### After a regulatory action has been completed, Executive Order 12866 requires agencies to identify the substantive changes between the draft submitted to Office of Information and Regulatory Affairs (OIRA) for review and the action subsequently announced, and to identify those changes made at the suggestion or recommendation of OIRA. The document below provides more information.1 CRE NOPR ECS OMB Compare 

### .docx [6450-01-P]

DEPARTMENT OF ENERGY

10 CFR Part 43 1

[Docket Number EERE

- 2010

- BT

- STD

- 0003]

RIN: 1904

- AC19
Energy Conservation Program: Energy Conservation Standards for Commercial Refrigeration Equipment

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 commercial refrigeration equipment

. (CRE)

. 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 commercial refrigeration equipment. The notice also announces a public meeting to receive comment on these proposed standards and associated analyses and results.2 CRE NOPR ECS OMB Compare 

### .docx DATES: DOE will hold a public meeting on [Day of week, Month, Day, Year] , from 9 a.m. to 4 p.m ., in Washingt on, 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.

DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and aft er the public meeting, but no later than [ INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER ]. See section VII , “ Public Participation ,” for details.

ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room [NUMBER] , 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
S tandards for C ommercial R efrigeration E quipment and provide docket number EE RE

2010- BT

- STD -0003 and/or regulatory information number (RIN) 1904- AC19

. Comments may be submitted using any of the following methods:
1. Federal eRulemaking Portal : www.regulations.gov

. Follow the instructions for submitting comment s.3 CRE NOPR ECS OMB Compare 

### .docx 2. E mail : CRE -2010- STD -0003@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, Ma ilstop 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 i t is not necessary to include printed copies.

Written comments regarding the burden-hou r 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 th e methods listed above and by e mail to TBD @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 those4 CRE NOPR ECS OMB Compare 

### .docx containing information that is exempt from public disclosure, may not be publicly available.

A link to the docket webpage can be found at : http://www.regulations.gov/#!docketDetail;D=EERE -2010- BT

- STD -0003. This web page will conta in a link to the docket for this notice on the regulations.go v site. The regulations.gov webpage 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. Charles Llenza , U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE -2J, 1000 Independence Avenue, SW., Washington, DC 20585 -0121 . Telephone: ( 202) 586-2192. E mail: commercial_refrigeration_e quipment@EE.Doe.Gov

.

Ms. Jennifer Tiedeman, U.S. Department of Energy, Office of the General Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Telephone: (202) 287-6111 . Email: Jennifer.Tiedeman@hq.doe.gov

.5 CRE NOPR ECS OMB Compare 

### .docx 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 Commercial Refrigeration Equipment III. General Discussion A. Test Procedures and Normalization Metrics 1. Test Procedures 2. Normalization Metrics B. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels C. Energy Savings 1. Determination of Savings 2. Significance of Savings D. 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. January 2009 Final Rule Equipment 3. Normalization Metrics 4. Treatment of Blast Chillers, Thawing Cabinets, Prep Tables, Salad Bars, and Buffet Tables 5. Dedicated Remote Condensing Units 6. Small Units 7. Consideration of Impact of Amended Standards 8. CO 2 

### Cascade Systems6 CRE NOPR ECS OMB Compare 

### .docx 9. Coverage of Existing Cases Undergoing Refurbishments or Retrofits 10. Components Shipped as After

- Market Additions 11. Definition of Hybrid Equipment 12. Coverage of Commercial Refrigeration Equipment with Drawers B. Test Procedures C. Market and Technology Assessment 1. Equipment Classes

a. Equipment Classification b. Application Temperature Equipment c. Open Cases d. Service Over Counter Equipment 2. Technology Assessment a. Technologies Applicable to All Equipment b. Technologies Relevant Only to Equipment with Doors c. Technolo gies Applicable Only to Equipment without Doors d. Self

- Contained Equipment Technologies D. Screening Analysis E. Engineering Analysis 1. Representative Equipment for Analysis

a. Representative Unit Selection b. Baseline Models 2. Design Options 3. Refrigerants 4. Cost Assessment Methodology a. Teardown Analysis b. Cost Model c. Manufacturer Production Cost d. Co st

- Efficiency Relationship e. Manufacturer Markup f. Shipping Costs g. Manufacturer Interviews 5. Energy Consumption Model a. Energy Consumption Model Results b. Anti

- Sweat Heater Power c. Evaporator Fan Motor Power d. Condenser Energy Consumption e. Evaporator Coil Design F. Markups Analysis 1. Baseline and Incremental Markups 2. Distribution Channel Market Shares G. Energy Use Analysis H. Life

- Cycle Cost Analysis 1. Effect of Current Standards 2. Equipment Cost 3. Installation , Maintenance, and Repair Costs a. Maintenance and Repair Costs by Efficiency Level7 CRE NOPR ECS OMB Compare 

### .docx b. Maintenance and Repair Cost Annualization c. Maintenance Cost Estimates d. Refrigerant Costs e. Repair Costs 4. Annual Energy Consumption 5. Energy Prices 6. Energy Price Projections 7. Equipment Lifetime 8. Discount Rates 9. Compliance Date of Standards 10. Base- Case and Standards

- Case Efficiency Distributions 11. Inputs to Payback Period Analysis 12. Rebuttable

- Presumption Payback Period I. National Impact Analysis – National Energy Savings and Net Present Value 1. Shipments

a. VOP.RC.L Shipments b. Shipments by End User Type c. Shipments Forecasts 2. For ecasted Efficiency in the Base Case and Standards Cases 3. National Energy Savings 4. Net Present Value of Customer Benefit 5. Benefits from Effects of Amended Standards on Energy Prices J. Customer Subgroup Analysis K. 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. Testing and Certification b. Cumulative Regulatory Burden c. Small Manufacturers d. Manufacturer Markup 4. Manufacturer Interviews a. Enforcement b. Certification and Compliance Costs c. Disproportionate Impact on Small Businesses d. Potential Loss of Product Uti lity and Decrease in Food Safety L. Employment Impact Analysis M. Utility Impact Analysis N. Emissions Analysis O. 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 Analys es c. Current Approach and Key Assumptions8 CRE NOPR ECS OMB Compare 

### .docx 2. Valuation of Other Emissions Reductions P. Regulatory Impact Analysis V. Analytical Results A. Trial Standard Levels 1. Trial Standard Level Formulation Process and Criteria 2. Trial Standard Level Equations B. Econo mic 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. 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 O ther 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 Meeting9 CRE NOPR ECS OMB Compare 

### .docx D. Submission of Comments E. Issues on Which DOE Seeks Comment 1. Primary and Secondary Equipment Classes 2. Design Option and Core Case Costs 3. Offset Factors 4. Extension of Standards 5. Types of Refrigerant Analyzed 6. Distribution Channel Market Shares and Markups 7. Market Shares of Efficiency Levels 8. Maintenance and Repair Costs at Higher Efficiency Levels. 9. Impact of Amended Standards on Future Shipments 10. Small Businesses VIII. Approval of the Office of the Secretary

I. Summary of the Proposed Rule Title III, Part C of the Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94

- 163 (42 U.S.C. 6311 -6317, as codified), added by Pub. L. 95-619, Title IV, section 441(a), established the Energy Conservation Program for Certain Industrial Equipment, a program covering certain industrial equipment, which includes the commerci al refrigeration equipment that is the focus of this notice. 1 , 2

1 For editorial reasons, upon codification in the U.S. Code, Part C was re

- designated Part A

- 1. 

### EPCA specifies that any new or amended energy conservation standard that DOE prescribes for the equipment covered shall be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy (Secretary) determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) Furthermore, EPCA mandates that the new or amended standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(e)(1)) In accordance with these and other statutory criteria discussed in this notice, DOE proposes to adopt amended energy conservation

2 All references to EPCA in this document refer to the statute as amended by the American Energy Manufacturing Technical Corrections Act (AEMTCA), Pub. L. 112

- 210 (Dec. 18, 2012)

.10 CRE NOPR ECS OMB Compare 

### .docx standards for commercial refrigeration equipment. The proposed standards, which consi st of m aximum d aily e nergy c onsumption (MDEC) values as a function of either refrigerated volume or total display area (TDA), are shown in Table I.1

. DOE proposes that the standards propos ed in this NOPR , if adopted, would apply to all equipment listed
in Table I.1 that is manufactured in, or imported into, the United States on or after 3 years following the publication date of the final rule , or January 1, 2016

. . (42 U.S.C. 6313(c)( 5 6 )(C)) For the NOPR analysis, DOE assume d a publication date in 2014 for th is final rule and a compliance date in 2017 for the amended standards established by the final rule.

Table I.1 Proposed Energy Conservation Standards for Commercial Refrigeration Equipment ( Assumes Compliance Beginning January 1, 2016 ) in 2017 Equipment Class † * Propos ed Standa

rd Level *,

** **, † E q ui p m en t Cl as s † P r o p os e d St a n d a r d L e v el

VCT.RC.L 0.43 x × TDA + 2.03 V O P. R C. I 2. 6 8 x T D A + 8. 0 8
VOP.RC.M 0. 76 x 61 × S V 2. 1 Comment [A1]: Revision requested by OIRA. Deleted Cells Deleted Cells11 CRE NOPR ECS OMB Compare 

### .docx TDA + 3. 76 03 O. R C. L 1 x T D A + 6. 3 6

SVO.RC.M 0. 77 x 63 × TDA + 2. 94 41 S V O. R C. I 2. 6 8 x T D A + 8. 0 8

HZO.RC.L 0.57 x × TDA + 6.88 H Z O. R C. I 0. 7 2 x T D A + 8. 7 4

HZO.RC.M 0.35 x × TDA + 2.88 V O P. S C. L 4. 2 1 x T D A + 1 1. 4

VCT.RC.M 0.08 x × TDA + 0.72 V O P. S C. I 5. 3 5 x T D A + 1 4. 4 8
VOP.RC.L 2.11 x × TDA + S V 4. 112 CRE NOPR ECS OMB Compare 

### .docx 6.36 O. S C. L 2 x T D A + 1 0. 9 3

SOC.RC.M 0. 49 x 39 × TDA + 0. 1 08 S V O. S C. I 5. 2 3 x T D A + 1 3. 8 8

VOP.SC.M 1. 68 x 51 × TDA + 4. 54 09 H Z O. S C. I 2. 4 4 x T D A + 9. 0

SVO.SC.M 1. 64 x 5 × TDA + 4.35 3.9 9 S O C. R C. L 1. 0 2 x T D A + 0. 2 2

HZO.SC.L 1.92 x × TDA + 7.08 S O C. R C. I 1. 1 9 x T D A + 0. 2 6
HZO.SC.M 0.75 x × TDA + S O 1. 613 CRE NOPR ECS OMB Compare 

### .docx 5.44 C. S C. I 7 x T D A + 0. 3 6

HCT.SC.I 0.49 x × TDA + 0.37 V C T. R C. I 0. 5 1 x T D A + 2. 3 7

VCT.SC.I 0.52 x × TDA + 2.56 H C T. R C. M 0. 1 4 x T D A + 0. 1 1

VCS.SC.I 0.35 x × V + 0.81 H C T. R C. L 0. 3 x T D A + 0. 2 3

VCT.SC.M 0.04 x × V + 1.07 H C T. R C. I 0. 3 5 x T D A + 0. 2 7

VCT.SC.L 0.22 x × V + 1.21 V C S. R 0. 1 x V14 CRE NOPR ECS OMB Compare 

### .docx C. M + 0. 2 4

VCS.SC.M 0.03 x × V + 0.53 V C S. R C. L 0. 2 1 x V + 0. 5

VCS.SC.L 0.13 x × V + 0.43 V C S. R C. I 0. 2 5 x V + 0. 5 8

HCT.SC.M 0.02 x × V + 0.51 H C S. S C. I 0. 3 5 x V + 0. 8 1

HCT.SC.L 0.11 x × V + 0.6 H C S. R C. M 0. 1 x V + 0. 2 4

HCS.SC.M 0.02 x × V + 0.37 H C S. R C. L 0. 2 1 x V + 0. 5

HCS.SC.L 0.12 x × V + 0.42 H C S. R C. I 0. 2 5 x V + 0. 5 815 CRE NOPR ECS OMB Compare 

### .docx PD.SC.M 0.03 x × V + 0.83
SOC.SC.M 0.32 × TDA + 0.53 * “TDA” is the total display area of the case, as measured in the Air

- Conditioning, Heating, and Refrigeration Instit ute (AHRI) Standard 1200

- 2010, a ppendix D. ** “V” is the volume of the case, as measured in American National Standards Institute ( ANSI ) / Association of Home Appliance Manufacturers ( AHAM ) Standard H RF

- 1

- 2004

. † Equipment class designations consist of a combination (in sequential order separated b y periods) of: (1) An equipment family code (VOP = vertical open, SVO = semivertical open, HZO = horizontal open, VCT = vertical transparent doors, VCS = vertical solid doors, HCT = horizontal transparent doors, HCS = horizontal solid doors, SOC = service over counter , or PD = Pull

- down ); (2) an operating mode code ( RC = remote condensing or SC = self

- contained); and (3) a rating temperature code (M = medium temperature (38 ±2 °F), L = low temperature (0 ±2 °F), or I = ice

cream temperature (

- 15 ±2 °F)). For e xample, ‘‘VOP.RC.M’’ refers to the ‘‘vertical open, remote condensing, medium temperature’’ equipment class. See discussion in chapter 3 of the NOPR TSD for a more detailed explanation of the equipment class terminology. VOP.RC.I 2.68 × TDA + 8.08

SVO.RC.L 2.11 × TDA + 6.36
SVO.RC.I 2.68 × TDA + 8.08
HZO.RC.I 0.72 × TDA + 8.74
VOP.SC.L 3.79 × TDA + 10.26
VOP.SC.I 4.81 × TDA + 13.03
SVO.SC.L 3.77 × TDA + 10.01
SVO.SC.I 4.79 × TDA + 12.72
HZO.SC.I 2.44 × TDA + 9.0
SOC.RC.L 0.83 × TDA + 0.18
SOC.RC.I 0.97 × TDA + 0.21
SOC.SC.I 1.35 × TDA + 0.29
VCT.RC.I 0.51 × TDA + 2.37
HCT.RC.M 0.14 × TDA + 0.11
HCT.RC.L 0.3 × TDA + 0.23
HCT.RC.I 0.35 × TDA + 0.27 VCS.RC.M 0.1 × V + 0.24 VCS.RC.L 0.21 × V + 0.5
VCS.RC.I 0.25 × V + 0.58
HCS.SC.I 0.35 × V + 0.81 HCS.RC.M 0.1 × V + 0.24 HCS.RC.L 0.21 × V + 0.5 Inserted Cells16 CRE NOPR ECS OMB Compare 

### .docx HCS.RC.I 0.25 × V + 0.58
SOC.SC.L 0.67 × TDA + 1.12 * Equipment class designations consist of a combination (in sequential order separated by periods) of: (1) an equipment family code (VOP = vertical open, SVO = semivertical open, HZO = horizontal open, VCT = vertical transparent doors, VCS = vertical solid doors, HCT = horizontal transparent doors, HCS = horizontal solid doors, SOC = service over counter, or PD = pull

- down); (2) an operating mode code (RC = remote condensing or SC = self

- contained); and (3) a rating temperature code (M = medium temperature (38±2 °F), L = low temperature (0±2 °F), or I = ice

- cream temperature (

- 15±2 °F)). For example, “VOP.RC.M” refers to the “vertical open, re mote condensing, medium temperature” equipment class. See discussion in chapter 3 of the NOPR technical support document (TSD) for a more detailed explanation of the equipment class terminology. ** “TDA” is the total display area of the case, as measured i n the Air

- Conditioning, Heating, and Refrigeration Institute (AHRI) Standard 1200

- 2010, appendix D. † “V” is the volume of the case, as measured in American National Standards Institute (ANSI) / Association of Home Appliance Manufacturers (AHAM) Standard H RF -1- 2004. 

### A. Benefits and Costs to Consumers Customer s Table I.2 presents DOE’s evaluation of the economic impacts of the proposed standards on consumers customer s of commercial refrigeration equipment , as measured by the average life

- cycle cost (LCC) savin gs 3 

### and the median payback period (PBP ). 4



### Table I.2 Impacts of Proposed Standards on Consumers Customer s of Commercial Refrigeration Equipment The average LCC savings are positive for all equipment class es under the standard proposed by DOE

. . in this notice

. At TSL 4, the percentage of customers who experience net benefits or no impacts ranges from 59 to 100 percent , and customers experiencing a net cost range from 0 to 41 percent

. Chapter 11 presents the LCC subgroup analysis on groups of customers that may be disproportionately affected by the proposed standard.

Equipment Class * Average LCC Savings 20 10 2012 $ Median PBP Y ears VOP.RC.M $ 453.06 1,493.72 2.41 3.91 VOP.RC.L $ 264.33 1,129.51 6.59 2.22 VOP.SC.M $ 214.15 691.27 2.23 4.39 VCT.RC.M $1, 038.12 108.13 3.73 2.70

3 Life

- cycle cost (LCC) of commercial refrigeration equipment is the cost to consumers customers of owning and operating the equipment over the entire life of the equipment. Life

- cycle cos t savings are the reductions in the life

- cycle costs due to amended energy conservation standards when compared to the life

cycle costs of the equipment in the absence of amended energy conservation standards . Further discussion of the LCC analysis can be found in Chapter 8 of the TSD. 4 Payback period (PBP) refers to the amount of time (in years) it takes the consumers customers to recover the increased installed cost of equipment associated with new or amended standards through savings in operating costs. Further discussion of the PBP can be found in Chapter 8 of the TSD. Comment [A2]: Revision requested by OIRA.17 CRE NOPR ECS OMB Compare 

### .docx VCT.RC.L $ 539.92 797.91 4.43 1.64 VCT.SC.M $ 717.99 641.05 2. 83 54 VCT.SC.L $1, 969.24 342.84 1.44 0.96 VCT.SC.I $ 370 431 .88 3.17 1.97 VCS.SC.M $ 125.10 131.80 1. 80 75 VCS.SC.L $ 214.03 220.83 1. 19 15 VCS.SC.I $ 140.59 152.69 2. 50 42 SVO.RC.M $ 331.41 1,008.46 3.36 4.50 SVO.SC.M $ 308.07 491.99 2.08 4.75 SOC.RC.M $ 119.60 494.51 2.84 4.41 HZO.RC.M** $0.00 NA HZO.RC.L** $0.00 NA HZO.SC.M $ 24.35 28.78 6. 52 40 HZO.SC.L** $0.00 NA HCT.SC.M $ 235.72 253.60 3. 09 08 HCT.SC.L $ 458.84 368.92 1. 55 47 HCT.SC.I $ 38.02 42.48 4. 42 28 HCS.SC.M $ 9.11 8.68 4. 26 28 HCS.SC.L $ 80. 72 .70 2. 67 57 PD.SC.M $ 351.49 310.43 2. 82 27 SOC.SC.M $739.75 2.99 * Values have been shown only for primary equipment classes, which are equipment classes that have significant volume of shipments and, therefore, were directly analyzed. See chapter 5 of the NOPR TSD, Engineering Analysis, for a detailed discussion of pri mary and secondary equipment classes. ** For equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, no efficiency levels above the baseline were found to be economically justifiable. Therefore, the proposed standards for these equipment classes are the same as the current standards. As a result, LCC savings for these equipment classes are shown as zero. The PBP values are indeterminate and are shown as “NA.”



### B. Impact on Manufacturers The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the base year ( 2010 2013 ) through the end of the analysis period ( 20 45 2046 ). Using a real discount rate of 10 percent, 5

5 This is the rate used to discount future cash flows in the Manufacturer Impact Analysis. A discount rate of 10% was calculated based on SEC filings and feedback from manufacturer interviews about the current cost of capital in the industry. For more information, refer to Chapter 12 of the NOPR TSD. 

### DOE estimates that the INPV for manufacturers of commercial refrigeration equipment is $ 869.3 1,1 62.0 million in
20 10 2012 $. Under the proposed standards , DOE expects that manufacturers may lose
up the industry net present value to 10.28 decrease by 3.95 p ercent of their INPV, or approximately $ 89.3 to 7.97 percent. Total industry conversion costs are expected to total Comment [A3]: Revision requested by OIRA.18 CRE NOPR ECS OMB Compare 

### .docx $87.5 million.

.

C. National Benefits DOE’s analyses indicate that the proposed standards for commercial refrigeration equipment would save a significant amount of energy over . The lifetime savings for commercial refrigeration equipment purchased in the 30 years (20 16

– 20 45 )―an
estimated

- year period that begins in the year of the compliance with amended standards (2017–2046 ) amount to 1.001 0 .636 

### quadrillion British thermal units ( quads ) of cumulative ). The average annual energy . In addition, DOE expects the energy savings from the proposed standards to eliminate the need for approximately 0. 2 2 gigawatts (GW) savings over the life of generating capacity by 20 45

. commercial refrigeration equipment purchased in 2017 through 2046 is 0.04 quads

. 6 

### The cumulative national net present value (NPV) of total consumer customer costs and savings of the proposed standards for commercial refrigeration equipment in
20 10 2012 $ ranges from $ 1. 023 606 billion (at a 7- percent discount rate) to $ 2. 718 4.067 billion (at a 3- percent discount rate 7

6 Total U.S. commercial sector energy (source energy) used for refrigeration in 2010 was 1.21 quads. Source: U.S. Department of Energy

– Offic e of Energy Efficiency and Renewable Energy. Buildings Energy Data Book , Table 3.1.4, 2010 Commercial Energy End

- Use Splits, by Fuel Type (Quadrillion Btu). 2012. (Last accessed April 23, 201 3 .) 

### ). This NPV expresses the estimated total value to

customers of future operating cost savings minus the estimated increased installed costs for equipment purchased in the period from 20 16

– 20 45 2017–2046 , discounted to
20 11 2013

.

http://buildingsdatabook.eren.doe.gov/TableView.aspx?table=3.1.4 7 These discount rates are used in accordance with the Office of Management and Budget (OMB) guidance to Feder al agencies on the development of regulatory analysis (OMB Circular A

- 4, September 17, 2003), and section E, “Identifying and Measuring Benefits and Costs,” therein. Further details are provided in section V.B.3

. Comment [A4]: Revision requested by OIRA.

Comment [A5]: Revision requested by OIRA.

Comment [A6]: Revision requested by OIRA.19 CRE NOPR ECS OMB Compare 

### .docx T he proposed standards are expected to have significant environmental benefits. The energy saved would be in the form of electricity and , as stated above, DOE expects The energy savings from the proposed standards to eliminate the need for approximately
0.2 2 GW of generating capacity by 20 45 . The se savings would result in cumulative greenhouse gas (GHG) emiss ion reductions of 50.91 54.88 million metric tons ( M Mt) 8 

### of carbon dioxide (CO 2 

### ) in the period from 20 16

– 20 45 . During this period, the proposed standards are expected to result in emissions reductions of 12.99 ), 265.9 thousand tons of methane, 1.1 thousand tons of nitrous oxide, 70.1 thousand tons of sulfur dioxide (SO2),
81.1 thousand tons of NOx and 0.1 tons of mercury (Hg) 9 , 10



### .

The value of the CO 2 

### reductions is calculated using a range of values per metric ton of CO 2 

### (otherwise known as the Social Cost of Carbon, or SCC) developed by a recent Federal interagency process. The derivation of the SCC values is discussed in section IV.O emissions are forecasted to increase by 0.2 6 tons

. 11

8 A metric ton is equivalent to 1.1 U.S. short tons. Results for NO x and Hg are presented in short tons. 

### . DOE estimates that the net present monetary value of the CO 2 

### emissions reduction would be between $ 0. 1 8 31 and $ 2. 8 6 4.55 billion , e xpressed in 20 10 $ and discounted to 20 11

. . DOE also estimates

9 DOE calculated emissions reductions relative to the Annual Energy Outlook (AEO) 201 3 Reference case, which generally represents current legislation and environmental regulations for which implementing regulations were available as of December 31, 201 2. 10 DOE also estimated CO 2 and CO 2 equivalent (CO 2 eq) emissions that occur through 2030 ( CO 2 eq includes greenhouse gases such as CH 4 and N 2 O). The estimated emissions reductions through 2030 are 16 million metric tons CO 2 , 1,687 thousand tons CO 2 eq for CH 4 , and 72.27 thousand tons CO 2 eq for N 2 O. 11 DOE calculates emissions reductions relative t o the most recent version of the Annual Energy Outlook ( AEO ) Reference Case forecast. Because the AEO 2011 NEMS that DOE is using for this rulemaking assumes the implementation of the Clean Air Interstate Rule ( CAIR ) , 70 FR 25162 (May 12, 2005) , DOE has not been able to take into account the effects of its replacement, the Transport Rule ( 76 FR 48208 (Aug. 8, 2011) ) for today’s NOPR analysis20 CRE NOPR ECS OMB Compare 

### .docx the net present monetary value of the NO x 

### emissions reduction , expressed in 20 10 $ and
discounted to 20 11 , is would be between $ 1.9 8.8 and $ 1 9 90.7 million at a 7

- percent discount rate, and between $ 3 .4 19.1 and $ 3 5. 1 196.2 million at a 3

- percent discount

rate. 12



### Table I.3 summarizes the national economic costs and benefits expected to result from the proposed standards for commercial refrigeration equipment.

12 DOE is aware of multiple Federal agency efforts to determine the appropriate range of values used in eva luating the potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg in its rulemakings. DOE is currently investigating va luation of avoided Hg and SO 2 emissions.21 CRE NOPR ECS OMB Compare 

### .docx Table I . 3 Summary of National Economic Benefits and Costs of Proposed Commercial Refrigeration Equipment Energy Conservation Standards Category Present Value million 2012$ Discount Rate Benefits Operating Cost Savings 2,695 7% 6,034 3% CO 2 Reduction Monetized Value (at $ 12.9 /Metric Ton)* 308 5% CO 2 Reduction Monetized Value (at $ 40.8 /Metric Ton)* 1,504 3% CO 2 Reduction Monetized Value (at $ 62.2 /Metric Ton)* 2,452 2.5% CO 2 Reduction Monetized Value (at $ 117.0 /Metric Ton)* 4,552 3%
NO X Reduction Monetized Value (at $ 2639 /Ton)** 50 7% 108 3% Total Benefits† 4,249 7% 7,646 3% Costs Incremental Installed Costs 1,089 7% 1,967 3% Net Benefits Including CO 2 and NO x Reduction Monetized Value 3,160 7% 5,679 3% * The interagency group selected four sets of SCC values for use in regulatory analyses. Three sets of values are based on th e average SCC from the 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 distri bution. The values in parentheses represent the SCC in 2015. The SCC time series incorporate an escalation factor. ** The value represents the average of the low and high NO X values used in DOE’s analysis. † Total Benefits for both the 3% and 7% cases are derived using the CO 2 reduction monetized value series corresponding to average SCC with 3

- percent discount rate.


### The benefits and costs of today’s proposed standards , for commercial refrigeration equipment sold in 20 16

– 20 45 2017–2046 , 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 customer operation of equipment that

meet s the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment installed cost, which is another way of representing consumer customer NPV ); and (2) the annualized monetary value of the Comment [A7]: Revision requested by OIRA.22 CRE NOPR ECS OMB Compare 

### .docx benefits of emission reductions, including CO 2 

### emission reductions. 13 

### The value of the
CO 2 

### reductions , otherwise known as the Social Cost of Carbon (SCC), is calculated using a range of value s per metric ton of CO 2 

### developed by a recent Federal interagency process. The derivation of th e SCC value s is discussed in section

.

Although com bining the value s of operating savings and CO 2 

### emission reductions provides a useful perspective, two issues should be considered. First, t he national operating savings are domestic U.S. consumer customer monetary savings that occur as a result of market transactions , while the value of CO 2 

### reductions is based on a global value. Second, t he assessments of operating cost savings and CO 2 

### savings are performed with different methods that use different time frames for analysis. The national operatin g cost savings is measured over the lifetime s of commercial refrigeration equipment shipped from 2016 to 2045

. in 2017–2046. The SCC value s , on the other hand, reflect the present value of some future climate

- related impacts resulting from the emission of 1 ton of CO 2 

### in each year. These impacts continue well beyond 2 100.

Table I.4 shows the annualized values for today’s benefits and costs of the proposed standards. All monetary values below The results of the primary estimate are as

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 CO 2 reductions. For the latter, DOE used a range of discount rates, as shown in Table I.4 The process that DOE used to convert the 30 year time

- series of costs and benefits into annualized values is explained in section . . From the present value, DOE then calculated the fixed annual payment over a 30

- year period ( 2017 through 2046 ) that yields the same present value. The fixed annual payment is the annualized value. Although DOE calculated annualiz ed 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.23 CRE NOPR ECS OMB Compare 

### .docx follows. Table I.4 shows the primary, low net benefits , and high net benefits scenarios. The primary estimate is the estimate in 20 10 $

. which the operating cost savings were calculated using the Annual Energy Outlook 2013 ( AEO 2013) Reference Case forecast of future electricity prices. The other two estimates, low net benefits estimate and high net benefits estimate, are based on the low and high electricity price scenarios from the
AEO 2013 forecast. At a 7- percent discount rate for benefits and costs , the cost in the primary estimate 14 

### of the standards proposed in today’s notice is $ 92 82 million per year in increased equipment costs

. T he annualized benefits are $ 203 million per year in reduced equipment operating costs, $ 75 million in CO 2 

### reductions (n ote that DOE used a
3- percent discount rate , along with the c orresponding SCC series value of $22.3/ton in
2010 that uses a 3

- percent discount rate , to calculate the monetized value of CO 2 

### emissions reductions .) T he annualized benefits are $ 208 million per year in reduced equipment operating costs, $ 56 million in CO 2 

### reductions, and $ 1. 1 8 ) , and $ 3.75 million in reduced NO x 

### emissions. In this case, the annualized net benefit amounts to $ 173 199 million. At a 3- percent discount rate for all benefits and costs, the cost in the primary estimate of the amended standards proposed in today’s notice is $ 253 97 million per year in increased equipment costs

. (Note that DOE used a 3

- percent discount rate along with the corresponding SCC series value of $22.3/ton in 2010 to calculate the monetized value
of CO 2 

### emissions reductio ns.) T he benefits are $ 92 T he benefits are $ 299 million per year in reduced operating costs, $ 56 75 million in CO 2 

### reductions, and $ 1. 1 4 5.33 million in reduced NO x 

### emissions. In this case , the net benefit amounts to $ 218 281 million per year.

14 Primary estimate in Table I

. 3 is the estimate in which the operating cost savings were calculated using the Annual Energy Outlook 2011 ( AEO2011 ) Reference Case forecast of future electricity prices.24 CRE NOPR ECS OMB Compare 

### .docx DOE also calculated the low net benefits and high net benefits estimates by calculating the operating cost savings and incremental installed costs at the AEO
2011 AEO2013 low economic growth case and high economic growth case scenarios, respectively. These scenario s do not change the monetized emissions reductions values. 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 increme ntal installed costs.

Table I.4 Annualized Benefits and Costs of Proposed Standards for Commercial Refrigeration Equipment
Discount

Rate Primary Estimate * million 2010 2012 $ Low Net Benefits Estimate*

million 2010 2012 $ High Net Benefits Estimate* million 2010 2012 $ Benefits Operating Cost Savings 7% 208 203 197 218 212 3% 253 299 237 288 266 314 CO 2 Reduction Monetized Value (at $ 4 12 .9 /Metric Ton)** 5% 15 19 15 19 15 19
CO 2 Reduction Monetized Value (at $ 22.3 40.8 /Metric Ton)** 3% 56 75 56 75 56 75
CO 2 Reduction Monetized Value (at $ 36.55 62.2 /Metric Ton)** 2.5% 86 114 86 114 86 114
CO 2 Reduction Monetized Value (at $ 67.6 117.0 /Metric Ton)** 3% 169 225 169 225 169 225
NO x Reduction Monetized Value (at $ 2, 543 63 9 /Ton)** 7% 1.18 3.75 1.18 3.75 1.18 3.75 3% 1.14 5.33 1.14 5.33 1.14 5.33 Total Benefits (Operating Cost Savings, CO 2 Reduction and NO x Reduction) † 7% 265 281 254 275 275 290 3% 310 379 294 368 323 394 Costs Total Incremental Installed Costs 7% 92 82 93 8 4 92 8 0 3% 92 97 92 100 92 9 5 Net Benefits Less Costs Total Benefits Less Incremental Costs 7% 173 199 161 19 1 183 2 10 3% 218 281 202 2 68 231 29 9 * * This table presents the annualized costs and benefits associated with equipment shipped in 2017 −2046. These results include benefits to consumers which accrue after 2046 from the products purchased in 2017 −2046. The primary, low, and high estimates utilize forecasts of energy prices from the Annual Energy Outlook 2011 ( AEO2011 ) AEO201 3 Reference Case, Low Economi c Growth Case, and High Economic Growth Case, respectively

. In addition, incremental equipment costs reflect a medium Comment [A8]: Revision requested by OIRA.25 CRE NOPR ECS OMB Compare 

### .docx decline rate for projected product price trends in the Primary Estimate, a low decline rate for projected equipment price tre nds in the Low Benefits Estimate, and a high decline rate for projected equipment price trends in the High Benefits Estimate. The method s used to derive projected price trends are explained in Appendix 10B. ** These The interagency group selected four sets of SCC values represent global for use in regulatory analyses. Three sets of values (in 2010$) of are based on the social cost of CO 2 emissions in 2010 under several scenarios. The values average SCC from the three integrated assessment models, at discount rates o f $4.9 0 , $22.3 0 2.5, 3 , and $36.55 per ton are the averages of SCC distributions calculated using 5

- 5 percent , 3

- percent, and 2.5

- percent discount rates, respectively. The value of $67.6 per ton . 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 calculated using a 3

- percent discount rate. See section for d etails. For NO x , an average value ($2,543) . The values in parentheses represent the SCC in 2015. The SCC time series incorporate an escalation factor. The value for NO X is the average of the low ($451) and high ($4,635) values was used in DOE’s analysis

. † Total monetary Benefits for both the 3

- percent and 7

- percent cases utilize are derived using the central estimate of social cost of NO x and CO 2 emissions calculated at a series corresponding to average SCC with 3- percent discount rate (averaged across three integrated assessment m odels (IAMs)), which is equal to $22.3/ton in (in 2010$). . In the rows labeled “7% plus CO 2 range” and “3% plus CO 2 range,” the operating cost and NO X benefits are calculated using the labeled discount rate, and those values are added to the full range of CO 2 values.


### DOE has tentatively concluded that the proposed standards meet the requirements found in EPCA by represent ing 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), 6316(e)) DOE further notes that technologies used to achieve these standard levels are already commercially available for the equipment classes covered by today’s proposal. 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 consumer customer benefits, consumer customer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some consumer s customer s ).

DOE also considered more - stringent and less

- 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. B ased on consideration of the public comments DOE receives in response to this notice and related information collected and Comment [A9]: Revision requested by OIRA.

Comment [A10]: Revision requested by OIRA.26 CRE NOPR ECS OMB Compare 

### .docx analyzed during the course of this rulemaking effort, DOE may adopt energy use levels presented in this notice that are either high er 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 today’s proposal, as well as some of the relevant historical background related to the establishment of standards for commercial refrigeration equipment.

A. Authori ty Title III, Part C of EPCA, Pub. L. 94-163 (42 U.S.C. 6311-6317, as codified), added by Pub. L. 95-619, Title IV, section 441(a), established the Energy Conservation Program for Certain Industrial Equipment, a program covering certain industrial equipment, which includes the commercial refrigeration equipment that is the focus of this notice. 15 , 16

15 For editorial reasons, upon codification in the U.S. Code, Part C was re

- designated Part A

- 1. 

### EPCA prescribe s e nergy conservation standards for commercial refrigeration equipment (42 U.S.C. 6313(c)(2) –( 3 4 )), and direct s DOE to conduct rulemakings to establish new and amended standards for commercial refrigeration equipment . (42 U.S.C. 6313(c)(4)–( 5 6 )) (DOE notes th at under 42 U.S.C. 6295(m) and 6316(e)(1) the agency must periodically review its already established energy conservation standards for covered equipment. Under this requirement, the next review

16 All references to EPCA in this document refer to the statute as amended through the American Energy Manufacturing Technical Corrections Act (AEMTCA), Pub. L. 1 12

- 210 (Dec. 18, 2012)

.27 CRE NOPR ECS OMB Compare 

### .docx that DOE would need to conduct must occur no later than 6 years from the issuance of a final rule establishing or amending a standard for covered equipment.)

Pursuant to EPCA, DOE’s energy conservation program for covered equipment generally consists of four parts: (1) testing; (2) labeling; (3) the establishme nt of Federal energy conservation standards; and (4) certification and enforcement procedures. For commercial refrigeration equipment , DOE is responsible for the entirety of this program. Subject to certain criteria and conditions, DOE is required to devel op 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 and when making representations to the public regarding the energy use or efficiency of that equipment . (42 U.S.C. 6315(b), 6295(s) , and 63 16(e)(1)) Similarly, DOE must use these test procedures to determine whether that equipment complies with standards adopted pursuant to EPCA. The DOE test procedure for commercial refrigeration equipment currently appears at title 10 of the Code of Federal Regulations (CFR) part 431, subpart C.

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) and28 CRE NOPR ECS OMB Compare 

### .docx 6316(e)(1)) 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 6316(e)(1)) DOE also may not prescribe a standard: (1) for certain equipment, including commercial refrigeration equipment , if no test procedure has been established fo r 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 6316(e)(1)) 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 6316(e)(1)) 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 th e 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 f rom 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;29 CRE NOPR ECS OMB Compare 

### .docx 6. The need for national energy and water c onservation; and
7. Other factors the Secretary considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)– (VII) and 6316(e)(1) )

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 6316(e)(1)) Also, the Secretary may not prescribe an amended or new standard if interest ed 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 6316(e)(1))

Further, EPCA, as codified, establishes a rebuttable presumption that a standard is 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

. ( See 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(e)( 1)) Section III.D.2 presents additional discussion about the rebuttable presumption payback period.30 CRE NOPR ECS OMB Compare 

### .docx Additionally, 42 U.S.C. 6295(q)(1) and 6316(e)(1) specify requirements when promulgating a standard for a type or class of covered equipment that has two or more subcategories that may justify different standard levels

. 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) and 6316(e)(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) and 6316(e)(1))

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(e))

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011

. 76 FR 3281. Executive Order 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review31 CRE NOPR ECS OMB Compare 

### .docx 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 pr oviding 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, 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. For the reasons stated in the preamble, DOE believes that today’s NOPR is consistent with these principles, including the requirement that, to the e xtent permitted by law, benefits justify costs and that net benefits are maximized

.32 CRE NOPR ECS OMB Compare 

### .docx Consistent with Executive Order 13563, and the range of impacts analyzed in this rulemaking, the energy efficiency standard proposed herein by DOE achieves maximum net be nefits.

B. Background
1. Current Standards The current energy conservation standards for commercial refrigeration equipment were established by two different legislative actions and one DOE final rule. EPCA, as amended by the Energy Policy Act of 2005 ( EPACT 2005 ) , established standards for self

- contained commercial refrigerators and freezer with solid or transparent doors, self

- contained commercial refrigerator -freezers with solid doors, and selfcontained commercial refrigerators designed for pull

- down applications. (42 U.S.C. 6313(c)(2)– (3)) On January 9, 2009, DOE published a final rule ( January 2009 final rule) prescribing current standards for commercial refrigeration equipment

. 74 FR at 1092. Specifically, this final rule completed the first amende d standards rulemaking for commercial refrigeration equipment by establishing standards for equipment types

e numerated specified in 42 U.S.C. 6313(c)( 4) 5), and for which EPCA did not prescribe standards in 42 U.S.C. 6313(c)(2 )

- (3). )–(3). These types consisted of c ommercial i ce c ream f reezers; s elf -c ontained c ommercial r efrigerators, c ommercial f reezers, and

c ommercial r efrigerator -f reezers w ithout doors; and r emote c ondensing c ommercial

r efrigerators, c ommercial f reezers, and c ommercial r efrigerator -f reezers . More recently,

the American Energy Manufacturing Technical Corrections Act (AEMTCA), Pub. L. Comment [A11]: Revision requested by OIRA.33 CRE NOPR ECS OMB Compare 

### .docx 112-210 (Dec. 18, 2012), amended section 342(c) of EPCA to establish a new standard for self

- contained service over counter medium temperature commercial refrigerator s (this class is known as SOC.SC.M per DOE’s equipment class nomenclature) . (42 U.S.C. 6313(c)(4)) As a result, DOE’s current energy conservation standards for commercial refrigeration equipment include the following: standards established by EPCA for commercial refrigeration equipment manufactured on or after January 1, 2010 ; standards established in the January 2009 final rule for commercial refrigeration equipment manufactured on or after January 1, 2012 ; and standard s established by AEMTCA for
SOC.SC.M equipment manufactured on or after January 1, 2012

.

Table II .1 and Table II .2 present DOE’s current energy conservation standards for commercial refr igeration equipment set by EPCA and the January 2009 final rule, respectively

. The AEMTCA standard for SOC.SC.M equipment manufactured on or after January 1, 2012 is prescribed as 0.6 × TDA + 1.0. (42 U.S.C. 6313(c)(4))

Table II .1 Commercial Refrigeration Equipment Standards Prescribed by EPCA – Compliance Required Beginning on January 1, 2010 Category Maximum D aily E nergy C onsumption

kWh/ day * Refrigerators with solid doors 0.10 V ** + 2.04 Refrigerators with transparent doors 0.12 V + 3.34 Freezers with solid doors 0.40 V + 1.38 Freezers with transparent doors 0.75 V + 4.10 Refrigerators/freezers with solid doors the greater of 0.27 AV †

- 0.71 or 0.70 Self

- contained refrigerators with transparent doors designed for pull

- down temperature applications 0.126V + 3.51 * k ilowatt

- hours per day ** Where “V” means the chilled or frozen compartment volume in cubic feet as defined in the Association of Home Appliance Manufacturers Standard HRF -1- 1979. 10 CFR 431.66 † Where “AV” means that adjusted volume in cubic feet measured in accordance with the Association of Home Appliance Manufacturers Standard HRF

- 1

- 1979. 10 CFR 431.66 Comment [A12]: Revision requested by OIRA.34 CRE NOPR ECS OMB Compare 

### .docx Table II .2 Commercial Refrigeration Equipment Standards Established in the January 2009 Final Rule – Compliance Required Beginning on January 1, 2012 Equipment Class † * Standard Level *,** **, † kWh/day Equipment Class † Standard Level *,** kWh/day VOP.RC.M 0.82 × TDA + 4.07 VCT.RC.I 0.66 × TDA +

3.05 SVO.RC.M 0.83 × TDA + 3.18 HCT.RC.M 0.16 × TDA +

0.13 HZO.RC.M 0.35 × TDA + 2.88 HCT.RC.L 0.34 × TDA +

0.26 VOP.RC.L 2.27 × TDA + 6.85 HCT.RC.I 0.4 × TDA +

0.31 HZO.RC.L 0.57 × TDA + 6.88 VCS.RC.M 0.11 × V + 0.26 VCT.RC.M 0.22 × TDA + 1.95 VCS.RC.L 0.23 × V + 0.54 VCT.RC.L 0.56 × TDA + 2.61 VCS.RC.I 0.27 × V + 0.63 SOC.RC.M 0.51 × TDA + 0.11 HCS.RC.M 0.11 × V + 0.26 VOP.SC.M 1.74 × TDA + 4.71 HCS.RC.L 0.23 × V + 0.54 SVO.SC.M 1.73 × TDA + 4.59 HCS.RC.I 0.27 × V + 0.63 HZO.SC.M 0.77 × TDA + 5.55 SOC.RC.L 1.08 × TDA +

0.22 HZO.SC.L 1.92 × TDA + 7.08 SOC.RC.I 1.26 × TDA +

0.26 VCT.SC.I 0.67 × TDA + 3.29 VOP.SC.L 4.37 × TDA + 11.82 VCS.SC.I 0.38 × V + 0.88 HCT.SC.I 0.56 × TDA + 0.43 SVO.RC.L 2.27 × TDA + 6.85 VOP.RC.I 2.89 × TDA + 8.7 SVO.RC.I 2.89 × TDA + 8.7 HZO.RC.I 0.72 × TDA + 8.74 VCT.RC.I 0.66 × TDA + 3.05 HCT.RC.M 0.16 × TDA + 0.13 HCT.RC.L 0.34 × TDA + 0.26 HCT.RC.I 0.4 × TDA + 0.31 VCS.RC.M 0.11 × V + 0.26 VCS.RC.L 0.23 × V + 0.54 VCS.RC.I 0.27 × V + 0.63 HCS.RC.M 0.11 × V + 0.26 HCS.RC.L 0.23 × V + 0.54 HCS.RC.I 0.27 × V + 0.63 Deleted Cells Deleted Cells Deleted Cells35 CRE NOPR ECS OMB Compare 

### .docx SOC.RC.L 1.08 × TDA + 0.22 SOC.RC.I 1.26 × TDA + 0.26 VOP.SC.L 4.37 × TDA + 11.82 VCS.SC.I 0.38 × V + 0.88 VOP.SC.I 5.55 × TDA + 15.02

HCT.SC.I 0.56 × TDA

+ 0.43 SVO.SC.L 4.34 × TDA + 11.51

SVO.RC.L 2.27 × TDA

+ 6.85 SVO.SC.I 5.52 × TDA + 14.63

VOP.RC.I 2.89 × TDA

+ 8.7 HZO.SC.I 2.44 × TDA + 9.

SVO.RC.I 2.89 × TDA

+ 8.7 SOC.SC.I 1.76 × TDA + 0.36

HZO.RC.I 0.72 × TDA

+ 8.74 HCS.SC.I 0.38 × V + 0.88

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

- Conditioning and Refrigeration Institute ( ARI ) Standard 1200

- 2006, a ppendix D.
** V is the volume of the case, as measured in AHAM Standard HRF

- 1

- 2004

. † * Equipment class designations consist of a combination (in sequential order separated by periods) of: (1) an equipment family code (VOP = vertical open, SVO = semivertical open, HZO = horizontal open, VCT = vertical transparent doors, VCS = vertical solid doors, HCT = horizontal transparent doors, HCS = horizontal solid doors, or SOC = service over counter); (2) an operating mode code (RC = remote condensing or SC = self

- contained); and (3) a rating temperature code (M = medium temperature (38 °F), L = low temperature (0 °F), or I = ice

- cream temperature (

- 15 °F)). For example, “VOP.RC.M” refers to the “vertical open, remote condensing, medium temperature” equipment class. ** TDA is the total display area of the case, as measured in ANSI/Air

- Conditioning and Refrigeration Institute (ARI) Standard 1200

- 2006, appendix D. † V is the volume of the case, as measured in AHAM Standard HRF -1- 2004.



### 2. History of Standards Rulemaking for Commercial Refrigeration Equipment EPCA, as amended by EPACT 2005, prescribes energy conservation standards for certain self

- contained commercial refrigeration equipment designed for holding temperatures 17

17 EPCA defines the term “holding temperature application” as a use of commercial refrigeration equipment other than a pull

- down temperature application, except a blast chiller or freezer. (42 U.S.C. 6311(9)(B)) 

### ( i.e. , commercial refrigerators, freezers , and refrigerator

- freezers with Comment [A13]: Revision requested by OIRA. Deleted Cells Deleted Cells Deleted Cells36 CRE NOPR ECS OMB Compare 

### .docx transparent and solid doors designed for holding temper ature applications) and self

contained commercial refrigerators with transparent doors designed for pull

- down temperature applications

. 18 

### Compliance with these standards was required as of January 1, 2010. (42 U.S.C. 6313(c)(2)

**−** (3)) DOE published a technica l amendment final rule on October 18, 2005 codif ying these standards into s ubpart C of p art 431 under t itle 10 of the Code of Federal Regulations ( CFR ) . 70 FR at 60407

.

In addition, EPCA requires DOE to set standards for additional commercial refrigeration equipment that is not covered by 42 U.S.C. 6313(c)(2)

**−** (3), namely : commercial ice

- cream freezers; self

- contained commercial refrigerators, freezers, and refrigerator

- freezers without doors; and remote condensing commercial refrigerators, freezers, and refrigerator

- freezers. (42 U.S.C. 6313(c)( 4 5 )) DOE published a final rule establishing these standards on January 9, 2009 (74 FR at 1092), and manufacturers must comply with these standards starting o n January 1, 2012. (42 U.S.C. 6313(c)( 4 5 )(A))

EPCA requires DOE to conduct a s ubsequent rulemaking to determine whether to amend the standards established under 42 U.S.C. 6313(c), which includes both the standards prescribed by EPACT 2005 and those presc ribed by DOE in the January 2009 final rule. (42 U.S.C. 6313(c)( 5 6 )) If DOE decides as part of this ongoing rulemaking to amend the current standards, DOE must publish a final rule establishing any such amended standards by January 1, 2013. Id

.

18 EPCA defines the te rm “pull

- down temperature application” as a commercial refrigerator with doors that, when fully loaded with 12 ounce beverage cans at 90 ° F, can cool those beverages to an average stable temperature of 38 ° F in 12 hours or less. (42 U.S.C. 6311(9)(D))37 CRE NOPR ECS OMB Compare 

### .docx To satisfy this requirement, DOE initiated the current rulemaking on April 30,
2010 by publishing on its website its “Rulemaking Framework for Commercial Refrigeration Equipment.” ( T he F ramework document is available at: www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/cre_framework_ 04-30-10.pdf .) DOE also published a notice in the Federal Register announcing the availability of the F ramework document , as well as a public meeting to discuss the document. The notice also solicited comment on the matters raised in the document. 7 5
FR 24824 ( May 6, 2010 ). The F ramework document described the proced ural and analytical approaches that DOE anticipated using to evaluate energy conservation standards for commercial refrigeration equipment , and identified various issues to be resolved in the rulemaking.

DOE held the Framework public meeting on May 18 , 20 10, at which it: (1) presented the contents of the F ramework 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 pa rties 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) potential updates to the test procedure and appropriate test metrics (being addressed in a concurrent rulemaking) ; (3) manufacturer and market information, including distribution channels; (4) equipment38 CRE NOPR ECS OMB Compare 

### .docx classes, baseline units , 19


### , and design options to improve efficiency; (5) life

- cycle costs to

consumer s customer , including installation, maintenance, and repair costs ; and (6) any

consumer customer subgroups DOE should consider. At the meeting and during the comment period on the F ramework document, DOE received many comments that helped it identify and resolve issues pertaining to commercia l refrigeration equipment relevant to this rulemaking

. These are discussed in subsequent sections of this notice

.

DOE then gathered additional information and performed preliminary analyses to help review energy conservation standards for this equipment. This process culminated in
DOE’s notice of another public meeting to discuss and receive comments regarding the tools and methods DOE used in performing its preliminary analysis , as well as the analyses results . 76 FR 17 573 ( March 30, 2011 ) (the March 2011 n otice). DOE also invited written comments on these subjects and announced the availability on its website 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 -0003-0030

. ) Finally,
DOE sought comments concerning other relevant issues that could affect amended
energy con servation standards for commercial refrigeration equipment, or that DOE should address in this NOPR

. 76 FR at 17575 (March 30, 2011)

.

The preliminary analysis TSD provided an overview of DOE ’s review of the standards for commercial refrigeration equipment , discussed the comments DOE received

19 B aseline units consist of units possessing features and levels of efficiency consistent with the least

efficient equipment currently available and widely sold on the market.39 CRE NOPR ECS OMB Compare 

### .docx in response to the F ramework 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 commercial refrigeration equipment, 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 commercial refrigeration equipment , characterized the markets for this equipment , and reviewed techniques and approaches for improving its efficiency;

**•** A screening analysis reviewed tec hnology options to improve the efficiency of commercial refrigeration equipment , and weighed these options against DOE’s four prescribed screening criteria;

**•** An engineering analysis estimated the manufacturer selling prices (MS Ps) associated with more energ y efficient commercial refrigeration equipment ;

**•** An energy use analysis estimated the annual energy use of commercial refrigeration equipment ;

**•** A markups analysis converted estimated MSPs derived from the engineering analysis to consumer customer purchase pr ices;

**•** A life

- cycle cost analysis calculated, for individual consumers customer s , the discounted savings in operating costs throughout the estimated average life of40 CRE NOPR ECS OMB Compare 

### .docx commercial refrigeration equipment , 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

consumers customer s to recover the higher purchase price of more energy efficient equipment through lower operating costs;

**•** A shipme nts analysis estimated shipments of commercial refrigeration equipment 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 consumer customer costs and savings, expected to result from specific, potential energy conservation standards for commercial refrigeration equipment ; and

**•** A preliminary manufacturer impact analysis (MIA) took the initial steps in evaluating the potential effects on manufacturers of amen ded efficiency standards.

The public meeting announced in the March 2011 n otice took place on April 19, 2011 (April 2011 preliminary analysis public meeting ) . At the April 2011 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; ( 4 ) installati on, maintenance, and repair costs; ( 5 ) markups and distributions chains; ( 6 ) commercial refrigeration equipment shipments; and ( 7 ) test procedures. The comments received since publication of the March 2011 n otice, including those received at the April41 CRE NOPR ECS OMB Compare 

### .docx 2011 p reliminary analysis public meeting , have contributed to DOE’s proposed resolution of the issues in this rulemaking as they pertain to commercial refrigeration equipment . This NOPR responds to the issues raised by the commenters. (A parenthetical reference at the end of a quotation or paraphrase provides the location of the item in the public record .)

In December 2012, AEMTCA established new standards for SOC.SC.M equipment with a compliance date of January 1, 2012. (42 U.S.C. 631 3(c)(4)) The SOC.SC.M equipment had previously been classified under the category self

- contained commercial refrigerators with transparent doors for which standards were established by
EPACT 2005

. (42 U.S.C. 6313(c)(2)) The standard established by AEMTCA f or SOC.SC.M equipment reduces the stringency of the standard applicable to this equipment.

AEMTCA also direct s DOE to determine , within three year s of enactment of the new SOC.SC.M standard , whether this standard should be amended. (42 U.S.C. 6313(c)(4)(B )(i)) If DOE determines that the standard should be amended, then DOE

must issue a final rule establishing an amended standard within this same three

- year period . (42 U.S.C. 6313(c)(4)(B)(ii))

III. General Discussion42 CRE NOPR ECS OMB Compare 

### .docx A. Test Procedures and Normalization Metrics
1. Test Procedures On December 8, 2006, DOE published a final rule in which it adopted American National Standards Institute ( ANSI ) / Air

- Conditioning and Refrigeration Institute ( ARI ) Standard 1200-2006, “ Performance Rating of Commercial Refrigerated Display Merchandisers and Storage Cabinets ,” as the DOE test procedure for this equipment. 71
FR at 71340, 71369

– 70. ANSI/ARI Standard 1200 -2006 requires performance tests to be conducted according to the American Society of Heating, Refrigerating, and Air

Condit ioning Engineers (ASHRAE) Standard 72 -2005, “ Method of Testing Commercial Refrigerators and Freezers. ” The standard also contain s rating temperature specifications
of 38 **°** F (+/ -2 **°** F) for commercial refrigerators and refrigerator compartments, 0 **°** F (+/ -2

**°** F ) for commercial freezers and freezer compartments, and -5 **°** F (+/ -2 **°** F) for
commercial ice

- cream freezers. During the 2006 test procedure rulemaking, DOE determined that testing at a

- 15 °F (±2 °F) rating temperature was more representative of the actual e nergy consumption of commercial freezers specifically designed for ice

- cream application. 71 FR at 71357 (Dec. 8, 2006)

. Therefore, in the test procedure final rule, DOE adopted a

- 15 °F (±2 °F) rating temperature for commercial ice

- cream freezers, rather than the

- 5 °F (±2 °F) prescribed in the ANSI/ ARI Standard 1200 -2006. In addition, DOE adopted ANSI/Association of Home Appliance Manufacturers ( AHAM ) Standard H RF -1-2004, “ Energy, Performance, and Capacity of Household Refrigerators, Refrigerator

- Freezers, and Freezers, ” for determining compartment volumes for this equipment. 71 FR at 71369–70 (Dec. 8, 2006)

.43 CRE NOPR ECS OMB Compare 

### .docx On XXXX XX , 201 X February 21 , 2012 , DOE published a test procedure final rule ( 201X 2012 test procedure final rule) in which it adopted several amendments to the DOE test procedure. This included an amendment to incorporate by reference the
ANSI/A H RI ANSI/ Air

- Conditioning, Heating, and Refrigeration Institute ( AH RI ) Standard 1200-2010, “ Performance Rating of Commercial Refrigerated Display Merchandisers and Storage Cabinets, ” as the DOE test procedure for this equipment.
XX 77 FR at XXXXX

. 10292, 10314 (Feb. 21, 2012)

. The 201 X 2012 test procedure final rule also include d an amendment to incorporate by reference the updated ANSI/ AHAM Standard H RF -1-2008, “ Energy, Performance, and Capacity of Household Refrigerators, Refrigerator

- Freezers, and Freezers, ” for determining compartment volumes for this equipment.

In addition, the 20 1 X 2012 test procedure final rule included several amendments designed to address certain energy efficiency features that were not accounted for by the previous DOE test procedure , including provisions for measuring the impact of night curtains 20

20 Night curtains are devices made of an insulating material, typically insulated aluminum fabric, designed to be pulled down over the open front of the case to decrease infiltration and heat transfer into the case when the merchandizing establishment is clo sed. 

### and lighting occupancy sensors and scheduled controls

. XX 77 FR at XXXX (XXXX 201 X )

. 10296–98 ( Feb. 21, 2012). In the 201X 2012 test procedure final rule , DOE also adopted amendments to allow testing of commercial refrigeration equipment at temperatures other than one of the three rating temperatures previously specified in the test procedure . Specifically, the 201X 2012 test procedure final rule allows testing of commercial refrigeration equipment at its lowest application product temperature . The44 CRE NOPR ECS OMB Compare 

### .docx 201X , for equipment that cannot be tested at the prescribed rating temperature. The 2012 test procedure final rule also allows manufacturers to test and certify equipment at the

more - stringent rating temperatures and ambient conditions required by NSF for food safety testing. XX 77 FR at XXXX (XXXX 201 X )

. 10305 ( Feb. 21, 2012 ). (The NSF was founded in 1944 as the National Sanitation Foundation , and is now referred to simply as NSF.)

T he test procedure amendments established in the 2011 2012 test procedure final rule are required to be used in conjunction with any amended standards promulgated as a result of this energy conservation standard rulemaking. As such, use of the amended test procedure to show compliance with DOE energy conservation standards or make representations with respect to energy consumption of commercial refrigeration equipment is required on the compliance date of any revised energy conservation standards established as part of this rulemaking

. XX 77 FR XXXX (XXXX 2011 at 10308 (Feb. 21, 2012 ).

DOE has initiated a test procedure rulemaking for commercial refrigeration equipment to address many issu es raised by stakeholders since the publication of the 2012 test procedure final rule. This rulemaking will address the following issues :

**•** a number of new definitions related to commercial refrigeration equipment,

**•** a description of the proper configuration and use of energy management systems,45 CRE NOPR ECS OMB Compare 

### .docx **•** clarifications on the use of calculation methods, appropriate reporting requirements, and determination of the lowest application product temperature,

**•** incorporat ion of Interpretations 1 thro ugh 5 to AHRI 1200 -2010, and

**•** updates and clarifi cations regarding the compliance dates of test procedure amendments adopted in the 2012 test procedure final rule by reorganizing the test procedure in two different appendices.

The issues that will be addressed in the test procedure rulemaking are consistent with the analysis in this NOPR.

2. Normalization Metrics Both the January 2009 final rule and EPACT 2005 contain energy conservation standards for respective covered types of commercial refrigeration eq uipment , expressed in the form of equations developed as a function of unit size. This use of normalization metric s allows for a single standard

- level equation developed for an equipment class to apply to a broad range of equipment sizes offered within that class by manufacturers

. In the aforementioned commercial refrigeration equipment standards, the two normalization metrics used are refrigerated compartment volume, as determined using AHAM HRF -1- 2004, and TDA, as determined using ANSI/ ARI 1200 -2006. I n particular , the EPACT 2005 standards utilize volume as the normalization metric for all equipment types, with the exception of refrigerator

- freezers with solid doors, for which it specifie s adjusted volume. (42 U.S.C. 6313(c)(2)) The January 2009 final r ule, meanwhile, utilized TDA as46 CRE NOPR ECS OMB Compare 

### .docx the normalization metric for all equipment with display capacity while specifying volume as the metric for solid -door (VCS and HCS) equipment. (42 U.S.C. 6313(c)(2)) 74 FR at 1093 (Jan. 9, 2009)

.

At the May 2010 F ramework public meeting , interested parties raised several questions regarding the potential normalization metrics that could be used in amended standards. DOE also received stakeholder feedback pertaining to this issue following the publication of the F ramework d ocument . I n the preliminary analysis, DOE suggested that it would consider retaining the normalization metrics in this rulemaking for the respective classes to which they were applied in EPCA (42 U.S.C. 6313(c)(2)

– (3)) and the January 2009 final rule. 74 FR at 1093 (Jan. 9, 2009)

. In chapter 2 of the preliminary analysis TSD, DOE presented its rationale for the continued use of TDA for equipment with display areas addressed in the January 2009 final rule and the continued use of volume as the metric for solid

- door remote condensing equipment and ice

- cream freezers, as well as for the equipment covered by EPACT 2005 standards. DOE did not receive any information or data while conducting the NOPR analyses that would alter this position, and thus DOE proposes continued use of the existing normalization metrics in today’s notice.

B. Technological Feasibility
1. General In each standards rulemaking, DOE conducts a screening analysis, which is base d on information that the Department has gathered on all current technology options and47 CRE NOPR ECS OMB Compare 

### .docx 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 consi deration , 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 use d by the relevant industry or if a working prototype has been developed . Technologies incorporated in commercial ly available equipment or in working prototypes will be considered technologically feasible. 10 CFR 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 monopoliz e the market.

Once DOE has determined that particular design option s are technologically feasible, it further evaluates each of these design option s 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 com mercial refrigeration equipment . Specifically, it presents the designs DOE considered, those it screened out, and those that are the bases for the TSLs considered in this rulemaking.48 CRE NOPR ECS OMB Compare 

### .docx 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 commercial refrigeration equipment, it determines the maximum improvement in energy efficiency that is technologically feasible for such equipment. ( S ee 42 U.S.C. 6295(p)(1) and 6316(e)(1) ) Accordingly, in the preliminary analysis, DOE determined the maximum technologically feasible (“max

- tech”) improvements in energy efficiency for commercial refrigeration equipment in the engineering analysis using th e design parameters that passed the screening analysis

.

As indicated previously, whether efficiency levels exist or can be achieved in commonly used equipment is not relevant to whether they are considered 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 re evaluated the efficiency levels, including the max

- tech levels, when it updated its results for this NOPR. See c hapter 5 of the NOPR TSD for the results of the analys e s, and a list of technologies included in max

- tech equipment. Table III .1 s hows the max

- tech levels determined in the engineering analysis for commercial refrigeration equipment.49 CRE NOPR ECS OMB Compare 

### .docx Table III .1 “Max
- Tech” Levels for Commercial Refrigeration Equipment Primary Classes Equip ment Class “Ma x - Tech” Level kWh/day Equip ment Class “Max
Tech” Level kWh/day VCT.R C.L 0.41 x × TDA + 1.93 VOP. RC.I 2.63 x TDA + 7.95 VOP.R C.M 0.6 x × TDA + 2.99 SVO. RC.L 2.07 x TDA +

6.26 SVO.R C.M 0.62 x × TDA + 2.38 SVO. RC.I 2.63 x TDA + 7.95 HZO.R C.L 0.55 x × TDA + 6.7 HZO. RC.I 0.7 x TDA + 8.5 HZO.R C.M 0.34 x × TDA + 2.83 VOP.S C.L 3.77 x TDA +

10.2 VCT.R C.M 0.07 x × TDA + 0.66 VOP.S C.I 4.78 x TDA + 12.95 VOP.R C.L 2.07 x × TDA + 6.26 SVO.S C.L 3.76 x TDA + 9.96 SOC.R C.M 0.39 x × TDA + 0.08 SVO.S C.I 4.77 x TDA + 12.65 VOP.S C.M 1.5 x × TDA + 4.06 HZO.S C.I 2.42 x TDA +

8.93 SVO.S C.M 1.5 x × TDA + 3.97 SOC.R C.L 0.82 x TDA + 0.18 HZO.S C.L 1.91 x × TDA + 7.03 SOC.R C.I 0.96 x TDA + 0.21 HZO.S C.M 0.74 x × TDA + 5.35 SOC.S C.I 1.34 x TDA + 0.29 HCT.S C.I 0.36 x × TDA + 0.28 VCT. RC.I 0.48 x TDA + 2.26 VCT.S C.I 0.5 x × TDA + 2.44 HCT. RC.M 0.1 x TDA + 0.08 VCS.S C.I 0.33 x × V + 0.76 HCT. RC.L 0.22 x TDA + 0.17 VCT.S C.M 0.03 x × V + 0.97 HCT. RC.I 0.26 x TDA +

0.2 VCT.S C.L 0.21 x × V + 1.16 VCS.R C.M 0.1 x V + 0.22 VCS.S C.M 0.02 x × V + 0.41 VCS.R C.L 0.2 x V + 0.46 VCS.S C.L 0.11 x × V + 0.38 VCS.R C.I 0.23 x V + 0.54 HCT.S 0.01 x × V + HCS.S 0.33 x V + Deleted Cells Deleted Cells50 CRE NOPR ECS OMB Compare 

### .docx C.M 0.38 C.I 0.76 HCT.S C.L 0.08 x × V + 0.45 HCS.R C.M 0.1 x V + 0.22 HCS.S C.M 0.01 x × V + 0.18 HCS.R C.L 0.2 x V + 0.46 HCS.S C.L 0.07 x × V + 0.24 HCS.R C.I 0.23 x V + 0.54 PD.SC. M 0.03 x × V + 0.72 SOC.S C.M 0.32 × TDA + 0.53



### C. Energy Savings
1. Determination of Savings DOE uses the NIA model to estimate the NES over the period from 20 16

– 2045

. For each TSL, DOE projected energy savings from the products that are the subject s of this rulemaking , purchased during the 30

- year period that begins in the year of compliance with amended standards (201 7–2046 ). The savings are measured over the entire lifetime of products purchased in the 30

- yea r period. 21



### IV.I DOE use d the NIA model to estimate the NES for equipment purchased over the period 2017–2046. The model forecasts total energy use over the analysis period for each representative equipment class at efficiency levels set by each of the five considered TSLs. DOE then compares the

ene rgy use at each TSL to the base

- case energy use to obtain the NES . The NIA model is described in section of this notice and in chapter 10 of the NOPR TSD.

DOE used its national impact analysis (NIA) spreadsheet model to estimate

21 In the past, DOE presented energy savings results for only the 30

- year period that begins in the year of compliance . In the calculation of economic impacts, however, DOE considered operating cost savings measured over the entire lifetime of produc ts purchased during the 30

- year period. DOE has chosen to modify its presentation of national energy savings to be consistent with the approach used for its national economic analysis. Field Code Changed51 CRE NOPR ECS OMB Compare 

### .docx energy savings from amended standards for the products that are the subject of this rulemaking

. The NIA spreadsheet model (described in section IV.I of this notice) calculates equipment energy savings in kilowatt

- hours of site energy . Site , which is the
energy is the electrical energy directly consumed at building sites by commercial refrigeration units. However, when presenting products at the locations where they are used. For electricity, DOE reports national energy savings in the context terms of the national level , DOE converts savings in the site energy to source energy , which is the
energy that is used to generate and transmit electricity the site electricity. To calculate this quantity, DOE derives annual conversion factors from the model used to prepare the Energy Information Administration’s (EIA) Annual Energy Outlook ( AEO ).

DOE has begun to also estimate full

- fuel

- cycle (FFC) energy savings. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (August 17, 2012). The FFC metric includes the energy consumed at the site in e xtracting, processing, and transporting primary fuels, and thus presents a more complete picture of the impacts of energy efficiency standards. DOE’s approach is based on calculation of an FFC multiplier for each of the energy types used by covered product s .

2. Significance of Savings
EPCA prohibits DOE from adopting a standard that would not result in significant additional energy savings. (42 U.S.C. 6295(o)(3)(B),(v) and 6316(e)(1) ) While the term “significant” is not defined in EPCA , the U.S. Court of Appeals for the District of Columbia in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 137352 CRE NOPR ECS OMB Compare 

### .docx (D.C. Cir. 1985), indicated that Congress intended significant energy savings to be savings that were not “genuinely trivial.” The estimated energy savings in the 30- year analysis period for the TSL s considered in this rulemaking range from 0. 274 236 to 1. 302 278 quads (see section V.B.2 for additional details) ; therefore, DOE considers them significant within the meaning of section 325 of the Act.

D. Economic Justification
1. Specific Criteria As discussed in section II.A , 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 6316(e)(1) ) 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 analyses pertaining to economic justification, see sections IV and V of today’s notice.

a. 

### Economic Impact on Manufacturers and Commercial Consumer s Customer s In determining the impacts of a potential new or amended energy conservation standard on manufacturers, DOE first determines its quantitati ve impacts using an annual cash flow approach. This includes both a short

- term assessment (based o n the cost and capital requirements associated with new or amended standards during the period between the announcement of a regulation and the compliance date of the regulation) and a long

- term assessment (based on the costs and marginal impacts over the 30- year analysis period). The impacts analyzed include INPV (which values the industry based on Field Code Changed53 CRE NOPR ECS OMB Compare 

### .docx 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 potential impacts on different types of manufacturers, paying particular attention to impacts on small manufacturers. Third, DOE considers the impact of new or amended standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for new or amended standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of other DOE regulations and nonDOE regulatory requirements on manufacturers.

For individual consume r s customer s , measures of economic impact include the changes in LCC and the PBP associated with new or amended standards. The LCC, which is also separately specified 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) , and 6316(e)(1) ), is discussed in the following section. For

consumer s customer s in the aggregate, DOE also calculates the NPV from a national perspective of the economic impacts on consumer s custom er s over the analysis period used in a particular rulemaking. For a description of the methodology used for assessing the economic impact on consumer s customer s , see sections IV.H and IV.I ; for results, see section s V.B.1 and V.B.2 of this notice. Additionally, c hapters 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.K ; for results , see section
V.B.2 of this notice . Additionally, c hapter 13 of the NOPR TSD contains a detailed54 CRE NOPR ECS OMB Compare 

### .docx description of the methodology and discussion of the results

.

b. 

### Life

- Cycle Costs The LCC is the sum of the purchase price of equipment (including the cost of its installation) and the operating costs (including energy and maintenance and repair costs ) discounted over the lifetime of the equipment. The LCC savings for the considered efficiency levels are calculated relative to a base

- case scenario , which reflects likely trends in the absence of new or amended standards. DOE carrie d out the LCC analysis for this rulemaking by analyzing the LCC impacts on th ose consumer s customer s who purchase the equipment in the year in which compliance with the new standard is required. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE uses a range of values , each with its own probability of selection. In addition to identify ing distribution of consumer customer impacts, DOE evaluates the LCC impacts of potential standards on identifiable subgroups of

consumer s customer s who may be disproportionately affected by a new national standard. For the results of DOE’s analyses related to the LCC , see section V.B.1 of this notice and chapter 8 of the NOPR TSD ; for LCC impacts on identifiable subgroups , see section
V.B.1 of this notice and chapter 1 1 of the NOPR TSD

.

c. 

### Energy Savings While significant conservation of energy is a statutory requirement for imposing an energy conservation standard, EPCA also requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expec ted55 CRE NOPR ECS OMB Compare 

### .docx to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and 6316(e)(1) ) DOE uses NIA spreadsheet results in its consideration of total projected savings. For the results of DOE’s analyses related to the potential energy savings, see sect ion VI.B.3 of this notice and chapter 10 of the NOPR TSD.

d. 

### Lessening of Utility or Performance of Equipment In establishing classes of equipment, an d in evaluating design options and the impact of potential standard levels, DOE seeks to develop standards that would not lessen the utility or performance of the equipment under consideration. None of the TSLs presented in today’s NOPR would reduce the utility or performance of the equipment considered in the rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(e)(1)) During the screening analysis, DOE eliminated from consideration any technology that would adversely impact consumer customer utility. For th e results of DOE’s analyses related to the potential impact of amended standards on equipment utility and performance, see section IV.D of this notice and chapter 4 of the NOPR TSD.

e. 

### Impact of Any Lessening of Competition EPCA d i rects DOE to consider the impact of any lessening of competition , as determined in writing by the Attorney General, that is likely to result from standards. the imposition of a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) Specifically, 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 and to transmit such determination to the Secretary, not later than 60 days after the56 CRE NOPR ECS OMB Compare 

### .docx publication of a proposed rule, together with an analysis of the nature and extent of such impact. (4 2 U.S.C. 6295(o)(2 )( ) B )(i)(V), (ii) and 6316(e)(1) ) For the results of DOE’s analysis related to lessening of competition, see section V.B.5 of this notice.

f. 

### Need of the Nation to Conserve Energy Another factor that DOE must consider in determining whether a new or amended standard is economically justified is the need for national energy and water conservation. (42 U.S.C. 6295(o)(2)(B)(i)(VI) and 6316(e)(1) ) The energy savings from new or amended standards are likely to provide improvements to the security and reliability of the Nation’s energy system. Reductions in the demand for electricity may also result in reduced costs for maintaining th e reliability of the Nation’s electricity system. DOE conducts a utility impact analysis to estimate how new or amended standards may affect the Nation’s needed power generation capacity.

Energy savings from amended standards for commercial refrigeration equipment are also likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production ( i.e. , from power plants). For a discussion of the results of the analyses relating to the potential environmental benefits of the amended standards, see section s IV.N , IV.O and V.B.6 of this notice. DOE reports the expected environmental effects from the proposed standards, as well as from each TSL it considered for commercial refrigeration equipment, in the environmental

assessment emissions analysis contained in chapter 1 5 13 of the NOPR TSD. DOE also reports estimates of the economic value of emissions reductions resulting from the57 CRE NOPR ECS OMB Compare 

### .docx considered TSLs

. in chapter 1 4 of the NOPR TSD

.

g. 

### Other Factors EPCA allows the Secretary, 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) a nd 6316(e)(1) ) In developing the TSLs set forth in this notice, 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 notice.

2. Rebuttable Presumption As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(e)(1) , EPCA provides for a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer customer of equipment that meets the new or amended standard level is less than three times the value of the first

- year energy (and, as applicable, water) savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE’s LCC and PBP analyses generate values that calculate the
PBP for consumer s customer s of potential new and amended energy conservation standards. These analyses include, but are not limited to, the 3- year PBP contemplated under the rebuttable presumption test. However, DOE routinely conducts a full economic analysis that considers the full range of impacts to the consum er customer , manufacturer, Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)

. The results of th ese analys e s serve as the basis for DOE to evaluate the economic Field Code Changed58 CRE NOPR ECS OMB Compare 

### .docx justification for a potential standard level definitively (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.H.12 of this notice and chapter 8 of the NOPR TSD

.

IV. Methodology and Discussion of Comments

A. General Rulemaking I ssues During the April 2011 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 discuss ed in this section.

1. Statutory Authority In the p reliminary a nalysis, DOE stated its position that EPCA prevents the setting of both energy performance standards and prescriptive design requirements (see chapter 2 of the p reliminary a nalysis TSD 22

22 U.S. Department of Energy

– Office of Energy Efficiency and Renewable E nergy. Preliminary Technical Support Document (TSD): Energy Conservation Program for Certain Commercial and Industrial Equipment: 

### ) . DOE al so stated its intent to amend the energy performance standards for commercial refrigeration equipment , and not to set prescriptive design requirements at this time (s ee chapter 2 of the preliminary analysis
TSD ). In a written comment, Earthjustice opined that DOE misread EPCA in suggesting that DOE does not have authority to establish design requirements for commercial

Commercial Refrigeration Equipment. Chapter 2. Analytical Framework, Comments from Interested Parties, and DOE Responses. Marc h 2011. Washington, D.C. www.regulations.gov/#!documentDetail;D=EERE

- 2010 -BT- STD

- 0003

- 003059 CRE NOPR ECS OMB Compare 

### .docx refrigeration equipment. More specifically, Earthjustice asserted that DOE’ s interpretation of 42 U.S.C. 6311(18) ignor es that EPCA uses the plural form in compelling this rulemaking to amend energy conservation “standards .” Further, Earthjustice stated, even if DOE were only authorized to promulgate a single standard or single design requirement in any one rulemaking, nothing in EPCA indicates that prior establishment of performance standards would foreclose the issuance of design requirements in a subsequent rulemaking, provided that those design requirements achieved the maximum technologically feasible and economically justified energy savings. (Earthjustice, No. 35 at p p . 4

– 5) 23



### EPCA defines the phrase “ energy conservation standard ” as a performance standard that prescribes a minimum level of energy efficiency or a maximum quantity of energy use for a product or a s a de sign requirement for a product. (42 U.S.C. 6311(18) (A)

– (B) ) Therefore, based on a clear reading of EPCA, DOE must use either a performance standard or a design (prescriptive) requirement in prescribing energy conservation standards

. It has been DOE’s longstanding interpretation that the term “standard” means either a performance standard or a design requirement, and that the plural term “standards” refers to the setting of a collective group of standards across all covered equipment or product classes. Thus , it is not DOE’s interpretation of EPCA that the statute’s use of the plural term “ standards ,” in referring to a collective group of

23 A notation in this form provides a reference for information that is in the docket of DOE’s rulemaking to develop energy conservation standards for commercial refrigeration equipment (Docket No. EERE

- 2010

- BT

- STD

- 0003), which is maintained at www.regulations.gov. This notation indicates that the statement preceding the refer ence is document number 35 in the docket for the commercial refrigeration equipment energy conservation standards rulemaking, and appears at pages 4–5 of that document

.60 CRE NOPR ECS OMB Compare 

### .docx equipment classes , grants DOE the authority to set both prescriptive and performance standards for a given class within that group. In the case of commercial refrigeration equipment, all of the equipment that is the subject of this rulemaking is currently covered either by a statutorily mandated performance standard or by a performance standard set by DOE in the January 2009 final rule. (42 U.S.C 6313(c)(1) –( 3) ; 4)); 74 FR at 1093 (Jan. 9, 2009)

. In this rulemaking, DOE is considering amendments to these performance standards for commercial refrigeration equipment, and is therefore not considering design requirements at this time.

2. January 2009 Final Rule Equipment At the April 2011 preliminary analysis public meetin g, AHRI stated that in 2005 when the legislation that was to become EPACT 2005 was drafted, the drafters’ intent was not for DOE to start a rulemaking on remote cases in 2010. According to AHRI, the drafters’ intent was that DOE start the rulemaking on sel f- contained units. AHRI pointed out that manufacturers w ould have to redesig n products (those covered by the 2009 DOE final rule) twice in a 4- year period , first to meet the 2009 DOE standards in 2012, and then again to meet the 2013 standards in 2016

. AHR I asked DOE to factor take that redesign into the equation account , a situation AHRI described as unprecedented. (AHRI, Public Meeting Transcript, No. 31 at p p . 204

– 05) AHRI elaborated on this situation in its written comment, expressing its belief that DOE’s decision it is illogical that DOE decided to analyze equipment types for which standards have exist , but with which manufacturers are not yet become effective is illogical required to comply

. AHRI stat ed that the intent of Congress was never to require DOE to start a rulemaking on this61 CRE NOPR ECS OMB Compare 

### .docx equipment, and question ed how DOE could possibl y assess whether amend ed standards are appropriate before the January 2009 final rule standards become effective . AHRI and reach the stage where manufacturers must comply . AHRI urg ed DOE to focus on self

contained refrigerators and freezers with doors in this rulemaking . (AHRI, No. 43 at pp. 1–2)

Similarly, Zero Zone expressed disappointment with the fact that the current rulemaking was initiated before the standards compliance date of January 1, 2012 specified in the January 2009 final rule

. Zero Zone went on to state that waiting until after this compliance date to initiate a rulemaking would have allowed DOE to determine the accuracy of its models and the impacts on industry. (Zero Zone, No. 37 at p. 1)

The EPACT 2005 amendments to EPCA require DOE to conduct a rulemaking to determine whether to amend the standards for commercial refrigeration equipment established under 42 U.S.C. 6313(c) , which covers both the standards prescribed by EPACT 2005 and the standards set by DOE in the January 2009 final rule. (42 U.S.C. 6313(c)( 5 6 )) If DOE determines that these standards should be amended , DOE must publish a final rule establishing such amended standards by January 1, 2013. Id

. Regarding AHRI’s comment, DOE is thus compelled by statute to conduct this rulemaking with a scope of coverage including the equipment specified in both EPACT 2005 and in the January 2009 final rule. In response to Zero Zone’s comment s concerning the burden imposed by amended standards, DOE has considered manufacturer impacts in the MIA, as required by 42 U.S.C. 6295(o)(2)(B)(i)(I) and62 CRE NOPR ECS OMB Compare 

### .docx 6316(e)(1) . DOE has also used its manufacturer interviews as a forum to discuss and receive feedback on the inputs to and accuracy of its models

.

3. Normalization Metrics
In chapter 2 of the preliminary analysis TSD , DOE stated its proposal to retain the current normalization metrics for all equipment classes and requested comment from interested parties. Traulsen agreed with DOE’s tentative plan to use cabinet volume as the normalization metric for “appropriate” equipment, but noted that there are other (unspecified) design factors that need to be considered. (Traulsen, No. 45 at p. 2) Zero Zone stated tha t evaluation of the normalization metrics should take place after the January 2009 final rule compliance date. (Zero Zone, No. 37 at p. 4)

During the NOPR analyses, DOE took into account stakeholder input when reviewing normalization metrics for covered equipment. DOE agree s with Traulsen that volume is the appropriate normalization metric for most self

- contained equipment classes , and considered the applicable design factors in its engineering analysis.

. With respect to the comment by Zero Zone, the timing of this proceeding made it difficult for significant amounts of data on sales and other factors to be acquired after the January 2009 final rule compliance date of January 1, 2012. DOE took into account information regarding the size and composition of the commercial refrigeration equipment market obtained through manufacturer interviews , market research publications, and other

sources during the NOPR stage.63 CRE NOPR ECS OMB Compare 

### .docx 4. Inadvertent Coverage of Certain Equipment
4. Tr eatment of Blast Chillers, Thawing Cabinets, Prep Tables, Salad Bars, and Buffet Tables In its written comment, Traulsen expressed concern that DOE may inadvertently include equipment such as prep tables, blast chillers, and thawing cabinets in standards i t develop s. (Traulsen, No. 45 at p. 1) During the ongoing rulemaking, DOE also received several inquiries from interested parties regarding the coverage, under current or amended energy conservation standards, of salad bars, buffet tables, and other refrigerated holding and serving equipment.

EPCA, in its definition of “commercial refrigerator, freezer, and refrigerator

freezer , ” states that such equipment must display or store merchandise or other perishable materials horizontally, vertically , or semi

- vertically, and must be designed for pull

- down temperature applications or holdi ng temperature applications , among other factors

. (42 U.S.C. 6311(9)(A)) Moreover, 42 U.S.C. 6311(9) defines “holding temperature application” as specifically omit ting blast chillers or freezers , and specifies that “pull

down temperature application” refer s solely to equipment designed to cool 12 ounce beverage cans from 90 to 38 **°** F in 12 hours or less. Due to its specificity, Thus, blast
chillers and thawing cabinets do not meet the relevant statutory definition precludes coverage of blast chillers by standards set for pull

- down or holding temperature applications. , and will not be addressed in this rulemaking.

With regard to buffet prep tables , chef bases, and prep with open bins or trays ,64 CRE NOPR ECS OMB Compare 

### .docx salad bars, and buff et tables, DOE does not currently have energy conservation standards that cover this equipment. DOE notes that some of this equipment is designed for the temporary placement of food during preparation , cooking, or service, rather than long

term storage or retailing , and may operate very differently from the commercial refrigeration equipment considered in this rulemaking

. Moreover, DOE’s current test procedure does not include a provision for the testing of this equipment

. provision s for testing this typ e of equipment

. For example , some types of foodservice equipment (such as salad bars, buffet tables, and prep tables) do not have doors, drawers, or openings typical of convention al comm ercial refrigeration equipment. While DOE has the authority to set standards for other types of commercial refrigeration equipment (42 U.S.C. 6313(c)( 4 5 )(B)), this rulemaking is not currently considering standards for equipment types other than th ose covered by DOE’s existing standards. 10 CFR 431.66

5. Dedicated Remote Co ndensing Units Several stakeholders inquired whether equipment consisting of a refrigerated case served by a single, dedicated remote condensing unit that serves only that unit would be covered under DOE’s proposed standards . True Manufacturing (True) stated that smaller unit s are more likely to have such a condensing unit, and that continuous cases 24 

### are almost exclusively rack condensing systems 25

24 In most supermarket and large food retail settings, multiple display cases from a manufacturer are attached together into a single continuous lineup without internal partitions; these are referred to as

“ continuous cases

. .” 

### due to the energy savings gained in the long term by rejecting heat outside of the building. (True, Public Meet ing Transcript, No.

25 Rack condensing systems utili ze a “rack” of multiple compressors and a condenser that serves to deliver liquid refrigerant to a number of different pieces of equipment served by the single rack. For example, most supermarkets have one or more compressor racks to serve their display cases, walk

- in coolers and freezers, and other equipment.65 CRE NOPR ECS OMB Compare 

### .docx 31 at p p . 268

– 69) Southern Store F ixtures stated that it is very difficult for the company to predict whether a given case that it build s will ultimately be connected to an individual condensing unit or to a compressor rack. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 268) Zero Zone commented that 20 to 40 percent of the units it sells are served by dedicated condensing units, and tha t the remainder are served by racks, noting that business es such as convenience stores and dollar stores use dedicated condensing units in the interest of simplicity. (Zero Zone, Public Meeting Transcript, No. 31 at p. 269) In its written comment, Earthjus tice referenced Zero Zone’s statement that
20 to 40 percent of remote condensing commercial refrigeration equipment is served by dedicated remote condensing units , and stated that because there is a significant market share for such equipment, DOE should explore standards that address the performance of such units. (Earthjustice, No. 35 at p. 4)

DOE understands that some stakeholders are concerned that shipments of equipment utilizing dedicated remote condensing unit s may comp ri se a nontrivial portion of the market. However, neither the ASHRAE 72 method of test nor the AHRI 1200 DOE test procedure contain s does not contain a methodology for testing such condensing units. Currently DOE anticipates working with the industry in the fut ure to develop testing methodologies that can be used in future commercial refrigeration equipment rulemakings. For this c urrent rulemaking , display cases connected to dedicated remote condensers will be treated like any other piece of remote condensing equipment under the DOE test procedure , with the energy of the remote condensing unit calculated as specified in AHRI 1200 and added to the measured energy consumption of the display66 CRE NOPR ECS OMB Compare 

### .docx case. As there is no industry

- accepted method of test for dedicated remot e condensers, DOE proposes to continue to treat equipment utilizing this condensing unit configuration in the same manner as all other display cases connected to remote condensers.

Also, as Southern Store Fixtures note d , it is often difficult or impossible for the display case manufacturer to know ahead of time whether a given case will be attached to a dedicated remote condensing unit or a remote condensing rack by an end user

. In some cases, the dedicated condensing unit is produced by a separate manufacture r and purchased independently. As Zero Zone stated, the majority of remote condensing cases are still sold to be connected to a remote condensing rack system that serv es multiple pieces of equipment . Thus, DOE believes that comparing remote condensing cases based on the calculated performance of a typical remote condensing rack , in the manner prescribed by AHRI 1200, is a consistent way to compare performance of remote condensing display cases.

In chapter 2 of the preliminary analysis TSD , DOE discussed the potential of addressing coverage of remote condensers in a separate future rulemaking. DOE believes that, should any such action take place in the future , such a proceeding would be the appropriate venue in which to investigate dedicated remo te condensers.

6. Small Units Traulsen stated that it believe s that small er units are effectively prohibited under

current DOE regulations, and that it recognize s that legislative change is the proper67 CRE NOPR ECS OMB Compare 

### .docx avenue for resolution of this issue. (Traulsen, No. 45 at p. 5)

DOE understands manufacturer concerns regarding the performance of small units, and took steps to account for them in its analyses. In its engineering analysis, DOE selected specification s for units that it found to be representative of typical, high sales volume models for each of the equipment classes directly analyzed. These selections were based on market and industry research , and the representative unit specifications were presented to manufacturers for their feedback and input during manufa cturer interviews . The representative units were then used as one analysis point in developing the standard

- level equations for their respective classes. DOE also developed “offset factors” that form the second analysis point used in developing the linear equations that represent the equipment standards. The purpose of the offset factor is to account for energy consumption end effects inherent in equipment of all sizes so that certain groups of units , including small units, would not b e disadvantaged by the standard

- level equations. An example To understand how the offset accounts for size effects, consider the energy consumption of a single lighting fixture

— a feature common to all sizes within a certain class is a single lighting fixture present in all of VCT display cases. The development of offset factors resulted in energy allowances at zero case volume or TDA, thus preventing even the smallest cases from being disadvantaged by the standards. The procedure that DOE used to develop the offset factors implici tly assumes that small units are relatively less efficient than larger units , particularly in the case of the smallest

- sized equipment. Therefore, DOE believes that its analysis adequately accounts for smaller units. A detailed discussion of offset factors can be found in chapter 5 of the NOPR TSD.68 CRE NOPR ECS OMB Compare 

### .docx 7. Consideration of Impact of Amended Standards Traulsen stated that there are many niches of commercial refrigeration equipment that are essential to manufacturers and customers, and that setting overly aggressive standards may lead to inadvertent equipment design obsolescence. Traulsen thus urged DOE to take a conservative approach when setting mandatory standards. (Traulsen, No. 45 at p. 1)

DOE performed a n MIA , as required by 42 U.S.C. 6295(o)(2)(B)( i)(I) and 6316(e)(1), in which it assessed both the qualitative issues of concern to manufacture r s and the quantitative potential impacts to the commercial refrigeration equipment industry. These impacts were weighed and taken into consideration during the selection of the proposed standard level in an effort to minimize adverse impacts on the industry. DOE also notes it considers the design configurations offered in the commercial refrigeration equipment market in its analysis and selection of equipment cl asses. As required by EPCA, DOE does not set standards that eliminate equipment designs that deliver unique utility or features for consumers. ( 42 U.S.C. 6295(o)(4) and 6316(e)( 1))

8. CO 2 

### Cascade Systems Hussmann stated that, in California, Title 24 26

26 “Title 24” refers to Title 24, part 6 of the California Code of Regulations, and includes California’s energy efficiency standards for residential and nonresidential buildings. This is available at : 

### allows the use of CO 2 

### cascade

www.energy.ca.gov/title24/

.69 CRE NOPR ECS OMB Compare 

### .docx systems , 27 

### and that compliance with both Title 24 and amended DOE standards could make development of a CO 2 

### cascade system difficult. (Hussmann, Public Meeting Transcript, No. 31 at p. 153) True stated that there is no DOE tes t procedure for cascade systems, and that there has been no consideration of cascade systems in the standards

setting process. (True, Public Meeting Transcript, No. 31 at p. 154)

DOE agrees with True that secondary coolant systems, including CO 2 

### cascade

s ystems, are not being addressed in this rulemaking , partially due to the lack of an industry

- accepted method of test for this type of equipment. DOE articulated its rationale in the preliminary analysis TSD chapter 2 and maintains the position in this notice

.

9. Coverage of Existing Cases Undergoing Refurbishments or Retrofits During the NOPR analysis period, DOE received a stakeholder inquiry as to whether the Department’s energy conservation standards apply only to new equipment manufactured or importe d after the compliance date, or to existing equipment undergoing retrofits and refu r bishments as well.

DOE wishes to clarify that energy conservation standards apply only to new equipment, and not to previously installed equipment undergoing retrofits or refurbishments . As DOE stated in its Certification, Compliance and Enforcement final rule published on March 7, 2011, manufacturers and private labelers must certify to DOE

27 A cascade system is a type of secondary

- loop refrigeration cycle that uses a higher

- temperature refrigerant to condense the secondary refrigerant, in this case carbon dioxide, which is then used to cool the refrigerated space.70 CRE NOPR ECS OMB Compare 

### .docx that any covered equipment meets the applicable standard before distributing that

e quipment into U.S. commerce. DOE’s authority covers newly manufactured equipment and does not extend to rebuilt and refurbished equipment. 76 FR 12422, 12426 and 12437 (March 7, 2011)

.

10. Components Shipped as After

- Market Additions DOE has received inquiries regarding open commercial refrigerated display cases that may be shipped with doors to be installed in the field. Stakeholders have sought guidance on whether equipment that is produced and shipped in this manner would be subject to the standards applicable to an open case or subject to the standards applicable

to a closed case.

DOE’s response to th e issue of components shipped as after

- market additions will be addressed in the on-going test procedure rulemaking

.

11. Definition of Hybrid Equipment During the NOPR analysis period, DOE received a comment regarding the definition of hybrid equipment. Specifically, the stakeholder inquired about the proper definition of commercial hybrid refrigerator

- freezer and the app licable standards.

DOE’s respons e to the issue of hybrid equipment will be addressed in the ongoing test procedure rulemaking

. Comment [A14]: Revision requested by OIRA. Comment [A15]: Revision requested by OIRA.

Comment [A16]: Revision requested by OIRA. Comment [A17]: Revision requested by OIRA.71 CRE NOPR ECS OMB Compare 

### .docx 12. Coverage of Commercial Refrigeration Equipment with Drawers DOE has received several comments from interested parties regarding the coverage of commercial refrigeration equipment units with drawers. Specifically, interested parties inquired if commercial refrigeration equipment units with drawers were covered under the existing and proposed energy conservation standards for com mercial refrigeratio n equipment and, so , (1) which equipment families they belong to ; and (2) what the test procedure requirements are for these units.

DOE’s response to the issue of commercial refrigeration equipment with drawers will be addressed in the on- going test pr ocedure rulemaking

.

B. Test Procedures DOE received several comments that pertain only to the test procedure rulemaking. DOE responded to these and similar comments in the 201X 2012 test procedure final rule

. XX 77 FR XXXX (XXXX, 2011 at 10298, 10300 , and 10307 (Feb. 21, 2012 ). Specifically, DOE received comments from multiple interested parties that
many cases ar e installed with remote lighting controls that a re operated at the aisle or store level (Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 190–91, 194; Zero Zone, Public Meeting Transcript, No. 31 at p. 196; California Investor Owned Utilities, No. 42 at p. 4) and, according to the North west Energy Efficiency Alliance (NEEA), that cases wired uniquely to receive a remote energy management system should receive credit in the DOE test procedure. (NEEA, Public Meeting Transcript, No. Comment [A18]: Revision requested by OIRA. Comment [A19]: Revision requested by OIRA.72 CRE NOPR ECS OMB Compare 

### .docx 31 at p. 195) DOE also received comments from interested parties that an accepted test method for secondary coolant systems, especially those with two -phase flow, had not been developed and validated. (True, Public Meeting Transcript, No. 31 at pp. 162

– 64; Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 164– 65; AHRI, Public Meeting Transcript, No. 31 at pp. 165–66) Because these comments pertain only to the test procedure for commercial refrigeration equipment and not the potential standard s or analysis discussed in this rulemaking, DOE addressed these comments in the 201X 2012 test procedure final rule and has not addressed them further here

. DOE did receive one

comment that relate d to both the test procedure and the proposed energy conservation standard , which is addressed below

.

NEEA stated that DOE’ s efforts to conduct a robust standards analysis are hindered by DOE’s failure to resolve some test procedure issues and the fact th at test procedure limitations have resulted in the remov al of some technologies from consideration. Among these iss ues , according to NEEA, are the inability of the test procedure to measure savings from anti

- sweat heater controls and the screening out of variable

- speed and variable

- capacity components based on the perceived limitations of the test procedure. (NEEA, No. 36 at p. 1)

DOE recognizes stakeholders’ desire to that the DOE test procedure better measure the performance of variable

- speed and variable

- capacity devices

. However, i n the 2011 2012 test procedure final rule, DOE stated that testing of part

- load technologies would significantly increase the burden on manufacturers to test and certify equipment73 CRE NOPR ECS OMB Compare 

### .docx and is not justified given the minimal efficiency gains achieved by this equipment. XX 77
FR XXXX (XXXX, 2011 at 10308 (Feb. 21, 2012 ). As such, DOE maintained that the fluctuations in refrigeration load experienced by equipment undergoing the DOE test procedure are sufficiently representative of average use , and that the establishment of additional test requirements would impose an undue burden on man ufacturers. When evaluating amended energy conservation standards, DOE bases its engineering analysis

on the energy efficiency of a unit as tested by the DOE test procedure. DOE has assess ed the potential energy savings associated with technologies as tested under the test procedure established in DOE’s 2011 2012 test procedure final rule and consider ed technologies based on the factors prescribed by EPCA . ( 42 U.S.C. 6295(o)(2)(B)(i ) and 6316(e)(1 ))

C. 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.
Thi s activity includes both quantitative and qualitative assessme nts based primarily on publicly available information ( e.g. , manufacturer specification sheets, industry publications) and data submitted by manufacturers, trade associations, and other stakehol ders. 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 rebate74 CRE NOPR ECS OMB Compare 

### .docx programs and tax credits); and (7) technologies that could improve the energy efficiency of the equipment under examination. DOE researched manufacturers of commercial refrigeration equipment 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 other performance

- related feature that justifies a different standard for equipment having such a feature. (42 U.S.C. 6295(q) and 6316(e)(1) ) 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.

Commercial refrigeration equipment can be divided into various equipment classes categorized by specific physical and design characteristics that affect

. These characteristics impact equipment efficiency , determine the kind of merchandise that the equipment can be used to display , and affect how the customer can access that merchandise. Key physical and design characteristics of commercial refrigeration equipment are the operating temperature, the presence or absenc e of doors ( i.e. , closed cases or open cases), the type of doors used (transparent or solid), the angle of the door or75 CRE NOPR ECS OMB Compare 

### .docx air curtain 28



### 1. Operating Temperature (horizontal, semivertical, or vertical), and the type of condensing unit (remote condensing or self

- contained). The followin g list shows the key characteristics of commercial refrigeration equipment that DOE developed as part of the January 2009 final rule ( 74 FR at 1099– 1100 (Jan. 9, 2009) ), and used during the F ramework and preliminary analysis for this rulemaking:

**•** Medium temperature (38 °F, refrigerators)

**•** Low temperature (0 °F, freezers)

**•** Ice

- cream temperature ( -15 °F, ice- cream freezers)
2. Door Type

**•** Equipment with transparent doors

**•** Equipment with solid doors

**•** Equipment without doors
3. Orientation (air -curtain or door angle)

**•** Horizontal

**•** Semivertical

**•** Vertical
4. Type of Condensing Unit

**•** Remote condensing

**•** Self

- contained

28 An air curtain is a continuously moving stream of air, driven by fans, which exits on one side of the opening in an open refrigerated case and re

- enters on the other side via an intake grille. The function of the air curtain is to cover the opening in the case with this sheet of air, which minimizes the infiltration of warmer ambient air into the refrigerated space.76 CRE NOPR ECS OMB Compare 

### .docx Additionally, because EPCA specifically sets a separate standard for refrigerators with a self

- contained condensing unit designed for pull

- down temperature applications and transparent doors , DOE plans to create a separate equipment class for this equipment

. (42 U.S.C. 6313(c)(3)) DOE include d this equipment in the form of a separate family with a single class (PD.SC.M) for the preliminary analysis

. A total of 49 equipment classes were created , and these are listed in chapter 3 of the NOPR TSD using the nomenclature developed in the January 2009 final rule

. 74 FR at 1100 (Jan

. 9, 2009)

.

During the April 2011 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 sect ion.

a. 

### Equipment Classification Several stakeholders commented on the general equipment classification structure used by DOE in the preliminary analysis. Traulsen stated that, with respect to the currently defined classes of equipment, there are sub

- catego ries subcategories DOE failed to specify, including upright units (1

- , 2

- , and 3

- section; reach

- in ; pass - through ; roll

- in ; and roll

- through) and undercounter units (categorized by length in inches). (Traulsen, No. 45 at p. 1) On the other hand, Zero Zone ap proved of DOE’s proposed equipment classes , as presented in the preliminary analysis TSD . (Zero Zone, No. 37 at p. 4) AHRI stated that the equipment class nomenclature developed by DOE in the January 2009 final rule77 CRE NOPR ECS OMB Compare 

### .docx was appropriate. (AHRI, No. 43 at p. 2)

In response to Traulsen’s comment, DO E recognizes that there are subcategories of equipment within certain equipment families and classes, each with varying geometries. However, DOE believe s that the equipment classes it has developed and modeled are broad enough to account for the variety of equipment incorporated within each of them , including the unit types described in Traulsen’s comment

. In performing its engineering analysis, DOE selected representative unit sizes and feature sets for modeling so as to best represent a typical unit for each given class. Regarding the comments from Zero Zone and AHRI, DOE has retained the equipment classes and nomenclature adopted in the January 2009 final rule (7 4 FR 1092, at 1100 (Jan. 9, 2009) ) a nd used in the
F ramework document and preliminary analysis for this NOPR

.

b. 

### Application Temperature Equipment DOE received feedback on the subject of application temperature equipment 29

29 Application temperature equipment is equipment that is designed to operate at temperatu res distinctly different from the DOE rating temperatures of 38 °F, 0 °F, and

- 15 °F. Examples include wine chillers and candy cases, which operate in the range of 45 to 60 °F. 

### at the April 2011 preliminary analysis public meeting and in written comments. NEEA stated that the difference between DOE rating temperatures and application temperatures can be significant, and commented that allowing for manufacturers to demonstrate that equipm ent to meet meet s a standard defined by rating temperature standard while tested by testing at (presumably higher) application temperature temperature s would equate to a very lenient standard for such equipment. (NEEA, Public Meeting Transcript, No. 31 at78 CRE NOPR ECS OMB Compare 

### .docx pp. 26–27) NEEA added that, for such equipment, the difference between ambient conditions and internal conditions would be much lower than for equipment maintaining a temperature of 38 ° F, and that daily energy use for this equipment would be lower as well. Thus, while NEEA agreed that cabinets should be tested at the lowest temperature they can achieve, NEEA stated that, if the standard for such cabinets is set equal to the level of energy use of cabinets designed to hold 38 ° F, that equipment may be much less efficient than what could be cost

- effectively possible were separate standards set for the equipment . (NEEA, No. 36 at p. 2) NEEA further asked why DOE was not setting proposing to set separate standards for application temperatur e equipment. (NEEA, Public Meeting Transcript, No. 31 at p p . 26 –27) NEEA stated that, while DOE has dismissed concerns regarding application temperature equipment because it is roughly 2 percent of the market, NEEA has heard from manufacturers that it is a growing market segment and added that 2 percent is, in its opinion, a nontrivial portion of the market. (NEEA, No. 36 at p p . 1 –2)

Moreover, NEEA asserted that DOE failed to acknowledge the differences between high

- temperature equipment (e.g. , floral cases) and ice storage cabinets , and suggested two new equipment classes for these products : one for equipment with cabinet temperature greater than 40 °F and one for ice storage cabinets that can operate outdoors and are design ed to hold temperatu res between 20 and 30 °F . (NEEA, No. 36 at p. 2; NEEA, Public Meeting Transcript, No. 31 at pp. 26–27) NEEA further opined that ice storage cabinets in particular are often used in environments not well represented by the test procedure conditions, namely outdoor environments. NEEA added that to allow the79 CRE NOPR ECS OMB Compare 

### .docx test procedure to not represent the operating conditions of this equipment would violat e 42 U.S.C. 6295(2). (NEEA, No. 36 at pp. 1 –2)

True stated that, during the test procedure public meeting, interested parties suggest ed that the lowest application temperature should include ice storage and be in the mid

- twenties. ( True, Public Meeting Transcript, No. 31 at p. 177) Traulsen commented that it d id not have an issue with testing equipment at internal temperatures that are higher than the rating temperatures, such as 50 ° F or 10 °F. However, Traulsen expressed concern regarding equipment that is designed to run at internal temperatures that are lower than the rating temperature, or ambient temperatures that are higher than the test ambient temperature. Specifically, Traulsen stated that this equipment inherently uses more energy at the design conditions (often very high ambient temperatures and relative humidities) and may also use more energy at the designated rating conditions (the temperature and relative humidity values specified by ASHRAE 72 -2005) as well. Traulsen provided the examples of a piece of equipment designed to hold ice cream at

- 40 ° F and a unit designed for 105 ° F ambient conditions. (Traulsen, No. 45 at p. 2)

In the 201X 2012 test procedure final rule, DOE adopted provisions that allow for the testing of commercial refrigeration equipment that cannot operate at its prescribed rating temperature at the “lowest application product temperature.” DOE defined “ lowest application pro duct temperature ” as “ the integrated average temperature closest to the specified rating temperature for a given piece of equipment achievable and repeatable, such that the integrated average temperature of a given unit is within ±2 °F of the80 CRE NOPR ECS OMB Compare 

### .docx reported lowe st application product temperature for that basic model .” DOE also applied this provision to all refrigerators, freezers, and ice

- cream freezers. XX 77 FR XXXX (XXXX, 2011 at 10302 (Feb. 21, 2012 ).

DOE maintains that units tested at the lowest application product temperature will still be required to meet the applicable energy conservation standard based on their equipment class. The required standard level will not change based on the different rati ng internal temperature of at which a particular unit is tested . While DOE understands that this requirement may result in slightly less stringent standards makes it easier for the a small number of units ( that cannot be tested at the prescribed rating temperatures ) to meet the current standards , DOE does not believe that establishing separate equipment categories for these niche types of equipment would be justified because the energy savings achievable with such standards would be relatively small

. In response to NEEA’s suggestion that ice chests designed to operate outdoors be tested at alternate ambient conditions, DOE notes that its test procedure prescribes only one ambient condition. DOE believes this ambient condition is adequately representative of the operating conditions for the majority of commercial refrigeration equipment

. Prescribing alternate ambient rating conditions for these cases would require establishing a new equipment class for this equipment, which DOE believes is not justified giv en the small shipment volume and niche application of this equipment Additionally, DOE has seen no evidence that a unit designed to perform at stricter conditions than the DOE test procedure ( i.e. , higher ambient temperature and/or humidity) would have difficulty meeting a standard at the conditions prescribed in the test procedure

.81 CRE NOPR ECS OMB Compare 

### .docx In response to NEEA’s assertion that application temperature equipment is a growing commercial refrigeration equipment market segment, DOE has no data to substantiate the a ssertion. DOE has not collected shipments data indicat ing that such a trend exists , nor hav e manufacturer interviews indicated that this is the case. Application temperature equipment represents a niche equipment market, and this equipment has been in exis tence for a long time ( e.g., candy cases, wine cases, floral cases). DOE has no evidence indicating that this market segment will grow disproportionately to other equipment types.

DOE also agrees with Traulsen that testing these units at a higher integrated average temperature does not necessarily mean that the unit will use less energy. The variability in energy use and the impact of variation in integrated average temperature will vary based on case type, geo metry, and configuration. This variation would make setting a consistent s tandard for h igh

- temperature or intermediate -t emperature equipment impractical , because any value chosen would not be representative of all cases.

c. 

### Open Cases At the April 2011 prel iminary analysis public meeting and in written comments, numerous stakeholders revisited the issue of DOE’s proposed decision to retain separate standards for open and closed cases. Earthjustice first raised the issue, inquir ing about the evidence behind D OE’s assertion that open cases provide distinct utility with respect to features such as unobstructed view and access to product, as well as simplified stocking,82 CRE NOPR ECS OMB Compare 

### .docx cleaning, and maintenance. Earthjustice continued by stating that it wished to renew its
reque st that DOE continue grouping open and doored cases together, adding that any determination of utility is required to be based on substantial evidence. (Earthjustice, Public Meeting Transcript, No. 31 at p p . 23 , 25) AHRI responded that the distinction between the two types of cases was made in the language of EPACT 2005 , which was developed through negotiations among AHRI and other parties, including advocacy groups. (AHRI, Public Meeting Transcript, No. 31 at pp . 24 –25) Southern Store Fixtures added th at open and doored cases are two distinct types of equipment with different applications, and that they cannot be combined into a single category. Southern Store Fixtures also stated that substantial analysis and evidence would have to be provided in order to show that there would be no product loss or sales loss as a result of moving from open to doored cases. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p p. 28–29)

In further discussion at the public meeting, Earthjustice stated that it had submitted to DOE a study conducted by ASHRAE, 30

30 Fricke, B.A., and B.R. Becker

. Comparison of Vertical Display Cases: Energy and Productivity Impacts of Glass Doors Versus Open Vertical Display Cases . December 2009. American Society of Heating, Refrigerating and Air

- Conditioning Engineers, Atlanta, GA. Report No. RP

- 1402

. 

### as well as a Swedish study, regarding to support Earthjustice’s assertion that product sales from open are unaffected by the presence of door on cases . (Earthjustice, Public Meeting Transcript, No. 31 at p. 29) However, Southern Store Fixtures stated that it would dispute the ASHRAE study regarding open cases, and that it would articulate its argument later. (Southern Store

http://rp.ashrae.biz/researchproject.php?rp_id=58083 CRE NOPR ECS OMB Compare 

### .docx Fixtures, Public Meeting Transcript, No. 31 at p p. 29

– 30) 29–30) Additionally, the
Swe dish study was retracted from submission due to copyright issues.

Stakeholders also provided comments regarding the subject of metrics of utility. Pacific Gas and Electric ( PG&E ) stated that, in its opinion, sales would be the most obvious metric, along w ith the ability to keep product at the desired temperature. However, PG&E asked that DOE elaborate on how it would quantify what constitutes utility. (PG&E, Public Meeting Transcript, No. 31 at p p . 30 –31) The California Investor Owned Utilities ( CA IOUs ) i ncluded a similar request in its written comment, asking that DOE clarify what it specifically considers as criteria to justify unique utility. CA IOUs also asked that DOE continue to assess options that would enable open case s to consume amounts of energy similar to those used by equivalent closed cases . (CA IOUs, No. 42 at p. 5) Zero Zone, continuing on the subject of utility, stated that , in its opinion, there may have been utility differences between open and doored cases at one time, but since that time it believe d the market had changed and this difference no longer exists. As a result,
Zero Zone supported the comments suggesting that DOE combine the open and doored display case classes. (Zero Zone, Public Meeting Transcript, No. 31 at p. 32)

The Appliance Standards Awareness Project ( ASAP ) , while not commenting specifically on equipment utility, stated that it believe d the issue of open versus closed

cases is very important from a n NES perspective, as the preliminary analysis docum ents showed that open cases consume two to three times as much energy as comparable doored cases. (ASAP, Public Meeting Transcript, No. 31 at p. 32) CA IOUs agreed with84 CRE NOPR ECS OMB Compare 

### .docx DOE’s assessment that open, low

- temperature vertical and semi vertical cases represent

s mall portions of the market. Further, it pointed out that the California Energy Commission ( CEC ) is proposing to require doors on all upright, low- temperature cases at the State level . (CA IOUs, No. 42 at p. 5)

During the preliminary analysis comment peri od, Earthjustice submitted a detailed comment outlining its position on the issue of open cases. Earthjustice expressed its belief that separate standards for open cases are neither warranted nor required by EPCA, as well as its opinion that such cases pro vide no capacity or performance features justifying separate standards, once again referencing the previously submitted ASHRAE and Swedish studies. Implicitly in response to statements made by AHRI at the public meeting, Earthjustice added that EPACT 2005’ s codification of standards for equipment with doors does not require DOE to maintain separate classes for equipment without doors. (Earthjustice, No. 35 at p.1) Earthjustice expressed the belief that DOE’s intention to adhere to its previous stance that the presence or absence of doors on cases affects case utility ignores the evidence that has been presented in the form of the aforementioned ASHRAE and Swedish sales studies, and that EPCA requires DOE’s factual conclusions to be supported by substan tial evidence which, according to Earthjustice, DOE has not provided. (Earthjustice, No. 35 at p. 2)

Earthjustice reiterated its disagreement with DOE’s assertion in the preliminary analysis that open cases provide utility in the form of “unobstructed vie w of and access to product, ” citing the two sales studies that it believed to conclude otherwise. Earthjustice85 CRE NOPR ECS OMB Compare 

### .docx also disagreed with DOE’s statement that open cases simplify stocking, cleaning, and maintenance, questioning how the need to prop a door open would impede stocking a case. On the contrary, Earthjustice asserted, reductions in warm air infiltration due to the presence of doors would reduce warm air infiltration and fewer the opportunities for items to fall out of the case onto the store floor would reduce , thereby reduc ing stocking burdens and losses due to products damaged during stocking. Furthermore, Earthjustice stated that DOE has not suggested shorter life cycles for equipment with doors, something it believe s would be a logical outcome were the presence of doors to impair cleaning and maintenance operations. (Earthjustice, No. 35 at p. 2)

Earthjustice then presented a legal argument, stating that, in maintaining that 42 U.S.C. 6295(o) prevents the merging of equipment classes for equipment wi th and without doors, DOE has misconstrued the statutory authority for whether separate classes are required. Earthjustice asserted that DOE has, in its preliminary analysis TSD , attempted to shift the evidentiary burden onto the stakeholders who support e quivalent standards for the two equipment types. Earthjustice commented that, in dismissing the findings of the ASHRAE study, DOE has violate d the plain language of EPCA , which requires that a preponderance of the evidence must support the position that open cases provide a unique feature in order for DOE to conclude that separate equipment classes are required. (Earthjustice, No. 35 at p p . 2

– 3)

Earthjustice suggested that, s hould DOE decide not to merge classes for open and closed cases, DOE should adopt standards reflecting the overlapping applications for the86 CRE NOPR ECS OMB Compare 

### .docx equipment. Earthjustice stated that because equipment with doors is economically advantageous on an LCC basis, e ncouraging a shift to equipment with doors will increase the monetary savings from this rulemaking. (Earthjustice, No. 35 at p

. 3) By adopting highly cost

- effective standards for equipment with doors as well as standards that would result in LCC increases for open cases, Earthjustice suggested, DOE could encourage consumers to purchase cases with transparent doors. Earthjustice stated that DOE has taken a market

- transforming approach in the past. Specifically, Earthjustice referenced the small electric moto rs rulemaking (75 FR 10874 (March 9, 2010)) , in which DOE maintained standards for two types of general purpose single

- phase motors but tailored those standards to encourage the market to shift to one of those types. (Earthjustice, No. 35 at p , . 3) Similarly, Earthjustice added, in the rulemaking for commercial clothes washers (75 FR 1122 (Jan. 8, 2010)) , DOE adopted standards set at the max

- tech level for top

- load ing washers, but less aggressive standards for front

- loading washers, partially to
encourage the growth of front

- loader market share. In conclusion, Earthjustice suggested that DOE adopt the max

- tech level for equipment without doors and a more economically advantageous standard for equipment with doors, thus encouraging the market to sh ift to doored cases. (Earthjustice, No. 35 at p p . 3

– 4)

DOE understands the concern of some stakeholders regarding the issue of open cases. While some stakeholders have reiterated their previous positions on this topic, DOE does not believe that any new data has been presented since the F ramework document public meeting (May 2010) that would warrant a change in DOE’s stance as outlined in the preliminary analysis TSD c hapter 2

. chapter 2 of the preliminary analysis87 CRE NOPR ECS OMB Compare 

### .docx TSD

. DOE maintains that to set standards discouraging users from purchasing open cases would violate its statutory charge to preserve the availability of features and performance characteristics currently on the market. While Earthjustice again cited the ASHRAE

study and the Swedish study comparing sales from open and closed cases, DOE still maintains its position from the preliminary analysis. After having reviewed the ASHRAE study, DOE believes that because the data were collected only under very specific conditi ons in a controlled environment and with a limited rang e of merchandise types , th e data is are insufficient for broad application to drive a conclusion applicable across the broad wide range of open case applications and end uses . As one example, DOE points out that neither study include s fresh produce and packaged meat products in the analysis of impact on product sales, and that these are types of merchandise that manufacturers have mentioned as benefiting from the use of open cases.

Regarding the questions about the definition of utility raised by Earthjustice and PG&E, EPCA states that, in setting or amending standard s , the Secretary must consider, among other factors, any lessening of the utility or performance of the covered produc ts likely from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(e)(1)) EPCA further states that :
the Secretary may not prescribe an amended or new standard under this section if the Secretary finds (and publishes such finding) that interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are88 CRE NOPR ECS OMB Compare 

### .docx substantially the same as those generally available in the United States at the time of the Secretary’ s finding. (42 U.S.C. 6295(o)(4) and 6316(e)(1))

Thus, while the term “utility” is not specifically defined in EPCA, it is used in conjunction with the term “performance” ; the statute further prohibit s DOE from setting standards that result in the unavailability of performance characteristics or features from the U.S. market. While sales performance and foo d safet y could comprise two aspects of performance , “features” also indicates a reference to design, as well as usable features applicable to the end user or consumer. In this case, DOE has determined that

consumer customer access to product is a distinct utilityperformance characteristic or feature in the case of commercial refrigeration equipment and believes , based on its research and discussions with experts and members of industry, that open cases provide more convenient access to products than do closed case s, as well as providing other measures of utility , such as ease of stocking and cleaning

.

In response to the comment by Earthjustice that DOE violated the plain language of EPCA , which requires that a preponderance of the evidence must support the positio n that open cases provide a unique feature in order to conclude that separate equipment classes are required, DOE refers to the language found at 42 U.S.C. 6295(o)(4) and 6316(e)(1) . This language states that the Secretary may not issue a standard if inter ested 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), or features currently available. One89 CRE NOPR ECS OMB Compare 

### .docx statement suggesting that the elimination of open cases would have this effect occurred was presented at the April 2011 preliminary analysis public meeting, when Southern Store Fixtures explicitly stated that open and doored cases are two different equipment types, adding that “substantial analysis and evidence would have to be provided” to ensure that there would be no detriment to performance by combining the classes

. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 28–29) DOE has agreed with this stance in its past and current proceedings, as evidenced by the retention of separate equipment types for open and closed cases in its analyses. At the commercial refrigeration equipment test procedure NOPR public meeting, Coca

- Cola, a major purchaser of display cases, cited internal studies concluding that the presence of doors on displays near registers can decrease sales by 35 to 50 percent . (Docket No.
EERE -2010- BT

- TP -0034 , Coca

- Cola, No. 19 at p. 90) These study results stand in contrast to the assertion by Earthjustice that the two sales studies it provided show that open cases do not provide utility in the form of unobstructed view of and access to product. The conflict between the sets of data suggests that, while both conclusions may be correct in the specific contexts of the respective studies , in some applications the presence of doors on cases can adversely affect sales. Given DOE’s understanding that sales is indeed an important metric of utility, DOE believes that to set standards which could potentially limit this utility in some applications through the presence of doors would be in violation of the language of EPCA. visibility and access to product

. Therefore, elimination of open cases from the market would e quate to the unavailability of this performance characteristic, in direct violation of (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(e)(1))

.90 CRE NOPR ECS OMB Compare 

### .docx In its manufacturer interviews, DOE spoke with several manufacturers who provided anecdotal data regarding the utility of open cases. They pointed to increased sales due to “impulse buys , ” stating that users of open cases reported generating higher revenues out of those cases. Manufacturers also stated that open cases allow for vastly easier stocking of high

- margin items i ncluding produce and meat . The ease of stocking these items is particularly important to retailers, because open cases are stocked continuously while shoppers are in the store, making simultaneous, unobstructed access to the case by both the employee and c ustomer an important utility issue. Manufacturers reaffirmed during these interviews that unobstructed view of and access to product, as well as simplified stocking, as previously referenced by DOE, were significant attributes of open cases. Furthermore, t he manufacturers pointed to better accommodation of non

standard

- sized merchandise within these cases. The information that DOE has gathered regarding market perceptions at conferences and other venues has indicated that many grocery store managers and operators strongly prefer open cases to closed cases, as they perceive that product visibility from a distance i s a very strong factor in sales. Engineers for large chain grocery stores have stated that their efforts to convert even part of the grocery store equipment from open cases to closed cases, during store remodeling, have been met with opposition from store managers due to their perception that open cases lead to higher sales compared to closed cases

. This finding is in contrast to the statement by Zer o Zone that utility differences between open and doored cases no longer exist. The statement by Zero Zone also conflicts with the internal study data quoted by Coca

- Cola, in which that company noted a significant loss in sales due to the presence of doors on91 CRE NOPR ECS OMB Compare 

### .docx display cases in certain settings. As the result of a collective review of the data obtained through its public meetings , manufacturer interviews , and conferences , DOE believes that its position of setting separate standards for open and closed cases is reasonable and based on the distinct performance characteristics of each class, as shown by a preponderance of the evidence presented

. DOE notes that manufacturers did not cite differences in maintenance and cleaning between open and closed cases, but DOE believes the other utility and performance factors cited , including ease of access to the product, increased visibility, and ease of use during operations and maintenance, are sufficient to warrant maintenance of two separate equipment classes.

DOE unde rstands AHRI’s statement that the distinction between case types was made in the EPACT 2005 language, which set standards for closed cases and required DOE to set standards for open cases (42 U.S.C. 6313(c)), and Earthjustice’s response that the codificati on of separate standards does not require DOE to maintain different classes

. However , DOE is restricted by EPCA from prescribing energy conservation standards in any manner that would lessen utility to the consumer customer or result in the unavailability of performance characteristics or features currently on the market. (42 U.S.C. 6295(o)(2)(B)(IV), 6295(o)(4) , and 6316(e)(1)) Therefore, DOE continues to consider open and doored cases to be two distinct equipment types due to the evident performance and feature differences between them.

DOE acknowledges ASAP’s factual statement that open cases have been shown to consume more energy than doored cases and CA IOU’s assertion that open , low

-92 CRE NOPR ECS OMB Compare 

### .docx temperature cases compose comp ris e a small market share. However, independent of these factors, as mentioned previously stated above , DOE is forbidden by EPCA from setting standards that would result in the unavailability on the market of the performance characteristics and features that open cases exhibit. (42 U.S.C. 6295(o)(4) and 6316(e)(1)) Therefore , DOE , th r ough its analys e s, sought to develop separate proposed standard level s for open and closed cases that would result in the maximum economically justified and technologically feasible energy savings for the respective equipment

.

Regarding Earthjustice’s assertion that DOE failed to suggest shorter life cycles for commercial refrigeration equipment with doors, DOE points out that the replacement of doors are is one of the items factors co ntributing to repair costs (see chapter 8 of the NOPR TSD) . Damage to doors does not necessarily contribute to shortening of shorten the life of the entire equipment itself

.

With respect to Earthjustice’s suggestion that DOE force a market shift from open to closed cases by adopting cost

- effective standards for doored cases but less economically attractive standards for open cases, DOE is compelled by EPCA to examine the economic and technical justification of all equipment under the same c riteria and with the same rigor . (42 U.S.C. 6295(o) and 6316(e)(1)) In other words , DOE must independently determine the maximum technologically feasible and economically justified standard level for each equipment class. Therefore , DOE examined all TSLs

e qually using the same quantitative metrics, such as LCC and national NPV , and selected a proposed standard level using these criteria. In response to the suggestion that DOE93 CRE NOPR ECS OMB Compare 

### .docx adopt a market

- transforming approach in which it would intentionally shift market share toward doored cases, DOE believes that to do so would violate the EPCA provision barring DOE from setting standards that result in the lessening of utility or unavailability of performance characteristics

. (42 U.S.C. 6295(o)(4) and 6316(e)(1)) Becaus e DOE has determined that open cases present a unique set of performance characteristics and features to the market, to set standards discouraging eliminating their manufacture and sale would violate 42 U.S.C. 6295(o)(4) and 6316(e)(1). DOE notes that in th e rulemakings for small electric motors and commercial clothes washers that Earthjustice cited, DOE was careful to set standards such that they would not result in the unavailability of features or performance characteristics

. For example, the commercial clothes washer s final rule, published by DOE on January 8, 2010, states that the amended efficiency levels can be met by either top - or front

- loading designs. In fact, the clothes washers final rule notes that there were vertical

- axis top

- loading and hori zontal

- axis frontloading washers on the market at the time that already met the higher standard. Thus,
DOE concluded, consumers would have the same range of clothes washer options, including features valued by consumers such as door placement, capacity, wa ter temperature , and adjustable load sizes. 75 FR 1122, 1133 –34 (Jan. 8, 2010). In the case of commercial refrigeration equipment, DOE believes that separate equipment classes are
necessary to preserve the unique features provided by open refrigerated disp lay cases , established by interested parties as discussed above . DOE does not believe it would be possible to combine standards classes or arbitrarily set more aggressive standards for open cases without violating EPCA provisions regarding utility/product availability . (42 U.S.C. 6295(o)(2)(B) and 6316 ( e)(1) ) As a result, DOE has maintained the position94 CRE NOPR ECS OMB Compare 

### .docx regarding utility of open cases that it asserted in the January 2009 final rule and in its

current preliminary analysis and framework document

. 74 FR 1092, at 1099 (Jan. 9, 2009).

DOE understands that there are other options available in the market to reduce the energy consumption of open cases , such as retrofitting doors to open cases , and that
DOE’s energy conservation standard s may not be the only factor related to improving the energy efficiency of open cases . DOE believes that, in general, management staff of grocery stores is well aware of high energy costs because energy costs consistently figure as one of the top five issues in the Food Marketing Inst itute ( FMI ) Worry Index , 31 

### which is obtained through surveys of the food retailers regarding the most important issues in their business es that cause them to “worry .” Some stores have retrofitt ed their open cases with transparent doors to achieve substantial savings in energy costs. DOE also recognizes that the market for retrofitting open , multi

- deck display cases with transparent doors is steadily increasing. In addition, the adoption of feature s such as night curtains and more

- efficient air curtains are also options available in the market to reduce the energy consumption of open cases.

In its NOPR analyses, DOE modeled open and closed display cases separately, and has included separate proposed standards for the two types of equipment in this notice.

31 FMI Research. The Food Retailing Industry Speaks 2011 . 2011. Food Marketing Institute, Arlington, VA.95 CRE NOPR ECS OMB Compare 

### .docx d. 

### Service Over Counter Equipment AHRI voiced concerns about self

- contained service over counter (SOC) equipment , 32


### , stating that DOE incorrectly determined that SOC equipment was covered by EPACT 200 5 and that this error resulted in an overly stringent standard being applied to the equipment . (AHRI, No. 43 at p. 2) AHRI commented that it , working with other stakeholders, had proposed legislative language that defines SOC equipment and establishes mini mum standards for that equipment, which is included in the Implementation of National Consensus Appliance Agreements Act of 2011 , S

. 398, 112 th Cong. (2011)

. AHRI asked that DOE adopt the definition of SOC equipment that AHRI had proposed in that legislation, and also asked DOE to use TDA as a normalization metric for this equipment. (AHRI, No. 43 at p. 2)

With respect to the statement by AHRI that DOE has incorrectly determined that SOC equipment is within the scope of coverage of EPACT 2005, DO E disagrees, having determined that SOC.SC.M equipment meet s the statutory definition of a self

- contained commercial refrigerator with transparent doors in 42 U.S.C. 6311(9)(A). EPCA does not specify equipment subsets such as SOC equipment beyond defining the terms “commercial refrigerator, ” “ freezer, ” and “ refrigerator

- freezer” and “self

- contained condensing unit,” among other definitions related to this equipment

. (42 U.S.C. 6311(9)) In December 2009, DOE’s Office of Hearings and Appeals (OHA) responded t o an application for exception relief from a manufacturer of SOC equipment. This

32 “ Service over counter ” means equipment with sliding or hinged doors in the back intended for use by sales personnel for loading and retrieving items for sale , and fixed, sliding or hinged transparent panels in the front for displaying merchandise. The equipment has a height no greater than 66 inches and is intended to serve as a counter for transactions between sales personnel and customers.96 CRE NOPR ECS OMB Compare 

### .docx manufacturer argued that it was entitled to relief because its SOC units could not meet the EPACT 2005 standards for self- contained equipment with doors. OHA responded that
DO E did not have jurisdiction to consider such exceptions for equipment covered by the statutorily mandated standards. (Case N o. TEE

- 0066, Dec. 29, 2009)

DOE understands the concerns of the interested parties regarding SOC.SC.M equipment standards. However, DOE cannot, without explicit statutory authority, exempt equipment from the standards prescribed by Congress. During the preliminary engineering analysi s for this rulemaking, DOE found confirmed that the EPACT 2005 standards for SOC.SC.M (42 U.S.C. 6313(c)(2)) could not be achieved at even the max

tech level (see chapter 2, section 2.2.1.5 , of the preliminary analysis TSD chapter 2). (42 U.S.C. 6313(c)(2) ) ). Therefore, DOE agrees with AHRI’s comment that the standard set by EPACT 2005 was too stringent for equipment belonging to equipment class SOC.SC.M. Consequently, DOE ha d excluded SOC.SC.M equipment from further the preliminary analysis as part of this

. 33



### In December 2012, during the NOPR analysis for this rulemaking to date. DOE has similarly excluded SOC.SC.L, a low

- shipments

- volume , the American Energy Manufacturing Technical Corrections Act ( AEMTCA ), Pub. L. 112-210 (Dec. 18, 2012) amended EPCA to establish new standards for self

- contained service over counter

33 DOE ha d also excluded SOC.SC.L, a low

- shipments

- volume equipment class, from the preliminary analysis as well, as it too is covered under standards prescribed by EPACT 2005 for freezers with tran sparent doors found at 10 CFR 431.66 (b). Due to its similarity in design, construction, and performance to SOC.SC.M equipment, DOE presumed that it too would not be able to meet the standards set by EPACT 2005 for self

- contained equipment with transparent doors.97 CRE NOPR ECS OMB Compare 

### .docx medium temperature commercial refrigerators. (42 U.S.C. 6313(c)(4)) The amendment reduces the stringency of the standard applicable to this equipment class, from the analysis as well,

. AEMTCA prescribed the standard for SOC.SC.M equipment manufactured on or after January 1, 2012 as 0.6 × TDA + 1.0, expressed in kilowatt hours per day. (42 U.S.C. 6313(c)(4)(A))

AEMTCA also amended EPCA to direct DOE to determine, within 3 years of enactment of the new standard for SOC.SC.M, whether the standard should be amended

. (42 U.S.C. 6313(c)(4)(B)(1) I f DOE determines that the standard should be amended, then DOE must issue a final rule establishing an amended standard within this same 3-
yea r period

. (42 U.S.C. 6313(c)(4)(B))

DOE conducted the analysis for this determination of whether to amend the standard for equipment class SOC.SC.M as part of this NOPR analysis . The analysis was carried out in a manner similar to that of all the other eq uipment classes being analyzed

as it too is covered under DOE’s part of the current rulemaking. DOE used the standard established by AEMTCA as the baseline efficiency level for equipment class
SOC.SC.M. 34 

### The results of the analysis indicated that if an amendment to the AEMTCA standard for equipment class SOC.SC.M , based on same criteria established for all the other equipment classes of the current rulemaking, 35

34 This approach is similar to that adopted for all the other equipment classes, as explained in section 

### would represent a reduction in
energy consumption of roughly 30 percent as compared to the AE MTCA standard. Based

IV.H.1

. 35 The criteria for trial standard level se lection can be found in section V.A.1 , and discussion concerning the selection of the proposed standard level can be found in section V.C

.98 CRE NOPR ECS OMB Compare 

### .docx on this result, DOE has proposed an amended standard for equipment class SOC.SC.M in this NOPR (see section I and section V.A.2 conservation standards found at ).

10 CFR 431.66 

### (b)

. In response to AHRI’s request that DOE use TDA as a normalization metric for this equipment, t he Janua ry 2009 final rule standards for remote condensing SOC equipment were expressed using TDA as a normalization metric. 74 FR 1092, at 1093 (Jan. 9, 2009)

. As AHRI suggested, DOE proposes in this NOPR to continue to use TDA as the normalization metric for remote condensing SOC equipment. DOE is also proposing to adopt a definition of the “service over counter” equipment family, which is included in this notice. SOC equipment.

DOE is also proposing to adopt a new definition of the “service over counter”
equ ipment family, which is included in this notice. DOE based its proposed definition on the definition of self

- contained service

- over - counter refrigerators (SOC.SC.M) found in Paragraph (1) of section 4 of AEMTCA

. (42 U.S.C. 6313(c)(1)(C)) However , DOE proposes to adopt a broader definition of SOC equipment that DOE believes is applicable to all of the equipment classes that belong to the SOC equipment family , not just the single SOC.SC.M equipment class described by the AEMTCA language

. The proposed def inition can be found in section VIII of this NOPR.

2. Technology Assessment As part of the market and technology assessment performed for the NOPR analysis, DOE devel oped a comprehensive list of technologies that would be expected to99 CRE NOPR ECS OMB Compare 

### .docx improve the energy efficiency of commercial refrigeration equipment. Chapter 3 of the NOPR TSD contains a detailed description of each technology that DOE identified. Although DOE identifi ed a complete list of technologies that improve efficiency, DOE only considered in its analysis technologies that would impact the efficiency rating of equipment as tested under the DOE test procedure. Therefore, DOE excluded several technologies from the analysis during the technology assessment because they do not improve the rated efficiency of equipment as measured under the specified test procedure . Technolog ies that DOE determined impact the rated efficiency were carried through to the screening analysis and are discussed in section IV.D

.

a. 

### Technologies Applicable to All Equipment In the preliminary analysis market and technology assessment, DOE listed the following technologies that would be expected to improve the efficiency of all equipment : higher efficiency lighting, higher efficiency lighting ball asts, remote lighting ballast location , higher efficiency expansion valves, higher efficiency evaporator fan motors, variable

- speed evaporator fan motors and evaporator fan motor controllers, higher efficiency evaporator fan blades, increased evaporator su rface area, low

- pressure differential evaporators, increased case insulation or improvements, defrost mechanisms, defrost cycle controls, vacuum insulated panels, and occupancy sensors for lighting controls. Not all of these technologies were considered in the preliminary engineering analysis ; some were screened out or removed from consideration on technical grounds, as described in chapters 3 and 4 of the NOPR TSD . After the publication of the preliminary analysis, DOE received numerous stakeholder comments regarding these technologies ,100 CRE NOPR ECS OMB Compare 

### .docx discussed below

.

Lighting Technologies In response to DOE’s request for comment, Southern Store Fixtures questioned DOE’s specification for light

- emitting diode ( LED ) lighting because it appeared that LEDs had a lower efficacy in terms of lumens per watt compared to T8 fluorescent lighting (the standard baseline lighting technology) in DOE’s model. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 59–60) Zero Zone observed that while fluorescent lighting is a mature technology, LED lighting is constantly evolving. (Zero Zone, Public Meeting Transcript, No. 31 at p. 63) Additionally, Southern Store Fixtures suggest ed that the efficiency of the driver pow ering the LEDs be explicitly considered , as it is a key aspect of lighting energy consumption. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 62) True noted that light output from LEDs is highly directional , and the additional heat load from the LEDs increases the load on the compressor, which is less efficient than the lighting system

. (True, Public Meeting Transcript, No. 31 at pp. 60–61)

Regarding the comment by Southern Store Fixtures, the output of LED light fixtures used in commercial refrigeration equipment is indeed lower in terms of lumens per watt when compared to T8 fluorescent bulbs. However, for commercial refrigerated display applications, the advantage of LED lighting lies in the directionality of its light output. While T 8 lighting produces greater output in lumens, much of that light is directed toward the ambient space rather than the merchandise to be illuminated, and thus101 CRE NOPR ECS OMB Compare 

### .docx is wasted from a product merchandising perspective. LED lighting, on the other hand, is very directional, and the light can be aimed directly at the product on display. This difference allows for more conservative sizing of LED fixtures and, as a result, overall
power consumption is lower compared to T8 fluorescent lamps.

DOE agrees with the comment by Zero Zone that LED lighting is an evolving technology. As a result, DOE has taken efforts to update its LED fixture cost estimates throughout the rulemaking process, ga thering the most current data available from publicly available sources a s well as from manufacturer interviews. Regarding Southern Store Fixtures’ concern about driver power, this power consumption is considered in the engineering model and is incorporated into the calculation of calculated daily energy consumption ( CDEC ). Sim ilarly, with respect to True’s comment, the impact of lighting on case heat load, and thus compressor power consumption, is accounted for in the engineering model through the use of a multiplier to estimate the fraction of light produced that is retained inside the case as heat.

Lighting Controls In addition to discussing lighting, stakeholders also commented on the location of lighting controls. Southern Store Fixtures observed that certain operators use central energy management systems to control the display case lighting , and asked i f this approach would be considered instead of just the placement of occupancy sensors in individual display cases

. The company added that when customers ask them to supply a case to be controlled by a central energy management system, the lights in the display102 CRE NOPR ECS OMB Compare 

### .docx cases must be wired separately from the other energy

- consuming components. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 190– 91, 194) Further, Southern Store Fixtures pointed out that CEC is considering these central lighting systems in its proceedings . (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 197) Zero Zone stated that it typically wire s cases with a separate lighting circuit to allow for independent lighting control, while NEEA stated that if a case is wired differently to interface with centralized controls, it should be treated identically to a self

- contained set of controls. (Zero Zone, Public Meeting Transcript, No. 31 at p. 196; NEEA, Public Meeting Transcrip t, No. 31 at p. 195) CA IOUs supported the manufacturer assertion made during the April 2011 preliminary analysis public meeting that it is possible to distinguish between cases designed for remote energy controls and those that are not. (CA IOUs , No. 42 a t p. 4) For this reason, the CA IOUs suggested that DOE develop a calculation to measure energy savings due to the use of such remote systems in the test procedure. (CA IOUs, No. 42 at p. 4)

DOE acknowledges that there are several ways to implement lighti ng controls (e.g. , individual case controls, controls for a case lineup, storewide energy management systems), and that allowing certain systems to be included in calculating energy consumption may set a precedent for how DOE defines the boundaries of covered equipment and what technologies are allocated energy savings for a piece of equipment in the test procedure. For example, cases set up to accept remote contro l systems have a dedicated circuit for lights so that the lights can be controlled separately from the rest of the case. However, this lighting circuit configuration does not inherently save energy and103 CRE NOPR ECS OMB Compare 

### .docx must be paired with an expensive energy management con trol system, which is sold separately from the piece of commercial refrigeration equipment, is produced by different manufacturers, and is not integral to the commercial refrigeration equipment. In addition, the existence of an energy management system does not necessarily mean it will be used with commercial refrigeration equipment; for example, energy management systems are used in many stores and offices to control room lighting and temperature set points.

DOE acknowledges that remote lighting controls do save energy and may be the more commonly used technology to dim or turn off lights. However, energy consumption for a piece of commercial refrigeration equipment must be determined using the DOE test procedure to measure the energy consumption of a rep resentative unit, as shipped to

consumers customer s . Because the remote energy management system is not part of the piece of commercial refrigeration equipment as shipped from the manufacturer, but rather , is a separate piece of equipment supplied by a separate manufacturer, remote energy management controls will not be considered as an energy conservation feature in this commercial refrigeration equipment rulemaking

.

Part

- Load Technologies Stakeholders also submitted comments on the subject of part

- load an d variable

capacity technologies. These are technologies that allow the performance of the system components to be varied in response to changes in the load placed on them, such as changes due to vary ing ambient conditions or product loading. PG&E requeste d that DOE clarify its stance on part

- load technologies, suggesting that there was a disparity104 CRE NOPR ECS OMB Compare 

### .docx between the NOPR DOE published on November 24, 2010, which proposed amendments to DOE’s test procedures for commercial refrigeration equipment ( November 2010 test procedure NOPR , in which (75 FR 71596 ( Nov

. 24, 2010 )) and the screening analysis presented in chapter 2 of the preliminary analysis TSD

. Specifically, i n the November 2010 test procedure NOPR, DOE stated that the proposed test procedure, which relie d on
AHRI Standard 1200 and ASHRAE Standard 72 , 36 

### is able to capture the energy -saving effects of some part

- load technologies , and the screening analysis presented in chapter 2 of the preliminary analysis TSD

. (76 FR at 71601 (Nov. 24, 2010)). Conversely , in which the screening analysis in chapter 2 of the preliminary analysis TSD , DOE removed some technologies from the analysis and stated that their effects could not be measured by the steady

- state test procedure. PG&E asked DOE to clarify its stance and asked that , if DOE determines that the effects of these technologies can be measured, to include them in the screening and engineering analyses. PG&E later reiterated its desire that DOE be consistent in its approach toward technologies that maintain ener gy savings at variable ambient conditions or variable load. (PG&E, Public Meeting Transcript, No. 31 at p p. 51– 52, 178)

Similarly, CA IOUs noted a perceived disparity between DOE’s statement in the preliminary analysis TSD chapter 2, where DOE stated tha t it “believes that the energy saving potential of these technologies is already captured to some degree in the current test procedure , ” and chapter 4 , where DOE stated that “ [t] echnologies that reduce energy use only under transient conditions, such as fluctuations in ambient temperature and

36 ANSI/ASHRAE Standard 72

- 2005. “Method of Testing Commercial Refrigerators and Freezers.” 2005. American Society of Heating, Refrigerating, and Air

- Conditioning Engineers, Inc. Atlanta, GA.105 CRE NOPR ECS OMB Compare 

### .docx humidity, periods of product loading, and frequent door openings, will not affect the measured CDEC. Therefore, DOE removed from consideration these technologies that do not affect or do not reduce CDEC during the tests.” CA IOUs requested clarification of DOE’s rationale for eliminating those technologies from consideration, and also requested that DOE include in its engineering analysis all technologies that can be measured in part by the test procedure, notably those that save energy at variable load or under fluctuating ambient conditions. (CA IOUs, No. 42 at p. 2) NEEA expressed its opinion that DOE had not yet adequately justified its lack of initiative in examining part

load technologies. (NEEA, No. 36 at p. 4)

S takeholders questioned the capacity ability of the DOE test procedure to reflect the performance of part

- load technologies. In a written comment submitted jointly , ASAP and the Natural Resources Defense Council ( NRDC ) encouraged DOE to consider technologies that improve efficiency under part

- load conditions in the engineering analysis, stating that DOE referenced in its test procedure NOPR the fact that units tested using ASHRAE 72, namely those with doors, experience variation in lo ad due to the door opening requirements of the test. ASAP and NRDC mentioned that there is clearly a variation in refrigeration load during the test for this equipment, due to the door opening requirement. In a written comment submitted jointly, ASAP and N RDC added that , in its proposed test procedure, DOE also referred to transient load variation effects inherent in the proposed test procedure ( 76 FR 71596, at 71601 (Nov. 24, 2010) ). ASAP and NRDC stated that, if single

- speed compressors cycle on and off during the test, there is likely opportunity for variable- speed compressors to reduce energy consumption by increasing106 CRE NOPR ECS OMB Compare 

### .docx the operating effectiveness of heat exchangers and reducing cycli ng losses. (ASAP and NRDC, No. 34 at pp. 1 –2)

Interested p arties also commented that it is important to distinguish between steady

- state and full

- load modes of operation, since equipment experiencing relatively constant loads is not necessarily operating at full load. ASAP and NRDC stated that i f the compressor is cycling, this indicates that the equipment is operating at part load. (ASAP and NRDC , No. 34 at p. 2) ASAP and NRDC continued, stating that if a commercial refrigerator or freezer did operate at full load during a test, then it would not be able to maintain the necessary case temperature under the more extreme conditions that it would likely encounter in the field, posing a risk to food safety issues . Therefore, ASAP and NRDC stated, it is likely that manufacturers design equipment to meet a higher load than that experienced during a test , and that technologies that improve part

- load performance could reduce energy consumption for both open and doored cases. (ASAP and NRDC , No. 34 at p. 2) NEEA expressed a similar viewpoint, commenting that the door opening provision in ASHRAE 72 lead s to load variation and that , even for open cases , it is unlikely that the refrigeration system is operating at full capacity during the test period, as this w ould make the system unable to meet load requirements and guarantee food safety under more extreme environmental conditions. (NEEA, No. 36 at p. 4) NEEA stated that, unless a refrigeration system is sized exactly for its operating load, and that load remai ns constant, there is good reason to examine part

- load system performance. NEEA added that, since most refrigeration systems must perform under a variety of conditions, they will operate cyclically, leaving room for more - efficient operation during107 CRE NOPR ECS OMB Compare 

### .docx times of lower load. NEEA urged DOE to explore the use of variable

- speed and variable

capacity components. (NEEA, No. 36 at p. 4)

DOE received comments regarding the treatment and modeling of specific part

load technologies. ASAP stated that, in its proposed ene rgy conservation standards for residential refrigerators (75 FR 59470 (Sept. 27, 2010)) , DOE had included variable

speed compressors as a design option, and that the residential refrigerators test procedure was also a steady

- state test. ASAP asked why vari able

- speed compressors were considered for residential refrigerators but not for commercial refrigeration equipment. (ASAP, Public Meeting Transcript, No. 31 at p. 54) NEEA commented that variable

speed condenser fans and condenser fan motor controllers could enable improved part

load performance, and that screening them out due to test procedure limitations is shortsighted. (NEEA, No. 36 at p. 3) NEEA added that high- efficiency expansion valves are becoming much more prevalent in refrigeration systems, and that they should be included in the analysis. NEEA stated that savings associated with high

- efficiency expansion valves may arise in conjunction with other technologies installed as part of a part

- load package and that, while these energy savings may be small, this should be proven by analysis. (NEEA, No. 36 at p. 3) CA IOUs requested clarification on how variable

- speed compressors and modulating capacity compressors 37

37 Variable

- speed compressors are able to control the rate at whic h they operate in order to tailor their performance to varying conditions and thus reduce compressor cycling. Modulating capacity compressors, most commonly found in larger sizes used in compressor racks, allow for the volume of fluid being compressed by t he moving pistons (and thus the throughput of the compressor) to be changed in response to load variations. 

### are covered in this rulemaking. CA IOUs stated that such compressor technologies did not appear to have108 CRE NOPR ECS OMB Compare 

### .docx been screened out or listed as an option, and appeared to have been included in the engineering analysis TSD chapter under the section discussing higher efficiency compressors. (CA IOUs, No. 42 at p. 2) Finally, ASAP and NRDC stated that th e model used in the engineering analysis should be able to capture the potential benefits of technologies that improve part

- load performance and that , if this is not the case, DOE should consider a different methodology. (ASAP and NRDC , No. 34 at p. 3)

Af

ter receiving these stakeholder comments, DOE reviewed its position on part

load and variable

- capacity technologies , as articulated in chapter 2 of the preliminary analysis and test procedure NOPR publications (75 FR at 71601 (Nov. 24, 2010)) . DOE agrees there was a disparity between the preliminary analysis, in which DOE reiterated its position from the January 2009 final rule that part

- load technologies could not be captured by the steady

- state ASHRAE 72 method of test , 38

38 U.S. Department of Energy

– Office of Energy Efficiency and Renewable Energy. Preliminary Technical Support Document (TSD): Energy Conservation Program for Certain Commercial and Industrial Equipment: Commercial Refrigeration Equipment. Chapter 5 , Engineering Analysis. March 2011. Washington, DC. 

### and the test procedure NOPR,
in wh ich DOE stated that the door opening and night curtain testing portions of the test would in fact create part

- load conditions. 75 FR at 71601 (Nov. 24, 2010)

. DOE believes that the position presented in the test procedure NOPR is accurate, as the variation in operating conditions introduced by door openings and the use of night curtains could create an opportunity for part

- load technologies to produce quantifiable energy impacts. DOE revised its position after reviewing the test procedure established in the 201X 2012 test procedure final rule ( XX 77 FR XXXX) 10292 (Feb. 21, 2012) ) and the energy consumption profile of equipment experienced observed during testing conducted using

www.regulatio ns.gov/#!documentDetail;D=EERE

- 2010

- BT

- STD

- 0003

- 0030109 CRE NOPR ECS OMB Compare 

### .docx the DOE test proce dure. DOE believes the confusion arose due to the way in which the industry refers to the ASHRAE 72 method of test is referred to in industry . As mentioned above, part load technologies allow a piece of commercial refrigeration equipment to respond to changes in refrigeration load that occur due to changes in ambient conditions or internal loads on the case. The ASHRAE 72 method of test occurs at one prescribes a single fixed set of ambient condition s , so no major changes in refrigeration load occur due to are intentionally introduced through changes in ambient condition. Thus, the ASHRAE 72 method of test is often referred to as steady

- state. How ever, as stated in the November 2010 t est p rocedure NOPR , commercial refrigeration equipment tested using ASHRAE 72 experience s variation in refrigeration load due to door openings, drawing of the night curtain, and inherent compressor cycling that occur d uring the test. 77 FR at 10308 ( Feb . 2 1 , 201 2). Realizing this, DOE has revised its position and agrees with ASAP, NRDC, and NEEA that the nature of the ASHRAE 72 method of test, while conducted at fixed ambient operating conditions, is not strictly thermodynamically steady

- state, as evidenced by compressor cycling and minor fluctuations in internal temperature s throughout the duration of the test. DOE also agrees with these stakeholders that the presence of compressor cycling demonstrates that commercial refrigeration units generally do not operat e at full load during the test

. From its discussions with manufacturers, DOE understands that most equipment can operate at tempera tures lower than the equipment’s given DOE rating temperature, and thus performance at the test procedure conditions would likely not constitute full

- capacity operation.

In response to the stakeholder suggestions that DOE include specific part

- load110 CRE NOPR ECS OMB Compare 

### .docx techn ologies in the NOPR analyses, DOE investigated the technologies referenced by these commenters. DOE researched the state of part

- load and variable

- capacity technologies such as fan motor controllers and variable

- speed compressors through available manufacturer and component supplier literature, as well as through its discussions with manufacturers during interviews. DOE found that that many of these part

- load technologies had not yet been developed for the commercial refrigeration equipment industry to the extent that they could be adopted by manufacturers in the near future. For example, while variable

- speed compressors are indeed, as some stakeholders mentioned, prevalent in residential refrigeration applications, their availability for commercial application is very limited and is not applicable to many equipment types. Some technologies were also removed for functional purposes or because of concerns over food safety performance. Others were removed from consideration because they would not have measurabl e impacts under the test procedure. Therefore, while DOE did not screen out or preclude the analysis of part

- load technologies, DOE did not utilize any of these technologies explicitly as design options in its engineering analysis. For further discussion o f DOE’s examination of these technologies, see chapters 3 through 5 of the
NOPR TSD.

D OE reiterate s that the design options that it has chosen for this particular analysis, and the design paths used in modeling the proposed standard levels, do not constitute a prescriptive design requirement . In other words, DOE does not claim that the combinations of d esign options presented in the engineering analysis form unique path s for achieving higher energy efficiency. M anufacturers are free to utilize any design111 CRE NOPR ECS OMB Compare 

### .docx features available to them in order to develop compliant units, provided that those units meet all th e requirements for testing under the DOE test procedure and other applicable regulations. Thus, should manufacturers develop part

- load features that produce quantifiable reductions in energy consumption under the DOE test procedure, they are not prohibited from taking advantage of those features, even if particular technologies were not modeled in the analysis for this rulemaking.

b. 

### Technologies Relevant Only to Equipment with Doors
In chapter 3 of the preliminary analysis TSD , DOE mentioned three technolog ies that could apply only to doored equipment: anti

- fog films , anti

- sweat heater controllers, and high

- performance doors. Not all of these technologies were considered in the preliminary engineering analysis, as some were screened out or removed from consideration on technical grounds. The following sections discuss stakeholder comments regarding these technologies.

Anti

- Fo g Films Zero Zone stated that research by Southern California Edison indicated that anti

fog films do not allow for the reduction of anti

- sweat heat . (Zero Zone, Public Meeting Transcript, No. 31 at p. 47)

DOE reviewed the available literature regarding anti

- fog films, and understands that these films alone do not necessarily eliminate the need for anti

- sweat heaters under
many conditions, including high ambient humidity, as they cannot prevent condensation112 CRE NOPR ECS OMB Compare 

### .docx from forming on the outside of the case . This shortcoming of anti

- fog films can present a major problem for consumers customer s . Discussions with manufacturers have led DOE to believe that alternative improvements in door construction provide the capacity to reduce anti

- sweat heat without the drawbacks mentioned here . Because of these issues, DOE did not consider anti

- fog films on transparent doors as a design option. For further discussion of this subject, see chapter 5 of the NOPR TSD.

Anti

- Sweat Heater Controllers During the April 2011 preliminary analysis public meeting, Zero Zone stated that anti

- sweat controllers have the potential to save energy because the controllers would allow heaters could to be designed with extra capacity for more humid climates . (Zero Zone, Public Meeting Transcript, No. 31 at p. 53 ) NEEA, ASAP , and NRDC all suggested DOE investigate Zero Zone’s comment further , while the CA IOUs noted it may be possible to include a calculation method to address the benefit of these

con trollers . (NEEA, No. 36 at p. 3; ASAP and NRDC , No. 34 at p. 2; CA IOUs, No. 42 at pp. 2 –4 )

DOE raised the subject of anti

- sweat heater controllers during its manufacturer interviews for this NOPR. Several manufacturers agreed that, within the context of the test procedure, anti

- sweat heater controllers will effectively keep the power to anti

- sweat heaters at the levels necessary for the test conditions. While anti

- sweat controllers could also modulate the anti

- sweat power further in the field to account for more or less extreme ambient conditions, a system equipped with anti

- sweat heater controllers will not113 CRE NOPR ECS OMB Compare 

### .docx likely exhibit significantly different performance at test procedure conditions than will a unit with anti

- sweat heaters tuned for constant 75 **°** F, 55 percent relative humidity conditions. Therefore, DOE did not consider anti

- sweat heater controllers in the engineering analysis, as modeling these devices within the context of the test procedure would not yield appreciable energy savings over anti

- sweat heaters that are properly sized for the test procedure ambient conditions

. DOE notes that manufacturers that produce cases with anti -sw eat heater controls for higher temperature and humidity environments may use anti

- sweat heater controllers in the test procedure , however

.

High

- Performance Doors
Z ero Zone also commented on high

- performance doors, stating that when they were incentivized in California, retail stores used more energy because they had to set their air conditioning to a lower set point to avoid condensation. Zero Zone added that high

- performance doors also sweat under conditions that are less favorable than the ASHRAE test conditions , and that DOE should evaluate technologies intended to be used for performance under actual conditions , not ju st under ASHRAE 72 test procedure conditions

. Zero Zone stated that DOE should remo ve high

- performance doors from the analysis. (Zero Zone, No. 37 at p p . 1 and 3)

During the NOPR engineering analysis, DOE reviewed its data for all design options, includi ng high

- performance doors. Transparent door performance was discussed at manufacturer interviews during the preliminary analysis and NOPR stages of the rulemaking , and the glass door designs considered in the e ngineering analysis are based114 CRE NOPR ECS OMB Compare 

### .docx on door models c urrently available on the market. The performance of these door designs was analyzed using Lawrence Berkeley National Laboratory’s ( LBNL’s ) WINDOW 5 software 39 

### in conjunction with the analyses for DOE’s ongoing energy conservation standards rule for walk

- in coolers and freezers energy conservation standards , an equipment type in which the same models of glass display doors are often employed. While it is true that extreme conditions could adversely impact glass door performance , as mentioned by Zero Zone , the performance of the equipment for this analysis was based
on the standardized ASHRAE 72 test conditions of 75 **°** F and 55 percent relative humidity, ambient conditions that have been accepted by industry , the ASHRAE working
group , and DOE as being generally representative of the environments typically encountered by commercial refrigeration equipment.

DOE believes that high

- performance doors, such as those offered on the market by several door manufacturers and analyzed in this rulemaking, have the pot ential to save significant amounts of energy for transparent

- door cases. Based on its market research and discussions with manufacturers, DOE has concluded that high

- performance doors meet all the criteria for inclusion in its analysis, and has thus consid ered them as a design option in the engineering analysis.

c. 

### Technologies Applicable Only to Equipment without Doors
In chapter 3 of the preliminary analysis TSD , DOE mentioned two technologies, air

- curtain design and night curtains, that could potentially be used to improve the

39 LBNL’s WINDOW 5 software is a program designed for modeling the performance of windows, doors, and other fenestration devices.115 CRE NOPR ECS OMB Compare 

### .docx efficiency of commercial refrigeration equipment without doors. Air curtain design was

not considered in the preliminary engineering analysis, as it was screened out and removed from consideration due to the fact that because , accordi ng to the information available to DOE, advanced air curtain designs are still in research and development stages and are not yet applicable to a vailable for use in the manufacture of commercial refrigeration equipment

. The following sections address stakeholder comments regarding technologies applicable to equipment without doors.

Night Curtains At the April 2011 preliminary analysis public meeting and in written comments, DOE received numerous comments from stakehold ers regarding night curtains and their use in equipment without doors

. CA IOUs agreed with DOE ’s decision to includ e night curtains in the analysis, but pointed out that such energy savings are only significant if the night curtains are properly deployed , and encouraged DOE to review and update its assumptions . (CA IOUs, No. 42 at pp. 4

– 5) Zero Zone also commented on the potential of night curtains to conserve energy , and s t ated that this technology should not be include d in this rulemaking because there is no reasonable way to estimate how it will actually be used and because it cannot be used in 24 -hour stores. (Zero Zone, No. 37 at p. 4) Southern Store Fixtures agreed with respect to these operational challenges , and also pointed out that CEC did not cons ider night curtains due to long PBPs , labor costs, and questions about the reliability of energy savings. (Southern Store Fixtures, No. 38 at p. 1; Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 42)116 CRE NOPR ECS OMB Compare 

### .docx Southe rn Store Fixtures expressed concern that the use of night curtains on open

cases could create design and operational challenges, potentially resulting in an inefficient case with product temperature issues and the potential for noncompliance with food safety regulations. (Southern Store Fixtures, No. 38 at p. 1) Southern Store Fixtures also noted that major design changes will be needed for cases with night curtains. Specifically, the evaporator coil and expansion devices currently used in open cases will be significantly oversized fo r use with night curtains ; the number of fans needed and airflow characteristics will change ; and lighting and temperature controls will need to be altered in converting a standard open case to accommodate night curtains. C ases with night curtains would al so, Southern Store Fixtures stated, require duplication of controls to be able to operate with and without the curtains. (Southern Store Fixtures, No. 38 at p. 1) In summary, Southern Store Fixtures asserted that these issues would require a redesign of an open case for compatibility with night curtains and that, when considering the potential energy savings associated with the use of a night curtain, DOE should include the cost of performing such a redesign in its analysis. (Southern Store Fixtures,
No. 38 at p. 1)

During the public meeting, Zero Zone observed that doored and open cases have a similar energy profile, and therefore, night curtains c ould be used as a design option for doored equipment as well. (Zero Zone, Public Meeting Transcript, No. 31 a t p p . 40 –41)

DOE acknowledges that the use of night curtains may not be consistent in the field. However, DOE’s test procedures and energy conservation standards cannot control117 CRE NOPR ECS OMB Compare 

### .docx for equipment application and actual end use. Night curtains are an available technology for reducing energy consumption in commercial refrigeration equipment and DOE believes that including night curtains in its test procedure and energy conservation

stan dards would allow manufacturers to take credit for the energy savings associated with this technolog y . In the 2011 2012 test procedure final rule, DOE assumed 6 hours as the time period that n ight curtains would be implemented. XX 77 FR at XXXX (XXXXX,
2011 10310 (Feb. 21, 2012 ). DOE believes that 6 hours conservatively represents the amount of time a night curtain would be drawn in a typical, non -24-hour store, when accounting for stocking and the fact that not all night curtains can be deployed at once. In addition, 6 hours is consistent with field data and studies that DOE has identified. 40 , 41 , 42



### With respect to Zero Zone’s concern regarding the use of night curtains in 24

- hour stores, DOE is not mandating the use of night curtains, but is simply accounting for them as one available energy efficiency technology. In addition, DOE notes that night curtains may be used in 24

- hour stores during periods of low customer traffic . DOE further acknowledges that accounting for the energy savings associated with night

c urtains on open cases would, by definition , result in the setting of a more

- stringent standard for open cases. DOE believes such a standard may encourage migration to the use of more

- efficient doored cases for those cases used in contexts where the distinct utility of an open case is not required, while preserving the availability of open cases.

40 Southern California Edison , Refrigeration and Technology and Test C ente r, Energy Efficiency Division. Effects of the Low Emissivity Shields on Performance and Power Use of a Refrigerated Display Case

. August 1997. Irwindale, CA. www.econofrost.com/acrobat/sce_report_long.pdf

. 41 Faramarzi, R. and Woodworth

- Szieper, M. Effects of Low

- E Shields on the Performance and Power Use of a Refrigerated Display Case. ASHRAE Transactions . 1999. 105(1). 42 Portland Energy Conservation, Inc. Query of Database of GrocerySmart Data. Portland, OR. Received October 18, 2011. Last viewed July 23, 2011.118 CRE NOPR ECS OMB Compare 

### .docx Regarding Southern Store Fixtures’ comment about the cost

- effectiveness of night curtains, DOE point s out that the LCC analysis and NIA conducted by DOE are specifically aimed at assessing the cost

- effectiveness of all the design options used to achiev e greater energy efficiency.

DOE acknowledges Southern Store Fixtures’ concerns regarding the cost s associated with the need for equipment redesign due to pres ence of night curtains

. After discussions with multiple manufacturers, DOE did not incorporate additional material costs and redesign costs associated with a secondary set of control s because most manufacturers do not implement this design according to information that DOE has obtained through market research and manufacturer interviews

. DOE recognizes that individual manufacturers may select different design options and incur different conversion costs than those modeled by DOE. However, DOE attempts in it s analysis to represent the choices most likely to be selected by the industry.

Southern Store Fixtures also commented that use of night curtains on open cases could create design and operational challenges that would result in inefficient case s with prod uct temperature issues and the potential for noncompliance with food safety regulations. (Southern Store Fixtures, No. 38 at p. 1) DOE acknowledges that, as with any new technology, implementation of night curtains on open cases may require slight adjustments to equipment design to ensure the case operates efficiently and effectively. During manufacturer interviews for the MIA, data was collected by manufacturer (under119 CRE NOPR ECS OMB Compare 

### .docx confidentiality agreements) and , in aggregate , DOE’s resulting conclusion was that night curtains would not result in the challenges discussed by Southern Store Fixtures. The prevalence of night curtains as retrofit options supports this conclusion as well. Thus, DOE believes that modifications can be made that allow open cases to be used with night curtains to achieve energy savings and improve temperature control , and has accounted for the cost to achieve these modifications in the MIA

.

In response to Zero Zone’s comment regarding the use of night curtains on doored cases, i t is DOE’s understanding that night curtains can be applied to all type s of open cases ( i.e. , vertical, semi vertical, and horizontal) , and that night curtains are most effective and commonly used on open cases rather than doored cases. DOE was not able

to identify any public data regarding the use or potential for energy savings of night curtains on doored cases. Lacking a sound technical basis for including night curtains on doored cases in its analysis, DOE is hesitant to expand the definition of night curtain , as established in the 20 1X 2012 test procedure final rule ( XX 77 FR XXXX (xxxxx xx

xxxx at 10296 (Feb. 21, 2012 ) ), to explicitly inc lude doored cases at this time. On January 6, 2011 , DOE held a public meeting to discuss amendments to the DOE test procedure for commercial refrigeration equipment proposed in a NOPR DOE published on November 24, 2010. 75 FR at 71596. At that January 2011 test procedure NOPR public meeting, True stated that it had seen night curtains implemented on doored cases and that this does save a minimal amount of energy, but that these minor savings did not justify consideration of night curtains in the DOE test procedure. ( Docket No. EERE

- BT -2010-
TP -0034, True, Pu blic Meeting Transcript, No. 19 at pp. 146

– 47) DOE agrees with True120 CRE NOPR ECS OMB Compare 

### .docx and believes that use of night curtains on doored cases will not significantly impact the daily energy consumption of the display case. Therefore, DOE did not incorporate the use of night curtain s on cases with doors in the 2011 2012 test procedure final rule. XX 77 FR XXXX (XXXXX, 2011 at 10297 (Feb. 21, 2012 ). Because night curtains on doored cases cannot be accounted for in the DOE test procedure, they are not included as a design option in the energy conservation standard s analyses

.

Strip Curtains While not providing specific comments on the included technologies, Earthjustice questioned DOE’s grounds for not considering strip curtains 43 

### in the analysis, stating that the criteria for con sidering design options in the analysis should be whether a technology is technologically feasible, economically justified, and reduces energy consumption, not whether it is currently used by manufacturers. (Earthjustice, Public Meeting Transcript, No. 31 at p. 36) Earth j ustice stated that DOE should include strip curtains as a design option because these devices can be installed by equipment purchasers, and this illustrates the ease and practicality of their use. (Earth justice, No. 35 at p. 4) True stated that manufacturers do no t install strip curtains at the factory because consumers customers can often receive a secondary rebate for installing strip curtains at the point of end use

. (True, Public Meetin g Transcript, No. 31 at p. 40)

While DOE understands that some end users purchase and install strip curtains on

43 Strip curtains consist of a series of strips of transparent, flexible material (usually plastic) that hang down and cover the opening of a case without doors. This cre ates a physical barrier that reduces ambient air infiltration into the case while still allowing customers and employees to access the product contained inside.121 CRE NOPR ECS OMB Compare 

### .docx some open refrigerated display cases, DOE has no information as to the prevalence of use of these accessories. DOE has concern s that incorporating strip curtains into its analyses , and thus poten tially into an amended standard , could impose restrictions similar to requiring the use of doors . Doing so would compromise one of the major utility factors of
an open case . Namely, m anufacturers have reported to DOE that the major utility of an
open case is enhanced product visibility to the customer and easy access to product. Installation of a strip curtain would, by definition, inhibit both of these functions. Moreover, on technical grounds, strip curtains could potentially interfere with the operation of the existing air curtain in cases in which the air curtain is less than vertical

. Thus, in response to the comment by Earthjustice, the latter issue described above is one of technical feasibility, while the former concern, reduction of utility, could m ake the consideration of strip curtains inconsistent with the requirement s of EPCA. (42 U.S.C. 6295(o)(4) and 6316(e)(1) ) While some end users may decide to install strip curtains on their own accord for their specific applications, DOE does not intend to explore their use as applicable to entire equipment classes.

d. 

### Self

- Contained Equipment Technologies
I n chapter 3 of the preliminary analysis , DOE listed several technologies were mentioned in the preliminary analysis as relevant that are applicable only to the self

contained equipment as part of the preliminary analysis TSD chapter 3 classes

. One of the technologies mentioned in the preliminary market and technology assessment , but not122 CRE NOPR ECS OMB Compare 

### .docx considered for analysis as a design option, was liquid suction hea t exchangers 44 

### (LSHXs). 45 

### NEEA commented that it did not see a reason for excluding LSHX s from the analysis for systems in which they are likely to be used, and that DOE should include them to the extent that the test procedure can be structured to capture t heir savings. (NEEA, No. 36 at p. 3 ) Southern Store Fixtures suggested that DOE investigate why CEC decided not to consider LSHXs because of potential refrigerant leaks. (Southern Store Fixtures, Public Meet ing Transcript, No. 31 at p. 44)

During the NOPR stage of this rulemaking, DOE further investigated the subject of LSHXs as applicable to commercial refrigeration equipment. The information obtained by DOE indicated that LSHX performance depends on the specific design of a given system, as well as other factors , including refrigerant type, operating temperature, and ambient conditions. These factors all combine to determine whether an LSHX will reduce the energy consumption of a given system ; in some systems, the use of an LSHX will actual ly increase energy consumption by introducing a greater pressure drop within the refrigeration circuit . DOE also heard comments from parties during manufacturer interviews and conferences concerning potential reliability and leakage issues such as those me ntioned by Southern Store Fixtures. Because LSHXs may not improve efficiency in all systems and may experience reliability issues, DOE did not include LSHXs in its

44 A liquid suction heat exchanger is a device intended to further cool the flow of liquid refri gerant entering the expansion valve from the condenser using the flow of gaseous refrigerant leaving the evaporator. The exchanger provides sub

- coo l ing for the entering liquid by super

- heating the exiting suction vapor. Hotter suction vapor is less suscept ible to heat gains in the return piping to the compressor. 45 A liquid suction heat exchanger is a device intended to further cool the flow of liquid refrigerant entering the expansion valve from the condenser using the flow of gaseous refrigerant leaving the evaporator. The exchanger provides sub

- coo l ing for the entering liquid by super

- heating the exiting suction vapor. Hotter suction vapor is less susceptible to heat gains in the return piping to the compressor.123 CRE NOPR ECS OMB Compare 

### .docx analysis. For more discussion of LSHXs, see chapter 3 of the NOPR TSD.

D. Screening Analysis DOE uses four screening criteria to determine which design options are suitable for further consideration in a standards rulemaking. Namely, 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)

In written comments submitted following the April 2011 preliminary analysis public meeting, Zero Zone stated that DOE was correct in screening out a number of technologies, as a ny technology needs to be thoroughly researched and proven reliable before inclusion for consideration in a standards rulemaking. Zero Zone cited demand defrost as an example of an unproven technology that, if included in a its use were encouraged by a n energy conservation standard, would produce poor results in the field. (Zero Zone, No. 37 at p. 1) DOE agrees with Zero Zone’s comment, as it is compelled by the screening criteria to ensure that any technology considered is feasible to implement ; practicable to manufacture, install, and service ; does not adversely impact ut ility or availability ; and w ould not lead to adverse impacts on health or safety.

Based on all available information, DOE has concluded that: (1) all of the efficiency levels discussed in today’s notice are technologically feasible; (2) equipment at124 CRE NOPR ECS OMB Compare 

### .docx thes e efficiency levels could be manufactured, installed, and serviced on a scale needed to serve the relevant markets; (3) these efficiency levels would not force manufacturers to use technologies that would adversely affect product utility or availability; a nd (4) these efficiency levels would not adversely affect consumer health or safety. Thus, the efficiency levels that DOE analyzed and discusses in this notice are all achievable through technology options that were “screened in” during the screening analy sis.

E. 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 achievi ng 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 F ramework document and preliminar y analysis, DOE conducted the engineering analyses for this rulemaking using a design

- option approach125 CRE NOPR ECS OMB Compare 

### .docx for commercial refrigeration equipment. Th e decision to use this approach was made due

to several factors, including the wide variety of equipment analyzed, the lack of numerous levels of equipment efficiency currently available in the market, and the prevalence of relatively easily implementable energy

- saving technologies applicable to this equipment. More specifically, DOE identified design options for analysis and used a combination of industry research and teardown

- based cost modeling to determine manufacturing costs, then employed numerical modeling to determine the energy consumption for each comb ination of design options employed in increase d equipment efficiency

. DOE selected a set of 24 high

- shipment classes, referred to as “primary” classes, to analyze directly in the engineering analysis. Additional details of the engineering analysis are available in chapter 5 of the NOPR TSD.

1. Representative Equipment for Analysis

a. 

### Representative Unit Selection In performing its engineering analysis, DOE selected representative units for each primary equipment class to serve as analysis points in the development of cost

- efficiency

curves. In selecting these units, DOE researched the offerings of major manufacturers to select model s that were generally representative of the typical offerings produced within the given equipment class. Unit sizes, configurations, and features were based on high

shipment

- volume designs prevalent in the market. Using this data, a set of specifications

w as developed defining a representative unit for each primary equipment class. These specifications include geometric dimensions, quantities of components (such as fans), operating temperatures, and other case features that are necessary to calculate energy126 CRE NOPR ECS OMB Compare 

### .docx consumption. Modifications to the units modeled were made as needed to ensure that those units were representative of typical models from industry, rather than a specific unit offered by one manufacturer. This process created a representative unit for each equipment class with typical characteristics for physical parameters ( e.g. , volume, TDA ), and minimum performance of energy

- consuming components ( e.g. , fans, lighting).

In its written comment following the preliminary analysis, Traulsen stated that
DOE ’s choice of representative unit sizes for self

- contained commercial refrigeration equipment with doors was generally suitable for direction al purposes , but added that factors such as cabinet sizes, door quantities, and door types contribute significantly to overall equipment performance. Traulsen cautioned that a failure to factor these variables into the analysis could lead to unintended obsolescence of units models with these features . (Traulsen, No. 45 at p. 2) DOE agrees with Traulsen that there are numerous design factors that can influence the performance of commercial refrigeration equipment. In selecting representative uni ts for analysis, DOE sought unit sizes and configurations that generally represented the most commonly sold equipment on the market. The geometric features DOE considered included unit volume, height, length and width, number of doors, and door orientation . DOE avoided considering any niche features or unit configurations that could skew the analysis away from sound representation of the majority of units produced within a chosen equipment class. As a result, DOE believes that its analysis and resulting pro posed standards are applicable and extensible to the range of covered equipment in each class. In response to Traulsen’s concern about impacts, potential effects , DOE wishes to point out that it is compelled by statu t e to avoid127 CRE NOPR ECS OMB Compare 

### .docx the elimination of standards features or utility currently present in equipment on manufacturers such as the market , and that the obsolescence of models or product lines were addressed and examined in detail during the MIA interview s . For more information on the MIA , see chapter 12 of the NOPR TSD. specific unique equipment types would be included in this provision . ( 42 U.S.C. 6295(o)(2)(B)(IV), 6295(o)(4), and 6316(e)(1) )

b. 

### Baseline Models
DOE created a set of baseline design specifications for each equipment class analyzed directly in the engineering model. Each set of representative baseline unit specifications, when combined with the lowest technological level of each design option applicable to the given equipment class , define s the energy consumption and cost of the lowest efficienc y equipment analyzed for that class

. DOE established baseline specifications by reviewing available manufacturer data for equipment manufactured at the time of the analysis , and by select ing components and design features that were representative of the most basic models being manufactured at the time of the analysis. Chapter 5 of the NOPR TSD sets forth the specifications that DOE chose for each equipment class and discusses baseline models in greater detail.

One complexity involved in developing a n eng ineering baseline was due to the timing of the analysis , which was conducted in 2010 and 2011. Because the analysis was performed in proximity to the January 2009 final rule compliance date of January 1, 2012 ( 74 FR 1092 (Jan. 9, 2009)) , and the compliance date for the standards established in
EPCA of January 1, 2010 ( 42 U.S.C. 6313(c)(2)

– (3)) , it was difficult for DOE to128 CRE NOPR ECS OMB Compare 

### .docx establish a market baseline reflecting compliance with any specific set of standards. In particular, the equipment covered by the January 2009 final rule was not required to comply with amended standards until after the preliminary and NOPR analyses had been performed. As a result, DOE retained the engineering baseline and associated technologies used in its January 2009 final rule e ngineering analysis and expanded them

to accommoda te the new equipment classes covered by the standards initially established by EPCA

. (42 U.S.C. 6313(c)(2)

– (3)) DOE then added technologies to this baseline to develop its cost

- efficiency curves. As a result, some of the engineering results represent units that are below the standard levels for equipment currently on the market and subject to the DOE’s existing standards

. 10 CFR 431.66 However, in its LCC and other downstream analyses, DOE accounted for this fact by utilizing a standards baseline as the minimum efficiency level examined , thereby truncating the enginee ring design option levels so that the lowest efficiency point analyzed corresponded to the current standard level with which that particular pie ce of equipment would have to comply. The exact procedure is described in s ection IV.H.1 , and additional details are provided in chapter 8 of NOPR TSD

.

2. Design Options After conducting the screening analysis and removing from consideration technologies described above that did no t warrant inclusion on technical grounds , DOE included the remaining technologies as design options in the energy consumption model for its NOPR engineering analysis levels of performance : :129 CRE NOPR ECS OMB Compare 

### .docx **•** higher efficiency lighting and occupancy sensors for VOP, SVO, and SOC equipment families (horizontal fixtures);

**•** higher efficiency lighting and occupancy sensors for VCT and PD equipment families (vertical fixtures);

**•** improved evaporator coil design ;

**•** higher eff iciency evaporator fan motors;

**•** improved case insulation;

**•** improved doors for VCT equipment family, low temperature a nd ice

- cream temperature (hinged);

**•** improved doors for VCT and PD equipment families, medium temperature (hinged);

**•** improved doors for HCT equipment family, low temperature and ice

- cream temperature (sliding);

**•** improved doors for HCT equipment family, medium temperature (sliding);

**•** improved doors for SOC equipment family, medium temperature (sliding);

**•** improved condenser coil design (for self

- contained equipment only);

**•** higher efficiency condenser fan motors (for self

- contained equipment only);

**•** higher efficiency compressors (for self

- contained equipment only); and

**•** night curtains (equipment without doors only).

3. Refrigerants For the prelimin ary analysis, DOE considered two refrigerants, hydrofluorocarbons (HFCs) R-134a and R-404a, because these are the industry

- standard130 CRE NOPR ECS OMB Compare 

### .docx choices for use in the vast majority of commercial refrigeration equipment covered by this rulemaking. This selection was co nsistent with the modeling performed in the January 2009 final rule , which was based on industry research and stakeholder feedback at that time. After the publication of the preliminary analysis , DOE received several comments on potential future issues rel ating to refrigerants for this equipment . Emerson noted that possible future EPA actions could prohibit certain refrigerants, which would reduce equipment efficiency , and suggested that if EPA is going to use total emissions as the basis for Significant New Alternative s Policy ( SNAP) 46 

### regulations , then energy efficiency must also be considered by the EPA when making those determinations

. However, Emerson conceded that the discussion of potential action by EPA was speculative at this point. (Emerson, Publi c Meeting Transcript, No. 31 at p p . 48, 157 –58) Similarly, True observed that EPA proposals could result in the banning of R 134a and R404a, and that while there are replacements for R 134a, it would be difficult to replace R404a. (True, Public Meeting Trans cript, No. 31 at p . 154) However, AHRI remarked that it believe d that EPA was only considering NRDC’s petition for removal of R134a 47

46 SNAP is EPA’s program to evaluate and regulate substitutes for the ozone

- depleting chemicals that are being phased out under the stratospheric ozone protection provisions of the Clean Air Act. For more information, please see: 

### was only being considered for from the list of acceptable substitutes under the SNAP program in the context of automotive air

- conditioning applications , and that EPA is not currently seeking to restrict the use of R134a in the commercial refrigeration industry. (AHRI, Public Meeting Transcript, No. 31 at pp. 155–56) True also pointed out that the

www.epa.gov/ozone/snap/

. 47 In May 2010, the Natural Resources Defense Council petitioned the EPA to remove HFC

- 134a from the list of acceptable substitutes under the SNAP program. In February 2011, the EPA concluded that NRDC’s petition was complete with respect to the end use of motor vehicle air conditioners, and expressed its intent to begin a rulemaking on the topic. For more information, please see: www.epa.gov/ozone/downloads/NRDC_petition_responses.pdf

.131 CRE NOPR ECS OMB Compare 

### .docx removal of HFC s f rom remote condensing equipment would likely necessitate a total system design and a shift toward cascade equipment. (True, Public Meeting Transcript, No. 31 at pp. 152 –53) However, True stated that 90 percent of its market is for self

contained equipment , and that 85 percent of its products could be converted to alternative refrigerants with minimal cost increases and efficiency losses. (True, Public Meeting Transcript, No. 31 at p. 155 )

Commenters also provided information regarding the performance and regulatory status of specific alternative refrigerants. True noted that it had tested a large amount of isobutene and propane

- driven equipment, which exhibited an efficiency gain of 7 to 11 percent in smaller equipment . True stated that the use of these alternative refrigerants was not overly cost burdensome because of the recent increase in the cost of HFC refrigerants , but that they could not be used on larger equipment because of SNAP regulations involving refrigerant charge levels. (True, Public Meeting Transcript, No. 31 at pp. 151

– 52, 155) However, True added, the need to address flammability concerns in the interest of safety could result in significant cost increases for certain components

. True further stated that the EPA SNAP program’s discussion o f allowing 150- gram charge sizes charges of propane as a refrigerant in self

- contained commercial applications would not be a risk factor , as that could prevent use of these refrigerants , a nd that
propane is not currently excluded from use by most building codes. (True, Public Meeting Transcript, No. 31 at p. 152, 159) Emerson asked whether building codes could be changed to allow for numerous 150

- gram charges within a supermarket. (Emerson, Public Meeting Transcript, No. 31 at p. 158) Coca

- Cola mentioned th at it had selected132 CRE NOPR ECS OMB Compare 

### .docx transcritical 48 

### CO 2 

### as an alternative for applications in the United States, but could not provide efficiency data. (Coca -Cola, Public Meeting Transcript, No. 31 at p. 157) NEEA noted that Daikin Industries, Ltd. , the world’s largest central air conditioner manufacturer , was progressing toward using on ly non- halogen refrigerants in its products. (NEEA, Public Meeting Transcript, No. 31 at p. 161) AHRI encouraged DOE to not assume constant refrigerant prices over the analysis period it considers because legislation has been introduced that could result in the unavailability of HFC refrigerants and lead to significant price increase s. (AHRI, No. 43 at p. 3)

In its written comments, NEEA provided an alternative viewpoint, stating that it did not believe refrigerant issue s are significant for this rulemaking. This is because , according to NEEA, refrigerant issues (referring to past phase -outs of CFCs, HCFCs, and other refrigerant types used in the past) have been known for almost 20 years , . Historically, th ese issues ha ve included the phase -outs of chlorofluorocarbons (CFCs) and HFCs in accordance with manufacturers of many different products having to contend the Montreal Protocol. 49

48 A transcritical system is one in which the refrigerant changes phase during the course of the refrigeration cycle. 

### Manufacturers have contended with these issues over time, and the pathways understand the design changes needed to lower impacts being well understood adapt to new refrigerants

. NEEA added that shifts to different refrigerants will have to be made regardless of the course that any one rulemaking takes. Further, NEEA pointed to the statements by several manufacturers that a reduction of system efficiency due to implementation of new refrigerants should not be assumed. NEEA agreed with

49 The Montreal Protocol on Substances that Deplete the Ozone Layer is an international treaty that was designed to protect the ozone layer by phasing out many ozone depleting substances.133 CRE NOPR ECS OMB Compare 

### .docx these manufacturers and suggested that it is likely t hat th e se parties will resolve refrigerant issues in a way that will not compromise efficiency and that will not be cost

prohibitive . In conclusion, NEEA stated that refrigerant issues are not new and that the outcome of the standards

- setting process is no t likely to affect how manufacturers resolve these issues. (NEEA, No. 36 at p p . 6

– 7)

While future regulations may cap or eliminate the use of the currently prevalent refrigerants , and proposed legislation , such as H.R. 2454, the American Clean Energy and Security Act of 2009, 50

50 Colloquially known as the Waxman

- Markey Bill, this legislation (H.R. 2454) would have established an emissions cap and trade system in the United States. It was passed by the House of Representatives in June 2009, but was tabled by the Senate. For more information, please see 

### h as included HFC phase

- downs , DOE does not speculate on the potential future impact of proposed legislation in current rulemaking analyses. Additionally, as mentioned above, many low global warming potenti al ( GWP ) refrigerants , such as CO 2 

### and propane, are being introduced to the market, and use of these new refrigerants may influence the cost and efficiency of equipment. However, DOE is not in a position to predict future trends of the refrigerants market or the performance of altern ative refrigerants , and any analysis conducted at this time would be speculative. Consequently, DOE is not considering the potential effects of alternative refrigerants or current or future legislation on refrigerant s within the scope of this rulemaking. Instead, DOE will continue to model equipment as currently designed for the U.S. market, utilizing the most common HFC refrigerants, R -134A and R- 404A, accepted and broadly used by the industry. To the extent that there has been experience within the industry , domestically or internationally, with the use of alternative low

- GWP

http://thomas.loc.gov/cgi

bin/bdquery/z?d111:H.R.2454:

.134 CRE NOPR ECS OMB Compare 

### .docx refrigerants , DOE requests any available information , specifically cost and efficiency information relating to use of alternative refrigerants. DOE acknowledges that there are
go vernment

- 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 stakeholder s to identify safer and more sustainable alternatives to HFCs while evaluating energy efficiency standards for this equipment.

4. Cost Assessment Methodology During the preliminary analysis, DOE developed costs for the core case structure of the representative units it modeled , based on cost estimates performed in the analysis for the January 2009 final rule

. For more information, see chapter 5 of the prelimina ry analysis TSD , pp. 5

- 3 to 5 -8. DOE also developed costs for the design option levels implemented , based on publicly available information and price quotes provided during manufacturer interviews. These costs were combined in the engineering cost model ba sed on the specifications of a given modeled unit in order to yield manufacturer production cost ( MPC ) estimates for each representative unit at each configuration modeled. At the preliminary analysis rulemaking stage, DOE’s component cost estimates were b ased on data developed from manufacturer interviews, estimates from the January 2009 final rule , and publicly available cost information. During the NOPR analysis, DOE augmented this information with data from physical teardowns of commercial refrigeration equipment currently on the market. Comment [A20]: Revision requested by OIRA.135 CRE NOPR ECS OMB Compare 

### .docx During the development of the engineering analysis for th is NOPR , DOE interviewed manufacturers to gain insight into the commercial refrigeration industry, and to request feedback on the engineering analysis methodolog y, data, and assumptions that DOE used. Based on the information gathered from these interviews, along with the information obtained through a teardown analysis and public comments , DOE refined the engineering cost model. Next, DOE derived manufacturer markups using publicly available commercial refrigeration industry financial data, in conjunction with manufacturer feedback. The markups were used to convert the MPCs into MSPs. Further discussion of the comment s received and the analytical methodology used is presented in the following subsections. For additional detail, see chapter 5 of the NOPR TSD.

a. 

### Teardown Analysis In the preliminary analysis TSD , DOE expressed its intent to update its core case cost estima tes, which were at that time developed based on estimates from the January 2009 final rule, through performing physical teardowns of selected units. These core case costs consist of the costs to manufacture the structural members, insulation, shelving, wir ing, etc., but not the costs associated with the components that could directly affect energy consumption, which were considered collectively as design options and served as one of many inputs to the engineering cost model. DOE first selected representativ e units for physical teardown based on available offerings from the catalogs of major manufacturers. DOE selected u nits that had sizes and feature sets similar to those of the representative units modeled in the engineering analytical model. DOE selected u nits for teardown representing each of the proposed equipment families , with the exception of the136 CRE NOPR ECS OMB Compare 

### .docx HZO family 51



### . The units were then disassembled into their base components , and DOE estimated the materials, processes, and labor required for the manufacture of each individual component . This process is referred to as a “physical teardown.” Using the data gathered from the physical teardowns, DOE characterized each component according to its weight, dimensions, material, quantity, and the manufacturing processes used to fabricate and assemble it. Th ese component data were then hierarchically entered into a spreadsheet and organized by system and subsystem levels to produce a comprehensi ve bill of materials (BOM) for each unit analyzed through the physical teardown process .

The physical teardown s allowed DOE to identify the technologies , designs , and manufacturing techniques that manufacturers incorporate d into the equipment that DOE analyzed. The result of each teardown was a structured BOM , incorporating all materials, components, and fasteners, classified as either raw materials or purchased parts and assemblies, and characterizing the materials and components by weight, manufacturing processes used, dimensions, material, and quantity. The BOMs from the teardown analysis were then modified , and the results used as one of the inputs to the cost model to calculate the MPC for each representative unit modeled. The MPCs resulting from the teardowns were then used to develop an industry average MPC for each equipment class analyzed. See chapter 5 of the NOPR TSD for more details on the teardown analysis.

51 The reason why no HZO units were torn down was that the HZO family is the least complex of the equipment classes with respect to its construction. DOE felt that there was no additional data which could be gained from teardown of this equipment which would not have already been captured by the teardowns of o ther units.137 CRE NOPR ECS OMB Compare 

### .docx b. 

### Cost Model The cost model for this rulemaking was divided i nto two parts. The first of these

was a standalone core case cost model, based on physical teardowns , that was used for developing the core case costs for the 24 directly analyzed equipment classes. This cost model is a spreadsheet that converts the materi als and components in the BOMs from the teardowns units into MPC dollar values based on the price of materials, average labor rates associated with manufacturing and assembling, and the cost of overhead and depreciation, as determined based on manufacturer interviews and DOE expertise. To convert the information in the BOMs to dollar values, DOE collected information on labor rates, tooling costs, raw material prices, and other factors. For purchased parts, the cost model estimates the purchase price based on volume

- variable price quotations and detailed discussions with manufacturers and component suppliers. For fabricated parts, the prices of raw metal materials ( e.g. , tube, sheet metal) are estimated based on 5- year
averages calculated from cost estimates obtained from sources including the American Metal Market and manufacturer interviews . The cost of transforming the intermediate materials into finished parts is estimated based on current industry pricing.

The function of the cost model described above i s solely to convert the results of the physical teardown analysis into core case costs. T o achieve this, components immaterial to the core case cost (lighting, compressors, fans, etc.) were removed from the BOMs, leaving the cost model to generate values for the core case costs for each of the teardown points. Then, these teardown

- based core case BOMs were used to develop a

“ parameterized to allow for the manipulation of features ” computational cost model,138 CRE NOPR ECS OMB Compare 

### .docx which allows a user to virtually manipulate case parameters such as height, length, insulation thickness, and number of doors by inputting different numerical values for these features to produce new cost estimates

. For example, a user could start with the teardown data for a two

- door case and expand th e model of the case computationally to produce a cost estimate for a three

- door case by changing the parameter representing the number of doors

. This parameterized model, coupled with the design specifications chosen for each representative unit modeled in the engineering analysis, was used to develop core case MPC cost estimates for each of the 24 directly analyzed representative units. These values served as one of several inputs to the engineering cost model.

The engineering analytical model , a s implemented by DOE in a Microsoft Excel spread sheet, also incorporated the engineering cost model , the second cost modeling tool used in this analysis . In the engineering cost model, core case costs developed based on physical teardowns were one input, and costs of the additional components required for a complete piece of equipment (design options) were another input. The two inputs were added together to arrive at an overall MPC value for each equipment class. Based on the configuration of the system at a given design option level, the appropriate design option costs were added to the core case cost to reflect the cost of the entire system . Costs for design options were calculated based on price quotes from publicly available sources and discussions with c ommercial refrigeration equipment manufacturers. Chapter 5 of the
NOPR TSD describes DOE’s cost model and definitions, assumptions, data sources, and estimates.139 CRE NOPR ECS OMB Compare 

### .docx Some stakeholders expressed concern with the potential variability in prices that served as in puts to the cost model. NEEA suggested that using a forecast of materials futures market pricing might be a better approach than using a historical average , and Hill Phoenix questioned whether the 2009 cost model had been updated , as its cost structure ha d significantly increased since that time . (NEEA, Public Meeting Transcript, No. 31 at pp. 85

– 86; Hill Phoenix, Public Meeting Transcript, No. 31 at p. 84) Southern Store Fixtures agreed with Hill Phoenix , and noted that it would be advisable to use 2011 co sts for equipment that complies with the January 2009 final rule , instead of a current market baseline. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 86 –87)

Regarding the comment s from Hill Phoenix and Southern Store Fixtures , DOE has updated all of its cost modeling information. This information includes component
costs, which were based on public

- source data and estimates provided during manufacturer interview s , and core case costs, which were developed based on DOE’s teardown analysis performed during the NOPR stage of the rulemaking . In response to Southern Store Fixtures ’ comment that DOE should use 2011 costs in its analyses for equipment that complies with the January 2009 final rule, DOE believes that material s prices depend on broader market conditions and are unlikely to be influenced by equipment that complies with the January 2009 final rule. DOE calculates the material s cost based on price information gathered from the market, and uses a methodology based on the Bureau of Labor Statistics (BLS) Producer Price Indices to account for fluctuations in material s prices and processing costs. Regarding NEEA’s suggestion that using a forecast of materials futures market pricing might be preferable to using an140 CRE NOPR ECS OMB Compare 

### .docx historical average, DOE believes that such price forecasting is speculative , and therefore
DOE has continued to use actual prices and averages thereof as the basis for its analyses

.

c. 

### Manufacturer Production Cost Once the cost estimates for all the components of each representa tive unit, including the core case cost and design option costs, were finalized , DOE totaled the

cost s in the engineering cost model to calculate the MPC . DOE estimated the MPC at each efficiency level considered for each directly analyzed equipment class, from the baseline through the max

- tech. After incorporating all of the assumptions into the cost model, DOE calculated the percentages attributable to each element of total production cost (i.e. , materials, labor, depreciation, and overhead). DOE use d the se production cost percentages in the MIA (see section IV.K ). DOE revised the cost model assumptions used for the preliminary analysis based on tea rdown analysis, updated pricing, and additional manufacturer feedback, which resulted in refined MPCs and production cost percentages. DOE calculated the average equipment cost percentages by equipment class

. Chapter 5 of the NOPR TSD presents DOE’s estimates of the MPCs for this rulemaking, along with the different percentages attributable to each element of the production costs that comprise the total MPC.

d. 

### Cost

- Efficiency Relationship The result of the engineering analysis is a cost

- efficiency relationship. DOE created a separate relationship for each input capacity associated with each commercial refrigeration equipment class examined for this NOPR . DOE also created 24 cost

-141 CRE NOPR ECS OMB Compare 

### .docx efficiency curves , representing the cost

- efficiency rel ationship for each commercial refrigeration equipment class.

T o develop cost

- efficiency relationships for commercial refrigeration equipment , DOE examined the cost differential to move from one design option to the next for manufacturer s . DOE used the re sults of teardowns to develop core case costs for the equipment classes modeled, and added those results to costs for design options developed from publicly available pricing information and manufacturer interviews. Additional details on how DOE developed the cost

- efficiency relationships and related results are available in the chapter 5 of the NOPR TSD. Chapter 5 of the NOPR TSD also presents these cost

- efficiency curves in the form of energy efficiency versus MPC. After the publication of the preliminary analysis, several stakeholders provided input and feedback regarding DOE’s cost estimates, specifically regarding insulation costs, LED lighting costs, and DOE’s methodology for estimating manufacturer overhead in its cost model

. The following sections ad dress these stakeholder comments and concerns.

Insulation Cost Specifications Several stakeholders submitted comments regarding DOE’s estimated costs and specifications for insulation . Traulsen observed that DOE’s estimates for the number of foaming fixtures 52

52 Foaming fixtures are pieces of equipment consisting of molds to guide the injection of foamed

- in

- place insulation so that that the foam takes a desired shape once hardened. 

### present in a manufacturing facility and units per year are high if they

are meant to represent the production of a base model by an average manufacturer

. (Traulsen, No. 45 at p. 4) Zero Zone noted that the material costs for increasin g foamed

-142 CRE NOPR ECS OMB Compare 

### .docx in

- place panels are not trivial , and that its foam cost associated with adding a half inch of insulation to a five

- door case is approximately $25. (Zero Zone, No. 37 at p. 3) Zero
Zone also commented that the engineering costs modeled by DOE do no t include any redesign costs that are incurred as wall thickness changes , and that foamed

- in

- place sheet metal panels are an integral part of the structural design of cases. However, Zero Zone expressed concern that the ability of vacuum insulated panels t o perform as structural members has not been verified and should be validated before vacuum insulated panels are included in the analysis. (Zero Zone, No. 37 at p. 3) Zero Zone concluded by stating that increased foam panel thickness should be dropped from the analysis because DOE had not collected sufficient, accurate cost information regarding this design option. (Zero Zone, No. 37 at p. 3)

DOE considered these comments in revising its implementation of improved insulation during the NOPR analyses. Regarding Traulsen’s statement, DOE based its estimates of costs and specifications on discussions with manufacturers and site visits of manufacturing facilities and, while DOE understands the variability in manufacturing practices and equipment utilizatio n that exists across manufacturers and product line offerings, DOE believes those estimates are sound. DOE took into account the comment from Zero Zone regarding additional foam costs and, in response, accounted for the differential cost of additional foam due to changes in wall thickness in its engineering analysis for the NOPR. However, regarding Zero Zone’s assertion that redesign costs are not accounted for in the engineering analysis, the engineering model does include an estimate of engineering cost t o account for the design efforts that must be incurred in143 CRE NOPR ECS OMB Compare 

### .docx developing a case with higher wall thickness. DOE has also discussed the implementation of vacuum insulated panels with manufacturers, cross

- referenced its data with other rulemaking analyses in whi ch vacuum insulated panels were used, and revised its data accordingly. As a result, DOE believes that its estimates and assumptions for improved insulation are valid, and has retained those design options for the NOPR.

Light

- Emitting Diode Cost Specifications
S takeholders also provided feedback on pricing and performance related to
DOE’s LED specifications in the engineering model . ASAP and NRDC stated that DOE should not assume LED prices remain constant because LEDs are an emerging technology and will likely experience a dramatic price decline in the near future. The comment cited DOE’s 2011 Solid

- State Lighting Research and Development ( R&D )
M ulti -Y ear Program P lan (MYPP) , 53

53 The DOE Solid

- State Lighting Research and Development Multi

- Year P rogram Plan outlines DOE’s research goals and planned methodologies with respect to the advancement of solid

- state lighting technologies in the United States. The complete document is available at: 

### which project s that , between 2010 and 2015, prices of some LEDs will decrease by 85 percent, while LED lighting will experienc e a significant increase in efficacy during the same period

. (ASAP and NRDC , No. 34 at p. 3) These stakeholders added that it is important for DOE to capture cost decreases not only during the analysis period ( 2016

– 2045 2017–2046 ), but prior to the proposed
2016 2017 compliance date for the amended standards considered in this rulemaking as well , stating that a price estimate for 2016 2017 will be needed f or the LCC calculations to be accurate. They ASAP and NRDC stated that, according to the DOE solid

- state lighting documents referenced, if today’s LED prices are held constant through the

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_mypp2011_web.pdf

.144 CRE NOPR ECS OMB Compare 

### .docx 2016 2017 compliance date, the result will be a misrepresentation in the LCC of the value of potential LED energy savings ; as a result, ASAP and NRDC urged DOE to develop cost estimates reflecting this price decline. (ASAP and NRDC , No. 34 at p. 3) NEEA referenced the DOE Solid

- State Lighting R&D multi

- year plan 2011 MYPP as well, and agreed that it believe d that DOE is grossly overestimating the future cost of LED lighting. (NEEA, No. 36 at pp. 3

– 4)

DOE agrees with these stakeholders that forecasts of the LED lighting industry , including those performed by DOE , suggest that LED lighting is an emerging technology that will continue to experience significant price decreases in coming years. For this reason, to capture the anticipated cost reduction in LED fixtures in the analyses for this rulemaking, DOE incorpor ated price projections from its Solid

- State Lighting P rogram into its MPC values for the primary equipment classes . The price projections for LED case lighting were developed from projections developed for the DOE Solid

- State Lighting Program 2012 report, Energy Savings Potential of Solid

- State Lighting in General Illumination Applications 2010 to 2030 (“the energy savings report”). 54 

### In the appendix of this report, price projections from 2010 to 2030 were provided in ($/klm) for LED lamps and LED luminaires . DOE analyzed the models used in the Solid

- State Lighting P rogram work and determined that the LED luminaire projection would serve as an appropriate proxy for a cost projection to apply to refrigerated case LEDs.

54 Navigant Consulting, Inc., Energy Savings Potential for Solid

- State Lighting in General Illumination Applications . 2012. Prepared for the U.S. Department of Energy - Office of Energy Efficiency and Renewable Energy Building Technologies Office, Washington, D.C.145 CRE NOPR ECS OMB Compare 

### .docx The price projections presented in the S olid

- State Lighting P rogram’s energy savings report are based on the DOE’s 2011 MYPP. The MYPP is developed based on input from manufacturers, researchers, and other industry experts. This input is collected by the DOE at annual roundtable meetings and conferences. The projections are based on expectations dependent on the continued investment into solid

- state lighting by the DOE.

DOE incorporated the price projection trends from the energy savings report into its engineering analysis by using the data to develop a curve of decreasing LED prices normalized to a base year. That base year corresponded to the year when LED price data was collected for the NOPR analyses of this rulemaking from catalogs, manufacturer interviews, and other sources. DOE started with this commercial refrigeration equipment

specific LED cost data and then applied the anticipated trend from the energy savings report to forecast the projected cost of LED fixtures for commercial refrigeration equipment at the time of compliance with the proposed rule (2017). These 2017 cost figures were incorporated into the engineering analysis as comprising the LED cost portions of the MPCs for the primary equipment classes. Table IV .1 shows the normalized LED price deflators used in this NOPR analysis.
Table IV . 1 LED price deflators used in the NOPR analysis.

Year Normalized to 2013 Normalized to 2017 Year Normalized to 2013 Normalized to 2017 2010 2.998 5.652 2021 0.361 0.681 2011 1.799 3.392 2022 0.335 0.631 2012 1.285 2.423 2023 0.312 0.588 2013 1.000 1.885 2024 0.292 0.550 2014 0.819 1.543 2025 0.274 0.517 2015 0.693 1.306 2026 0.259 0.488 2016 0.601 1.133 2027 0.245 0.462 2017 0.530 1.000 2028 0.232 0.438 2018 0.475 0.895 2029 0.221 0.417 2019 0.430 0.810 2030 0.211 0.398146 CRE NOPR ECS OMB Compare 

### .docx 2020 0.393 0.740 2031
- 20 46 * 0.211 0.398
* DOE did not have data available to project prices beyond 2030. Therefore, for the NOPR analysis, it was assumed that the LED prices stay constant after 2030

. 

### The LCC analysis ( section IV

. H ) was carried out with the engineering numbers that account for the 2017 prices of LED luminaires

. The reduction in price of LED luminaires from 2018 through 2030 was taken into account in the NIA ( section IV

. I DOE understands the stakeholders’ assertions that some forecasts predict significant decreases in LED cost and increases in LED performance in the future. However, these projections

are uncert ain and , in the case of the DOE Solid

- State Lighting R&D multi

- year plan, are based upon tentative research targets that may require significant technical and manufacturing innovations to achieve. DOE is not aware of any past rulemaking efforts in which th e prices and performance of emerging technology components were assumed to change drastically during the analysis period, and DOE believes that to speculate that LED pricing and performance will do so could adverse ly affect the accuracy of the analyses. Th erefore, DOE intends to continue to use current

- year cost estimates as the basis for all of its analys e s. T his treatment of LED pricing is consistent with the methodology that DOE utilized in its January 2009 final rule. In that rule, DOE used aggregated p ast LED price data from 2007

– 2008 to arrive at an estimate of pricing at the time of the final rule analysis. Please see appendix B of the January 2009 final rule TSD for more information. However, DOE did not make any predictions or use any forecasts of L ED pricing beyond the time at which the analysis took place. DOE intends to maintain that stance in this rulemaking as well, basing its modeling of LEDs on cost estimates obtained from equipment manufacturers and public sources at the time of the analysis.147 CRE NOPR ECS OMB Compare 

### .docx ) . The cost reductions were calculated for each year from 2018 through 2030 and subtracted from the equipment costs in the NIA. The reduction in lighting maintenance

costs 55 

### due to reduction in LED prices for equipment installed in 2018 to 2030 were also calculated and appropriately deducted from the lighting maintenance costs.

Manufacturer Overhead Costs NEEA commented that, in the DOE rulemaking on distribution transformer s, manufacturers had stated that they do not apply overhead to material costs, but to labor costs only, and that the application of overhead to both of these cost components can have a major impact on MPCs, depending on how much of the product cost is attributed to each component. (NEEA, Public Meeting Transcript, No. 31 at pp. 70 –71) In another comment, NEEA elaborated on this statement, adding that during the distribution transformers public meeting, manufacturers stated that they do not apply factory

ove rhead rates to the cost of materials, but only to labor. NEEA went on to suggest that DOE use this methodology to the extent applicable to commercial refrigeration equipment, and adjust its cost estimation methods to take this approach into account. (NEEA, No. 36 at pp. 4 –5)

In DOE’s cost model for commercial refrigeration equipment, the following three overhead components are dependent on labor or materials: utilities, property tax, and insurance. The cost of utilities is a function of equipment costs on ly (no labor included) and is calculated using a ratio derived in the past from U.S. Securities and Exchange

55 Discussion related to lighting maintenance costs for commercial refrigeration equipment can be found in section IV.H.3 , and a more detailed explanation can be found in chapter 8 of the NOPR TSD.148 CRE NOPR ECS OMB Compare 

### .docx Commission ( SEC ) 10- K forms for appliance manufacturers

. 56 

### The ratios for property tax and insurance costs are also based on past 10

- K form analysis , but are dependent on overall unit costs (i.e. , cost of goods sold). Altogether, these three components represent only about 3 percent of the total cost of a unit, so whether they are based on labor and materials or on labor only, they are unlikely to hav e a significant effect on MPCs, especially on an incremental cost basis. DOE welcomes suggestions on how to improve its methodology and hopes that stakeholders can provide DOE with documentation for improved insurance, property tax, and utility calculations. In particular, DOE would welcome nationwide data on property tax rates based on property, plant, and equipment valuations; average power consumption for conditioned as well as unconditioned factory spaces; and insurance rates and how they are applied.

For the distribution transformers energy conservation standards rulemaking , DOE did not apply overhead rates to labor

— overhead was only applied to direct material production costs. For more details on material and labor inputs for distribution transformer s, see chapter 5 of the TSD for the distribution transformers preliminary analysis ( www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/transformer_pre analysis_ch5.pdf ). Furthermore, due to the different industries in which distribution transformer and commercial refrigeration manufacturers operate, the same cost model
may not necessarily be applicable to both.

56 A searchable directory of SEC filings is available at: www.sec.gov/edgar/searchedgar/companysearch.html http://www.sec.gov/edgar/searchedgar/companysearc h.html

.149 CRE NOPR ECS OMB Compare 

### .docx e. 

### Manufacturer Markup To account for manufacturers’ non -production costs and profit margin, DOE applies a non

- production cost multiplier (the manufacturer markup) to the full MPC. The resulting MSP is the price at whi ch the manufacturer can recover all production and non

production costs and earn a profit. To meet new or amended energy conservation standards, manufacturers often introduce design changes to their product lines that result in increased MPCs . Depending on the competitive environment for this equipment , some or all of the increased production costs may be passed from manufacturers to retailers and eventually to consumer s customer s in the form of higher purchase prices. The MSP should be high enough to recove r the full cost of the equipment ( i.e. , full production and

non- production costs) and yield a profit. The manufacturer markup has an important bearing on profitability. A high markup under a standards scenario suggests manufacturers can readily pass along the increased variable costs and some of the capital and equipment conversion costs (one

- time expenditures) to consumers customer s . A low markup suggests that manufacturers will not be able to recover as much of the necessary investment in plant and equipme nt.

To calculate the manufacturer markups, DOE used 10

- K reports submitted to the SEC by the six publicly owned commercial refrigeration equipment companies in the United States . (SEC 10- K reports can be found using the search database available at www.sec.gov/edgar/searchedgar/webusers.htm .) The financial figures necessary for calculating the manufacturer markup are net sales, costs of sales, and gross profit. DOE150 CRE NOPR ECS OMB Compare 

### .docx averaged the financial figures spanning the years from 2004 to 2010 57



### IV.E.4.g to calculate the markups. For commercial refrigeration equipment , t o calculate the average gross profit margin for the periods analyzed for each firm, DOE summed the gross profit earned during all of the aforementioned years and then divided the result by the sum of the net sales for those years. DOE presented the calculated markups to manufacturers during the manufacturer interviews for the NOPR (see section ). DOE considered manufacturer feedback to supplement the calculated markup , and refined the markup to better reflect the commercial refrigeration mar ket . DOE developed the manufacturer markup by weighting the feedback from manufacturers on a market share basis because manufacturers with larger market shares more significantly affect the market average. DOE used a constant markup to reflect the MSPs of both t he baseline eq uipment and higher efficiency equipment . DOE used this approach because amended standards may transfo rm high

- efficiency equipment, which currently is considered to be premium equipment , into baseline equipment. See chapter 5 of the NOPR TSD for more details about the manufacturer markup calculation.

f. 

### Shipping Costs The final component of the MSP after the MPC and manufacturer markup is the shipping cost associated with mov ing the equipment from the factory to the first point on the distribution chain. During interviews, m anufacturers stated that the specific party (manufacturer or buyer) that incurs that cost for a given shipment may vary based on the terms of the sale, the type of account, the manufacturer’s own business practices, and

57 Typically, DOE uses the data for the 5 years preceding the year of analysis. However, in this case additional data were available up to 2004. Hence, data from 2004 to 2010 were used for these calculations.151 CRE NOPR ECS OMB Compare 

### .docx other factors. However, for consistency, DOE includes shipping costs as a component of
MSP. In calculating the shipping costs for use in its analysis , DOE first gathered estimates of the cost to ship a full trailer of manufactured equipment an average distance in the United States , generally representative of the distance from a typical manufacturing facility to the first point on the distribution chain . DOE then used representative unit sizes

to calculate a volume for each unit. Along with the dimensions of a shipping trailer and a loading factor to account for inefficiencies in packing, DOE used this cost and volume information to develop an average shipping cost for each equipment class directl y analyzed.

g. 

### Manufacturer Interviews Throughout the rulemaking process, DOE has sought and continues to seek feedback and insight from interested parties that would improve the information used in its analyses. DOE interviewed manufacturers as a part of the NOPR MIA (see section
IV.K ). During the interviews, DOE sought feedback on all aspects of its analyses for commercial refrigeration equipment . F or the engineering analysis, DOE discussed the analytical assumptions and estimates, cost model, and cost

- efficiency curves with manufacturers. DOE considered all of the information learned from manufacturers when refining the cost model and assumptions. However, DOE incorporated equipment and manufacturing process figures into the analysis as averages to avoid disclosing sensitive information about individual manufacturers ’ equipment or manufacturing processes. More details about the manufacturer intervie ws are contained in chapter 12 of the NOPR
TSD.152 CRE NOPR ECS OMB Compare 

### .docx 5. Energy Consumption Model The energy consumption model is the second key analytical model used in constructing cost

- efficiency curves. This model estimates the daily energy consumption , calculated using the D OE test procedure, of commercial refrigeration equipment in kilowatt

- hours at various performance levels using a design-option approach. In this methodology, a unit is initially modeled at a baseline level of performance, and higher

efficiency technologies , referred to as design options, are then implemented and modeled to produce incrementally more

- efficient equipment designs. The model is specific to the types of equipment covered under this rulemaking, but is sufficiently generalized to model the energy consumption of all covered equipment classes. DOE developed the energy consumption model as a Microsoft Excel spreadsheet.

For a given equipment class, the model estimates the daily energy consumption for the baseline , as well as the energy consumption o f subsequent levels of performance above the baseline. The model calculates each performance level separately. For the baseline level, a corresponding cost is calculated using the cost model, which is described in section IV.E.4.b . For each level above the baseline, the changes in system cost due to the implementation of various design options are used to recalculate the cost. Collectively, the data f rom the energy consumption model are paired with the cost model data to produce points on cost

- efficiency curves corresponding to specific equipment configurations. After the publication of the preliminary analysis, DOE received numerous stakeholder commen ts regarding the methodology and results of the energy consumption153 CRE NOPR ECS OMB Compare 

### .docx model.

a. 

### Energy Consumption Model Results Zero Zone noted that , while the overall modeling approach is appropriate, the results for the VCT.RC.M class are , in its opinion, too restrictive. (Zero Zone, No. 37 at p. 1) Similarly, Traulsen believed that DOE’s numbers were slightly high for the VCT.SC.L equipment class , and that the incremental energy change may have be en overstated, while the cost was understated , for technolo gies such as LED lighting, high

performance doors, and vacuum insulated panels. (Traulsen, No. 45 at p. 4)

In its analyses for the NOPR stage of this rulemaking, DOE reviewed its inputs to the engineering cost model and energy consumption model. This inc luded reviewing publicly available data from sources such as manufacturer specification sheets and catalogs, as well as incorporating information drawn from stakeholder comments and manufacturer interviews conducted as part of the MIA process. The process included discussion and investigation of specific design options, such as the aforementioned LED lighting and vacuum insulated panels. DOE has taken efforts to incorporate all available information into its models to produc e the most accurate results possi ble. In response to the comments by Zero Zone and Traulsen regarding energy consumption and cost results for the VCT.RC.M and VCT.SC.L classes, respectively, DOE has reviewed and updated its methodologies during the NOPR analyses to account for the latest information available, and is confident that its current results best reflect this information.154 CRE NOPR ECS OMB Compare 

### .docx b. 

### Anti

- Sweat Heater Power Traulsen suggested that DOE investigate whether the anti

- sweat power consumed by the VCT.SC.L and VCT.SC.I equipment classes can truly be zero when highperformance doors are used , and suggested that DOE review its data

. Traulsen added that it believe d that , even with these door types, anti

- sweat heaters are often still found on the cabinet body , especially in low

- temperature equipment, which is prone to condensation due to conduction . (Traulsen, No. 45 at pp. 6 –7)

In DOE’s preliminary engineering analysis, anti

- sweat heater power values were assigned for each of the transparent door configuration s based on available data from manufacturer specification sheets and data obtained during manufacturer interview s . For medium

- temperature doors, both commercial refrigeration equipment manufacturer and door manufacturer literature indicated that truly energ y- free door designs with no anti

sweat heat are available on the market. This finding was confirmed through discussions with commercial refrigeration equipment manufacturers. However, for low - and ice

cream temperature doors, DOE has found that, as Traulse n stated, anti

- sweat heat is still required, at a minimum, on the door frame. Table 5.6.9 of the preliminary analysis TSD chapter 5 lists anti -sweat heater powers of 165 and 80 watts for standard and highperformance doors, respectively, at low and ice

- cream temperatures. These values are consistent with those that DOE has found through its research, and were retained in the NOPR analysis

.155 CRE NOPR ECS OMB Compare 

### .docx c. 

### Evaporator Fan Motor Power
Zero Zone observed that , while DOE’s assumptions regarding motor efficiency are valid, the evaporator fan specifications used by DOE for freezers of 6 rated watts per fan were flawed because freezer fans are generally higher in wattage ( i.e. , 9 or 12 watts) to increase airflow and decrease frost formation. (Zero Zone, No. 37 at p. 2)

After rec eiving the comment by Zero Zone, DOE further researched evaporator fan motor power values through manufacturer catalogs and discussed the subject in manufacturer interviews during the NOPR stage of the rulemaking. The data yielded by this effort showed tha t remote condensing freezer cases do utilize evaporator fan motors with rated shaft powers generally closer to 9 watts. As a result , DOE updated the design specifications for those representative units in its engineering model to more accurately reflect th e standard design of those units.

d. 

### Condenser Energy Consumption Southern Store Fixtures stated that the energy usage of the condenser is missing from the energy consumption model diagram contained in chapter 5 of the preliminary analysis TSD (Figure 5.6.1).

Regarding the comment by Southern Store Fixtures, Figure 5.6.1 of the preliminary analysis TSD chapter 5 does include a representation of the condenser fan motor energy consumption under the category of component energy consumption. Th e
energy usage a ttributed to the condenser fan , found in self

- contained units , is accounted156 CRE NOPR ECS OMB Compare 

### .docx for in the energy consumption model by the compressor duty cycle. For remote condensing units, the condenser fan energy consumption is not explicitly calculated; instead, remote ca se compressor energy consumption is calculated based on the energy efficiency ratio values given in AHRI 1200.

e. 

### Evaporator Coil Design Zero Zone expressed concerns about DOE’s assumptions regarding evaporator coils , and noted that reduced fin spacing 58 

### will result in coils that do not function well in the field due to excessive frost loading. (Zero Zone, No. 37 at p. 2) Zero Zone also observed that the improved evaporator coil described in the preliminary analysis TSD for the VCT.RC.M and VCT.RC.L equipment classes would raise evaporator temperatures to the same level as the discharge air temperature , which is not feasible . (Zero Zone, No. 37 at pp. 2

– 3) Additionally, Zero Zone recommended that DOE conduct performance testing before assuming that high

- performance coils will work in all situations because , Zero Zone asserted , DOE failed to address issues with superheat control for these advanced coils , namely that as the evaporating temperature becomes closer to the retu rn air temperature, the ability of the expansion valve to maintain a stable superheat is decreased . (Zero Zone, No. 37 at p. 3)

With respect to Zero Zone’s comment on reduction of fin spacing, DOE confirm ed during manufacturer interviews that excessive f rost loading becomes a concern once fin spacing is reduced below certain thresholds. As a result, DOE sought to ensure

58 Fin spacing, or fin pitch, refers to the distan ce between the flat fins that are oriented transverse to the direction of airflow across a fin

- and

- tube heat exchanger.157 CRE NOPR ECS OMB Compare 

### .docx that its coil models reflected coil geometries that are suitable for production and field use without incurring such negative secondary e ffects as increased frost buildup. With respect

to Zero Zone’s second comment involving the evaporator coil temperatures, the referenced statement in the preliminary analysis TSD was intended to be a single example , and was incorrectly presented as applyin g to all equipment classes. The engineering model never utilized evaporator temperatures that were physically infeasible or impossible to attain.

During its NOPR analyses, DOE performed independent modeling of evaporator and condenser coils based on physi cal teardowns of coils available on the market, coupled with numerical modeling of the coil performance. Design parameters were varied from the baseline , and the heat transfer performance of the coils was iteratively analyzed to yield higher efficiency coi l designs. Cost modeling was utilized to produce cost estimates for the baseline and high

- performance coil designs. This analysis served as the basis for the coil cost and performance values input into the engineering model. While DOE was unable to perform physical testing of its high

- performance coil designs, as those designs were solely analytically derived and not constructed as prototype s , DOE controlled the parameters of its analysis to retain the required conditions for proper system performance. DOE believes that this analysis addresses the concerns presented by Zero Zone in its comments. For more details on the coil modeling process, see chapter 5 of the NOPR TSD.158 CRE NOPR ECS OMB Compare 

### .docx F. Markups Analysis DOE applies multipliers called “markups” to the MSP to calculate the

consumer customer purchase price of the analyzed equipment. These markups are in addition to the manufacturer markup (discussed in section IV.E.4.e ) and are intended to reflect the cost and profit margins associated with the distribution and sales of the equipment between the manufacturer and end user

. . DOE identified three major distribution channels for commercial refrigeration equipment , and markup values were calculated for each distribution channel based on industry financial data. 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 an a lysis

.

DOE received a number of comments regarding markups after the publication of the preliminary analysis.

1. Baseline and Incremental Markups Traulsen stated that, in its experience, the initial markup on equipment will be consistent with production costs , and that the incremental markups will increase with higher levels of product efficiency due to product differentiatio n. (Traulsen, No. 45 at p. 4) However, Traulsen also state d that it d id not believe that wholesalers differentiate markups based on the technologies inherently present in this equipment and that, in its experience, wholesalers/reseller s will use traditiona l markup rates regardless of equipment’s energy efficiency. (Traulsen, No. 45 at p. 7)159 CRE NOPR ECS OMB Compare 

### .docx In general, DOE has found that markup values vary over a wide range according

to general economic outlook, manufacturer brand value, inventory levels, manufacturer reba tes 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 scale the
same way as does the MSP of baseline equipment

. In other words, the remaining costs stay constant irrespective of equipment efficiency level. I ncremental markups were applied as multipliers only to the MSP increments (of higher efficiency equipment compared to baseline) and not to the entire MSP . This assumption is in line with Traulsen’s first comment. Further, while DOE’s use of separate values for baseline and
i ncremental markup rates will lead to higher marked

- up values for equipment at higher efficiency levels, the rate of markup will be same for all higher efficiency levels, which is consistent with Traulsen’s second comment.

2. Distribution Channel Market Shares True stated that national chains are a major part of the glass -doored, selfcontained equipment market. True stated that it serve s these via national accounts, adding that the market shares of the national accounts channel and the distributor channe l that160 CRE NOPR ECS OMB Compare 

### .docx were used for the preliminary analysis of this rulemaking should be reversed . (True, Public Meeting Transcript, No. 31 at p. 80) NEEA agreed with True, stating that DOE ha d more or less reversed the market shares of the distribution channel s for gla ss door and open self

- contained equipment. NEEA also agreed with other commenters who stated that DOE’s market channel fractions appl ied more to specialty and solid -door selfcontained equipment. (NEEA, No. 36 at p. 5) Southern Store F ixtures added that it sell s
many remote condensing units directly to the end users, and that it also sell s many self

contained units directly to supermarket and convenience store chains without using an intermediary. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p p . 80 –81) Traulsen commented that it believe d that DOE’s distribution channel data were reasonably accurate, within plus or minus 10 percent. (Traulsen, No. 45 at p. 3)

DOE agrees with comments from True, NEEA , and Southern Store Fixtures regarding market shares for self

- contained display cases. Consequently, DOE made the distribution channel market shares for all display cases ( VOP, SVO, HZO, VCT, HCT , SOC, and PD ) , irrespective of self

- contained or remote cond ensing configuration, equal to that of the remote condensing equipment market shares that were proposed in the preliminary analysis TSD

. DOE kept the market shares of VCS and HCS equipment families same as the self

- contained equipment market shares propose d in the preliminary analysis TSD . The distribution channel market share s used for this NOPR are shown in Table IV .2

. Chapter 6 and appendix 6A of the NOPR TSD provide complete details of the methodology and data used in the estimation of the markups.

Table IV .2 Distribution Channel Market Share s Equipment Family National Account Wholesaler Contractor161 CRE NOPR ECS OMB Compare 

### .docx Channel Ch annel Channel VOP, SVO, HZO, VCT, HCT , SOC , and PD 70% 15% 15% VCS and HCS 30% 60% 10%



### G. Energy Use Analysis Several stakeholders commented on DOE’s methodology for investigating secondary impacts of efficiency improvement , as described in the preliminary analysis. Southern Store Fixtures agreed with DOE ’ s conclusion that efficiency improvements in self

- contained equipment do not have a noticeable impact on building heating and cooling loads. Southern Store Fixtures further stated that a kitchen area, with limited space and limited equipment, differs from larger settings such as supermarkets, which contain a large quantity of self

- contained equipment. Southern Store Fixtures asked whether the impact of large numbers of self

- contained unit s on the heating and cooling loads of buildings had been investigated. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p p . 93 –94)

Other stakeholders, however, had questions regarding DOE’s methods. NRDC asked why only self

- contained units w ere reviewed for secondary impacts, and whether

an y rack

- based units had been reviewed. (NRDC, Public Meeting Transcript, No. 31 at p. 100) NEEA stated that the placement of multiple cases in a supermarket will affect heating, ventilation, and air

- conditio ning ( HVAC ) loads, and suggested that DOE reexamine the subject in a non

- restaurant business type. by modeling the performance of commercial refrigeration equipment in a business type other than a restaurant, such as a grocery store

. NEEA added that restaurants typically have high ventilation loads, and162 CRE NOPR ECS OMB Compare 

### .docx opined that, in a space such as a supermarket, where the refrigeration loads approximat e the ventilation loads, DOE’s results are inaccurate

. NEEA added that mechanical engineers use D OE -2 59 

### to model secondary impacts. (NEEA, Public Meeting Transcript, No. 31 at pp . 98 –100)

NEEA continued, stating that self

- contained equipment, because it is not perfectly efficient, will emit more heat into its surroundings than it absorbs, which could be of benefit in the heating season but which is definitely a detriment in the cooling season. While the magnitude of these effects will depend on the equipment’s geographic location, NEEA expressed its belief that DOE should not ignore this issue. NEEA added that DOE should quantify the contributions to space cooling and heating loads being generated by self

- contained equipment so that stakeholders can make an informed judgment as to their significance. (NEEA, No. 36 at p. 5)

In response to NRDC ’s comment regarding modeling rack

- based units, DOE point s to the January 2009 final rule analysis that presents an extensive energy use analysis for remote condensing equipment and self

- contained equipment without doors

. The analysis was carried out by simulating display cases in supermarkets using the DOE

2.2 software package. Details of this analysis can be found in chapter 7 of the January 2009 final rule TSD ( www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/chp_7_cre_ener

59 DOE

- 2 is a widely used and accepted freeware building energy analysis program that can predict the energy use and cost for different types of buildings. DOE

- 2 uses a description of the building layout, construction, usage, conditioning systems and utility rates provided by the user, along with weather data, to perform an hourly simulation of the building and to estimate utility bills.163 CRE NOPR ECS OMB Compare 

### .docx gy_final.pdf ). Based on this energy use analysis, DOE concluded that the overall impact of the considered design options had only a minor differential impact on the overall
HVAC energy consumption of supermarkets . Further, DOE concluded that the energy consumption model used in the engineering analysis simulated the energy consumption of the various equipment classes with adequate accuracy , and therefore DOE used the estimates from the engineering analysis for the LCC and subsequent analyses

.

For the current rulemaking, DOE received comments during the May 2010 Framework document public meeting regarding the proportionally larger share of self

contained equipment examined in this rulemaking compared to that examined in the January 2009 final rule, and the impact of this equipment on building HVAC loads. DOE evaluated the impact of self

- contained equipment through whole

- building simulations with a VCT.SC.L freezer in restaurant buildings using the whole

- building energy use simulation tool EnergyPlus, which is the primary software tool supported by DOE’s Building Technologies Program for energy use analysis of buildi ngs. Through these simulations, DOE found that the differential impact of efficiency improvements in VCT.SC.L equipment on the HVAC loads of restaurant buildings was negligible. Since VCT.SC.L energy consumption is one of the highest among the major self -c ontained equipment classes, DOE concluded that the incremental impact of efficiency improvements in all self

- contained refrigerators and freezers on HVAC loads of restaurant buildings is negligible. While it is true , as stated in NEEA’s comment, that

resta urant building models have higher ventilation loads than other building models,
DOE does not believe decided, as a matter of policy, that this it would alter not assess the164 CRE NOPR ECS OMB Compare 

### .docx secondary impacts of amended standards such as the simulation results significantly imp acts of improved equipment efficiency on building HVAC loads. Therefore, DOE did not pursue this matter any further in its NOPR analysis

.

In response to NEEA’s comment regarding the equipment’s heat emitted by self

contained equipment and the geographic location of these units , DOE point s to chapter 7 of the preliminary analysis TSD for complete details of the analysis. The whole

- building simulation s conducted for the preliminary analysis w ere carried out in 15 different climates zones , representing all t he major climate zones in the United States , with an appropriate weighting factor applied to each climate zone. Further, the analysis was carried out over 1 full year (365 days). T he results of the preliminary energy use analysis were obtained by averaging the energy consumption of the equipment over 1 full year and over all the major climate zones in the United States.

DOE understands that the presence of many self

- contained refrigeration unit s may have a considerable impact on the HVAC loads of a busines s establishment , as stated by Southern Store Fixtures . However, DOE reiterate s that the objective of its analysis is to assess only the differential impact of equipment efficiency improvements , and not to assess the impact of total heat output by a self

- contained unit. Moreover, DOE’s energy use analysis is concerned with the impact of only one unit of commercial refrigeration equipment. As stated above, DOE found that the differential impact of equipment efficiency improvements to a VCT.SC.L freeze r on the building HVAC loads was negligible

.165 CRE NOPR ECS OMB Compare 

### .docx As a matter of policy, DOE has determined that it will not carry out studies to determine the impact of efficiency improvements to equipment on building HVAC loads in appliance and commercial equipment standard s rulemakings

.

H. Life

- Cycle Cost and Payback Period Analysis DOE conducts LCC analysis to evaluate the economic impacts of potential amended energy conservation standards on individual commercial

consumer s customer s

— that is, buyers of the equipment. LCC is defined as the total

consumer customer cost over the life of the equipment , and consists of purchase price, installation costs , and operating costs (maintenance , repair , and energy costs ). DOE discounts future opera ting costs to the time of purchase and sums them over the expected lifetime of the piece of equipment . PBP is defined as the estimated amount of time it takes consumer s customer s to recover the higher installed costs of mo re - efficient equipment through savi ngs in operating costs. DOE calculates the PBP by dividing the increase in installed costs by the average savings in annual operating cost s.

As part of the engineering analysis, design option levels were ordered based on increasing efficiency ( decreased i.e., decreas ing energy consumption) and increasing MSP. For the LCC analysis, DOE chose a maximum of eight levels, henceforth referred

to as “ efficiency levels ,” from the list of engineering design option levels. For equipment classes for which fewer than eight design option levels were defined in the engineering analysis, all design option levels were used. However, for equipment classes where more166 CRE NOPR ECS OMB Compare 

### .docx than eight design option levels were defined, DOE selected specific levels to analyze in the following manne r: 1. The lowest and highest energy consumption levels provided in the engineering analysis were preserved.
2. If the difference in reported energy consumptions and reported manufacturer price between sequential levels was minimal , only the higher efficiency lev el was selected.
3. If the energy consumption savings benefit between efficiency levels relative to the increased cost was very similar across multiple sequential levels, an intermediate level was not selected as an efficiency level.

The first efficiency le vel (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 increase s in efficiency and cost from Level 1. The highest efficiency level in each equipment class corresponds to the max

- tech level. DOE treats the efficiency levels as “ candidate standard levels, ” as each higher efficiency level represents a potential new standard level.

The installed cost of equipment to a consumer customer i s the sum of the equipment purchase price and installation costs. The purchase price includes MPC, to which a manufacturer markup and outbound freight cost are 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 markups167 CRE NOPR ECS OMB Compare 

### .docx associated with the distribution channels for the particular type of equipment (chapter 6 of the NOPR TSD). Installation costs varied by S tate , depending on the prevailing labor

rates.

Operating costs for commercial refrigeration equipment are the sum of maintenance costs, repair costs, and energy costs. These costs are incurred over the life of the equipment and therefore are discounted to the base year ( 2016 2017 , which is the effective compliance date of the any amended standards that will be are 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 l ife

- cycle cost or LCC.

Generally, consumer s customer s 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 equip ment. 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 less than lower efficiency equipment. LCC savings are calculated for each efficiency level of each equipment class.

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 changes as the estimate of the decrease in operating cost, noting that the first year operating costs include maintenance and repair costs that are168 CRE NOPR ECS OMB Compare 

### .docx annualized over the entire lifetime of the equipment a nd the first year In addition to energy costs (calculated using the electricity price forecast for the first year ), the annual operating cost include s annualized maintenance and repair costs. PBP is calculated for each efficiency level of each equipment cla ss.

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 dis count rates.

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, there is uncertainty each input value has a range of values associated with most of the inputs , as it is difficult to obtain ac curate . While single representative values for these inputs. each input may yield an output that is the most probable value for that output, such an analysis does not provide 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 , 60

60 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 uncertain ties 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 variations in the inputs. 

### in which certain inputs were expressed as a range of values and probability distributions t o account for the uncertainties. ranges of values that may be typically associated with the respective input values

. The results , or outputs ,169 CRE NOPR ECS OMB Compare 

### .docx of the LCC analysis are presented in the form of mean and median LCC savings ; percentages of consumer s customer s 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

.

LCC savings and PBP are calculated by comparing the installed costs and LCC values of standards

- case scenarios against those of base

- case scenario s. The base

- case scenario is the scenario in which equipment is assumed to be purchased by

consumer s customer s in the absence of the proposed energy conservation standards. Standards

- case scenarios are scenarios in which equipment is assumed to be purchased by

cons umer s customer s 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 t hat equipment class , since 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 sce narios, in the LCC analysis , DOE assume d 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).

Recognizing that each building that uses commercial refrigeration equipment is unique, DOE analyzed variability and uncertainty in the LCC and PBP results by170 CRE NOPR ECS OMB Compare 

### .docx performing the LCC and PBP calculations for seven types of businesses: (1) supermarkets; (2) wholesaler/multi

- line retail stores, such as “big -b ox stores,” “warehouses,” and “supercenters ” ; (3) convenience and small specialty stores, such as meat markets and wine, beer, and liquor stores; (4) convenience stores associated w ith gasoline stations; (5) full

- service restaurants; (6) limited service restaurants; and (7) other foodservice businesses , such as caterers and cafeterias. Different types of businesses face different energy prices and also exhibit differing discount rates that they apply to purchase de cisions.

E xpected e quipment lifetime is another input for which it is inappropriate to use a single value for each equipment class. whose value varies over a range

. Therefore, DOE

assume d a distribution of equipment lifetimes that are defined by Weibull survival functions. 61



### Another important factor influencing the LCC analysis is the State in which the commercial refrigeration equipment is installed. Inputs that vary based on this factor include energy prices and sales tax. At the national level, the sprea dsheets explicitly modeled variability in the model inputs for electricity price and markups , using probability distributions based on the relative shipments of units to different S tates and business types.

Detail ed description s of the methodology used for the LCC analysis , along with a

61 Weibull survival function is a continuous probability distribution function that is used to approximate the distribution of equipment lifetimes of commercial refrigeration equipment.171 CRE NOPR ECS OMB Compare 

### .docx discussion of inputs and results , are presented in chapter 8 and appendices 8A and 8B of the NOPR TSD

.

1. Effect of Current Standards DOE notes that, beginning January 1, 2012, manufacturers will ne ed were required to comply with the standards set by the January 2009 final rule. 62

62 DOE extended the compliance date for manufacturers to submit certification reports tor commercial refrigeration equipment until December 31, 2013. 77 FR 76825 (Dec. 31, 2012). DOE emphasizes, however, that the testing and sampling requirements for commercial refrigeration equipment are unchanged by this extension. 

### 74 FR 1092 , 1093 (Jan. 9, 2009). The market technology DOE concludes that the efficiency level will be altered of the equipment on the market increased during this time . T he engineering analysis for this
NOPR was first developed in 2012 when compliance with 2011, and therefore the engineering design option levels include efficiency level s of equipment available in the market in 2011. This means that the engineering efficiency levels were built up starting from levels which are below the standards set by the January 2009 final rule

. These levels were included for analytical purposes, solely to represent the manner in which manufacturers may have achieved compliance with the Janu ary 2009 final rule standard levels, and were not considered in the development of proposed standard levels. T he LCC analysis and NIA assume the first year for the analyses as 2017. As noted above, the market in 2017 will be different from that in 2011 in terms of efficiency distribution of the equipment , mainly due to the effect of the standards is required. Id. established by the January 2009 final rule. Therefore, the current market baseline obtained in ( from the year 2011) used as the starting point f or the engineering analysis is not represent the same as the market baseline in 2016 2017 , when any amended standards prescribed by the current172 CRE NOPR ECS OMB Compare 

### .docx rulemaking are scheduled to go into effect.

T o estimate the state of the market technology baseline level in 2016 2017 , DOE introduced a baseline level termed the “standards baseline.” The energy consumption of the standards baseline level of an equipment class is equal to the standard prescribed by the January 2009 final rule for that equipment class. 74 FR at 1093

. DOE inserted the standards baseline into the engineering design option levels by placing it at the appropriate level based on the energy consumption of the standards baseline. (Jan. 9, 2009). The design option levels that are less efficient than the standa rds baseli ne were disregarded , and the more

- efficient design option levels were carried forward for downstream analyses. A detailed description of this procedure i s presented with the aid of an example in chapter 8 of NOPR TSD.

At the April 2011 preliminary analysis public meeting, AHRI asked whether DOE intended to update the LCC analysis once the standards set in the January 2009 final rule bec a me effective in order to change the baseline. (AHRI, Public Meeting Transcript, No. 31 at p p . 99 –100)

The engineering analys i s for this NOPR w as first developed in 2011, and updated with new information as it became available up to the time of this publication

. However, DOE continued to use in its engineering baseline characteristics reflecting the

constr uction of equipment prior to required compliance with the standards set by the January 2009 final rule. As a result, some of the engineering efficiency levels reflect173 CRE NOPR ECS OMB Compare 

### .docx levels which do not correspond to equipment performance currently permitted on the market after January 1, 2012. These levels, however, are solely used to reflect the manner in which DOE believes manufacturers could have attain ed the 2009 final rule standard levels through implementation of design options, and were not used in the downstream

a nalysis for the purposes of calculating standard levels proposed in this NOPR

.

Consistent with the methodology described above and explained in detail in Chapter 8 of the NOPR TSD, DOE developed a “standards baseline” for use as the starting point for its downstream (LCC and PBP, NIA, etc.) analyses. T he first opportunity to revise the analysis afte r the January 2009 final rule goes into effect would be in January 2012 , which would be after the conclusion of the NOPR analysis period for this rulemaking. This timeframe is not sufficient for DOE to conduct a full engineering analysis to study the full impact of the January 2009 final rule standards on the designs available in the commercial refrigeration equipment market. Therefore, DOE will continue with its current approach of estimating the predictable effects of the January 2009 final rule (such as using the January 2009 final rule standards as the baseline efficiency level), and reflecting such in the LCC and PBP (as well as upstream engineering) analyses to ensure the timely publication of the current rulemaking documents. This standards baseline corresponds to the lowest efficiency level which would be compliant with current (January 2009 final rule) standards. From there, higher efficiency levels were studied as the basis for developing potential standard levels as proposed in today’s NOPR. In res ponse to AHRI’s comment, DOE used updated inputs to the174 CRE NOPR ECS OMB Compare 

### .docx baseline in order to reflect the compliance date of the January 2009 final rule standards having passed. This includes updates to the non

- standards case efficiency distribution and other inputs to the downstream analyses. These inputs were updated based on the most recent available information for use in conducting the analysis described in today’s
NOPR.

2. Equipment Cost To calculate consumer customer equipment costs, DOE multiplied the MSPs developed in the engineering analysis by the distribution channel markups, described in section IV.F . DOE applied baseline markups to baseline MSPs , and incremental markups to the MSP increments associated with higher efficiency levels.

3. Installation , Maintenance, and Repair Cost s 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 do not vary with efficiency levels within an equipment class. Costs that do not vary with efficiency levels do not impact the LCC, PBP, or NIA results. DOE retained the nationally r epresentative installation cost values from the January 2009 final rule of $2,000 for all remote condensing equipment of $2,000 and $750 for all self

- contained equipment of $750 , and simply escalated the values from 2007$ to 2010 2012 $ , resulting in 2010 2012 installation costs of $ 2, 106 299 and $ 790 862 , respectively.175 CRE NOPR ECS OMB Compare 

### .docx True stated that the average glass

- doored merchandiser i s moved and installed twice in its lifetime, and that self

- contained , solid -doored units, which are used in commercial kitchens, ar e moved and installed in different locations at least three times, on average, during their lifetimes. Therefore, True suggested that DOE double or triple its estimated installation cost. (True, Public Meeting Transcript, No, 31 at p. 110)

Based on the design o ptions for higher efficiency levels, DOE determined that installation costs do not vary by efficiency levels within a given equipment class. Costs that do not vary with efficiency levels do not impact the LCC , PBP, or NIA results. Because doubling or tripl ing of installation costs would not impact the net results, DOE did n ot alter the installation costs for th e NOPR analyses based on True’s comment

.

Maintenance costs are associated with maintaining the operation of the equipment. DOE split the maintenance costs into regular maintenance costs and lighting maintenance costs. Regular maintenance activities, which include cleaning evaporator and condenser coils, drain pans, fans , and intake screens; inspecting door gaskets and seals ; lubricating hinges; and checking starter panel , control , and defrost system operation, were considered to be equivalent for equipment at all efficiency levels. Lighting maintenance costs are the costs incurred to replace display case lighting at regular intervals in a preventative fashion. Because lights and lighting configuration change with efficiency levels, lighting maintenance costs vary with efficiency levels. As stated in section IV

. E.4.d , for efficiency levels that incorporate LED lights as a design option, the reduction in LED costs beyond 2017 were taken into account when176 CRE NOPR ECS OMB Compare 

### .docx calculating the lighting maintenance costs vary with efficiency levels

.

Repair cost is the cost to the consumer customer of replacing or repairing failed components . DOE calculated repair costs based on the typical failure rate of refrigeration system components, original equipment manufacturer (OEM) cost of the components , and an assumed markup value to account for labor cost.

a. 

### Maintenance and Repair Cost s by Effic iency Level Traulsen commented that it agreed with DOE that installation and maintenance costs would be flat across all efficiency levels. (Traulsen, No. 45 at p. 4) AHRI, however, disagreed with DOE’s ass ump tion that repair and maintenance costs would not vary with efficiency. AHRI stat ed that the industry’s experience has been that hig her efficiency equipment is more expensive to repair and maintain since it uses more sophisticate d components. AHRI also added that, if repair and maintenance cost data are not available by efficiency level, DOE should correlate it repair and maintenance cost with equipment

cost. (AHRI, No. 43 at p. 3)

DOE does not believe that any design option used in the higher efficiency equipment for considered in this rulemaking would lead to higher costs for regular maintenance activities . R epair costs and lighting maintenance costs , on the other hand, have been modeled to be proportional to the OEM cost of the components and , consequently , are higher for higher efficiency equipment. D OE requested information from stakeholders regarding maintenance and repair costs specifically related to any of177 CRE NOPR ECS OMB Compare 

### .docx the design options used for this rulemaking , but did not receive any such information. Therefore, DOE retained its current approach of using fl at costs for regular maintenance , and costs proportional to OEM cost for repair costs and lighting maintenance costs.

Southern Store Fixtures questioned whether DOE would examine the economic impact of night curtains and lighting occupancy sensors on equipment cost and operating cost. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p p . 185 –86) CA IOUs stated that labor costs related to night curtain deployment can be significant. CA IOUs urged DOE to review and update its assumptions involvi ng night curtains. (CA IOUs, No. 42 at p. 5)

Equipment costs, which include costs of night curtains and lighting occupancy sensors, were covered in the engineering analysis used to obtain the MSP (see section
IV.E ). Based on interactions discussions with specialists in display case retrofits who are familiar with lighting occupancy sensor installation and setup, DOE concluded that lighting occupancy sensors do not increase maintenance costs of commercial refrigeration equipment. With respect to repair or replacement costs, DOE determine d that the manufacturing processes used today produce highly reliable products , making the failure of occupancy sens ors relatively rare . Typically , according to the available data, lighting occupancy sensors last nearly 15 years, which is longer than the average lifetime of commercial refrigeration equipment. Therefore, DOE did not include lighting occupancy
sensor repa ir or replacement costs in the LCC analysis

.178 CRE NOPR ECS OMB Compare 

### .docx DOE believes that the night curtains currently available in the market are designed for easy deployment and retraction. In most instances, it takes less than 15 seconds per refrigerated display case to deploy o r retract a night curtain. DOE believes that deployment and retraction of night curtains can be easily assimilated into the personnel activities associated with store closing or opening operations , and will not

amount to an added expense. Therefore, DOE di d not add labor costs for night curtain deployment and retraction to the LCC analysis or NIA.

b. 

### Maintenance and Repair Cost Annualization
S takeholders provided feedback on DOE’s methodology in annualizing the costs of equipment maintenance and repair. ASAP stated that annualizing lighting maintenance costs results in a present value that is greater than it would be if DOE were to model lighting replacement costs in the years in which they actually were incurred . (ASAP, Public Meeting Transcript, No. 31 at p. 104) NEEA agreed that DOE should try to characterize maintenance costs as accurately as possible, modeling truly annual costs on

an annual basis, and other costs as they occur ( i.e. , as capital equipment costs). NEEA added that it is not appropriate to annualize all costs because , while some costs are truly annual or biannual, others are periodic maintenance investments and should be treated as such. NEEA referenced the fluorescent lamp ballast rulemaking (Docket No. EE -2007-
BT

- STD -0016), in which DOE accounted for lamp replacement costs in the years in which they occurred, and urged DOE to adopt a similar methodology in this rulemaking. (NEEA, Public Meeting Transcript, No. 31 at p. 105 , No. 36 at p p . 5 –6 ) ASAP and NRDC echoed this stance in their joi ntly submitted written comment, stating that, while it179 CRE NOPR ECS OMB Compare 

### .docx is reasonable to annualize costs that are indeed incurre d annually or biannually, annualizing costs that only occur in certain years could distort the LCC output, resulting in a higher present value of annualized costs. ASAP and NRDC also referenced the fluorescent ballast rulemaking , and suggested that DOE acco unt for costs similarly in this rulemaking’s analyses. (ASAP and NRDC , No. 34 at p. 4) Southern Store Fixtures, however, offered a dissenting opinion, add ing that it is a common practice in supermarkets to have lighting contract s under which a maintenance worker changes the lights on a scheduled basis, whether they are broken or not, making light ing costs indeed annual. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 107)

DOE has determined that , if the costs of known items occurring at predictable intervals are appropriately discounted when annualized, there will be no impact on LCC and NIA results , regardless of whether or not the costs are annualized . Additionally, in the commercial refrigeration equipment analyses, repairs and replacements have been modeled as a combination of known, expected items, plus others modeled simply as a fraction of failed components that are expected to be replaced during equipment lifetime. Such a characterization of maintenance and repair costs does not le nd itself to explicit timing in the analysis. specification of a particular time, during the equipment lifetime, when such repairs are likely to occur

. Further, the PBP by its very definition cannot be calculated unless the costs are annualized. Finally, if multiple explicit repair and maintenance line items were tracked individually in the NIA model, the size and complexity of the computer model would grow exponentially without a commensurate improvement in value . Therefore, DOE has retained its conventional approach of180 CRE NOPR ECS OMB Compare 

### .docx annualizing the maintenance and repair costs.

c. 

### Maintenance Cost Estimates At the April 2011 preliminary analysis public meeting, Coca

- Cola stated that it s largest maintenance cost is condenser cleaning, which is much more expensive than lighting maintenance. (Coca -Cola, Public Meeting Transcript, No. 31 at p. 109) NEEA commented that, in the case of actual maintenance costs, it agree d with Coca

- Cola’s

asse rtion that $35 per year , the maintenance cost presented by DOE in its preliminary analysis, is too low , based on its intuition regarding the cost of labor and travel to maintain equipment. (NEEA, No. 36 at p. 6 )

DOE obtained its annualized maintenance costs for commercial refrigeration equipment from RS Means Facilities Maintenance and Repair Cost Data. 63

63 RS Means Company, Inc. Means Costworks 2010: Facility, Maintenance and Repair Cost Data . 2010. Kingston, MA. 

### RS Means data provide estimates of the person

- hours, labor rates, and materials required to maintain commercial refrigeration e quipment. While it could be true that an amount of $35 per
year does not reflect travel and other overhead charges, DOE believes that the value reflects the cost incurred for labor if the maintenance were to be performed by in -house personnel of the busine ss establishment. In any case, the actual amount allocated to the regular maintenance costs has no effect on the LCC analysis or the NIA because maintenance costs do not vary based on efficiency levels in any equipment class. DOE believes t he higher effici ency design options selected for this rulemaking do not result in changes to the regular maintenance costs of the commercial refrigeration equipment.181 CRE NOPR ECS OMB Compare 

### .docx Therefore, DOE believes that a value of $35 is reasonably representative of the regular
maintenance costs for self

- contained equipment.

d. 

### Refrigerant Costs Southern Store Fixtures stated that DOE should include refrigerant recharge costs in its maintenance cost estimates, because EPA and DOE have accepted that there is an
18- percent refrigerant leakage rate annually, or at least regularly, for rack systems. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 108)

Costs incurred due to refrigerant leakage do not vary with equipment efficiency levels. Therefore, these costs will not affect the LCC analysis or NIA results. DOE did not take these costs into account for the NOPR analysis

.

e. 

### Repair Costs Traulsen stated that repair costs would increase commensurate with the purchase price of the components to be repaired. This increase, Traulsen added, would be consistent with the increase in manufacturing cost due to the implementation of a technology. (Traulsen, No. 45 at p. 4)

DOE modeled repair costs as directly proportional to the OEM cost of the failed components. This approach yi elds higher repair costs for higher efficiency equipment and is consistent with Traulsen’s comment.182 CRE NOPR ECS OMB Compare 

### .docx Zero Zone stated that it suspected the average lifetime of an LED light is less than 5 years, and that the cost to replace one will be higher than estimate d. This, Zero Zone added, is because LEDs continue to evolve and older models are discontinued, meaning that replacement of failed LEDs will require a complete relamping to maintain consistent product appearance. (Zero Zone, No. 37 at p. 4)

All major manufacturers of LED lighting solutions for refrigerated display cases state that the maintenance -free lifetime for LED lights is 50,000 hours, and some of the retailers offer a 5

- year warranty

. DOE did not find any basis for doubt ing the assumption of a 50,000- hour lifetime for LED lights in refrigerated display case s. Recognizing that replacement of LED strip lighting in refrigerated display cases involves higher labor costs compared to the simple lamp replacement process of fluorescent tube lights, DOE applied a retrofit factor (multiplier) of 1.4 to the LED lamp cost to account for relamping of LED lights in display cases. The retrofit factor was estimated based on retrofit costs of some of the refrigerated display case LED retrofit projects. The result s presented in the preliminary analysis used the retrofit factor of 1.4 , and DOE used the same factor for its NOPR analysis.

4. Annual Energy Consumption Annual energy consumption of commercial refrigeration equipment is obtained from engineering analysis (chapter 5 of the NOPR TSD).183 CRE NOPR ECS OMB Compare 

### .docx 5. Energy Prices DOE calculated average commercial electricity prices using the U.S. Energy Information Administration’s (EIA’ s) Form EIA -826, “ Database Monthly Electric Utility Sales and Revenue Data .” 64 

### DOE calculated an average national commercial price by (1) estimating an average commercial price for each utility company by dividing the commercial revenues by commercial sales; and (2) weighting each utility by the number of commercial customers it served in that region, across the nation.

6. Energy Price Projections To estimate energy prices in future years for the prelimi nary 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
AEO2011 AEO2013

. 65 

### AEO2011 AEO2013 forecasted prices through 2035 2040

. To estimate the price trends after 2035 2040 , DOE assumed the same average annual rate of change in prices as from 2026 2031 to 2035 2040

.

7. Equipment Lifetime DOE defines lifetime as the age at which a commercial refrigeration equipment unit is retired from service. DOE based expected equipment lifetime on discussions with industry experts, and concluded that a typical lifetime of 10 years is appropriate for mos t

64 U.S. Energy Information Administration. EIA

- 826 Sales and Revenue Spreadsheets . (L ast accessed May 16, 2012). www.eia.doe.gov/cneaf/electricity/page/eia826.html 65 T he spreadsheet tool that DOE used to conduct the LCC and PBP analyses allow s users to select price forecasts from either AEO ’s H igh Economic G rowth or Low Economic Growth Cases. Users can thereby estimate the sensitivity of the LCC and PBP results to different energy price forecasts.184 CRE NOPR ECS OMB Compare 

### .docx commercial refrigeration equipment in large grocery/multi

- line stores and restaurants. Industry experts believe that o perators of small food retail stores, on the other hand, tend to use display cases longer. DOE used 15 years as the average equipment lifetime for display cases used in such retail stores. DOE reflects the uncertainty of equipment lifetimes in the LCC analysis for both equipment markets as probability distributions, as discussed in section 8.2.3.5 of the TSD.

Traulsen stated that 10 years is an acceptable estimate for the lifetime of self

contained equipment, and that it is not uncommon for some applications to have a 20

- year lifetime. However, Traulsen added that smaller units subject to more frequent human interaction, such as undercounter units, would likely have shorter lifetimes, such as 7 years. Traulsen also stated that price point could indicate potential lifetime. (Traulsen, Public Meeting Transcript, No. 31 at p. 4) AHRI commented that properly installed and maintained equi pment typically has a much longer lifetime than the actual period of time the end use customers retain it, and that this is entirely dependent on the specific business models of and competitive demands on different users. However, AHRI added that the
10- year lifetime used by DOE is an appropriate average value. (AHRI, No. 43 at p. 3) NEEA concurred, stating that it generally agreed with the inputs to the Crystal Ball simulations that DOE used. In particular, NEE A stated that it was comfortable with the assumed equipment lifetimes and distributions thereof, and that, while much of the equipment does indeed last longer, at that point the equipment becomes used equipment and is not directly applicable to the rulemaking except for purposes of estimating shipments. (NEEA, No. 36 at p. 6) Comment [A21]: Revision requested by OIRA.

Comment [A22]: Revision requeste d by OIRA.185 CRE NOPR ECS OMB Compare 

### .docx DOE appreciates the comments supporting the assumption of average previously submitted and welcomes further input on the equipment lifetimes for the LCC analysis and NIA.

8. Discount Rates
In calculating the LCC, DOE applies discount rates to estimate the present value of future operating costs

. to the customers for commercial refrigeration equipment

. The discount rate is the rate at which future expenditures are discounted to establish thei r present value

. to the customer

. 66 

### DOE derived the discount rates for the commercial refrigeration equipment analysis by estimating the cost of capital for a large number of companies similar to those that could purchase commercial refrigeration equipment and then sampling them to characterize the effect of a distribution of potential customer discount rates . The cost of capital is commonly used to estimate the present value of cash flows to be derived from a typical company project or investment. Most companies use both debt and equity capital to fund investments, so their cost of capital is the weighted average of the cost to the company of equity and debt financing.

DOE estimated the cost of equity financing by using the Capital Asset Pricing

66 The LCC analysis estimates the economic impac t on the individual customer from that customer’s own economic perspective in the year of purchase and therefore needs to reflect that individual’s own perceived cost of capital. By way of contrast DOE’s analysis of national impact requires a societal discount rate. These rates used in that analysis are 7 percent and 3 percent, as required by OMB Circular A

- 4, September 17, 2003

. Comment [A23]: Revision requested by OIRA.

Comment [A24]: Revision requested by OIRA.

Comment [A25]: Revision requested by OIRA.
Comment [A26]: Revision requested by OIRA.
Comment [A27]: Revision requested by OIRA. Comment [A28]: Revision requested by OIRA.

Comment [A29]: Revision requested by OIRA.186 CRE NOPR ECS OMB Compare 

### .docx Model (CAPM). 67 

### The CAPM, among the most widely used models to estimate the cost of equity financing, assumes that the cost of equity is proportional to the amount of systematic r isk associated with a company. The cost of equity financing tends to be high when a company faces a large degree of systematic risk , and it tends to be low when the company faces a small degree of systematic risk.

9. Compliance Date of Standards EPCA prescri bes that DOE must review and determine whether to amend performance

- based standards for commercial refrigeration equipment by January 1, 2013. (42 U. S.C. 6313(c)( 5 6 )(A)) In addition, EPCA requires that the any amended standards established in this rulemaking must apply to equipment that is manufactured on or after 3 years after the final rule is published in the Federal Register unless DOE determines, by rule, that a 3

- year period is inadequate, in which case DOE may ex tend the compliance date for that standard by an additional 2 years. (42 U.S.C. 6313(c)( 5 6 )(C)) Based on these criteria, DOE assumed reasoned due to the cumulative regulatory burden of the recently implemented 2009 CRE final rule and of the upcoming walk

- in cooler and freezer rule, which both affect the same industry that the most likely compliance date for the standards set by this rulemaking would be , at the earliest, in 2016 2017 . Therefore, DOE calculated the LCC and PBP for commercial refrigeration equipment under the assumption that compliant equipment would be purchased in 2016, 2017. DOE seeks comment on whether it should e xtend the year when compliance with the amended standard is required date as authorized, and, if so, by how long

.

67 Harris, R.S. Applying the Capital Asset Pricing Model . UVA -F- 1456. Available at SSRN: http://ssrn.com/abstract=909893

. Comment [A30]: Revision requested by OIRA.
Comment [A31]: Revision requested by OIRA. Comment [A32]: Revision requested by OIRA.

Comment [A33]: Revision requested by OIRA.
Comment [A34]: Revision requested by OIRA.187 CRE NOPR ECS OMB Compare 

### .docx 10. Base

- Case and Standards

- Case Efficiency Distributions To accurately estimate the share of affected consumer s customer s 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 consumer s customer s purchase under the base case (that is, the case without new or amended 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 a cost

- based method consi stent with the approaches that were used in the EIA’s National Energy Modeling System ( NEMS ) 68 

### and in the Canadian Integrated Modeling System (CIMS) 69 , 70 

### for estimating efficiency choices within each equipment class. DOE then extrapolated future scenarios of the equipment efficiency for the base case and amended standards cases using the same cost

- based method. The difference in equipment efficiency between the base case and amended standards case was the basis for determining the reduction in unit energy consumption resulting from amended standards.

Traulsen commented that it believe d that DOE’s estimates of shipment

- weighted

68 U.S. Energy Information Administration. National Energy Modeling System Commercial Model (200 4 Version). 2004. Washington, D C. 69 The CIMS Model was originally known as the Canadian Integrated Modeling System, but as the model is now being applied to other countries, the acronym is now used as its proper name. 70 Energy Research Group / M.K. Jaccard & Associates. Integration of GHG Emission Reduction Options using CIMS . 2000. Vancouver, B.C. www.emrg.sfu.ca/media/publications/Reports%20for%20Natural%20Resources%20Canada/Rollup.pdf188 CRE NOPR ECS OMB Compare 

### .docx market share are skewed towar d the higher performance levels. Traulsen added that it believe d that DOE has overestimated the value that end users place on energy efficiency. (Traulsen, No. 45 at p. 7)

DOE recognizes Traulsen’s concern, but at this time has no data to more accurately define the market shares by efficiency level within each equipment class. No data on shipments by efficiency level of either self

- contained or remote condensing equipment classes are known to DOE or were provided by industry or other stakeholders. Currentl y, there is also no extensive database of available efficiency levels by model that could be used to provide a proxy for efficiency levels for shipped equipment, an approach that has been used in rulemakings for other products when efficiency data on shipp ed products was lacking. The methodology used for this analysis was identical to that used in the January 2009 final rule analysis . S ee chapter 10 of the TSD for the January 2009 final rule , available at : www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/chp_10_cre_ship mts_final.pdf

. If the model may overstate this value, it wi ll result in greater fraction overstates the share of shipments at the base

- case scenario to be at higher efficiency levels , which may slightly understate in the base case scenario, it results in analysis erring on the side of lower NES and NPV

. values.

11. Inputs to Payback Period Analysis Payback period is the amount of time it takes the consumer customer to recover the higher purchase cost of more energy efficient equipment as a result of lower operating189 CRE NOPR ECS OMB Compare 

### .docx costs. Numerically, the PBP is the ratio of the incre ase 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 or the time value of money ; that is, the calculation is don e at an effective discount rate of zero percent. PBPs are expressed in years. PBP s 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.

The inputs to the PBP calculation are the total installed cost to the

consumer customer of the equipment for each efficiency level and the average annual operating expenditures for each efficiency level in the first year. The PBP calcula tion uses the same inputs as the LCC analysis, except that electricity price trends and discount rates are not used.

12. Rebuttable

- Presumption Payback Period Sections 325(o)(2)(B)(iii) and 345(e)(1)(A) of EPCA , (42 U.S.C. 6295(o)(2 )(B)(iii) and 42 U.S.C. 6316(e)(1)(A)), establish a rebuttable presumption applicable to commercial refrigeration equipment. The rebuttable presumption states that

a new or amended standard is 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

. This rebuttable presumption test is an Comment [A35]: Revision requested by OIRA.190 CRE NOPR ECS OMB Compare 

### .docx alternative way of establishing economic justification.

To evaluate the rebuttable presumption, DOE estimated the add itional cost of purchasing more- efficient, standards

- compliant equipment, and comp ared this cost to the value of the energy saved during the first year of operation of the equipment. DOE interprets that the increased cost of purchasing standard s- compliant equipment includes the cost of installing the equipment for use by the purchaser. DOE calculated the rebuttable presumption payback period (RPBP), or the ratio of the value of the increased installed price above the baseline efficiency level to the first year’s energy cost savings. When the RPBP is less than 3 years, the rebuttable pres umption is satisfied; when the RPBP is equal to or more than 3 years, the rebuttable presumption is not satisfied. Note that this PBP calculation does not include other components of the annual operating cost of the equipment ( i.e. , maintenance costs and r epair costs).

While DOE examined the rebuttable

- presumption criterion , it also 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)(i). The results of this analysis serve d 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 justificatio n).

I. National Impact Analysis – National Energy Savings and Net Present Value The NIA assesses the NES and the NPV of total consumer customer costs and191 CRE NOPR ECS OMB Compare 

### .docx savings that would be expected as a result of amended energy conservation standards. The NES and NPV are analyzed at specific efficiency levels for each equipment class of commercial refrigeration equipment. 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

consumer customer benefits for equipment sold from 20 16 2017 through 20 4 5 2046

— the year in which the last standards

- compliant equipment is shipped during the 30- year analysis period

.

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 consumer customer costs for each equipment class in the absence of any amended energy conservation standards. DOE compares these projections with projections characterizing the market for each equipment class if DOE adopted the were
to adopt an amended standard at specific energy efficiency levels for that equipment class. For the standards cases, DOE considered a “roll

- up” scenario , in which DOE

assume d that equipment efficiencies that do not meet the standard level under consid eration would “ roll -up” to meet the amended standard level, and those already above the proposed standard level would remain unaffected.

DOE uses a Microsoft Excel spreadsheet model to calculate the energy savings and the national consumer customer costs and savings from each TSL. The NOPR TSD192 CRE NOPR ECS OMB Compare 

### .docx 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 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 AEO20 11 AEO20 13 Reference C ase. In addition, DOE analyzed scenarios that used inputs from the AEO20 11 AEO20 13 Low Economic Growth and High Econo mic Growth C ases. These cases have lower and higher energy price trends , respectively, compared to the Reference C ase. NIA results based on these cases are presented in chapter 10 of the NOPR TSD.

A d etailed description of the procedure to calculate NES and NPV, and inputs for this analysis are provided in chapter 1 0 of the NOPR TSD.

1. Shipments Complete h istoric al s hipment s data for commercial refrigeration equipment could not be obtained from a single source; therefore, DOE used data from multiple sources to estimate historical shipments. The major sources were 2005 shipments data provided by ARI as part of its comments submitted in response to the January 2009 final rule Framework d ocument , ARI 2005 Report ( Docket No. EERE -2006- BT

- STD -0126, ARI,
No. 7 , Exhibit B at p. 1); Commercial Refrigeration Equipment to 2014 by Freedonia193 CRE NOPR ECS OMB Compare 

### .docx Group, Inc. 71 

### ; 2008 Size and Shape of Industry by the North American Association of Food Equipment Manufacturers 72 

### ; and Energy Savings Potential and R&D Opportunities for Commercial Refrigeration prepared by Navigant Consulting, Inc. for DOE. 73 

### Exact shipments numbers and assumptions have been withheld because some of the sources cited above are not public documents and are available only for purchase.

Historic al linear feet of shipped units depicts the annual amount of commercial refrigeration equipment capacity shipped , and is an alternative way to express shipments data. DOE determined the linear feet shipped for any given year by multiplying each unit shipped by its associated average length, and then summing all the linear footage values. Table IV .3 presents the representative equipment class lengths used for the conversion of
per - unit shipments to linear footage within each equipment class.

71 Freedonia Group, Inc. Commercial Refrigeration Equipment to 2014 . 2010. Cleveland, OH. Study 2261. www.freedoniagroup.com/Commercial

- Refrigeration

- Equipment.html 72 North American Association of Food Equipment Manufacturers. 2008 Size an d Shape of Industry . 2008. Chicago, IL. 73 Navigant Consulting, Inc. Energy Savings Potential and R&D Opportunities for Commercial Refrigeration

. 2009. Prepared by Navigant Consulting, Inc. for the U.S. Department of Energy, Washington, DC.194 CRE NOPR ECS OMB Compare 

### .docx Table IV .3 Equipment Linear Dimensions Assumed for Shipments Analysis

Equipment

Class Assumed Length

ft Basis
VOP.RC.M 10 Average of 8 ft and 12 ft, manufacturer interviews VOP.RC.L 10 Average of 8 ft and 12 ft, manufacturer interviews VOP.SC.M 4 Baseline equipment used for engineering analysis SVO.RC.M 10 Average of 8 ft and 12 ft, manufacturer interviews SVO.SC.M 4 Baseline equipment used for engineering analysis HZO.RC.M 10 Average of 8 ft and 12 ft, manufacturer interviews HZO.RC.L 10 Average of 8 ft and 12 ft, manufacturer interviews HZO.SC.M 4 Baseline equipment used for engineering analysis HZO.SC.L 4 Baseline equipment used for engineering analysis VCT.RC.M 10 Average of 3

- door and 5

- door (30 in. per door), manufacturer interviews VCT.RC.L 10 Average of 3

- door and 5

- door (3 in. per door), manufacturer interviews VCT.SC.M 4 Engineering estimate * VCT.SC.L 3.5 Average of 1

- door and 2

- door freezer VCT.SC.I 5 Baseline equipment used for engineering analysis VCS.SC.M 4 Engineering estimate * VCS.SC.L 3.5 Average of 1

- door and 2

- door freezer VCS.SC.I 5 Baseline equipment used for engineering analysis HCT.SC.M 3 .0 Engineering estimate * HCT.SC.L 3 .0 Engineering estimate * HCT.SC.I 3.4 Baseline equipment used for engineering analysis HCS.SC.M 4 .0 Engineering estimate * HCS.SC.L 5 .0 Engineering estimate * SOC.RC.M 8 Average of 4 ft, 8ft 8 ft , 12 ft, all common equipment lengths PD.SC.M 2.5 Baseline equipment used for engineering analysis SOC.SC.M 5 Engineering estimate* * For equipment classes that exhibit a wide range of equipment lengths in the market, DOE assumed a value for equipment length based on its best engineering judgment.


### DOE converted the estimated 2009 shipments data in each equipment class to percentages of total shipped linear feet of commercial refrigeration equipment for use in the s hipments m odel. This established the commercial refrigeration equipment market share attributed to each equipment class. DOE calculated the percent percentage of shipped linear footage by dividing the linear footage shipped for each equipment class by the overall linear footage shipped for all commercial refrigeration equipment covered in this rulemaking.

Table IV .4 summarizes DOE’s estimated division of historic al annual shipments195 CRE NOPR ECS OMB Compare 

### .docx into new and replacement categories by building type. The distributions shown in Table
IV .4 result from several discrete steps. First, equipment types were identified by the type of business they generally serve. For example, vertical open cases with remote compressors are associated with large grocers and multi

- line retail stores. Remote condensing equipment is generally associated w ith retail stores which that sell high volumes of perishable goods , while self

- contained units are associated with foodservice and convenience or small food sales stores. When there was no strong association between the building type and equipment class, equipment was distributed across broader classes. Second, a ratio of new versus replacement equipment was developed based on commercial floor space estimates (floor space estimates are discussed below). Using the expected useful life of commercial refrigeration equipment and commercial floor space stock, additions, and retirements, ratios were developed that yielded a ratio of new versus replacement stock for use in this analysis. Using these and related factors ( e.g. , the division of foodservice into the thr ee building types

— limited service restaurants, fu ll

service restaurants, and other), DOE distributed commercial refrigeration equipment shipments among building types and new versus replacement shipments , as shown in Table IV

. 3 4

.

Table IV .4 Estimated Distribution of 2009 Linear Feet of Commercial Refrigeration Equipment Shipments Among New vs. Replacement Equipment Building Type Replacement New Total Large Grocery / Multi

- Line Retail 31.1 30.5 % 8. 0 6 % 39.1% Small Grocery / Convenience 14. 9 6 % 3.8 4.1 % 18.7% Limited Service Restaurants 9. 0 4 % 3. 7 3 % 12.7% Full Service Restaurants 9. 4 8 % 3. 8 4 % 13.2% Other 11.6 12.1 % 4. 7 2 % 16.3% Total 76. 0 4 % 24.0 23.6 % 100.0%



### Table IV .5 shows the forecasted square footage of new construction used to scale1 96 CRE NOPR ECS OMB Compare 

### .docx annual new commercial refrigeration equipment shipments. As the data in Table IV .5 show, forecasted square footage additions to the building stocks vary from year to year, with the first few years of the analyzed period exhibiting lower levels of growth due to predicted lingering impacts of the U.S. economic recession. The forecasted commercial refrigeration equipment shipments therefore show some variability as well, tracking the forecasted square footage floor space additions. The growth rates over the last 10 years of the AEO AEO 2013 forecast ( 2026 2031 through 2035 2040 ) were used to extend the AEO forecast out until the year 2045 2046 to develop the full 30

- year forecast needed for the national impacts analysis NIA

.

Table IV .5 AEO201 1 AEO201 3 Forecast of New Food Sales and Foodservice Square Footage
Year New Construction million ft 2 Foodservice Food Sales 2009 49.472 47.715 35.612 34.070 2011 2012 39.320 31. 455 28.162 22.149 2016 2017 51.604 49. 076 37.180 34. 496

2020 53.026 4 7

. 6 17 38.159 33.447 2025 57.487 47.522 41.384 33.416 2030 59.748 53.630 42.946 37.836 2035 62.723 55. 536 45.032 39. 107 2040 55.814 39. 243 Annual Growth Factor, 2026

– 2035 2031

– 2040 2. 55 41 % 2. 43 27 %

Source: U.S. Department of Energy

– Energy Information Administration, Annual Energy Outlook 201 1 , 201 3

. 

### DOE then estimated the annual linear footage shipped for each of the 24 primary equipment classes. The shipments analysis relies on the 24 primary equipment classes to represent the commercial refrigeration equipment market. Table IV .6 shows the fraction of the linear footage shipped by each of t hese 24 equipment classes.197 CRE NOPR ECS OMB Compare 

### .docx Table IV .6 Percent of Shipped Linear Feet of Commercial Refrigeration Equipment Equipment

Class Percentage of Linear Feet Shipped * VOP.RC.M 11.59% VOP.RC.L 0.61% VOP.SC.M 0.82% SVO.RC.M 9.30% SVO.SC.M 1.23% HZO.RC.M 1.43% HZO.RC.L 4.49% HZO.SC.M 0.11% HZO.SC.L 0.22% VCT.RC.M 0.87% VCT.RC.L 12.11% VCT.SC.M 5.46% VCT.SC.L 0.27% VCT.SC.I 0.30% VCS.SC.M 22.11% VCS.SC.L 11.25% VCS.SC.I 0.07% HCT.SC.M 0.07% HCT.SC.L 0.43% HCT.SC.I 0.48% HCS.SC.M 5.01% HCS.SC.L 0.65% SOC.RC.M 2.34% PD.SC.M 8.58% SOC.SC.M 0.17% * The percentages in this column do not sum to 100 % percent because shipments of secondary equipment classes and certain other equipment classes that were not analyzed in this rulemaking were not included

.



### The amount of new and existing commercial floor space is the main driver for commercial refrigeration equip ment shipments , and is appropriately one of the basic inputs into the s hipments m odel. The model divides commercial space into two components: space from new construction floor space and space from existing floor
space.

DOE took the projected floor space construction after the year 2009 from the198 CRE NOPR ECS OMB Compare 

### .docx NEMS projection underlying AEO2010 AEO2013

. 74 

### DOE extracted annual estimates of new floor space additions from an AEO2010 AEO2013 data file (kdbout) for the period from 2009 through 2035 period 2040 . As stated earlier, the last 10 years of the AEO forecast were used to develop growth rates used to extend the forecast to 2045 2046

.

The total Detailed description of new length of display case area is the estimated total procedure to calculate future shipments is presented in linear feet for 2009, divided between the food sales and foodservice sectors and multiplied by indexes of new construction of square feet for each building type. The index for each building type was developed by dividing floor spa ce projections in each future year by the prior year’s value. All existing display space is presumed to be replaced when demolished.

c hapter 9 of NOPR TSD. Comments related to s hipment analysis received during the April 2011 preliminary analysis public m eeting are listed below , along with DOE’s responses to the comments.

a. 

### VOP.RC.L Shipments At the April 2011 preliminary analysis public meeting, Southern Store Fixtures stated that vertical open freezers represent far less than the figure of 1.9 percent of the commercial refrigeration equipment shipments that DOE included in the preliminary analysis TSD . (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 123) In a written comment, NEEA referenced th is statement by Southern Store Fixtures, urgi ng

74 U.S. Energy In formation Administration. Annual Energy Outlook 2010

. 2010 201 3 . 201 3 . Washington, DC. DOE/EIA

- 0383( 2010 201 3 ).199 CRE NOPR ECS OMB Compare 

### .docx DOE to ensure the accuracy of its shipments data for the VOP.RC.L equipment class, but stating that it generally agree d with DOE’s shipments analysis. (NEEA, No. 36 at p. 6)

Shipments estimates for VOP.RC.L were not explicitly stated in the AHRI ARI 2005 shipments data Report . DOE assumed that these shipments numbers were likely grouped with those of VOP.RC.M. For the preliminary analysis , DOE allocated a portion of VOP.RC.M shipments to the VOP.RC.L equipment class. In response to the comments from S outhern Store Fixtures and based on new anecdotal evidence, DOE reduced the portion of the reported AHRI VOP.RC.M shipments which (obtained from the ARI 2005 Report) that it allocated to the VOP.RC.L equipment class.

b. 

### Shipments b y End User Type Southern Store Fixtures stated that the shipments estimates presented in the preliminary analysis for new equipment for large supermarkets and smaller markets did not appear to reflect the assumption of 10 - and 15

- year equipment lifetimes. Specifically,
So uthern Store Fixtures pointed out that the replacement shipment numbers were much higher than the new shipments in the small grocery store segment. Southern Store Fixtures pointed out that because the equipment life in small grocery stores is 15 years , compared to 10 years in large grocery stores, the ratio of replacement shipments to new shipments for small grocery stores should be smaller than the same ratio for large grocery

stores. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 124)

Small grocery stores and convenience stores house many self

- contained units. In200 CRE NOPR ECS OMB Compare 

### .docx many stores, self

- contained units comprise most of the refrigeration load, when the refrigeration from walk

- in cold rooms is discounted (as it does not belong in the commercial refrigeration equipment rulemaking). In the current rulemaking, a ll self

contained units are assumed to have an average lifetime of 10 years. Therefore, the ratio of replacement shipments to new shipments in small grocery stores and convenience stores is dictated largely by the 10

- year lifetime of self

- contained units , and i s relatively less impact ed by the 15

- year lifetime of remote condensing display cases, which form a much smaller share of the commercial refrigeration equipment found in small grocery and convenience stores. DOE believes that this factor explains the apparent discrepancy highlighted in the comment by Southern Store Fixtures.

Traulsen expressed the belief that DOE’s values for projected shipments for the foodservice building type, as we ll as its projected shipments by equipment class, were low. (Traulsen, No. 45 at p. 4)

DOE calculated future shipments numbers based on forecasted square footage of new construction , obtained from the AEO 2011 AEO forecast and historic al shipments data. The ratio of floor space occupied by commercial refrigeration equipment to the total commercial floor space is much smaller in foodservice buildings than in food sales buildings such as grocery stores. Further, DOE converted the historic al shipment numbers from number of units into number of linear feet by multiplying the number of units by the average linear feet of equipment. Commercial refrigeration equipment used in the foodservice industry is overwhelmingly dominated by self

- contained equipment ,201 CRE NOPR ECS OMB Compare 

### .docx which, on an average, has a shorter length compared to the remote condensing equipment found in grocery stores. A combination of these factors results in the shipments numbers ( in linear feet ) to foodservice building s being much lower than shipments numbers to food sales buildings. However, in terms of number of units shipped, the proportion of shipments to foodservice building s is much higher as compared to shipments to food sales buildings

.

c. 

### Shipments Forecasts Traulsen commented that overly a ggressive performance standards are likely to add costs that will be passed along to the consumer customer , resulting in stunted market growth and retention of less

- efficient units. Traulsen estimated that equipment prices have increased 1 –2 percent based on variable manufacturing cost increases alone as a result of the need to comply with the standards set by EPACT 2005. (Traulsen, No. 45 at p. 6)

DOE does not have detailed information on the historic al shipments data of various types of commercial refrigeration equipment by equipment classes. As described in earlier in this section, DOE extracted shipments data from certain publications and estimated the shipments by equipment class. The ARI 2005 report only contains shipments data for the year 200 5. With the available shipments data for commercial refrigeration equipment , it difficult to determine the impact of price increases on future shipments.202 CRE NOPR ECS OMB Compare 

### .docx Regarding display cases, which are predominantly used in supermarkets and grocery stores, DOE believ es that replacement of display cases is largely performed during store remodeling , and that the major driving factor behind remodeling is the need to improve aesthetics. D ecisions regarding store remodeling are influenced by many factors, including overall future economic outlook and availability of capital, and DOE believes that equipment price increases do not figure as the major fa ctor

. DOE recognizes that, on the other hand, foodservice establishments may be more sensitive to equipment prices. The equip ment that is predominantly used in this sector is comp os ed of

r efrigerators and freezers with solid doors. DOE estimates an approximate increase in The
MSP increases related to the higher efficiency refrigerators and freezers were estimated as part of 6 to 8 percent based on the engineering analysis , and were found to be 6 to 8 percent of the baseline MSPs

. The effect of amended DOE standards could be that foodservice establishments extend the life of their existing equipment. DOE expects that this effect wi ll result in a slight dip in shipments only in the early years after amended standards go into effect because the old equipment will have to be replaced eventually. The effect of such a dip will not have a significant impact on the NIA, which is carried
out over a 30- year period. Extending the life of the existing equipment may also result in higher maintenance and repair costs that may offset part or all of the apparent

consumer customer savings.

DOE welcome s stakeholder input in this regard , as t he information currently available to DOE is not sufficient to determine the impact of price increases on future shipments of commercial refrigeration equipment.203 CRE NOPR ECS OMB Compare 

### .docx 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.H.9 , and a detailed description can be foun d in chapter 11 of the
NOPR TSD. To estimate efficiency trends in the standards cases, DOE use s 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 sta ndard level under consideration would “roll up” to meet the new standard level , and equipment efficiencies above the standard level under consideration would be un affected. Table IV .7 shows the shipment

- weighted market shares by efficiency level in the base

- case scenario.204 CRE NOPR ECS OMB Compare 

### .docx Table IV .7 Shipment
- Weighted Market Shares by Efficienc y Level, Base Case Equipment

Class Shipment
- Weighted Market Shares by Efficiency Level* , ** Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8 VOP.RC.M 25.4 24. 3 % 25.1 24. 0 % 24.3 23.4 % 23.0 13.4 % 1 12 .8% 2. 0 .4 % 0.0% NA 0.0% NA

VOP.RC.L 28.5 26.0 % 28.4 26.1 % 27 23 .2% 14.3 22.4 % 1.5 2.2 % 0.0% NA 0.0% NA 0.0% NA

VOP.SC.M 23.7 19.1 % 23.5 19.0 % 23.2 18.8 % 22 18 .1% 3 11 .3% 3.1 10. 7 % 3. 1 .0 % 0.0% NA

VCT.RC.M 25.6 18.8 % 24.1 18.8 % 16.7 15.9 % 16.0 15.5 % 15.7 14.8 % 1.9 14.5 % 0.0 1.7 % 0.0% NA

VCT.RC.L 31.4 19.5 % 22.8 20.4 % 22.1 20.0 % 21.6 19.4 % 2.1 19.0 % 0.0 1.8 % 0.0% NA 0.0% NA

VCT.SC.M 18.8 16.7 % 17. 6 4 % 14.4 15. 5 % 14.1 13.0 % 11.8 12.6 % 11. 4 7 % 10.4 11.5 % 1. 6 7 %

VCT.SC.L 14.9 10.5 % 15.8 13.3 % 16. 3 4 % 14.5 16.2 % 12.7 14.4 % 12.5 14. 2 % 11.6 13.1 % 1.7 2.0 %

VCT.SC.I 20.0 16.4 % 17.5 18.1 % 17. 3 8 % 15. 1 9 % 14.8 15.5 % 14. 0 8 % 1. 4 5 % 0.0% NA

VCS.SC.M 13. 7 1 % 15.0 14.9 % 15.0% 14.9 15.0 % 14. 5 6 % 13.8 14.0 % 12. 4 6 % 0. 7 8 %
VCS.SC.L 12. 9 1 % 15. 2 1 % 15.3% 15. 3 4 % 14. 1 3 % 13. 7 9 % 13. 0 3 % 0. 5 6 % VCS.SC.I 17.0 16.7 % 17.0 16.8 % 17.4% 17.0% 15.8 16.0 % 15. 2 4 % 0. 6 7 % 0.0% NA

SVO.RC.M 25.8 24.5 % 25.8 24.5 % 23 22 .2% 22.1 13.2 % 2.3 12.6 % 3. 0 .7 % 0.0% NA 0.0% NA

SVO.SC.M 23.8 19.5 % 23.7 19.5 % 22.2 18.5 % 21.6 18.0 % 3.7 10.8 % 3.5 10.1 % 1.4 3.7 % 0.0% NA

SOC.RC.M 21 17

. 7 % 21.7 17.8 % 21.7 17.8 % 21.0 14.5 % 6.0 14.1 % 5.5 12.7 % 2. 5 .4 % 0.0% NA

HZO.RC.M 79.3 78.4 % 20.7 21.6 % 0.0% NA 0.0% NA 0.0% NA 0.0% NA 0.0% NA 0.0% NA

HZO.RC.L 87.1 86.2 % 12.9 13.8 % 0.0% NA 0.0% NA 0.0% NA 0.0% NA 0.0% NA 0.0% NA
HZO.SC.M 25. 7 4 % 25. 6 4 % 25. 1 0 % 21. 7 9 % 1.9 2.4 % 0.0% NA 0.0% NA 0.0% NA HZO.SC.L 73.3 71. 8 % 26.7 28. 2 % 0.0% NA 0.0% NA 0.0% NA 0.0% NA 0.0% NA 0.0% NA

HCT.SC.M 15.6 14.8 % 16.0 15.4 % 16.1 15.6 % 16.0 15.7 % 12.7 13. 4 % 12. 2 8 % 10.3 11.0 % 1. 2 4 %

HCT.SC.L 13.5 12.3 % 14 13 .3% 14.5 13.6 % 14.4 15.8 % 15. 1 6 % 14.5 15.0 % 12.6 13.2 % 1. 0 2 %

HCT.SC.I 25. 9 6 % 26.0 25.8 % 25. 2 1 % 22. 0 3 % 0.9 1.1 % 0.0% NA 0.0% NA 0.0% NA
HCS.SC.M 17. 4 2 % 17. 6 5 % 17. 3 2 % 16. 9 8 % 15.9% 13. 2 3 % 2. 1 .9 % 0.0% NA HCS.SC.L 16.5 17 .2 % 17. 2 5 % 17. 3 2 % 17.1 16.8 % 16. 5 6 % 14. 2 5 % 1. 3 5 % 0.0% NA

PD.SC.M 19.2 14.0 % 16.9 17.2 % 15.0 16.1 % 14.7 15.8 % 14 15 .3% 10.1 11.0 % 8. 9 .7 % 1. 0 .9 %
SOC.SC.M 14.7% 15.1% 15.1% 15.0% 12.5% 12.1% 1 1 .0 % 4.6% * A value of 0.0% “ NA ” means that no market share was calculated for this efficiency level. For example, the VOP.RC.M equipment class only had six possible efficiency levels, so no market share was allotted to Efficiency Levels 7 and 8. ** Shares may not add to 100 percent exactly due to rounding.205 CRE NOPR ECS OMB Compare 

### .docx 3. National Energy Savings For each year in the forecast period, DOE calculates the NES for each potential standard level 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. However, DOE used a rebound factor of 1, or no effect, for commercial refrigeration equipment because it is operate s 24 hours a day , and therefore there is no potential for a rebound effect

.

Major inputs to the calculation of NES are annual unit energy consumption, shipments, equipment stock, a site

- to -source conversion factor , and a full fuel cycle factor

.

The annual unit energy consumption is the site energy consumed by a commercial refrigeration unit in a given year. Because the equipment classes analyzed represent equipment sold across a range of sizes, DOE’s “unit” in the NES is actually expressed as a linear foot of equipment in an equipment class , and not an indiv idual unit of commercial refrigeration equipment of a specific size. DOE determined annual forecasted shipment

- weighted average equipment efficiencies that, in turn, enabled determination of shipment

- weighted annual energy consumption values.206 CRE NOPR ECS OMB Compare 

### .docx The commerci al refrigeration equipment stock in a given year is the total linear footage of commercial refrigeration equipment shipped from earlier years (up to 15 years earlier , depending on the type of equipment ) that is in use in that year. The NES spreadsheet model keeps track of the total linear footage of commercial refrigeration units shipped each year. For purposes of the NES and NPV analyses conducted for the
NOPR , DOE assume d that , based on 15- year and 10

- year aver age equipment lifetimes, approximately 6.67 and 10 percent , respectively, of the existing commercial refrigeration units are retired in each year . DOE assume s that , for units shipped in 2045 2046 , any units still remaining at the end of 2055 2060 will be rep laced.

DOE uses a multiplicative factor called site

- to

- source conversion factor to convert site energy consumption (at the commercial building) into has historically presented NES in te rms of 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 facto rs that DOE developed are marginal values, which represent the energy savings. In 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 factors207 CRE NOPR ECS OMB Compare 

### .docx based on the version of NEMS that corresponds to AEO2008

. 75 

### For today’s NOPR , DOE updated its conversion factors based on the U.S. energy sector modeling using the
NEMS

- BT version that corresponds to AEO2011 and which provides national energy forecasts through 20 35 . For the period from 20 35

– 20 45 , DOE used the same conversion factors as that of the year 20 35

.

Section 1802 of EPACT 2005 (Pub. L. 109

- 58) directed DOE to contract a study with the National Academy of Science (NAS) to examine whether the goals of energy efficiency standards are best served by measuring the amount of energy consumed and the impact of efficiency improvements at the actual point

- of

- use or through the use of the full

- fuel

- cycle (FFC) , which would begin a t the source of energy production. NAS appointed to the recommendations of a committee on “Point -of- Use and Full

- Fuel

- Cycle Measurement Approaches to Energy Efficiency Standards” to conduct the study, which was completed in May 2009. 76 

### The NAS committee defined FFC energy consumption as including, in addition to site energy use, the following: energy consumed in the extraction, processing, and transport of primary fuels such as coal, oil, and natural gas; energy losses in thermal combus tion in power generation plants; and energy losses in transmission and distribution to homes and commercial buildings.

In evaluating the merits of using point

- of

- use and FFC appointed by the National

75 For preliminary analysis estimates, DOE typically does not perform analyses using NEMS. Rather, DOE relies on existing estimates considered appropriate for the analysis. The site

- to

- source values DOE considered most appropriate were those used in the prio r commercial refrigeration rulemaking. 76 The National Academies, Board on Energy and Environmental Systems

. Letter to Dr. John Mizroch, Acting Assistant Secretary, DOE, Office of EERE from James W. Dally, Chair

. Committee on Point

- of

Use and Full

- Fuel

- Cycl e Measurement Approaches to Energy Efficiency Standards

. May 15, 2009. A free copy of the study can be downloaded at: www.nap.edu/catalog.php?record_id=12670

.208 CRE NOPR ECS OMB Compare 

### .docx Academy of Science , DOE announced its intention to use full

- fuel

- cycle (FFC) measures , the NAS committee noted that DOE uses what the committee referred to as “extended site” energy consumption to assess the impact of energy use on the economy, energy security, and environmental quality. The extended site mea sure of energy consumption includes the energy consumed during the generation, transmission, and distribution of electricity, but, unlike the FFC measure, does not include the energy consumed in extracting, processing, and transporting primary fuels. A maj ority of the NAS committee concluded that extended site energy consumption understates the total energy consumed to make an appliance operational at the site. As a result, the NAS committee recommended that DOE consider shifting its analytical approach ove r time to use a n FFC measure of energy consumption when assessing national and environmental impacts, especially with respect to the calculation of GHG emissions. The NAS committee also recommended that DOE provide more comprehensive information to the pub lic through labels of energy use and greenhouse gas and other means, such as an enhanced website. For those appliances that use multiple fuels (such as water heaters), the NAS committee indicated that measuring FFC energy consumption would provide a more complete picture of energy consumed and permit comparisons across many different appliances, as well as an improved assessment of impacts.

In response to the NAS committee recommendations, DOE issued, on August 20, 2010, a notice of proposed policy propo s ing to incorporate a n FFC analysis into the methods it uses to estimate the likely impacts of proposed energy conservation standards
on energy use emissions in the national impact analyses and emissions . 75 FR at 51423.209 CRE NOPR ECS OMB Compare 

### .docx Specifically, DOE proposed to use FFC measures of energy and GHG emissions, rather than the primary (extended site) energy measures it currently uses. Additionally, DOE proposed to work collaboratively with the Federal Trade Commission (FTC) to make
FFC en ergy and GHG emissions data available to the public to enable consumer s to make

cross - class comparisons. On October 7, 2010, DOE held an informal public meeting to discuss and receive comments on its planned approach. The notice, a transcript of the public meeting, and all public comments received by DOE are available at: . DOE intends to develop a final policy statement on these subjects and then to begin implementing that policy analyses included in future energy conservation standards rulemakings and oth er activities.

. 76 FR 5128 1 (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 alternati ve 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. 77



### 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 FFC savings in section V.B.3.a

.

77 Docket ID: EERE

- 2010

- BT

- NOA

- 0028 , comment by Kirk Lundblade

.210 CRE NOPR ECS OMB Compare 

### .docx 4. Net Present Value of Consumer Customer Benefit The inputs for determining the NPV of the total costs and benefits experienced by

consumer s customer s of the commercial refrigeration equipment are: (1) total annual installed cost; (2) total annual savin gs in operating costs; and (3) a discount factor. DOE calculated net national customer savings for each year as the difference in installation and operating costs between the base

- case scenario and standards

- case scenarios in terms of installation and operating costs . 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 cost s and savings. DOE estimated national impacts using 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 2011 2013 for the NOPR an alysis. 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.211 CRE NOPR ECS OMB Compare 

### .docx 5. Benefits from Effects of Amended Standards on Energy Prices The reduction in electricity consumption associated with amended standards for commercial refrigeration equipment could reduce the electricity prices charged to

consumer s customer s in all sectors of the economy , and thereby reduce electricity expenditures. In chapter 2 of the preliminary analysis TSD , DOE explained that, because the power industry is a complex mix of fuel and equipment suppliers, electricity producers, and distributors, it did not plan to estimate the value of potentially reduced electricity costs for all consumer s customer s associated with new or amended standards for refrigeration products.

For this rule making , DOE used NEMS

- BT to assess the impacts of the reduced need for new electric power plants and infrastructure projected to result from amended standards. In NEMS

- BT, changes in power generation infrastructure affect utility revenue requirements, which in turn affect electricity prices. DOE estimated the impact on electricity prices associated with each considered TSL. Although the aggregate benefits for electricity users are potentially large, there may be negative effects on some involved in ele ctricity supply, particularly power plant providers and fuel suppliers. DOE has concluded that, at present, it should not give significant weight ing to this factor (aggregate benefit to customers due to reductions in electricity prices) in its consideratio n of the justification of the amended standards because there is uncertainty about the extent to which the benefits to electricity users from reduced electricity prices would represent a transfer from those involved in electricity supply to electricity con sumer s customer s . DOE is continuing to investigate the extent to which electricity price changes projected to212 CRE NOPR ECS OMB Compare 

### .docx result from amended standards represent a net gain to society.

J. Consumer Customer Subgroup Analysis In analyzing the potential impact of new or amended standards on commercial

consumer s customer s , DOE evaluates the impact on identifiable groups (i.e. , subgroups) of consumer s customer s , such as different types of businesses that may be disproportionately af fected. 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 convenience stores and restaurants fall under the definition of small businesses (see chapter 11 of NOPR TSD for details)

. Small businesses typically face higher electricity prices and 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. Table IV .8 and Table IV .9 present average commercial electricity price s by business type and disc ount rates by building types, respectively.

Comparing the small grocery and convenience store category to the convenience store with gas station category, both face the same cost of capital, but convenience stores with gas stations generally incur lower electricity prices. Therefore, convenience stores with gas stations were chosen for LCC subgroup analysis in the food

- retail segment.

In the foodservice segment, limit ed service restaurants and full

- service restaurants have similar electricity price and d iscount rates , with limited service restaurant s paying213 CRE NOPR ECS OMB Compare 

### .docx slightly l ower electricity rates and full

- service restaurants facing a slightly higher cost of capital. DO E chose to study full

- service restaurants for the LCC subgroup analysis in the foodservice segment because a higher percentage of full

- service restaurants tend to be operated by independent small business concerns , as compared to a majority of fast -food restaurants which are owned by or affiliated wi th national restaurant chains

.

DOE estimated the impact on the identified consumer customer subgroups using the LCC spreadsheet model. The standard LCC and PBP analyses analys is (described in section IV.H ) include s various types of businesses that use commercial refrigeration equipment. For the LCC subgroup analysis, it was assumed that the subgroups analyzed do not have access to national com mercial refrigeration equipment purchasing accounts and, consequently, face a higher distribution channel markup. Further, electricity rates and discount rates differ among these subgroups. Details of the data used for LCC subgroup analysis and results are presented in chapter 1 1 of the NOPR TSD.

Table IV .8 Derived Average Commercial Electricity Price by Business Type
Business Type Electricity Price cents/kWh Ratio of Electricity Price to Average Price

for all Commercial Buildings Grocery store/food market 0.07222 0.910 Convenience store * 0.08583 1.082 Convenience store with gas station 0.07722 0.973 Multi

- line retail ** 0.07262 0.915 Limited service restaurant 0.07962 1.003 Full service restaurant 0.08467 1.067 Other foodservice 0.07664 0.966 All commercial buildings 0.07936 1.000 Source: Commercial Buildings Energy Consumption Survey 2003 * This group is assumed to include convenience stores without gas stations, specialty stores (such as meat markets), and beer, wine, and liquor stores. ** This group is assumed to include mainly large multi

- line retailers and supercenters that sell both grocery and non

grocery items. 

### Table IV .9 Derivation of Real Discount Rates by Building Type

Building Type Major Chain Local or Governmental No.214 CRE NOPR ECS OMB Compare 

### .docx Description Non
- Chain Obs. †
WACC * Percent of Stock Small Firm Premium ** Percent of Stock Muni Bond Rate Percent of Stock Discount Rate Large Grocery 3.56 4.16 % 100% 0.0% 0% 0% 0% 3.56 4.16 % 13 18 Small Grocery & Convenience 3.97 4.20 % 50% 2.5 1.9 % 50% 1 0 % 0% 5. 27 19 % 4 5 Gas Station With Convenience Store 3.97 4.20 % 50% 2.5 1.9 % 50% 1 0 % 0% 5. 27 19 % NA Multi

- Line Retail 4. 01 33 % 100% 0.0% 0% 0% 0% 4. 01 33 % 3 6 Restaurant

- Limited Service 4.81 5.29 % 50% 2.5 1.9 % 50% 1 0 % 0% 6. 12 29 % 20 21 Restaurant

- Full Service 5. 20 61 % 50% 2.5 1.9 % 50% 1 0 % 0% 6. 51 62 % 30 24 Restaurant

- Other Foodservice 5. 20 61 % 25% 2.5 1.9 % 25% 1 2.34 % 50% 3.94 4. 48 % NA Source: Pacific Northwest National Laboratory (PNNL) Weighted Average Cost of Capital (WACC) calculations applied to firms sampled from the Damodaran Online web site ( http://pages.stern.nyu.edu/~adamodar/New_Home_Page/papers.html ) . Assumptions for weighting factors for convenience and foodservice reflect lack of reliable data sources. The estimate of inflation used to tr anslate nominal rates to real rates is based on a 40

- year (1971

- – 2010) average gross domestic product deflator (3.832 percent). *WACC stands for weighted

- average cost of capital. See chapter 8 of the NOPR TSD for additional details. ** Small Firm Premium refers to higher premium paid by smaller firms that face higher risks of loss of invested capital. Source: 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 compiled 6/20/2013. † “NA” means no Da modaran observations available.



### K. Manufacturer Impact Analysis
1. Overview DOE performed an MIA to estimate the financial impact of amended energy conservation standards on manufacturers of commercial refrigeration equipment and to calculate the impact of such standards on employment and manufacturing capacity. The MIA has both q uantitative and qualitative aspects. 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 are data on the industry cost structure, product costs, shipments, and assumptions about markups and conversion expenditures. The key output is the INPV. Different sets of markup scenarios will produce different results. The qualitative part of the MIA addresses factors such as equipme nt characteristics, impacts on particular subgroups of firms manufacturers , and215 CRE NOPR ECS OMB Compare 

### .docx important market and product trends. 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
MI A, DOE prepared a profile of the commercial refrigeration equipment industry that includes a top

- down cost analysis of manufacturers used to derive preliminary financial inputs for the GRIM ( e.g. , sales general and administration (SG&A) expenses; research and development (R&D) expenses; and tax rates). DOE used public sources of information, including company SEC 10 -K filings, corporate annual reports, the U.S. Census Bureau’s Economic Census, and Hoover’s reports.

In Phase 2 of the MIA, DOE prepared an industry cash

- flow analysis to quantify the impacts of an amended energy conservation standard. In general, more

- stringent energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) by creat ing a need for increased investment; (2) by raising production costs per unit; and (3) by altering revenue due to higher per

- unit prices and possible changes in sales volumes.

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.K.4 for a description of the key issues manufacturers raised during the interviews.216 CRE NOPR ECS OMB Compare 

### .docx Additionally, in Phase 3, DOE evaluated subgroups of manufacturers tha t 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. For example, small manufacturers, niche players, or manufacturers exhibiting a cost structure that largely differs from the industry average could be more negatively affected.

DOE identified one subgroup, small manufacturers, for separate impact analyses. DOE applied the small business size standards published by the SBA to de termine whether a company is considered a small business. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (Sept. 5, 2000) and codified at 13 CFR part 121. To be categorized as a small business under North American Industry Classificatio n System (NAICS) 333415 , “Air

- Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing , ” a commercial refrigeration manufacturer and its affiliates may employ a maximum of 750 employees. The 750

- employ ee threshold includes all employees in a business’s parent company and any other subsidiaries. Based on this classification, DOE identified at least 31 32 commercial refrigeration equipment manufacturers that qualify as small businesses. The commercial refr igeration equipment small manufacturer subgroup is discussed in chapter 12 of the NOPR TSD and in section VI.B.1 of this notice.217 CRE NOPR ECS OMB Compare 

### .docx 2. Government Regulatory Impact Model DOE uses the GRIM to quantify the changes in the commercial refrigeration equipment industry cash flow due to amended standards that result in a higher or lower industry value. The GRIM analysis uses a standard, annual cash

- flow analysis that incorporates manufacturer costs, markups, shipments, and industry financial information as inputs, and models changes in costs, investments, and manufacturer margins that would result from new and amended energy conservation standards. The GRIM spread sheet uses the inputs to arrive at a series of annual cash flows, beginning with the base year of the analysis, 2010 2013 in this case , and continuing to 20 45 2046 . DOE calculated INPVs by summing the stream of annual discounted cash flows during this period . For commercial refrigeration equipment manufacturers, DOE used a real discount rate of 10 percent. DOE’s discount rate estimate was derived from industry financials and then modified according to feedback during manufacturer interviews.

The GRIM calcul ate s cash flows using standard accounting principles and
compare s changes in INPV between a base case and various TSLs (the standards case s).
T he difference in INPV between the base case and a standards case represents the financial impact of the amended s tandard on manufacturers. As discussed previously, DOE collected th e information on the critical GRIM inputs from a number of sources, including publicly available data and interviews with a number of 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.218 CRE NOPR ECS OMB Compare 

### .docx 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 components, which are more costly than baseline components. The change s in the MPCs of the analyzed products can affect the revenues, gross margins, and cash flow of the industry, making these product cost data key GRIM inputs for DOE’s analysis.

In the MIA, DOE used the MPCs for each considered efficiency level calculated in the engineering analysis, as described in section IV.C and further detailed in chapter 5 of the NOPR TSD. In addition, DOE used information from its teardown analysis, described in section IV.E.4.a , to disaggregate the MPCs into material, labor, and overhead costs. To calculate the MPCs for equipment above the baseline, DOE added incremental material, labor, overhead costs from the engineering cost

- efficiency curves to the baseline MPCs. 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 these values by efficiency level. Changes in sales volumes and efficiency mix over time can significantly affect manufacturer finances. For this analysi s, the GRIM uses the NIA’s annual shipment forecasts derived from the shipments analysis from 2010 2013 , the base year, to 2045 2046 , the end of the analysis219 CRE NOPR ECS OMB Compare 

### .docx 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

convers ion costs and (2) capital conversion costs. Product conversion costs are investments in research, development, testing, marketing, and other non

- capitalized costs necessary to make product designs comply with a new or amended energy conservation standard. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new product designs can be fabricated and assembled.

To evaluate the level of capital conversion expenditures manufacturers would likely incur to comply with amended energy conservation standards, DOE used manufacturer interviews to gather data on the level of capital investment required at each efficiency level. DOE validated manufacturer comments through estimates of capital expenditure requirements derived from the product teardown analysis and engineering model described in section IV.E.4

.

DOE assessed the equipment conversion costs at each level by integrating data from quantitative and qualitative sources. DOE considered feedback regarding the potential costs of each efficiency level from multiple manufacturers to determine220 CRE NOPR ECS OMB Compare 

### .docx conversion costs such as R& D expenditures and certification costs. Manufacturer data were aggregated to better reflect the industry as a whole and to protect confidential information.

In general, DOE assumes that all conversion

- related investments occur between the year of publica tion of the final rule and the year by which manufacturers must comply with an amended standard. 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 above, MSPs includ e direct manufacturing production costs ( i.e. , labor, material, and overhead estimated in DOE’s MPCs) and all non

- production costs ( i.e ., SG&A, R&D, and interest), along with profit. To calculate the MSPs in the GRIM, DOE applied markups to the MPCs estima ted in the engineering analysis and then added in the cost of shipping

. 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 uncertain ty 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 operating profi t markup scenario. These scenarios lead to different markups values that , when applied to the inputted MPCs, result in varying221 CRE NOPR ECS OMB Compare 

### .docx 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 commercial refrigeration equipment and comments from manufacturer interviews, DOE assumed the non -production cost markup— which includes SG&A expenses , R&D
expenses , interest , and profit

— to be 1.42. Because this markup scenario assumes that manufacturers would be able to maintain their gross margin percentage markups as production costs increase in response to an amended energy conservation standard, the scenario represents a h igh bound to industry profitability under an amended energy conservation standard.

In the preservation of operating profit scenario, manufacturer markups are set so that operating profit 1 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 and the cost of sales go up, manufacturers are generally required to reduce their markups to a level that maintains base

- case operating profit. The implicit assumption behind this markup scenario is that the industry can only maintain its operating profit in absolute dollars after compliance with the amended standard is required. Therefore, operating margin in percentage terms is squeezed (reduced) between the base case and standards case. DOE adjusted the manufacturer markups in the GRIM at each TSL to yield222 CRE NOPR ECS OMB Compare 

### .docx approximately the same earnings before interest and taxes in the standards case in the year after the compliance date of the amended standards as in the base case. This markup scenario represents a low bound to industry profitability under an amended energy conservation standard.

3. Discussion of Comments During the April 2011 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 testing and certification, cumulative regulatory burden, small manufacturers, and manufacturer markups.

a. 

### Testing and Certification At the public meeting and in written comments, several stakeholders expressed concern to DOE regarding the potential burden of testing.

Traulsen stated that certification, compliance, and enforcement (CC&E) is its most significant cost item in terms of internal resources in the form of time and direct expenses. Traulsen further explained that, with respect to the manufacturer impacts, the three most important topics are CC&E, testing burden, and compliance with other (unspecified) certifications. (Traulsen, No. 45 at pp. 4 –5) NEEA expressed the opinion that the most significant issue associated with manufacturer impacts is testing and compliance for a wide array of equipment offerings, especially given the large number of variations on single models. AHRI also stated that the CC&E requirements put in place223 CRE NOPR ECS OMB Compare 

### .docx by DOE have the potential to bankrupt the industry due to the excessive number of tests required. (AHRI, No. 43 at p. 3) True added that it believe d there are economies of scale in testing commercial refrigeration equipment units. (True, Public Meeting Transcript, No. 31 at p. 151) True also stated that the testing and regulatory burden, including tooling, fixturing, and setup costs imposed on small production runs is an issue for large manufacturers as well as small manufactu rers. (True, Public Meeting Transcript, No. 31 at p p . 206, 210) NEEA expressed agreement with manufacturers that testing each variation would create a significant potential burden, especially on small manufacturers. (NEEA, No. 36 at p. 7) In addition, Sout hern Store Fixtures stated that it would be difficult to produce information to estimate the compliance testing burden on manufacturers, as the certification and compliance requirements had not yet been finalized. (Southern Store Fixtures, Public Meeting T ranscript, No. 31 at pp. 149–50) Southern Store Fixtures added that it is impossible to determine potential impacts of testing and certification on manufacturers until the definition of a basic model is clarified. (Southern Store Fixtures, No. 38 at p. 1)

DOE recognizes industry concerns regarding CC&E testing requirement s . Although CC&E costs are not directly analyzed in the GRIM because they do not vary with different standard levels, the CC& E burden is identified as a key issue and as a cumulative regulatory burden in the MIA. DOE intends to address these manufacturer concerns in ongoing CC&E rulemakings. Moreover, DOE is currently considering alternative efficiency determination methods (AED Ms) for commercial refrigeration equipment

. 76 and issued a notice of proposed rulemaking on Alternative Efficiency224 CRE NOPR ECS OMB Compare 

### .docx Determination Methods and Alternative Rating Methods in May 2012. 77 FR 21673 (April 18, 2011 32038 ( May 31, 2012 ). AEDMs are computer modelin g tools used to establish a model’s efficiency rating in lieu of testing. More information about the AEDM rulemaking can be found at : www1.eere.energy.go v/buildings/appliance_standards/certification_enforcement.html .-

While the GRIM does not account for DOE certification costs, it does account for product industry certification ( i.e. , Underwriters Laboratories ( UL ) and NSF testing) and research and development costs in it s analysis of product conversion costs, which are associated with a change in standards. The change in INPV , the primary output of the GRIM, reflect s the possible increase in industry certification costs and is considered by DOE when propos ing a standard.

b. 

### Cumulative Regulatory Burden Numerous stakeholders commented on the cumulative regulatory burden tied to DOE efficiency standards. Some stakeholders expressed concern regarding potential conflicts with other certification programs. Traulsen stated that the redundancy of testing required by other Federal programs (such as EPA ENERGY STAR ® 

### ), 78

78 ENERGY STAR is a joint program of EPA and DOE that helps the N ation save money and protect the environment through energy efficient products and practices. More information can be found at : 

### potentially involves conflicting criteria, increases cost, and that cross

- references to databases with inconsistent tests, classes, and enforcement requirements adds further complications. Traulsen estimated that the financial burden associated with meeting both DOE and EPA

www.energystar.gov

.225 CRE NOPR ECS OMB Compare 

### .docx E NERGY STAR requirements has been greater than 0.5 percent of revenue, and that it would be beneficial to reconcile the differences between DOE and EPA standards. (Traulsen, No. 45 at pp. 5

– 6) NEEA stated that the burden of certifications and associated testing is inherent in the manufacturing industry, and that this burden should have little to do with the current standards rulemaking. However, NEEA added, any steps that can be taken to harmonize test methods and procedures between certifications should be taken. (NEEA, No. 36 at p. 7)

DOE realizes that the cumulative effect of multiple regulations on an industry may significantly increase the burden faced by manufacturers that need to comply with regulations and certification programs from different organ izations and levels of government. However, DOE notes that certain standards, such as ENERGY STAR, are optional for manufacturers.

AHRI stated that there are several legislative and regulatory activities that could significantly burden manufacturers of co mmercial refrigeration equipment, including the DOE CC&E program and the upcoming amended energy conservation standards for walk

- in coolers and freezers. AHRI also added that climate change bills could have a significant negative impact on the availability and price of HFC refrigerants. (AHRI, No. 43 at p. 4)

DOE estimates the present value of the total benefits over the analysis period (20 10-2040 ) of the EPACT 2005 standards for CRE to be $2.3 billion and the costs to be226 CRE NOPR ECS OMB Compare 

### .docx $0.32 billion , in 2012 dollars an d using a discount rate of 7 percent . DOE estimates the present value of total benefits over the analysis period (2012 -2042) of the DOE 2009 standards for CRE to be $ 3.97 b illion and the costs to be $ 1.52 b illion , in 2012 dollars and using a 7 percent discount rate

. Additionally, in the energy conservation standard NOPR for walk

- in coolers and freezers, DOE estimates the net present value of the total benefits over the analysis period (2017 -2046) to be $21.6 billion and the costs to be $3.7 billion, in 2012% and using a discount rate of 7 percent.

DOE takes into account the cumulative cost of multiple Federal regulations on manufacturers, including CC& E, in the cumulative regulatory burden (CRB) section of its analysis. The CRB can be found in section V.B.2.e of this document. The CRB review also recognizes the additional burden faced by manufacturers that produce both commercial refrigeration equipment and walk

- in coolers and freezers. However, DOE does not analyze the quantitative impacts of standards that have not yet been finalized, such as those for walk

- ins. Likewise, DOE does not analyze the impacts of potential climate change bills because any impacts would be speculative in the absence of final legislation

.

AHRI also stated that California is currently working on new regulations as part of Title 24 that will likely establish new prescriptive requirements on commercial refrigeration equipment beginning in 2013. AHRI added that other States on the W est C oa st are following California’s actions lead and are likely to implement similar regulations in the near future. AHRI suggested that DOE account for these developments Comment [A36]: Revision requested by OIRA.

Comment [A37]: Revision requested by OIRA.227 CRE NOPR ECS OMB Compare 

### .docx in its analysis. (AHRI, No. 43 at p. 4) Finally, AHRI commented that several States have

en acted their own climate change legislation, including regulations established by the California Air Resources Board (CARB) to limit GHGs and reduce the usage of high
GWP refrigerants such as HFCs. AHRI stated that CARB will implement these regulations in 2 011. (AHRI, No. 43 at p. 4)

According to the California Code of Regulations, title 24, part 6, any appliance for which there is a California standard established in the Appliance Efficiency Regulations may be installed only if the manufacturer has certified to the CEC, as specified in those regulations, that the appliance complies with the applicable standard for that appliance. California’s appliance efficiency regulations require that the MDEC (in kilowatt

- hours) for commercial refrigerators manufactured on or after January 1, 2010 does not exceed the following:

**•** Refrigerators with solid doors: 0.10V + 2.04

**•** Refrigerators with transparent doors: 0.12V + 3.34

**•** Freezers with solid doors: 0.40V + 1.38

**•** Freezers with transparent doors: 0.75V + 4.10

**•** Refrigerator/f reezers with solid doors: the greater of 0.27AV

– 0.71 or 0.70

**•** Refrigerators with self

- condensing unit designed for pull

- down temperature applications: 0.126V + 3.51

Since these standards are identical to the ones prescribed in EPACT 2005 and the efficiency levels set by the current rulemaking will either exceed or be equivalent to the228 CRE NOPR ECS OMB Compare 

### .docx EPACT 2005 levels, DOE does not expect the Title 24 regulations to create a cumulative regulatory burden on manufacturers. California also has started a rulemaking proceeding to adopt changes to the building energy efficiency standards contained in the California Code of Regulations, title 24, part 6, but the CEC is currently in the pre

- rulemaking stage and any new standards will not be published until 2013. DOE has not evaluat ed the impacts of the 2013 rule because any analysis would be speculative in the absence of final legislation regulations

.

CARB is currently limiting the in

- State use of high

- GWP refrigerants in non

residential refrigeration systems through its Refrigerant Management Program, effective January 1, 2011. 79

79 California Air Resources Board. Refrigerant Management Program Final Regulation

. 2011. (Last accessed March 16, 2012.) 

### According to this new regulation, facilities with refrigeration systems that have a refrigerant capacity exceeding 50 pounds 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 poun ds typically belong to food retail operations with remote condensing racks that store refrigerant serving multiple commercial refrigeration equipment units within a business. However, commercial refrigeration equipment units 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 commercial refrigeration manufacturers.

www.arb.ca.gov/cc/reftrack/reftrackrule.html

.229 CRE NOPR ECS OMB Compare 

### .docx The cumulative regulatory burden on manufacturers of commercial refrigeration equipment is discussed in further detail in chapter 12 of the NOPR TSD.

c. 

### Small Manufacturers During the April 2011 prelimi nary analysis public meeting, Southern Store Fixtures stated that the impact of research, development, and testing is greater on smaller manufacturers because, while they may have the same number of models in their product lines as do larger manufacturers, they produce fewer units of each model. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at p. 150) Similarly, Zero Zone stated that amended standards have large impacts on small companies. For example, Zero Zone uses foamed

- in

- place urethane panels. If it were to become necessary to use thicker foam, Zero Zone stated, the company could face capital conversion expenditures of roughly $250,000. (Zero Zone, Public Meeting Transcript, No. 31 at p. 199)

DOE agrees that amended standard s may have disproportionate impacts on smaller manufacturers. As a result, the DOE conducts a small business analysis to assess those impacts , the results of which are set forth in section VI.B of this notice

.

Stakeholders also commented on DOE’s classification of small manufacturers. NEEA suggested that DOE review its characterizations of small and large manufacturers, as it believed there to be disparities between the listed company sizes and market shares in DOE’s classifications. (NEEA, Public Meeting Transcript, No. 31 at p. 160) Emerson230 CRE NOPR ECS OMB Compare 

### .docx stated that manufacturers’ sizes should be characterized by their operations in th e market. According to Emerson, some manufacturers are part of larger companies, but the fact that they are owned by larger companies does not change the potential for impacts on their employment levels or risk of going out of business. (Emerson, Public Meeting Transcript, No. 31 at p . 207)

DOE requested feedback regarding the accuracy of its list of small businesses during its interviews with manufacturers. Since the publication of the preliminary analysis TSD, DOE has revised the list based on responses received from manufacturers. Furthermore, DOE understands that manufacturers that are owned by large parent companies may not be protected from the potential impacts of amended standards. However, in its analysis of small businesses, DOE also takes into account that manufacturers that belong to large parent companies are more likely to have better access to capital and engineering resources than manufacturers that have no parent company or have parent companies with a total size of less than 750 employees.

A detailed discussion of the impact of the proposed standards on small manufacturers can be found in chapter 12 of the NOPR TSD.

d. 

### Manufacturer Markup Southern Store Fixtures expressed concern that research and development was considered part of the manufacturer markup. The company also asked whether sales, marketing, and engineering costs were included in this markup as well, and suggested231 CRE NOPR ECS OMB Compare 

### .docx that all of these expenses should be considered indirect costs instead. (Southern Store Fixtures, Public Meeting Transcript, No. 31 at pp. 71–72)

DOE incorporates all non- production costs, including sales, marketing, and R&D, in its manufacturer markup. Although manufacturers’ accounting practices may vary, DOE uses this standard model to approximate the cost structure of the commercial refrigeration industry as a whole. A detailed explanation of the manufacturer markup can be found in section V.B.2 of this notice and in chapter 5 of the NOPR TSD.

4. Manufacturer Interviews DOE interviewed manufacturers representing over 90 percent of food retail sales and over 60 percent of foodservice sales. These interviews were in addition to those DOE conducted as part of the engineering analysis. The inform ation gathered during these interviews enabled DOE to tailor the GRIM to reflect the unique financial characteristics of the commercial refrigeration industry. All interviews provided information that DOE used to evaluate the impacts of potential 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 t he most significant issues identified by manufacturers. DOE has also include d additional concerns in chapter 12 of the NOPR TSD.232 CRE NOPR ECS OMB Compare 

### .docx a. 

### Enforcement Interviewed manufacturers expressed concern about the enforcement of an amended energy efficiency standard for com mercial refrigeration equipment. Manufacturers believe that insufficient enforcement will lead to market distortions, as companies that make the necessary investments to meet amended standards and compliance requirements would be at a distinct pricing disa dvantage to unscrupulous competitors 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.

b. 

### Certification and Compliance Costs Nearly all manufacturers expressed concern over CC&E costs. In particular, confusion over the definition of “basic model” and the implementation of AEDMs is making it difficult for some manufacturers to anticipate their total testing needs and total testing costs.

Manufacturers are concerned that CC&E requirements for commercial refrigeration equipment do not take into account the customized nature of the commercial refrigeration equipment industry. Manufacturers stated that their industry has a high level of end- user specification and low production volumes compared to other industries, such as residential refrigeration. As a result, the strictest interpretations of the CC&E requirements could lead to hundreds of thousands of tests per company. Additional clarification of how basic models and AEDMs apply to the commercial refrigeration233 CRE NOPR ECS OMB Compare 

### .docx equipment industry would help manufacturers understand the testing investments that will be necessary. DOE is aware of the current confusion and continues t o work with industry to improve the CC&E process and AEDM rules to address these concerns .

c. 

### Disproportionate Impact on Small Businesses Manufacturers noted that small businesses will be disproportionately impacted when by certification and compliance requi rements compared to larger businesses. One manufacturer indicated that small and large manufacturers of the same equipment tend to have similar numbers of basic models, but large manufacturers offer a broader suite of products based on those basic models a nd have higher sales. Therefore, the manufacturer expressed concern that small manufacturers will be at a disadvantage because they will need to spread both industry certification and conversion costs over a smaller number of shipments.

Also, small manuf acturers indicated they have fewer resources with which to manage CC&E requirements. As a result, they will be forced to focus on compliance rather than on innovation. Small manufacturers believe that their large competitors will have greater resources to continue innovating while meeting amended energy conservation standards requirements

.

d. 

### Potential Loss of Product Utility and Decrease in Food Safety A majority of M anufacturers expressed concern about the potential impact of amended energy conservation sta ndards on product performance. Specifically,234 CRE NOPR ECS OMB Compare 

### .docx manufacturers serving the foodservice industry were concerned about negative impacts on food safety, while manufacturers serving the food retail industry were concerned about negative impacts on merchandising de sign.

One manufacturer of commercial refrigeration equipment for the foodservice industry summarized the challenge of amended energy conservation standards as “the design trade

- off between product price, energy efficiency, and food safety.” In the foodser vice industry, refrigeration equipment must maintain safe food temperatures despite frequent door openings in challenging environments, such as kitchens with high temperatures and high humidity. The infiltration of warm, moist air places an additional burd en on the refrigeration equipment and increases energy usage. Manufacturers expressed concern that more

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

Manufacturers in the food retail market design their equipment to optimally present merchandise. Some manufacturers were concerned that amended energy conservation standards would limit their ability to tailor their commercial refrigeration equipment for specific merchandise. Specifically, manufactur ers noted that the highly directional light from LED bulbs provides poor light for display case applications where the product is presented in multiple layers, such as prepared food display cases. Additionally, manufacturers noted that higher efficiency de signs generally have less airflow (due to reduced fan power consumption). They stated that this reduction in airflow could result in less desirable presentation of meats and in increased icing on235 CRE NOPR ECS OMB Compare 

### .docx products. In general, more- efficient standards limit manufac turer options for optimizing the presentation features of products. Food retail customers such as supermarkets make purchasing decisions based on the various presentation features of commercial refrigeration equipment offered by different manufacturers.

L. Employment Impact Analysis Employment impacts are one of the factor s that DOE considers in selecting an efficiency standard. Employment impacts include direct and indirect impacts. Direct employment impacts are any changes that affect employment of commercial refrigeration equipment manufacturers, their suppliers, and rela ted service firms. Indirect impacts are those changes in employment in the larger economy that occur because of the shift in expenditures and capital investment caused by the purchase and operation of more

efficient commercial refrigeration equipment. Dire ct employment impacts are analyzed as part of the MIA

. Indirect impacts are assessed as part of the employment impact analysis

.

Indirect employment impacts from amended commercial refrigeration equipment standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, as a consequence of (1) reduced spending by end user s on electricity ; (2) reduced spending on new energy supply by the utility industry ; (3) increased spending on the purchase price of new commercial refrigeration equipment ; and (4) the effects of those three factors throughout the Nation’s economy. DOE expects the net monetary savings from amended standards to stimulate o ther forms of economic activity. DOE also expects these shifts in spending and economic activity to236 CRE NOPR ECS OMB Compare 

### .docx affect the demand for labor.

In developing this analysis in the NOPR, DOE estimated indirect national employment impacts using an input/output model of th e U.S. economy, called ImSET (Impact of Sector Energy Technologies) , developed by DOE’s Building Technologies Program. ImSET is a personal computer

- based an economic analysis model that characterizes the interconnections among 188 sectors of the economy as national input/output structural matrices , using data from the U.S. Department of Commerce’s 1997 Benchmark U.S. input/ output table. 80 

### The ImSET model estimates changes in employment, industry output, and wage income in the overall U.S. economy resulting from changes in expenditures in various sectors of the economy. DOE estimated changes in expenditures using the NIA model. ImSET then e stimated the net national indirect employment impacts that amended commercial refrigeration equipment efficiency standards could have on employment by sector.

For more details on the employment impact analysis and its results, see chapter
14 16 of the NOP R TSD and section V.B of this notice.

M. Utility Impact Analysis The utility impact analysis estimates the several important effects on the utility
in dustry of the adoption of new or amended standards. For this analysis, DOE used the
NEMS

- BT model to generate forecasts of electricity consumption, electricity generation

80 U.S. Department of Commerce, Bureau of Economic Analysis. Benchmark Input

- Output Accounts

. 1997. U.S. Government Printing Office: Washington, DC. Field Code Changed237 CRE NOPR ECS OMB Compare 

### .docx by plant type, and electric generating capacity by plant type , that would result from each considered TSL. DOE conducted obtained the impact analysis energy savings inputs associated with efficiency improvements to considered products from the NIA. DOE conducts the utility impact analysis as a scenario that departed departs from the latest
AEO Reference C ase. In other words the analysis for today’s rule , the estimated impacts of a n amended standard standards are the differences between values forecasted by
NEMS

- BT and the values in the AEO20 11 AEO2013 Reference C ase. Chapter 1 3 For more details on the utility impact analysis, see chapter 1 5 of the NOPR TSD presents results of the utility impact analysis

.

N. Emission Emission s Analysis In the emission emission s analysis ( EA ) , , DOE estimated the reduction in power sector emissions of CO 2 

### , NO x 

### , and Hg using the NEMS

- BT computer model. In the EA,
NEMS

- BT is run similarly to the AEO NEMS, except that sul f ur dioxide (SO 2 

### ) and Hg from amended energy conservation standards for commercial refrigeration equipment energy use is reduced by the amount of energy saved (by fuel type) due to each TSL. The inputs of NES come from the NIA spreadsheet model, while the output is the forecasted physical emissions. The net benefit of each TSL in today’s proposed rule is the d ifference between the forecasted

. In addition, DOE estimates emissions estimated by NEMS

- BT at each TSL impacts in production activities ( extracting, processing, and 

### the AEO20 11 Reference Case. NEMS

- BT tracks CO 2 

### transporting fuels) 

### that provide the energy inputs to power plants. These are referred to as “upstream” emissions using a detailed module that provides results with broad coverage of all sectors and inclusion of interactive238 CRE NOPR ECS OMB Compare 

### .docx effects. For today’s NOPR, DOE used the AEO20 11 . For the final rule, DOE int ends to revise the . 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)) 77 FR 49701 (August 17, 2012) , the FFC analysis using the most current includes impacts on

e missions of methane (CH 4 

### ) and nitrous oxide (N 2 

### O), both of which are recognized as greenhouse gases.

DOE conducted 

### the emissions analysis using emissions factors that were derived from data in EIA’s Annual Energy Outlook 2013 ( AEO 201 3), 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.

EIA prepares the Annual E nergy Outlook using the National Energy Modeling System (NEMS). Each annual version of NEMS incorporates the projected impacts of existing air quality regulations on emissions. 

### AEO 201 3 generally represents current legislation and environmental regulations, including recent government actions, for which implementing regulations were available as of December 31, 201 2

.

SO 2 

### emissions from affected electric generating units (EGUs) are subject to nationwide and regional emissions cap

- and

- trade programs , and DOE has preliminarily determined that these programs create uncertainty about the potential amended standards’ impact on SO 2 

### emissions. . Title IV of the Clean Air Act sets an annual emissions cap on
SO 2 

### for affected EGUs in the 48 contiguous S tates (42 U.S.C. 7651 et seq. ) and the239 CRE NOPR ECS OMB Compare 

### .docx District of Columbia (D.C.). SO 2 

### emissions from 28 eastern S tates and D.C. were also limited under the Clean Air Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which created an allowance

- based trading program. CAIR was remanded to the U.S. Environmental Protection Agency ( EPA ) by the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) ( but it remained in effect. See North Carolina v. EPA , 550 F.3d 1176 (D.C. Cir. 2008 )), it remained in effect temporarily, consistent with the D.C. Circuit’s earlier opinion in ); North Carolina v. EPA , 531 F.3d 896 (D.C. Cir. 2008) . O n July 6, 2010 2011 , EPA issued the Transport Rule proposal, a replacement for CAIR (75 FR 45210 (Aug. 2, 2010)), and on July 6, 2011 EPA issued the final Transport Rule, titled , the Cross

- State Air Pollution Rule

. (CSAPR)

. 76 FR 48208 (Aug. 8, 2011). ( ). Because the AEO2011 NEMS On August 21, 2012, the D.C. Circuit issued a decision to

v acate 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 AEO 2013 emissions factors used for today’s NOPR assumes the implementation of CAIR, DOE has not been able to take into account the effects of the Transport Rule for this rulemaking assume that CAIR remains a binding regulation through 2040.

. 81



### The attainment of emissions caps is typically flexible among EGUs and is enforced through the use of emissions allowances and tradable permits. Under existing

81 DOE notes that future iterations of the NEMS

- BT model will i ncorporate any changes necessitated by issuance of the Transport Rule. On December 30, 2011, the D.C. Circuit stayed the new rules while a panel of judges reviews them, and told EPA to continue administering CAIR . S ee EME Homer City Generation, LP v. EPA , Order, No. 11

- 1302 , Slip Op. at *2 (D.C. Cir. Dec. 30 , 2011). On August 21, 2012, the D.C. Circuit issued a decision to vacate CSAPR. See EME Homer City Generation, LP v. EPA , No. 11

- 1302 , 2012 WL 3570721 at *24 (D.C. Cir. Aug. 21, 2012). The court again ordered EPA to continue administering CAIR. AEO2012 had been finalized prior to both these decisions, however. DOE understands that CAIR and CSAPR are similar with respect to their effect on emissions impacts of energy efficiency standards.240 CRE NOPR ECS OMB Compare 

### .docx EPA regulations, any excess SO 2 

### emissions allowances resulting from the lower electricity demand caused by the imposition adoption of a new or amended efficiency standard could be used to permit offsetting increases in SO 2 

### emissions by any regulated
EGU. However, if the new or amended standards resulted in a permanent increase in the quantity of unused emissions allowances, In past rulemakings, DOE recognized that there would be an overall reduction in SO 2 

### emissions resulting from the standards. While there remains some was uncertainty about the ultimate effects of amended efficiency standards
on SO 2 

### emi ssions covered by the existing cap

- and

- trade system, the NEMS

- BT modeling system that DOE uses to forecast emissions reductions currently indicates but it concluded that no physical negligible reductions in power sector SO 2 

### emissions would occur as a result of standards.

Beginning in 2015, however, SO 2 

### emissions will fall as a result of the AEO2011
NEMS Mercury and Air Toxics Standards (MATS) for power plants , which were announced by EPA on December 21, 2011 . 77 FR 9304 (Feb. 16, 2012). In the final MATS rul e, EPA established a standard for hydrogen chloride as a surrogate for acid gas hazardous air pollutants (HAP), and also established a standard for SO 2 

### (a non

- HAP acid gas) as an alternative equivalent surrogate standard for acid gas HAP. The same controls

are used for today’s NOPR to reduce HAP and non- HAP acid gas; thus, SO 2 

### 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 the implementation of that, in order to continue operating, coal plants must have either flue gas desulfurization or dry sorbent injection systems installed by 2015. Both technologies,241 CRE NOPR ECS OMB Compare 

### .docx which are used to reduce acid gas emissions, also reduce SO 2 

### emissions. Under the MATS, NEMS shows a reduction in SO 2 

### emissions when electricity demand decreases (e.g. , as a result of energy efficiency standards). Emissions will be far below the cap that would be established by CAIR 2005 , which , so it is unlikely that excess SO 2 

### emissions allowances resulting from the lower electricity demand would be needed or used to permit offsetting increases in SO 2 

### emissions by any regulated EGU. Therefore, DOE believes that efficiency standards will reduce SO 2 

### emissions in 2015 and beyon d.

C AIR established a cap on NO x 

### emissions in 28 eastern S tates and the District of Columbia. With CAIR in effect, the proposed amended E nergy conservation standards for commercial refrigeration equipment are are expected to have little or no physical effect on NO x 

### emissions in those S tates covered by CAIR , for the same reasons that they may have little effect on SO 2 

### emissions. because excess NO x 

### emissions allowances resulting from the lower electricity demand could be used to permit offsetting increase s in NO x 

### emissions. However, the proposed standards would be expected to reduce NO x 

### emissions in the 22 S tates not affected by CAIR. For these 22 states, DOE is using the
NEMS

- BT to estimate the caps, so DOE estimate d NO x 

### emissions reductions from the proposed standards considered in today’s NOPR f or these S tates

.

Similar to emissions of SO 2 

### and NO x 

### , future emissions of Hg would have been subject to emissions caps. In May 2005, E PA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18, 2005). CAMR would have permanently capped emissions of mercury for new and existing coal

- fired power plants in all states by 2010.242 CRE NOPR ECS OMB Compare 

### .docx However, on February 8, 2008, the D.C. Circuit issued a dec ision in New Jersey v. Environmental Protection Agency , 517 F.3d 574 (D.C. Cir. 2008), in which it vacated CAMR. EPA has decided to develop emissions standards for power plants under s ection 112 of the Clean Air Act, consistent with the D

. C

. Circuit’s opinion on CAMR. See . Pending EPA’s forthcoming revisions to the rule, DOE is excluding CAMR from its emission analysis . In the absence of CAMR, a n amended DOE standard would likely reduce Hg emissions and DOE used NEMS

- BT to estimate these re ductions. However, DOE continues to review the impact of rules that reduce energy consumption on Hg emissions, and may revise its assessment of Hg emission reductions in future rulemakings.

The MATS limit mercury emissions from power plants, but they do n ot include emissions caps and, as such, DOE’s energy conservation standard s wou ld likely reduce Hg emissions. DOE estimated mercury emissions factors based on AEO2013 , which incorporates the MATS.

After the preliminary analysis, two stakeholders provided comments pertinent to the emission s analysis . NRDC stated that, given that supermarket rack

- based commercial refrigeration equipment units have leakage rates of 15 to 30 percent and use HFC refrigerants with GWPs in the range of 2,000 to 3,400, direct emissions can be as large as the indirect emissions due to energy use. NRDC added that DOE or EPA should review emissions due to leakage. (NRDC, Public Meeting Transcript, No. 31 at p. 173) CA IOUs stated that refrigerant emissions and leakage may have a significant GWP, and suggested243 CRE NOPR ECS OMB Compare 

### .docx that DOE include in its environmental impact analysis estimates of changes in refrigerant emissions, and their effects on total GHG emissions and GWP. CA IOUs pointed to the CEC analysis as a potential starting point for DOE to use in including refrigerants in the environmental impact analysis. (CA IOUs, No. 42 at p. 6)

DOE appreciates the comments by stakeholders regarding the emissions analy sis of refrigerants. DOE’s emission analysis strictly adheres to the interagency guidance and methodologies that has been outlined in this section. Currently, the guidance does not permit the assessment of direct emissions such as refrigerant leakage. Therefore, DOE did not assess the impact of refrigerant leakage in today’s NOPR.

DOE also adds that the design options used for efficiency improvement of commercial refrigeration equipment in this rulemaking are not expected to impact refrige rant leakage rates. Consequently, the proposed standards would not a ffect refrigerant emissions. If stakeholders believe that the proposed standards would lead to an increase or a decrease in refrigerant emissions, then supporting arguments may be submitted for DOE’s consideration during the NOPR public meeting or comment period.

O. Monetizing Carbon Dioxide and Other Emissions Impacts As part of the development of the proposed standard s in this NOPR, DOE considered the estimated monetary benefits li kely to result from the reduced emissions of
CO 2 

### and NO x 

### that are expected to result from each of the TSLs considered. In order to make this calculation analogous to the calculation of the NPV of the expected Comment [A38]: Revision requested by OIRA. Comment [A39]: Revision requested by OIRA. Comment [A40]: Revision requested by OIRA. Comment [A41]: Revision requested by OIRA.

Comment [A42]: Revision requested by OIRA.244 CRE NOPR ECS OMB Compare 

### .docx consumer customer 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 NOPR.

For today’s NOPR, DOE is relying on a set of values for the SCC that was developed by a Federal interagency process

. 82 

### A summary of T he basis for these values is summarized below, and a more detailed description of the methodologies used is provided as an appendix to chapter 1 7 14 of the NOPR 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 inc reased 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.

82 As part of the interagency process that developed these SCC estimates, technical experts from numerous Federal agencies met on a regular basis to consider public comments, explore the technical literature in relevant f ields, 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 uncertai nties and model differences transparently and consistently inform the range of SCC estimates used in the rulemaking process.245 CRE NOPR ECS OMB Compare 

### .docx 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 CO 2 

### emissions into cost

- benefit analyses of regulatory actions that have small, or “marginal,” impacts on cumulative global emissions. The estimates are presented with an acknowledge ment 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 r ange of SCC values using a defensible set of input assumptions grounded in the existing scientific and economic literature s . In this way, key uncertainties and model differences transparently and consistently inform the range of SCC estimates used in the r ulemaking process.

a. 

### Monetizing Carbon Dioxide Emissions 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 agricultur al productivity, human health, property damages from246 CRE NOPR ECS OMB Compare 

### .docx increased flood risk, and the value of ecosystem services. Estimates of the SCC are provided in dollars per metric ton of carbon dioxide. When attempting to assess the incremental economic impacts of car bon dioxide emissions, the analyst faces a number of serious challenges. A report from the National Research Council 83 

### points out that any assessment will suffer from uncertainty, speculation, and lack of information about (1) future emissions of GHG s; (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 quanti fy and monetize the harms associated with climate change will raise serious questions of science, economics, and ethics and should be viewed as provisional.

Despite the serious limits of both quantification and monetization, SCC estimates can be useful i n estimating the social benefits of reducing carbon dioxide emissions. Consistent with the directive in Executive Order 12866 quoted above, the purpose of the SCC estimates presented here is to make it possible for Federal agencies to incorporate the socia l benefits from reducing carbon dioxide emissions into cost

- benefit analyses of regulatory actions , such as this one, that have small, or “marginal,” impacts on cumulative global emissions. CO 2 

### emissions. Most Federal regulatory actions can be expected to h ave 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

83 National Research Council. Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use

. 2009. National Academies P ress: Washington, DC

.247 CRE NOPR ECS OMB Compare 

### .docx 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 CO 2 

### 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.

At the time of the preparation of this notice, the most recent interagency estimates of the potential global benefits resulting from reduced CO 2 

### emissions in 2010, expressed in 2010$, were $4.9, $22.3, $36.5, and $67.6 per metric ton avoided. For emissions reductions that occur in later years, these 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, 84



### 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. Specifically, the interagency group has set a although preference is given to considera tion of the global benefits of reducing CO 2 

### emissions.

84 It is recognized that this calculation for domestic values is approximate, provisional, and highly speculative. There is no a priori reason why domestic benefits should be a constant fraction of net global damages over time.248 CRE NOPR ECS OMB Compare 

### .docx preliminary goal of revisiting the SCC values within 2 years , or at such time as substantially updated models become available, and to continue to support research in this area. In the meantime, the inter agency 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 To date, E conomic analyses for Federal regulati ons have used a wide range of values to estimate the benefits associated with reducing CO 2 

### 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 CO 2 

### and a “global” SCC value of $33 per metric ton of CO 2 

### for 2007 emission reductions (in 2007$), increasing both values at 2.4 percent per year. 85 

### DOT also included a sensitivity analysis at $80 per metric ton of CO 2 

### . See Average Fuel Econom y Standards Passenger Cars and Light Trucks Model Year 2011 , 74 FR 14196 (Mar

. 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) ( a vailable at: ). 86

85 Throughout this section, references to tons of CO 2 refer to metric tons. 

### 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.

86 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: www.nhtsa.gov/fuel

- economy ).249 CRE NOPR ECS OMB Compare 

### .docx A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per
metric ton of CO 2 

### (in 2006$) for 2011 emission reductions (with a range of $0- $14 for sensitivity analysis), also increasing at 2.4 percent per year. See Average Fuel Economy Standard s, 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) ( a vailable at: ). 87 88 

### A regulation for packaged terminal air conditioners and packaged terminal heat pumps finalized by DOE in October of 2008 used a domestic SCC range of $0 to $20 per metric ton CO 2 

### 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.
See Regulating Greenhouse Gas Emissions Under the Clean Air Act , 73 FR 44354 (July 30, 2008). EPA’s global mean values were $68 and $40 per metric ton CO 2 

### for discount rates of approximately 2 percent and 3 percent, respectiv ely (in 2006$ for 2007 emissions).

In 2009, an interagency process was initiated to offer a preliminary assessment of

87 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 : www.nhtsa.gov/fuel

- economy ) 88 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: www.nhtsa.gov/fuel

- economy ).250 CRE NOPR ECS OMB Compare 

### .docx how best to quantify the benefits from reducing carbon dioxide emissions. To ensure consistency in how benefits are evaluated across Fede ral 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 CO 2 

### emissions. The interagency group did not undertake any ori ginal 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 CO 2 

### . These interim values represented the first sustained interagency effort within the U.S. government to develop an SCC for use in regulatory analysis. The res ults of this preliminary effort were presented in several proposed and final rules and were offered for public comment in connection with proposed rules, including the joint EPA

- DOT fuel economy and CO 2 

### tailpipe emission proposed 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 , which were considered in this NOPR for the proposed standard levels. Specifically

. Specially, the group considered public comments and further explored 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. 89

89 The mode ls are described in appendix 16 A of the NOPR TSD. 

### These models are frequently cited in the peer

-251 CRE NOPR ECS OMB Compare 

### .docx 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 IAM s, at discount rates of 2.5, 3, and 5 percent . The fourth value set , which represents the 95 th 

### percentile SCC estimate across all three models at a 3

- percent discount rate, was 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 should252 CRE NOPR ECS OMB Compare 

### .docx be used to adjust the global SCC to calculate domestic effects, 90


### Table IV .10 although preference is given to consideration of the global benefits of reducing CO 2 

### emissions. For emissions ( or emission reductions) tha t occur in later years, these values grow in real terms over time, as depicted in . presents the values in the 2010 interagency group report, 91



### Table IV . 10 Cost of CO2 Annual SCC Values from 2010 Interagency Report , 2010– 2050 (in 20 07 $ dollars per metric ton) which is reproduced in appendix 1 4 A of the NOPR TSD.

Year Discount Rate 5% 3% 2.5% 3% Average Average Average 95 th 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

. 92 

### Table IV .11 shows the updated sets of SCC estimates in 5- year increments from 2010 to 2050. The full set of annual SCC estimates between 2010 and 2050 is reported in appendix 14 A of th e TSD . The central value that emerges is the

90 It is recognized that this calculation for domestic values is approximate, provisional, and highly speculative. There is no a priori reason why domestic benefits should be a constant fraction of net global damages over time. 91 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

. 92 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. http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf253 CRE NOPR ECS OMB Compare 

### .docx average SCC across models at the 3 percent discount rate. However, for purposes of capturing the unc ertainties involved in regulatory impact analysis, the interagency group emphasizes the importance of including all four sets of SCC values.

Table IV . 11 Annual SCC Values from 2013 Interagency Report , 2010– 2050 (in 2007 dollars per metric ton)

Year Discount Rate 5% 3% 2.5% 3% Average Average Average 95 th percentile 2010 11 33 52 90 2015 12 38 58 109 2020 12 43 65 129 2025 14 48 70 144 2030 16 52 76 159 2035 19 57 81 176 2040 21 62 87 192 2045 24 66 92 206 2050 27 71 98 221


### 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 2009 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 intera gency 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.254 CRE NOPR ECS OMB Compare 

### .docx DOE recognizes the uncertainties embedded in the estimates of the SCC used for

cost

- benefit The interagency group intends analyses. As such, DOE and others in the U.S. Government intend 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 this context, statements recognizing the limitations of the analysis and calling for further research take on exceptional significance.

In summary, in considering the potential global benefits resulting from reduced
CO 2 

### emissions, DOE used the most recent values identified by from the 2013 interagency
process, report adjusted to 2010 2012 $ using the gross domestic product GDP price deflator values for 2008 t hrough 2010.

. For each of the four cases specified sets of SCC values , the values used for emissions in 2010 2015 were $ 4 12 .9 , $ 22.3, $36.5 40.8 , $ 62.2 , and $ 67.6 117 per metric ton avoided 93 

### (values expressed in 2010$). 94 

### To monetize the
CO 2 

### emissions reductions expected to result from new ly amended standards for commercial refrigeration equipment , 2012$). DOE used the derived values identified after 2050 using the relevant growth rates for the 2040

- 2050 period in Table A1 of the “Social Cost of Carbon interagency update.

DOE multiplied the CO 2 

### emissions reduction estimated for each year by the SCC

93 The interagency report presents SCC values through 2050. DOE derived values after 2050 using the 3

- percent per year escalation rate used by the interagency group.

94 Table A1 presents SCC values through 2050. For DOE’s calculation, it derived values a fter 2050 using the 3

- percent per year escalation rate used by the interagency group.255 CRE NOPR ECS OMB Compare 

### .docx value for Regulatory Impact Analysis Under Executive Order 12866,” wh ich is reprinted that year in appendix 1 6 A of the NOPR TSD, appropriately adjusted to
200 10 $. 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. Valuat ion of Other Emissions Reductions DOE investigated the potential monetary benefit of reduced NO x 

### emissions from the TSLs potential standards it considered. As noted above, DOE has taken into account how new or amended energy conservation standards would re duce NO x 

### emissions in those 22 S tates that are not affected by the CAIR emissions caps . DOE estimated the monetized value of NO x 

### emissions reductions resulting from each of the TSLs considered for today’s NOPR based on environmental damage estimates found in the relevant scientific literature. Available estimates suggest a very wide range of monetary values , ranging from $370 per ton to $3,800 per ton of NO x 

### from stationary sources, measured in 2001$ (equivalent to a range of $451 ranging fro m $468 to $4, 635 809 per ton in
2010 2012 $). 95 

### In accordance with OMB guidance, 96 

### DOE conducted two calculations of the calculat ed a range of monetary benefits derived using each of the economic values used for NO X 

### , one using a and real discount rate rate s of 3 percent and another using a real discount rate of 7 percent

. 97

95 F or 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

. 96 OMB, Circular A

- 4: Regulatory Analysis (Sept. 17, 2003). 97 OMB, Circular A

- 4: Regulatory Analysis ( Sept. 17, 2003).256 CRE NOPR ECS OMB Compare 

### .docx DOE is aware of multiple agency efforts to determine the appropriate range of values used in evaluating the potential economic benefits of reduced Hg emissions. DOE has decided to await further guidance regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg emissions in its rulemakings. DOE is evaluating appropriate monetization of avoided SO 2 

### and Hg emissions in energy conservation standards rulemak ings. I t has not included monetization in the current analysis

P. Regulatory Impact Analysis DOE prepared a regulatory impact analysis (RIA) for this rulemaking, which is described in chapter 1 6 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

a lternatives ; and (4) the national economic impacts of the proposed standard.

The RIA assesses the effects of feasible policy alternatives to amended commercial refrigeration equipment 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.257 CRE NOPR ECS OMB Compare 

### .docx DOE identified the following major policy alternatives for achieving increase d commercial refrigeration equipment efficiency:

**•** n o new regulatory action

**•** c ommercial customer tax credits

**•** c ommercial customer rebates

**•** v oluntary energy efficiency targets

**•** b ulk government purchases

**•** e arly replacement

DOE qualitatively evaluated each alternat ive’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 effici ency 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 d iscuss each policy alternative. (See chapter 16 17 of the NOPR TSD for further details.)

No new regulatory action : The case in which no regulatory action is taken for commercial refrigeration equipment constitutes the base case (or no action) scenario. By definition, no new regulatory action yields zero energy savings and a n NPV of zero dollars.258 CRE NOPR ECS OMB Compare 

### .docx Commercial customer tax credits : Consumer Customer tax credits are considered a viable non

- regulat ory market transformation program. From a consumer 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 consumer customer to taxpayers as a whole. DOE, therefore, assumed that equipment costs in the

consumer 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 p rices of higher efficiency equipment.

Commercial customer rebates : Consumer Customer rebates cover a portion of the difference in incremental product price between products meeting baseline efficacy levels and those meeting higher efficacy 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 consumer 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 higher259 CRE NOPR ECS OMB Compare 

### .docx 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 efficien cy equipment would modify the market.

Bulk g overnment purchases and early replacement incentive programs : DOE also considered, but did not analyze, the potential of bulk g overnment purchases 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 commercial refrigeration equipment because they would be a negligible part of the total equipment sold in the market . In the case o f 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 manuf acturers, 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.260 CRE NOPR ECS OMB Compare 

### .docx V. Analytical Results

A. Trial Standard Levels
1. Trial Standard Level Formulation Process and Criteria DOE selected between five and eight efficiency levels for all but three equipment classes for the LCC analysis and NIA ; the three exceptions were the HZO.RC.M,
HZO.RC.L , and HZO.SC.L equipment classes , which ha d only two efficiency levels each , including the baseline efficiency levels

. 98

98 As explained in section 

### For all equipment classes, the fir st efficiency level is the baseline efficiency level. Based on the results of the LCC analysis and NIA , DOE selected five TSL s above the baseline level for each equipment class for the NOPR stage of this rulemaking. TSL 5 was selected at the max

- tech level for all equipment classes. TSL 4 was chosen so as to group the efficiency level s with the highest energy savings combined with a positive consumer customer NPV at a 7- percent discount

rate. Consumer “ Customer NPV ” is the NPV of future savings obtained from the NIA. It provides a measure of the benefits only to the consumer s customer s of the commercial refrigeration equipment, 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 consumer customer NPV. TSL 3 was chosen to represent the group of efficiency level s with the highest consumer customer NPV at a 7- percent discount rate. While the selection of TSL 4 and TSL 3 were based on consumer customer NPV, the proposed

IV.H.1 , the baseline efficiency levels for equipment classes HZO.RC.M, HZO. RC.L and HZO.SC.L were set by their respective standards baseline values. The latest ame nded standards for these equipment classes were specified by the January 2009 final rule. DOE could identify only one design option (vacuum insulated panels) that could increase the efficiency of these equipment classes above the standards baseline. Therefore, apart from the baseline efficiency levels (standard baseline levels), there was only one additional efficiency level for each of these three equipment classes.261 CRE NOPR ECS OMB Compare 

### .docx standard levels were selected on the basis of net social benefits. TSL 2 and TSL 1 were selected to provide intermediate efficiency levels that fill the gap between the baseline efficiency level and TSL 3. For the HZO.RC.M, HZO.RC.L , and HZO.SC.L equipment classes, there i s only one efficiency level above baseline. While TSL 5 was associated with the max - tech level for these three equipment classes , TSLs 1 through 4 did not have corresponding efficiency l evels that sati sf ied TSL formulation criteria. Therefore, the baseline efficiency level was assigned to TSL 1 through TSL 4 for each of these three equipment classes. Table V.1 shows the mapping between TSL s and efficiency levels.262 CRE NOPR ECS OMB Compare 

### .docx Table V.1 Mapping B et ween TSLs and Efficiency Levels

Equipment

Class Inte r mediate Level * Intermediate Level ** Max NPV *** Max Eff. Lvl with Pos
- NPV † Max
tech Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M Level 1 Level 2 Level 2 3 Level 3 4 Level 4 5 Level 6 VOP.RC.L Level 1 Level 2 Level 3 Level 4 Level 4 Level 5 VOP.SC.M Level 1 Level 2 3 Level 3 4 Level 4 5 Level 4 6 Level 7 VCT.RC.M Level 1 Level 2 Level 2 3 Level 3 4 Level 5 6 Level 6 7 VCT.RC.L Level 1 Level 2 3 Level 3 4 Level 4 5 Level 4 5 Level 5 6 VCT.SC.M Level 1 Level 3 2 Level 4 3 Level 6 4 Level 7 Level 8 VCT.SC.L Level 1 Level 2 3 Level 3 4 Level 6 5 Level 7 Level 8 VCT.SC.I Level 1 Level 3 Level 4 5 Level 6 Level 6 Level 7 VCS.SC.M Level 1 Level 3 Level 5 Level 7 Level 7 Level 8 VCS.SC.L Level 1 Level 2 3 Level 4 5 Level 6 Level 7 Level 8 VCS.SC.I Level 1 Level 3 Level 4 5 Level 6 Level 6 Level 7 SVO.RC.M Level 1 Level 2 Level 2 3 Level 3 4 Level 4 5 Level 6 SVO.SC.M Level 1 Level 2 3 Level 3 4 Level 4 5 Level 4 6 Level 7 SOC.RC.M Level 1 Level 2 Level 2 3 Level 3 4 Level 4 6 Level 7 HZO.RC.M ‡ Level 1 Level 1 Level 1 Level 1 Level 1 Level 2 HZO.RC.L ‡ Level 1 Level 1 Level 1 Level 1 Level 1 Level 2 HZO.SC.M Level 1 Level 2 Level 2 Level 3 Level 4 Level 5 HZO.SC.L ‡ Level 1 Level 1 Level 1 Level 1 Level 1 Level 2 HCT.SC.M Level 1 Level 3 Level 4 5 Level 6 Level 7 Level 8 HCT.SC.L Level 1 Level 3 Level 4 Level 5 Level 7 Level 8 HCT.SC.I Level 1 Level 2 Level 3 Level 4 Level 4 Level 5 HCS.SC.M Level 1 Level 2 Level 3 Level 4 Level 5 Level 7 HCS.SC.L Level 1 Level 4 Level 5 Level 6 Level 6 Level 7 PD.SC.M Level 1 Level 2 Level 2 Level 3 Level 7 Level 8 SOC.SC.M Level 1 Level 3 Level 4 Level 5 Level 7 Level 8 “Level” stands for “Efficiency Level

. ” * TSL 1 was generally chosen as one level below TSL 2, but could be in some cases an even lower efficiency level was chosen if the immediate lower level is too Level immediate ly below TSL 2 had an NPV value that was close to TSL 2 when the NPV values are compared.

. ** value of TSL 2. ** TSL 2 was generally chosen as one level below TSL3 TSL 3 , but could be lower in some cases an even lower efficiency level was chosen if the immediate lower level is too Level immediately below TSL 3 had an NPV value that was close to TSL 3 when the NPV values are compared. value of TSL 3.

. *** Efficiency level that has the highest N PV at a 7

- percent discount rate. † Highest efficiency level with a positive N PV at a 7

- percent discount rate. ‡ TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L do not satisfy the criteria for the corresponding TSL selection. See explanation in section V.A.1

. They TSLs 1 through 4 were assigned to the baseline efficiency level for TSLs 1 through 4 all three equipment classes

.



### 2. Trial Standard Level Equations Because of the equipment size variation within each equipment class and the use of daily energy consumption as the efficiency metric, DOE developed a methodology to express efficiency standards in terms of a normalizing metric. DOE used two normalizing263 CRE NOPR ECS OMB Compare 

### .docx metrics that were used for a ll equipment classes: (1) volume (V) and (2) TDA. The use of these two normalization metrics allows for the development of the standard in the form of a linear equation that can be used to represent the entire range of equipment sizes within a given equipm ent class. DOE retained the respective normalization metric (TDA or volume) previously used in the EPACT 2005 or the January 2009 final rule standards for each covered equipment class. (42 U.S.C. 6313(c)(2)

– (3)); 74 FR 1092, at 1093 (Jan. 9, 2009). Additionally, in its January 2009 final rule, DOE developed offset factors as a method to adjust the energy efficiency requirements for smaller equipment in each equipment class analyzed. These offset factors , which form the y

- intercept on a plot of each standard level equation (representing a fictitious case of zero volume or zero TDA), accounted for certain components of the refrigeration load (such as conduction end effects) that remain constant even when equipment sizes vary. These constant loads affect smaller cases disproportionately. The offset factors were intended to approximate these constant loads and provide a fixed end point in an equation that describes the relationship between energy consumption and the corresponding normalization metric. 74 F R at 1,118–19 (Jan. 9, 2009)

. The standard level equations prescribed by EPACT 2005 also contained similar fixed parts not multiplied by the volume metric and which correspond to these offset factors

. (42 U.S.C. 6313(c)(2)) In this NOPR, DOE modified the J anuary 2009 final rule (74 FR at 1,118– 19 (Jan. 9, 2009) ) and EPACT 2005 offset factors at each TSL to reflect the proportional changes in energy consumption for each equipment class, as modeled in the engineering analysis. See chapter 5 of the NOPR TSD for further details and discussion of offset factors

.264 CRE NOPR ECS OMB Compare 

### .docx For the equipment classes covered under this rulemaking, the standards equation at each TSL is proposed in the form of MDEC ( in kilowatt

- hours per day ), normalized by a volume (V) or TDA metric , w ith an offset factor added to that value

. These equations take the form:

MDEC = A x TDA + B (for equipment using TDA as a normalizing metric)

or MD EC = A x V + B (for equipment using volume as a normalizing metric )

For equipment classes directly analyzed in the engineering analysis, offset factor
B was calculated for each class (see c hapter 5 of the NOPR TSD for discussion of offset factors) . T he slope , A , wa s derived based on the offset factor , B, and the CDEC of th e representative unit modeled in the engineering analysis for that equipment class is presented in Table V.2 . The standard s equations may be used to prescribe the MDEC for equipment of different sizes within the same equipment class. Chapter 9 of the NOPR TSD explains the methodology used for select ing TSL s and developing the coefficients shown in Table V.3

.

Table V.2 CDEC V alues by TSL for Representative Units A nalyzed in the Engineering Analysis for Each Primary Equipment C lass

Equipment

Class CDEC Values by TSL kWh/da y TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 46.84 46.84 44.33 44.33 35.71 44.09 35.51 35.06 VOP.RC.L 106.22 105.60 101.03 100.51 100.51 98.87 VOP.SC.M 30. 37 03 30.03 29.60 29.60 26.70 29.60 26.62 26.46 VCT.RC.M 14.17 15.56 14.17 8.10 6.26 5.97 5.49 VCT.RC.L 31.13 30.58 30.29 30.29 28.85 VCT.SC.M 4.18 7.56 4.08 3. 13 24 2.97 2.68 VCT.SC.L 24.96 13.48 17.32 13.30 12. 37 44 12.09 11.57 VCT.SC.I 17.45 16. 51 36 16.14 16.14 15.37265 CRE NOPR ECS OMB Compare 

### .docx VCS.SC.M 2.36 2.17 1.81 1.81 1.39 VCS.SC.L 7. 69 26 7.07 6.75 6.66 6.56 5.71 VCS.SC.I 18.24 18.11 17.79 17.64 17.64 16.53 SVO.RC.M 36.11 33.85 36.11 27.71 33.85 33.68 27.57 27.26 SVO.SC.M 26.67 25.74 25. 74 36 25.36 23.29 25.36 23.24 23.12 SOC.RC.M 25.62 25.62 24.97 24.97 20.43 24.85 20.15 19.93 HZO.RC.M 14.43 14.43 14.43 14.43 14.17 HZO.RC.L 33.10 33.10 33.10 33.10 32.22 HZO.SC.M 14.76 14.76 14.60 14.49 14.26 HZO.SC.L 30.12 30.12 30.12 30.12 29.91 HCT.SC.M 1.87 1.73 0.84 0.75 0.67 0.49 HCT.SC.L 4.11 3.98 1.77 1. 77 70 1.57 1.18 HCT.SC.I 3.22 3.07 2.86 2.86 2.13 HCS.SC.M 0.65 0.60 0.56 0.50 0.25 HCS.SC.L 1.61 1.46 1.27 1.27 0.74 PD.SC.M 3.90 3.90 2.23 1.64 1.42 SOC.SC.M 27.04 26.80 22.02 21.70 21.41 

### Table V.3 Equations Representing the Standards at Each TSL for All Primary Equipment Class es Equipment

Class Trial Standard Levels for Primary Equipment Classes Analyzed Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VCT.RC.L 0.56 x × TDA + 2.61 0.45 x × TDA + 2.08 0.44 x × TDA + 2.05 0.43 x × TDA + 2.03 0.43 x × TDA + 2.03 0.41 x × TDA + 1.93 VOP.RC.M 0.82 x × TDA + 4.07 0.8 x × TDA + 3.99 0. 8 x 76 × TDA + 3. 99 78 0. 76 x 61 × TDA + 3. 78 04 0. 76 x 61 × TDA + 3. 76 03 0.6 x × TDA + 2.99 SVO.RC.M 0.83 x × TDA + 3.18 0.82 x × TDA + 3.16 0. 82 x 77 × TDA + 3.16 2.96 0. 77 x 63 × TDA + 2. 96 42 0. 77 x 63 × TDA + 2. 94 41 0.62 x × TDA + 2.38 HZO.RC.L 0.57 x × TDA + 6.88 0.57 x × TDA + 6.88 0.57 x × TDA + 6.88 0.57 x × TDA + 6.88 0.57 x × TDA + 6.88 0.55 x × TDA + 6.7 HZO.RC.M 0.35 x × TDA + 2.88 0.35 x × TDA + 2.88 0.35 x × TDA + 2.88 0.35 x × TDA + 2.88 0.35 x × TDA + 2.88 0.34 x × TDA + 2.83 VCT.RC.M 0.22 x × TDA + 1.95 0. 19 x 21 × TDA + 1. 7 87 0. 19 x 11 × TDA + 1.7 0.97 0.08 x × TDA + 0.75 0.08 x × TDA + 0.72 0.07 x × TDA + 0.66 VOP.RC.L 2.27 x × TDA + 6.85 2.23 x × TDA + 6.72 2. 21 x 12 × TDA + 6. 68 39 2.11 x × TDA + 6.36 2.11 x × TDA + 6.36 2.07 x × TDA + 6.26 SOC.RC.M 0.51 x × TDA + 0.11 0.5 x × TDA + 0.11 0. 5 x 49 × TDA + 0.11 0. 49 x 4 × TDA + 0. 11 09 0. 49 x 39 × TDA + 0. 1 08 0.39 x × TDA + 0.08 VOP.SC.M 1.74 x × TDA + 4.71 1. 72 x 7 × TDA + 4. 66 61 1. 7 x 68 × TDA + 4. 61 54 1. 68 x 51 × TDA + 4. 54 1 1. 68 x 51 × TDA + 4. 54 09 1.5 x × TDA + 4.06 SVO.SC.M 1.73 x × TDA + 4.59 1. 73 x 67 × TDA + 4. 58 42 1. 67 x 64 × TDA + 4. 42 35 1. 64 x 51 × TDA + 4. 35 1. 64 x 5 × TDA + 4.35 3.99 1.5 x × TDA + 3.97 HZO.SC.L 1.92 x × TDA + 7.08 1.92 x × TDA + 7.08 1.92 x × TDA + 7.08 1.92 x × TDA + 7.08 1.92 x × TDA + 7.08 1.91 x × TDA + 7.03 HZO.SC.M 0.77 x × TDA + 5.55 0.77 x × TDA + 5.54 0.77 x × TDA + 5.54 0.76 x × TDA + 5.48 0.75 x × TDA + 5.44 0.74 x × TDA + 5.35 HCT.SC.I 0.56 x × TDA + 0.43 0.55 x × TDA + 0.42 0.52 x × TDA + 0.4 0.49 x × TDA + 0.37 0.49 x × TDA + 0.37 0.36 x × TDA + 0.28 VCT.SC.I 0.67 x × TDA + 3.29 0.56 x × TDA + 2.77 0.53 x × TDA + 2. 62 6 0.52 x × TDA + 2.56 0.52 x × TDA + 2.56 0.5 x × TDA + 2.44266 CRE NOPR ECS OMB Compare 

### .docx VCS.SC.I 0.38 x × V + 0.88 0.36 x × V + 0.84 0. 36 x 35 × V + 0. 83 82 0.35 x × V + 0.81 0.35 x × V + 0.81 0.33 x × V + 0.76 VCT.SC.M 0.12 x × V + 3.34 0. 05 x 1 × V + 1.51 2.74 0.05 x × V + 1.48 0.04 x × V + 1. 13 17 0.04 x × V + 1.07 0.03 x × V + 0.97 VCT.SC.L 0.53 x × V + 2.92 0. 46 x 25 × V + 2.51 1.35 0. 32 x 24 × V + 1. 74 33 0.23 x × V + 1. 24 25 0.22 x × V + 1.21 0.21 x × V + 1.16 VCS.SC.M 0.06 x × V + 1.31 0.03 x × V + 0.69 0.03 x × V + 0.64 0.03 x × V + 0.53 0.03 x × V + 0.53 0.02 x × V + 0.41 VCS.SC.L 0.21 x × V + 0.72 0. 15 x 14 × V + 0. 51 48 0.13 x × V + 0. 47 44 0.13 x × V + 0.44 0.13 x × V + 0.43 0.11 x × V + 0.38 HCT.SC.M 0.06 x × V + 1.73 0.05 x × V + 1.42 0. 05 x 02 × V + 1.32 0.63 0.02 x × V + 0.57 0.02 x × V + 0.51 0.01 x × V + 0.38 HCT.SC.L 0.36 x × V + 1.98 0.29 x × V + 1.57 0. 28 x 12 × V + 1.52 0.68 0.12 x × V + 0. 68 65 0.11 x × V + 0.6 0.08 x × V + 0.45 HCS.SC.M 0.03 x × V + 0.54 0.02 x × V + 0.49 0.02 x × V + 0.45 0.02 x × V + 0.41 0.02 x × V + 0.37 0.01 x × V + 0.18 HCS.SC.L 0.2 x × V + 0.69 0.15 x × V + 0.53 0.14 x × V + 0.48 0.12 x × V + 0.42 0.12 x × V + 0.42 0.07 x × V + 0.24 PD.SC.M 0.13 x × V + 3.51 0.07 x × V + 1.98 0.07 x × V + 1.98 0.04 x × V + 1.13 0.03 x × V + 0.83 0.03 x × V + 0.72 SOC.SC.M 0.6 × TDA + 1.0 0.4 × TDA + 0.67 0.4 × TDA + 0.66 0.33 × TDA + 0.54 0.32 × TDA + 0.53 0.32 × TDA + 0.53



### In addition to the 24 primary equipment classes analyzed, DOE intends to amend evaluating existing and potentially amended standards for 23 secondary equipment classes of commercial refrigeration equipment covered in this rulemaking that were not directly analyzed in the engineering analysis. DOE’s approach to amending evaluating standards for these secondary equipment classes involves extensio n multipliers developed using the engineering results for the primary equipment classes analyzed and a set of matched

- pair analyses performed during the January 2009 final rule analysis

. 99



### . In addition, DOE believes that standards for certain primary equipm ent classes can be directly applied to similar secondary equipment classes. Chapter 5 of the NOPR TSD discusses the development of the extension multipliers.

99 The matched

- pair analyses compared calculated energy consumption levels for pieces of equ ipment with similar designs but one major construction or operational difference; for example, vertical open remote condensing cases operating at medium and low temperatures. The relationships between these sets of units were used to determine the effect o f the design or operational difference on applicable equipment. For more information, please see chapter 5 of the 2009 final rule TSD, which can be found at http://www .regulations.gov/#!documentDetail;D=EERE

- 2006

- STD

- 0126

- 0058

.267 CRE NOPR ECS OMB Compare 

### .docx Using the extension multiplier approach, DOE developed an additional set of
TSLs and associated equations for the secondary equipment classes , as shown in Table
V.4

. The TSLs shown in Table V.4 do not necessarily satisfy the criteria spelled out in section V.A

. DOE is present ing the standards equations developed for each TSL for all 47 equipment classes to allow interested parties to better review the ramifications of each TSL across the range of equipment sizes on the market.

### 268 CRE NOPR ECS OMB Compare 

## .docx Table V.4 Equations Representing the Standards at Each TSL for All Secondary Equipment Classes Equipment Class Trial Standard Levels for Secondary Equipment Classes Analyzed Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
VOP.RC.I 2.89 

### x × TDA + 8.7 2.83 

### x × TDA + 8.54 2. 

### 81 x 69 × TDA + 8. 

### 49 12 2.68 

### x × TDA + 8.08 2.68 

### x × TDA + 8.08 2.63 

### x × TDA + 7.95



### SVO.RC.L 2.27 

### x × TDA + 6.85 2.23 

### x × TDA + 6.72 2. 

### 21 x 12 × TDA + 6. 

### 68 39 2.11 

### x × TDA + 6.36 2.11 

### x × TDA + 6.36 2.07 

### x × TDA + 6.26



### SVO.RC.I 2.89 

### x × TDA + 8.7 2.83 

### x × TDA + 8.54 2. 

### 81 x 69 × TDA + 8. 

### 49 12 2.68 

### x × TDA + 8.08 2.68 

### x × TDA + 8.08 2.63 

### x × TDA + 7.95 

### HZO.RC.I 0.72 

### x × TDA + 8.74 0.72 

### x × TDA + 8.74 0.72 

### x × TDA + 8.74 0.72 

### x × TDA + 8.74 0.72 

### x × TDA + 8.74 0.7 

### x × TDA + 8.5 

### VOP.SC.L 4.37 

### x × TDA + 11.82 4. 

### 32 x 27 × TDA + 11. 

### 7 57 4. 

### 27 x 21 × TDA + 11. 

### 57 4 

### 4.21 x 3.8 × TDA + 

### 11.4 10.29 

### 4.21 x 3.79 × TDA + 

### 11.4 10.26 3.77 

### x × TDA + 10.2



### VOP.SC.I 5.55 

### x × TDA + 15.02 5. 

### 49 x 43 × TDA + 14. 

### 86 69 5. 

### 43 x 35 × TDA + 14. 

### 69 48 

### 5.35 x 4.83 × TDA + 

### 14.48 13.06 

### 5.35 x 4.81 × TDA + 

### 14.48 13.03 4.78 

### x × TDA + 12.95



### SVO.SC.L 4.34 

### x × TDA + 11.51 4. 

### 33 x 18 × TDA + 11. 

### 49 09 4. 

### 18 x 12 × TDA + 

### 11.09 10.93 

### 4.12 x 3.78 × TDA + 10. 

### 93 04 

### 4.12 x 3.77 × TDA + 10. 

### 93 01 3.76 

### x × TDA + 9.96



### SVO.SC.I 5.52 

### x × TDA + 14.63 5. 

### 5 x 31 × TDA + 14. 

### 6 09 5. 

### 31 x 23 × TDA + 

### 14.09 13.88 

### 5.23 x 4.8 × TDA + 

### 13.88 12.75 

### 5.23 x 4.79 × TDA + 

### 13.88 12.72 4.77 

### x × TDA + 12.65 

### HZO.SC.I 2.44 

### x × TDA + 9.0 2.44 

### x × TDA + 9.0 2.44 

### x × TDA + 9.0 2.44 

### x × TDA + 9.0 2.44 

### x × TDA + 9.0 2.42 

### x × TDA + 8.93 

### SOC.RC.L 1.08 

### x × TDA + 0.22 1.05 

### x × TDA + 0. 

### 22 23 1. 

### 05 x 02 × TDA + 0.22 

### 1.02 x 0.84 × TDA + 0. 

### 22 18 

### 1.02 x 0.83 × TDA + 0. 

### 22 18 0.82 

### x × TDA + 0.18



### SOC.RC.I 1.26 

### x × TDA + 0.26 1.23 

### x × TDA + 0. 

### 26 27 1. 

### 23 x 2 × TDA + 0.26 

### 1.2 x 0.98 × TDA + 0. 

### 26 21 

### 1.19 x 0.97 × TDA + 0. 

### 26 21 0.96 

### x × TDA + 0.21



### SOC.SC.I 1.76 

### x × TDA + 0.36 1.72 

### x × TDA + 0. 

### 36 37 1. 

### 72 x 68 × TDA + 0.36 1. 

### 68 x 37 × TDA + 0. 

### 36 3 1. 

### 67 x 35 × TDA + 0. 

### 36 29 1.34 

### x × TDA + 0.29 

### VCT.RC.I 0.66 

### x × TDA + 3.05 0.52 

### x × TDA + 2.44 0.51 

### x × TDA + 2.39 0.51 

### x × TDA + 2.37 0.51 

### x × TDA + 2.37 0.48 

### x × TDA + 2.26 

### HCT.RC.M 0.16 

### x × TDA + 0.13 0.16 

### x × TDA + 0.12 0.15 

### x × TDA + 0.12 0.14 

### x × TDA + 0.11 0.14 

### x × TDA + 0.11 0.1 

### x × TDA + 0.08 

### HCT.RC.L 0.34 

### x × TDA + 0.26 0.33 

### x × TDA + 0.26 0.32 

### x × TDA + 0.24 0.3 

### x × TDA + 0.23 0.3 

### x × TDA + 0.23 0.22 

### x × TDA + 0.17 

### HCT.RC.I 0.4 

### x × TDA + 0.31 0.39 

### x × TDA + 0.3 0.37 

### x × TDA + 0.29 0.35 

### x × TDA + 0.27 0.35 

### x × TDA + 0.27 0.26 

### x × TDA + 0.2 

### VCS.RC.M 0.11 

### x × V + 0.26 0.11 

### x × V + 0.24 0.1 

### x × V + 0.24 0.1 

### x × V + 0.24 0.1 

### x × V + 0.24 0.1 

### x × V + 0.22 

### VCS.RC.L 0.23 

### x × V + 0.54 0.22 

### x × V + 0.51 0.22 

### x × V + 0. 

### 51 5 0.21 

### x × V + 0.5 0.21 

### x × V + 0.5 0.2 

### x × V + 0.46 

### VCS.RC.I 0.27 

### x × V + 0.63 0.26 

### x × V + 0.6 0. 

### 26 x 25 × V + 0. 

### 6 58 0.25 

### x × V + 0.58 0.25 

### x × V + 0.58 0.23 

### x × V + 0.54 

### HCS.SC.I 0.38 

### x × V + 0.88 0.36 

### x × V + 0.84 0. 

### 36 x 35 × V + 0. 

### 83 82 0.35 

### x × V + 0.81 0.35 

### x × V + 0.81 0.33 

### x × V + 0.76 

### HCS.RC.M 0.11 

### x × V + 0.26 0.11 

### x × V + 0.24 0.1 

### x × V + 0.24 0.1 

### x × V + 0.24 0.1 

### x × V + 0.24 0.1 

### x × V + 0.22 

### HCS.RC.L 0.23 

### x × V + 0.54 0.22 

### x × V + 0.51 0.22 

### x × V + 0. 

### 51 5 0.21 

### x × V + 0.5 0.21 

### x × V + 0.5 0.2 

### x × V + 0.46 

### HCS.RC.I 0.27 

### x × V + 0.63 0.26 

### x × V + 0.6 0. 

### 26 x 25 × V + 0. 

### 6 58 0.25 

### x × V + 0.58 0.25 

### x × V + 0.58 0.23 

### x × V + 0.54 

### SOC.SC.L * 0.75 × V + 4.10 0.84 × TDA + 1.4 0.83 × TDA + 1.39 0.68 × TDA + 1.14 0.67 × TDA + 1.12 0.66 × TDA + 1.11

### 269 CRE NOPR ECS OMB Compare 

## .docx * Equipment class SOC.SC.L was inadvertently grouped under the category self

- contained commercial freezers with transparent doors in the standards prescribed by EPCA, as amended by EPACT 2005. (42 U.S.C. 6313(c)(2)) The baseline expression is thus given by the expression 0.75 × V + 4.10, which is the current standard for SOC.SC.L equipment. A similar anomaly (of inadvertent classification under a different equipment category) for SOC.SC.M equipment was corrected by the standard established by AEMTCA (see se ction IV.C.1.d for a detailed discussion) . (42 U.S.C. 6313(c)(4)) However, no such corrective action has been prescribed for standards for SOC.SC.L equipment. In establishing a new standard f or SOC.SC.M equipment, AEMTCA also changed the normalization metric from volume (V) to total display area (TDA). Accordingly, DOE is proposing the amended standards for SOC.SC.M equipment with TDA as the normaliza tion metric (see Table V .3 ) , DOE derives the proposed standards for secondary equipment classes based on the proposed standard of a primary equipment that has similar characteristics as the secondary equipment class un der consideration (see chapter 5 of the NOPR TSD for details). For the equipment class SOC.SC.L, the proposed standards were derived from the proposed standards for equipment class SOC.SC.M. Since the proposed standards for SOC.SC.M are in terms of TDA, the proposed standards for SOC.SC.L equipment have also been specified in terms of TDA. Therefore, while the baseline expression has been shown with V as the normalization metric, the expressions for TSLs 1 through 5 ha ve been shown in terms of TDA. This cha nge of normalization metric for equipment class SOC.SC.L is consistent with the legislative intent, evident in AEMTCA, for eq uipment class SOC.SC.M.270 CRE NOPR ECS OMB Compare 

### .docx B. Economic Justification and Energy Savings
1. Economic Impacts on Commercial Consumers Customer s

a. 

### Life

- Cycle Cost and Payback Period
Consumers Customer s affected by new or amended standards usually incur higher purchase prices and lower operating costs. DOE evaluates these impacts on individual

consumers customer s by calculating changes in the 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 201X 2012 test procedure final rule , which adopts

. 77 FR 10292 , 10318

- 21 (Feb 21, 2012) The DOE test procedure adopt ed an industry

- accepted test method and has been widely accepted as a reasonably accurate represen ta t ive representation of the conditions under actual equipment use for to which a vast majority of the equipment covered in this rulemaking

. is subjected during actual use

. Using the approach described in section IV.H , DOE calculated the LCC savin gs and PBPs for the TSLs considered in this NOPR. The LCC analysis was 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 distribution s of results

.

Table V.5 through Table V.29 show the results of LCC analysis for each271 CRE NOPR ECS OMB Compare 

### .docx equipment class. Each table presents the important results of the LCC analysis , including

mean LCC, mean LCC savings, median PBP, and distribution of consumer customer impacts in the form of percentages of consumer s customer s who experience net cost, no impact, or net benefit.

Except for VCT.SC.L, A ll of the equipment classes have negative LCC savings values at TSL 5. Negative average LCC savings imply that, on average,

c onsu mers customers experience an increase in LCC of the equipment as a consequence of buying equipment associated with that particular TSL. TSL 5 is associated with the

max - tech level for all th e equipment classes. Vacuum insulated panel technology is the design option associated with the max - tech efficiency levels for all equipment classes. The cost increments associated with vacuum insulated panel s are considerably high , and the increase in LCC indicates that this design option may not be economically justified. Even for VCT.SC.L, which has a positive value for mean LCC savings (see ) , the median LCC savings value at TSL 5 is a negative value of $1,102.96 (not shown in any the tables in the NOPR) . VCT .SC.L units are among the most widely used equipment in the commercial refrigeration equipment market, and are associated with all seven types of businesses considered in the LCC analysis (see section ) . There fore, the discount rates and electricity prices used in the Monte Carlo simulations span a wide range of values. The distribution of results in this case is such that while the mean LCC savings are slightly positive, the median LCC savings are negative, in dicating most consumer s are negatively impacted.272 CRE NOPR ECS OMB Compare 

### .docx The mean LCC savings associated with TSL 4 are all either positive values or zero (in the case of equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L ) for all equipment classes , and the non- zero values rang e from $ 9 to $ 1, 969 494

. The mean LCC savings at all lower TSL levels are also positive. This implies that, on average, all the equipment classes show either no change in LCC or a decrease in LCC for TSL 1 through TSL 4. A comparison of LCC savings between TSL 4 and TSL 3, across all equipment classes, shows that the LCC savings associated with TSL 3 are either greater than or equal to the LCC savings associated with TSL 4. LCC savings are equal in cases in which both TSLs are associated with the same efficiency level. Comparison of the mean LCC savings associated with TSL 3, TSL 2 , and TSL 1 s hows mixed results, with three equipment classes showing the highest mean LCC savings at TSL 2 and seven equipment classes showing the highest mean LCC savings at TSL 1. The remaining classes show the highest mean LCC savings at TSL3

.

As described in s ec tion IV.I.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.
C onsu mers 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 T SL. C onsu mers Customers , in the base

- case scenario, who buy equipment below the273 CRE NOPR ECS OMB Compare 

### .docx TSL under consideration would be affected if the amended standard were to be set at that TSL. Among these affected consumers customer s , some may benefit from lower LCC of the equ ipment and some may incur net cost due to higher LCC, depending on the inputs to LCC analysis such as electricity prices, discount rates and markups. DOE’s results clearly indicate that only a small percentage of consumer s customer s may benefit from an

amen ded standard that is set at TSL 5 , and in most cases these are the c onsumers that are already purchasing the equipment at TSL 5. . At TSL 4, the percentage of

c onsu mers customers who experience net benefits or no impacts ranges from 60 59 to 100 percent. For remote condensing equipment, the range is from 66 to 98 percent, while for self

- contained equipment the range is from 81 to 100 percent , with the exception of the PD.SC.M equipment class, which shows a value of 60 percent at TSL 4. At TSL 3, a larger percentage of c onsu mers customers experience net benefits or no impacts as compared to TSL 4. At TSLs 1 and 2 , almost all c onsumers customer s experience either net benefits or no impacts.

The median PBP values for TSL 5 are long and, in For most cases of the equipment classes , the median PBP s for TSL 5 are greater than the average lifetime of the equipment, indicating that a majority of the consumers customer s may not be able to recover the higher equipment installed costs through savings in operating costs thr oughout the life of the equipment. The median PBP values for TSL 4 range from 1.19 0.9 6 years for VCS.SC.L to 6. 59 40 years for VOP.RC.L.

. The average lifetime of a majority of the commercial refrigeration equipment under consideration is 10 years. Therefore , PBP resu lts for TSL 4 indicate that, in general, the majority of274 CRE NOPR ECS OMB Compare 

### .docx consumers customer s will be able to recover the increased purchase costs associated with equipment that is compliant with TSL 4 through operating cost savings within the lifetime of the equipment.

Table V.5 Summary LCC and PBP Results for VOP.RC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period, years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit

1 17,095 9, 212 490 19,509 20,6 18 28,721 30 ,108 216 236 0 75 76 25 24 1. 83 73 2 17,095 16,180 9, 212 633 19, 509 849 28,721 29 ,482 216 743 0 75 52 25 48 1. 83 77 3 16,180 13,033 9,352 10,8 23 18,800 17,3 64 28, 152 18 7 677 1,789 0 50 28 50 72 1.87 3.77 4 16,092 12,962 9,425 10,8 98 18,731 17,3 03 28, 156 20 1 453 1,494 16 11 25 15 59 74 2.41 3.91 5 12,798 16,508 14, 006 17, 751 162 34,258 31 ,168 ( 5,705 1,669 ) 100 90 0 2 0 8 38. 11 .76 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V.6 Summary LCC and PBP Results for VOP.RC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period y ea rs Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit

1 38,770 9,815 10,099 36,203 39,184 46,018 49,282 501 537 0 72 74 28 26 1. 18 11 2 38,546 36,877 9,896 10,511 36,027 37,520 45,923 48,031 346 1,517 0 43 48 57 52 1.94 2.03 3 36,685 11,085 10,594 34,807 37,356 45,891 47,950 264 1,130 34 0 16 25 50 75 6.59 2.22 4 36,685 11,085 10,594 34,807 37,356 45,891 47,950 264 1,130 34 0 16 25 50 75 6.59 2.22 5 36,088 16,045 15,667 34,339 36,847 50,384 52,513 ( 4,267 3,693 ) 98 2 0 24.96 18.30 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V.7 Summary LCC and PBP Results for VOP.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed Discounted LCC Affected % of Consumer s Customer s275 CRE NOPR ECS OMB Compare 

### .docx Cost Operating Cost Consumer s ’ Customer s’

Average Savings 2010 2012 $ that Experience **
Net Cost No Impact Net Benefit
1 11,085 10,960 4, 514 650 14,226 15,471 18,740 20,120 106 171 0 76 62 24 38 1. 57 61 2 10, 960 804 4, 534 693 14,100 15,314 18,634 20,008 159 227 0 53 43 47 57 1.67 2.17 3 10,804 9,747 4,577 5,183 13,950 14,180 18,527 19,364 214 815 0 30 25 70 75 2.23 4.12 4 10,804 9,718 4,577 5,234 13,950 14,147 18,527 19,381 214 691 0 11 30 14 70 75 2.23 4.39 5 9,660 7,101 6,293 13,333 14,079 20, 434 373 ( 1,694 377 ) 99 77 1 3 0 20 29.48 11.37 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V.8 Summary LCC and PBP Results for VCT.RC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 5, 171 679 12, 280 070 11, 081 800 23, 361 870 450 175 0 74 81 26 19 2.63 1.23 2 5,171 2,955 12, 280 669 11,081 9,411 23,361 22,081 450 1,864 0 74 62 26 38 2. 63 42 3 2,285 13,186 12,819 8, 654 809 21, 840 629 1, 749 759 0 50 46 50 54 3.49 2.43 4 2,177 13,293 12,929 8, 567 715 21, 860 644 1, 038 108 29 26 18 16 53 57 3.73 2.70 5 2,005 16, 821 537 8, 424 560 25, 245 097 (2, 513 509 ) 95 94 2 3 4 14.29 13.09 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V.9 Summary LCC and PBP Results for VCT.RC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 11,362 14,088 13,756 16,639 17,581 30,727 31,337 1, 078 357 0 69 60 31 40 4.33 1.30 2 11,161 14,167 13,836 16,474 17,401 30,640 31,237 711 1,005 0 46 40 54 60 4.36 1.51 3 11,056 14,216 13,887 16,390 17,311 30,606 31,198 540 798 2 0 24 21 75 79 4.43 1.64 4 11,056 14,216 13,887 16,390 17,311 30,606 31,198 540 798 2 0 24 21 75 79 4.43 1.64 5 10,531 18, 850 15,958 34,808 (3, 781 624 ) 98 97 2 0 1 22.38276 CRE NOPR ECS OMB Compare 

### .docx 626 16,840 35,466 15.75 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 10 Summary LCC and PBP Results for VCT.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 1,526 2,758 4, 997 594 3,707 5,261 8,704 9,855 1,425 566 0 64 83 36 17 2.05 0.86 2 1,488 5,012 4,849 3, 675 916 8, 687 764 1, 038 364 0 49 66 51 34 2.10 1.73 3 1, 141 182 5,183 4,999 3, 338 583 8, 521 582 830 1,122 4 0 23 51 73 49 2. 60 21 4 1,082 5, 246 088 3, 280 489 8, 525 578 718 641 15 27 12 13 73 60 2. 83 54 5 979 6, 492 362 3, 176 377 9, 668 739 ( 500 596 ) 72 74 2 27 24 8. 22 13 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 11 Summary LCC and PBP Results for VCT.SC.L Equipment Class

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit

1 9,112 4,921 5,705 6,101 11,774 8,222 17,479 14,323 1,434 4,186 0 85 76 15 24 0. 43 58 2 6,321 4,853 5,940 6,120 9,026 8,150 14, 966 270 3,228 2,523 0 69 60 31 40 0. 76 61 3 4, 514 541 6, 395 271 7, 132 811 13,527 14,082 2,281 1,984 3 0 26 44 71 56 1.33 0.83 4 4,411 6, 471 364 7, 038 692 13,509 14,056 1, 969 343 8 7 13 15 79 78 1.44 0.96 5 4,222 8, 146 077 6,849 7,486 14,995 15,562 252 (343) 62 74 2 37 24 4.25 3.65 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 12 Summary LCC and PBP Results for VCT.SC.I Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience ** Net Cost No Impact Net Benefit277 CRE NOPR ECS OMB Compare 

### .docx

1 6,370 6, 525 383 9,350 10,160 15,875 16,543 437 572 0 63 65 37 35 2.32 0.86 2 6,024 5,972 6, 672 558 8,999 9,733 15,671 16,292 503 486 0 1 45 32 55 68 2.87 1.74 3 5,891 6, 749 612 8,873 9,644 15,622 16,256 371 432 2 1 15 16 82 83 3.17 1.97 4 5,891 6, 749 612 8,873 9,644 15,622 16,256 371 432 2 1 15 16 82 83 3.17 1.97 5 5,609 8, 970 883 8,587 9,332 17,556 18,215 (1, 616 592 ) 97 95 1 2 3 15.97 13.21 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 13 Summary LCC and PBP Results for VCS.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 863 3, 292 386 1,957 2,122 5, 249 508 268 279 0 71 72 29 28 0. 80 78 2 793 3, 312 406 1,907 2,070 5, 219 476 158 163 0 41 42 58 1.01 0.98 3 659 3, 389 484 1, 810 967 5, 199 451 125 132 13 7 13 73 80 1. 80 75 4 659 3, 389 484 1, 810 967 5, 199 451 125 132 13 7 13 73 80 1. 80 75 5 507 4, 648 771 1, 691 837 6, 339 608 (1, 031 042 ) 99 1 0 14. 57 11 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 14 Summary LCC and PBP Results for VCS.SC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s

that Experience ** Net Cost No Impact Net Benefit 1 2, 808 649 3, 563 673 3, 624 829 7, 186 501 864 525 0 87 73 13 27 0. 51 55 2 2, 582 463 3, 586 735 3, 452 671 7, 038 405 368 329 0 57 42 43 58 0. 61 91 3 2,432 3, 654 751 3, 339 651 6,993 7,402 257 268 5 27 28 68 1. 04 00 4 2,394 3, 678 776 3, 317 630 6,995 7,405 214 221 19 20 14 67 66 1. 19 15 5 2,084 5, 371 505 3, 075 366 8, 446 871 (1, 265 274 ) 97 0 1 3 2 10. 96 54 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 15 Summary LCC and PBP Results for VCS.SC.I Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s ’ Customer s’

Average % of Consumer s Customer s that Experience ** Net No Net278 CRE NOPR ECS OMB Compare 

### .docx Savings 2010 2012 $ Cost Impact Benefit
1 6,657 4, 051 148 6,878 7,526 10,929 11,674 218 237 0 66 67 34 33 0. 83 80 2 6, 612 492 4, 066 218 6,847 7,392 10,913 11,610 160 177 0 49 32 51 68 1.22 2.07 3 6,438 4, 144 243 6,719 7,357 10,863 11,600 141 153 4 3 16 80 81 2. 50 42 4 6,438 4, 144 243 6,719 7,357 10,863 11,600 141 153 4 3 16 80 81 2. 50 42 5 6,034 6, 388 535 6,403 7,013 12,790 13,548 (1, 809 819 ) 99 1 0 28.30 27.19 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 16 Summary LCC and PBP Results for SVO.RC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 13,179 8, 072 341 15,887 16,8 21 23,959 25, 161 68 74 0 74 75 26 25 1. 38 31 2 12,355 13,179 8, 072 547 15,887 16,0 98 23,959 24, 645 68 552 0 74 51 26 49 1.38 2.64 3 10,114 12,355 8,273 9,45 5 15,224 14,3 47 23, 497 802 495 1,217 0 48 29 52 71 2.79 4.34 4 12,293 10,065 8,333 9,51 7 15,174 14,3 04 23, 507 821 331 1,008 18 13 25 16 57 72 3.36 4.50 5 9,949 13,265 11, 511 14, 483 202 27,748 25, 713 ( 3,937 1,015 ) 99 85 1 3 0 12 38.30 11. 60 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 17 Summary LCC and PBP Results for SVO.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience ** Net Cost No Impact Net Benefit
9,396

1 9,736 3,885 3,678 12,7 44 11,972 16,6 29 15,650 324 20 0 0 61 76 39 24 1.97 1.25 9,39 6 9,255

2 3,914 9,396 3,745 12,6 00 11,621 16,5 14 15,366 335 294 0 0 43 52 57 48 2.06 9,255 2.01

3 8,501 4,314 9,255 3,774 11,8 66 11,485 16,1 80 15,258 588 308 0 0 25 30 75 70 4.43 2.08 8,50 1

4 8,481 4,359 9,255 3,774 11,8 43 11,485 16,2 02 15,258 492 308 12 0 14 30 75 70 4.75 2.08 8,48 1279 CRE NOPR ECS OMB Compare 

### .docx 8,439

5 5,049 8,439 5,581 11,7 96 11,086 16,8 44 16,667 (202) (1,133) 69 98 4 1 27 1 10.36 23.49 8,4 39 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 18 Summary LCC and PBP Results for SOC.RC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience ** Net Cost No Impact Net Benefit 1 9,353 12, 455 766 14,361 15,1 06 26,816 27, 872 113 118 0 78 82 22 18 1. 28 25 2 9, 353 115 12, 455 799 14, 361 906 26,816 27, 704 113 226 0 78 64 22 36 1. 28 44 3 9,115 7,455 12,487 13, 343 14,176 13,5 11 26, 662 854 209 998 0 57 47 43 53 1.50 3.31 4 9,072 7,356 12,541 13, 570 14,142 13,4 43 26,682 27, 012 120 495 21 29 35 18 45 53 2.84 4.41 5 7,274 16,259 15, 050 13, 397 372 29,656 28, 423 ( 2,715 982 ) 98 89 2 5 0 6 35.99 11. 88 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 19 Summary LCC and PBP Results for HZO.RC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 5,267 7,788 8,056 8, 286 916 16, 075 972 0 NA 0 NA 100 NA 0 NA NA 2 5,267 7,788 8,056 8, 286 916 16, 075 972 0 NA 0 NA 100 NA 0 NA NA 3 5,267 7,788 8,056 8, 286 916 16, 075 972 0 NA 0 NA 100 NA 0 NA NA 4 5,267 7,788 8,056 8, 286 916 16, 075 972 0 NA 0 NA 100 NA 0 NA NA 5 5,173 9, 109 406 8, 214 837 17,322 18, 243 (1, 248 271 ) 79 78 21 22 0 170.62 16 1.23 * “ NA ” stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the PBP is indet er minate LCC savings, distribution of customer impacts and has been PBP are shown as “NA ” .” * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 20 Summary LCC and PBP Results for HZO.RC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average % of Consumer s Customer s that Experience ** Net Cost No Impact Net Benefit280 CRE NOPR ECS OMB Compare 

### .docx Savings 2010 2012 $ 1 12,082 8, 620 895 13,876 14,9 89 22,496 23, 884 0 NA 0 NA 100 NA 0 NA NA 2 12,082 8, 620 895 13,876 14,9 89 22,496 23, 884 0 NA 0 NA 100 NA 0 NA NA 3 12,082 8, 620 895 13,876 14,9 89 22,496 23, 884 0 NA 0 NA 100 NA 0 NA NA 4 12,082 8, 620 895 13,876 14,9 89 22,496 23, 884 0 NA 0 NA 100 NA 0 NA NA 5 11,759 10,972 11,3 01 13,627 14,7 18 24,599 26, 019 (2, 103 135 ) 87 86 13 14 0 88.66 83. 78 * “ NA ” stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the PBP is indet erminate LCC savings, distribution of customer impacts and has been PBP are shown as “NA ” .” * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 21 Summary LCC and PBP Results for HZO.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience ** Net Cost No Impact Net Benefit 1 5,388 2, 249 343 6,427 7,055 8,676 9,3 99 8 9 0 74 75 26 25 1. 92 89 2 5,388 2, 249 343 6,427 7,055 8,676 9,3 99 8 9 0 74 75 26 25 1. 92 89 3 5,330 2, 261 356 6, 373 999 8,635 9,3 54 46 49 0 49 51 2. 43 42 4 5,289 2, 309 405 6, 332 954 8,641 9,3 58 24 29 21 19 24 55 57 6. 52 40 5 5,206 3, 224 340 6, 249 862 9,472 10, 202 ( 812 822 ) 98 2 0 57.36 55.78 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 22 Summary LCC and PBP Results for HZO.SC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience ** Net Cost No Impact Net Benefit 1 10,994 3, 584 691 12,654 13,8 91 16,238 17,5 82 NA 0 NA 100 NA 0 NA NA 2 10,994 3, 584 691 12,654 13,8 91 16,238 17,5 82 NA 0 NA 100 NA 0 NA NA 3 10,994 3, 584 691 12,654 13,8 91 16,238 17,5 82 NA 0 NA 100 NA 0 NA NA 4 10,994 3, 584 691 12,654 13,8 91 16,238 17,5 82 NA 0 NA 100 NA 0 NA NA 5 10,916 4, 132 251 12,575 13,8 16,707 18,0 ( 468 474 ) 73 72 27 28 028 1 CRE NOPR ECS OMB Compare 

### .docx 04 56 76.60 73. 62 * “ NA ” stands for not applicable. TSLs 1 through 4 are at the baseline efficiency level. Therefore, the PBP is indeter minate LCC savings, distribution of customer impacts and has been PBP are shown as “NA ” .” * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 23 Summary LCC and PBP Results for HCT.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s Customer s Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 683 1,965 2,05 7 1, 541 685 3, 506 742 99 107 0 68 70 32 30 0. 70 69 2 632 305 1,972 2,16 1 1, 490 263 3, 462 423 110 359 0 52 38 48 62 0.89 2.24 3 275 2, 081 175 1, 124 236 3, 204 411 286 307 0 24 25 76 75 2. 43 42 4 244 2, 125 220 1, 091 200 3, 215 420 236 254 17 18 11 12 71 70 3. 09 08 5 181 2, 704 812 1, 024 127 3, 727 939 ( 301 294 ) 89 1 10 12. 31 26 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 24 Summary LCC and PBP Results for HCT.SC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s’ Customers’

Average Savings 2010 2012 $ % of Consumer s Customer s

that Experience ** Net Cost No Impact Net Benefit 1 1,499 2, 147 240 2, 147 336 4, 294 576 206 217 0 72 75 28 26 0. 55 53 2 1,454 667 2, 153 337 1,589 2,112 4,265 3,926 164 791 0 58 61 42 39 0.67 1.00 3 647 2, 248 344 1, 440 574 3, 688 918 698 571 0 43 45 57 55 1. 10 05 4 572 2, 306 403 1, 382 513 3, 688 916 459 369 17 23 14 69 63 1. 55 47 5 432 3, 089 204 1, 264 385 4, 354 590 ( 266 355 ) 73 76 1 26 23 7. 53 15 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 25 Summary LCC and PBP Results for HCT.SC.I Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s’ Customers’

Average Savings 2010 2012 $ % of Consumer s Customer s

that Experience ** Net Cost No Impact Net Benefit 1 1,174 2, 237 331 1, 839 991 4, 076 322 20 22 0 74 26 0. 92 88 2 1,121 2, 251 346 1, 802 953 4, 053 299 33 35 0 48 49 52 51 2. 43 39 3 1,045 2, 295 391 1, 742 889 4, 037 279 38 42 5 2 23 72 75 4. 42 28 4 1,045 2, 295 391 1, 742 889 4, 037 279 38 42 5 2 23 72 75 4. 42 28282 CRE NOPR ECS OMB Compare 

### .docx

5
776 3, 342 461 1, 532 663 4,874 5,124 ( 807 811 ) 99 1 0 29.21 27.9 9 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 26 Summary LCC and PBP Results for HCS.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s ’ Customer s ’ Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 238 1, 866 951 903 972 2, 768 924 21 23 0 83 17 0. 52 50 2 220 1, 871 957 890 959 2, 761 916 18 19 0 65 35 1. 69 64 3 203 1, 878 964 879 948 2, 757 912 16 17 2 1 48 50 51 2. 58 54 4 183 1, 892 979 868 937 2, 760 916 9 27 29 31 42 40 4. 26 28 5 90 2, 393 490 794 857 3, 187 347 ( 418 423 ) 98 2 0 34. 96 05 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 27 Summary LCC and PBP Results for HCS.SC.L Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Consumer s ’ Customer s’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit
1 588 1, 902 988 1, 187 284 3, 089 272 69 75 0 49 50 51 50 0. 89 86 2 534 1,916 2,003 1, 149 244 3, 065 246 76 81 0 32 33 68 67 1. 41 36 3 464 1,959 2,046 1, 095 184 3, 053 231 73 81 5 2 15 16 80 82 2. 67 57 4 464 1,959 2,046 1, 095 184 3, 053 231 73 81 5 2 15 16 80 82 2. 67 57 5
271 2, 580 681 943 1,020 3, 523 700 ( 407 401 ) 99 98 1 2 0 15.63 14.9 8 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V. 28 Summary LCC and PBP Results for PD.SC.M Equipment Class *

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Consumer s Customer s 2010 2012 $ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affec ted Consumer s’ Customers’

Average Savings 2010 2012 $ % of Consumer s Customer s that Experience **
Net Cost No Impact Net Benefit

1 1,423 3, 030 002 2, 676 926 5, 706 927 935 1,010 0 81 86 19 14 1.46 0.53 2 1,423 3, 030 002 2, 676 926 5, 706 927 935 1,010 0 81 86 19 14 1.46 0.53 3 815 3, 147 121 2, 120 322 5, 267 444 940 934 0 64 69 36 31 1. 72 10283 CRE NOPR ECS OMB Compare 

### .docx

4 597 3, 369 348 2,112 1,924 5, 293 460 351 310 40 41 10 11 50 48 2. 82 27 5 517 4, 346 347 1,850 2,031 6, 196 379 ( 583 638 ) 84 86 1 15 13 8.12 7.61 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding. 

### Table V . 29 Summary LCC and PBP Results for SOC .SC.M Equipment Class*

TSL Annual Energy Consumption

kWh/yr Life
- Cycle Cost, All Customers 2012$ Life
- Cycle Cost Savings Median Payback Period years Installed

Cost Discounted Operating

Cost LCC Affected Customers’

Average Savings 2012$ % of Customers that Experience ** Net Cost No Impact Net Benefit 1 9,869 12,314 14,364 26,678 646 0 70 30 1.12 2 9,783 12,339 14,301 26,640 466 0 55 45 1.24 3 8,039 12,883 12,863 25,747 1,242 0 40 60 2.35 4 7,920 13,110 12,777 25,887 740 25 16 60 2.99 5 7,814 14,591 12,687 27,277 (735) 80 5 16 7.42 * Values in parentheses are negative values. **Percentages may not add up to 100 percent due to rounding.



### b. 

### Life

- Cycle Cost Subgroup Analysis As described in section IV.J , DOE estimated the impact of potential amended efficiency standards for commercial refrigeration equipment , at each TSL, on two

consumer customer subgroups , and two small business segment s , one belonging to the foodservice sector and one to the food- retail sector. For the small business segment in the foodservice sector, full

- service restaurants were chosen as the representative subgroup, and for the food

- retail sector , convenience stores with gas station s were chosen as the representative subgroup

. DOE carried out two LCC subgroup analyses , one each for full

service restaurants and gasoline stations with convenience stores, by using the LCC spreadsheet described in chapter 8 of the NOPR TSD , bu t 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). The discount rate was further increased by applying the small firm premium to the WACC (See Table284 CRE NOPR ECS OMB Compare 

### .docx IV .9 Another major change from for details). Anothe r major modification to the LCC analysis was an added assumption that the subgroups do not have access to national accounts, which results in higher distribution channel markups for the subgroups, leading to higher equipment purchase prices. Apart from these changes, all other i nputs for LCC subgroup analysis are same as those in the LCC analysis described in chapter 8 of the
NOPR TSD.

The results for the small business subgroup in the foodservice sector ( Table V.30 , Table V.31 , and Table V.32 ) are presented only f or the self

- contained equipment classes because full

- service restaurants that are small businesses generally do not use remote condensing equipment. Table V.30 presents the comparison of mean LCC savings for the small business subgroup in foodservice sector (full

- service restaurants) with the national average values (LCC savings results from chapter 8 of the NOPR TSD). For all TSLs in all equipment classes, the LCC savings for the small business subgroup are lower than the national average values

. Table V.31 presents the percentage change in LCC s avings compared to national average values for self

- contained equipment only because full

service restaurants that are small businesses generally do not use remote

- condensing equipment. . For a majority many of the equipment classes in Table V.31 , the percentage decrease in LCC savings is less than 15 percent. Equipment classes that show a substantial decrease in LCC savings, compared to national average values, are
VCT VOP .SC.M, VCT.SC. M, VCT.SC. L, VCT.SC.I, SVO.SC.M, H ZO .SC.M, HCT.SC.I and PD.SC.M, which belong to the classification of self

- contained display type equipment. It is uncommon to find display type equipment in small full

- service285 CRE NOPR ECS OMB Compare 

### .docx restaurants. An overwhelming majority of commercial refrigeration equipment in small restaurants is comprised comp o sed of solid door refrigerators and freezers that are used for food storage in the kitchen. The solid -door equipment (VCS and HCS) exhibits a relatively smaller percentage decrease in LCC savings. In any case, the one case where the percentage decrease is high, HCS.SC.M, the actual value of change in LCC savings ($2.23 at TSL 4 is positive for all equipment classes as shown in Table V.30 ) is negligible. . Therefore, even though the LCC savings for small business subgroup in foodservice sector are lower than the national average values, they are still positive, implying that small businesses still save money over the equipment lifetime at TSL 4. Table V.32 presents the comparison of median PBPs for the small business subgroup in the foodservice sector with national median values (median PBPs from chapter 8 of the
NOPR TSD). The PBP values are higher for the small business subgroup in all cases, which is consistent with the decrease in LCC savings.

Table V.33 presents the comparison of mean LCC savings for the small business subgroup in the food- retail sector (convenience stores with gasoline stations) with the national average values (LCC savings results from chapter 8 of the NOPR TSD ) at each
TSL

. This comparison shows mixed results , with higher LCC savings for the subgroup in some instances and negative lower LCC savings in others. The higher LCC savings for the subgroup are exhibited in the case of large display cases such as VOP.RC.M, VOP.RC.L, VCT.RC.M, VCT.RC.L, SVO.RC.M, and SOC.RC.M. This equipment is predominantly used in large grocery stores, where the average lifetime of the equipment wa s assumed to be 10 years, while the average lifetime of this equipment in convenience stores with gas286 CRE NOPR ECS OMB Compare 

### .docx stations was assumed to be 15 years (see chapter 8 of the NOPR TSD for discussion o f equipment lifetime assumptions). In general, the longer the equipment lifetime, the lower the LCC values because of a longer available timeframe to offset the initial cost increases . Since by savings in energy costs

. Because the large display type equipment is predominantly used in larger grocery and multi

- line retail stores, the national average values show lower LCC savings compared to the LCC savings of the subgroup. Self

contained equipment, on the other hand, w as assumed to have a 10

- year average lifetime in all businesses. F or self

- contained equipment, the subgroup LCC savings were lower than the national average LCC savings values are higher than the subgroup LCC savings with the exception of the HCT.SC.L cases

.

Table V.34 presents the percentage change in LCC savings of the

consumer customer subgroup in the food- retail sector compared to national average values

at e ach TSL . For a majority of equipment classes that show a decrease in LCC savings for the subgroup, the percentage decrease in LCC savings is less than 15 percent. Equipment classes that show a substantial decrease in LCC savings, compared to national average values, are VOP.SC.M, VCT.SC.M, VCT.SC.I, SVO.SC.M, and HCT.SC.M. SVO.SC.M, HZO.SC.M, HCT.SC.M , HCT.SC.I, and HSC.SC.M. Among these, the equipment classes that show decrease in LCC saving of greater than 15 percent at TSL 4 are VOP.SC.M ( 27 percent), SVO.SC.M (26 percent), HZO.SC.M ( 38 percent), HCT.SC.M (21 percent), HCT.SC.I ( 17 percent), and HCS.SC.M ( 15 percent). Even though the percentage decrease in LCC savings for these equipment classes may appear to be high, the absolute value of decrease in LCC savings is small when compared to the287 CRE NOPR ECS OMB Compare 

### .docx total LCC for e ach equipment class. Table V.35 presents the comparison of median PBPs for small business subgroup in the foodservice sector with national median values (median PBPs from chapter 8 of the NOPR TSD ). ) at each TSL

. The PBP values are higher in the small business subgroup in all instances, including instances in which the LCC savings for the subgroup are higher t han national average values. This is an expected outcome because the PBP values are obtained by dividing the increase in equipment installed cost by the first year savings in operating costs , and are not affected by the higher average lifetime of the equip ment in the convenience stores with gas stations.

Table V. 30 Comparison of Mean LCC Savings for the Small Business Subgroup in the Foodservice Sector with the National Average Values

Equipme nt Class * Category Mean LCC Savings 2010$ 2012$ ** TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
VOP.SC. M Small Business $ 94.67 157.27 $ 141.04 205.5 0 $ 185.57 690.2 2 $ 185.57 576 .21 ($ 2,010.78 58 6.43 ) All Business Types $ 106.45 170.7 8 $ 159.12 227.1 7 $ 214.15 814.9 1 $ 214.15 691 .27 ($ 1,693.94 37 6.52 )
VCT.SC. M Small Business $ 918.03 421.5 9 $ 665.05 960.3 4 $ 490.12 752.1 5 $ 399.97 405 .47 ($ 940.18 954. 55 ) All Business Types $ 1,424.70 566 .18 $1, 038.14 363 .60 $ 830.17 1,122 .14 $ 717.99 641 .05 ($ 500.02 595. 52 )
VCT.SC. L Small Business $ 1,026.22 3,1 27.24 $ 2,262.44 1,8 79.37 $1, 509.79 433 .25 $ 1,276.62 9 41.77 ($ 581.87 906. 58 ) All Business Types $ 1,434.12 4,1 86.06 $ 3,227.77 2,5 22.67 $ 2,281.37 1,9 84.45 $1, 969.24 3 42.84 $252.00 ($343.16)

VCT.SC.I Small Business $ 268.46 414.0 2 $ 274.25 310.2 6 $ 182.80 261.2 4 $ 182.80 261 .24 ($2, 085.53 03 6.01 ) All Business Types $ 437.37 572.0 5 $ 502.51 486.2 8 $ 370 431 .88 $ 370 431 .88 ($1, 616.18 59 1.87 )
VCS.SC. M Small Business $ 249.50 272.2 6 $ 145.79 158.6 7 $ 109.55 125.7 2 $ 109.55 125 .72 ($1, 083.08 07 9.78 ) All Business Types $ 268.29 278.8 4 $ 158.07 162.8 8 $ 125.10 131.8 0 $ 125.10 131 .80 ($1, 031.06 04 2.03 )
VCS.SC. L Small Business $ 806.20 511.6 4 $ 342.36 318.9 6 $ 234.31 259.1 0 $ 193.48 213 .08 ($1, 339.58 32 6.22 ) All Business Types $ 863.65 524.5 2 $ 368.04 329.3 3 $ 256.76 267.8 1 $ 214.03 220 .83 ($1, 264.83 27 4.03 )
VCS.SC.I Small Business $ 202.73 231.0 8 $ 147.41 170.1 3 $ 124.68 146.5 4 $ 124.68 146 .54 ($1, 897.52 88 4.22 ) All Business $ 218.38 236.7 $ 159.81 176.8 $ 140.59 152.6 $ 140.59 152 ($1, 808.93 81288 CRE NOPR ECS OMB Compare 

### .docx Types 7 3 9 .69 8.87 )
SVO.SC. M Small Business $ 18.43 296.25 $ 258.96 305.2 1 $ 270.75 486.7 0 $ 270.75 397 .67 ($ 1,366.29 35 6.12 ) All Business Types $ 20.50 324.33 $ 293.95 334.8 9 $ 308.07 587.9 0 $ 308.07 491 .99 ($ 1,133.50 20 1.61 )
HZO.SC. M Small Business $ 7.50 8.16 $ 7.50 8.16 $ 40.05 44.26 $ 12.58 18.9 0 ($ 920.98 925. 33 ) All Business Types $8. 43 85 $8. 43 85 $ 45.74 48.60 $ 24.35 28.7 8 ($ 811.71 821. 57 )
HZO.SC. L ** † Small Business $0.00 NA $0.00 NA $0.00 NA $0.00 NA ($ 530.40 532. 72 ) All Business Types $0.00 NA $ NA 0.00 $ NA 0.00 $ NA 0.00 ($ 468.24 473. 71 )
HCT.SC. M Small Business $ 89.69 99.52 $ 98.34 323.44 $ 243.27 274.7 6 $ 191.91 219 .49 ($ 405.10 385. 92 ) All Business Types $ 99.37 106.59 $ 109.64 359.4 8 $ 285.69 307.2 6 $ 235.72 253 .60 ($ 300.80 293. 54 )
HCT.SC. L Small Business $ 198.51 209.0 5 $ 157.60 754.2 7 $ 667.27 544.1 4 $ 431.57 344 .36 ($ 372.73 458. 19 ) All Business Types $ 205.71 217.1 9 $ 163.89 790.5 3 $ 697.97 571.0 7 $ 458.84 368 .92 ($ 265.52 354. 75 )

HCT.SC.I Small Business $ 20. 21 .15 $ 31.60 32.20 $ 32.41 35.19 $ 32.41 35.1 9 ($ 919.02 926. 07 ) All Business Types $ 20.46 21.83 $ 33.19 34.69 $ 38.02 42.48 $ 38.02 42.4 8 ($ 807.17 811. 31 )
HCS.SC. M Small Business $ 19.88 22.47 $ 16.34 18.59 $ 14.06 16.03 $ 6.88 7.99 ($436. 25 55 ) All Business Types $ 21.34 23.07 $ 17.94 19.18 $ 15.86 16.66 $ 9.11 8.68 ($ 418.13 422. 79 )
HCS.SC. L Small Business $ 64.23 72.79 $ 69.30 78.72 $ 63.04 76.67 $ 63.04 76.6 7 ($ 440.61 422. 16 ) All Business Types $ 74. 69 .41 $ 75.74 80.97 $ 80. 72 .70 $ 80. 72 .70 ($ 407.48 400. 63 )

PD.SC.M Small Business $ 676.69 815.0 4 $ 676.69 815.0 4 $ 669.36 729.7 2 $ 185.63 187 .05 ($ 849.95 861. 56 ) All Business Types $ 934.80 1,009 .53 $ 934.80 1,009 .53 $ 939.55 933.5 9 $ 351.49 310 .43 ($ 582.78 637. 94 )
SOC .SC. M Small Business $625.01 $449.27 $1,149.04 $651.93 ($959.99) All Business Types $646.15 $466.47 $1,241.60 $739.75 ($735.33) * Only self

- contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used by small full

- service restaurants. ** ** Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values imply increase in LCC savings. † TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the LCC savings are shown as zero. “NA”. 

### Table V. 31 Percentage Change in Mean LCC Savings for the Small Business Subgroup in the Foodservice Sector Compared to National Average Values Equipment Class* TSL 1 ** TSL 2 ** TSL 3 ** TSL 4 ** TSL 5 ** VOP.SC.M

- 11% (8%)

- 11% (10%)

- 13% (15%)

- 13% (17%)

- 19% (56%) VCT.SC.M

- 36% (26%)

- 36% (30%)

- 41% (33%)

- 44% (37%)

- 88% (60%) VCT.SC.L

- 28% (25%)

- 30% (26%)

- 34% (28%)

- 35% (30%)

-289 CRE NOPR ECS OMB Compare 

### .docx 331%** (164 %) VCT.SC.I

- 39% (28%)

- 45% (36%)

- 51% (40%)

- 51% (40%)

- 29% (28%) VCS.SC.M

- 7% (2%)

- 8% (3%)

- 12% (5%)

- 12% (5%)

- 5% (4%) VCS.SC.L

- 7% (2%)

- 7% (3%)

- 9% (3%)

- 10% (4%)

- 6% (4%) VCS.SC.I

- 7% (2%)

- 8% (4%)

- 11% (4%)

- 11% (4%)

- 5% (4%) SVO.SC.M

- 10% (9%)

- 12% (9%)

- 12% (17%)

- 12% (19%)

- 21% (77%) HZO.SC.M

- 11% (8%)

- 11% (8%)

- 12% (9%)

- 48% (34%)

- ( 13 % %) HZO.SC.L † ‡ NA NA NA NA

- 13% (12%) HCT.SC.M

- 10% (7%)

- ( 10 % %)

- 15% (11%)

- 19% (13%)

- 35% (31%) HCT.SC.L

- ( 4 % %)

- 4% (5%)

- 4% (5%)

- 6% (7%)

- 40% (29%) HCT.SC.I

- 1% (3%)

- 5% (7%)

- 15% (17%)

- 15% (17%)

- ( 14 % %) HCS.SC.M

- 7% (3%)

- 9% (3%)

- 11% (4%)

- 24% (8%)

- 4% (3%) HCS.SC.L

- 7% (3%)

- 9% (3%)

- 13% (5%)

- 13% (5%)

- 8% (5%) PD.SC.M

- 28% (19%)

- 28% (19%)

- 29% (22%)

- 47% (40%)

- 46% (35%) SOC.SC.M (3%) (4%) (7%) (12%) (31%) * Negative percentage values imply decrease in LCC savings and positive percentage values imply increase in LCC savings. * Only self

- contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used by small full

- service restaurants. ** Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values imply increase in LCC savings. † This value is high because of change of sign from subgroup value to national average value. † ‡ TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hen ce, the percentage change s in LCC savings are shown as zero. “ NA ”. ‘0%’ means the value is in between

- 0.5% and 0.5%. 

### Table V. 32 Comparison of Median Payback Periods for the Small Business Subgroup in the Foodservice Sector with National Median Values

Equipment

Class * Category Median Payback Period years TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
VOP.SC.M Small Business 1. 72 77 1.83 2.38 2.44 4.52 2.44 4.81 32.49 12.46 All Business Types 1. 57 61 1.67 2.17 2.23 4.12 2.23 4.39 29.48 11.37

VCT.SC.M Small Business 2.14 0.89 2.19 1.77 2. 72 27 2. 95 61 8. 57 34 All Business Types 2.05 0.86 2.10 1.73 2. 60 21 2. 83 54 8. 22 13

VCT.SC.L Small Business 0. 44 60 0. 79 63 1.39 0.85 1.50 0.99 4.43 3.76 All Business Types 0. 43 58 0. 76 61 1.33 0.83 1.44 0.96 4.25 3.65

VCT.SC.I Small Business 2.53 0.93 3.13 1.89 3.47 2.14 3.47 2.14 17.45 14.34 All Business Types 2.32 0.86 2.87 1.74 3.17 1.97 3.17 1.97 15.97 13.21

VCS.SC.M Small Business 0. 77 74 0. 98 94 1. 74 68 1. 74 68 14.09 13.51 All Business Types 0. 80 78 1.01 0.98 1. 80 75 1. 80 75 14. 57 11

VCS.SC.L Small Business 0. 49 53 0. 59 87 1.01 0.96 1. 16 10 10. 61 11 All Business Types 0. 51 55 0. 61 91 1. 04 00 1. 19 15 10. 96 54
VCS.SC.I Small Business 0. 81 77 1. 18 99 2. 42 32 2. 42 32 27.42 26.08 All Business 0. 83 80 1.22 2.07 2. 50 42 2. 50 42 28.30 27.19290 CRE NOPR ECS OMB Compare 

### .docx Types
SVO.SC.M Small Business 1.36 2.15 2. 20 25 2.27 4.83 2.27 5.17 25.48 11.30 All Business Types 1. 25 97 2. 01 06 2.08 4.43 2.08 4.75 23.49 10.36

HZO.SC.M Small Business 2. 11 07 2. 11 07 2. 68 64 7.17 6.98 63.01 60.83 All Business Types 1. 92 89 1. 92 89 2. 43 42 6. 52 40 57.36 55.78

HZO.SC.L ** Small Business NA NA NA NA 84.11 80.27 All Business Types NA NA NA NA 76.60 73.62

HCT.SC.M Small Business 0. 76 77 0.97 2.49 2. 65 69 3. 38 43 13. 44 64 All Business Types 0. 70 69 0.89 2.24 2. 43 42 3. 09 08 12. 31 26

HCT.SC.L Small Business 0. 60 58 0.74 1.10 1. 20 15 1. 69 61 8.22 7.83 All Business Types 0. 55 53 0.67 1.00 1. 10 05 1. 55 47 7. 53 15

HCT.SC.I Small Business 1.01 0.96 2. 67 60 4. 84 67 4. 84 67 31.97 30.57 All Business Types 0. 92 88 2. 43 39 4. 42 28 4. 42 28 29.21 27.99

HCS.SC.M Small Business 0. 50 48 1. 64 57 2. 49 42 4. 09 06 33.77 32.56 All Business Types 0. 52 50 1. 69 64 2. 58 54 4. 26 28 34. 96 05

HCS.SC.L Small Business 0. 86 82 1. 36 30 2. 58 47 2. 58 47 15. 14 .38 All Business Types 0. 89 86 1. 41 36 2. 67 57 2. 67 57 15.63 14.98

PD.SC.M Small Business 1.47 0.53 1.47 0.53 1. 73 11 2. 83 28 8.16 7.63 All Business Types 0.53 0.53 1.10 2.27 7.61

SOC.SC.M Small Business 1.14 1.26 2.40 3.06 7.59 All Business Types 1. 46 12 1. 46 24 1.72 2.35 2. 82 99 8.12 7.42 * Only self

- contained equipment have been shown for this subgroup analysis because the remote condensing equipment is not generally used by small full

- service restaurants. ** TSLs 1 through 4 for equipment class HZO.SC.L are associated with the baseline efficiency level. Hence, the payback period is shown as “NA.” 

### Table V. 33 Comparison of LCC Savings for the Small Business Subgroup in the Food
- Retail Sector with the National Average Values Equipmen

t Class Category Mean LCC Savings 2010$ 2012$ * TSL1 TSL2 TSL3 TSL4 TSL5

VOP.RC. M Small Business $ 260.45 295. 31 $ 260.45 927. 25 $ 810.97 2,34 7.11 $ 547.90 1,9 70.10 ($ 6,087.04 1,5 28.98 ) All Business Types $ 216.39 235. 92 $ 216.39 743. 00 $ 677.32 1,78 8.85 $ 453.06 1,4 93.72 ($ 5,704.77 1,6 68.79 )

VOP.RC.L Small Business $ 597.95 668. 10 $ 416.96 1,89 9.69 $ 420.25 1,42 1.70 $ 420.25 1,4 21.70 ($ 4,560.67 3,8 55.19 ) All Business Types $ 501.33 537. 27 $ 345.84 1,51 6.59 $ 264.33 1,12 9.51 $ 264.33 1,1 29.51 ($ 4,266.53 3,6 92.90 )

VOP.SC. M Small Business $ 87.91 145.7 2 $ 130.26 187. 71 $ 168.95 608. 29 $ 168.95 503 .17 ($ 2,089.29 655 .21 ) All Business $ 106.45 170. 78 $ 159.12 227. 17 $ 214.15 814. 91 $ 214.15 691 .27 ($ 1,693.94 376 .52 )291 CRE NOPR ECS OMB Compare 

### .docx Types

VCT.RC. M Small Business $ 512.73 205. 12 $ 512.73 2,20 0.61 $ 1,975.37 2,0 74.57 $1, 173.96 3 13.23 ($2, 744.77 663 .30 ) All Business Types $ 450.12 175. 23 $ 450.12 1,86 4.44 $1, 749.37 75 8.73 $1, 038.12 1 08.13 ($2, 513.32 508 .61 )

VCT.RC.L Small Business $1, 255.38 58 6.15 $ 825.62 1,17 7.93 $ 626.02 937. 97 $ 626.02 937 .97 ($ 4,139.03 3,9 02.43 ) All Business Types $1, 077.91 35 7.25 $ 711.31 1,00 4.72 $ 539.92 797. 91 $ 539.92 797 .91 ($3, 781.14 624 .20 )

VCT.SC. M Small Business $ 1,261.91 53 5.27 $ 917.28 1,26 4.79 $ 712.43 1,02 4.79 $ 604.60 574 .38 ($ 737.32 784.3 5 ) All Business Types $ 1,424.70 56 6.18 $1, 038.14 36 3.60 $ 830.17 1,12 2.14 $ 717.99 641 .05 ($ 500.02 595.5 2 )

VCT.SC.L Small Business $ 1,310.49 3,9 80.86 $2, 930.10 39 6.41 $ 2,033.11 1,8 64.97 $1, 741 248

. 55 ($ 135.40 602.0 9 ) All Business Types $ 1,434.12 4,1 86.06 $ 3,227.77 2,5 22.67 $ 2,281.37 1,9 84.45 $1, 969.24 3 42.84 $252.00 ($343.16)

VCT.SC.I Small Business $ 367.00 529. 93 $ 407.67 430. 30 $ 290.82 375. 53 $ 290.82 375 .53 ($1, 939.10 881 .48 ) All Business Types $ 437.37 572. 05 $ 502.51 486. 28 $ 370 431 .88 $ 370 431 .88 ($1, 616.18 591 .87 )

VCS.SC. M Small Business $ 262.13 271. 17 $ 153.73 157. 63 $ 118.65 124. 30 $ 118.65 124 .30 ($1, 069.80 081 .39 ) All Business Types $ 268.29 278. 84 $ 158.07 162. 88 $ 125.10 131. 80 $ 125.10 131 .80 ($1, 031.06 042 .03 )

VCS.SC.L Small Business $ 845.52 510. 86 $ 359.83 318. 22 $ 248.64 258. 09 $ 206.16 211 .59 ($1, 317.72 328 .25 ) All Business Types $ 863.65 524. 52 $ 368.04 329. 33 $ 256.76 267. 81 $ 214.03 220 .83 ($1, 264.83 274 .03 )

VCS.SC.I Small Business $ 213.38 230. 24 $ 155.54 169. 16 $ 134.21 145. 08 $ 134.21 145 .08 ($1, 875.29 886 .42 ) All Business Types $ 218.38 236. 77 $ 159.81 176. 83 $ 140.59 152. 69 $ 140.59 152 .69 ($1, 808.93 818 .87 )

SVO.RC. M Small Business $ 79.24 89.01 $ 79.24 674.2 7 $ 577.44 1,54 4.54 $ 389.02 1,2 86.98 ($ 4,242.70 949 .64 ) All Business Types $ 68.05 73.77 $ 68.05 551.9 8 $ 495.44 1,21 6.77 $ 331.41 1,0 08.46 ($ 3,936.63 1,0 15.16 )

SVO.SC. M Small Business $ 17.67 285.3 7 $ 247.30 292. 93 $ 257.68 449. 78 $ 257 364 .68 ($ 1,410.15 387 .03 ) All Business Types $ 20.50 324.3 3 $ 293.95 334. 89 $ 308.07 587. 90 $ 308.07 491 .99 ($ 1,133.50 201 .61 )

SOC.RC. M Small Business $ 135.36 147. 25 $ 135.36 280. 43 $ 249.47 1,27 8.84 $ 146.81 670 .29 ($ 2,904.17 960 .27 ) All Business $ 112.80 118. 36 $ 112.80 226. 26 $ 209.19 997. 89 $ 119.60 494 .51 ($ 2,715.27 982 .21 )292 CRE NOPR ECS OMB Compare 

### .docx Types

HZO.RC. M * ** Small Business $0.00 $0.00 $0.00 $0.00 ($1, 369.23 384 .63 ) All Business Types $0.00 $0.00 $0.00 $0.00 ($1, 247.58 271 .24 )

HZO.RC. L * ** Small Business $0.00 $0.00 $0.00 $0.00 ($2, 296.27 306 .30 ) All Business Types $0.00 $0.00 $0.00 $0.00 ($2, 103.12 134 .96 )

HZO.SC. M Small Business $ 7.32 8.05 $ 7.32 8.05 $ 39.02 43.45 $ 11.28 17.8 9 ($ 923.20 927.0 1 ) All Business Types $8. 43 85 $8. 43 85 $ 45.74 48.60 $ 24.35 28.7 8 ($ 811.71 821.5 7 )

HZO.SC.L * ** Small Business $0.00 $0.00 $0.00 $0.00 ($ 531.55 533.6 0 ) All Business Types $0.00 $0.00 $0.00 $0.00 ($ 468.24 473.7 1 )

HCT.SC. M Small Business $ 84.46 93.73 $ 92.37 299.6 6 $ 224.15 253. 49 $ 173.82 199 .55 ($ 424.55 407.2 9 ) All Business Types $ 99.37 106.5 9 $ 109.64 359. 48 $ 285.69 307. 26 $ 235.72 253 .60 ($ 300.80 293.5 4 )

HCT.SC.L Small Business $ 225.93 249. 39 $ 180.05 906. 61 $ 767.25 655. 15 $ 504.10 425 .64 ($ 295.06 366.2 3 ) All Business Types $ 205.71 217. 19 $ 163.89 790. 53 $ 697.97 571. 07 $ 458.84 368 .92 ($ 265.52 354.7 5 )

HCT.SC.I Small Business $ 20. 21 .15 $ 31.60 32.20 $ 32.41 35.19 $ 32.41 35.1 9 ($ 919.02 926.0 7 ) All Business Types $ 20.46 21.83 $ 33.19 34.69 $ 38.02 42.48 $ 38.02 42.4 8 ($ 807.17 811.3 1 )

HCS.SC. M Small Business $ 20.89 22.48 $ 17.34 18.44 $15. 09 75 $7. 95 40 ($ 432.39 437.1 6 ) All Business Types $ 21.34 23.07 $ 17.94 19.18 $ 15.86 16.66 $ 9.11 8.68 ($ 418.13 422.7 9 )

HCS.SC.L Small Business $ 67.64 72.46 $ 73.34 78.02 $ 68.69 75.98 $ 68.69 75.9 8 ($ 428.99 423.2 1 ) All Business Types $ 74. 69 .41 $ 75.74 80.97 $ 80. 72 .70 $ 80. 72 .70 ($ 407.48 400.6 3 )

PD.SC.M Small Business $ 904.89 1,02 6.80 $ 904.89 1,02 6.80 $ 904.87 945. 24 $ 315.25 299 .03 ($ 716.78 744.2 7 ) All Business Types $ 934.80 1,00 9.53 $ 934.80 1,00 9.53 $ 939.55 933. 59 $ 351.49 310 .43 ($ 582.78 637.9 4 )

SOC .SC. M Small Business $619.20 $444.70 $1,138.70 $643.60 ($967.59) All Business $646.15 $466.47 $1,241.60 $739.75 ($735.33)293 CRE NOPR ECS OMB Compare 

### .docx Types
* Values in parentheses are negative values. ** TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are associated with the baseline efficiency level. Hence, the LCC savings are shown as zero. “NA.”



### Table V. 34 Comparison of Percentage of Consumers that Experience Net Benefits or No Impacts Change in Mean LCC Savings for the Small Business Subgroup in the Food
- Retail Sector with Compared to National Average Values All Business Types 

### for Commercial Refrigeration Equipment Equipment

Class TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 * VOP.RC.M 20 25 % 20 25 % 20 31 % 21 32 %

- 7 8 % VOP.RC.L 19 24 % 21 25 % 59 26 % 59 26 %

- 7% (4%) VOP.SC.M - 17% (15%) - 18% (17%) - 21% (25%) - 21% (27%) - 23% (74%) VCT.RC.M 14 17 % 14 18 % 13 18 % 13 19 %

- 9% (6%) VCT.RC.L 16 17 % 16 17 % 16 18 % 16 18 %

- 9% (8%) VCT.SC.M

- 11% (5%)

- 12% (7%)

- 14% (9%) - 16% (10%) - 47% (32%)
VCT.SC.L

- 9% (5%)

- 9% (5%)

- 11% (6%)

- 12% (7%) - 154%** (75%) VCT.SC.I

- 16% (7%) - 19% (12%) - 22% (13%) - 22% (13%) - 20% (18%) VCS.SC.M

- 2% (3%)

- ( 3 % %)

- 5% (6%)

- 5% (6%)

- ( 4 % %) VCS.SC.L

- 2% (3%)

- 2% (3%)

- 3% (4%)

- ( 4 % %)

- ( 4 % %) VCS.SC.I

- 2% (3%)

- 3% (4%)

- ( 5 % %)

- ( 5 % %)

- ( 4 % %) SVO.RC.M 16 21 % 16 22 % 17 27 % 17 28 %

- 8 6 % SVO.SC.M - 14% (12%) - 16% (13%) - 16% (23%) - 16% (26%) - 24% (92%) SOC.RC.M 20 24 % 20 24 % 19 28 % 23 36 %

- 7 2 % HZO.RC.M * † NA NA NA NA

- 10% (9%) HZO.RC.L * † NA NA NA NA

- 9% (8%) HZO.SC.M

- 13% (9%)

- 13% (9%) - 15% (11%) - 54% (38%) - 14% (13%) HZO.SC.L * † NA NA NA NA

- 14% (13%) HCT.SC.M - 15% (12%) - 16% (17%) - 22% (17%) - 26% (21%) - 41% (39%) HCT.SC.L 10% 10% 10% 10%

- 11% HCT.SC. I L

- 1 15 %

- 5 15 %

- 15%

- 15%

- 14% (3%) HCT.SC.I (3%) (7%) (17%) (17%) (14%) HCS.SC.M

- 2% (3%)

- 3% (4%)

- ( 5 % %) - 13% (15%) - ( 3 % %) HCS.SC.L

- ( 3 % %)

- 3% (4%)

- ( 6 % %)

- ( 6 % %)

- 5% (6%) PD.SC.M

- 3 2 %

- 3 2 %

- 4 1 %

- 10% (4%)

- 23% (17%) SOC.SC.M (4%) (5%) (8%) (13%) (32%) * Values in parentheses are negative values. Negative percentage values imply decrease in LCC savings and positive percentage values imply increase in LCC savings. * † TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are associated with the baseline efficiency level. Hence, the LCC savings are zero and the decrease in LCC savings are shown as

“ NA. ” **This value is high because of change of sign from subgroup value to national average value. ‘0%’ implies the value is in between

- 0.5% and 0.5%294 CRE NOPR ECS OMB Compare 

### .docx Table V. 35 Comparison of Median Payback Periods for the Small Business Subgroup in the Food
- Retail Sector with the National Median Values

Equipment

Class Category Median Payback Period years TSL1 TSL 1 TSL2 TSL 2 TSL3 TSL 3 TSL4 TSL 4 TSL5 TSL 5

VOP.RC.M Small Business 1. 87 78 1. 87 83 1.92 3.88 2.48 4.02 36.80 12.09 All Business Types 1. 83 73 1. 83 77 1.87 3.77 2.41 3.91 38. 11 .76

VOP.RC.L Small Business 1. 21 15 1.99 2.10 6.71 2.30 6.71 2.30 25.45 18.90 All Business Types 1. 18 11 1.94 2.03 6.59 2.22 6.59 2.22 24.96 18.30

VOP.SC.M Small Business 1. 90 95 2. 03 65 2.72 5.02 2.72 5.34 38.36 13.84 All Business Types 1. 57 61 1.67 2.17 2.23 4.12 2.23 4.39 29.48 11.37

VCT.RC.M Small Business 2.72 1.28 2. 72 51 3.61 2.53 3.86 2.80 14.79 13.61 All Business Types 2.63 1.23 2. 63 42 3.49 2.43 3.73 2.70 14.29 13.09

VCT.RC.L Small Business 4.38 1.35 4.42 1.57 4.49 1.71 4.49 1.71 22.78 16.40 All Business Types 4.33 1.30 4.36 1.51 4.43 1.64 4.43 1.64 22.38 15.75

VCT.SC.M Small Business 2.33 0.98 2.39 1.95 2. 97 49 3.22 2.87 9. 37 17 All Business Types 2.05 0.86 2.10 1.73 2. 60 21 2. 83 54 8. 22 13

VCT.SC.L Small Business 0. 49 65 0. 86 68 1.52 0.93 1. 65 09 4. 85 12 All Business Types 0. 43 58 0. 76 61 1.33 0.83 1.44 0.96 4.25 3.65

VCT.SC.I Small Business 2.83 1.02 3.49 2.08 3.86 2.35 3.86 2.35 19.36 15.75 All Business Types 2.32 0.86 2.87 1.74 3.17 1.97 3.17 1.97 15.97 13.21

VCS.SC.M Small Business 0. 82 79 1. 04 01 1. 85 79 1. 85 79 14. 92 45 All Business Types 0. 80 78 1.01 0.98 1. 80 75 1. 80 75 14. 57 11

VCS.SC.L Small Business 0. 52 56 0. 63 93 1. 07 03 1. 22 18 11.23 10.80 All Business Types 0. 51 55 0. 61 91 1. 04 00 1. 19 15 10. 96 54

VCS.SC.I Small Business 0. 85 82 1.25 2.12 2. 56 48 2. 56 48 29.01 27.85 All Business Types 0. 83 80 1.22 2.07 2. 50 42 2. 50 42 28.30 27.19

SVO.RC.M Small Business 1. 42 36 1.42 2.74 2.88 4.49 3.46 4.66 37.06 12.01 All Business Types 1. 38 31 1.38 2.64 2.79 4.34 3.36 4.50 38.30 11.60

SVO.SC.M Small Business 1.49 2.29 2. 41 40 2.50 5.18 2.50 5.55 29.60 12.12 All Business Types 1. 25 97 2. 01 06 2.08 4.43 2.08 4.75 23.49 10.36

SOC.RC.M Small Business 1. 31 28 1. 31 48 1.53 3.41 2.90 4.54 35.36 12.24 All Business Types 1. 28 25 1. 28 44 1.50 3.31 2.84 4.41 35.99 11.88

HZO.RC.M* Small Business 0.00 NA 0.00 NA 0.00 NA NA 0.00 175.10 166.41 All Business Types NA 0.00 NA 0.00 NA 0.00 NA 0.00 170.62 161.23

HZO.RC.L* Small Business NA 0.00 NA 0.00 NA 0.00 NA 0.00 90.99 86.47 All Business Types NA 0.00 NA 0.00 NA 0.00 NA 0.00 88.66 83.78295 CRE NOPR ECS OMB Compare 

### .docx HZO.SC.M Small Business 2. 19 14 2. 19 14 2. 79 74 7. 46 23 65.53 62.97 All Business Types 1. 92 89 1. 92 89 2. 43 42 6. 52 40 57.36 55.78

HZO.SC.L* Small Business NA 0.00 NA 0.00 NA 0.00 NA 0.00 87.36 83.02 All Business Types NA 0.00 NA 0.00 NA 0.00 NA 0.00 76.60 73.62

HCT.SC.M Small Business 0. 83 80 1.06 2.60 2. 92 81 3. 72 58 14. 80 23 All Business Types 0. 70 69 0.89 2.24 2. 43 42 3. 09 08 12. 31 26

HCT.SC.L Small Business 0. 61 59 0.75 1.12 1. 23 17 1. 72 65 8. 38 01 All Business Types 0. 55 53 0.67 1.00 1. 10 05 1. 55 47 7. 53 15

HCT.SC.I Small Business 1.01 0.96 2. 67 60 4. 84 67 4. 84 67 31.97 30.57 All Business Types 0. 92 88 2. 43 39 4. 42 28 4. 42 28 29.21 27.99

HCS.SC.M Small Business 0. 53 51 1. 73 68 2. 64 60 4. 36 39 35.80 34.88 All Business Types 0. 52 50 1. 69 64 2. 58 54 4. 26 28 34. 96 05

HCS.SC.L Small Business 0. 91 88 1. 44 40 2. 73 63 2. 73 63 16.02 15.35 All Business Types 0. 89 86 1. 41 36 2. 67 57 2. 67 57 15.63 14.98

PD.SC.M Small Business 1.61 0.58 1.61 0.58 1. 89 22 3.10 2.50 8. 93 40 All Business Types 0.53 0.53 1.10 2.27 7.61

SOC.SC.M Small Business 1.23 1.36 2.58 3.28 8.13 All Business Types 1. 46 12 1. 46 24 1.72 2.35 2. 82 99 8.12 7.42 * TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are associated with the baseline efficiency level. Hence, the payback period is shown as “NA.”



### 2. Economic Impacts on Manufacturers DOE performed an MIA to estimate the impact of amended energy conservation standards on manufacturers of commercial refrigeration equipment. 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 standards on manufacturers as well as the conversion costs that DOE estimates manufacturers would incur for all equipment classes at each TSL. To296 CRE NOPR ECS OMB Compare 

### .docx evaluate the range of cash flow impacts o n the commercial refrigeration industry, DOE modeled two different scenarios using different assumptions for markups that correspond to the range of anticipated market responses to new and amended standards.

To assess the lower (less severe) end of the r ange of potential impacts, DOE modeled a preservation of gross margin percentage markup scenario, in which a uniform “gross margin percentage” markup wa s applied across all potential efficiency levels. In this scenario, DOE assumed that a manufacturer’s ab solute dollar markup would increase as production costs increase in the amended 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 cos ts increase in response to an amended efficiency standard, particularly at higher TSLs. To assess the higher (more severe) end of the range of potential impacts, DOE modeled the preservation of operating profit markup scenario, which assumes that manufacturers would be able to earn the same operating margin in absolute dollars in the amended standards case as in the base case. Table V.36 and Table V.37 show the potential INPV impacts for commercial refrigeration equipment manufacturers : the first table at each TSL : Table V.36 reflects the lower bound of impacts and Table V.37 the second represents the upper bound.

Each of the modeled scenarios 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 difference in industry value between the base case and each potential amended standards case that results from the sum of discounted cash flows from the base297 CRE NOPR ECS OMB Compare 

### .docx year 2009 2013 through 2045 2046 , the end of the analysis period. To provide perspective on the short- run cash flow impact, DOE includes in the discussion of the results below 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.

Table . Manufacturer Impact Analysis for Commercial Refrigeration Equipment
- Preservation of Gross Margin Percentage Markup Scenario Units Base Case Trial Standard Level 1 2 3 4 5 INPV 2010$ Millions 869.3 869.0 863.8 836.2 824.4 860.4 Change in INPV 2010$ Millions - (0.2) (5.4) (33.1) (44.8) (8.9)

(%)

- (0.03) (0.63) (3.80) (5.16) (1.02) Product Conversion Costs 2010$ Millions - 5.6 6.8 7.6 7.9 51.7 Capital Conversion Costs 2010$ Millions - 0.0 8.1 56.5 79.8 222.0 Total Conversion Costs 2010$ Millions - 5.6 14.9 64.2 87.6 273.7


### Table V. 36 Manufacturer Impact Analysis for Commercial Refrigeration Equipment
- – Preservation of Operating Profit Gross Margin Percentage Markup Scenario * Units Base Case Trial Standard Level 1 2 3 4 5 INPV 2012$ Millions 1,162.0 1,158.4 1,146.9 1,135.7 1,116.1 1,136.5 Change in INPV 2012$ Millions - (3.6) (15.2) (26.3) (45.9) (25.5)

(%)

- (0.31) (1.30) (2.26) (3.95) (2.20) Product Conversion Costs 2012 $ Millions - 8.0 9.9 10.5 11.2 68.0 Capital Conversion Costs 2012 $ Millions - - 18.4 42.9 76.3 252.4 Total Conversion Costs 2012 $ Millions - 8.0 28.3 53.4 87.5 320.4 * Values in parentheses are negative values. 

### Table V . 37 Manufacturer Impact Analysis for Commercial Refrigeration Equipment – Preservation of Operating Profit Markup Scenario * Units Base Case Trial Standard Level 1 2 3 4 5 INPV 2010 2012 $ Millions 869.3 1, 162.0 859.0 1, 155.2 851. 1 ,1 35.6 805.6 1, 102.8 779.9 1,06 9.4 183.2 646.0 Change in INPV 2010 2012

- ( 10.2 6.8 ( 18.2 26. ( 63.7 59. ( 89.3 92.6 ) ( 686.1 516.298 CRE NOPR ECS OMB Compare 

### .docx $ Millions ) 4 ) 2 ) 0 ) (%) - ( 1.18 0.5 8 ) (2. 09 27 ) ( 7.32 5.0 9 ) ( 10.28 7.9 7 ) ( 78.93 44.4 1 ) Product Conversion Costs 2010 2012 $ Millions - 5.6 8.0 6.8 9.9 7.6 10.5 7.9 11.2 51.7 68.0 Capital Conversion Costs 2010 2012 $ Millions - 0.0

- 8.1 18.4 56.5 42. 9 79.8 76.3 222.0 252.4 Total Conversion Costs 2010 2012 $ Millions - 5.6 8.0 14.9 28. 3 64.2 53. 4 87. 6 5 273.7 320.4 * Values in parentheses are negative values.



### At TSL 1, DOE estimates impacts on INPV for commercial refrigeration equipment manufacturers to range from -$ 10.2 6.8 million to -$ 0.2 3. 6 million, or a change in INPV of

- 1.18 0.5 8 percent to

- 0. 03 31 percent. At this potential standard level, industry free cash flow is estimated to decrease by approximately 2. 2 85 percent to $ 81.5 89.6 million, compared to the base

- case value of $ 83.4 92.2 million in the year before the compliance date ( 2015 2016 ).

DOE anticipates no capital conversion costs at TSL 1 because manufacturers would be able to make simple component swaps to meet the efficiency levels for each equipment class at this TSL. However, small product conversion costs may be incurred in order to incorporate the new components in existing designs.

At TSL 2, DOE estimates impacts on INPV for commercial refrigeration equipment manufacturers to range from -$ 18 26.4 million to -$15 .2 million to

- $ 5.4 million , or a change in INPV of - 2. 09 27 percent to

- 0.63 1. 30 percent. At this potential standard level, industry free cash flow is estimated to decrease by approximately
7.04 12.4 8 percent to $ 77.5 80.7 million, compared to the base

- case value of $ 83.4 92.2 million in the year before the compliance date ( 2015 2016 ).299 CRE NOPR ECS OMB Compare 

### .docx At TSL 2, DOE expects mild impacts on the industry. While capital conversion costs ramp up to $ 8 18.4 million for the industry, these costs ar e entirely accounted for by the VOP.RC.L and VCT.RC.L equipment classes. This is due to the potential need for foam insulation that is a half

- inch thicker to meet the a standard

. set at this level

. Product conversion costs will also slightly increase as des ign options that require new UL or NSF certification are incorporated

. Detailed discussion can be found in chapter 12 of NOPR
TSD

.

At TSL 3, DOE estimates impacts on INPV for commercial refrigeration equipment manufacturers to range from -$ 63.7 59.2 millio n to -$ 33.1 26.3 million, or a change in INPV of

- 7.32 5. 09 percent to

- 3.8 2. 26 percent. At this potential standard level, industry free cash flow is estimated to decrease by approximately 33.52 24.6 5 percent to $ 55.4 69.5 million, compared to the base

- case value of $ 83.4 92.2 million in the year before the compliance date ( 2015 2016 ).

DOE expects mild, though slightly higher, conversion costs at TSL 3. The majority of the capital conversion costs are associated with the pot ential need for additional foam insulation for high -volume products, such as VCS.SC.M, which accounts for approximately 27 .4 percent of total shipments, and for VCS.SC.L, which accounts for
15.5 approximately 16 percent. In total, DOE expects 8 of the 24 equ ipment classes to require new production equipment due to higher standards at this level

.300 CRE NOPR ECS OMB Compare 

### .docx At TSL 4, DOE estimates impacts on INPV for commercial refrigeration equipment manufacturers to range from -$ 89.3 9 2.6 million to -$ 44.8 45.9 million, or a change in I NPV of

- 10.28 7.97 percent to

- 5.16 3. 95 percent. At this p otential proposed standard level, industry free cash flow is estimated to decrease by approximately
46.13 41.1 9 percent to $ 44.9 54 .2 million, compared to the base

- case value of $ 83.4 92.2 million in the year before the compliance date ( 2015 2016 ).

At TSL 4, the drop in INPV is largely driven by continued increases in conversion costs. The increase in conversion costs is caused by the need for new tooling to accommodate additional foam insulation. At TSL 4, DOE expects 21 18 of the 24 equipment classes to require new production equipment due to higher standards.

At TSL 5, DOE estimates impacts on INPV for commercial refrigeration

e quipment manufacturers to range from -$ 686.1 516.0 million to -$ 8.9 25 .5 million, or a change in INPV of

- 78.93 44.41 percent to

- 1.02 2. 20 percent. At this potential standard level, industry free cash flow is estimated to decrease by approximately 140.16 147.31 percent to -$ 33.5 43.6 million, compared to the base

- case value of $ 83.4 92.2 million in the year before the compliance date ( 2015 2016 ).

A substantial increase in conversion costs are expected at TSL 5 due to the possible need for vacuum insulated panel technology required to meet a standard at TSL 5. Vacuum insulated panels are not currently used by any commercial refrigeration equipment manufacturers, and the production of vacuum insulated panels would require301 CRE NOPR ECS OMB Compare 

### .docx processes different from those used to prod uce standard foam panels. Therefore, high R&D investments may be necessary to redesign commercial refrigeration equipment cases. It is possible that substantial new equipment would be necessary to produce vacuum insulated panels for commercial refrigeratio n equipment applications. Current panel production equipment that cannot be used to produce vacuum insulated panels would be retired before it reaches the end of its useful life and would become a stranded

asset.

b. 

### Impacts on Direct Employment
To quantitatively assess the impacts of amended energy conservation standards on employment, DOE considered used the GRIM to estimate the domestic labor expenditures and number of employees in the base case and at each TSL from 2013 through 2046. DOE used sta tistical data from the U.S. Census Bureau’s 2011 Annual Survey of Manufacturers (ASM), the results of the engineering analysis and responses from , the commercial refrigeration equipment shipments forecast, and interviews with manufacturers

. to determine t he inputs necessary to calculate industry

- wide labor expenditures and domestic employment levels. Labor expenditures related to manufacturing of the equipment product are a function of the labor intensity of the equipment product , the sales volume, and an as sumption that wages remain fixed in real terms over time. The total labor expenditures in each year are calculated by multiplying the MPCs by the labor percentage of MPCs.

DOE typically presents modeled quantitative estimates of the potential changes302 CRE NOPR ECS OMB Compare 

### .docx in T he total labor expenditures in the GRIM were then converted to domestic production employment that could result following amended energy conservation standards. However, for this rulemaking, DOE determined that labor costs do not change across efficiency l evels for any of the equipment classes analyzed, as explained below. Since labor inputs remain mostly constant regardless of the TSL selected, DOE does not expect employment levels to change based on the proposed standard.

by dividing production labor expenditures by the annual payment per production worker (production worker hours times the labor rate found in the U.S. Census Bureau’s 2011 ASM). The estimates of production workers in this section only account for cover workers up to the , including line

- su pervisor level that supervisors who are directly involved in fabricating and assembling a piece of equipment product within the manufacturer’s OEM facility. Workers that perform performing services that are closely associated with production operations, such as material handing with a forklift materials handling tasks using forklifts , are also included as production labor. DOE’s estimates only account for production workers who specifically manufacture the equipment specific products covered by this rulemaking.303 CRE NOPR ECS OMB Compare 

### .docx Table V . 38 Potential Change s in the Number of Commercial Refrigeration E quipment Production Workers in 2017 Trial Standard Level * Base Case 1 2 3 4 5 Total Number of Domestic Production Workers in 2017 (assuming no changes in production locations) 3,672 3,672 3,672 3,672 3,672 3,925 Range of Potential Changes in Domestic Production Workers in 2017 ** - - 3,672 to 0 - 3,672 to 0 - 3,672 to 0 - 3,672 to 0 - 3,672 to 253 *Numbers in parentheses are negative numbers. ** DOE presents a range of potential employment impacts, where the lower range represents the scenario in which all domestic manufacturers move production to other countries.


### The employment impacts shown in Table V.38 represent the potential production employment changes that could result following the compliance date of an amended energy conservation standard. The upper end of the results in the table est imates the maximum increase in the number of production workers after the implementation of new energy conservation standards and it assumes that manufacturers would continue to produce the same scope of covered products within the United States. The lower end of the range indicates the 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. Though manufacturers stated in interviews that shifts in production to foreign countries is unlikely, the industry did not provide enough information for DOE fully quantify what percentage of the industry would move production at each evaluated standard level.

The majority of design options analyzed in the engineering analysis require manufacturers to purchase more

- efficient components from suppliers. However, most of the more

- efficient These components do not require significant additional labor to assemble. Thus, labor costs are not expected to increase along with higher effic iency304 CRE NOPR ECS OMB Compare 

### .docx components. The main A key component of a commercial refrigeration equipment unit that requires fabrication labor by the commercial refrigeration equipment manufacturer is the shell of the unit, which needs to be formed and foamed in. A lthough this ac tivity may require new production equipment if thicker insulation is needed to meet higher efficiency levels, the process of building the panels would essentially remain the same, and therefore require no additional labor costs. Costs for supervisors and i ndirect labor employees (forklift drivers, quality control management, etc.) are also expected to remain constant as the overall process for manufacturing a unit would require them to hold the same responsibilities regardless of the unit’s level of efficie ncy As a result, labor needs are not expected to increase as the amended energy conservation standard increases from baseline to TSL 4

.

During interviews, manufacturers confirmed that higher efficiency standards would not have a major impact on employment. The only exception would be if an amended standard were set so high that the necessary price increases were found to be unacceptable by their customers. If industry

- wide shipments decreased from current levels, manufacturers may be forced to reduce their workforce.

At TSL 5, the introduction of hybrid vacuum insulation panels may lead to greater labor requirements. In general, the production and handling of hybrid VIPs will require more labor than the production of standard panels. This is due to the delicate nature of VIPs and the additional labor necessary to embed them into a hybrid panel. The additional labor and handling associated with hybrid panels account for the increase in305 CRE NOPR ECS OMB Compare 

### .docx labor at the m ax - tech trial standard level.

DOE notes that the employment impacts discussed here are independent of the employment impacts to the broader U.S. economy, which are documented in the Emplo y ment Impact Analysis, chapter 15 16 of the NOPR TSD.

c. 

### Impacts on Manufacturing Capacity According to the majority of commercial refrigeration equipment manufacturers interviewed, amended energy conservation standards will not significantly affect manufacturers’ production capacities. Any necessary redesign of commercial refrigeration equipment would not change the fundamental assembly of the equipment, but manufacturers do anticipate some potential for minor changes to tooling. The most significant of thes e would come as a result of any redesigns performed to accommodate additional foam insulation thickness. Additionally, most of the design options being evaluated are already available on the market as product options. Thus, DOE believes 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 manufacturers, niche equipment manufacturers, and manufacturers exhibiting a cost structure substantially different from the industry average could be affected disproportionately. As discussed in section IV.K , using average co st assumptions to develop an industry cash- flow estimate is inadequate to assess differential impacts306 CRE NOPR ECS OMB Compare 

### .docx among manufacturer subgroups.

For commercial refrigeration equipment, DOE identified and evaluated the impact of amended energy conservation standards o n 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.” Based on this d efinition, DOE identified 31 32 manufacturers in the commercial refrigeration equipment 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 m anufacturers, 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 mar kets with lower expected future returns than competing products. For these reasons, DOE307 CRE NOPR ECS OMB Compare 

### .docx conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency.

During previous stages of this rulemaking, DOE identified a number of requirements in addition to amended energy conservation standards for commercial refrigeration equipment. The following section briefly addresses comments DOE received with respect to cumulative regulatory burden and summarizes other k ey related concerns that manufacturers raised during interviews.

Certification, Compliance, and Enforcement Rule Multiple manufacturers have expressed concerns about the CC&E burdens for commercial refrigeration equipment. Traulsen stated that CC&E is the most significant cost item in terms of internal resources in the form of time and direct expenses. (Traulsen, No. 45 at pp. 4

– 5) NEEA expressed the opinion that the most significant issue associated with manufacturer impacts is testing and compliance for a wide array of equipment offerings, especially considering the large number of variations on single models. NEEA also agreed with manufacturers that testing each variation would create a significant potential burden, especially on small manufactur ers. (NEEA, No. 36 at p. 7) AHRI stated that the CC&E requirements put in place by DOE have the potential to bankrupt the industry due to the excessive number of tests required. (AHRI, No. 43 at p. 3) In addition, Southern Store Fixtures stated that it wou ld be difficult to produce information to estimate the compliance testing burden on manufacturers, as the certification and compliance requirements had not yet been finalized. (Southern Store308 CRE NOPR ECS OMB Compare 

### .docx Fixtures, Public Meeting Transcript, No. 31 at pp. 149–50) Southern Store Fixtures added that it is impossible to determine potential impacts of testing and certification on manufacturers until the issue of basic model is clarified. (Southern Store Fixtures, No. 38 at p. 1)

DOE understands that testing and certificat ion 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 customize d commercial refrigeration equipment . As a result, DOE is considering approval conducting a rulemaking to expand AEDM coverage and has issued a proposed rule to permit the application of AEDMs to establish CRE efficiency rating s in lieu of testing

. for commercial refrigeration equipment . 77 FR at 32038 (May 31, 2012). More information about the AEDM rulemaking can be found at: www1.eere.energy.gov/build ings/appliance_standards/certification_enforcement.html

.

In addition, the Department continues to review and develop more precise, product

- specific definitions for basic models and will take into account comments received when addressing this issue in th e next phase of the certification, compliance, and enforcement rulemaking.

EPA and ENERGY STAR Some stakeholders also expressed concern regarding potential conflicts with other309 CRE NOPR ECS OMB Compare 

### .docx certification programs. Traulsen stated that redundancy of testing given other Federal programs (such as EPA ENERGY STAR) , where there may be conflicting criteria, increases cost, and that cross

- references to other databases with inconsistent tests, classes, and enforcement adds further complications. Traulsen estimated that the fin ancial impact of meeting DOE and EPA ENERGY STAR requirements has been greater than 0.5 percent of revenue, and stated that it would be beneficial to reconcile the differences between DOE and EPA standards. (Traulsen, No. 45 at pp. 5

– 6) NEEA stated that th e burden of certifications and associated testing is inherent in the manufacturing industry, and that this burden should have little to do with the standards rulemaking. However, NEEA added, any steps that can be taken to harmonize test methods and procedures between certifications should be taken. ( NEEA, No. 36 at p. 7 )

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 an d certification programs from different organizations and levels of government. However, DOE notes that certain standards, such as ENERGY STAR, are optional for manufacturers. Harmonizing of test methods and procedures is not part of the energy conservatio n standards rulemaking. In its test procedure rulemaking, which culminated in the publication of the February 2012 test procedure final rule (77 FR 10292 (Feb. 21, 2012) ), DOE attempted to set the test procedure in such a way so as to maximize the similari ties between the DOE test procedure and the test procedure required for ENERGY STAR certification.310 CRE NOPR ECS OMB Compare 

### .docx Other Federal Regulations AHRI stated that there are several legislative and regulatory activities that could significantly burden manufacturers of commerc ial refrigeration equipment, including the upcoming amended energy conservation standards for walk

- in coolers and freezers. AHRI also added that climate change bills that could be presented before Congress could have significant negative impact on the avai lability and price of HFC refrigerants. (AHRI, No. 43 at p. 4)

DOE recognizes the additional burden faced by manufacturers that produce both commercial refrigeration equipment and walk

- in coolers and freezers. 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. However, DOE cannot consider the quantitative impacts of amended standards that have not yet been finalized, s uch as those for walk

- ins. Likewise, DOE cannot consider the impacts of potential climate change bills because any potential impacts would be speculative in the absence of finalized legislation.

State Regulations AHRI stated that California is currently working on new regulations as part of Title 24 that will likely establish new prescriptive requirements on commercial refrigeration equipment beginning in 2013. Additionally, AHRI added, other S tates on the West Coast are following California’s lead and are likely to implement similar regulations in the near future. Finally, AHRI commented that several States have enacted311 CRE NOPR ECS OMB Compare 

### .docx their own climate change legislation, including regulations established by CARB to limit GHGs and reduce the usage of high

- GWP refrigerants such as HFCs. AHRI stated that CARB will implement these regulations in 2011. (AHRI, No. 43 at p. 4)

According to the latest California Code of Regulations, title 24, part 6, any appliance f or which there is a California energy conservation standard established in the California Appliance Efficiency Regulations may be installed only if the manufacturer has certified to the CEC , as specified in those regulations, that the appliance complies wi th the applicable standard for that appliance. The Commission’s appliance efficiency regulations require that the MDEC (in kilowatt

- hours) for commercial refrigerators manufactured on or after January 1, 2010 does not exceed the following:

**•** r efrigerators wi th solid doors: 0.10V + 2.04

**•** r efrigerators with transparent doors: 0.12V + 3.34

**•** freezers with solid doors: 0.40V + 1.38

**•** 

### f reezers with transparent doors: 0.75V + 4.10

**•** 

### r efrigerator/freezers with solid doors: the greater of 0.27AV

– 0.71 or 0.70

**•** 

### r efrigerators with self

- condensing unit designed for pull

- down temperature applications: 0.126V + 3.51

Since these standards are identical to the ones prescribed in EPACT 2005, and the efficiency levels set by the current rulemaking will either exceed or be equivalent to the EPACT 2005 levels, DOE does not expect the Title 24 regulations to create a cumulative regulatory burden on manufacturers. California has started a rulemaking proceeding to312 CRE NOPR ECS OMB Compare 

### .docx adopt changes to the building energy efficiency standards contained in the C alifornia Code of Regulations, title 24, part 6, but the CEC is currently in the pre

- rulemaking stage and amended standards will not be published until 2013.

Further, CARB is currently limiting the in

- State use of high

- GWP refrigerants in

non- residential refrigeration systems through its Refrigerant Management Program, effective January 1, 201 1. 100 

### According to this new regulation, facilities with refrigeration systems that have a refrigerant capacity exceeding 50 pounds 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 pounds typically belong to food retail operations with remote condensing racks that store refrigerant serving multiple commercial refrigeration equipment units within a business. However, commercial refrigeration equipment units in food retail are usually installed and serviced by refrigeration contractors, not manufacturers. As a result, although these CARB regulations do apply to refrigeration technicians and owners of facilities with refrigeration systems, they are unlikely to represent a regulatory burden for commercial refrigeration manufacturers.

DOE discusses these and other requirements, and includes the full details of the cumulative regulatory burden analysis, in chapter 12 of the NOPR TSD.

100 California Air Resources Board. Refrigerant Management Program Final Regulation

. 2011. Cal. Code Regs. tit. 17, § 95386

. (Last accessed March 16, 2012.) www.arb.ca.gov/cc/reftrack/reftrackrule.html313 CRE NOPR ECS OMB Compare 

### .docx 3. National Impact A nalysis

a. 

### Amount and Significance of Energy Savings DOE estimated the NES by calculating the differen ce 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 over the 30

- year analysis period from 2016 to 2045. for all equipment purchased in 2017-2046. The energy consumption calculated in the NIA is source energy, taking into account losses in the generation and transmission of electricity as discussed in section IV.I

.

Table V.39 presents the undiscounted NES for all equipment classes at each TSL and the sum total of NES for each TSL

. and Table V.40 pres ent the NES results discounted at 7

- percent and 3

- percent discount rates , respectively. presents estimated FFC energy savings for each considered TSL

. The undiscounted total NES progressively increase s from 0. 274 236 quads at TSL 1 to 1. 302 278 quads at TSL 5

. Table V.41 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. 39 Undiscounted Cumulative National Primary Energy Savings (2016

– 2045) for E quipment P urchased in 2017–2046

Equipment Class quads * TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.007 0. 007 045 0. 042 238 0. 047 244 0. 294 257 VOP.RC.L 0.001 0. 001 005 0. 008 006 0. 008 006 0. 010 009 VOP.SC.M 0. 000 001 0. 001 003 0. 003 017 0. 003 018 0. 021 019 VCT.RC.M 0. 001 000 0. 001 007 0.009 0.009 0.010 VCT.RC.L 0. 068 061 0. 076 071 0. 082 078 0. 082 078 0.121 VCT.SC.M 0. 058 011 0. 060 057 0. 082 074 0. 087 081 0. 097 092 VCT.SC.L 0. 001 005 0.005 0. 010 006 0. 010 007 0. 011 008 VCT.SC.I 0.001 0. 002 003 0.003 0.003 0.005 VCS.SC.M 0. 044 047 0. 059 064 0. 101 111 0. 101 111 0. 159 176314 CRE NOPR ECS OMB Compare 

### .docx VCS.SC.L 0. 031 042 0. 045 064 0. 064 068 0. 070 076 0. 131 144 VCS.SC.I 0.000 0.000 0.000 0.000 0.001 SVO.RC.M 0.002 0. 002 029 0. 028 139 0. 031 142 0. 170 150 SVO.SC.M 0. 000 004 0. 004 006 0. 006 021 0. 006 022 0. 025 023 SOC.RC.M 0.001 0. 001 002 0. 002 017 0. 003 019 0. 027 020 HZO.RC.M

- - - - 0.001 HZO.RC.L

- - - - 0. 008 009 HZO.SC.M 0.000 0.000 0.000 0.000 0.000 HZO.SC.L

- - - - 0.000 HCT.SC.M 0.000 0.000 0.000 0.000 0.001 HCT.SC.L 0.001 0. 001 004 0. 005 004 0.005 0. 007 006 HCT.SC.I 0.000 0.000 0.001 0.001 0. 004 005 HCS.SC.M 0.001 0.001 0.002 0. 003 004 0. 012 013 HCS.SC.L 0.001 0.001 0.002 0.002 0. 004 005 PD.SC.M 0. 057 047 0. 057 047 0. 117 105 0. 164 157 0. 186 181 SOC.SC.M 0.000 0.000 0.002 0.002 0.002 Net NES 0. 274 233 0. 325 416 0. 566 905 0. 636 985 1. 302 257 ‘- ’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are associated with the baseline efficiency level. * A values value of 0.000 means NES values are less than 0.0005 quads. 

### Table V. 40 Cumulative National Full
- Fuel
- Cycle Energy Savings at a 7
- percent discount rate (2016
- 2045) for E quipment P urchased in 2017–2046

Equipment Class quads * TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0. 002 007 0. 002 046 0. 010 242 0. 011 248 0. 067 262 VOP.RC.L 0. 000 001 0. 000 005 0. 002 006 0. 002 006 0. 002 009 VOP.SC.M 0. 000 001 0. 000 003 0. 001 018 0. 001 018 0. 005 019 VCT.RC.M 0.000 0. 000 007 0. 002 009 0. 002 009 0. 002 010 VCT.RC.L 0. 015 062 0. 017 072 0. 019 079 0. 019 079 0. 027 123 VCT.SC.M 0. 013 011 0. 014 058 0. 019 075 0. 020 083 0. 022 094 VCT.SC.L 0.005 0.006 0.00 6 0.007 0.008 VCT.SC. L I 0. 000 001 0. 001 003 0. 002 003 0. 002 003 0. 003 005 VCS.SC.M 0.048 0.065 0.112 0.112 0.179 VCS.SC.L 0.043 0.065 0.070 0.077 0.146 VCT VCS .SC.I 0.000 0. 001 000 0. 001 000 0. 001 000 0.001 SVO.RC.M 0.002 0.030 0.141 0.144 0.152 VCS SVO .SC.M 0. 010 004 0. 013 006 0. 023 022 0. 023 022 0. 036 023 SOC.RC.M 0.001 0.002 0.018 0.019 0.020 HZO.RC.M

- - - - 0.001 VCS.SC HZO.RC

. L 0.007

- 0.010

- 0.014

- 0.016

- 0. 030 009 VCS HZO .SC. I M 0.000 0.000 0.000 0.000 0.000 HZO.SC.L

- - - - 0.000 SVO.RC HCT.SC

. M 0.000 0.000 0. 006 000 0. 007 000 0. 039 001 SVO HCT .SC. M L 0. 000 001 0. 001 004 0. 002 004 0. 002 005 0.006 SOC.RC.M HCT.S C.I 0.000 0.000 0.001 0.001 0. 006 005
HZO.RC.M

- - - - 0.000 HZO.RC.L

- - - - 0.002 HZO.SC.M 0.000 0.000 0.000 0.000 0.000 HZO.SC.L

- - - - 0.000 HCT.SC.M 0.000 0.000 0.000 0.000 0.000315 CRE NOPR ECS OMB Compare 

### .docx HCT HCS .SC. L M 0. 000 001 0. 000 001 0. 001 002 0. 001 004 0. 002 013 HCT.SC.I 0.000 0.000 0.000 0.000 0.001 HCS.SC. M L 0. 000 001 0. 000 001 0. 000 002 0. 001 002 0. 003 005 HCS PD .SC. L M 0. 000 048 0. 000 048 0. 000 106 0. 000 159 0. 001 184 PD SOC .SC.M 0. 013 000 0. 013 000 0. 027 002 0. 037 002 0. 042 002 Net NES 0. 062 236 0. 074 422 0. 129 920 1.001 0.144 0.296 1.278 ‘- ’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are associated with the baseline efficiency level. * A value of 0.000 means NES values are less than 0.0005 quads. 

### Table V. 41 Cumulative National Energy Savings at a 3
- percent discount rate

Equipment Class quads * TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.003 0.003 0.021 0.024 0.149 VOP.RC.L 0.000 0.001 0.004 0.004 0.005 VOP.SC.M 0.000 0.001 0.002 0.002 0.010 VCT.RC.M 0.001 0.001 0.005 0.005 0.005 VCT.RC.L 0.035 0.039 0.042 0.042 0.061 VCT.SC.M 0.029 0.030 0.042 0.044 0.049 VCT.SC.L 0.001 0.003 0.005 0.005 0.006 VCT.SC.I 0.001 0.001 0.002 0.002 0.002 VCS.SC.M 0.022 0.030 0.051 0.051 0.081 VCS.SC.L 0.016 0.023 0.032 0.036 0.067 VCS.SC.I 0.000 0.000 0.000 0.000 0.000 SVO.RC.M 0.001 0.001 0.014 0.016 0.086 SVO.SC.M 0.000 0.002 0.003 0.003 0.013 SOC.RC.M 0.000 0.000 0.001 0.001 0.014 HZO.RC.M

- - - - 0.000 HZO.RC.L

- - - - 0.004 HZO.SC.M 0.000 0.000 0.000 0.000 0.000 HZO.SC.L

- - - - 0.000 HCT.SC.M 0.000 0.000 0.000 0.000 0.000 HCT.SC.L 0.000 0.000 0.002 0.003 0.003 HCT.SC.I 0.000 0.000 0.001 0.001 0.002 HCS.SC.M 0.000 0.001 0.001 0.002 0.006 HCS.SC.L 0.000 0.001 0.001 0.001 0.002 PD.SC.M 0.029 0.029 0.059 0.083 0.094 Net NES 0.139 0.165 0.287 0.323 0.661

‘

- ’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L and HZO.SC.L are associated with the baseline efficiency level. *A values of 0.000 means NES values are less than 0.0005 quads.



### Table . Cumulative Energy Savings by TSL for E ach E quipment C lass Expressed as a Percent age of Cumulative Base- Case Energy Usage of the New Commercial Refrigeration Equipment Stock (2016
- 2045) P urchased in 2017
**-** 2046

Equipment

Class Total Usage 2016
- 2045 Base
Case Energy Use quads * TSL Savings a s Percent o f Total 2016
- 2045 Usage Base
- Case Energy Use TSL1 TSL 1 TSL2 TSL 2 TSL3 TSL 3 TSL4 TSL 4 TSL5 TSL 5 VOP.RC.M 1. 456 606 0% 0 3 % 3 15 % 3 15 % 20 16 % VOP.RC.L 0. 178 203 0% 1 3 % 4 3 % 4 3 % 6 4 %316 CRE NOPR ECS OMB Compare 

### .docx VOP.SC.M 0. 203 231 0 1 % 1% 2 8 % 2 8 % 10 8 % VCT.RC.M 0. 024 027 5 1 % 5 25 % 37 33 % 38 35 % 42 39 % VCT.RC.L 1. 046 198 7 5 % 7 6 % 8 7 % 8 7 % 12 10 % VCT.SC.M 0. 218 235 27 5 % 27 25 % 38 32 % 40 35 % 44 40 % VCT.SC.L 0.036 3 15 % 15% 27 18 % 28 19 % 30 22 % VCT.SC.I 0. 040 047 3% 6% 7% 7% 11 10 % VCS.SC.M 0. 408 472 11 10 % 14% 25 24 % 25 24 % 39 38 % VCS.SC.L 0. 623 720 5 6 % 7 9 % 10% 11% 21 20 % VCS.SC.I 0. 010 012 1% 2 3 % 3% 3% 9 8 % SVO.RC.M 0. 894 990 0% 0 3 % 3 14 % 3 15 % 19 15 % SVO.SC.M 0. 263 300 0 1 % 2% 2 7 % 2 7 % 9 8 % SOC.RC.M 0. 160 173 0% 0 1 % 1 10 % 2 11 % 17 12 % HZO.RC.M 0. 057 066 0% 0% 0% 0% 1% HZO.RC.L 0. 409 475 0% 0% 0% 0% 2% HZO.SC.M 0. 013 015 0% 0% 1% 1% 2% HZO.SC.L 0. 054 063 0% 0% 0% 0% 0% HCT.SC.M 0.001 5% 9 40 % 45 43 % 49 48 % 59 57 % HCT.SC.L 0.012 5 6 % 7 33 % 41 33 % 45 38 % 55 50 % HCT.SC.I 0. 015 017 1% 3% 7% 7% 28 27 % HCS.SC.M 0. 023 026 2% 5% 8% 14% 50 49 % HCS.SC.L 0. 009 010 8% 13% 21% 21% 49 48 % PD.SC.M 0. 373 401 15 12 % 15 12 % 31 27 % 44 40 % 50 46 % SOC.SC.M 0.014 3% 3% 13% 13% 14% Totals 6.5236 7.349 4 3 % 5 6 % 9 13 % 10 14 % 20 17 % * Stock energy usage in the base

- case scenario. * Energy use of the entire commercial refrigeration equipment stock in the base

- case scenario in 2017

– 2046 plus the energy use of the surviving stock of equipment in 2047

– 2060 for equipment purchased in 2017

– 2046

. ‘- ’ represents zero energy savings, since TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline e fficiency level. 

### 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 elemen ts underlying the estimates of benefits and costs. For this rulemaking, DOE undertook a sensitivity analysis using nine 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 certa in energy conservation standards and potential revision of and compliance with such revised standards. 101

101 EPCA requires DOE to review its standards at least once every 6 years (42 U.S.C. 6295(m)(1), 6316(e)), and requires, for certain products, a 3

- year period after any new standard is promulgated before compliance is required, except that in no case may any new standards be required within 6 years of the compliance date of the previous standards. (42 U.S.C. 6295(m)(4), 6316(e)).While adding a 6

- year review to the 3

- year 

### We would note that the review timeframe established in EPCA generally Comment [A43]: Revision required by OIRA.317 CRE NOPR ECS OMB Compare 

### .docx does not overlap with the product lifetime, product manufacturing cycles or other factors specific to commercial refrigeration equipment. Thus, this information is presented for informational purposes only and is not indicative of any change in DOE’s analytical methodology. The primary and full

- fuel cycle NES results based on a 9

- year analysis period are presented in Table V.42 and Table V.43 , respectively

. The impacts are counted over the lifetime of products purchased in 2017–2025.

Table V . 42 Cumulative National Primary Energy Savings for 9
- year A nalysis P eriod ( E quipment P urchased in 2017–2025)

Equipment Class quads * TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.001 0.009 0.049 0.050 0.053 VOP.RC.L 0.000 0.001 0.001 0.001 0.002 VOP.SC.M 0.000 0.001 0.004 0.004 0.004 VCT.RC.M 0.000 0.001 0.002 0.002 0.002 VCT.RC.L 0.012 0.015 0.016 0.016 0.025 VCT.SC.M 0.002 0.012 0.015 0.017 0.019 VCT.SC.L 0.001 0.001 0.001 0.001 0.002 VCT.SC.I 0.000 0.001 0.001 0.001 0.001 VCS.SC.M 0.010 0.013 0.023 0.023 0.036 VCS.SC.L 0.009 0.013 0.014 0.016 0.030 VCS.SC.I 0.000 0.000 0.000 0.000 0.000 SVO.RC.M 0.000 0.006 0.029 0.029 0.031 SVO.SC.M 0.001 0.001 0.004 0.004 0.005 SOC.RC.M 0.000 0.000 0.004 0.004 0.004 HZO.RC.M

- - - - 0.000 HZO.RC.L

- - - - 0.002 HZO.SC.M 0.000 0.000 0.000 0.000 0.000 HZO.SC.L

- - - - 0.000 HCT.SC.M 0.000 0.000 0.000 0.000 0.000 HCT.SC.L 0.000 0.001 0.001 0.001 0.001 HCT.SC.I 0.000 0.000 0.000 0.000 0.001 HCS.SC.M 0.000 0.000 0.000 0.001 0.003 HCS.SC.L 0.000 0.000 0.000 0.000 0.001 PD.SC.M 0.010 0.010 0.021 0.032 0.037 SOC.SC.M 0.000 0.000 0.000 0.000 0.000 Net NES 0.048 0.085 0.18 5 0.202 0.258

‘

- ’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. compliance period sums to 9 years, DOE notes that it may undertake reviews at any time within the 6

- year period, and that the 3 year compliance date may be extended to 5 years. A 9

- year analysis period may not be appropriate given the variability that occurs in the timing of standards reviews and the fact that, for some consumer products, the period following establishment of a new or amended standard before which compliance is required is 5 years rather than 3 years. Comment [A44]: Revision requested by OIRA. Comment [A45]: Revision requested by OIRA.318 CRE NOPR ECS OMB Compare 

### .docx * A value of 0.000 means NES values are less than 0.0005 quads. ‘- ’ represents zero energy savings, since TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level.



### Table V . 43 Cumulative Full Fuel Cycle National Energy Savings for 9
- year A nalysis P eriod ( E quipment P urchased in 2017–2025)

Equipment Class quads * TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.001 0.009 0.050 0.051 0.054 VOP.RC.L 0.000 0.001 0.001 0.001 0.002 VOP.SC.M 0.000 0.001 0.004 0.004 0.004 VCT.RC.M 0.000 0.001 0.002 0.002 0.002 VCT.RC.L 0.013 0.015 0.016 0.016 0.025 VCT.SC.M 0.002 0.012 0.015 0.017 0.019 VCT.SC.L 0.001 0.001 0.001 0.001 0.002 VCT.SC.I 0.000 0.001 0.001 0.001 0.001 VCS.SC.M 0.010 0.013 0.023 0.023 0.037 VCS.SC.L 0.009 0.013 0.014 0.016 0.030 VCS.SC.I 0.000 0.000 0.000 0.000 0.000 SVO.RC.M 0.000 0.006 0.029 0.030 0.031 SVO.SC.M 0.001 0.001 0.004 0.005 0.005 SOC.RC.M 0.000 0.000 0.004 0.004 0.004 HZO.RC.M

- - - - 0.000 HZO.RC.L

- - - - 0.002 HZO.SC.M 0.000 0.000 0.000 0.000 0.000 HZO.SC.L

- - - - 0.000 HCT.SC.M 0.000 0.000 0.000 0.000 0.000 HCT.SC.L 0.000 0.001 0.001 0.001 0.001 HCT.SC.I 0.000 0.000 0.000 0.000 0.001 HCS.SC.M 0.000 0.000 0.000 0.001 0.003 HCS.SC.L 0.000 0.000 0.000 0.000 0.001 PD.SC.M 0.010 0.010 0.022 0.033 0.038 SOC.SC.M 0.000 0.000 0.000 0.000 0.000 Net NES 0.048 0.087 0.189 0.205 0.262 ‘- ’ represents zero energy savings, since TSLs 1 through 4 for the equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. * A value of 0.000 means NES values are less than 0.0005 quads. ‘- ’ represents zero energy savings, since TSLs 1 through 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level.



### b. 

### Net Present Value of Consumer Customer Costs and Benefits DOE estimated the cumulative NPV to the Nation of the total savings for the

customer s 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.319 CRE NOPR ECS OMB Compare 

### .docx 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 discoun ts 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 Consumer Price Index), which has averaged about 3 percent o n a pre - tax basis for the last 30 years.

Table V.44 and Table V.45 show the customer NPV results for each of the TSLs DOE considered for commercial refrigeration equipment at both 7

- percent and 3

- percent discount rate s . In each case, the impacts cover the expected lifetime of equipment purchased from 20 16

– 20 45 in 2017–2046 . Detailed NPV results are presented in chapter
10 of the NOPR TSD.

The NPV results at a 7

- percent discount rate were negative for all equipment classes at TSL 5. This is consistent with the results of LCC analysis results for TSL 5, which showed significant increase in LCC and significantly high PBPs that were greater tha n the average equipment lifetimes. Efficiency levels for TSL 4 were chosen to correspond to the highest efficiency level with a positive NPV at a 7

- percent discount rate for each equipment class. Similarly, the criteria for choice of efficiency levels for TSL 3,320 CRE NOPR ECS OMB Compare 

### .docx 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 commercial refrigeration equipment i s highest for TSL 3 , with a value of $ 1. 093 705 billion ( 2010 2012 $) at a 7

- percent discount rate. TSL 4 show s the second highest total NPV , with a value of $ 1. 023 606 billion ( 2010 2012 $) at a 7

- percent discount rate. TSL 2 and TSL 1 have a total NPV lower than TSL 4, while TSL 5 has a negative total NPV of $ 8.354 6. 735 billion ( 2010 2012 $).

Table V. 44 Net Present Value at a 7
- percent Discount Rate

Equipment Class b illion 2010 2012 $ * , ** TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.016 0. 016 099 0. 099 466 0. 098 461 ( 1.720 0.466 ) VOP.RC.L 0.002 0. 003 013 0. 003 014 0. 003 014 (0. 068 062 ) VOP.SC.M 0. 001 003 0. 003 005 0. 006 027 0. 006 025 (0. 125 041 ) VCT.RC.M 0. 002 001 0. 002 013 0. 016 017 0. 016 017 (0. 056 060 ) VCT.RC.L 0. 088 141 0. 100 155 0. 106 161 0. 106 161 (1. 134 170 ) VCT.SC.M 0. 139 026 0. 141 120 0. 162 136 0. 155 129 (0. 283 340 ) VCT.SC.L 0. 003 014 0.014 0. 023 015 0. 023 015 (0. 006 016 ) VCT.SC.I 0. 002 003 0.004 0. 004 005 0. 004 005 (0. 039 042 ) VCS.SC.M 0. 114 113 0. 137 135 0. 157 153 0. 157 153 (1. 596 720 ) VCS.SC.L 0. 084 105 0. 121 138 0. 140 139 0. 138 135 (1. 001 084 ) VCS.SC.I 0.000 0. 000 001 0.001 0.001 (0. 010 011 ) SVO.RC.M 0.004 0. 004 057 0. 057 245 0. 055 240 (0. 961 231 ) SVO.SC.M 0.000 0.009 0.014 0.014 (0.127) SOC.RC.M 0.002 0.002 0.005 0.005 (0.163) HZO.RC.M

- - - - (0.037) HZO.RC.L

- - - - (0.216) HZO.SC.M 0.000 0.000 0.000 0.000 ( 0.007 ) HZO.SC.L

- - - - ( 0.006 ) HCT.SC.M 0.000 0.000 0.001 0.001 (0.002) HCT SVO .SC. L M 0. 002 008 0. 002 012 0. 013 029 0. 012 027 (0. 012 037 ) HCT.SC.I SOC.RC.M 0. 000 001 0. 001 004 0. 001 039 0. 001 031 (0. 036 056 ) HCS.SC HZO.RC .M 0.001

- 0.002

- 0.003

- 0.002

- (0. 155 039 ) HCS.SC.L 0.002 0.002 0.003 0.003 (0.020) PD.SC.M 0.150 0.150 0.280 0.225 (0.755) Sum Total 0.613 0.712 1.093 1.023 (8.534)

‘

- ’ represents zero energy savings, since TSLs 1 to 4 for the equipment classes HZO.RC.M, HZO.RC.L and - - - - (0.229) Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells321 CRE NOPR ECS OMB Compare 

### .docx HZO.SC.L are associated with the baseline efficiency level. *A values of $0.000 means NES values are less than 0.001 billion 2010$. **Values in parentheses are negative values. HZO.RC.L 

### Table . Net Present Value at a 3
- percent Discount Rate Equipment

Class b illion 2010$ * , ** TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.036 0.036 0.220 0.223 (2.837) VOP.RC.L 0.016 0.023 0.043 0.043 (0.364) VOP.SC.M 0.003 0.008 0.015 0.015 (0.229) VCT.RC.M 0.006 0.006 0.043 0.043 (0.096) VCT.RC.L 0.239 0.272 0.292 0.292 (2.079) VCT.SC.M 0.349 0.354 0.422 0.416 (0.428) VCT.SC.L 0.020 0.092 0.156 0.157 0.007 VCT.SC.I 0.006 0.010 0.011 0.011 (0.071) VCS.SC.M 0.264 0.322 0.409 0.409 (2.802) VCS.SC.L 0.189 0.272 0.328 0.330 (1.675) VCS.SC.I 0.001 0.001 0.002 0.002 (0.018) SVO.RC.M 0.010 0.010 0.146 0.145 (1.768) SVO.SC.M 0.001 0.023 0.035 0.035 (0.229) SOC.RC.M 0.004 0.004 0.013 0.012 (0.298) HZO.RC.M

- - - - (0.037) HZO.RC.L

- - - - (0.216) HZO.SC.M 0.000 0.000 0.000 0.000 (0.007) HZO.SC.L

- - - - (0.006) HCT.SC.M 0.000 0. 000 001 0.001 0.001 (0. 002 003 ) HCT.SC.L 0.002 0. 002 009 0. 013 010 0. 012 009 (0. 012 016 ) HCT.SC.I 0.000 0.001 0.001 0.001 (0. 036 039 ) HCS.SC.M 0.001 0.002 0.003 0. 002 001 (0. 155 166 ) HCS.SC.L 0.002 0.002 0.003 0.003 (0. 020 021 ) PD.SC.M 0. 150 119 0. 150 119 0. 280 237 0. 225 176 (0. 755 872 ) SOC.SC.M 0.001 0.001 0.004 0.003 (0.003) Sum Total 1.296 0.561 1.589 0.905 2.435 1.705 2.375 1.606 ( 14.133 6.735 ) ‘- ’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are associated with the baseline efficiency level. * A value of $0.000 means NES values are less than 0.001 billion 2010 2012 $. ** Values in parentheses are negative values. 

### Table V . 45 Net Present Value at a 3
- percent Discount Rate

Equipment Class b illion 2012$ * , ** TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.037 0.233 1.144 1.140 (0.549) VOP.RC.L 0.005 0.030 0.032 0.032 (0.104) VOP.SC.M 0.006 0.012 0.070 0.068 (0.053) VCT.RC.M 0.001 0.031 0.041 0.041 (0.100) VCT.RC.L 0.327 0.363 0.383 0.383 (2.017)322 CRE NOPR ECS OMB Compare 

### .docx VCT.SC.M 0.059 0.283 0.331 0.326 (0.524) VCT.SC.L 0.031 0.032 0.035 0.035 (0.020) VCT.SC.I 0.007 0.011 0.012 0.012 (0.071) VCS.SC.M 0.259 0.316 0.398 0.398 (2.976) VCS.SC.L 0.239 0.323 0.329 0.327 (1.837) VCS.SC.I 0.001 0.001 0.002 0.002 (0.018) SVO.RC.M 0.008 0.137 0.615 0.608 (0.249) SVO.SC.M 0.018 0.028 0.078 0.074 (0.043) SOC.RC.M 0.003 0.010 0.093 0.079 (0.078) HZO.RC.M

- - - - (0.071) HZO.RC.L

- - - - (0.411) HZO.SC.M 0.000 0.000 0.000 0.000 (0.013) HZO.SC.L

- - - - (0.012) HCT.SC.M 0.000 0.002 0.002 0.002 (0.004) HCT.SC.L 0.004 0.022 0.022 0.022 (0.023) HCT.SC.I 0.001 0.002 0.003 0.003 (0.066) HCS.SC.M 0.003 0.005 0.007 0.006 (0.292) HCS.SC.L 0.004 0.006 0.007 0.007 (0.034) PD.SC.M 0.270 0.270 0.551 0.494 (1.406) SOC.SC.M 0.002 0.002 0.009 0.008 (0.003) Sum Total 1.285 2.118 4.165 4.067 (10.972)

‘

- ’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. * A value of $0.000 means NES values are less than 0.001 billion 2012$

. ** Values in parentheses are negative values. 

### The NPV results based on the aforementioned 9

- year analysis period are presented in Table V.46 and Table V.47 . The impacts are counted over the lifetime of products purchased in 2017–2025. 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 . 46 Net Present Value at a 7- percent Discount Rate for 9 -y ear A nalysis P eriod ( Equipment Purchased in 2017–2025) Equipment Class billion 2012$ * , ** , † TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.008 0.039 0.154 0.150 (0.294) VOP.RC.L 0.001 0.005 0.005 0.005 (0.032) VOP.SC.M 0.001 0.002 0.008 0.007 (0.025) VCT.RC.M 0.000 0.005 0.006 0.006 (0.031) VCT.RC.L 0.054 0.059 0.060 0.060 (0.583) VCT.SC.M 0.011 0.045 0.049 0.044 (0.182) VCT.SC.L 0.005 0.005 0.006 0.006 (0.009) VCT.SC.I 0.001 0.002 0.002 0.002 (0.021) VCS.SC.M 0.043 0.051 0.049 0.049 (0.858) VCS.SC.L 0.041 0.051 0.051 0.047 (0.548) VCS.SC.I 0.000 0.000 0.000 0.000 (0.005)323 CRE NOPR ECS OMB Compare 

### .docx SVO.RC.M 0.003 0.021 0.078 0.075 (0.151) SVO.SC.M 0.003 0.004 0.008 0.007 (0.024) SOC.RC.M 0.001 0.002 0.014 0.009 (0.032) HZO.RC.M

- - - - (0.019) HZO.RC.L

- - - - (0.111) HZO.SC.M 0.000 0.000 0.000 (0.000) (0.004) HZO.SC.L

- - - - (0.003) HCT.SC.M 0.000 0.000 0.000 0.000 (0.001) HCT.SC.L 0.001 0.004 0.004 0.003 (0.009) HCT.SC.I 0.000 0.000 0.000 0.000 (0.019) HCS.SC.M 0.001 0.001 0.001 0.000 (0.082) HCS.SC.L 0.001 0.001 0.001 0.001 (0.011) PD.SC.M 0.047 0.047 0.090 0.049 (0.455) SOC.SC.M 0.000 0.000 0.001 0.001 (0.002) Sum Total 0.221 0.343 0.586 0.521 (3.509)

‘

- ’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. *A value of $0.000 means NES values are less than 0.001 billion 2012$

. **Values in parentheses are negative values. †The impacts were calculated over the lifetime of the equipment purchased in 2017

– 2025



### Table V . 47 Net Present Value at a 3- percent Discount Rate for 9 -y ear A nalysis period ( E quipment P urchased in 2017–2025)

Equipment Class billion 2012$ * , ** , † TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 VOP.RC.M 0.013 0.063 0.267 0.263 (0.330) VOP.RC.L 0.001 0.008 0.008 0.008 (0.040) VOP.SC.M 0.002 0.003 0.015 0.014 (0.028) VCT.RC.M 0.001 0.008 0.010 0.010 (0.039) VCT.RC.L 0.088 0.096 0.099 0.099 (0.753) VCT.SC.M 0.017 0.073 0.083 0.077 (0.222) VCT.SC.L 0.008 0.009 0.009 0.009 (0.011) VCT.SC.I 0.002 0.003 0.003 0.003 (0.027) VCS.SC.M 0.069 0.082 0.090 0.090 (1.111) VCS.SC.L 0.064 0.083 0.084 0.080 (0.702) VCS.SC.I 0.000 0.000 0.000 0.000 (0.007) SVO.RC.M 0.004 0.036 0.138 0.135 (0.166) SVO.SC.M 0.005 0.007 0.016 0.014 (0.027) SOC.RC.M 0.001 0.003 0.023 0.017 (0.038) HZO.RC.M

- - - - (0.025) HZO.RC.L

- - - - (0.147) HZO.SC.M 0.000 0.000 0.000 (0.000) (0.005) HZO.SC.L

- - - - (0.004) HCT.SC.M 0.000 0.000 0.000 0.000 (0.002) HCT.SC.L 0.001 0.006 0.006 0.006 (0.011) HCT.SC.I 0.000 0.000 0.001 0.001 (0.025) HCS.SC.M 0.001 0.001 0.002 0.001 (0.107) HCS.SC.L 0.001 0.001 0.002 0.002 (0.014) PD.SC.M 0.074 0.074 0.145 0.102 (0.568) SOC.SC.M 0.001 0.001 0.002 0.002 (0.002) Sum Total 0.352 0.558 1.003 0.934 (4.410) ‘- ’ represents zero energy savings, since TSLs 1 to 4 for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L are associated with the baseline efficiency level. * A value of $0.000 means NES values are less than 0.001 billion 2012$

.324 CRE NOPR ECS OMB Compare 

### .docx ** Values in parentheses are negative values. † The impacts were calculated over the lifetime of the equipment purchased in 2017

– 2025



### c. 

### 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 energy amended conservation standards for commercial refrigeration equipment to reduce energy bills for commercial cus tomers, 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 commercial refrigeration equipment 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

var iety of businesses not directly involved in the decision to make, operate, or pay the utility bills for commercial refrigeration equipment. To estimate these indirect economic effects, DOE used an input/output model of the U.S. economy using U.S. Departmen t of Commerce, Bureau of Economic Analysis (BEA) and BLS data (as described in section
IV.L of this notice ; see chapter 14 16 of the NOPR TSD for mo re details).

In this Customers who purchase more

- efficient equipment pay lower amounts towards utility bills, which results in job losses in the electric utilities sector. However, i n the input/output model, the dollars s aved on utility bills from more

- efficient commercial refrigeration equipment are concentrated are re - invested in economic sectors that create more jobs than are lost in the electric utilities sector when spending is shifted from325 CRE NOPR ECS OMB Compare 

### .docx electricity to other products and services . Thus, the propos ed amended energy conservation standards for commercial refrigeration equipment 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. Neithe r the BLS data nor the input/output model used by DOE includes the quality of jobs. As shown in Table
V. 43 48 , DOE estimates that net indirect employme nt impacts from a proposed commercial refrigeration equipment amended standard are small relative to the national
economy.

Table V. 48 Net Short -T erm Change in Employment * Trial Standard Level 2016 * 201 7 2020 * 2021 1 4 35 to 15 38 64 198 to 76 201 2 4 53 to 17 61 74 345 to 89 354 3 ( 4 ) 74 to 27 108 118 719 to 153 749 4 ( 24 ) 60 to 28 105 113 760 to 171 801 5 ( 752 728 ) to ( 61 363 ) ( 588 ) 130 to 181 504
* Values in parentheses are negative values

.



### 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 scree ning 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 tentatively concluded that none of the efficiency levels proposed for commercial refrigeration eq uipment 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 Field Code Changed326 CRE NOPR ECS OMB Compare 

### .docx amended standards. It directs the 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 6316(e)(1) ) To assist the Attorney General in making such a determination, DOE provided the Department of Justice (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 commercial refrigeration equipment industry, but not in significant numbers

. Manufacturers also stated t hat consolidation has occurred among commercial refrigeration equipment 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 amen ded standards would result in domestic firms moving their production facilities outside the United States. The majority of commercial refrigeration equipment is manufactured in the United States and, during interviews, manufacturers in general indicated th ey 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 N ation’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, presents the estimated reduction Reductions in national electric generating capacity in 20 45 estimated for the327 CRE NOPR ECS OMB Compare 

### .docx TSLs that DOE each considered in this rulemaking

. TSL are reported in chapter 14 of the
NOPR TSD.

Table . Reduction in Electric Generating Capacity in 20 45 TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 Capacity Reduction GW 0.09 0.11 0.1 9 0.2 2 0.4 5



### Energy savings from amended standards for commercial refrigeration equipment could also produce environmental benefits in the form of reduced emissions of air pollutants and GHG s associated with electricity production. Table V.49 provides DOE’s estimate of cumulative CO 2 

### , NO x 

### , and Hg 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.N . DOE reports annual CO 2 

### , NO x 

### , SO 2 

### , NO 2 

### , CH 4 

### and Hg emissions reductions for each TSL in the environmental assessment in chapter 16 15 of the NOPR TSD.

Table . Summary of Emissions Reduction Estimated for Commercial Refrigeration Equipment TSLs (cumulative for 20 16 through 20 45 ) Trial Standard Level Cumulative Reduction in Emissions (20 16 through 20 45 ) CO 2 MMt NO x kt Hg t 1 21.93 5.6 ( 0.111 ) 2 25.99 6.63 ( 0.132 ) 3 44.59 11.38 ( 0.226 ) 4 51.08 13.03 ( 0.259 ) 5 104.21 26.59 ( 0.528 )



### As discussed in Section IV.N , DOE did not report SO 2 

### emission reductions from power plants due to amended standards because there is uncertainty about the effect of energy conservation standards on the overall level of S O 2 

### emissions in the United States328 CRE NOPR ECS OMB Compare 

### .docx due to SO 2 

### emission caps. DOE also did not include NO x 

### emission reduction from power plants in States subject to C AIR because an amended energy conservation standard would not affect the overall level of NO x 

### emissions in those States due to the emission caps mandated by C AIR

. 70 FR 25162 (May 12, 2005)

.

Table V . 49 Cumulative Emissions Reduction Estimated for Commercial Refrigeration Equipment TSLs for E quipment P urchased in 2017–2046 TSL 1 2 3 4 5 Primary Emissions CO 2 (million metric tons) 12.22 21.83 47.55 51.77 66.05 NO X (thousand tons) 9.05 16.18 35.23 38.36 48.93 Hg ( tons) 0.03 0.05 0.10 0.11 0.14 N 2 O ( thousand tons ) 0.26 0.47 1.02 1.11 1.42 CH 4 ( thousand tons ) 1.53 2.73 5.95 6.48 8.27 SO 2 ( thousand tons ) 16.39 29.28 63.78 69.43 88.58 Upstream Emissions CO 2 (million metric tons) 0.73 1.31 2.85 3.10 3.96 NO X (thousand tons) 10.08 18.01 39.23 42.71 54.49 Hg ( tons) 0.000 0.001 0.002 0.002 0.002 N 2 O ( thousand tons ) 0.01 0.01 0.03 0.03 0.04 CH 4 ( thousand tons ) 61.23 109.39 238.27 259.41 330.92 SO 2 ( thousand tons ) 0.16 0.28 0.61 0.67 0.85 Total Emissions CO 2 (million metric tons) 12.95 23.14 50.41 54.88 70.01 NO X (thousand tons) 19.14 34.19 74.46 81.07 103.42 Hg ( tons) 0.03 0.05 0.10 0.11 0.14 N 2 O ( thousand tons ) 0.27 0.48 1.05 1.15 1.46 CH 4 ( thousand tons ) 62.76 112.13 244.22 265.89 339.19 SO 2 ( thousand tons ) 16.55 29.56 64.39 70.10 89.43


### As part of the analysis for this NOPR, DOE estimated monetary benefits likely to result from the reduced emissions of CO 2 

### and NO x 

### that DOE estimated for each of the TSLs considered. As discussed in section IV.O , for CO 2 

### , DOE used values for the SCC developed by an interagency process. The The interagency group selected four sets of
SCC values for CO 2 

### emission reductions resulting from that process (expressed in 20 10 $) are $ 4. 9 /ton (the average value from a distribution that uses a 5

- percent discount rate), $ 2 2.3 /ton (the average value from a distribution that uses use in regulatory analyses

. Comment [A46]: Revision requested by OIRA.329 CRE NOPR ECS OMB Compare 

### .docx 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 95 th



### - percentile SCC estimate across all three models at a 3

- percent discount rate ), $ 3 6.5 /ton (the average value from a distribution that uses a 2.5

- percent discount rate), and $ 6 7.6 /ton (the 95 th



### - percentile value from a distribution that uses a 3

- percent discount rate). These values correspond , is included to the value of emission reductio ns in 2010 ; the values for represent higher

- than

- expected impacts from temperature change further out in the tails of the SCC distribution

. The four SCC values for CO 2 

### emissions reductions in 2015, expressed in 2012 $, are $ 12.9 /ton, $ 40.8 /ton, $ 62.2 /ton, a nd $117.0 /ton. These values for later years are higher due to increasing damages emissions

related costs as the magnitude of projected climate change is expected to increase.

Table V.50 For each TSL, DOE calculated presents the global present values of
CO 2 

### emission reductions, using the same discount rate as was used in the studies upon which the dollar

- per - ton values are ba sed. value of CO 2 

### 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 1 4 of the NOPR TSD

.

Table V . 50 Global Present Value of CO 2 

### Emissions Reduction f or Potential Standards for Commercial Refrigeration Equipment

TSL SCC Scenario*
5% discount rate, average 3% discount rate, average 2.5% discount

rate, average 3% discount rate, 95 th percentile million 2012$ Primary Emissions 1 68.6 335.1 546.1 1,013.7 2 122.6 598.7 975.6 1,811.1 3 266.9 1,304.1 2,124.9 3,944.8330 CRE NOPR ECS OMB Compare 

### .docx 4 290.6 1,419.8 2,313.4 4,294.8 5 370.7 1,811.2 2,951.2 5,478.8 Upstream Emissions 1 4.0 20.0 32.6 60.6 2 7.2 35.7 58.3 108.3 3 15.8 77.8 126.9 236.0 4 17.1 84.7 138.1 256.9 5 21.9 108.1 176.2 327.7 Total Emissions 1 72.6 355.1 578.7 1,074.4 2 129.8 634.4 1,033.8 1,919.5 3 282.7 1,381.9 2,251.8 4,180.7 4 307.8 1,504.5 2,451.6 4,551.7 5 392.6 1,919.2 3,127.4 5,806.5 * For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.9, $40.8, $62.2 and $117.0 per metric ton (2012$).


### DOE is well aware that scientific and economic knowledge about the contribution of CO 2 

### and other GHG emissions to changes in the future global climate and the potential resulting damages to the world economy continues to evolve rapidly. Thus, any value placed in this NOPR on reducing CO 2 

### emissions is subject to change. DOE, together with

o ther Federal agencies, will continue to review various methodologies for estimating the monetary value of reductions in CO 2 

### 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 NO x 

### emission reductions anticipated to result from amended commercial refrige ration equipment standards. Estimated monetary benefits for CO 2 

### and
NO x 

### emission reductions are detailed in chapter 14 of the NOPR TSD. Table V.51 1 7 of331 CRE NOPR ECS OMB Compare 

### .docx the NOPR TSD presents the present value of cumulative NO x 

### emissions reductions for each TSL calculated using the average dollar

- per - ton values and 7- percent and 3- percent discount rates

. Table V . 51 Present Value of NO x 

### Emissions Reduction for Potential Standards for Commercial Refrigeration Equipment TSL 3% Discount Rate 7% Discount Rate million 2012$ Primary Emissions 1 12.0 5.6 2 21.4 10.0 3 46.6 21.7 4 50.7 23.6 5 64.7 30.1 Upstream Emissions 1 13.4 6.2 2 24.0 11.0 3 52.3 24.0 4 56.9 26.1 5 72.6 33.3 Total Emissions 1 25.4 11.7 2 45.4 21.0 3 98.9 45.7 4 107.6 49.8 5 137.3 63.5



### 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.52 present s the NPV values that result from adding the estimates of the potential economic benefits resulting from reduced CO 2 

### and NO X 

### emissions in each of four valuation scenarios to the NPV of c onsu mer savings calculated for each TSL considered in this NOPR. shows, as an example, results of the calculation of the combined NPV including benefits from emission reductions for TSL 4 rulemaking, at both a 7- percent and a 3- percent discount rate

. The CO 2 

### values used in the table correspond to the four scenarios for the valuation of CO 2 

### emission reductions discussed above.332 CRE NOPR ECS OMB Compare 

### .docx Table V. 52 Adding Commercial Refrigeration Equipment TSLs : Net Present Value of C onsumer Savings to Combined with Net Present Value of Monetized Benefits from CO 2 

### and NO X 

### Emission Emissions Reductions at TSL 4 for Commercial Refrigeration Equipment

Category TS L Consumer NPV at 3% Discount Rate added with: Prese nt Value millio

n 2010$ Benefits Operating Cost Savings 7% 1,838 3% 4,280 Merged Cells Deleted Cells333 CRE NOPR ECS OMB Compare 

### .docx CO2 Reduction Monetized SCC Value (at $4 of $ 12 .9 /metric ton )** CO 2 * and Low Value for NO X ** 5% SCC Value of $ 40.8 /metric ton CO 2 * and Medium Value

for NO X ** 18 5 SCC Value of $ 62.2 /metric ton CO 2 * and Medium Value

for NO X ** SCC Value of $ 117.0 /metric ton CO 2 * and High Value for NO X **

CO2 Reduction Monetized Value (at $22.3/Metric

Ton)** 3% billion 2012$ 9 39

CO2 Reduction Monetized Value (at $36.5/Metric

Ton)** 1 2.50% 1.362 1 ,5 88 .665 1.889 2.406

2 2.256 2.798 3.197 4.120 3 4.466 5.646 6.516 8.5 4 26 4.394 5.679 6.6 8.815 26 5 ( 10.555 ) ( 8.916 ) ( 7.708 ) ( 4.916 )

TSL Consumer NPV at 7% Discount Rate added with: CO2 Reduction Monetized Value (at $67.6/Metric

Ton)** SCC

Value of $ 12.9 /metric ton CO 2 * and Low Value for NO X ** 3% SCC Value of $ 40.8 /metric ton CO 2 * and Medium Value

for NO X ** 2,8 65 SCC Value of $ 62.2 /metric ton CO 2 * and Medium Value

for NO X ** SCC Value of $ 117.0 /metric ton CO 2 * and High Value for NO X **

NO x Reduction Monetized Value (at $2,543/Ton) ** 7% billion 2012$ 10.4

1 0.636 3% 19. 2 0.928 1.151 1.657 Total Benefits (Operating

Cost Savings,

CO 2 Reduction and NO x Reduction)† 2 7% 1.038 1.560 1.959 2 ,7 87 .862

3 1.996 3 % .133 4.002 5 ,2 38 .969 Costs Total Incremental Installed Costs 7% 815 4 1.922 3 % .160 1,562 4.107 6.248 Net Benefits/Costs Inserted Cells Inserted Cells

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### .docx Total Benefits Less Incremental Costs 7% 1,97 2 5 3% ( 6.331 ) ( 4.752 ) ( 3 ,67 6 .544 ) ( 0.813 ) Note: Parentheses indicate negative values.
* These label values represent the global values ( SCC in 20 10 $) of the social cost of CO 2 emissions 2015, in 2010 under several scenarios. 2012$

. The present values of $4.9 , $22.3, and $36.5 per ton are the averages of SCC distributions have been calculated using 5 percent, 3 percent, and 2.5 percent with scenario

- consistent discount rates , respectively. The value of $67.6

. ** Low Value corresponds to $468 per ton of NO X emissions

. Medium Value corresponds to $2,639 per ton represents the 95 th percentile of the SCC distribution calculated using a 3

- percent discount rate. See section for details. For NO x , an average value ($2,543) of the low ($451) and high ($4,635) values was used. ** Total monetary b enefits for both the 3 percent and 7 percen t cases utilize the central estimate of social cost of NO x and CO 2 emissions calculated at a 3

- percent discount rate (averaged across three IAMs), which is equal to $22.3/ton in 2010 (in 20 10 $). of NO X emissions

. High Value corresponds to $4,809 per ton of NO X emissions.


### Although adding the value of consumer c ustomer savings to the values of emission reductions provides a valuable perspective, two issues should be considered

. First, the national consumer operating cost savings are domestic U.S. consumer customer monetary savings found in that occur as a result of market transactions, while the value of emission CO 2 

### reductions are based on estimates of marginal social costs, which, in the case of CO 2 

### , are is based on a global value

. Second, the assessments of

consumer operating cost savings and emission

- related benefits the SCC are performed with different computer models, leading to methods that use quite different time frames for analysis

. For commercial refrigeration equipment , the pr esent value of The national

consumer operating cost savings is measured for the period in which units lifetime of products shipped (20 16

– 20 45 ) continue to operate. However, the time frames of the benefits associated with the emission reductions differ. For e xample, the value of CO 2 

### emission reductions in a given year reflects the present value of all in 2017–2046. The SCC values, on the other hand, reflect the present value of future climate

- related impacts due to emitting a resulting from the emission of one metric ton of CO 2 

### in that year, out to the year each year

. These impacts continue well beyond 2100. Inserted Cells Inserted Cells335 CRE NOPR ECS OMB Compare 

### .docx Chapter 1 7 of the NOPR TSD presents calculations of the combined NPV including benefits from emission reductions for each TSL.

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 6316(e)(1)) DOE considered LCC impacts on identifia ble groups of customers, such as customers of different business types, who may be disproportionately affected by any amended national energy conservation standard le vel

. DOE also considered the reduction in generat ion capacity that could result from the i mposition of any amended national energy conservation standard level.

DOE carried out a RIA , as described in section IV.P , to study the impact of certain non

- regulatory alternatives that may encoura ge 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
pr ogram s available in the United States. Typically, rebates are offered for grocery stores that retrofit their display cases with energy efficiency components such as LED lamps, electronically commutated motor ( ECM ) fan motors, night curtains , and higher efficiency doors. Based on comparison with the incremental MSP values obtained from the engineering analysis, DOE chose to model a scenario in which consumers customer s are offered, as rebates, 60 percent of the incremental equipment installed cost. The value of336 CRE NOPR ECS OMB Compare 

### .docx 60 percent is very high compared to most rebate programs and was chosen to represent the maximum possible rebate scenario.

For the tax credit s scenario, DOE did not find a suitable program by which to model the scenario. Therefore, DOE used a 5

- percent/10

- percent tax credit scenario. DOE first calculated the MSP increments over baseline for each TSL for each equipment class. For TSLs that had an increase in MSP between 10 and 15 percent over the baseline MSP, DOE applied a 5

- percent tax credit, where the amount of tax credit was equal to 5 percent of the MSP of the higher efficiency equipment. For TSLs that had increase of 15 percent or more in MSP values over the baseline MSP, DOE applied a 10

- percent tax credit. This type of tax credit scenario is an attempt to approximate a model in which the tax credits are proportional to the magnitude of efficiency improvement with the implicit assumption that the magnitude of the increase in MSP is proportional to the magnitude of increase in energy efficiency.

Table V.53 and Table V.54 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 4 , 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.

Table V. 53 Cumulative NES Primary Energy Savings of Non
- Regulatory Alternatives Compared to the Proposed Standards for Commercial Refrigeration Equipment * Policy Alternatives Cumulative NES Q uads No new regulatory action 0337 CRE NOPR ECS OMB Compare 

### .docx Consumer Customer tax credits 0. 12 151 Customer rebates 0. 119 198 Voluntary energy efficiency targets ** 0 NA Early replacement ** 0 NA Proposed standards (TSL 4) 0. 636 985 *Chapter 17 of the TSD describes the inputs and their respective source s for the RIA

. ** Analysis of two non

- regulatory alternatives: voluntary energy efficiency targets and early replacement w ere not performed as DOE expected minimal potential benefits as discussed in Chapter 17 of the TSD. 

### Table V. 54 Cumulative NPV of Non
- Regulatory Alternatives Compared to the Proposed Standards for Commercial Refrigeration Equipment Policy Alternatives Cumulative Net Present Value billion 2010 2012 $ 7% Discount 3% Discount No new regulatory action 0 0 Consumer Customer tax credits 0. 172 2 57 0. 334 4 89 Customer rebates 0. 101 0 55 0. 197 122 Voluntary energy efficiency targets * 0 NA 0 NA Early replacement * 0 NA 0 NA Proposed standards (TSL 4) 1. 023 606 2.718 4. 067
* Analysis of two non

- regulatory alternatives: voluntary energy efficiency targets and e arly replacement , w ere not performed as DOE expect ed minimal potential benefits as discussed in Chapter 17 of the TSD.


### 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 proposed standards, it is subject to the EPCA requirement that any new or amended energy conservation standard fo r 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 6316(e)(1) ) In determining wheth er

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 Comment [A47]: Revision requested by O IRA

. Comment [A48]: Revision requested by O IR A

. Comment [A49]: Revision requested by O IRA

. Comment [A50]: Revision requested by O IRA

.

Comment [A51]: Revision requested by O IRA

. Comment [A52]: Revision requested by O IRA

. Comment [A53]: Revision requested by O IRA

. Comment [A54]: Revision requested by O IRA

.338 CRE NOPR ECS OMB Compare 

### .docx the seven statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B )(i) and 6316(e)(1) ) The new or amended standard must also result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(e)(1) )

DOE considered the impacts of potential 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 , i ncluding NES , NPV (discounted at 7 and 3 percent), emission reductions, INPV , LCC , and

consumers ’ customer s’ 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.55 , Table V.56 , Table V.57 and Table V.58 present a summary of the results of DOE’s quantitative analysis for each TSL. In addition to the quantitative results presented in the tables, DOE also considers other burdens and benefits that affect economic justification of certain consumer customer subgroups that are disproportionately339 CRE NOPR ECS OMB Compare 

### .docx affected by the proposed standards . Section V.B.7 presents the estimated impacts of each TSL for these subgroups.

Table V. 55 Summary of Results for Commercial Refrigeration Equipment TSLs: National Impacts † 

### * Category TSL 1 TSL 2 TSL 3 TSL 4 TSL5 Cumulative National Energy Savings 2016 2017 through 2045 2060 quads Undiscoun ted values 0. 274 236 0. 325 422 0. 566 920 0.636 1.001 1. 302 278 Cumulative NPV of Consumer Customer Benefits 2016 2017 through 2045 2060 2010 201 2 $ billion 3% discount rate $ 1. 500 285 1.750 $ 2.118 2.771 $ 4.165 2.718 $ 4.067 ( 15.096 ($ 10.972 ) 7% discount rate $ 0. 613 561 $ 0. 712 905 $ 1. 093 705 $ 1. 023 606 ( 8.534 ($6.735 ) Industry Impacts Change in Industry NPV ( 2010 201 2 $ million) ( 10.2 3.6 ) to ( 0.2 6.8 ) ( 18 15 .2) to ( 5 26 .4) ( 63.7 26.3 ) to ( 33.1 59.2 ) ( 89.3 45.9 ) to ( 44.8 92.6 ) ( 686.1 25.5 ) to ( 8.9 516.0 ) Change in Industry NPV (%) ( 1.18 0.58 ) to (0. 03) 31) (2. 09 27 ) to ( 0.63) 1.30) ( 7.32 5.09 ) to ( 3.8) 2.26) ( 10.28 7.97 ) to ( 5.16) 3.95) ( 78.93 44.41 ) to ( 1.02) 2.20) Cumulative Emissions Reductions 2016 201 7 through 2045 20 60 CO 2 (MMt )* )** 21.93 12.95 26.02 23.14 45.33 50.41 50.91 54.88 104.21 70.01 NO x (kt )* )** 5.6 19.14 6.64 34.19 11.57 74.46 12.99 81.07 26.59 103.42 Hg (t )* )** ( 0. 111 ) 03 ( 0. 132 ) 05 ( 0. 23 ) 10 ( 0. 258 ) 11 ( 0. 528 ) 14 N 2 O (kt ) ** 0.27 0.48 1.05 1.15 1.46 N 2 O (kt CO 2 eq ) ** 80.56 143.92 313.48 341.29 435.39 CH 4 ( kt ) ** 62.76 112.13 244.22 265.89 339.19 CH 4 ( kt CO 2 eq ) ** 1,568.96 2,803.13 6,105.43 6,647.15 8,479.71 SO 2 (kt)** 16.55 29.56 64.39 70.10 89.43 Monetary Value of Cumulative Emissions Reductions 2016 201 7 through 2045** 20 60 † CO 2 ( 2010$ billion 201 2 $ m illion ) 0.08 73 to 1 .23 ,074 0.09 130 to 1 .46 ,919 0.16 283 to 2.55 4,181 0.18 308 to 2.86 4,552 0.38 393 to 5 .86 ,807 NO X – 3% discount rate ( 2010 201 2 $ million) 1 4 .5 to 15.1 46.3 8. 1 .7 to 17.9 82.7 3.0 to31 17.5 to 180 .2 3.4 19.1 to 35.1 196.2 7.0 24.4 to 71.4 250.2

NO x – 7% 0.8 2.1 to 0.9 3.7 to 8. 1 .6 to 16.9 83.3 1.9 8.8 to 19 90.7 11. 3 .8 to Comment [A55]: Revision requested by OIRA.

Comment [A56]: Revision requested by OIRA.340 CRE NOPR ECS OMB Compare 

### .docx discount rate ( 2010 201 2 $ million) 8.2 21.4 9.7 38.2 38.8 115.7

Impact on Utilities Generatio n Capacity Reduction in 2045 (GW) 0.09 0.11 0.19 0.22 0.45

Employment Impacts Net Change in Indirect Domestic Jobs by 20 20 202 1 64 198 to 76 201 74 345 to 89 354 118 719 to 153 749 113 760 to 171 801 ( 588 ) 130 to 181 504

* * Values in parentheses are negative values. ** “ MMt” stands for million metric tons; “kt” stands for kilotons; “t” stands for tons

. CO 2 eq is the quantity of CO 2 that would have the same global warming potential (GWP) ** † Range of the economic value of CO 2 reductions is based on estimates of the global benefit of reduced CO 2 emissions † Values in parentheses are negative values

. 

### Table V. 56 Summary of Results for Commercial Refrigeration Equipment TSLs: Mean LCC Savings Mean LCC Savings * 2010 2012 $ Equipment Class TSL 1 TSL 2 TSL 3 TSL 4 TSL5
VOP.RC.M 216.39 $235.9 2 216.39 $743.0 0 677.32 $1,788. 85 453.06 $1,493. 72 (5704.77 ($1,668 .79 ) VOP.RC.L 501.33 $537.2 7 345.84 $1,516. 59 264.33 $1,129. 51 264.33 $1,129. 51 (4266.53 ($3,692 .90 ) VOP.SC.M 106.45 $170.7 8 159.12 $227.1 7 214.15 $814.9 1 214.15 $691.2 7 (1693.94 ($376.5 2 ) VCT.RC.M 450.12 $175.2 3 450.12 $1,864. 44 1749.37 $1,75 8.73 1038.12 $1,10 8.13 (2513.32 ($2,508 .61 ) VCT.RC.L 1077.91 $1,35 7.25 711.31 $1,004. 72 539.92 $797.9 1 539.92 $797.9 1 (3781.14 ($3,624 .20 ) VCT.SC.M 1424.70 $566. 18 1038.14 $1,36 3.60 830.17 $1,122. 14 717.99 $641.0 5 (500.02 ($595.52 ) VCT.SC.L 1434.12 $4,18 6.06 3227.77 $2,52 2.67 2281.37 $1,98 4.45 1969.24 $1,34 2.84 252.00 ($343.16) VCT.SC.I 437.37 $572.0 5 502.51 $486.2 8 370 $431 .88 370 $431 .88 (1616.18 ($1,591 .87 ) VCS.SC.M 268.29 $278.8 4 158.07 $162.8 8 125.10 $131.8 0 125.10 $131.8 0 (1031.06 ($1,042 .03 ) VCS.SC.L 863.65 $524.5 2 368.04 $329.3 3 256.76 $267.8 1 214.03 $220.8 3 (1264.83 ($1,274 .03 ) VCS.SC.I 218.38 $236.7 7 159.81 $176.8 3 140.59 $152.6 9 140.59 $152.6 9 (1808.93 ($1,818 .87 ) SVO.RC.M 68.05 $73.77 68.05 $551.98 495.44 $1,216. 77 331.41 $1,008. 46 (3936.63 ($1,015 .16 ) SVO.SC.M 20.50 $324.33 293.95 $334.8 9 308.07 $587.9 0 308.07 $491.9 9 (1133.50 ($201.6 1 ) Comment [A57]: Revision requested b y OIRA.341 CRE NOPR ECS OMB Compare 

### .docx

SOC.RC.M 112.80 $118.3 6 112.80 $226.2 6 209.19 $997.8 9 119.60 $494.5 1 (2715.27 ($982.2 1 ) HZO.RC.M * ** $ 0.00 $ 0.00 $ 0.00 $ 0.00 (1247.58 ($1,271 .24 ) HZO.RC.L * ** $ 0.00 $ 0.00 $ 0.00 $ 0.00 (2103.12 ($2,134 .96 ) HZO.SC.M $ 8. 43 85 $ 8. 43 85 45.74 $48.60 24.35 $28.78 (811.71 ($821.57 ) HZO.SC.L * ** $ 0.00 $ 0.00 $ 0.00 $ 0.00 (468.24 ($473.71 ) HCT.SC.M 99.37 $106.59 109.64 $359.4 8 285.69 $307.2 6 235.72 $253.6 0 (300.80 ($293.54 ) HCT.SC.L 205.71 $217.1 9 163.89 $790.5 3 697.97 $571.0 7 458.84 $368.9 2 (265.52 ($354.75 ) HCT.SC.I 20.46 $21.83 33.19 $34.69 38.02 $42.48 38.02 $42.48 (807.17 ($811.31 ) HCS.SC.M 21.34 $23.07 17.94 $19.18 15.86 $16.66 9.11 $8.68 (418.13 ($422.79 ) HCS.SC.L $74. 69 .41 75.74 $80.97 $80. 72 .70 $80. 72 .70 (407.48 ($400.63 ) PD.SC.M 934.80 $1,009. 53 934.80 $1,009. 53 939.55 $933.5 9 351.49 $310.4 3 (582.78 ($637.94 ) SOC.SC.M $646.15 $466.47 $1,241.60 $739.75 ($735.33)

* LCC savings * Values in parentheses are negative values. ** “NA” means “not applicable,” because for equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L are shown as zero because , TSLs 1 through 4 for these equipment classes are associated with the baseline efficiency level.342 CRE NOPR ECS OMB Compare 

### .docx Table V. 57 Summary of Results for Commercial Refrigeration Equipment TSLs: Median Payback Period Median Payback Period years Equipment Class TSL 1 TSL 2 TSL 3 TSL 4 TSL5 VOP.RC.M 1. 83 73 1. 83 77 1.87 3.77 2.41 3.91 38. 11 .76 VOP.RC.L 1. 18 11 1.94 2.03 6.59 2.22 6.59 2.22 24.96 18.30 VOP.SC.M 1. 57 61 1.67 2.17 2.23 4.12 2.23 4.39 29.48 11.37 VCT.RC.M 2.63 1.23 2. 63 42 3.49 2.43 3.73 2.70 14.29 13.09 VCT.RC.L 4.33 1.30 4.36 1.51 4.43 1.64 4.43 1.64 22.38 15.75 VCT.SC.M 2.05 0.86 2.10 1.73 2. 60 21 2. 83 54 8. 22 13 VCT.SC.L 0. 43 58 0. 76 61 1.33 0.83 1.44 0.96 4.25 3.65 VCT.SC.I 2.32 0.86 2.87 1.74 3.17 1.97 3.17 1.97 15.97 13.21 VCS.SC.M 0. 80 78 1.01 0.98 1. 80 75 1. 80 75 14. 57 11 VCS.SC.L 0. 51 55 0. 61 91 1. 04 00 1. 19 15 10. 96 54 VCS.SC.I 0. 83 80 1.22 2.07 2. 50 42 2. 50 42 28.30 27.19 SVO.RC.M 1. 38 31 1.38 2.64 2.79 4.34 3.36 4.50 38.30 11.60 SVO.SC.M 1. 25 97 2. 01 06 2.08 4.43 2.08 4.75 23.49 10.36 SOC.RC.M 1. 28 25 1. 28 44 1.50 3.31 2.84 4.41 35.99 11.88 HZO.RC.M* NA 0.00 NA 0.00 NA 0.00 NA 0.00 170.62 161.23 HZO.RC.L* NA 0.00 NA 0.00 NA 0.00 NA 0.00 88.66 83.78 HZO.SC.M 1. 92 89 1. 92 89 2. 43 42 6. 52 40 57.36 55.78 HZO.SC.L* NA 0.00 NA 0.00 NA 0.00 NA 0.00 76.60 73.62 HCT.SC.M 0. 70 69 0.89 2.24 2. 43 42 3. 09 08 12. 31 26 HCT.SC.L 0. 55 53 0.67 1.00 1. 10 05 1. 55 47 7. 53 15 HCT.SC.I 0. 92 88 2. 43 39 4. 42 28 4. 42 28 29.21 27.99 HCS.SC.M 0. 52 50 1. 69 64 2. 58 54 4. 26 28 34. 96 05 HCS.SC.L 0. 89 86 1. 41 36 2. 67 57 2. 67 57 15.63 14.98 PD.SC.M 0.53 0.53 1.10 2.27 7.61 PD SOC .SC.M 1. 46 12 1. 46 24 1.72 2.35 2. 82 99 8.12 7.42 * “NA” means “not applicable,” because for equipment classes HZO.RC.M, HZO.RC.L, and HZO.SC.L, TSLs 1 through 4 are associated with the baseline efficiency level. 

### Table V. 58 Summary of Results for Commercial Refrigeration Equipment TSLs: Distribution of Consumer Customer LCC Impacts

Category TSL 1* TSL 2* TSL 3* TSL 4* TSL 5* VOP.RC.M Net Cost (%) 0 0 0 16 11 100 90 No Impact (%) 75 76 75 52 50 28 25 15 0 2 Net Benefit (%) 25 24 25 48 50 72 59 74 0 8 VOP.RC.L Net Cost (%) 0 0 34 0 34 0 98 No Impact (%) 72 74 43 48 16 25 16 25 2 Net Benefit (%) 28 26 57 52 50 75 50 75 0 VOP.SC.M Net Cost (%) 0 0 0 0 11 99 77 No Impact (%) 76 62 53 43 30 25 30 14 1 3 Net Benefit (%) 24 38 47 57 70 75 70 75 0 20 VCT.RC.M Net Cost (%) 0 0 0 29 26 95 94 No Impact (%) 74 81 74 62 50 46 18 16 2 Net Benefit (%) 26 19 26 38 50 54 53 57 3 4 VCT.RC.L Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells343 CRE NOPR ECS OMB Compare 

### .docx Net Cost (%) 0 0 2 0 2 0 98 97 No Impact (%) 69 60 46 40 24 21 24 21 2 Net Benefit (%) 31 40 54 60 75 79 75 79 0 1 VCT.SC.M Net Cost (%) 0 0 4 0 15 27 72 74 No Impact (%) 64 83 49 66 23 51 12 13 2 Net Benefit (%) 36 17 51 34 73 49 73 60 27 24 VCT.SC.L Net Cost (%) 0 0 3 0 8 7 62 74 No Impact (%) 85 76 69 60 26 44 13 15 2 Net Benefit (%) 15 24 31 40 71 56 79 78 37 24 VCT.SC.I Net Cost (%) 0 0 1 2 1 2 1 97 95 No Impact (%) 63 65 45 32 15 16 15 16 1 Net Benefit (%) 37 35 55 68 82 83 82 83 2 3 VCS.SC.M Net Cost (%) 0 0 13 7 13 7 99 No Impact (%) 71 72 41 42 13 13 1 Net Benefit (%) 29 28 58 73 80 73 80 0 VCS.SC.L Net Cost (%) 0 0 5 19 20 97 No Impact (%) 87 73 57 42 27 28 14 0 1 Net Benefit (%) 13 27 43 58 68 67 66 3 2 VCS.SC.I Net Cost (%) 0 0 4 3 4 3 99 No Impact (%) 66 67 49 32 16 16 1 Net Benefit (%) 34 33 51 68 80 81 80 81 0 SVO.RC.M Net Cost (%) 0 0 0 18 13 99 85 No Impact (%) 74 75 74 51 48 29 25 16 1 3 Net Benefit (%) 26 25 26 49 52 71 57 72 0 12 SVO.SC.M Net Cost (%) 0 0 0 0 12 98 69 No Impact (%) 76 61 52 43 30 25 30 14 1 4 Net Benefit (%) 24 39 48 57 70 75 70 75 1 27 SOC.RC.M Net Cost (%) 0 0 0 21 29 98 89 No Impact (%) 78 82 78 64 57 47 35 18 2 5 Net Benefit (%) 22 18 22 36 43 53 45 53 0 6 HZO.RC.M ** Net Cost (%) 0 NA 0 NA 0 NA 0 NA 79 78 No Impact (%) 100 NA 100 NA 100 NA 100 NA 21 22 Net Benefit (%) 0 NA 0 NA 0 NA 0 NA 0 HZO.RC.L ** Net Cost (%) 0 NA 0 NA 0 NA 0 NA 87 86 No Impact (%) 100 NA 100 NA 100 NA 100 NA 13 14 Net Benefit (%) 0 NA 0 NA 0 NA 0 NA 0 HZO.SC.M Net Cost (%) 0 0 0 21 19 98 No Impact (%) 74 75 74 75 49 24 2 Net Benefit (%) 26 25 26 25 51 55 57 0 HZO.SC.L ** Net Cost (%) 0 NA 0 NA 0 NA 0 NA 73 72 No Impact (%) 100 NA 100 NA 100 NA 100 NA 27 28 Inserted Cells

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### .docx Net Benefit (%) 0 NA 0 NA 0 NA 0 NA 0 HCT.SC.M Net Cost (%) 0 0 0 17 18 89 No Impact (%) 68 70 52 38 24 25 11 12 1 Net Benefit (%) 32 30 48 62 76 75 71 70 10 HCT.SC.L Net Cost (%) 0 0 0 17 23 73 76 No Impact (%) 72 75 58 61 43 45 14 1 Net Benefit (%) 28 26 42 39 57 55 69 63 26 23 HCT.SC.I Net Cost (%) 0 0 5 2 5 2 99 No Impact (%) 74 48 49 23 23 1 Net Benefit (%) 26 52 51 72 75 72 75 0 HCS.SC.M Net Cost (%) 0 0 2 1 27 29 98 No Impact (%) 83 65 48 31 2 Net Benefit (%) 17 35 50 51 42 40 0 HCS.SC.L Net Cost (%) 0 0 5 2 5 2 99 98 No Impact (%) 49 50 32 33 15 16 15 16 1 2 Net Benefit (%) 51 50 68 67 80 82 80 82 0 PD.SC.M Net Cost (%) 0 0 0 40 41 84 86 No Impact (%) 81 86 81 86 64 69 10 11 1 Net Benefit (%) 19 14 19 14 36 31 50 48 15 13 SOC.SC.M Net Cost (%) 0 0 0 25 80 No Impact (%) 70 55 40 16 5 Net Benefit (%) 30 45 60 60 16
* Values have been rounded to the nearest integer. Therefore, some of the percentages may not add up to 100 due to rounding

. ** “NA” means “not applicable”; because for equipment classes HZO.RC.M, HZO.RC.L and HZO.SC.L, TSLs 1 through 4 are associated with the baseline efficiency level

.



### 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 improvemen ts. 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 sa vings as a resu lt of (1) a lack of information; (2) a lack of sufficient salience of the long

- term or aggregate benefits; (3) a lack of Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells Inserted Cells345 CRE NOPR ECS OMB Compare 

### .docx sufficient savings to warrant delaying or altering purchases ( e.g. , an inefficient ventilation fan in a new building or the delay ed 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,

c onsumers 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. 102 

### DOE is committed to developing a framework that can support empirical quantitative tools for improved assessment of the consumer welfare impacts of appliance standard s. 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.

102 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

.346 CRE NOPR ECS OMB Compare 

### .docx TSL 5 corresponds to the ma x- tech level for all the equipment classes and offers the potential for the highest cumulative energy savings through the analysis period from
2016 to 2045.

. The estimate d energy savings from TSL 5 is 1. 302 2784 quads of primary energy. DOE projects a net negative NPV for consumers customer s with estimated increased costs valued at $ 8.5 6.735 billion at a 7

- percent discount rate. Estimated emissions reductions are 104.21 70.0 MM t of CO 2 

### , and up to 26.59 103.4 kt of NO x 

### . , and 89.4 kt o f SO 2 

### . DOE also projects an increase a de crease in Hg emissions of up to 0. 53 14 tons. The CO 2 

### emissions have a value of up to $5. 86 8 billion and the NO x 

### emissions have a value of $ 38.8 115.7 million at a 7

- percent discount rate. DOE estimates that, compared to base case, the total required electric generating capacity in 2045 w ould decrease by
0.45 GW at TSL 5

.

For TSL 5 , w ith the exception of equipment class VCT.SC.L, the mean LCC savings for all equipment classes are negative, implying an increase in LCC, with the increase ranging from $ 266 for the HCT.SC.L equipment class to $5,705 for the VOP.RC.M equipment class. Although the mean LCC decrease for VCT.SC.L shows a value of $252, the median LCC savings is a negative value of $1,103 (not shown in any of th e tables in today’s NOPR ), implying an increase in LCC for the majority of the

consumers . 202 for the SVO.SC.M equipment class to $ 3, 693 for the VOP.RC. L equipment class.

At TSL 5, manufacturers may expect diminished profitability due to large increases in product costs, capital investments in equipment and tooling, and347 CRE NOPR ECS OMB Compare 

### .docx expenditures related to engineering and testing. The projected change in INPV ranges from a decrease of $ 686.1 516.0 million to a decrease of $ 8.9 25 .5 million b ased on DOE’s manufacturer ma rk up scenarios. The upper bound of -$ 8.9 25 .5 million is considered an optimistic scenario for manufacturers because it assumes manufacturers can fully pass on substantial increases in equipment costs. DOE recognizes the risk of large negative impacts on in dustry if manufacturers’ expectations concerning reduced profit margins are realized. TSL 5 could reduce commercial refrigeration equipment INPV by up to 78.93 44.41 percent if impacts reach the lower bound of the range.

After careful ly considering the analys es results and weighing the benefits and burdens of TSL 5, DOE finds that the benefits to the Nation from TSL 5, in the form of energy savings and emissions reductions, including environmental and monetary benefits, are small compared to the burdens, in the form of a decrease of $ 8.5 6. 735 billion in

consumer customer NPV and a decrease of up to 78.93 44.41 percent in INPV. DOE concludes that the burdens of TSL 5 outweigh the benefits and, therefore, does not find TSL 5 to be economically justifi able . DOE is not proposing to adopt TSL 5 in this notice

.

TSL 4 corresponds to the highest efficiency level, in each equipment class, with a positive NPV at a 7- percent discount rate. The estimated energy savings from 2016 to
2045 for equipment purchased in 2017–2046 is 0. 636 1.0 01 quads of primary energy, an amount DOE deems significant. At TSL 4, DOE projects an increase in

consumer customer NPV of $ 1. 023 606 billion at a 7- percent discount rate ; estimated emissions reductions of 50.91 54.88 MM t of CO 2 

### ; up to 1 2.99 81.1 kt of NO x 

### . Analysis348 CRE NOPR ECS OMB Compare 

### .docx results show an increase , 0. 11 in Hg emissions and 70.1 kt of up to 0.2 6 tons. SO 2 

### . The monetary value of these emissions was estimated to be up to $ 2. 8 6 4 .55 billion for CO 2 

### and up to $ 1 9 90.7 million for NO x 

### at a 7- percent discount rate

. Total required electric generating capacity in 2045 is projected to decrease by 0.2 2 GW compared to the base

case .

At TSL 4, the mean LCC savings vary from $ 9.11 8.68 for HCS.SC.M to $ 1, 969.24 493.72 for VCT.SC.L VOP.RC.M , which implies that on an average

consumers customer s will experience a decrease in LCC . For equipment classes HZO.RC.M, HZO.RC.L , and HZO.SC.L, TSL 4 is associated with the baseline level because these equipment classes have only one efficiency level above baseline and each of those higher efficiency levels yields a negative NPV. Therefore, there are no efficiency level s that satisfy the criteri a used for selection of TSLs 1 through 4. DOE is not proposing to amend standard levels the standard s for these th ree equipment classes at TSL 4 (and below).

.

At TSL 4, the projected change in INPV ranges from a decrease of $ 89.3 92.6 million to a decrease of $ 44.8 45.9 million. At TSL 4, DOE recognizes the risk of negative impacts if manufacturers’ expectations concerning reduced profit margins are realized. If the lower bound of the range of impacts is reached , as DOE expects, TSL 4 could result in a net loss of 10.28 7 .97 percent in INPV for commercial refrigeration equipment manufacturers.349 CRE NOPR ECS OMB Compare 

### .docx DOE contrasted the benefits and burdens of TSL 4 with those of TSL 3 because

even though TSL 4 has the benefits of higher energy savings than TSL 3, the

consumer customer NPV values at TSL 3 are higher than at TSL 4. The estimated energy savings at TSL 3 from 2016 to 2045 is 0. 566 920 quads of primary energy ; , whereas at TSL 4 the energy savings are higher by about 12 9 percent at 0.636 1.0 01 quads. At TSL 3, DOE projects an increase in consumer customer NPV of $ 1. 0 9 3 705 billion at a 7

- percent discount rate , whereas at TSL 4 the consumer customer NPV is lower by about 6 .5 percent at $ 1. 023 606 billion, with the actual difference amounting to abou t $70 approximately $99 million. Estimated emissions reductions at TSL 3 are 45.33 50.41
MMt of CO 2 

### as opposed to 50.91 54.88 MM t at TSL 4 , and up to 74.4 6 kt of NO x 

### at TSL 3 as compared to 12.99 81.07 kt at TSL 4. The monetary value of the CO 2 

### emissions reduction s was estimated to be up to $ 2 4.18 billion at TSL 3 compared to $ 4 .55 billion at TSL3 compared to $2.86 billion at TSL4 TSL 4 , and NO x 

### emission reductions at a 7

- percent discount rate were valued at up to up to $16.9 $ 83.3 million at TSL3 TSL 3 compared to $ 19 90.7 million at TSL 4.

T o facilitate a direct comparison between the benefits of TSL 3 versus those of TSL4, DOE evaluated the net social benefits of TSL 3 and TSL 4 by combining the

consumer customer NPV values with monetized emissions reductions. While Table V.55 provides a range of monetized values for CO 2 

### and NO x 

### emissions reductions, DOE calculated certain intermediate values here for the purpose of net benefits calculation. The monetized CO 2 

### emissions reduction values were calculated at $ 22.3 40.8 per ton in
2010 2012 $ and the monetized NO x 

### emissions reductions were calculated at an350 CRE NOPR ECS OMB Compare 

### .docx intermediate value of $ 2, 537 639 per ton in 2010 2012 $. These monetized emissions
reduction values were added to the consumer customer NPV at 3

- percent and a 7- percent discount rates rate to obtain values a value of $ 3. 624 133 billion and 1.939 billion, respectively, at TSL 3. At TSL 4, the net benefit values value of $ 3. 676 160 billion and $1.973 billion, respectively, are is higher than those th at at TSL 3.

After careful consideration of the analyses results , weighing the benefits and burdens of TSL 4, and comparing the m to those of TSL 3 , DOE believes that setting the standards for commercial refrigeration equipment at TSL 4 represents the maximum improvement in energy efficiency that is technologically feasible and economically justified. TSL 4 is technologically feasi ble because the technologies required to achieve these levels already exist in the current market. TSL 4 is economically justified because the benefits to the Nation in the form of energy savings, consumer customer NPV at 3 percent and at 7 percent, and emi ssions reduction s outweigh the costs associated with reduced INPV.

Therefore, DOE has decided to propose the adoption of amended energy conservation standards for commercial refrigeration equipment at TSL 4. DOE specifically seeks comment on the magnitude of the estimated decline in INPV at TSL 4 compared to the baseline , and whether this impact could risk industry consolidation. DOE also specifically requests comment on whether DOE should adopt TSL 5, and , in particular , whether, compared to TSL 4, TSL 5’s higher energy savings outweigh its lower NPV benefits and higher m anufacturer impacts. DOE may re examine this level351 CRE NOPR ECS OMB Compare 

### .docx depending on the nature of the information it receives during the comment period and adjust its final levels in response to that informati on.

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 commercial refrigeration equipment 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 commercial refrigeration equipment that are not captured by th e 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

.352 CRE NOPR ECS OMB Compare 

### .docx 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 a n RIA on today’s rule and that OIRA in OMB review this rule. DOE presente d to OIRA for review the draft rule and other documents prepared for this rulemaking, including the RIA, and 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 3281 ( Jan. 21, 2011). Executive Order 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions gov erning 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 cost s 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; an d 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 direct353 CRE NOPR ECS OMB Compare 

### .docx regulation, including provid ing 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 th e 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 a final regulatory flexibility analysis (FRFA) 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 n umber 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 website354 CRE NOPR ECS OMB Compare 

### .docx ( http ://energy.gov/gc/office

- general

- counsel )

.

1. Description and Estimated Number of Small Entities Regulated For the manufacturers of commercial refrigeration equipment, the SBA has set a size threshold, which defines those entities classified as “small busine sses” 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/idc/groups/public /documents/sba_homepage/serv_sstd_tablepdf.pdf

. Commercial refrigeration equipment manufacturing is classified under NAICS 333415,
“Air

- Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing.” The SB A sets a threshold of 750 employees or less for an entity to be considered as a small business for 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. , AHRI Directory, 103 

### the SBA Database 104 

### ), individual company websites, and market research tools ( e.g. , Dunn and Bradstreet reports 105 

### and Hoovers reports 106

103 See 

### ) to create a list of com panies that

www.ahridirectory.org/ahriDirectory/pages/home.aspx

. 104 See http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm

. 105 See www.dnb.com/

.355 CRE NOPR ECS OMB Compare 

### .docx manufacture or sell products 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 public ly 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 commercial refrigeration equipment. DOE screened out companies that do not offer prod ucts covered by this rulemaking, do not meet the definition of a “small business,” or are foreign owned.

DOE identified 53 54 companies selling commercial refrigeration equipment products in the United States. Nine of the companies are foreign

- owned firms . Of the remaining 44 45 companies, about 70 percent ( 31 32 companies) are small domestic manufacturers. DOE interviewed two of the small contacted eight domestic commercial refrigeration equipment manufacturers during MIA for interviews and all eight companies accepted. Of these eight companies, four were small businesses

.

2. Description and Estimate of Compliance Requirements The 31 32 identified domestic manufacturers of commercial refrigeration equipment that qualify as small businesses under the SBA size standard account for approximately 26 percent of commercial refrigeration equipment shipments. 107

107 

### While some small businesses have significant market share ( e.g. , Continental has a 4- percent market share for foodservice commercial refrigeration ), the majority of small

106 See www.hoovers.com/

. 107 32nd Annual Portrait of the U.S. Appliance Industry. Appliance Magazine . September 2009. 66(7).356 CRE NOPR ECS OMB Compare 

### .docx businesses have less than a 1

- percent market share. These smaller firms often specialize in designing custom products and servi cing niche markets. At the proposed level, the average small manufacturer is expected to face capital conversion costs that are more than triple the average annual capital expenditures , and product conversion co sts that are nearly double the 80% of annual R&D spending of an average commercial refrigeration equipment manufacturer , as shown in Table VI .1

. At the proposed level, the conversion costs are dr iven by the incorporation of thicker insulation into case designs. The thicker cases design may necessitate the purchase of new jigs for production. Manufacturer estimates of the cost of a new jig ranged from $50,000 to $ 300,000 in 2011 , depending on the j ig design. In addition to the cost of jigs, changes in case thickness may require product redesign due to changes in the interior volume of the equipment and may require new industry certifications.

The proposed standard could cause small manufacturers t o be at a disadvantage relative to large manufacturers. The capital conversion costs represent a smaller percentage of annual capital expenditures for large manufacturers than for small manufacturers. The capital conversion costs are 48% 60 percent of annua l capital expenditures for an average large manufacturer , while capital conversion costs are 378% 423 percent of annual capital expenditures for an average small manufacturer. Small manufacturer manufacturer s may have greater difficulty obtaining credit , or may obtain less favorable terms than larger competitors when financing the equipment necessary to meet the an amended standard.357 CRE NOPR ECS OMB Compare 

### .docx Additionally, small manufacturers may be disproportionately affected by product equipment conversion costs. Product redesign and industry certification costs tend to be fixed and do not scale with sales volume. For each product equipment platform, small businesses must make product equipment redesign investments that are similar to their large competitors. However, small manufact urer costs are spread over a much lower volume of units, making cost recovery more difficult.

Manufacturers indicated that many design options evaluated in the engineering analysis ( e.g. , higher efficiency lighting, motors, and compressors) would force t hem to purchase more expensive components. Due to smaller purchasing volumes, small manufacturers typically pay higher prices for components , while their large competitors receive volume discounts. At the proposed standard , small businesses will likely have greater increases in component costs than large businesses and will thus be at a pricing disadvantage.

Small firms would likely be at a disadvantage relative to larger firms in meeting an amended energy conservation standard for commercial refrigeration equipment. The small businesses face disadvantages in terms of access to capital, the cost of product redesigns, and pricing for key components . As a result, DOE could not certify that the proposed standards would not have a significant impact on a signif icant number of small businesses.

To estimate how small manufacturers would be potentially impacted, DOE used358 CRE NOPR ECS OMB Compare 

### .docx the market share of small manufacturers to estimate the annual revenue, earnings before interest and tax (EBIT), R&D expense, and capital expenditures for a typical small manufacturer. DOE then compared these costs to the required capital and product conversion costs at each TSL for both an average small manufacturer ( Table VI .1 ) and an average large manufacturer ( Table VI .2 ). In the following tables, TSL 4 represents the proposed stan dard.

Table VI .1 Comparison of an Average Small Commercial Refrigeration Equipment Manufacturer’s Conversion Costs to Annual Expenses, Revenue, a nd Profit

TSL Capital Conversion Cost as a Percentage

of Annual Capital

Expenditures Product Conversion Cost as

a Percentage of Annual R&D

Expense Total Conversion Cost as a Percentage of Annual Revenue Total Conversion Cost as a Percentage

of Annual EBIT
TSL 1 0% 0% 0% 0% TSL 2 38 102 % 157 71 % 3 5 % 93 63 % TSL 3 268 238 % 176 76 % 8 10 % 238 119 % TSL 4 378 423 % 181 80 % 11 17 % 305 196 % TSL 5 1053 1400 % 1190 489 % 41 62 % 1159 717 % 

### Table VI .2 Comparison of an Average Large Commercial Refrigeration Equipment Manufacturer’s Conversion Costs to Annual Expenses, Revenue, a nd Profit

TSL Capital Conversion Cost as a Percentage

of Annual Capital

Expenditures Product Conversion Cost as

a Percentage of Annual R&D

Expense Total Conversion Cost as a Percentage of Annual Revenue Total Conversion Cost as a Percentage

of Annual EBIT
TSL 1 0% 0% 0% 0% TSL 2 5 15 % 9 10 % 0 1 % 7 9 % TSL 3 34% 10 11 % 1% 25 17 % TSL 4 48 60 % 11% 1 2 % 33 28 % TSL 5 134 200 % 70% 4 9 % 111 102 %



### 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 pro posed today.359 CRE NOPR ECS OMB Compare 

### .docx 4. Significant Alternatives to the Rule The primary alternatives to the proposed rule are the TSLs other than the one being considered proposed today, TSL 4. DOE explicitly considered the role of manufacturers, including small manufacturers, in its selection of TSL 4 rather than TSL
5. Though TSL 5 results in greater energy savings for the country, the standard would place excessive 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, the NOPR TSD includes a n RIA. For commercial refrigeration equipment, the RIA discusses the following policy alternatives: (1) no change in standard; (2) consumer customer rebates; (3)

consumer 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 would be at l east five times smaller than those that would be expected to result from adoption of the proposed amended standard levels. Thus, DOE rejected these alternatives and is proposing to adopt the amended standards set forth in this rulemaking. (See chapter 16 17 of the NOPR TSD for further detail on the policy alternatives DOE considered.)

However, DOE seeks comment and, in particular, data on the impacts of this rulemaking on small businesses. (See Issue 10 under “Issues on Which DOE Seeks Comment” in section VII.E of this NOPR.)360 CRE NOPR ECS OMB Compare 

### .docx C. Review Under the Paperwork Reduction Act Manufacturers of commercial refrigeration equipment must certify to DOE that their pro ducts comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for commercial refrigeration equipment , including any amendments adopted for those test
pr ocedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including commercial refrigeration equipment

. 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 N umber 1910 -1400. Public reporting b urden 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.361 CRE NOPR ECS OMB Compare 

### .docx 4321 et seq .) DOE has determined that the proposed rule fi ts 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 p art 1021, appendix B, B5.1(b); 1021.410(b) and appendix B, B(1)- (5). The proposed rule fits within the c ategory 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://cxnepa.ener gy.gov/

.

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 F ederalism implications. On March 14, 2000, DOE published a state ment 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 to362 CRE NOPR ECS OMB Compare 

### .docx 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 O rder 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 standard and promote simplification and burden reduction. 61 FR 4729 (Feb. 7, 1996). Se ction 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 r egulation; (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 clar ity 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 whethe r 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 of363 CRE NOPR ECS OMB Compare 

### .docx 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. Pub. L. 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 (a djusted 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 UMR A. 62 FR at 12820. DOE’s policy statement is also available at http://energy.gov/gc/office

- general

- counsel

.

Although today’s proposed rule does not contain a Federal intergovernmental mandate, it m ay require expenditures of $100 million or more on the private sector. Specifically, the proposed rule will likely result in a final rule that could require364 CRE NOPR ECS OMB Compare 

### .docx expenditures of $100 million or more . Such expenditures may include : (1) investment in research and development and in capital expenditures by commercial refrigeration equipment manufacturers in the years between the final rule and the compliance date for the new standard s; and (2) incremental additional expenditures by co nsumers cus t omers to purchase higher efficiency commercial refrigeration equipment, 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 st atement 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 a nd 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 burden some 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( d) , (f), and (o), 6313(e), and 6316(a), today’s proposed rule365 CRE NOPR ECS OMB Compare 

### .docx would establish energy conservation standards for commercial refrigeration equipment that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technolo gically 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 Appropriat ions 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 1 26 DOE has determined, under Executive Order 12630, “Go vernmental 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. 30

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 publi c under guidelines established by each agency pursuant to general366 CRE NOPR ECS OMB Compare 

### .docx 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 unde r 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, Distribut ion, 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 prom ulgates 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 pro posal be implemented, and of reasonable alternatives to the 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 commercial refrigeration equipment, 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 been367 CRE NOPR ECS OMB Compare 

### .docx designated as such by the Administr ator 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

- pro gress 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. The368 CRE NOPR ECS OMB Compare 

### .docx “Energy Conservation Standards Rulemaking Peer Review Report , ” dated February 2007, has been disseminated and is available at the following w ebsite:
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 notice

. 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 se curity 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.

In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE’s website at : www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/52

. Participants are responsible for ensuring their systems are compatible with the webinar software.369 CRE NOPR ECS OMB Compare 

### .docx B. Procedure for Submitting Prepared General Statements for Distribution Any perso n 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 me eting 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

m eeting, 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 will370 CRE NOPR ECS OMB Compare 

### .docx 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 state ment (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 modif ication 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 notice. 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 DATES371 CRE NOPR ECS OMB Compare 

### .docx 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 regu lations.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 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 t his 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 includ e 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 through372 CRE NOPR ECS OMB Compare 

### .docx regulations.gov cannot be claimed as CBI. Comments received through the website will waive any CBI claims for the infor mation 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. Ho wever, 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.

Sub mitting 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 i n a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewa ble 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.373 CRE NOPR ECS OMB Compare 

### .docx C omments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file forma t. Provide documents that are not secured, that are written in English , and that

are free of any defects or viruse s. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of t he 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 ma il, 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 confidenti al 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 why374 CRE NOPR ECS OMB Compare 

### .docx such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sourc es; (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 i nformation 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, i ncluding 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. Primary and S econdary E quipment C lasses In the January 2009 final rule analysis, DOE selected 15 “primary” classes to analyze directly in its engineering analyses, and designated the remaining 23 classes as “secondary” classes, for which standards were developed based on the primary class results. These designations were based on shipment

- volume data coupled with input from stakeholders durin g that rulemaking process. As this rulemaking s eeks to review and375 CRE NOPR ECS OMB Compare 

### .docx potentially amend standards for the 38 total equipment classes examined in the January 2009 final rule, DOE retained those primary and secondary class designations in its analyses. Additionally, equipment for which EPACT 2005 directly set standards was incorporated into the scope of this rulemaking. DOE treated all of these equipment classes previously covered by EPACT 2005 standards as primary classes. DOE seeks comment regarding its designa tion of primary and secondary equipment classes.

2. Design Option and Core Case Costs During the NOPR analyses, DOE performed physical teardowns on a selection of units currently on the market. From the bills of materials and cost model developed using this teardown data, DOE calculated an estimate of the manufacturer production cost of the core case assembly for each of the primary equipment classes in the engineering analysis. DOE also developed estimates of the costs for components that affect energy

cons umption, namely those it considered as design options. These estimates were obtained from a combination of sources, including publicly available prices from vendors and confidential estimates provided by manufacturers. This price data was aggregated for

us e in the engineering analysis. DOE seeks comment and data regarding the manufacturer production costs for commercial refrigeration equipment cases and components and the technological feasibility of applying technologies identified in the engineering analy sis to meeting the proposed standards

. Comment [A58]: Revision requested by OIRA.376 CRE NOPR ECS OMB Compare 

### .docx 3. Offset Factors In its January 2009 final rule, DOE developed offset factors as a way to adjust the
energy - efficiency requirements for smaller equipment in each equipment class analyzed. These offset factors accounted for certain components of the refrigeration load (such as conduction end effects) that remain constant when equipment size varies and thus affect smaller cases disproportionately. The offset factors were intended to approximate these constant loa ds and provide a fixed end point, corresponding to a zero

- volume or zero

TDA case, in an equation that describes the relationship between energy consumption and the corresponding TDA or volume metric. Similarly, the EPACT 2005 standards also contained valu es that did not vary with unit volume and which served a similar purpose. In developing standard level equations for the proposed amended standards, DOE scaled the existing offset factors by the ratio of the amount of energy consumption allowed by the exis ting standards for a given representative unit and the energy use calculated in the engineering analysis at each TSL. This adjustment of the offset factors ensures that neither larger nor smaller units are disadvantaged by these proposed standards. DOE

see ks comment on its methodology for developing offset factors for the standard level equations presented in this NOPR.

4. Extension of Standards In its January 2009 final rule, DOE developed an extension approach to a quantitative method for applying the stand ards developed for its primary equipment classes to the remaining, secondary classes. This approach involved extension multipliers developed created using results from the analysis of the primary equipment classes and a377 CRE NOPR ECS OMB Compare 

### .docx set of focused matched

- pair analyses. Additionally, DOE applied standards developed for certain primary equipment classes directly to other similar secondary classes. In this rulemaking, DOE retained the extension multipliers from the January 2009 final rule and reapplied them to the equipment classes from that rulemaking for which DOE is proposing amended standards. DOE believes that the relationship between the performance s of various types of equipment is still adequately modeled by the use of those multipliers. DOE’s approach in developing extension multipliers in the 2009 rulemaking and its rationale for retaining them in this rulemaking are discussed in detail in section 5.9 of the NOPR TSD. DOE seeks comment on its approach to extending the results of the engineering analysis to secon dary equipment classes. Specifically, DOE requests comment on whether the assumptions underlying its development and application of extension multipliers are appropriate, or whether there are additional differences between related equipment classes that DO E should take into account.

5. Types of Refrigerant Analyzed DOE based its analysis on refrigeration equipment using R404A and R134a, HFC refrigerants widely used in the commercial refrigeration industry. DOE received comments regarding the consideration of refrigerants with lower GWP due to possible shifts in the marketplace toward these refrigerants and notes that a number of low er - GWP alternatives are available for use within certain portions of the commercial refrigeration

sector

. 108

108 For an overview of lower

- GWP alternatives available to certain sections of the commercial refrigeration equipment sector, please see 

### The use of alternative refrigerants could be impacting to Climate Change and the environment. DOE requests comment on the extent of the current use or likely future

http://www.epa.gov/ozone/downloads/EPA_HFC_ComRef.pdf Comment [A59]: Revision requested by OIRA.

Comment [A60]: Revision requested by OIRA.

Comment [A61]: Revision requested by OIRA.378 CRE NOPR ECS OMB Compare 

### .docx use of lower

- GWP refrigerants , and asks manufacturers to submit data related to the ability of e quipment (either existing or redesigned) using these refrigerants to meet the proposed standard

. DOE seeks input as to the impacts of alternative refrigerants to the refrigeration system in this rulemaking

.

6. Distribution Channel Market Shares and Mar kups DOE has revised the distribution channel market shares for some of the equipment classes based on comment s received during April 2011 preliminary analysis public meeting. The markup values associated with each distribution channel have been updated based on currently available industry profit data. DOE welcomes comment on the assumption s and values used for the markups analysis.

7. Market Shares of Efficiency Levels DOE seeks comments on the market shares of efficiency levels used for this NOPR analysi s. DOE is currently using a model to predict the market share of efficiency levels. According to commenters, the calculated market shares are biased toward the higher efficiency levels. However, DOE has cited lack of data as the primary reason for its lack of more accurate numbers. DOE welcomes information from stakeholders that would aid DOE in improving up on the numbers for market shares of efficiency levels.

8. Maintenance and Repair Costs at Higher Efficiency Levels

. Currently, DOE assumes no increase in regular maintenance costs at higher efficiency levels contemplated in the proposed rule

. Lighting maintenance and repair Comment [A62]: Revision requested by OIRA.
Comment [A63]: Revision requested by OIRA.

Comment [A64]: Revision requested by OIRA.

Comment [A65]: Revision requested by OIRA.379 CRE NOPR ECS OMB Compare 

### .docx costs are estimated based on OEM costs ; they vary with higher efficiency levels. DOE welcome s stakeholder input and additional information to improve up on these estimates with respect to maintenance and repair costs

. Data pertaining to cost increases specifically associated with the design options considered in this rulemaking would be greatly appreciated.

9. Impact of Amended Standards on Future Shipments Currently, DOE assumes that future shipments of commercial refrigeration equipment will not be affected by amended standards. While DOE has cited strong reasons to believe that this assumption is true for display cases, the assumption may not be entirely true in the case of equipment used in the foodservice industry. While there may be a small effect in the initial years of amended standards, DOE does not have data for the commercial refrigeration industry to obtain a reasonably accurat e estimate of this effect. DOE welcomes stakeholder input and estimates on the effect of amended standards on future commercial refrigeration equipment shipments

. DOE also welcomes input and data on the demand elasticity estimates used in the analysis

.

1 0. Learning Impacts on Price F orecast for Future Shipments Currently, DOE projects future prices by subtracting the cost reductions associated with learning effects from the cost associated with the amended standards. DOE analyzes learning effects using PPI, a quantity adjusted index of wholesale prices, as a proxy for price of commercial refrigerators. DOE is seeking input, and price data that could be used in place of PPI. Also DOE is seeking input on the magnitude of the380 CRE NOPR ECS OMB Compare 

### .docx price data and the cause of those price changes.

11. Product Attributes DOE requests comment on whether there are features or attributes of the more
energy - efficient commercial refrigerators that manufacturers would produce to meet the standards in this proposed rule that might affect how they would be used by different customer categories (e.g., refrigeration in grocery stores or restaurants). One example of such an effect might be that grocers or restaurant operators would change where, how , and how long food items would be stor ed or displayed. DOE requests comment specifically on how any such effects should be weighed in the choice of standards for these refrigerators for the final rule.

12. Analytic al Timeline For this rulemaking, DOE analyzed the effects of this proposal ass uming that the commercial refrigerators would be available to purchase for 30 years and undertook a sensitivity analysis using 9 years rather than 30 years of product shipments. The choice of
a 30

- year period of shipments is consistent with the DOE analysi s for other products and commercial equipment . The choice of a 9

- year period is a proxy for the timeline in EPCA for the review of certain energy conservation standards and potential revision of and compliance with such revised standards. We are seeking input, information and data on whether there are ways to refine the analytic timeline further.381 CRE NOPR ECS OMB Compare 

### .docx 13. Equipment Lifetime DOE defines lifetime as the age at which a commercial refrigeration equipment unit is retired from service. DOE based expected equipment lifetime on discussions with industry experts and concluded that a typical lifetime of 10 years is appropriate for most commercial refrigeration equipment in large grocery/multi

- line stores and restaurants. Operators of small food retail stores, on the oth er hand, tend to use display cases longer. DOE used 15 years as the average equipment lifetime for display c ases used in such retail

stores. DOE welcomes further input on the average equipment lifetimes for the LCC analysis and NIA.

13. 14. Small Businesses During the F ramework and preliminary analysis public meetings, DOE received many comments regarding the potential impacts of amended energy conservation standards on small business manufacturers of commercial refrigeration equipment. In its market and technology assessment and manufacturer impact analysis research, DOE developed a list of companies falling under its classification of small businesses, and sought specific feedback regarding potentially disproportionate impacts of amended standards on these b usinesses. DOE incorporated this feedback into its analyses for the NOPR and has presented its results in this notice and the technical support document. However, DOE seeks comment and, in particular, data, in its efforts to quantify the impacts of this rulemaking upon small businesses. on small business manufacturers. In addition, DOE seeks comment on any disproportionate impacts of amended standards on any particular customer groups , such as small businesses that are small grocery, Comment [A66]: Revision reques ted by OIRA.382 CRE NOPR ECS OMB Compare 

### .docx convenience stores, and restaurants.

15. Update to Social Cost of Carbon Values 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 2017 to 2046 plus an additional 15 years to account for the lifetime of the equipment p urchased between 2017 and 2046. In particular, the agency solicits comment on the agency’s d erivation 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.

16. Cumulative Regulatory Burdens The agency seeks input on the cumulative regulatory burden that may be imposed o n industry either from recently i mplemented rulemakings for this product class or other rulemakings that affect the same industry.

17. Compliance Date Pursuant to EPCA, any amended standards established in this rulemaking must apply to equipment that is manufactured on or after 3 years a fter 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. DOE proposes to provide 3 years for compliance with this standard,383 CRE NOPR ECS OMB Compare 

### .docx but seeks comment on whether it should consider a longer compliance date as authorized, and, if so, by how much

. Comment [A67]: Revision requested by OIRA.384 CRE NOPR ECS OMB Compare 

### .docx 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, and Reporting and recordkeeping requirements , and Small businesses

.

Issued in Washington, DC, on

________________________________ Henry Kelly Acting David T. Danielson Assistant Secretary Energy Efficiency and Renewable Energy385 CRE NOPR ECS OMB Compare 

### .docx 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

1. The auth ority citation for p art 431 continues to read as follows: Authority: 42 U.S.C. 6291 –6317.

2. Section 431.62 is amended by adding in alphabetical order a new definition for “service over counter ,” to read as follows: § 431.62 Definitions concerning commercial refrigerators, freezers and refrigerator
- freezers.
* * * * * Service over counter means equipment with sliding or hinged doors i n the back intended for use by sales personnel for loading and retrieving items for sale and fixed, sliding or hinged transparent panels in the front for displaying merchandise. The equipment has a height no greater than 66 inches and is intended to serve as a counter for transactions between sales personnel and customers.
* * * * *

3. Section 431.66 is amended by:
a. R evising paragraph (a)(3);386 CRE NOPR ECS OMB Compare 

### .docx b. Revising paragraph (b) introductory paragraph , (c), and (d) introductory paragraph text ;

c. Adding new Revising paragraph ( c); d. Revising paragraph (d) introductory text ; and c. Adding paragraph ( e)

.

The revisions and addition read as follows: § 431.66 Energy conservation standards and their effective dates. (a) * * * (3) For the purpose of paragraph (d) of this section , the term “TDA” means the total display area (ft 2 

### ) of the case, as defined in ARI Standard 120 0- 2006, appendix D (incorporated by reference, see §431.63). For the purpose of paragraph (e) of this section , the term “TDA” means the total display area (ft 2 

### ) of the case, as defined in AHRI Standard 1200 (I

- P) -2010, appendix D (incorporated by reference, see §431.63). (b) Each commercial refrigerator, freezer, and refrigerator

- freezer with a self

contained condensing unit designed for holding temperature applications manufactured on or after January 1, 2010 and before January 1, 2016 [date 3 years after date of publication of the final rule in the Federal Register ] shall have a daily energy consumption (in kilowatt

- hours per day) that does not exceed the following:
* * * * * (c) Each commercial refrigerator with a self

- contained condensing unit designed for pull

- down temperature applications and transparent doors manufactured on or after January 1, 2010 and before January 1, 2016 [date 3 years after date of publication of the f

inal rule in the Federal Register ] shall have a daily energy consumption (in kilowatt

-387 CRE NOPR ECS OMB Compare 

### .docx hours per day) of not more than 0.126V + 3.51. (d) Each commercial refrigerator, freezer, and refrigerator

- freezer with a self

contained condensing unit and without doors ; commercial refrigerator, freezer, and refrigerator

- freezer with a remote condensing unit; and commercial ice

- cream freezer manufactured on or after January 1, 2012 and before January 1, 2016 [date 3 years after date of publication of the final rule in the Federal Register ] shall have a daily energy consumption (in kilowatt

- hours per day) that does not exceed the levels specified:
* * * * * (e) Each commercial refrigerator, freezer, and refrigerator

- freezer with a self

contained condensing unit designed for holding temperature applications and with solid or transparent doors; commercial refrigerator with a self

- contained condensing unit designed for pull

- down temperature applications and with transparent doors; commercial refrigerator, freezer, and refrigerator

- freezer with a self

- contained condensing unit and without doors; commercial refrigerator, freezer, and refrigerator

- freezer with a remote condensing unit; and commercial ice

- cream freezer manufactured on or after January 1, 2016, [date 3 years after date of publication of the final rule in the Federal Register ] , shall have a daily energy consumption (in kilowatt

- hours per day) that does not exceed the levels specified: (1) For equipment other than hybrid equipment, refrigerator/freezers, or wedge

case s:

Equipment Category Condensing Unit Configuration Equipment Family Rating Temp .

° F Operating Temp.

° F Equipment Class Designation* Maximum Daily Energy Consumption

kWh/day Remote Condensing Commercial Remote (RC) Vertical Open (VOP) 38 (M) ≥32 VOP.RC.M 0. 76 x 61 × TDA + 3. 76 03388 CRE NOPR ECS OMB Compare 

### .docx Refrigerators and Commercial Freezers 0 (L) <32 VOP.RC.L

..... 2.11 x × TDA + 6.36

Semivertical Open (SVO) 38 (M) ≥32 SVO.RC.M 0. 77 x 63 × TDA + 2. 94 41 0 (L) <32 SVO.RC.L

..... 2.11 × TDA + 6.36

Horizontal Open (HZO) 38 (M) ≥32 HZO.RC.M 0.35 × TDA + 2.88 0 (L) <32 HZO.RC.L 0.57 × TDA + 6.88 Vertical Closed Transparent (VCT) 38 (M) ≥32 VCT.RC.M 0.08 × TDA + 0.72 0 (L) <32 VCT.RC.L 0.43 × TDA + 2.03 Horizontal Closed Transparent (HCT) 38 (M) ≥32 HCT.RC.M 0.14 × TDA + 0.11 0 (L) <32 HCT.RC.L 0.3 × TDA + 0.23 Vertical Closed Solid (VCS) 38 (M) ≥32 VCS.RC.M 0.1 × V + 0.24 0 (L) <32 VCS.RC.L 0.21 × V + 0.5 Horizontal Closed Solid (HCS) 38 (M) ≥32 HCS.RC.M 0.1 × V + 0.24 0 (L) <32 HCS.RC.L 0.21 × V + 0.5
Service Over Counter (SOC) 38 (M) ≥32 SOC.RC.M 0. 49 x 39 × TDA + 0. 1 08 0 (L) <32 SOC.RC.L 1.02 x 0.83 × TDA + 0. 22 18

Self

- Contained Commercial Refrigerators and Commercial Freezers Without Doors Self

- Contained (SC)

. Vertical Open (VOP) 38 (M) ≥32 VOP.SC.M 1. 68 x 51 × TDA + 4. 54 09 0 (L) <32 VOP.SC.L 4.21 x 3.79 × TDA + 11.4 10.26

Semivertical Open (SVO) 38 (M) ≥32 SVO.SC.M 1. 64 x 5 × TDA + 4.35 3.99 0 (L) <32 SVO.SC.L 4.12 x 3.77 × TDA + 10. 93 01
Horizontal Open (HZO) 38 (M) ≥32 HZO.SC.M 0.75 × TDA + 5.44 0 (L) <32 HZO.SC.L 1.92 × TDA + 7.08 Self

- Contained Commercial Self

- Contained (SC)

. Vertical Closed 38 (M) ≥32 VCT.SC.M 0.04 × V + 1.07389 CRE NOPR ECS OMB Compare 

### .docx Refrigerators and

Commercial Freezers With Doors Transparent (VCT) 0 (L) <32 VCT.SC.L 0.22 × V + 1.21 Vertical Closed Solid (VCS) 38 (M) ≥32 VCS.SC.M 0.03 × V + 0.53 0 (L) <32 VCS.SC.L 0.13 × V + 0.43 Horizontal Closed Transparent (HCT) 38 (M) ≥32 HCT.SC.M 0.02 × V + 0.51 0 (L) <32 HCT.SC.L 0.11 × V + 0.6 Horizontal Closed Solid (HCS) 38 (M) ≥32 HCS.SC.M 0.02 × V + 0.37 0 (L) <32 HCS.SC.L 0.12 × V + 0.42 Service Over Counter (SOC) ≥32 SOC.SC.M 0.32 × TDA + 0.53 0 (L) <32 SOC.SC.L 0.67 × TDA + 1.12
Self

- Contained Commercial Refrigerators with Transparent Doors for Pull

Down Temperature Applications Self

- Contained (SC)

. Pull

- Down (PD) 38 (M) ≥32 PD.SC.M 0.03 × V + 0.83

Commercial Ice

Cream Freezers

. Remote (RC) Vertical Open (VOP)

- 15 (I) ≤

- 5** VOP.RC.I 2.68 × TDA + 8.08 Semivertical Open (SVO) SVO.RC.I 2.68 × TDA + 8.08 Horizontal Open (HZO) HZO.RC.I 0.72 × TDA + 8.74 Vertical Closed Transparent (VCT) VCT.RC.I 0.51 × TDA + 2.37
Horizontal Closed Transparent (HCT) HCT.RC.I 0.35 × TDA + 0.27
Vertical Closed Solid (VCS) VCS.RC.I 0.25 × V + 0.58 Horizontal Closed Solid (HCS) HCS.RC.I 0.25 × V + 0.58 Service Over Counter (SOC) SOC.RC.I 1.19 x 0.97 × TDA + 0. 26 21390 CRE NOPR ECS OMB Compare 

### .docx Self

- Contained (SC)

. Vertical Open (VOP) VOP.SC.I 5.35 x 4.81 × TDA + 14.48 13.03 Semivertical Open (SVO)

. SVO.SC.I 5.23 x 4.79 × TDA + 13.88 12.72 Horizontal Open (HZO)

. HZO.SC.I 2.44 × TDA + 9.0 Vertical Closed Transparent (VCT)

. VCT.SC.I 0.52 × TDA + 2.56

Horizontal Closed Transparent (HCT)

. HCT.SC.I 0.49 × TDA + 0.37

Vertical Closed Solid (VCS)

. VCS.SC.I 0.35 × V + 0.81 Horizontal Closed Solid (HCS)

. HCS.SC.I 0.35 × V + 0.81 Service Over Counter (SOC) SOC.SC.I 1. 67 x 35 × TDA + 0. 36 29 * The meaning of the letters in this column is indicated in the columns to the left. ** Ice

- cream freezer is defined in 10 CFR 431.62 as a commercial freezer that is designed to operate at or below

- 5 °F *(

- 21 °C) and that the manufacturer designs, markets, or intends for the storing, displaying, or dispensing of ice cream. 

### (2) For commercial refrigeration equipment with two or more compartments ( i.e. , hybrid refrigerators, hybrid freezers, hybrid refrigerator

- freezers, and non

- hybrid refrigerator

- freezers), the maximum daily energy consumption for each model shall be the sum of the MDEC values for all of its compartments. For each compartment, measure the TDA or volume of that compartment, and determine the appropriate equipment class based on that compartment’s equipment family, condensing unit configuration, and designed operat ing temperature. The MDEC limit for each compartment shall be the calculated value obtained by entering that compartment’s TDA or volume into the standard equation in paragraph (e)(1) of this section for that compartment’s equipment391 CRE NOPR ECS OMB Compare 

### .docx class. Measure the CDEC or TDEC for the entire case as described in §431.66(d)(2)(i) through (iii), except that where measurements and calculations reference ARI Standard 1200-2006 (incorporated by reference, see §431.63), AHRI Standard 1200 (I

- P) -2010 (incorporated by reference, see §431.63) shall be used

. (3) For remote condensing and self- contained wedge cases, measure the CDEC or TDEC according to the AHRI Standard 1200 (I

- P)

- 2010 test procedure (incorporated by reference, see §431.63). For wedge cases in equipment classes for which a volume metric is used, the MDEC shall be the amount derived from the appropriate standards equation in paragraph (e)(1) of this section. For wedge cases of equipment classes for which a TDA metric is used, the MDEC for each model shall be the amount derived by incorporating into the standards equation in paragraph (e)(1) of this section for the equipment class a value for the TDA that is the product of: (i) The vertical height of the air curtain (or glass in a transparent door) and (ii) The largest overall width of the case, when viewed from the front. (ii) The largest overall width of the case, when viewed from the front.