company is ready for the initial production and "usability" phase of the program.

While Allied Signal appears to be about a year behind the earlier projected time

line, there is clearly more than ample time remaining for full production to meet the

January 1, 2003 phase-out date for HCFC-141b.

b. While Amana correctly notes some of the advantages of HFC-245fa in section 3

of the Application, the "negatives" list actually amounts to a single fault - Amana's

dissatisfaction with the prospect of a sole source for this blowing agent (Allied

Signal). While we sympathize with any buyer faced with a sole source situation

for an important commodity, such circumstances are growing more numerous by

the month, and have become common in all sectors and at all levels in our

economy. And yet the economy presses on.

c. Amana is correct in stating that at this time there is no manufacturing facility for

HFC-245fa. But the scaling of a proposed new production facility is, after all, the

goal of Allied Signal in its negotiations with AHAM members. Amana has

presented no evidence or convincing argument that the manufacturing facility will

not be built. Nor has it provided any evidence to justify its assertion that only one

such plant will be built.

d. While we're not familiar with the status and terms of the negotiations of AHAM

members with Allied Signal , we found no compelling argument in Amana's

Application that suggests that an agreement will not be reached. Nor has Amana

convinced us that the terms of a final agreement will be those dictated by Allied

Signal.

e. The price for HFC-245fa cited by Amana (page 3 of the Application) was

anticipated in the DOE life cycle cost analysis for the new standard, and in no way

provides cause for rethinking DOE's decision. The TSD supporting the Final Rule

estimates that the added cost to consumers of meeting the new standard will be

$80. Approximately one quarter of this added cost is associated with the use of

HFC-245fa as the replacement blowing agent for HCFC-141b. So while we have

 EE-RM-93-801 COMMENT 336

Pg 3 

Office of Hearings and Appeals 

March 12, 1999 

a. In a November 5, 1996 letter to Mr. Chuck Samuels of the American Home 

Appliance Manufacturers Association (AHAM), Mr. David Weidman of Allied 

Signal discusses the prospects of his company's development of HFC-245fa as 

an alternative blowing agent to HCFC-141b (copy attached). In the final 

paragraph, Mr. Weidman describes the estimated time line for all of the activities 

required to bring HFC-245fa to market. Today, all of the toxicity tests alluded to 

have been successfully completed, testing for the insulation performance of foam 

insulation blown with HFC245fa has been substantial and complete, and the 

company is ready for the initial production and "usability" phase of the program. 

While Allied Signal appears to be about a year behind the earlier projected time 

line, there is clearly more than ample time remaining for full production to meet the 

January 1, 2003 phase-out date for HCFC-141 b. --

b. While Amana correctly notes some of the advantages of HFC-245fa in section 3 

of the Application, the "negatives" list actually amounts to a single fault - Amana's 

dissatisfaction with the prospect of a sole source for this blowing agent (Allied 

Signal). While we sympathize with any buyer faced with a sole source situation 

for an important commodity, such circumstances are growing more numerous by 

the month, and have become common in all sectors and at all levels in our 

economy. And yet the economy presses on. 

c. Amana is correct in stating that at this time there is no manufacturing facility for 

HFC-245fa. But the scaling of a proposed new production facility is, after all, the 

goal of Allied Signal in its negotiations with AHAM members. Amana has 

presented no evidence or convincing argument that the manufacturing facility will 

not be built. Nor has it provided any evidence to justify its assertion that only one 

such plant will be built. 

d. While we're not familiar with the status and terms of the negotiations of AHAM 

members with Allied Signal, we found no compelling argument in Amana's 

Application that suggests that an agreement will not be reached. Nor has Amana 

convinced us that the terms of a final agreement will be those dictated by Allied 

Signal. 

e. The price for HFC-245fa cited by Amana (page 3 of the Application) was 

anticipated in the DOE life cycle cost analysis for the new standard, and in no way 

provides cause for rethinking DOE's decision. The TSD supporting the Final Rule 

estimates that the added cost to consumers of meeting the new standard will be 

$80. Approximately one quarter of this added cost is associated with the use of 

HFC-245fa as the replacement blowing agent for HCFC-141b. So while we have 
Pg 4

Office of Hearings and Appeals

March 12, 1999

no reason to doubt Amana's assertions with regard to added manufacturing costs,

we do take issue with Amana's suggestion that these costs can not be passed on

to consumers, or that somehow this wasn't accounted for in the justification of the

Final Rule. Federal law requires DOE to examine the impact on consumers in

justifying its standard decision. The law also requires that DOE account for what

fraction of the added costs from the new standard can be passed on by

manufacturers, and to analyze the resulting financial impact on the manufacturers.

All of this was done. The negotiations leading to the consensus recommendation

to DOE, of which Amana was a part, considered these same issues as well.

f. While we won't argue Amana's point concerning the lack of HFC-245fa testing in

production quantities of product (bottom of page 3 of the Application), we do wish

to point out that the performance of production product almost always exceeds the

performance of prototype product, once the manufacturing process is fine-tuned.

In the spring of 1998, we followed through this process with another manufacturer

as their new refrigerator/freezer line was brought from initial to full production

volumes. Initial units fell significantly short of expectations in energy use

performance, but full production units exceeded expectations. These units

perform at or above the level of the 2001 Standard.

2. Since Amana has, in our opinion, failed to make a convincing case for

consideration of blowing agents other than HFC-245fa, the company's discussion of other

alternatives seems beside the point . While we recognize that the use of blowing agents

such as cyclopentane and HFC-134a result in a lowering of energy efficiency, the DOE

analysis was based on the best information available in early 1997 on alternative

blowing agents, and it considered these . The conclusion then was that HFC-245fa

represented the most promising and likely choice, and much information was gathered

about probable price , testing time lines, and availability . All of the information assumed

then has been validated to a remarkable degree in the interim. Allied Signal could not

now be negotiating production volumes with AHAM members if it had not.

We also note here that Amana cites a seriously dated passage from DOE's 1995

Proposed Rule in its attempt to justify a 10 percentage point increase in allowable energy

use over that required by the 2001 Standard. However, the cited text was simply a

proposal made by DOE at that time, and was based on very preliminary information with

regard to specific alternative blowing agents, their cost, their performance, or their

availability. The Final Rule was based on much better, more recent information in this

area, and is much better founded than the passage that Amana cites.

We are aware that maximum allowable refrigeratorlfreezer energy consumption is based

 EE-RM-93-801 COMMENT 336

Pg 4 

Office of Hearings and Appeals 

March 12, 1999 

no reason to doubt Amana's assertions with regard to added manufacturing costs, 

we do take issue with Amana's suggestion that these costs can not be passed on 

to consumers, or that somehow this wasn't accounted for in the justification of the 

Final Rule. Federal law requires DOE to examine the impact on consumers in 

justifying its standard decision. The law also requires that DOE account for what 

fraction of the added costs from the new standard can be passed on by 

manufacturers, and to analyze the resulting financial impact on the manufacturers. 

All of this was done. The negotiations leading to the consensus recommendation 

to DOE, of which Amana was a part, considered these same issues as well. 

f. While we won't argue Amana's point concerning the lack of HFC-245fa testing in 

production quantities of product (bottom of page 3 of the Application), we do wish 

to point out that the performance of production product almost always exceeds the 

performance of prototype product, once the manufacturing process is fine-tuned. 

In the spring of 1998, we followed through this process with another manufacturer 

as their new refrigerator/freezer line was brought from initial to full production 

volumes. Initial units fell significantly short of expectations in energy use 

performance, but full production units exceeded expectations. These units 

perform at or above the level of the 2001 Standard. 

2. Since Amana has, in our opinion, failed to make a convincing case for 

consideration of blowing agents other than HFC-245fa, the company's discussion of other 

alternatives seems beside the point. While we recognize that the use of blowing agents 

such as cyc\opentane and HFC-134a result in a lowering of energy efficiency, the DOE 

analysis was based on the best information available in early 1997 on alternative 

blowing agents, and it considered these. The conclusion then was that HFC-245fa 

represented the most promising and likery choice, and much information was gathered 

about probable price, testing time lines, and availability. All of the information assumed 

then has been validated to a remarkable degree in the interim. Allied Signal could not 

now be negotiating production volumes with AHAM members if it had not. 

We also note here that Amana cites a seriously dated passage from DOE's 1995 

Proposed Rule in its attempt to justify a 10 percentage point increase in allowable energy 

use over that required by the 2001 Standard. However, the cited text was simply a 

proposal made by DOE at that time, and was based on very preliminary information with 

regard to specific alternative blowing agents, their cost, their performance, or their 

availability. The Final Rule was based on much better, more recent information in this 

area, and is much better founded than the passage that Amana cites. 

We are aware that maximum allowable refrigeratorlfreezer energy consumption is based 
Pg 5

Office of Hearings and Appeals

March 12, 1999

on volume (as is that of water heaters); it should not be otherwise. However, it would be

wrong to assume that product internal volume reduction is the only way to achieve the

energy efficiency performance required by the new standard. Amana dismisses a

number of the other technology options at its disposal (improved heat exchangers, more

efficient motors or compressors, etc.). But We wish to point out that Amana has been

manufacturing products for several years now that meet (their S6 line), and nearly meet

(their S5/V5 line), this level of performance, using technologies that are now at least five

years old. Given this record of accomplishment, we find it hard to believe that Amana will

find it impossible or too costly to compensate for the 2-4 percent energy efficiency

penalty that might result from the use of HFC-245fa as a blowing agent (2-4% is the

worst case testing result so far for insulation blown with HFC-245fa).

3. We acknowledge Amana's concern with regard to some level of competitive

disadvantage that might result if some of its competitors continue to use HCFC-141b in

products manufactured outside the United States (section 5 of the Application).

However, several points not raised by Amana are relevant here. First, only a limited

number of products are manufactured in Mexico and Canada , and these products

comprise only a fraction of these manufacturers ' product lines. Second, this advantage

is temporary, lasting only until HCFC-141b is phased out everywhere. Third, the cost

penalty is small ($9-12), as pointed out by Amana , and should not result in a significant

level of cost differentiation of product in the marketplace. And even that small differential

may disappear if manufacturers of HCFC-141b take advantage of the higher price of

alternatives to raise their prices.

In addition , we not at all persuaded that decisions to locate a manufacturing plant within

or outside the U.S. will be made on the basis of a $9-12 cost advantage conferred by

choice of blowing agents. One need only examine the history of factory relocation to

Mexico to conclude that more significant advantages stem from labor and infrastructure

cost savings. For instance, blowing agents are not an issue for fluorescent lamp ballast

manufacturers, but most production for these devices has been moved overseas. But

these larger advantages have thus far failed to move most of the refrigerator/freezer

manufacturing out of the U.S. If such decisions are taken , it would be a long stretch of

logic to attribute them to blowing agent cost differentials.

3. We strongly dispute the assertion by Amana that, "The DOE 7/1/01

Refrigerator/Freezer Standards were negotiated but not financially justified." First, the

standards were not negotiated. What was negotiated was a consensus recommendation

for a standard, and Amana was a willing stakeholder in that negotiation. Once DOE

received that recommendation, it was still obligated under NAECA to justify its decision

as the highest standard that is technologically feasible and economically justified, and

 EE-RM-93-801 COMMENT 336

Pg S 

Office of Hearings and Appeals 

March 12, 1999 

on volume (as is that of water heaters); it should not be otherwise. However, it would be 

wrong to assume that product internal volume reduction is the only way to achieve the 

energy efficiency performance required by the new standard. Amana dismisses a 

number of the other technology options at its disposal (improved heat exchangers, more 

efficient motors or compressors, etc.). But we wish to point out that Amana has been 

manufacturing products for several years now that meet (their S6 line), and nearly meet 

(their SSNS line), this level of performance, using technologie~ that are now at least five 

years old. Given this record of accomplishment, we find it hard to believe that Amana will 

find it impossible or too costly to compensate for the 2-4 percent energy efficiency 

penalty that might result from the use of HPC-24Sfa as a blowing agent (2-4% is the 

worst case testing result so far for insulation blown with HFC-24Sfa). 

3. We acknowledge Amana's concern with regard to some level of competitive 

disadvantage that might result if some of its competitors continue to use HCFC-141b in 

products manufactured outside the United States (section 5 of the Application). 

However, several points not raised by Amana are relevant here. First, only a limited 

number of products are manufactured in Mexico and Canada, and these products 

comprise only a fraction of these manufactun~rs' product lines. Second, this advantage 

is temporary, lasting only until HCFC-141b is phased out everywhere. Third, the cost 

penalty is small ($9-12), as pointed out by Amana, and should not result in a significant 

level of cost differentiation of product in the marketplace. And even that small differential 

may disappear if manufacturers of HCFC-141b take advantage of the higher price of 

alternatives to raise their prices. 

In addition, we not at all persuaded that decisions to locate a manufacturing plant within 

.or outside th.e U.S. will be made on the basis of a $9-12 cost advantage conferred by 

choice of blowing agents. One need only examine the history of factory relocation to 

Mexico to conclude that more significant advantages stem from labor and infrastructure 

cost savings. For instance, blowing agents are not an issue for fluorescent lamp ballast 

manufacturers, but most production for these devices has been moved overseas. But 

these larger advantages have thus far failed to move most of the refrigerator/freezer 

manufacturing out of the U.S. If such decisions are taken, it would be a long stretch of 

logic to attribute them to blowing agent cost differentials. 

3. We strongly dispute the assertion by Amana that, "The DOE 7/1/01 

Refrigerator/Freezer Standards were negotiated but not financially justified." First, the 

standards were not negotiated. What was negotiated was a consensus recommendation 

for a standard, and Amana was a willing stakeholder in that negotiation. Once DOE 

received that recommendation, it was still obligated under NAECA to justify its decision 

as the highest standard that is technologically feasible and economically justified, and 
Pg 6

DOE Office of Hearings and Appeals

March 12, 1999

to examine the other criteria specified by law. These other criteria included manufacturer

and competitive impacts. As pointed out above, the decision was made using the most

recent information available with regard to blowing agent cost and availability. And those

assumptions have been borne out to a remarkable degree today.

Amana states that, "In effect, this states that the DOE could financially justify

approximately a 20% reduction in energy consumption in refrigerators and freezers;..."

We have no idea what document or phrase "this" is, but our reading of the analysis

supporting the Final Rule is that the 30% reduction in energy use, and the cost to achieve

it, provided a 4-year payback to consumers (see the TSD, life cycle cost analysis

section). Given this, and the results of the analyses for other criteria (manufacturer and

competitive impact, for instance), all of which were used and understood by the parties

negotiating the consensus recommendation, there is clear justification for the new

standard level. We find no reason whatsoever to believe that the same decision would

not be reached today.

4. While Amana's discussion of internal volume as a key market driver is interesting,

the subtle assumption in its comparisons of HFC- 134a as the alternative blowing agent

yields a more drastic impact on internal volume than is warranted . If one assumes HFC245fa instead , the impact on volume is quite negligible . As we find no reason believe

that HFC-245fa won't be available, we find no merit in Amana's arguments based on

HFC-134a.

Likewise, we find little merit in Amana 's discussion of other technology options for

improving the overall efficiency of their product line. As we pointed out earlier, Amana,

using older technologies, has already manufactured product that meets, and nearly

meets, the new standard. Other manufacturers are using these technologies . Maytag

now manufactures versions of almost all of its products that exceed the efficiency levels

required by the 2001 standard , using some of the same technologies , reliably, that

Amana disparages. Amana notes a $5 premium for a permanent split capacitor motor

(PSC motor) that provides a 1-2% improvement in energy efficiency. It is our belief,

based on the extensive testing already done, that this 1-2% improvement is virtually all

that is needed to overcome the energy penalty that might be imposed by the use of HFC245fa as a blowing agent. In the long term, there may be no penalty at all to overcome.

 EE-RM-93-801 COMMENT 336

Pg 6 

DOE Office of Hearings and Appeals 

March I 2, 1999 

to examine the other criteria specified by law. These other criteria included manufacturer 

and competitive impacts. As pointed out above, the decision was made using the most 

recent information available with regard to blowing agent cost and availability. And those 

assumptions have been borne out to a remarkable degree today. 

Amana states that, "In effect, this states that the DOE could financially justify 

approximately a 20% reduction in energy consumption in refrigerators and freezers; ... " 

We have no idea what document or phrase "this" is, but our reading of the analysis 

supporting the Final Rule is that the 30% reduction in energy use, and the cost to achieve 

it, provided a 4-year payback to consumers (see the TSD, life cycle cost analysis 

section). Given this, and the results of the analyses for other criteria (manufacturer and 

competitive impact, for instance), all of which were used and understood by the parties 

negotiating the consensus recommendation, there is clear justification for the new 

standard level. We find no reason whatsoever to believe that the same decision would 

riot be reached today. 

4. While Amana's discussion of internal volume as a key market driver is interesting, 

the subtle assumption in its comparisons of HFC-134a as the alternative blowing agent 

yields a more drastic impact on int~rnal volume than is warranted. If one assumes HFC245fa instead, the impact on volume is quite negligible. As we find no reason believe 

that HFC-245fa won't be available, we find no merit in Amana's arguments based on 

HFC-134a. 

Likewise, we find little merit in Amana's discussion of other technology options for 

improving the overall efficiency of their product line. As we pointed out earlier, Amana, 

using older technologies, has already manufactured product that meets, and nearly 

meets, the new standard. Other manufacturers are using these technologies. Maytag 

now manufactures versions of almost all of its products that exceed the efficiency levels 

required by the 2001 standard, using some of the same technologies, reliably, that 

Amana disparages. Amana notes a $5 premium for a permanent split capacitor motor 

(PSC motor) that provides a 1-2% improvement in energy efficiency. It is our belief, 

based on the extensive testing already done, that this 1-2% improvement is virtually all 

that is needed to overcome the energy penalty that might be imposed by the use of HFC245fa as a blowing agent. In the long term, there may be no penalty at all to overcome. 
Pg 7

DOE Office of Hearings and Appeals

. aren 1.. 1 *Y1J 1 2 999

In Conclusion:

We urge the Office of Hearings and Appeals to reject Amana's Application for Exception.

Amana's arguments concerning the availability and price of HFC-245fa are

unconvincing. In fact, this Application resembles nothing so much as one part of

a negotiating strategy, as Amana's discussions with Allied Signal are ongoing.

® The Exception terms applied for (a ten percentage point increase in allowable

energy consumption, for all products, for nearly nine years) amount to a drastic

remedy for a potential minor risk.

The worst energy penalty implied by Amana's arguments is an 8 percent

reduction in energy performance if cyclopentane is used as a blowing

agent, assuming that no other cost-effective efficiency-enhancing design

options are used to reduce this penalty. In fact, the blowing agent penalty

will be substantially less than this. Like other manufacturers have already

demonstrated , Amana should have no trouble making up at least some of

this shortfall, were it to occur.

There is no reason to assume that an exception should be granted for

Amana's entire product line. As manufacturers , including Amana, have

argued in the past, energy performance improvements are more difficult for

some models than others. Amana has failed to take account of this fact

anywhere in its arguments.

The 8'/ year Exception term applied for is far too long, and applied for too

soon. The recent history of refrigerator technology upgrades demonstrates

that significant advances occur in a 3-5 year cycle. There is every reason

to believe that whatever barriers to achieving a 30% performance

improvement exist today will be overcome well before 2005. In fact, a

rulemaking for the next standard could conceivably be underway by then.

The year 2010 is significant only as the next mark on the international time

line for the phase-out of HCFC-141b. In other words, 2010 should be

largely irrelevant to the refrigerator/freezer industry in North America. On

an additional note, Amana's application is premature. It is too early to be

able to conclusively demonstrate that suitable alternative blowing agents

will not be available, or that there will be energy efficiency penalties large

enough that they can not be overcome using other component upgrades.

 EE-RM-93-801 COMMENT 336

Pg 7 

DOE Office of Hearings and Appeals "'\ I' 1 1" .. Ar~,~ .\lareD j'::. J ';J';J';J 

In Conclusion: 

We urge the Office of Hearings and Appeals to reject Amana's Application for Exception. 

• Amana's arguments concerning the availability and price of HFC-245fa are 

unconvincing. In fact, this Application resembles nothing so much as one part of 

() negotiating strategy, as Amana's discussions with Allied Signal are ongoing. 

.. The Exception terms applied for (a ten percentage point increase in allowable 

energy consumption, for all products, for nearly nine years) amount to a drastic 

remedy for a potential minor risk. __ 

The worst energy penalty implied by Amana's arguments is an 8 percent 

reduction in energy performance if cyclopentane is used as a blowing 

agent, assuming that no other cost-effective efficiency-enhancing design 

options are used to reduce this penalty. In fact, the blowing agent penalty 

will be substantially less than this. Like other manufacturers have already 

demonstrated, Amana should have no trouble making up at least some of 

this shortfall, were .it to occur. 

There is no reason to assume that an exception should be granted for 

Amana's entire product line. As manufacturers, including Amana, have 

argued in the past, energy performance improvements are more difficult for 

some models than others. Amana has failed to take account of this fact 

anywhere in its arguments. 

The 8Y2 year Exception term applied for is far too long, and applied for too 

soon. The recent history of refrigerator technology upgrades demonstrates 

that significant advances occur in a 3-5 year cycle. There is every reason 

to believe that whatever barriers to achieving a 30% performance 

improvement exist today will be overcome well before 2005. In fact, a 

rulemaking for the next standard could conceivably be underway by then. 

The year 2010 is significant only as the next mark on the international time 

line for the phase-out of HCFC-141b. In other words, 2010 should be 

largely irrelevant to the refrigerator/freezer industry in North America. On 

an additional note, Amana's application is premature. It is too early to be 

able to conclusively demonstrate that suitable alternative blowing agents 

will not be available, or that there will be energy efficiency penalties large 

enough that they can not be overcome using other component upgrades. 
Pg 8

DOE Office of Hearings and Appeals

March 12. 1999

Amana's potential exposure to competitive impacts due to blowing agent

performance and cost is minimal, and is considerably outweighed by other factors

affecting manufacturers' financial and market positions. There is no basis for

assuming an impact on U.S. manufacturing jobs caused by such small cost

differences.

This concludes our comments at this time. Pursuant to 10 CFR § 1003.9(b), I certify that

I am a duly authorized representative of the Oregon Office of Energy.

Sincerely,

Charlie Stephens

Policy Analyst

Conservation Division

503 378-4298

 EE-RM-93-801 COMMENT 336

" . 

Pg 8 

DOE Office of Hearings and Appeals 

March 12, 1999 

• Amana's potential exposure to competitive impacts due to blowing agent 

performance and cost is minimal, and is considerably outweighed by other factors 

affecting manufacturers' financial and market positions. There is no basis for 

assuming an impact on U.S. manufacturing jobs caused by such small cost 

differences. 

This concludes our comments at this time. Pursuant to 10 CFR § 1003.9(b), I certify that 

I am a duly authorized representative of the Oregon Office of Energy. 

Sincerely, 

a~' iJrt---

Charlie Stephens 

Policy Analyst 

Conservation Division 

503 378-4298 
.W.

H

David N. Weidman

YreFidrnc

Tlucwinc Products

Mr. Charles A. Samuels

Government Relations Counsel

Association of Home Appliance Manufacturers

701 Pennsylvania Avenue, N W

Suite 900

Washington, DC 20004

Dear Chuck:

MJV 0, lye 1=.59Prt ii1?4 . P.03

Auicdslgnal Inc . 201 455 3611

P.U. Box 1053

Mottistowa, NJ 07962.1053

201 455 2759 Fa

November 5, 1996

AlliedSignal has identified HFC 245fa as the most likely replacement product for

HCFC 141b in appliance systems and boardstoek. IIFC 245fa has outstanding energy

efficiency characteristics that should lead to significant environmental benefits.

As we discussed at the CFC Conference in Washington, DC, the

commercialization process has some critically important steps that have to be taken

before HFC 245fa, or any other product, can be said to be commercially available. I want

AHAM members to understand how we see the timetable for the commercialization of

1IFC 245fa today. I want to emphasire "today" because, as we discussed, it's impossible

to predict with complete accuracy what the future holds.

Our view of the world is that toxicity, manufacturability, and what I call usability

are the three critical steps we have to address. With regard to toxicity testing, we have

completed the 28-day test which came out well and expect to see the results of the 90-day

test around December l st. We will review those results with AlliedSignal's Risk

Assessment Committee, EPA and potential users of the product.. At that point, we have

to decide whether more tox testing, such as a two generation study is needed, or whether

we arc confident enough in the results to move forward.

Subsequently, we expect food migration studies to be conducted by appliance

manufacturers. These studies will be completed and reviewed by the GRAS committee,

followed by recommendations to the FDA. We expect this process to be completed

within about a year from now.

 EE-RM-93-801 COMMENT 336

'-

.1 4IliedSignai 

David N. Weidman 

f'rffi(i(-n( 

Fluorine Products 

".J" 

Attkd$lgnal Inc. 

P.O. Box 1053 

M~tO'illo'1t, NJ 07962-1 05~ 

November S. 1996 

Mr. Charles A. Samuels 

Government Relations Counsel 

Association of Home Appliance Manufacturers 

701 Pennsylvania Avenue, NW 

Suite 900 

Washington, DC 20004 

DeuChuck: 

. 201 455 }(iJ 1 

201 -(55 2759 fax 

AlJiedSjgnal hac; identified HFC 24Sfa as the most likely replacement product for 

HCFC 14tb in appliance systems and boardstock.. IIFC 24Sfa bas outstanding ~ergy 

efficiency characteristics that should l:ad to siJ.,'llificant environmental benefits. 

As we diseu.~ at the CFC Conference in Washington, DC, the 

commercialization process h:as sonle critically jmportant steps that have to be ~en 

before HFe 24Sfa. or any other product. can be said to be commercially available. I want 

AHAM members to understand how we see the timetable for the commercialization of 

lIFe 24Sfa today. J want to emphasi~.e "today" because, as we di~usscd, it's impossible 

to predict with complete accuracy what the ·future holds. 

Ow- view of the world is that toxicity, manufacturability, and what I call usability 

arc the three critical steps we have to address. With regard to toxicity testing. we have 

completed the 28-day test which came out wen and expect to see the results ofilie 9O-day 

test around December J sL We will review those results with AllicdSignal's Risk 

Assessment Committee, EPA and potential users of the product.. At th~ point, we have 

to decide whether more tox testing, such a.c; a two generation study is needed, or whether 

we arc confident enough in the results to move fo~. 

Subsequently. we expect food migration studies to be conducted by appliance _ 

manufacturers. These studies wi)) be completed and reviewed by the GRAS committee, 

fol1owed by recommendations to the FDA. We expect this process.to be completed 

within about a year from now. 
6

_2_

On the manufacturing side, we have significant work ahead of us. Presently we

manufacture HI'C 245fa at a pilot plant in our Fluorine Research Center in Buffalo, New

York. We will need to build a manufacturing plant to support the needs of the industry,

We are still optimizing the manufacmring process and evaluating different locations for

customizing. As we go forward with engineering and design, we will put together a

capital request to our management for constructing an HFC 245fa plant. Like all capital

requests it will be judged on the basis of its return to AlliedSignal's shareholders. We

won't know the cost of the facility until we get much deeper into the engineering and

design work.

The final point to make is in regard to what I will call usability . Once we have a

manufacturing facility running, we will ship commercial grade quantities of product to

customers to allow them to qualify AllicdSignal 's HFC 245fa. We will also be

optimizing our process because an important lesson we have learned during the CFC

phase out is that the substitutes are more challenging to-manufacturz:

Today we believe that the timeline that insults from these events, if all goes well,

is AlliedSignal investing in a facility in early 1998, having it begin production in late

1999, early 2000, and delivering products shortly after that time. We see a ramp up in

capacity taking some time as customers qualify product and make their necessary

investments to use HFC 245fa. For these reasons, we believe that the phase out date for

HCPC 141b in 2003 is still appropriate as our capacity ramps up and our customers

change out will take some time.

Chuck, I would be happy to meet with you to discuss any points in this letter or

any other questions you may have about HI?C 245fa

Sincerely,

 EE-RM-93-801 COMMENT 336

... -'....0 .... ' .-...ar-... ,HJ., ("'" r-. ~ 

-2-

On the manufacturing side, we have significant work ahead of us. Presently we 

manufacture Hl~C 245fa at 8 pilot plant in our Huorine Research Center in Buffalo. New 

York. We will need to build a manufacturing plant to support the needs ofthc industry, . 

We are still optimizing the manufacturing process and eva1usting different locations for 

customizing. As we go forward with engineering and design, we wiJl put tOgether a 

capital request to our management for constructing an HFC 24S{a planl Like all capital 

requests it win be judged on the basis of its return to AlliedSignal's shareholders. We 

won't know the cost of the facility untiJ we get much deeper into the engineering and 

design work. 

The final point to make is in regard to what I will call usability. Once we have a 

manufacturing facility nmning, we win ship commercial grade quantities of product to 

customers to allow them to qualify AUicdSignaJ's HFC 245fa. We will also be , 

optimizing our process because an important lesson we have learned during the CFC' 

phase out is that the substitutes are more chaJJenbrlng to·manufactun:: 

Today we hcHcve that the tjmcline that results from these events, if all goes well, 

is AlliedSignal iqvesting in a facility in early 1998, having it begin production in late 

1999, early 2000, and delivering products shortly after that time. We see a ramp up in 

capacity taking some time as customers qualify prodU¢ and make their necessary . 

jnvestments to use HFC 24Sfa. For these reasons, we believe that the phase out date for 

HCFC 14lb in 2003 is still approprime as our capacity nunps up IUld our customers 

change out will take some time. 

Chuck. I would be happy to meet with you to discuss any points in this letter or 

any other questions you may have about HFC 245fa. 

Sincerely. 

~1'J+w:-- N. Weidman 

1 

\ 

.-"\ '