October 1, 2013 Docket Number: EERE - 2013 - BT - STD - 0030 PkgdBoilers2013STD0030@ee.doe.gov 

## Energy Conservation Standards Framework for Commercial Packaged Boilers2 

# Welcome and Introduction

• Introductions

• Role of the Facilitator

• Ground Rules

– Listen as an ally

– Focus on issues

– Use short, succinct statements/keep to the point

– Hold sidebar conversations outside the room

– One person speaks at a time (raise hand to be recognized; state your name for the record)

– Set cell phones to silent/vibrate



### • Housekeeping Items

• Agenda Review

• Opening Remarks

Title Slide, Boiler Photo Source: http:// www.easco.com/mobile - temporary - boilers - rentals.html3 

# Morning Agenda
9:00 – 9:05 am Welcome 9:05 – 9:20 am Opening Remarks, Introductions, and Agenda Review 9:20 – 9:30 am Regulatory History 9:30 – 10:00 am Rulemaking Process Overview 10:00 – 10:15 am Break 10:15 – 11:00 am Scope and Test Procedure 11:00 – 11:30 am Market & Technology Assessment 11:30 – 11:50 am Screening Analysis, Engineering Analysis 11:50 – 12:10 pm Markups and Energy Use Analyses 12:10 – 12:30 pm Life

- Cycle Cost and Payback Period Analysis 12:30 – 1:30 pm Break for Lunch4 

# Afternoon Agenda
1:30 – 1:50 pm Shipments Analysis and National Impact Analysis 1:50 – 2:10 pm Preliminary Manufacturer Impact Analysis 2:10 – 2:30 pm NOPR Analyses 2:30 – 3:00 pm Next Steps and Closing Remarks5 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 76 

# Listening Via the Webcast

• The U.S. Department of Energy (DOE) is broadcasting this meeting live over the internet.

• DOE is providing the webcast to accommodate interested parties that are unable to attend the public meeting in person.

• The web broadcast allows interested parties to listen in, view the slides, and submit questions and comments.

• All interested parties are encouraged to submit written comments after the public meeting but before the close of the public comment period on October 18, 2013.7 

# Purpose of the Public Meeting

• Present the F ramework Document’s procedural and analytical approaches for evaluating potential amended energy conservation standards for commercial packaged boilers.

• Provide a forum for public discussion of rulemaking matters.

• Facilitate the rulemaking process.

• Encourage participants to submit data, information, summary statements, and written comments, including additional issues for discussion.8 

# Request for Comment

Issue box numbering corresponds to the list of items published at the end of the Framework Document, available at: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/p roductid/74 The deadline for submitting comments is October 18, 2013
. While DOE invites comment on all aspects of the material presented in this document, several specific issues on which DOE seeks comment are set out in comment boxes like this one. DOE uses these comment boxes to highlight issues and to ask specific questions on the approaches DOE plans to follow to conduct the analyses required for this energy conservation standards rulemaking. Such requests for feedback are numbered sequentially throughout the document.9 

# Opening Remarks

Meeting participants are invited to provide opening remarks or statements at this time.10 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 711 

# Regulatory History

• The Energy Policy and Conservation Act (EPCA) of 1975 (Public Law 94

- 163)

– Established the Energy Conservation Program for Certain Commercial and Industrial Equipment

• The Energy Policy Act of 1992 (EPACT 1992), (Public Law 102−486) amended EPCA to add commercial packaged boilers as a type of covered equipment. ( 42 U.S.C. 6311(1)(J) and (11 )(B))

• EPCA directs DOE to consider amending existing Federal energy conservation standards for commercial packaged boilers whenever the American Society of Heating, Refrigerating, and Air

- Conditioning Engineers (ASHRAE) amends the efficiency levels in Standard 90.1. (42 U.S.C . 6313(a )(6))

• The Energy Independence and Security Act of 2007 (EISA 2007) (Public Law 110

- 140) and the American Energy Manufacturing Technical Corrections Act (AEMTCA) (Public Law 112

- 210) amended EPCA to require that every 6 years, the Secretary publish either:

• (I) a notice of the determination that standards for the product do not need to be amended; or
• (II) a notice of proposed rulemaking including new proposed standards (42 U.S.C. 6313(6)(C)(i))12 

# Regulatory History

• DOE published a final rule in 2009 (74 FR 36312 (July 22, 2009)).

– Adopted energy conservation standards that correspond to the levels in ASHRAE Standard 90.1

- 2007. These standards are codified at 10 CFR 431.87(b).
Boiler Type Subtype Size category ( input, BTU/H) Efficiency Level Hot Water Gas

- fired 300,000

- 2,500,000 80.0% E T Hot Water Gas

- fired > 2,500,000 82.0% E C Hot Water Oil

- fired 300,000

- 2,500,000 82.0% E T Hot Water Oil

- fired > 2,500,000 84.0% E C Steam Gas

- fired

— all, except natural draft 300,000

- 2,500,000 79.0% E T Steam Gas

- fired

— all, except natural draft > 2,500,000 79.0% E T Steam Gas

- fired

— natural draft 300,000

- 2,500,000 77.0% E T * Steam Gas

- fired

— natural draft > 2,500,000 77.0 % E T * Steam Oil

- fired 300,000

- 2,500,000 81.0% E T Steam Oil

- fired > 2,500,000 81.0% E T E T – Thermal efficiency, E C – Combustion efficiency * Efficiency level will increase to 79.0% E T on March 2, 2022 Table 1. Commercial Packaged Boiler Equipment Minimum Efficiency Standards – Effective Date: March 2, 201213 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 714 

### • TP and ECS rulemakings are separate processes but have integrated timelines.

• The TP rulemaking timeline duration is about 1.5 years from start to finish.

• The ECS rulemaking timeline duration is about 3 years from start to finish.

• For additional information on the rulemaking process go to: http :// www1.eere.energy.gov/buildings/appliance_standards/standards_dev_and_revision.html 

### Energy Conservation Standards (ECS)

Test Procedure (TP) NOPR Final Rule 

## Test Procedure and Standard Rulemakings Timelines

Framework Document Preliminary Analysis NOPR Final Rule 

# Rulemaking Overview15 

# EPCA Factors

• 42 U.S.C. 6313(a)(6)(B)(ii) directs DOE to consider seven factors when setting energy conservation standards.

EPCA Factors DOE Analysis 1. Economic impact on consumers and manufacturers Life

- Cycle Cost Analysis Manufacturer Impact Analysis 2. Lifetime operating cost savings compared to increased cost for the product Life

- Cycle Cost Analysis 3. Total projected energy savings National Impact Analysis 4. Impact on utility or performance Engineering Analysis Screening Analysis 5. Impact of any lessening of competition Manufacturer Impact Analysis 6. Need for national energy conservation National Impact Analysis
7. Other factors the Secretary of Energy considers relevant Environmental Assessment Utility Impact Analysis Employment Impact Analysis Table 2. EPCA Factors and Associated Rulemaking Analyses16 

## Framework Document

• Provides an overview of the rulemaking process and encourages early participation from interested parties.

• Invites comments on proposed approach and issues.

• Accompanying Federal Register Notice of Public Meeting (NOPM) – 78 FR 54197 (Sept. 3, 2013).

– Gives notice of the public meeting and availability of the Framework Document being discussed today.

– Encourages interested parties to submit comments. 

# ECS Rulemaking Stages: Overview

Framework Document Preliminary Analysis NOPR Final Rule Today17 

## Preliminary Analysis Document 

# ECS Rulemaking Stages: Overview

Framework Document Preliminary Analysis NOPR Final Rule

• Preliminary Analyses:

• Federal Register Notice and Public Meeting (NOPM) – Planned July, 2014 .

− Gives notice of the public meeting and availability of the Preliminary Technical Support Document (TSD).

− Encourages interested parties to submit comments. − Design options to increase efficiency (engineering analysis).

− Manufacturer
- to - user markups

− Energy use

− Consumer life
- cycle cost (LCC) and payback period (PBP) − Shipments

− National impacts (including national energy savings (NES) and consumer net present value (NPV)

− Preliminary analysis of manufacturer impacts

− Discussion of comments received in response to the Framework D ocument18 

## Notice of Proposed Rulemaking (NOPR) Document

• Discussion of comments received in response to Preliminary Analysis TSD.

• Analysis of the impacts of potential standards on consumers, manufacturers, and the Nation and weighting of these impacts.

• Any proposed standard levels for public comment.

• Federal Register publication of the NOPR – Planned July, 2015.

– Gives notice of DOE’s proposal, availability of the revised NOPR TSD, and the public meeting.

– Encourages interested parties to submit comments. 

# ECS Rulemaking Stages: Overview

Framework Document Preliminary Analysis NOPR Final Rule19 

## Final Rule Publication

• Discussion of comments received in response to the NOPR.

– DOE will consider all written comments and oral input ( e.g ., public meeting transcript) when preparing the final rule

• Revision of the analysis of the proposed standards and weighing of the impacts to arrive at the final rule.

• Determination and promulgation of the energy efficiency standard levels that DOE is adopting.

• Establish the “effective date” and “compliance date” for any new standards

• Federal Register publication of the Final Rule – Planned July, 2016. 

# ECS Rulemaking Stages: Overview

Framework Document Preliminary Analysis NOPR Final Rule20 

## Notice of Proposed Rulemaking (NOPR) Document

• Discussion of comments received from the ECS Framework public meeting.

• Analysis of the current test procedure and the need for updates or revisions.

• Federal Register publication of the NOPR – Planned September, 2014.

- Gives notice of DOE’s proposal and the public meeting.

- Encourages interested parties to submit comments. 

# Test Procedure Rulemaking Stages: Overview

TP NOPR TP Final Rule21 

## Final Rule Publication 

# Test Procedure Rulemaking Stages: Overview

TP NOPR TP Final Rule

• Discussion of comments received in response to the NOPR.

– DOE will consider all written comments and oral input ( e.g ., public meeting transcript) when preparing the final rule.

• Revision of the analysis of a ny proposed amendments or revisions to the test procedure.

• Determination and promulgation of amendments or revisions to the DOE test procedure.

• Establish the “effective date” for any amendments or revisions to the test procedure.

• Federal Register publication of the test procedure Final Rule – Planned July, 2015.22 

# Commercial Packaged Boiler Rulemaking Schedules

2013 2016 2014 2015 2017 2018 Rulemaking Milestone Date ECS Framework Document August 2013 ECS Availability of the Preliminary Analysis (projected) July 2014 TP Test Procedure Notice of Proposed Rulemaking (NOPR) (projected) Sep 2014 TP Test Procedure Final Rule (projected) July 2015 ECS Notice of Proposed Rulemaking (NOPR) (projected) July 2015 ECS Final Rule (projected) July 2016 ECS Compliance Date (projected) July 2019

2019 Table 3. Commercial Packaged Boiler ECS and TP Rulemaking Schedules

2020

Energy Conservation

Standards Timeline

Test Procedure Timeline23 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 724 

# Scope of Coverage

• DOE plans to maintain the scope of coverage as defined by its current regulations.

• At this time, DOE is not considering standards for electric commercial packaged boilers.

• This rulemaking may consider establishing energy conservation standards for energy consumption of boilers operating in standby mode and off mode.

• DOE recently published a notice of proposed determination (NOPD) regarding coverage of natural draft commercial packaged boilers. 78 FR 49202 (August 13, 2013). As explained in the NOPD, DOE is performing a coverage determination to explicitly clarify its statutory authority under EPCA to cover natural draft commercial packaged boilers, because explicit coverage of this equipment is necessary to carry out the purposes of part A

- 1 of EPCA, 42 U.S.C. 6311 et seq
. Photo Source: http://www.cyclotherm.com/commercial.html25 

# Scope of Coverage

Item 2 - 1 : DOE welcomes comments on the proposed scope of coverage and on whether there are any additional types of commercial packaged boilers that should or should not be included in the scope of this rulemaking. Item 2 - 2: DOE welcomes comments regarding the need to and feasibility of including electric commercial packaged boilers in this rulemaking. Item 2 - 3: DOE requests comments on pursuing standby mode and off mode energy conservation standards for commercial packaged boilers. Item 2 - 4: DOE welcomes comments as to whether there are any size

- related issues with conducting testing under the DOE test procedure which the agency should consider addressing in its test procedure rulemaking. DOE is also interested in any comments regarding whether there is a capacity limit beyond which amended energy conservation standards would not be technologically feasible and economically justified.26 

# Test Procedure

• Current DOE Test Procedure for Commercial Packaged Boilers (10 CFR 431.86)

– Based on the Hydronics Institute (HI) division of the Air

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

– 2000 (Rev 06.07), Method to Determine Efficiency of Commercial Space Heating Boilers

.

– Updated in energy conservation standard Final Rule (74 FR 36312 (July 22, 2009)).

– DOE believes that certain requirements of BTS

- 2000 may cause testing to be either difficult or unfeasible for manufacturers of certain commercial packaged boiler models.

• In the current rulemaking, DOE plans to analyze the alternative test procedures that are available and widely accepted within the industry.


### • Efficiency Metric

– The majority of equipment classes are rated using steady

- state thermal efficiency

.

– Large (>2,500,000 Btu/h) hot water gas

- fired and oil

- fired commercial packaged boilers are rated using steady

- state combustion efficiency.27 

# Test Procedure

Item 3 - 1: DOE welcomes comments on all aspects of the current DOE test procedure for commercial packaged boilers and on whether the test procedure is in need of updates or revisions. Item 3 - 2: DOE requests feedback on issues with the current test procedure that may make it burdensome or unfeasible for manufacturers to conduct testing on some or all models of commercial packaged boilers. Specifically, DOE requests comment whether the operating pressures required by BTS

- 2000 are not achievable for any commercial packaged boilers within the scope of this rulemaking. Item 3 - 3 : DOE requests feedback on testing conditions within the current test procedure that may need to be refined to ensure fair comparison of efficiencies across commercial packaged boiler models. Item 3 - 4: DOE welcomes comments on alternative industry test methods for determining the efficiency for commercial packaged boilers, particularly with regards to how an alternative testing standard would improve or not improve upon the current test procedure based on BTS

- 2000, and on the comparability of efficiency ratings determined using the alternative standards to those from a BTS

- 2000 test.28 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 729 

# Preliminary Analysis

Framework Document Preliminary Analysis NOPR Final Rule Effective Date

Market & Technology Screening Analysis Engineering Analysis

Energy Use Analysis Shipments Analysis National Impact Analysis Life - Cycle Cost and Payback Period Analysis
Preliminary Manufacturer Impact Analysis Markups Analysis30 

# Market and Technology Assessment (M&TA) Purpose

• Characterize the market, the commercial packaged boiler industry, and the measures to improve boiler efficiency. 

## Method

• Identify and characterize manufacturers of commercial packaged boilers;

• Estimate historical shipments and trends in the market;

• Identify regulatory and non

- regulatory initiatives intended to improve the efficiency of the equipment covered under this rulemaking;

• Characterize equipment currently available on the market; and

• Identify technologies that could improve efficiency.31 

# M&TA: Equipment Classes

• DOE may divide covered equipment into equipment classes by:

– (a) the type of energy used;

– (b) the capacity of the equipment; and/or

– (c) any other performance

- related feature that justifies different standard levels.



### • At this time, DOE plans to maintain all commercial packaged boiler equipment classes.

– DOE may consider an electric commercial packaged boiler equipment class.

– In its August 13, 2013 notice of proposed determination (NOPD), DOE discusses natural draft boilers. DOE may consider a separate equipment category for natural draft commercial packaged boilers, which would include its own set of equipment classes.32 

# Market and Technology Assessment

Item 5 - 1: DOE welcomes data that would contribute to the market assessment, including but not limited to information on the national historical shipments, manufacturing costs, distribution channels, and manufacturer market share of commercial packaged boilers. Item 5 - 2: DOE welcomes information about organizations interested in the commercial packaged boilers rulemakings for energy efficiency standards and test procedures, including manufacturers, component manufacturers, assemblers, trade associations, utilities, inspectors, State agencies, energy efficiency advocates, and related organizations . Item 5 - 3: DOE welcomes comment on its considered equipment classes. Are there any other performance

- related features that should be considered for commercial packaged boilers equipment classes?33 

# M&TA: Technology Options to Improve Efficiency

Item 5 - 4: DOE welcomes comments on the technologies identified, and any additional technology options which are not herein identified. Table 5. Technology Options to Improve Combustion and/or Thermal Efficiency Jacket Insulation Burner Derating Condensing Boilers and Other Heat Exchanger Improvements Combustion Air Preheaters Improved Burner Technology Economizers Integrated, High

- Efficiency Steam Boilers Table 6. Technology Options to Reduce Standby /Off Mode Energy Consumption Toroidal Transformer Control Relay for Models with Brushless Permanent Magnet (BPM) Motors Switching Mode Power Supply Table 7. Technology Options to Reduce Seasonal Boiler Energy Consumption Modulating Burners

Electronic Ignition Dampers Temperature Reset Controls Thermal Post

- Purge Controls Delayed

- Action Oil Pump Solenoid Valve34 

# Screening Analysis Purpose

• Screen out technology options that DOE will not consider in the engineering analysis and downstream analyses for commercial packaged boilers. 

## Approach

• DOE evaluates each technology option based on the following criteria, as provided at 10 CFR Part 430, Subpart C, Appendix A, sections 4(a )(4) and 5(b ):



### − T echnological feasibility;

− P racticability to manufacture, install, and service;

− A dverse effects on equipment utility or availability; and

− A dverse effects on health or safety.
Item 6 - 1 : Of the technology options listed in section 5.4 of the Framework Document, which, if any, should be screened out based on the four screening criteria? If so, which criteria apply and why?35 

# Engineering Analysis

• A key factor in setting an energy conservation standard is the increased cost of a more - efficient equipment.

• The Engineering Analysis determines the relationship between cost and efficiency

.
Rulemaking Analyses

• Life
- Cycle Cost and Payback Period

• Manufacturer Impact Analysis

• Employment Impact Analysis Manufacturer Selling Price – Efficiency RelationshipManufacturerSelling Price

Efficiency Level36 

# Engineering Analysis

Identify Efficiency Levels

Perform Teardown Analysis

Develop Manufacturer Production Cost Define Baseline Models  Define characteristics of models in each equipment class, which will serve as reference points to assess changes due to more - stringent standard levels.
 Identify more

- efficient substitutes from a database of commercially

- available boilers.
 Develop estimates of equipment cost for baseline boilers and boilers at higher efficiency levels.
 Develop cost

- efficiency relationship from efficiency data and equipment cost estimates.37 

# Engineering Analysis
Item 7 - 1: DOE seeks input about the range of efficiency levels and any key efficiency levels that it should examine as part of its analysis. Item 7 - 2: DOE seeks comment about maximum technologically feasible (“max

- tech”) efficiency levels applicable to each class of commercial packaged boiler. Item 7 - 3: DOE seeks input on the representative capacity and other representative characteristics for each commercial packaged boiler equipment class. Item 7 - 4: DOE seeks input about design, construction, or performance characteristics which may require consideration of multiple representative units within a single equipment class.38 

# Markups Analysis Purpose

• Characterize the channels for how equipment is distributed from the manufacturer to the boiler end

- user ( i.e. , the commercial consumer).

• Determine prices paid by end

- users based on manufacturer selling prices for baseline and higher

- efficiency equipment


### . 

## Method

• Identify distribution channels.

• Estimate the markups for each step of the distribution channel from manufacturer to end

- user.39 

# Markups Analysis Commercial Packaged Boiler Distribution Channels

Manufacturer Mechanical Contractor Wholesaler End User Replacement Distribution Channel
Manufacturer Mechanical Contractor General Contractor End User New Construction Distribution Channel Wholesaler

Manufacturer End User National Account Distribution Channel

Manufacturer Wholesaler End User
Wholesaler Distribution Channel 

### A)

B )

C )
D)40 

# Markups Analysis
Item 8 - 1 : DOE seeks input about whether the distribution channels described on the previous slide are appropriate for commercial packaged boilers. Item 8 - 2: DOE seeks input about the percentage of equipment being distributed through the different distribution channels, and whether the share of equipment through each channel varies based on equipment class or equipment capacity. Item 8 - 3: DOE welcomes suggestions and comments concerning its proposed approach to developing estimates of future commercial packaged boiler retail prices. Item 8 - 4: DOE seeks recent data to establish the markups for the parties involved with the distribution of the equipment.41 

# Energy Use Analysis Purpose

• Develop annual energy use (AEU) for commercial packaged boilers to estimate the energy

savings potential of amended energy conservation standards in the LCC and PBP analysis. 

## Method

• Determine space heating and water heating over the range of applications , commercial building types, and climate zones for commercial packaged boiler equipment.

• Develop a relationship between commercial packaged boiler energy use and thermal efficiency to determine energy use, by efficiency level, for all equipment classes.

• Account for the electricity consumption of commercial packaged boiler components.

Item 9 - 1 : DOE seeks input on the planned approach for determining the energy consumption of commercial packaged boilers in commercial buildings

. Item 9 - 2 : DOE seeks historical shipment

- weighted commercial packaged boiler efficiency data or shipment data by efficiency bins. DOE is primarily interested in obtaining these data during the last 10 years to capture the impact of the most current technologies on the boilers market

.42 

# Energy Use Analysis
Item 9 - 3 : DOE seeks input about data sources that it can use to characterize the variability in annual energy consumption for commercial packaged boilers. DOE is particularly interested in field monitoring studies and data. Item 9 - 4 : DOE requests comment about what other energy use by commercial packaged boilers should be included in the energy use analysis

. Item 9 - 5 : DOE welcomes comment about whether the rated thermal efficiencies for all commercial packaged boiler equipment should be adjusted to reflect return
- water conditions (previously done for condensing boilers only). Item 9 - 6 : DOE seeks input about what fractions of hot

- water commercial packaged boilers are used both for space heating and hot water. Item 9 - 7 : DOE seeks input about the fraction of commercial packaged boilers used in residential applications. Is this market large enough that DOE should take it into account? Item 9 - 8 : DOE seeks comment about the rebound effect that may be associated with more

- efficient commercial packaged boilers.43 

# Life
- Cycle Cost (LCC) & Payback Period (PBP) Analysis Purpose

• Assess the LCC and PBP for users of commercial packaged boilers under the considered efficiency levels. 

## Method

• LCC equals user price plus the sum of installation cost and annual operating costs over the analysis period discounted to a particular base year.

• Analysis will model the uncertainty and variability of inputs using a Monte Carlo calculation method and probability distributions.

• Analysis will be implemented in MS Excel® spreadsheet combined with Crystal Ball 

### .®

Item 10 - 1: DOE seeks input about its proposed LCC approach to using probability distributions and Monte Carlo simulation to conduct the LCC and PBP analysis.44 

# LCC & PBP Analysis Inputs

• Energy Prices

– DOE intends to determine gas, oil, and electricity prices based on recent or current tariffs from a representative sample of utilities and EIA’s Annual Energy Outlook (AEO).



### • Installation, Maintenance, and Repair Costs

– DOE intends to develop installation, maintenance, and repair costs for its analysis using the most recent RS Means data available.



### • Lifetime

– DOE plans to develop Weibull probability distributions to characterize commercial packaged boiler lifetime.

– DOE plans to use ASHRAE data, as well as review available literature and consult with industry experts to establish typical equipment lifetime.



### • Discount Rates

– DOE will derive the discount rates for boiler users by estimating the capital costs for companies that purchase commercial packaged boilers.45 

# LCC & PBP Analysis Flowchart

Baseline Manufacturer Cost Engineering Analysis Std - Level Manufacturer Cost

Manufacturer Markup Markups to Determine Equipment Price Distributer & Contractor

Markups
Sales Tax

Energy Use Characterization Energy Consumption
Energy Prices Consumer Price

Installation Cost Total Installed Cost

Annual Energy Cost Repair Cost

Maintenance Cost Annual Operating Expense
Lifetime

Discount

Rate Energy Price Trend Lifetime Operating Expense Payback

Period Life - Cycle Cost46 

# Life
- Cycle Cost and Payback Period Analysis
Item 10 - 2: DOE requests data to characterize the current mix of boiler efficiencies in the market.
Item 10 - 3 : DOE seeks input about the planned approach for estimating future energy prices.
Item 10 - 4 : DOE seeks input about the maintenance and repair costs approach. In particular, DOE requests comment about frequency and cost of maintenance, major repair issues, repair frequency and cost for boilers that just meet the minimum efficiency standards, as well as for high

- efficiency boilers

. Item 10 - 5 : DOE seeks interested party input about its proposed installation cost approach. Specifically, DOE requests data about the fractions of installations that would entail significant additional installation expenses.47 

# Life
- Cycle Cost and Payback Period Analysis
Item 10 - 6: DOE requests comment about the methodology used to determine equipment lifetimes for commercial packaged boilers. Item 10 - 7 : DOE seeks input about its planned approach for estimating discount rates for commercial boiler users. Item 10 - 8 : DOE requests data about the boiler efficiency distribution and welcomes comment about the likelihood and degree of improvement in efficiency of commercial packaged boilers in the next 5 to 10 years as a result of market forces or industry trends (in the absence of amended energy conservation standards ).48 

# Shipments Analysis Purpose

• To project commercial packaged boiler shipments in the base case and standards cases in order to calculate the effects of amended energy conservation standards on energy savings and present value of savings, as well as future manufacturer cash flows. 

## Method

• DOE plans to project shipments of commercial packaged boilers by accounting for sales to the two primary market segments: (1) the replacement market and (2) the new construction market.

• The shipments model relies on multiple data sources including:

− Manufacturers and industry organizations

− Historical commercial packaged boiler shipments were provided in the 2009 commercial packaged boilers final rule by GAMA/AHRI.

− National market reports

− Publicly

- available sources49 

# Shipments Analysis
Item 11 - 1: DOE welcomes comment about the shipments projection methodology.
Item 11 - 2: DOE welcomes input on the selection of appropriate economic drivers and sources of data for historical shipments.
Item 11 - 3: DOE seeks historical commercial packaged boiler shipments data, disaggregated by equipment class and efficiency level if possible.
Item 11 - 4: DOE seeks input on the potential impact of amended standards on commercial packaged boiler shipments.50 

# National Impact Analysis Purpose

• To assess the aggregate effects at the n ational level of potential amended energy conservation standards for each equipment class, in terms of national energy savings (NES) and net present value (NPV). 

### Method

• DOE plans to apply a boiler efficiency distribution to the shipments projections to determine energy use in the base case and various standards cases

.

− DOE can use a “roll

- up” or “shift” scenario to characterize the boiler efficiency distribution.
• DOE calculates annual NES by taking the difference in energy use between the base case and the standards cases.

• DOE calculates NPV as the difference between the present value of operating cost savings and the present value of total installed costs for each of the standards cases.51 

# National Impact Analysis

Item 12 - 1 : DOE seeks comment on appropriate assumptions to use for long

- run changes in boiler efficiency independent of amended energy conservation standards. Item 12 - 2: DOE requests comment about whether to pursue a roll

- up or shift approach.52 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 753 

# Notice of Proposed Rulemaking (NOPR) Analyses

Manufacturer Impact Analysis Utility Impact Analysis Employment Impact Analysis LCC Subgroup Analysis Revise Preliminary Analysis Emissions Analysis and Monetization Regulatory Impact Analysis

Engineering Analysis Life - Cycle Cost & Payback Period Analysis National Impact Analysis Framework Document Preliminary Analysis NOPR Final Rule Effective Date54 

# LCC Consumer Subgroup Analysis Purpose

• Analyze the economic impacts of amended energy conservation standards on subgroups of boiler end

- users who are likely to be disproportionately impacted compared with the general population.


## Method

• DOE plans to utilize the LCC spreadsheet model to analyze the LCC for subgroups by sampling inputs specific to that subgroup.

Item 13 - 1: DOE requests input about what consumer subgroups are appropriate to evaluate for commercial packaged boilers.55 

# Manufacturer Impact Analysis Purpose

• To assess the potential impacts of amended standards on manufacturers.

• To identify and estimate impacts on manufacturer subgroups that may be more severely impacted than the industry as a whole.

• To examine the impact of cumulative regulatory burden on the industry. 

## Method

• Analyze industry cash flow and industry net present value through use of the Government Regulatory Impact Model (GRIM).

• Interview manufacturers to refine inputs to the GRIM, develop subgroup analyses, and address qualitative issues.
Item 14 - 1 : DOE seeks comments about appropriate manufacturer subgroups, if any, that DOE should consider in a manufacturer subgroup analysis for commercial packaged boilers

. Item 14 - 2 : DOE welcomes data about the names and number of small manufacturers in the commercial packaged boilers industry. Item 14 - 3: DOE requests comments about what other existing regulations or pending regulations it should consider in its examination of cumulative regulatory burden.56 

# Emissions Analysis Purpose

• To report environmental impacts of amended energy conservation standards. 

## Method

• In estimating physical reductions of emissions, DOE intends to use the emissions effects projected from the National Energy Modeling System (NEMS)

– Building Technologies (BT) to conduct its analysis.

• DOE plans to consider, to the extent feasible, reduction in power sector emissions of carbon dioxide (CO 2 ), nitrogen oxides (NO X ), sulfur dioxide (SO 2 ), mercury (Hg ), methane (CH 4 ), nitrous oxide (N 2 O), and particulate matter (PM).

• DOE plans also to consider emissions impacts in fuel production activities (extracting, processing, and transporting fuels) for the fuels used in power plants.

• DOE plans to account for the emissions from boiler combustion at the building site. Item 15 - 1 : DOE seeks input about its approach to conduct the emissions analysis for the commercial packaged boiler equipment covered by this rulemaking.57 

# Monetizing CO 2 

# and Other Emissions Reductions Purpose

• To report monetary benefits from the reduced emissions of CO 2 and NO X from amended energy conservation standards. 

## Method

• In estimating the monetary value of reduced emissions, DOE intends to use the most current social c ost of carbon (SCC) values developed by interagency reviews.

• DOE multiplies the CO 2 emissions reduction by the SCC value then discounts the values to calculate its present value.

• DOE estimates the potential monetary benefit of reduced NO X emissions based on environmental impact estimates found in the relevant scientific literature. These values are discounted to obtain a present value at 3% and 7% (in accordance with OMB guidance).

• Although it may not be possible to do so at this time, DOE plans to investigate valuation methods for avoided SO 2 , Hg, CH 4 , N 2 O, and PM emissions. Item 16 - 1: DOE requests comments about the approach it plans to use for estimating monetary benefits associated with emissions reductions.58 

# Utility Impact Analysis Purpose

• Assess the overall effects on domestic energy supplies that would result from the adoption of amended energy conservation standards

. 

## Method

• DOE proposes to use the Energy Information Agency (EIA’s) NEMS

- BT model, as the basis of the utility impact analysis.

• DOE plans to model the energy savings impacts from amended energy conservation standards using NEMS

- BT to generate projections for the Annual Energy Outlook ( AEO ) Reference Case and additional cases.

• Outputs of the utility impact analysis include projections of electricity generation and avoided capacity resulting from a comparison of the base case and standards cases.
Item 17 - 1 : DOE welcomes input about its proposed approach to conduct the utility impact analysis.59 

# Employment Impact Analysis Purpose

• Assess the overall effects on national employment from the adoption of amended energy conservation standards at various levels.

• Includes both direct and indirect employment impacts.

• Direct employment impacts are estimated in the manufacturer impact analysis.

• Indirect employment analysis estimates the impacts on the national economy that result from shifting user expenditures among goods and services (“substitution effect”) and changes in income and overall expenditure levels (“income effect”). 

## Method

• DOE intends to use the Impact of Sector Energy Technologies (ImSET) model for the evaluation of indirect employment impacts.

Item 18 - 1 : DOE welcomes feedback about its proposed approach to assessing national employment impacts.60 

# Regulatory Impact Analysis Purpose

• To investigate the national effects of non

- regulatory alternatives compared with mandatory energy conservation standards

. 

## Method

• Modify NES spreadsheet model to consider non

- regulatory scenarios.

• Estimate effects of non

- regulatory scenarios based on experience with the considered policies.

• Output will include NES and NPV of the non

- regulatory alternatives.61 

# Public Meeting Agenda

Scope and Test Procedures Preliminary Analyses NOPR Analyses 4
5
6 Regulatory History 2 Rulemaking Overview 3 1 Introduction

Closing Remarks 762 

# Closing Remarks

Meeting participants are invited to provide closing remarks or statements at this time.63 

# How to Submit Written Comments

• In all correspondence, please refer to the commercial packaged boiler rulemaking by :

− Commercial Packaged Boiler Energy Conservation Standard Rulemaking

− Docket Number: EERE

- 2013

- BT

- STD

- 0030

− Regulatory Identification Number (RIN): 1904

- AD01



### • Email: PkgdBoilers2013STD0030@ee.doe.gov Postal : Courier : Ms. Brenda Edwards U.S. Department of Energy Building Technologies Office, Mailstop EE

- 2J 1000 Independence Avenue, SW Washington, DC 20585

- 0121 Ms. Brenda Edwards U.S. Department of Energy Building Technologies Office, Suite 600 950 L’Enfant Plaza, SW Washington, DC 20024 Tel: (202) 586

- 2945 

### Comment period closes : October 18, 2013 — 11:59 PM EDT http:// www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/74