20608 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Parts 429 and 430 

[EERE–2014–BT–STD–0059] 

RIN 1904–AD97 

Energy Conservation Program: Energy 

Conservation Standards for Room Air 

Conditioners 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notice of proposed rulemaking 

and announcement of a webinar. 

SUMMARY: The Energy Policy and 

Conservation Act, as amended 

(‘‘EPCA’’), prescribes energy 

conservation standards for various 

consumer products and certain 

commercial and industrial equipment, 

including room air conditioners. EPCA 

also requires the U.S. Department of 

Energy (‘‘DOE’’) to periodically 

determine whether more-stringent 

standards would be technologically 

feasible and economically justified, and 

would result in significant energy 

savings. In this notice of proposed 

rulemaking (‘‘NOPR’’), DOE proposes 

amended energy conservation standards 

for room air conditioners, and also 

announces a webinar to receive 

comment on these proposed standards 

and associated analyses and results. 

DATES: DOE will hold a webinar on 

Tuesday, May 3, 2022, from 12:30 p.m. 

to 4:30 p.m. See section VIII, ‘‘Public 

Participation,’’ for webinar registration 

information, participant instructions, 

and information about the capabilities 

available to webinar participants. 

Comments: DOE will accept 

comments, data, and information 

regarding this NOPR no later than June 

6, 2022. 

Comments regarding the likely 

competitive impact of the proposed 

standard should be sent to the 

Department of Justice contact listed in 

the ADDRESSES section on or before May 

9, 2022. 

ADDRESSES: Interested persons are 

encouraged to submit comments using 

the Federal eRulemaking Portal at 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Alternatively, interested persons may 

submit comments, identified by docket 

number EERE–2014–BT–STD–0059, by 

any of the following methods: 

(1) Federal eRulemaking Portal: 

www.regulations.gov. Follow the instructions 

for submitting comments. 

(2) Email: RoomAC2014STD0059@

ee.doe.gov. Include the docket number 

EERE–2014–BT–STD–0059 in the subject line 

of the message. 

No telefacsimilies (‘‘faxes’’) will be 

accepted. For detailed instructions on 

submitting comments and additional 

information on this process, see section 

IV of this document. 

Although DOE has routinely accepted 

public comment submissions through a 

variety of mechanisms, including postal 

mail and hand delivery/courier, the 

Department has found it necessary to 

make temporary modifications to the 

comment submission process in light of 

the ongoing Covid–19 pandemic. DOE is 

currently suspending receipt of public 

comments via postal mail and hand 

delivery/courier. If a commenter finds 

that this change poses an undue 

hardship, please contact Appliance 

Standards Program staff at (202) 586– 

1445 to discuss the need for alternative 

arrangements. Once the COVID–19 

pandemic health emergency is resolved, 

DOE anticipates resuming all of its 

regular options for public comment 

submission, including postal mail and 

hand delivery/courier. 

Docket: The docket for this activity, 

which includes Federal Register 

notices, comments, and other 

supporting documents/materials, is 

available for review at 

www.regulations.gov. All documents in 

the docket are listed in the 

www.regulations.gov index. However, 

not all documents listed in the index 

may be publicly available, such as 

information that is exempt from public 

disclosure. 

The docket web page can be found at 

www.regulations.gov/docket?D=EERE2014-BT-STD-0059. The docket web 

page contains instructions on how to 

access all documents, including public 

comments, in the docket. See section 

VIII of this document for information on 

how to submit comments through 

www.regulations.gov. 

Written comments regarding the 

burden-hour estimates or other aspects 

of the collection-of-information 

requirements contained in this proposed 

rule may be submitted to Office of 

Energy Efficiency and Renewable 

Energy following the instructions at 

RegInfo.gov. 

EPCA requires the Attorney General 

to provide DOE a written determination 

of whether the proposed standard is 

likely to lessen competition. The U.S. 

Department of Justice Antitrust Division 

invites input from market participants 

and other interested persons with views 

on the likely competitive impact of the 

proposed standard. Interested persons 

may contact the Division at 

energy.standards@usdoj.gov on or 

before the date specified in the DATES

section. Please indicate in the ‘‘Subject’’ 

line of your email the title and Docket 

number of this proposed rulemaking. 

FOR FURTHER INFORMATION CONTACT: 

Mr. Bryan Berringer, U.S. Department 

of Energy, Office of Energy Efficiency 

and Renewable Energy, Building 

Technologies Office, EE–5B, 1000 

Independence Avenue SW, Washington, 

DC 20585–0121. Telephone: (202) 586– 

0371. Email: 

ApplianceStandardsQuestions@

ee.doe.gov. 

Ms. Sarah Butler, U.S. Department of 

Energy, Office of the General Counsel, 

GC–33, 1000 Independence Avenue SW, 

Washington, DC 20585–0121. 

Telephone: (202) 586–1777. Email: 

Sarah.Butler@hq.doe.gov. 

For further information on how to 

submit a comment, review other public 

comments and the docket, or participate 

in the webinar, contact the Appliance 

and Equipment Standards Program staff 

at (202) 287–1445 or by email: 

ApplianceStandardsQuestions@

ee.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Synopsis of the Proposed Rule 

A. Benefits and Costs to Consumers 

B. Impact on Manufacturers 

C. National Benefits and Costs 

D. Conclusion 

II. Introduction 

A. Authority 

B. Background 

1. Current Standards 

2. History of Standards Rulemaking for 

Room ACs 

C. Deviation From Appendix A 

III. General Discussion 

A. Product Classes and Scope of Coverage 

B. Test Procedure 

C. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible 

Levels 

D. Energy Savings 

1. Significance of Savings 

E. Economic Justification 

1. Specific Criteria 

a. Economic Impact on Manufacturers and 

Consumers 

b. Savings in Operating Costs Compared To 

Increase in Price (LCC and PBP) 

c. Energy Savings 

d. Lessening of Utility or Performance of 

Products 

e. Impact of Any Lessening of Competition 

f. Need for National Energy Conservation 

g. Other Factors 

2. Rebuttable Presumption 

IV. Methodology and Discussion of Related 

Comments 

A. Market and Technology Assessment 

1. Scope of Coverage and Product Classes 

2. Technology Options 

a. Reduced Evaporator Air Recirculation 

b. Compressors 

c. Significant New Alternatives Policy 

(SNAP)-Approved Refrigerants 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20609 

1For editorial reasons, upon codification in the 

U.S. Code, Part B was redesignated Part A. 

2All references to EPCA in this document refer 

to the statute as amended through the Infrastructure 

Investment and Jobs Act, Public Law 117–58 (Nov. 

15, 2021). 

B. Screening Analysis 

1. Screened-Out Technologies 

2. Remaining Technologies 

C. Engineering Analysis 

1. Efficiency Analysis 

a. Baseline Efficiency 

b. Higher Efficiency Levels 

2. Cost Analysis 

3. Cost-Efficiency Results 

D. Markups Analysis 

E. Energy Use Analysis 

F. Life-Cycle Cost and Payback Period 

Analysis 

1. Product Cost 

2. Installation Cost 

3. Annual Energy Consumption 

a. Rebound Effect 

4. Energy Prices 

5. Maintenance and Repair Costs 

6. Product Lifetime 

7. Discount Rates 

8. Energy Efficiency Distribution in the NoNew-Standards Case 

9. Payback Period Analysis 

G. Shipments Analysis 

H. National Impact Analysis 

1. Product Efficiency Trends 

2. National Energy Savings 

3. Net Present Value Analysis 

I. Consumer Subgroup Analysis 

J. Manufacturer Impact Analysis 

1. Overview 

2. Government Regulatory Impact Model 

and Key Inputs 

a. Manufacturer Production Costs 

b. Shipments Projections 

c. Product and Capital Conversion Costs 

d. Manufacturer Markup Scenarios 

3. Manufacturer Interviews 

4. Discussion of MIA Comments 

K. Emissions Analysis 

1. Air Quality Regulations Incorporated in 

DOE’s Analysis 

L. Monetizing Emissions Impacts 

1. Monetization of Greenhouse Gas 

Emissions 

a. Social Cost of Carbon 

b. Social Cost of Methane and Nitrous 

Oxide 

2. Monetization of Other Air Pollutants 

M. Utility Impact Analysis 

N. Employment Impact Analysis 

V. Analytical Results and Conclusions 

A. Trial Standard Levels 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Individual 

Consumers 

a. Life-Cycle Cost and Payback Period 

b. Consumer Subgroup Analysis 

c. Rebuttable Presumption Payback 

2. Economic Impacts on Manufacturers 

a. Industry Cash Flow Analysis Results 

b. Direct Impacts on Employment 

c. Impacts on Manufacturing Capacity 

d. Impacts on Subgroups of Manufacturers 

e. Cumulative Regulatory Burden 

3. National Impact Analysis 

a. Significance of Energy Savings 

b. Net Present Value of Consumer Costs 

and Benefits 

c. Indirect Impacts on Employment 

4. Impact on Utility or Performance of 

Products 

5. Impact of Any Lessening of Competition 

6. Need of the Nation To Conserve Energy 

7. Other Factors 

8. Summary of National Economic Impacts 

C. Conclusion 

1. Benefits and Burdens of TSLs 

Considered for Room AC Standards 

2. Annualized Benefits and Costs of the 

Proposed Standards 

VI. Cooling Capacity Verification 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Orders 12866 

and 13563 

B. Review Under the Regulatory Flexibility 

Act 

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. Information Quality 

VIII. Public Participation 

A. Attendance at the Webinar 

B. Procedure for Submitting Prepared 

General Statements for Distribution 

C. Conduct of the Public Meeting 

D. Submission of Comments 

E. Issues on Which DOE Seeks Comment 

IX. Approval of the Office of the Secretary 

I. Synopsis of the Proposed Rule 

Title III, Part B1 of EPCA,2 established 

the Energy Conservation Program for 

Consumer Products Other Than 

Automobiles. (42 U.S.C. 6291–6309) 

These products include room air 

conditioners (‘‘room ACs’’), the subject 

of this proposed rulemaking. 

Pursuant to EPCA, any new or 

amended energy conservation standard 

must be designed to achieve the 

maximum improvement in energy 

efficiency that DOE determines is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A)) Furthermore, the new or 

amended standard must result in a 

significant conservation of energy. (42 

U.S.C. 6295(o)(3)(B)) EPCA also 

provides that not later than 6 years after 

issuance of any final rule establishing or 

amending a standard, DOE must publish 

either a notice of determination that 

standards for the product do not need to 

be amended, or a notice of proposed 

rulemaking including new proposed 

energy conservation standards 

(proceeding to a final rule, as 

appropriate). (42 U.S.C. 6295(m)) 

In accordance with these and other 

statutory provisions discussed in this 

document, DOE proposes amended 

energy conservation standards for room 

ACs. The proposed standards, which are 

expressed in the amount of cooling 

provided per amount of energy 

consumed, measured in British thermal 

units per watt-hour (Btu/Wh) are shown 

in Table I.1. These proposed standards, 

if adopted, would apply to all room ACs 

listed in Table I.1 manufactured in, or 

imported into, the United States starting 

on the date 3 years after the publication 

of the final rule for this proposed 

rulemaking. 

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20610 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

3The average LCC savings refer to consumers that 

are affected by a standard and are measured relative 

to the efficiency distribution in the no-newstandards case, which depicts the market in the 

compliance year in the absence of new or amended 

standards (see section IV.F.8 of this document). The 

simple PBP, which is designed to compare specific 

efficiency levels, is measured relative to the 

baseline product (see section IV.F.9 of this 

document). 

A. Benefits and Costs to Consumers 

Table I.2 presents DOE’s evaluation of 

the economic impacts of the proposed 

standards on consumers of room ACs, as 

measured by the average life-cycle cost 

(‘‘LCC’’) savings and the simple payback 

period (‘‘PBP’’).3 The average LCC savings are positive for all product 

classes, and the PBP is less than the 

average lifetime of a room AC, which is 

estimated to be 9 years (see section 

IV.F.6 of this document). 


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T a e bl I 1 P . ropose dE neri!V C onserva f 10n St an d d f R ar s or oom A" Ir C on d"f 110ners 

Equipment Class CEER (Btu/Wh) 

1. Without reverse cycle, with louvered sides, and less than 6,000 Btu/h 13.1 

2. Without reverse cycle, with louvered sides and 6,000 to 7,900 Btu/h 13.7 

3. Without reverse cycle, with louvered sides and 8,000 to 13,900 Btu/h 16.0 

4. Without reverse cycle, with louvered sides and 14,000 to 19,900 Btu/h 16.0 

5a. Without reverse cycle, with louvered sides and 20,000 to 27,900 Btu/h 13.8 

5b. Without reverse cycle, with louvered sides and 28,000 Btu/h or more 13.2 

6. Without reverse cycle, without louvered sides, and less than 6,000 Btu/h 12.8 

7. Without reverse cycle, without louvered sides and 6,000 to 7,900 Btu/h 12.8 

8a. Without reverse cycle, without louvered sides and 8,000 to 10,900 Btu/h 14.1 

8b. Without reverse cycle, without louvered sides and 11,000 to 13,900 Btu/h 13.9 

9. Without reverse cycle, without louvered sides and 14,000 to 19,900 Btu/h 13.7 

10. Without reverse cycle, without louvered sides and 20,000 Btu/h or more 13.8 

11. With reverse cycle, with louvered sides, and less than 20,000 Btu/h 14.4 

12. With reverse cycle, without louvered sides, and less than 14,000 Btu/h 13.7 

13. With reverse cycle, with louvered sides, and 20,000 Btu/h or more 13.7 

14. With reverse cycle, without louvered sides, and 14,000 Btu/h or more 12.8 

15. Casement-Only 13.9 

16. Casement-Slider 15.3 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20611 

4All monetary values in this document are 

expressed in 2020 dollars. 

5The quantity refers to full-fuel-cycle (‘‘FFC’’) 

energy savings. FFC energy savings includes the 

energy consumed in extracting, processing, and 

transporting primary fuels (i.e., coal, natural gas, 

petroleum fuels), and, thus, presents a more 

complete picture of the impacts of energy efficiency 

standards. For more information on the FFC metric, 

see section IV.H.2 of this document. 

6A metric ton is equivalent to 1.1 short tons. 

Results for emissions other than CO2 are presented 

in short tons. 7 DOE calculated emissions reductions relative to 

the no-new-standards case, which reflects key 

assumptions in the Annual Energy Outlook 2021 

(‘‘AEO 2021’’). AEO 2021 represents current Federal 

and State legislation and final implementation of 

regulations as of the time of its preparation. See 

section IV.K of this document for further discussion 

of AEO 2021 assumptions that effect air pollutant 

emissions. 

BILLING CODE 6450–01–C 

DOE’s analysis of the impacts of the 

proposed standards on consumers is 

described in section IV.F of this 

document. 

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 through the end of the analysis 

period (2021–2055). Using a real 

discount rate of 7.2 percent, DOE 

estimates that the INPV for 

manufacturers of room ACs in the case 

without amended standards is $1.08 

billion in 2020$. Under the proposed 

standards, the change in INPV is 

estimated to range from ¥6.0 percent to 

7.8 percent, which is approximately 

¥$64.5 million to $84.1 million. In 

order to bring products into compliance 

with amended standards, DOE 

estimated that the industry would incur 

total conversion costs of $22.8 million. 

DOE’s analysis of the impacts of the 

proposed standards on manufacturers is 

described in section IV.J of this 

document. The analytic results of the 

manufacturer impact analysis (‘‘MIA’’) 

are presented in section V.B.2 of this 

document. 

C. National Benefits and Costs 4

DOE’s analyses indicate that the 

proposed energy conservation standards 

for room ACs would save a significant 

amount of energy. Relative to the case 

without amended standards, the lifetime 

energy savings for room ACs purchased 

in the 30-year period that begins in the 

anticipated year of compliance with the 

amended standards (2026–2055) amount 

to 1.40 quadrillion British thermal units 

(‘‘Btu’’), or quads.5 This represents a 

savings of 12 percent relative to the 

energy use of these products in the case 

without amended standards (referred to 

as the ‘‘no-new-standards case’’). 

The cumulative net present value 

(‘‘NPV’’) of total consumer benefits of 

the proposed standards for room ACs 

are $4.83 billion (at a 7-percent discount 

rate) and $10.56 billion (at a 3-percent 

discount rate). This NPV expresses the 

estimated total value of future 

operating-cost savings minus the 

estimated increased product costs for 

room ACs purchased in 2026–2055. 

In addition, the proposed standards 

for room ACs are projected to yield 

significant environmental benefits. DOE 

estimates that the proposed standards 

would result in cumulative emission 

reductions (over the same period as for 

energy savings) of 49.5 million metric 

tons (‘‘Mt’’) 6 of carbon dioxide (‘‘CO2’’), 

19.1 thousand tons of sulfur dioxide 

(‘‘SO2’’), 69.4 thousand tons of nitrogen 

oxides (‘‘NOX’’), 339.3 thousand tons of 

methane (‘‘CH4’’), 0.5 thousand tons of 

nitrous oxide (‘‘N2O’’), and 0.1 tons of 

mercury (‘‘Hg’’).7

DOE estimates the value of climate 

benefits from a reduction in greenhouse 

gases using four different estimates of 

the social cost of CO2 (‘‘SC–CO2’’), the 

social cost of methane (‘‘SC–CH4’’), and 

the social cost of nitrous oxide (‘‘SC– 

N2O’’). Together these represent the 


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Table 1.2 Impacts of Proposed Energy Conservation Standards on Consumers of 

Room Air Conditioners for Representative Product Classes (TSL 3) 

AverageLCC Simple Payback 

Room AC Product Class Savings Period 

(2020$) (vears) 

1. Without reverse cycle, with louvered sides, and less $63.49 0.7 than 6,000 Btu/h 

2. Without reverse cycle, with louvered sides and 6,000 $80.02 0.9 to 7,900 Btu/h 

3. Without reverse cycle, with louvered sides and 8,000 $99.14 2.8 

to 13,900 Btu/h 

4. Without reverse cycle, with louvered sides and $97.49 2.9 14,000 to 19,900 Btu/h 

5a. Without reverse cycle, with louvered sides and $152.52 2.6 20,000 Btu/h to 27,900 Btu/h 

5b. Without reverse cycle, with louvered sides and $275.19 2.3 28,000 Btu/h or more 

8a. Without reverse cycle, without louvered sides and $74.28 3.3 8,000 to 10,900 Btu/h 

8b. Without reverse cycle, without louvered sides and $116.89 2.4 11,000 to 13,900 Btu/h 

9. Without reverse cycle, without louvered sides and $162.64 2.8 14,000 to 19,900 Btu/h 

11. With reverse cycle, with louvered sides, and less $131.12 3.2 than 20,000 Btu/h 

12. With reverse cycle, without louvered sides, and less $122.74 2.5 than 14,000 Btu/h 

16. Casement-Slider $81.33 4.0 
20612 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

8See Interagency Working Group on Social Cost 

of Greenhouse Gases, Technical Support Document: 

Social Cost of Carbon, Methane, and Nitrous Oxide. 

Interim Estimates Under Executive Order 13990, 

Washington, DC, February 2021, available at 

www.whitehouse.gov/wp-content/uploads/2021/02/ 

TechnicalSupportDocument_

SocialCostofCarbonMethaneNitrous

Oxide.pdf?source=email. 

9 DOE estimated the monetized value of NOX and 

SO2 emissions reductions associated with 

electricity savings using benefit per ton estimates 

from the scientific literature. See section IV.L.2 of 

this document for further discussion. 

10 DOE estimates the economic value of these 

emissions reductions resulting from the considered 

TSLs for the purpose of complying with the 

requirements of Executive Order 12866. 

11On March 16, 2022, the Fifth Circuit Court of 

Appeals (No. 22–30087) granted the federal 

government’s emergency motion for stay pending 

appeal of the February 11, 2022, preliminary 

injunction issued in Louisiana v. Biden, No. 21–cv– 

1074–JDC–KK (W.D. La.). As a result of the Fifth 

Circuit’s order, the preliminary injunction is no 

longer in effect, pending resolution of the federal 

government’s appeal of that injunction or a further 

court order. Among other things, the preliminary 

injunction enjoined the defendants in that case 

from ‘‘adopting, employing, treating as binding, or 

relying upon’’ the interim estimates of the social 

cost of greenhouse gases—which were issued by the 

Interagency Working Group on the Social Cost of 

Greenhouse Gases on February 26, 2021—to 

monetize the benefits of reducing greenhouse gas 

emissions. In the absence of further intervening 

court orders, DOE will revert to its approach prior 

to the injunction and present monetized benefits 

where appropriate and permissible under law. 

social cost of greenhouse gases (‘‘SC– 

GHG’’). DOE used interim SC–GHG 

values developed by an Interagency 

Working Group on the Social Cost of 

Greenhouse Gases (‘‘IWG’’).8 The 

derivation of these values is discussed 

in section IV.L of this document. For 

presentational purposes, the climate 

benefits associated with the average SC– 

GHG at a 3-percent discount rate is 

$2.39 billion. DOE does not have a 

single central SC–GHG point estimate 

and it emphasizes the importance and 

value of considering the benefits 

calculated using all four SC–GHG 

estimates. 

DOE also estimates health benefits 

from SO2 and NOX emissions 

reductions.9 DOE estimates the present 

value of the health benefits would be 

$1.82 billion using a 7-percent discount 

rate, and $4.14 billion using a 3-percent 

discount rate.10 DOE is currently only 

monetizing (for SO2 and NOX) PM2.5

precursor health benefits and (for NOX) 

ozone precursor health benefits, but will 

continue to assess the ability to 

monetize other effects such as health 

benefits from reductions in direct PM2.5

emissions.11

Table I.3 summarizes the economic 

benefits and costs expected to result 

from the proposed standards for room 

ACs. In the table, total benefits for both 

the 3-percent and 7-percent cases are 

presented using the average GHG social 

costs with 3-percent discount rate. DOE 

does not have a single central SC–GHG 

point estimate and it emphasizes the 

importance and value of considering the 

benefits calculated using all four SC– 

GHG estimates. The estimated total net 

benefits using each of the four SC–GHG 

estimates are presented in section V.B.8 

of this document. 

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Table 1.3 Summary of Monetized Economic Benefits and Costs of Proposed Energy 

Conservation Standards for Room Air Conditioners for TSL 3 

Billion 2020$ 

3% discount rate 

Consumer Operating Cost Savings 13.87 

Climate Benefits* 2.39 

Health Benefits** 4.14 

Total Benefitst 20.41 

Consumer Incremental Product Costst 3.31 

Net Benefits 17.10 

7% discount rate 

Consumer Operating Cost Savings 6.89 

Climate Benefits* 2.39 

Health Benefits** 1.82 

Total Benefitst 11.10 

Consumer Incremental Product Costst 2.05 

Net Benefits 9.05 

Note: This table presents the costs and benefits associated with consumer room ACs shipped in 2026-2055. These 

results include benefits to consumers which accrue after 2055 from the products shipped in 2026-2055. 

*Climate benefits are cakulated using four diITerent estimates of lhe social cost of carbon (SC-CO2), methane (SCCH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th 

percentile at 3 percent discount rate), as shown in Table V.50 through Table V.52. Together these represent the global 

social cost of greenhouse gases (SC-GHG). For presentational purposes of this table, the climate benefits associated 

with the average SC-GHG at a 3 percent discount rate are shown, but the Department does not have a single central SCGHG point estimate. See section IV.L of this docU111ent for more details. 

** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only monetizing (for 

SO2 and NOx) PM2.s precursor health benefits and (for NOx) ozone precursor health benefits, but will continue to 

assess the ability to monetize other effocts such as health benefits from reductions in direct PMz.s emissions. The 

health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this docU111ent for more 

details. 

t Total and net benefits include consU111er, climate, and health benefits. For presentation purposes, total and net benefits 

for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but 

the Department does not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of 

considering the benefits calculated using all four SC-GHG estimates. See Table V.55 for net benefits using all four SCGHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal 

government's emergency motion for stay pending appeal of the F ebrumy 11, 2022, preliminary injunction issued in 

Louisiana v. Eiden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary 

injunction is no longer in effect, pending resolution of the federal government's appeal of that injunction or a further 

court order. Among other things, the preliminary injunction enjoined the defendants in that case from 

"adopting, employing, treating as binding, or relying upon" the interim estimates of the social cost of greenhouse 

gases-which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 

2021-to monetize the benefits of reducing greenhouse gas emissions. In the absence of further intervening court 

orders, DOE will revert to its approach prior to the injunction and present monetized benefits where appropriate and 

permissible under law. 

:j: Costs include incremental equipment costs as well as installation costs. 
20614 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

12To convert the time-series of costs and benefits 

into annualized values, DOE calculated a present 

value in 2021, the year used for discounting the 

NPV of total consumer costs and savings. For the 

benefits, DOE calculated a present value associated 

with each year’s shipments in the year in which the 

shipments occur (e.g., 2030), and then discounted 

the present value from each year to 2021. The 

calculation uses discount rates of 3 and 7 percent 

for all costs and benefits. Using the present value, 

DOE then calculated the fixed annual payment over 

a 30-year period, starting in the compliance year, 

that yields the same present value. 

The benefits and costs of the proposed 

standards, for room ACs sold in 2026– 

2055, can also be expressed in terms of 

annualized values. The monetary values 

for the total annualized net benefits are 

(1) the reduced consumer operating 

costs, minus (2) the increase in product 

purchase prices and installation costs, 

plus (3) the value of the benefits of 

GHG, NOX, and SO2 emission 

reductions, all annualized.12

The national operating savings are 

domestic private U.S. consumer 

monetary savings that occur as a result 

of purchasing the covered products and 

are measured for the lifetime of room 

ACs shipped in 2026–2055. The climate 

benefits associated with reduced GHG 

emissions achieved as a result of the 

proposed standards are also calculated 

based on the lifetime of room ACs 

shipped in 2026–2055. 

Estimates of annualized benefits and 

costs of the proposed standards are 

shown in Table I.4 of this document. 

The results under the primary estimate 

are as follows. 

Using a 7-percent discount rate for 

consumer benefits and costs and health 

benefits from reduced SO2 and NOX

emissions, and the 3-percent discount 

rate case for climate benefits from 

reduced GHG emissions, the estimated 

cost of the standards proposed in this 

rule is $216.9 million per year in 

increased equipment costs, while the 

estimated annual benefits are $727.5 

million in reduced equipment operating 

costs, $137.5 million in climate benefits, 

$192.1 million in health benefits. In this 

case, the net benefit would amount to 

$840.2 million per year. 

Using a 3-percent discount rate for all 

benefits and costs, the estimated cost of 

the proposed standards is $190.1 

million per year in increased equipment 

costs, while the estimated annual 

benefits are $796.7 million in reduced 

operating costs, $137.5 million in 

climate benefits, and $237.9 million in 

health benefits. In this case, the net 

benefit would amount to $982.0 million 

per year. 


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BILLING CODE 6450–01–C 


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Table 1.4 Annualized Monetized Benefits and Costs of Proposed Energy Conservation 

Standards for Room Air Conditioners for TSL 3 

Million 2020$/year 

Primary Estimate Low-Net-Benefits High-Net-Benefits 

Estimate Estimate 

3% discount rate 

Consumer Operating Cost Savings 796.7 751.9 847.8 

Climate Benefits* 137.5 134.2 140.4 

Health Benefits** 237.9 232.3 242.7 

Total Benefitst 1,172.0 1,118.4 1,230.9 

Consumer Incremental Product Costst 190.1 213.2 163.1 

Net Benefits 982.0 905.2 1,067.7 

7% discount rate 

Consumer Operating Cost Savings 727.5 693.3 768.4 

Climate Benefits* 137.5 134.2 140.4 

Health Benefits** 192.1 188.1 195.7 

Total Benefitst 1,057.1 1,015.6 1,104.4 

Consumer Incremental Product Costst 216.9 240.0 190.0 

Net Benefits 840.2 775.7 914.5 

Note: This table presents the costs and benefits associated with room A Cs shipped in 2026-2055. These results include benefits 

to consumers which accrue after 2055 from the products shipped in 2026-2055. 

* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane (SC-CIL), and 

nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3 percent 

discount rate). Together these represent the global social cost of greenhouse gases (SC-GHG ). For presentational purposes of this 

table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the Department does 

not have a single central SC-GHG point estimate, and it emphasizes the importance and value of considering the benefits 

calculated using all four SC-GHG estimates. See section IV.L of this document for more details. 

** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only monetizing (for SO2 and 

NOx) PMi.s precursor health benefits and (for NOx) ozone precursor health benefits, but will continue to assess the ability to 

monetize other effects such as health benefits from reductions in direct PMi.5 emissions. The health benefits are presented at real 

discount rates of 3 and 7 percent. See section IV.L of this document for more details. 

t Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both 

the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but the Department does 

not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of considering the benefits 

calculated using all four SC-GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the 

federal government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in 

Louisiana v. Eiden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary injunction is no 

longer in effect, pending resolution of the federal government's appeal of that injunction or a further court order. Among other 

things, the preliminary injunction eajoined the defendants in that case from "adopting, employing, treating as 

binding, or relying upon" the interim estimates of the social cost of greenhouse gases-which were issued by the Interagency 

Working Group on the Social Cost of Greenhouse Gases on February 26, 2021-to monetize the benefits of reducing greenhouse 

gas emissions. In the absence of further intervening court orders, DOE will revert to its approach prior to the injunction and 

present monetized benefits where appropriate and permissible under law. 

t Costs include incremental equipment costs as well as installation costs 
20616 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

DOE’s analysis of the national impacts 

of the proposed standards is described 

in sections IV.H, IV.K and IV.L of this 

document. 

D. Conclusion 

DOE has tentatively concluded that 

the proposed standards represent the 

maximum improvement in energy 

efficiency that is technologically 

feasible and economically justified, and 

would result in the significant 

conservation of energy. Based on the 

analyses described previously, DOE has 

tentatively concluded that the benefits 

of the proposed standards to the Nation 

(energy savings, positive NPV of 

consumer benefits, consumer LCC 

savings, and emission reductions) 

would outweigh the burdens (loss of 

INPV for manufacturers and LCC 

increases for some consumers). 

DOE also considered more-stringent 

energy efficiency levels as potential 

standards, and is still considering them 

in this rulemaking. However, DOE has 

tentatively concluded that the potential 

burdens of the more-stringent energy 

efficiency levels would outweigh the 

projected benefits. 

Based on consideration of the public 

comments DOE receives in response to 

this document and related information 

collected and analyzed during the 

course of this rulemaking effort, DOE 

may adopt energy efficiency levels 

presented in this document that are 

either higher or lower than the proposed 

standards, or some combination of 

level(s) that incorporate the proposed 

standards in part. 

II. Introduction 

The following section briefly 

discusses the statutory authority 

underlying this proposed rule, as well 

as some of the relevant historical 

background related to the establishment 

of standards for room ACs. 

A. Authority 

EPCA authorizes DOE to regulate the 

energy efficiency of a number of 

consumer products and certain 

industrial equipment. Title III, Part B of 

EPCA established the Energy 

Conservation Program for Consumer 

Products Other Than Automobiles. 

These products include room ACs, the 

subject of this document. (42 U.S.C. 

6292(a)(2)) EPCA prescribed energy 

conservation standards for these 

products (42 U.S.C. 6295(c)(1)), and 

directs DOE to conduct future 

rulemakings to determine whether to 

amend these standards. (42 U.S.C. 

6295(c)(2)) EPCA further provides that, 

not later than 6 years after the issuance 

of any final rule establishing or 

amending a standard, DOE must publish 

either a notice of determination that 

standards for the product do not need to 

be amended, or a NOPR including new 

proposed energy conservation standards 

(proceeding to a final rule, as 

appropriate). (42 U.S.C. 6295(m)(1)) 

The energy conservation program 

under EPCA consists essentially of four 

parts: (1) Testing, (2) labeling, (3) the 

establishment of Federal energy 

conservation standards, and (4) 

certification and enforcement 

procedures. Relevant provisions of 

EPCA specifically include definitions 

(42 U.S.C. 6291), test procedures (42 

U.S.C. 6293), labeling provisions (42 

U.S.C. 6294), energy conservation 

standards (42 U.S.C. 6295), and the 

authority to require information and 

reports from manufacturers (42 U.S.C. 

6296). 

Federal energy efficiency 

requirements for covered products 

established under EPCA generally 

supersede State laws and regulations 

concerning energy conservation testing, 

labeling, and standards. (42 U.S.C. 

6297(a)–(c)) DOE may, however, grant 

waivers of Federal preemption for 

particular State laws or regulations, in 

accordance with the procedures and 

other provisions set forth under EPCA. 

(See 42 U.S.C. 6297(d)) 

Subject to certain criteria and 

conditions, DOE is required to develop 

test procedures to measure the energy 

efficiency, energy use, or estimated 

annual operating cost of each covered 

product. (42 U.S.C. 6295(o)(3)(A) and 42 

U.S.C. 6295(r)) Manufacturers of 

covered products must use the 

prescribed DOE test procedure as the 

basis for certifying to DOE that their 

products comply with the applicable 

energy conservation standards adopted 

under EPCA and when making 

representations to the public regarding 

the energy use or efficiency of those 

products. (42 U.S.C. 6293(c) and 42 

U.S.C. 6295(s)) Similarly, DOE must use 

these test procedures to determine 

whether the products comply with 

standards adopted pursuant to EPCA. 

(42 U.S.C. 6295(s)) The DOE test 

procedures for room ACs appear at title 

10 of the Code of Federal Regulations 

(‘‘CFR’’) part 430, subpart B, appendix 

F. 

DOE must follow specific statutory 

criteria for prescribing new or amended 

standards for covered products, 

including room ACs. Any new or 

amended standard for a covered product 

must 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) Furthermore, DOE may 

not adopt any standard that would not 

result in the significant conservation of 

energy. (42 U.S.C. 6295(o)(3)) 

Moreover, DOE may not prescribe a 

standard: (1) For certain products, 

including room ACs, if no test 

procedure has been established for the 

product, or (2) if DOE determines by 

rule that the standard is not 

technologically feasible or economically 

justified. (42 U.S.C. 6295(o)(3)(A)–(B)) 

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)) DOE must make 

this determination after receiving 

comments on the proposed standard, 

and by considering, to the greatest 

extent practicable, the following seven 

statutory factors: 

(1) The economic impact of the standard 

on manufacturers and consumers of the 

products subject to the standard; 

(2) The savings in operating costs 

throughout the estimated average life of the 

covered products in the type (or class) 

compared to any increase in the price, initial 

charges, or maintenance expenses for the 

covered products that are likely to result 

from the standard; 

(3) The total projected amount of energy (or 

as applicable, water) savings likely to result 

directly from the standard; 

(4) Any lessening of the utility or the 

performance of the covered products likely to 

result from the standard; 

(5) The impact of any lessening of 

competition, as determined in writing by the 

Attorney General, that is likely to result from 

the standard; 

(6) The need for national energy and water 

conservation; and 

(7) Other factors the Secretary considers 

relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)(I)–(VII)) 

Further, EPCA 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. (42 U.S.C. 6295(o)(2)(B)(iii)) 

EPCA 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 a covered 

product. (42 U.S.C. 6295(o)(1)) Also, the 

Secretary may not prescribe an amended 

or new standard if interested persons 


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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 are substantially the same as those 

generally available in the United States. 

(42 U.S.C. 6295(o)(4)) 

Additionally, EPCA specifies 

requirements when promulgating an 

energy conservation standard for a 

covered product that has two or more 

subcategories. DOE must specify a 

different standard level for a type or 

class of product 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 products within such type (or 

class); or (B) have a capacity or other 

performance-related feature which other 

products within such type (or class) do 

not have and such feature justifies a 

higher or lower standard. (42 U.S.C. 

6295(q)(1)) In determining whether a 

performance-related feature justifies a 

different standard for a group of 

products, 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)) 

Finally, pursuant to the amendments 

contained in the Energy Independence 

and Security Act of 2007 (‘‘EISA 2007’’), 

Public Law 110–140, any final rule for 

new or amended energy conservation 

standards promulgated after July 1, 

2010, is required to address standby 

mode and off mode energy use. (42 

U.S.C. 6295(gg)(3)) Specifically, when 

DOE adopts a standard for a covered 

product after that date, it must, if 

justified by the criteria for adoption of 

standards under EPCA (42 U.S.C. 

6295(o)), incorporate standby mode and 

off mode energy use into a single 

standard, or, if that is not feasible, adopt 

a separate standard for such energy use 

for that product. (42 U.S.C. 

6295(gg)(3)(A)–(B)) DOE’s current test 

procedures for room ACs address 

standby mode and off mode energy use. 

In this rulemaking, DOE intends to 

incorporate such energy use into any 

amended energy conservation standards 

that it may adopt. 

B. Background 

1. Current Standards 

In a direct final rule published on 

April 21, 2011 (‘‘April 2011 Direct Final 

Rule’’), DOE prescribed the current 

energy conservation standards for room 

ACs. 76 FR 22454. These standards are 

set forth in DOE’s regulations at 10 CFR 

430.32(b) and are repeated in Table II.1 

where CEER stands for ‘‘Combined 

Energy Efficiency Rating.’’ 

2. History of Standards Rulemaking for 

Room ACs 

EPCA prescribed initial energy 

conservation standards for room ACs 

and further directed DOE to conduct 

two cycles of rulemakings to determine 

whether to amend these standards. (42 

U.S.C. 6295(c)(1)–(2)) DOE completed 

the first of these rulemaking cycles on 

September 24, 1997, by adopting 

amended performance standards for 

room ACs manufactured on or after 

October 1, 2000. 62 FR 50122. 

Additionally, DOE completed a second 

rulemaking cycle to amend the 

standards for room ACs by issuing the 

April 2011 Direct Final Rule, in which 

DOE prescribed the current energy 

conservation standards for room ACs 

manufactured on or after April 21, 2014. 

76 FR 22454 (April 21, 2011). DOE 

subsequently published a final rule 

amending the compliance date for the 


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T a e bl II . 1 F d e era IE ner2V C onservat1on S d d tan ar s :t or R oom A" Ir C on d". 1t1oners 

Minimum 

Room AC Product Class CEER, 

(Btu/Wh) 

1. Without reverse cycle, with louvered sides and less than 6,000 Btu/h 11.0 

2. Without reverse cycle, with louvered sides and 6,000 to 7,999 Btu/h 11.0 

3. Without reverse cycle, with louvered sides and 8,000 to 13,999 Btu/h 10.9 

4. Without reverse cycle, with louvered sides and 14,000 to 19,999 Btu/h 10.7 

5a. Without reverse cycle, with louvered sides and 20,000 Btu/h to 27,999 Btu/h 9.4 

Sb. Without reverse cycle, with louvered sides and 28,000 Btu/h or more 9.0 

6. Without reverse cycle, without louvered sides, and less than 6,000 Btu/h 10.0 

7. Without reverse cycle, without louvered sides and 6,000 to 7,999 Btu/h 10.0 

8a. Without reverse cycle, without louvered sides and 8 000 to 10,999 Btu/h 9.6 

8b. Without reverse cycle, without louvered sides and 11,000 to 13,999 Btu/h 9.5 

9. Without reverse cycle, without louvered sides and 14 000 to 19,999 Btu/h 9.3 

10. Without reverse cycle, without louvered sides and 20 000 Btu/h or more 9.4 

11. With reverse cycle, with louvered sides, and less than 20,000 Btu/h 9.8 

12. With reverse cycle, without louvered sides, and less than 14,000 Btu/h 9.3 

13. With reverse cycle, with louvered sides, and 20,000 Btu/h or more 9.3 

14. With reverse cycle, without louvered sides, and 14,000 Btu/h or more 8.7 

15. Casement-Only 9.5 

16. Casement-Slider 10.4 
20618 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

13Pursuant to amendments to appendix A to 10 

CFR part 430, subpart C (‘‘Appendix A’’) DOE 

generally will issue an early assessment request for 

information announcing that DOE is considering 

initiating a rulemaking proceeding. Section 6(a)(1) 

of Appendix A; see also 85 FR 8626, 8637 (Feb. 14, 

2020) and 86 FR 70892 (December 13, 2021). 

Section 6(a)(2) of Appendix A provides that if the 

DOE determines it is appropriate to proceed with 

a rulemaking, the preliminary stages of a 

rulemaking to issue or amend an energy 

conservation standard that DOE will undertake will 

be a Framework Document and Preliminary 

Analysis, or an Advance Notice of Proposed 

Rulemaking. Because this proposed rulemaking was 

already in progress at the time the relevant 

amendments to the Process Rule were published, 

DOE did not reinitiate the entire rulemaking 

process. Additionally, the June 2015 RFI presented 

the issues, analyses, and processes relevant to 

consideration of amended standards for room ACs. 

14Comments are available at 

www.regulations.gov/document/EERE-2014-BTSTD-0059-0001/comment. 

15The parenthetical reference provides a 

reference for information located in the docket of 

DOE’s rulemaking to develop energy conservation 

standards for room ACs. (Docket No. EERE–2014– 

BT–STD–0059, which is maintained at 

www.regulations.gov/docket?D=EERE-2014-BTSTD-0059). The references are arranged as follows: 

(commenter name, comment docket ID number, 

page of that document). 

current room AC standards to June 1, 

2014. 76 FR 52852 (Aug. 24, 2011). In 

a separate notice, also published on 

August 24, 2011, DOE confirmed the 

adoption of these energy conservation 

standards in a notice of effective date 

and compliance dates for the April 2011 

Direct Final Rule. 76 FR 52854. 

As part of the current analysis, on 

June 18, 2015, DOE prepared a Request 

for Information (‘‘June 2015 RFI’’), 

which solicited information from the 

public to help DOE determine whether 

amended standards for room ACs would 

result in a significant amount of 

additional energy savings and whether 

those standards would be 

technologically feasible and 

economically justified.13 80 FR 34843. 

Comments received following the 

publication of the June 2015 RFI helped 

DOE identify and resolve issues related 

to the subsequent preliminary 

analysis.14 DOE published a notice of 

public meeting and availability of the 

preliminary technical support document 

(‘‘TSD’’) on June 17, 2020 (‘‘June 2020 

Preliminary Analysis’’). 85 FR 36512. 

DOE subsequently held a public 

meeting on August 5, 2020, to discuss 

and receive comments on the 

preliminary TSD. The preliminary TSD 

that presented the methodology and 

results of the preliminary analysis is 

available at: www.regulations.gov/ 

document/EERE-2014-BT-STD-0059- 

0013. 

DOE received comments in response 

to the June 2020 Preliminary Analysis 

from the interested parties listed in 

Table II.2. 

A parenthetical reference at the end of 

a comment quotation or paraphrase 

provides the location of the item in the 

public record.15

C. Deviation From Appendix A 

In accordance with section 3(a) of 10 

CFR part 430, subpart C, appendix A 

(‘‘appendix A’’), DOE notes that it is 

deviating from the provision in 

appendix A regarding the pre-NOPR 

stages for an energy conservation 

standards rulemaking. Section 6(d)(2) of 

appendix A specifies that the length of 

the public comment period for a NOPR 

will vary depending upon the 

circumstances of the particular 

rulemaking, but will not be less than 75 

calendar days. For this NOPR, DOE has 

opted to instead provide a 60-day 

comment period. As stated, DOE 

requested comment in the June 2015 RFI 

on the technical and economic analyses 

and provided stakeholders a 76-day 

comment period. 80 FR 34843, 80 FR 

44301. Additionally, DOE provided a 

74-day comment period for the June 

2020 preliminary analysis. 85 FR 36512, 

85 FR 52280. DOE has relied on many 

of the same analytical assumptions and 

approaches as used in the preliminary 

assessment and has determined that a 

60-day comment period, in conjunction 


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Table 11.2 June 2020 Preliminary Analysis Written Comments 

Reference in Organization 

Oreanization( s) this NOPR Type 

Appliance Standards Awareness Project, 

Consumer Federation of America, National Joint Efficiency Consumer Law Center ( on behalf of its lowincome clients), Natural Resources Defense Comm enters Organizations 

Council 

Association of Home Appliance Manufacturers AHAM Trade 

Association 

California Investor-Owned Utilities California IOUs Utilities 

Northwest Energy Efficiency Alliance NEEA Efficiency 

Organization 

Institute for Policy Integrity at NYU School of Social Cost of 

Carbon Law, Montana Environmental Information Comm enters Efficiency 

Center, Natural Resources Defense Council, ("SCoC Organizations 

Sierra Club, Union of Concerned Scientists Comm enters") 

GE Appliances GEA Manufacturer 

C. Keith Rice Rice Individual 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20619 

16Each TSL is composed of specific efficiency 

levels for each product class. The TSLs considered 

for this NOPR are described in section V.A of this 

document. DOE conducted a sensitivity analysis 

that considers impacts for products shipped in a 9- 

year period. 

17The FFC metric is discussed in DOE’s 

statement of policy and notice of policy 

amendment. 76 FR 51282 (Aug. 18, 2011), as 

amended at 77 FR 49701 (Aug. 17, 2012). 

with the prior comment periods, 

provides sufficient time for interested 

parties to review the proposed rule and 

develop comments. 

III. General Discussion 

DOE developed this proposal after 

considering oral and written comments, 

data, and information from interested 

parties that represent a variety of 

interests. The following discussion 

addresses issues raised by these 

commenters. 

A. Product Classes and Scope of 

Coverage 

When evaluating and establishing 

energy conservation standards, DOE 

divides covered products into product 

classes by the type of energy used or by 

capacity or other performance-related 

features that justify differing standards. 

In making a determination whether a 

performance-related feature justifies a 

different standard, DOE must consider 

such factors as the utility of the feature 

to the consumer and other factors DOE 

determines are appropriate. (42 U.S.C. 

6295(q)) DOE’s preliminary analysis 

indicated that the current room AC 

product classes are still appropriate. 

B. Test Procedure 

EPCA sets forth generally applicable 

criteria and procedures for DOE’s 

adoption and amendment of test 

procedures. (42 U.S.C. 6293) 

Manufacturers of covered products must 

use these test procedures to certify to 

DOE that their product complies with 

energy conservation standards and to 

quantify the efficiency of their product. 

In addition, consistent with section 

8(d)(1)(i) of appendix A, DOE will 

finalize amended test procedures that 

impact measured energy use or 

efficiency at least 180 days prior to the 

close of the comment period for a NOPR 

proposing new or amended energy 

conservation standards. DOE published 

a test procedure final rule on March 29, 

2021, retaining the CEER metric used to 

express DOE’s current energy 

conservation standards for room ACs in 

Btu/Wh. 86 FR 16446. DOE’s test 

procedures for room ACs appear at 

appendix F to 10 CFR part 430, subpart 

B. 

C. Technological Feasibility 

1. General 

In each energy conservation standards 

rulemaking, DOE conducts a screening 

analysis based on information gathered 

on all current technology options and 

prototype designs that could improve 

the efficiency of the products or 

equipment that are the subject of the 

rulemaking. As the first step in such an 

analysis, DOE develops a list of 

technology options for consideration in 

consultation with manufacturers, design 

engineers, and other interested parties. 

DOE then determines which of those 

means for improving efficiency are 

technologically feasible. DOE considers 

technologies incorporated in 

commercially-available products or in 

working prototypes to be 

technologically feasible. Sections 

6(b)(3)(i) and 7(b)(1) of appendix A. 

After DOE has determined that 

particular technology options are 

technologically feasible, it further 

evaluates each technology option in 

light of the following additional 

screening criteria: (1) Practicability to 

manufacture, install, and service; (2) 

adverse impacts on product utility or 

availability; (3) adverse impacts on 

health or safety, and (4) unique-pathway 

proprietary technologies. Sections 

6(b)(3)(ii)–(v) and 7(b)(2)–(5) of 

appendix A. Section IV.B of this 

document discusses the results of the 

screening analysis for room ACs, 

particularly the designs DOE 

considered, those it screened out, and 

those that are the basis for the standards 

considered in this proposed rulemaking. 

For further details on the screening 

analysis for this proposed rulemaking, 

see chapter 4 of the NOPR TSD. 

2. Maximum Technologically Feasible 

Levels 

When DOE proposes to adopt an 

amended standard for a type or class of 

covered product, it must determine the 

maximum improvement in energy 

efficiency or maximum reduction in 

energy use that is technologically 

feasible for such product. (42 U.S.C. 

6295(p)(1)) Accordingly, in the 

engineering analysis, DOE determined 

the maximum technologically feasible 

(‘‘max-tech’’) improvements in energy 

efficiency for room ACs, using the 

design parameters for the most efficient 

products available on the market or in 

working prototypes. The max-tech 

levels that DOE determined for this 

proposed rulemaking are described in 

section IV.C.1 of this document and in 

chapter 5 of the NOPR TSD. 

D. Energy Savings 

For each trial standard level (‘‘TSL’’), 

DOE projected energy savings from 

application of the TSL to room ACs 

purchased in the 30-year period that 

begins in the year of compliance with 

the proposed standards (2026–2055).16

The savings are measured over the 

entire lifetime of a room AC purchased 

in the previous 30-year period. DOE 

quantified the energy savings 

attributable to each TSL as the 

difference in energy consumption 

between each standards case and the nonew-standards case. The no-newstandards case represents a projection of 

energy consumption that reflects how 

the market for a product would likely 

evolve in the absence of amended 

energy conservation standards. 

DOE used its national impact analysis 

(‘‘NIA’’) spreadsheet model to estimate 

national energy savings (‘‘NES’’) from 

potential amended or new standards for 

room ACs. The NIA spreadsheet model 

(described in section IV.H of this 

document) calculates energy savings in 

terms of site energy, which is the energy 

directly consumed by products at the 

locations where they are used. For 

electricity, DOE reports national energy 

savings in terms of primary energy 

savings, which is the savings in the 

energy that is used to generate and 

transmit the site electricity. DOE also 

calculates NES in terms of full-fuel 

cycle (‘‘FFC’’) energy savings. The FFC 

metric includes the energy consumed in 

extracting, processing, and transporting 

primary fuels (i.e., coal, natural gas, 

petroleum fuels), and thus presents a 

more complete picture of the impacts of 

energy conservation standards.17 DOE’s 

approach is based on the calculation of 

an FFC multiplier for each of the energy 

types used by covered products or 

equipment. For more information on 

FFC energy savings, see section IV.H.2 

of this document. 

1. Significance of Savings 

To adopt any new or amended 

standards for a covered product, DOE 

must determine that such action would 

result in significant energy savings. (42 

U.S.C. 6295(o)(3)(B)) Although the term 

‘‘significant’’ is not defined in the 

EPCA, the U.S. Court of Appeals, for the 

District of Columbia Circuit in Natural 

Resources Defense Council v. 

Herrington, 768 F.2d 1355, 1373 (D.C. 

Cir. 1985), opined that Congress 

intended ‘‘significant’’ energy savings in 

the context of EPCA to be savings that 

were not ‘‘genuinely trivial.’’ 

The significance of energy savings 

offered by a new or amended energy 

conservation standard cannot be 

determined without knowledge of the 

specific circumstances surrounding a 


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18The numeric threshold for determining the 

significance of energy savings established in a final 

rule published on February 14, 2020 (85 FR 8626, 

8670), was subsequently eliminated in a final rule 

published on December 13, 2021 (86 FR 70892). 

given rulemaking.18 For example, the 

United States recently rejoined the Paris 

Agreement and will exert leadership in 

confronting the climate crisis. These 

actions have placed an increased 

emphasis on the importance of energy 

savings that reduce greenhouse gas 

emissions and help mitigate the climate 

crisis. Additionally, some covered 

products and equipment, particularly 

those providing space cooling, such as 

room ACs, are likely to consume 

significant energy during periods of 

peak energy demand. The impacts of 

these products on the energy 

infrastructure can be more pronounced 

than products with relatively constant 

demand. Lastly, in evaluating the 

significance of energy savings, DOE 

considers differences in primary energy 

and FFC effects for different covered 

products and equipment when 

determining whether energy savings are 

significant. Primary energy and FFC 

effects include the energy consumed in 

electricity production (depending on 

load shape), in distribution and 

transmission, and in extracting, 

processing, and transporting primary 

fuels (i.e., coal, natural gas, petroleum 

fuels), and thus present a more complete 

picture of the impacts of energy 

conservation standards. 

Accordingly, DOE is evaluating the 

significance of energy savings on a caseby-case basis. DOE has initially 

determined the energy savings for the 

TSL proposed in this rulemaking are 

nontrivial, and, therefore, DOE 

considers them ‘‘significant’’ within the 

meaning of 42 U.S.C. 6295(o)(3)(B). 

E. Economic Justification 

1. Specific Criteria 

As noted previously, 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)(I)– 

(VII)) The following sections discuss 

how DOE has addressed each of those 

seven factors in this proposed 

rulemaking. 

a. Economic Impact on Manufacturers 

and Consumers 

In determining the impacts of a 

potential amended standard on 

manufacturers, DOE conducts an MIA, 

as discussed in section IV.J of this 

document. DOE first uses an annual 

cash-flow approach to determine the 

quantitative impacts. This step includes 

both a short-term assessment—based on 

the cost and capital requirements during 

the period between when a regulation is 

issued and when entities must comply 

with the regulation—and a long-term 

assessment over a 30-year period. The 

industry-wide impacts analyzed include 

(1) INPV, which values the industry on 

the basis of expected future cash flows, 

(2) cash flows by year, (3) changes in 

revenue and income, and (4) other 

measures of impact, as appropriate. 

Second, DOE analyzes and reports the 

impacts on different types of 

manufacturers, including impacts on 

small manufacturers. Third, DOE 

considers the impact of standards on 

domestic manufacturer employment and 

manufacturing capacity, as well as the 

potential for standards to result in plant 

closures and loss of capital investment. 

Finally, DOE takes into account 

cumulative impacts of various DOE 

regulations and other product-specific 

regulatory requirements on 

manufacturers. 

For individual consumers, measures 

of economic impact include the changes 

in LCC and PBP associated with new or 

amended standards. These measures are 

discussed further in the following 

section. For consumers in the aggregate, 

DOE also calculates the national net 

present value of the consumer costs and 

benefits expected to result from 

particular standards. DOE also evaluates 

the impacts of potential standards on 

identifiable subgroups of consumers 

that may be affected disproportionately 

by a standard. 

b. Savings in Operating Costs Compared 

to Increase in Price (LCC and PBP) 

EPCA requires DOE to consider the 

savings in operating costs throughout 

the estimated average life of the covered 

product in the type (or class) compared 

to any increase in the price of, or in the 

initial charges for, or maintenance 

expenses of, the covered product that 

are likely to result from a standard. (42 

U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts 

this comparison in its LCC and PBP 

analysis. 

The LCC is the sum of the purchase 

price of a product (including its 

installation) and the operating expense 

(including energy, maintenance, and 

repair expenditures) discounted over 

the lifetime of the product. The LCC 

analysis requires a variety of inputs, 

such as product prices, product energy 

consumption, energy prices, 

maintenance and repair costs, product 

lifetime, and discount rates appropriate 

for consumers. To account for 

uncertainty and variability in specific 

inputs, such as product lifetime and 

discount rate, DOE uses a distribution of 

values, with probabilities attached to 

each value. 

The PBP is the estimated amount of 

time (in years) it takes consumers to 

recover the increased purchase cost 

(including installation) of a moreefficient product through lower 

operating costs. DOE calculates the PBP 

by dividing the change in purchase cost 

due to a more-stringent standard by the 

change in annual operating cost for the 

year that standards are assumed to take 

effect. 

For its LCC and PBP analysis, DOE 

assumes that consumers will purchase 

the covered products in the first year of 

compliance with new or amended 

standards. The LCC savings for the 

considered efficiency levels are 

calculated relative to the case that 

reflects projected market trends in the 

absence of new or amended standards. 

DOE’s LCC and PBP analysis is 

discussed in further detail in section 

IV.F of this document. 

c. Energy Savings 

Although significant conservation of 

energy is a separate statutory 

requirement for adopting an energy 

conservation standard, EPCA requires 

DOE, in determining the economic 

justification of a standard, to consider 

the total projected energy savings that 

are expected to result directly from the 

standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) 

As discussed in section III.D of this 

document, DOE uses the NIA 

spreadsheet models to project national 

energy savings. 

d. Lessening of Utility or Performance of 

Products 

In establishing product classes and in 

evaluating design options and the 

impact of potential standard levels, DOE 

evaluates potential standards that would 

not lessen the utility or performance of 

the considered products. (42 U.S.C. 

6295(o)(2)(B)(i)(IV)) Based on data 

available to DOE, the standards 

proposed in this document would not 

reduce the utility or performance of the 

products under consideration in this 

rulemaking. 

e. Impact of Any Lessening of 

Competition 

EPCA directs DOE to consider the 

impact of any lessening of competition, 

as determined in writing by the 

Attorney General, that is likely to result 

from a proposed standard. (42 U.S.C. 

6295(o)(2)(B)(i)(V)) It also directs the 

Attorney General to determine the 

impact, if any, of any lessening of 

competition likely to result from a 

proposed standard and to transmit such 

determination to the Secretary within 60 


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19A notation in the form ‘‘Joint Commenters, No. 

20 at p. 1’’ identifies a written comment: (1) Made 

by the Joint Commenters; (2) recorded in document 

number 20 that is filed in the docket of this energy 

conservation standards rulemaking (Docket No. 

EERE–2014–BT–STD–0059) and available for 

review at www.regulations.gov; and (3) which 

appears on page 1 of document number 20. 

days of the publication of a proposed 

rule, together with an analysis of the 

nature and extent of the impact. (42 

U.S.C. 6295(o)(2)(B)(ii)) DOE will 

transmit a copy of this proposed rule to 

the Attorney General with a request that 

the Department of Justice (‘‘DOJ’’) 

provide its determination on this issue. 

DOE will publish and respond to the 

Attorney General’s determination in the 

final rule. DOE invites comment from 

the public regarding the competitive 

impacts that are likely to result from 

this proposed rule. In addition, 

stakeholders may also provide 

comments separately to DOJ regarding 

these potential impacts. See the 

ADDRESSES section for information to 

send comments to DOJ. 

f. Need for National Energy 

Conservation 

DOE also considers the need for 

national energy and water conservation 

in determining whether a new or 

amended standard is economically 

justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) 

The energy savings from the proposed 

standards are likely to provide 

improvements to the security and 

reliability of the Nation’s energy system. 

Reductions in the demand for electricity 

also may result in reduced costs for 

maintaining the reliability of the 

Nation’s electricity system. DOE 

conducts a utility impact analysis to 

estimate how standards may affect the 

Nation’s needed power generation 

capacity, as discussed in section IV.M of 

this document. 

DOE maintains that environmental 

and public health benefits associated 

with the more efficient use of energy are 

important to take into account when 

considering the need for national energy 

conservation. The proposed standards 

are likely to result in environmental 

benefits in the form of reduced 

emissions of air pollutants and 

greenhouse gases (‘‘GHGs’’) associated 

with energy production and use. As part 

of the analysis of the need for national 

energy and water conservation, DOE 

conducts an emissions analysis to 

estimate how potential standards may 

affect these emissions, as discussed in 

section IV.K of this document; the 

estimated emissions impacts are 

reported in section V.B.6 of this 

document. 

g. Other Factors 

In determining whether an energy 

conservation standard is economically 

justified, DOE may consider other 

factors that the Secretary deems to be 

relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) 

To the extent DOE identifies any 

relevant information regarding 

economic justification that does not fit 

into the other categories described 

previously, DOE could consider such 

information under ‘‘other factors.’’ 

2. Rebuttable Presumption 

As set forth in 42 U.S.C. 

6295(o)(2)(B)(iii), EPCA creates a 

rebuttable presumption that an energy 

conservation standard is economically 

justified if the additional cost to the 

consumer of a product that meets the 

standard is less than three times the 

value of the first year’s energy savings 

resulting from the standard, as 

calculated under the applicable DOE 

test procedure. DOE’s LCC and PBP 

analyses generate values used to 

calculate the effects that proposed 

energy conservation standards would 

have on the payback period for 

consumers. These analyses include, but 

are not limited to, the 3-year payback 

period contemplated under the 

rebuttable-presumption test. In addition, 

DOE routinely conducts an economic 

analysis that considers the full range of 

impacts to consumers, manufacturers, 

the Nation, and the environment, as 

required under 42 U.S.C. 

6295(o)(2)(B)(i). The results of this 

analysis serve as the basis for DOE’s 

evaluation of the economic justification 

for a potential standard level (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). The rebuttable 

presumption payback calculation is 

discussed in section IV.F.9 of this 

document. 

IV. Methodology and Discussion of 

Related Comments 

This section addresses the analyses 

DOE has performed for this proposed 

rulemaking with regard to room ACs. 

Separate subsections address each 

component of DOE’s analyses. 

DOE used several analytical tools to 

estimate the impact of the standards 

proposed in this document. The first 

tool is a spreadsheet that calculates the 

LCC savings and PBP of potential 

amended or new energy conservation 

standards. The national impacts 

analysis uses a second spreadsheet set 

that provides shipments projections and 

calculates national energy savings and 

net present value of total consumer 

costs and savings expected to result 

from potential energy conservation 

standards. DOE uses the third 

spreadsheet tool, the Government 

Regulatory Impact Model (‘‘GRIM’’), to 

assess manufacturer impacts of potential 

standards. These three spreadsheet tools 

are available on the DOE website for this 

proposed rulemaking: 

www.regulations.gov/docket?D=EERE2014-BT-STD-0059. Additionally, DOE 

used output from the latest version of 

the Energy Information Administration’s 

(‘‘EIA’s’’) Annual Energy Outlook 

(‘‘AEO’’), a widely known energy 

projection for the United States, for the 

emissions and utility impact analyses. 

A. Market and Technology Assessment 

DOE develops information in the 

market and technology assessment that 

provides an overall picture of the 

market for the products concerned, 

including the purpose of the products, 

the industry structure, manufacturers, 

market characteristics, and technologies 

used in the products. This activity 

includes both quantitative and 

qualitative assessments, based primarily 

on publicly-available information. The 

subjects addressed in the market and 

technology assessment for this proposed 

rulemaking include (1) a determination 

of the scope of the rulemaking and 

product classes, (2) manufacturers and 

industry structure, (3) existing 

efficiency programs, (4) shipments 

information, (5) market and industry 

trends, and (6) technologies or design 

options that could improve the energy 

efficiency of room ACs. The key 

findings of DOE’s market assessment are 

summarized in the following sections. 

See chapter 3 of the NOPR TSD for 

further discussion of the market and 

technology assessment. 

1. Scope of Coverage and Product 

Classes 

In the June 2020 Preliminary 

Analysis, DOE did not identify any 

potential changes to the room AC scope 

of coverage or product classes. 85 FR 

36512. 

The Joint Commenters expressed 

concerns regarding DOE’s current set of 

room AC product classes. (Joint 

Commenters, No. 20 at p. 1 19) The Joint 

Commenters disagreed with DOE’s 

explanation that Product Classes 1 and 

6 are necessary, despite having the same 

efficiency requirements as Product 

Classes 2 and 7, respectively, to 

recognize the value to certain consumer 

segments of a low-cost, low-cooling 

capacity room AC in Product Classes 1 

and 6. They did not object to 

maintaining these product class 

distinctions based on cooling capacity, 

but suggested that cost must not be a 

rationale for maintaining the 


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distinctions because cost is not a 

‘‘performance-related feature.’’ Id. 

DOE understands the Joint 

Commenters’ concerns about cost being 

a rationale for distinguishing product 

classes. However, the cost is 

substantively related to the 

performance-related features used to 

distinguish between the product classes, 

namely product size and weight. The 

NOPR analysis, based on models 

currently on the market, identified 

different efficiency levels above the 

ENERGY STAR® qualification levels for 

Product Classes 1 and 2, showing that 

these product classes have performancerelated distinctions between them. 

While DOE is not proposing to 

combine product classes at this time, 

DOE is proposing a clarifying 

modification to the cooling capacity 

descriptors delineating the product 

classes, specifying that the capacity 

used to determine the product class of 

a basic model is the certified cooling 

capacity and expressing the capacity 

ranges to the nearest hundred British 

thermal units per hour (‘‘Btu/h’’) in 

accordance with the rounding 

instruction in 10 CFR 429.15(a)(3). For 

example, Product Class 2 currently 

specifies it includes room ACs with 

capacities ranging from 6,000 to 7,999 

Btu/h; however, DOE recognizes that 

based on the rounding instruction in 10 

CFR 429.15(a)(3), the upper range of this 

product class is, in practice, 7,900 Btu/ 

h. Accordingly, DOE proposes in this 

NOPR to revise the threshold values of 

cooling capacity in the product class 

descriptions to the nearest hundred Btu/ 

h that would not exceed the existing 

thresholds. DOE believes this slight 

modification that is being proposed for 

product class delineation is what 

manufacturers are using today in 

practice due to the rounding instruction 

at 10 CFR 429.15(a)(3) and will not 

impact compliance with current energy 

conservation standards. DOE is simply 

proposing to add clarity and consistency 

amongst two existing regulatory 

provisions. 

DOE requests comment on the 

proposal to make clarifying 

amendments to the product class 

descriptions, but otherwise not make 

any changes to room AC product 

classes. 

For ease of reviewing this NOPR, DOE 

is presenting the results of its analysis 

using the existing product class 

descriptions. The proposed new 

labeling of the product class thresholds 

using the rounded cooling capacity 

values are included in the proposed 

standards in Table I.1 and Table V.58 of 

this document. 

2. Technology Options 

In the preliminary market analysis 

and technology assessment, DOE 

identified 22 technology options that 

would likely improve the efficiency of 

room ACs, as measured by the DOE test 

procedure: 


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20As determined using experimental infrared 

camera imaging techniques applied to units outside 

of controlled calorimeter chamber conditions. 

21 s3.amazonaws.com/szmanuals/ 

f50601c1a4960b3d7627df44cc951d28. 

Several commenters provided 

feedback on some of these technology 

options. These comments are 

summarized below, along with DOE’s 

responses. 

a. Reduced Evaporator Air Recirculation 

The Joint Commenters referenced a 

2013 National Renewable Energy 

Laboratory (‘‘NREL’’) study in which 

room AC performance was found to 

degrade with evaporator air 

recirculation, with the cooling 

coefficient of performance (‘‘COP’’) 

decreasing by 7 percent on average.20 21

The Joint Commenters emphasized 

NREL’s conclusion that the room AC 

energy efficiency ratio (‘‘EER’’) could be 

improved by at least 1 Btu/Wh using 

simple and low-cost methods such as 

supplying air from the bottom rather 

than the top of the interior face, or 

providing an attachment fin to separate 

supply and return airflows. The Joint 

Commenters noted that DOE mentioned 

the results of this NREL study in the 

preliminary TSD but did not consider 

reduced evaporator air recirculation in 

the engineering analysis. Thus, given 

the large potential energy savings, the 

Joint Commenters urged DOE to 

investigate how to model the efficiency 

improvement associated with reduced 

evaporator air recirculation. (Joint 

Commenters, No. 20 at p. 2) 

DOE is aware of, and has reviewed the 

2013 NREL study cited by the Joint 

Commenters, and notes that that study 

had a limited sample of four room ACs 

from only two different manufacturers 

(Frigidaire and GE/Haier), and found a 

wide range of COP degradation due to 

evaporator air recirculation, from losses 

as low as 2 percent to as high as 19 

percent. Without intensive airflow 

modeling of each unit analyzed in the 

DOE teardown sample, more data on 

evaporator air recirculation in the 

market as a whole, and test data from a 

unit incorporating the sort of airflow 

changes suggested by NREL (DOE is not 

aware of such a unit on the market), 

DOE is unable to properly assess the 

impacts, both positive and negative of 

evaporator air recirculation reduction as 

a technology. Therefore, DOE is not 

incorporating this technology into its 

engineering analysis. DOE seeks 


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Table IV.I Technology Options for Room Air Conditioners 

Increased Heat Transfer Surface Area 

1. Increased heat exchanger surface area (frontal area, fin density and depth of coil) 

2. Condenser coil subcooler 

3. Suction line heat exchanger 

Increased Heat Transfer Coefficient 

4. Improved fin and tube design 

5. Hydrophilic coating on fins 

6. Microchannel heat exchangers 

7. Spray condensate on condenser coil 

Component Improvements 

8. Improved indoor blower and outdoor fan blade design 

9. Improved blower/fan motor design 

10. Improved compressor efficiency 

Improved Installation, Insulation, and Airflow 

11. Improved installation materials 

12. Reduced evaporator air recirculation 

13. Reduced thermal bridging and internal air leakage 

Part-load Performance 

14. Variable-speed compressors 

15. Variable-speed drive fans and blowers 

16. Thermostatic or electronic expansion valves 

17. Thermostatic cyclic controls 

18. Air and water economizers 

Standby Power Improvements 

19. Low standby-power electronics 

20. High frequency switching power suooly 

Alternative Refrigerants 

21. SNAP-approved refrigerants (R-32. R-44 lA. and R-290) 

Other Improvements 

22. Washable air filters 
20624 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

22For the latest information on EPA SNAP 

regulations, visit: www.epa.gov/snap/snapregulations. 

23A notation in the form ‘‘NEEA, Public Meeting 

Transcript, No. 18 at pp. 59–60’’ identifies an oral 

comment that DOE received on August 25, 2020 

during the public meeting, and was recorded in the 

public meeting transcript in the docket for this 

energy conservation standards rulemaking (Docket 

No. EERE–2014–BT–STD–0059). This particular 

notation refers to a comment (1) made by the 

Northwest Energy Efficiency Alliance during the 

public meeting; (2) recorded in document number 

18, which is the public meeting transcript that is 

filed in the docket of this energy conservation 

standards rulemaking; and (3) which appears on 

pages 59 through 60 of document number 18. 

24See https://ww2.arb.ca.gov/rulemaking/2020/ 

hfc2020 for more information on the CARB 

refrigerant rulemaking. 

additional comment on whether 

evaporator air recirculation should be 

included in the engineering analysis. 

b. Compressors 

AHAM and GEA stated that their data 

do not support DOE’s assumptions 

regarding the efficiency of single-speed 

compressors. (AHAM, No. 19 at p. 12; 

GEA, No. 26 at pp. 1–2) 

Feedback given to DOE by 

manufacturers during interviews 

supported the commenters’ assertion 

that the efficiency of the most efficient 

single-speed compressor available was 

overestimated in the June 2020 

Preliminary Analysis. Upon further 

analysis, DOE has reduced its estimate 

for the efficiency of the most efficient 

single-speed R–410a compressor 

available, from 13.1 to 10.9 Btu/Wh, 

based on a comprehensive survey of 

compressor catalogues and information 

provided by manufacturers, as 

discussed further in chapter 3 of the 

NOPR TSD. However, as discussed 

below, DOE also implemented a 

changeover from R–410A to R–32 

refrigerant, resulting in the most 

efficient available single-speed 

compressor being 12.7 Btu/Wh. DOE 

requests comment on the updated 

single-speed compressor maximum 

efficiency estimates. 

c. Significant New Alternatives Policy 

(SNAP)—Approved Refrigerants 

In the June 2020 Preliminary 

Analysis, DOE discussed the potential 

for alternative refrigerants, restricted to 

the Significant New Alternatives Policy 

(‘‘SNAP’’)—approved refrigerants (i.e., 

R–32, R–441A, R–290),22 but decided to 

forgo implementing them in the 

engineering analysis because they either 

did not significantly improve unit 

efficiency or DOE lacked sufficient 

technical and economic data to assess 

the costs and benefits of a changeover. 

AHAM, the California IOUs, Joint 

Commenters, and NEEA disagreed with 

DOE’s decision not to consider these 

alternative refrigerants in the 

engineering analysis. They stated that 

alternative refrigerants are already in 

use for some product classes to meet 

current energy conservation standards 

(baseline) and ENERGY STAR 

(Efficiency Level (‘‘EL 2’’)) levels. 

(AHAM, No. 19 at pp. 10–11; California 

IOUs, No. 23 at p. 3; Joint Commenters, 

No. 20 at p. 2; NEEA, No. 24 at pp. 4– 

5; NEEA, Public Meeting Transcript, No. 

18 at pp. 59–60) 23 AHAM emphasized 

the significant costs associated with 

changing refrigerant type. (AHAM, No. 

19 at pp. 10–11) The California IOUs, 

Joint Commenters, and NEEA 

specifically noted that room ACs using 

R–32 are now widely available in the 

United States, suggesting that the use of 

alternative refrigerants is not cost 

prohibitive to manufacturers, as DOE 

stated in the preliminary TSD. NEEA 

stated that manufacturers using R–32 in 

air conditioning systems have generally 

found energy savings ranging from 8 to 

11 percent. AHAM, the California IOUs, 

and NEEA noted that there is currently 

a proposed rule from the California Air 

Resource Board (‘‘CARB’’) that would 

ban all refrigerants with global warming 

potential (‘‘GWP’’) equal to or greater 

than 750 in new residential and 

commercial AC systems beginning in 

2023 and would likely push additional 

manufacturers to explore alternative 

refrigerants.24 (AHAM, No. 19 at pp. 10– 

11; California IOUs, No. 23 at p. 3; Joint 

Commenters, No. 20 at p. 2; NEEA, No. 

24 at pp. 4–5; NEEA, Public Meeting 

Transcript, No. 18 at pp. 59–60) The 

Joint Commenters referenced a study 

performed by the Oak Ridge National 

Laboratory (‘‘ORNL’’) in which ORNL 

developed a high-efficiency room AC to 

determine the viability of a window AC 

unit with an EER over 13.0 Btu/Wh and 

found that using a ‘‘drop-in’’ 85-percent 

R–32 mixture as the refrigerant in place 

of R–410A boosted efficiency by about 

3 percent and, thus, that pure R–32 

would offer an additional efficiency 

gain. The Joint Commenters referenced 

another ORNL study in which a room 

AC unit was modified to use propane 

(R–290) and demonstrated an increase 

in EER of 17 percent. The Joint 

Commenters also stated that, while any 

cost impacts to consumers and/or 

manufacturers should be considered as 

part of the economic analysis, cost 

cannot be a consideration in 

determining what is technologically 

feasible. (Joint Commenters, No. 20 at p. 

2) Thus, AHAM, the California IOUs, 

Joint Commenters, and NEEA urged 

DOE to further investigate alternative 

refrigerants as a technology option. 

(AHAM, No. 19 at pp. 10–11; California 

IOUs, No. 23 at p. 3; Joint Commenters, 

No. 20 at p. 2; NEEA, No. 24 at pp. 4– 

5) NEEA specifically urged DOE to 

consider R–32. (NEEA, No. 24 at pp. 4– 

5) The California IOUs encouraged DOE 

to work closely with CARB, the 

American Society of Heating, 

Refrigerating and Air-Conditioning 

Engineers (‘‘ASHRAE’’) Standing 

Standard Project Committee 15—Safety 

Standard for Refrigeration Systems, and 

the Air-Conditioning, Heating, and 

Refrigeration Institute (‘‘AHRI’’) LowGWP Alternative Refrigeration 

Evaluation Program to address in this 

rulemaking the efficiency benefits from 

using low-GWP refrigerants in room 

ACs. (California IOUs, No. 23 at p. 3) 

DOE is aware that R–32 refrigerant is 

currently in use in the room AC market 

and that adoption of the refrigerant in 

room ACs is increasing, in part due to 

the CARB regulation regarding lowGWP refrigerants. R–32 has a GWP of 

675, just under a third of the GWP of R– 

410a, which is 2,090. However, the 

research findings on efficiency impacts 

due to the transition from R–410A to R– 

32 are inconsistent, ranging from a 2- 

percent decrease in efficiency to the 8- 

to 11-percent increase cited by NEEA. 

Due to these inconsistent data, DOE did 

not consider efficiency gains due to R– 

32 implementation alone. However, as 

discussed previously, DOE found that 

the most efficient single-speed 

compressors available on the market use 

R–32 refrigerant, so DOE did 

incorporate a changeover to R–32 in the 

engineering analysis to capture the 

compressor efficiency gains that are 

technologically feasible by 

implementing improved-efficiency 

single-speed compressors (which use R– 

32 refrigerant) in place of existing 

baseline-efficiency single-speed 

compressors (which use R–410A 

refrigerant). DOE requests comment on 

the approach to addressing alternative 

refrigerants in this engineering analysis. 

B. Screening Analysis 

DOE uses the following five screening 

criteria to determine which technology 

options are suitable for further 

consideration in an energy conservation 

standards rulemaking: 

(1) Technological feasibility. 

Technologies that are not incorporated 

in commercial products or in working 

prototypes will not be considered 

further. 

(2) Practicability to manufacture, 

install, and service. If it is determined 

that mass production and reliable 

installation and servicing of a 

technology in commercial products 

could not be achieved on the scale 


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necessary to serve the relevant market at 

the time of the projected compliance 

date of the standard, then that 

technology will not be considered 

further. 

(3) Impacts on product utility or 

product availability. If it is determined 

that a technology would have significant 

adverse impact on the utility of the 

product to significant subgroups of 

consumers or would result in the 

unavailability of any covered product 

type with performance characteristics 

(including reliability), features, sizes, 

capacities, and volumes that are 

substantially the same as products 

generally available in the United States 

at the time, it will not be considered 

further. 

(4) Adverse impacts on health or 

safety. If it is determined that a 

technology would have significant 

adverse impacts on health or safety, it 

will not be considered further. 

(5) Unique-Pathway Proprietary 

Technologies. If a design option utilizes 

proprietary technology that represents a 

unique pathway to achieving a given 

efficiency level, that technology will not 

be considered further due to the 

potential for monopolistic concerns. 

Sections 6(b)(3) and 7(b) of appendix 

A. 

In summary, if DOE determines that a 

technology, or a combination of 

technologies, fails to meet one or more 

of the listed five criteria, it will be 

excluded from further consideration in 

the engineering analysis. The 

subsequent sections include comments 

from interested parties pertinent to the 

screening criteria, DOE’s evaluation of 

each technology option against the 

screening analysis criteria, and whether 

DOE determined that a technology 

option should be excluded (‘‘screened 

out’’) based on the screening criteria. 

1. Screened-Out Technologies 

In the June 2020 Preliminary 

Analysis, DOE considered screening out 

air and water economizers and suctionline heat exchangers in the screening 

analysis, based on their negative 

impacts on product utility to consumers 

and on manufacturing impracticality. 

AHAM agreed with DOE screening 

out these technologies. AHAM stated, as 

DOE noted, air and water economizers 

and suction line heat exchangers would 

increase the size and weight of room 

ACs, which would negatively impact 

consumer utility and require retooling. 

AHAM further stated that suction line 

heat exchangers could also decrease 

compressor lifetime. (AHAM, No. 19 at 

p. 10) 

DOE agrees with the comments made 

by AHAM and proposes to screen out 

the same technologies in this NOPR 

analysis. For additional details, see 

chapter 4 of the NOPR TSD. DOE 

requests comment on the technologies 

screened out in the NOPR screening 

analysis. 

2. Remaining Technologies 

Through a review of each technology, 

DOE tentatively concludes that all of the 

other identified technologies listed in 

section IV.A.2 of this document met all 

five screening criteria to be examined 

further as design options in DOE’s 

NOPR analysis. In summary, DOE did 

not screen out the following technology 

options: 


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DOE determined that these 

technology options are technologically 

feasible because they are being used or 

have previously been used in 

commercially available products or 

working prototypes. DOE also finds that 

all of the remaining technology options 

meet the other screening criteria (i.e., 

practicable to manufacture, install, and 

service; do not result in adverse impacts 

on consumer utility, product 

availability, health, or safety; and do not 

represent unique-pathway proprietary 

technologies). For additional details, see 

chapter 4 of the NOPR TSD. 

C. Engineering Analysis 

The purpose of the engineering 

analysis is to establish the relationship 

between the efficiency and cost of room 

ACs. There are two elements to consider 

in the engineering analysis; the 

selection of efficiency levels to analyze 

(i.e., the ‘‘efficiency analysis’’) and the 

determination of product cost at each 

efficiency level (i.e., the ‘‘cost 

analysis’’). In determining the 

performance of higher-efficiency 

products, DOE considers technologies 

and design option combinations not 

eliminated by the screening analysis. 

For each product class, DOE estimates 

the baseline cost, as well as the 

incremental cost for the product at 

efficiency levels above the baseline. The 

output of the engineering analysis is a 

set of cost-efficiency ‘‘curves’’ that are 

used in downstream analyses (i.e., the 

LCC and PBP analyses and the NIA). 

1. Efficiency Analysis 

DOE typically uses one of two 

approaches to develop energy efficiency 

levels for the engineering analysis: (1) 

Relying on observed efficiency levels in 

the market (i.e., the efficiency-level 

approach), or (2) determining the 

incremental efficiency improvements 

associated with incorporating specific 

design options to a baseline model (i.e., 

the design-option approach). Using the 

efficiency-level approach, the efficiency 

levels established for the analysis are 

determined based on the market 

distribution of existing products (in 

other words, based on the range of 

efficiencies and efficiency level 

‘‘clusters’’ that already exist on the 

market). Using the design option 

approach, the efficiency levels 

established for the analysis are 

determined through detailed 

engineering calculations and/or 

computer simulations of the efficiency 

improvements from implementing 

specific design options that have been 

identified in the technology assessment. 

DOE may also rely on a combination of 

these two approaches. For example, the 

efficiency-level approach (based on 

actual products on the market) may be 

extended using the design option 

approach to ‘‘gap fill’’ levels (to bridge 

large gaps between other identified 

efficiency levels) and/or to extrapolate 

to the max-tech level (particularly in 

cases where the max-tech level exceeds 


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Table IV.2 Retained Design Options for Room Air Conditioners 

15. Thermostatic or electronic ex ansion valves 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20627 

the maximum efficiency level currently 

available on the market). 

In this proposed rulemaking, DOE 

relies on a combination of these two 

approaches. For each product class, 

DOE analyzed a few units from different 

manufacturers to ensure the analysis 

was representative of various designs on 

the market. The analysis involved 

physically disassembling commercially 

available products, reviewing publicly 

available cost information, and 

modeling equipment cost. From this 

information, DOE estimated the 

manufacturer production costs 

(‘‘MPCs’’) for a range of products 

currently available on the market. DOE 

then considered the design options 

manufacturers would likely rely on to 

improve product efficiencies. From this 

information, DOE estimated the cost and 

efficiency impacts of incorporating 

specific design options at each 

efficiency level. 

DOE analyzed six efficiency levels as 

part of the engineering analysis: (1) The 

current DOE standard (baseline); (2) an 

intermediate level above the baseline 

but below the ENERGY STAR level, 

either halfway between the two or at a 

level where a number of models were 

certified (EL 1); (3) the ENERGY STAR 

efficiency criterion (EL 2); (4) the 

efficiency attainable by a unit with the 

most efficient R–32 single-speed 

compressor on the market (EL 3); (5) an 

intermediate level representing the 

efficiency of variable-speed units on the 

market, as tested by DOE using the 

recently amended test procedure (EL 4); 

and (6) the maximum technologically 

feasible (max-tech) efficiency (EL 5). 

In evaluating the technologies 

manufacturers could use to achieve the 

analyzed efficiency levels, DOE 

considered design options which made 

the largest impact on unit efficiency and 

for which the cost-efficiency 

relationship was well defined. 

Accordingly, DOE implemented 

increased heat exchanger area, 

condenser coil subcoolers, improved 

blower motor efficiency, improved 

compressor efficiency, variable-speed 

compressors, and low standby-power 

electronic controls as design options, 

some or all of which were used to 

estimate the cost required to reach each 

efficiently level. DOE did not consider 

for analysis certain technologies that 

met the screening criteria but were 

unable to be evaluated for one or more 

of the following reasons: (1) Data are not 

available to evaluate the energy 

efficiency characteristics of the 

technology, (2) available data suggest 

that the efficiency benefits of the 

technology are negligible, and (3) 

certain technologies cannot be measured 

according to the conditions and 

methods specified in the existing test 

procedure. Further information on how 

the design options were chosen and 

implemented in the engineering 

analysis is available in chapter 5 of the 

NOPR TSD. 

a. Baseline Efficiency 

For each product class, DOE generally 

selects a baseline model as a reference 

point for each class, and measures 

changes resulting from potential energy 

conservation standards against the 

baseline. The baseline model in each 

product class represents the 

characteristics of a product typical of 

that class (e.g., capacity, physical size). 

Generally, a baseline model is one that 

just meets current energy conservation 

standards, or, if no standards are in 

place, the baseline is typically the most 

common or least efficient unit on the 

market. 

For this NOPR, DOE selected 19 

baseline units, of the 48 total units 

selected, that fell within 12 of the 16 

room AC product classes as reference 

points for each analyzed product class, 

against which DOE measured changes 

that would result from amended energy 

conservation standards to support the 

engineering, LCC, and PBP analyses. 

The baseline units in each of the 

analyzed product classes represent the 

basic characteristics of equipment in 

that class 

b. Higher Efficiency Levels 

As part of DOE’s analysis, the 

maximum available efficiency level is 

the highest efficiency unit currently 

available on the market. DOE also 

defines the ‘‘max-tech’’ efficiency level 

to represent the maximum possible 

efficiency for a given product. As 

discussed in chapter 5 of the NOPR 

TSD, for the max-tech level, DOE 

modeled replacing permanent split 

capacitor (‘‘PSC’’) fan motors with more 

efficient electronically commutated 

motors (‘‘ECMs’’), replacing singlespeed compressors with the maximum 

efficiency variable-speed compressors 

available, reducing standby power to the 

minimum observed in DOE’s teardown 

sample, and increasing the cabinet and 

heat exchanger to the largest feasible 

sizes to improve efficiency. For all 

product classes, the max-tech level 

identified for EL 5 exceeds any other 

regulatory or voluntary efficiency 

criteria currently in effect. 

DOE notes that the max-tech level is 

based entirely on modeled combinations 

of design options that have not yet been 

combined in a commercially available 

product. Notably, the key design option, 

variable-speed compressors, are nascent 

in room ACs, and because there are no 

models on the market or prototypes that 

implement these highest efficiency 

variable-speed compressors, the 

efficiency level at max-tech for each 

product class is a numerical estimation. 

This is in contrast to the variable-speed 

compressors currently implemented in 

room ACs on the market today, for 

which performance has been 

characterized through testing. 

Furthermore, the room AC test 

procedure measures variable-speed unit 

performance differently than test 

procedures for other air conditioning 

products, so limited performance and 

efficiency data are available for the most 

efficient examples of this emergent 

technology for room ACs. 

Additionally, the most efficient 

variable-speed compressors that were 

implemented in the analysis at the maxtech efficiency level are manufactured 

by one manufacturer and have rated 

EERs between 11.2 and 11.7 Btu/Wh, 

with a range of rated capacities between 

4,705 Btu/h and 16,170 Btu/h. Given the 

lack of information regarding 

availability of these highest efficiency 

variable-speed compressors, and the 

limited number of variable-speed 

compressors rated at or near the 

compressors considered for the maxtech efficiency level, there may not be 

widespread availability of these highefficiency variable-speed compressors. 

The Joint Commenters and NEEA 

encouraged DOE to consider evaluating 

additional efficiency levels, particularly 

an intermediate level between EL 3 and 

EL 4. According to the Joint 

Commenters and NEEA, the most 

efficient products available today fall 

between these two efficiency levels. 

(Joint Commenters, No. 20 at pp. 2–3; 

NEEA, No. 24 at pp. 3 and 7) DOE 

agrees that the most efficient available 

units should be represented in the 

engineering analysis. In particular, 

variable-speed models, of which an 

increasing number of models are 

available, were not included in a 

separate efficiency level in the 

preliminary engineering analysis as a 

stand-alone design option. Therefore, 

DOE included a new efficiency level (EL 

4) in the NOPR engineering analysis, 

between EL 3 and the max-tech level 

(EL 4 in the preliminary analysis, now 

EL 5 for this NOPR). This new EL 4 is 

an intermediate efficiency level that 

represents the efficiency of variablespeed units on the market, as tested by 

DOE using the recently amended test 

procedure. DOE modeled all teardown 

units to reach this efficiency level in the 

engineering analysis by replacing each 

single-speed compressor with a 

variable-speed compressor and 


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25Because the projected price of standardscompliant products is typically higher than the 

price of baseline products, using the same markup 

for the incremental cost and the baseline cost would 

result in higher per-unit operating profit. While 

such an outcome is possible, DOE maintains that in 

markets that are reasonably competitive it is 

unlikely that standards would lead to a sustainable 

increase in profitability in the long run. 

26U.S. Census Bureau, Annual Retail Trade 

Survey. 2017. www.census.gov/programs-surveys/ 

arts.html. 

adjusting the rated efficiency of the 

modeled variable-speed compressor to 

achieve the target overall CEER value. 

DOE requests comment on the new 

efficiency level (EL 4) in the engineering 

analysis. 

AHAM and GEA stated that any 

energy standard levels achievable only 

with variable-speed compressors should 

not be selected and asserted that EL 3 

and above would require the use of 

variable-speed compressors. AHAM and 

GEA further stated that manufacturers 

would likely begin using variable-speed 

compressors to meet energy 

conservation standards at EL 3. GEA 

supported AHAM’s position and noted 

that incorporating variable-speed 

compressors into existing room AC 

units requires platform-level changes to 

room AC designs and manufacturing 

facilities. GEA further stated that, while 

variable-speed compressors are 

becoming available in some products, 

the technology is not sufficiently costeffective to use as the basis for setting 

an energy standard level for this 

proposed rulemaking. Thus, AHAM and 

GEA urged DOE to adjust its analysis to 

reflect the use of variable-speed 

compressors at EL 3. (AHAM, No. 19 at 

pp. 11–12; GEA, No. 26 at pp. 1–2) 

As discussed in section IV.A.2.b of 

this document, DOE adjusted its 

estimated efficiency for the most 

efficient available single-speed 

compressors, thus slightly reducing the 

CEER level for EL 3, but along with the 

additional proposed changeover to more 

efficient compressors that use R–32 

refrigerant, room ACs that implement 

single-speed compressors are still 

expected to meet EL 3. Therefore, DOE 

did not revise its analysis to assume that 

the use of variable-speed compressors 

would be necessary to achieve EL 3. 

DOE requests comment on the approach 

to design EL 3 as the level reached by 

the most efficient single-speed room 

ACs. 

2. Cost Analysis 

The cost analysis portion of the 

engineering analysis is conducted using 

one or a combination of cost 

approaches. The selection of cost 

approach depends on a suite of factors, 

including the availability and reliability 

of public information, characteristics of 

the regulated product, the availability 

and timeliness of purchasing the 

product on the market. The cost 

approaches are summarized as follows: 

• Physical teardowns: Under this 

approach, DOE physically dismantles a 

commercially available product, 

component-by-component, to develop a 

detailed bill of materials for the product. 

• Catalog teardowns: In lieu of 

physically deconstructing a product, 

DOE identifies each component using 

parts diagrams (available from 

manufacturer websites or appliance 

repair websites, for example) to develop 

the bill of materials (‘‘BOM’’) for the 

product. 

• Price surveys: If neither a physical 

nor catalog teardown is feasible (for 

example, for tightly integrated products 

such as fluorescent lamps, which are 

infeasible to disassemble and for which 

parts diagrams are unavailable) or costprohibitive and otherwise impractical 

(e.g., large commercial boilers), DOE 

conducts price surveys using publicly 

available pricing data published on 

major online retailer websites and/or by 

soliciting prices from distributors and 

other commercial channels. 

In the present case, DOE conducted 

the analysis using physical teardowns. 

The resulting BOM provides the basis 

for the MPC estimates. DOE estimated 

the cost of the highest efficiency singlespeed and variable-speed compressors 

implemented in EL 3 and EL 5, 

respectively, by extrapolating the costs 

from price surveys of other compressors. 

DOE used this approach because, as 

discussed previously, DOE is not aware 

of these most efficient single-speed and 

variable-speed compressors being 

implemented in any available room ACs 

to date. 

3. Cost-Efficiency Results 

The results of the engineering analysis 

are presented as cost-efficiency data for 

each of the efficiency levels for each of 

the product classes that were analyzed, 

as well as those extrapolated from a 

product class with similar cooling 

capacity and features. DOE developed 

estimates of MPCs for each unit in the 

teardown sample, and also performed 

additional modeling for each of the 

teardown samples, to develop a 

comprehensive set of MPCs at each 

efficiency level. DOE then consolidated 

the resulting MPCs for each of DOE’s 

teardown units and modeled units using 

a weighted average for product classes 

in which DOE analyzed units from 

multiple manufacturers. DOE’s 

weighting factors were based on a 

market penetration analysis for each of 

the manufacturers within each product 

class. The resulting weighted-average 

incremental MPCs (i.e., the additional 

costs manufacturers would likely incur 

by producing room ACs at each 

efficiency level compared to the 

baseline) are provided in Tables 5.5.5 

and 5.5.6 in chapter 5 of the NOPR TSD. 

See chapter 5 of the NOPR TSD for 

additional detail on the engineering 

analysis. DOE requests comment on the 

incremental MPCs from the NOPR 

engineering analysis. 

D. Markups Analysis 

The markups analysis develops 

appropriate markups (e.g., retailer 

markups, distributor markups, 

contractor markups) in the distribution 

chain and sales taxes to convert the 

MPC estimates derived in the 

engineering analysis to consumer prices, 

which are then used in the LCC and PBP 

analysis and in the manufacturer impact 

analysis. At each step in the distribution 

channel, companies mark up the price 

of the product to cover business costs 

and profit margin. 

To account for manufacturers’ nonproduction costs and profit margin, DOE 

applied a non-production cost 

multiplier (the manufacturer markup) to 

the MPC. The resulting manufacturer 

selling price (‘‘MSP’’) is the price at 

which the manufacturer distributes a 

unit into commerce. DOE developed an 

average manufacturer markup by 

examining the annual Securities and 

Exchange Commission (‘‘SEC’’) 10–K 

reports filed by publicly traded 

manufacturers primarily engaged in 

appliance manufacturing and whose 

combined product range includes room 

ACs. 

For room ACs, DOE further developed 

baseline and incremental markups for 

each link in the distribution chain (after 

the product leaves the manufacturer). 

Baseline markups are applied to the 

price of products with baseline 

efficiency, while incremental markups 

are applied to the difference in price 

between baseline and higher-efficiency 

models (the incremental cost increase). 

The incremental markup is typically 

less than the baseline markup and is 

designed to maintain similar per-unit 

operating profit before and after new or 

amended standards.25

DOE relied on economic data from the 

U.S. Census Bureau to estimate average 

baseline and incremental markups. 

Specifically, DOE used the 2017 Annual 

Retail Trade Survey for the ‘‘electronics 

and appliance stores’’ sector to develop 

retailer markups; 26 and the 2017 

Annual Wholesale Trade Survey for the 

‘‘household appliances, and electrical 

and electronic goods merchant 


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27U.S. Census Bureau, Annual Wholesale Trade 

Survey. 2017. www.census.gov/awts. 

28U.S. Department of Energy-Energy Information 

Administration, Residential Energy Consumption 

Survey, 2015 Public Use Microdata Files, 2015. 

Washington, DC. Available online at: 

www.eia.doe.gov/emeu/recs/recspubuse15/ 

pubuse15.html. DOE will update all the 2015 RECS 

data to 2020 RECS if it is available prior to the final 

rule. 

29U.S. Department of Energy-Energy Information 

Administration, Commercial Buildings Energy 

Consumption Survey, 2012 Public Use Microdata 

Files, 2012. Washington, DC. Available online at: 

www.eia.doe.gov/emeu/cbecs/cbecspubuse12/ 

pubuse12.html. DOE will update all 2012 CBECS 

data to 2018 CBECS when it becomes available. 

30Burke et al., 2014. ‘‘Using Field-Metered Data 

to Quantify Annual Energy Use of Residential 

Portable Air Conditioners.’’ LBNL, Berkeley, CA. 

LBNL Report LBNL–6469E. September 2014. 

wholesalers’’ sector to estimate 

wholesaler markups.27

Chapter 12 of the NOPR TSD provides 

additional detail on the manufacturer 

markup and chapter 6 of this NOPR TSD 

provides additional detail on DOE’s 

development of the baseline and 

incremental retail markups. 

E. Energy Use Analysis 

The purpose of the energy use 

analysis is to determine the annual 

energy consumption of room ACs at 

different efficiencies in representative 

U.S. single-family homes, multi-family 

residences, manufactured housing, and 

commercial buildings, and to assess the 

energy savings potential of increased 

room AC efficiency. The energy use 

analysis estimates the range of energy 

use of room ACs in the field (i.e., as they 

are actually used by consumers). The 

energy use analysis provides the basis 

for other analyses DOE performed, 

particularly assessments of the energy 

savings and the monetary savings in 

consumer operating costs that could 

result from adoption of amended or new 

standards. 

To estimate annual room AC use and 

energy consumption in the June 2020 

Preliminary Analysis, DOE first 

calculated the number of operating 

hours in cooling mode for each room AC 

in the residential and commercial 

samples using the reported energy use 

for room air conditioning in the 

Residential Energy Consumption Survey 

(‘‘RECS’’) 2015 28 and Commercial 

Building Energy Consumption Survey 

(‘‘CBECS’’) 2012,29 along with estimates 

of the EER of the room AC(s) in each 

sample home or building. DOE based 

the latter on the reported age (or 

simulated age) of the unit and historical 

data on shipment-weighted average 

EER. In the June 2020 Preliminary 

Analysis, the estimated mean number of 

cooling mode operating hours for the 

residential room AC sample is 912 

hours for the 6,000 to 7,999 Btu/h 

product class, 636 hours for the 8,000 to 

13,999 Btu/h product classes, 422 hours 

for the 14,999 to 19,999 Btu/h product 

class, and 261 hours for the ≥20,000 

Btu/h product class. The estimated 

mean number of cooling mode operating 

hours for the commercial room AC 

sample is 746 hours for the 6,000 to 

7,999 Btu/h product class, 868 hours for 

the 8,000 to 13,999 Btu/h product 

classes, 921 hours for the 14,999 to 

19,999 Btu/h product class, and 1,073 

hours for the ≥20,000 Btu/h product 

class. DOE assumed that units plugged 

in, but not in cooling mode, would be 

in standby mode and included the 

contribution of standby power 

consumption in its energy use model. 

AHAM agreed that, in the absence of 

field data on annual operating hours, 

DOE should use the most recent version 

of RECS and CBECS to establish the 

annual operating hours for residential 

room ACs. (AHAM, No. 19 at p. 15) 

NEEA believes DOE has identified 

energy savings associated with room 

ACs, but contends that there are more 

energy savings achievable. NEEA 

encourages DOE to look at more of the 

efficiency technology options and how 

they perform the energy analysis in 

order to get more savings. (NEEA, Public 

Meeting Transcript, No. 18 at pp. 8–9) 

NEEA suggested modifying the energy 

use analysis to capture more of the 

benefits of other technologies in the 

market that are not necessarily captured 

in the current test procedure. (Id. at pp. 

57–58) 

DOE notes that the standards 

rulemaking must recommend efficiency 

levels that are both economically 

justified and technologically feasible. 

The availability of technologies used to 

achieve different efficiency levels are 

identified in the market and technology 

assessment (see chapter 3 of the NOPR 

TSD). DOE’s engineering analysis 

analyzes technologies in currently 

available room AC units. The energy use 

analysis uses the efficiency levels and 

power consumption values from the 

engineering analysis. Estimates for 

energy consumption are based on 

available data of how room ACs are 

operated in the field. DOE welcomes 

information about additional 

technologies that can be analyzed in the 

rulemaking process. 

NEEA recommended that DOE 

include fan-only hours in its analysis 

and take into account energy savings 

from variable-speed fans and motors. 

NEEA stated that fan-only operation is 

likely to account for a significant 

number of operating hours, resulting in 

a significant portion of overall energy 

use. (NEEA, No. 24 at p. 5) Rice 

suggested measuring the energy 

consumption of the fan-mode during 

cooling mode operation when the fan 

typically runs continuously while the 

compressor cycles. If it is not accounted 

for, Rice recommended, at a minimum, 

that the energy use information on the 

Energy Label indicate that the energy 

costs is based on the economy mode 

setting. (Rice, No. 25 at p. 3) 

DOE is unaware of a data set that can 

be used to estimate the amount of time 

room ACs spend in fan-only mode. For 

this NOPR analysis, DOE included the 

impact of fan-only mode energy 

consumption to the total energy use 

consumption, based on available data 

for portable ACs. Based on field 

metering data of portable ACs, fan-only 

mode is estimated at 30 percent of 

cooling mode hours.30 DOE assumed 

that models below ENERGY STAR 

efficiency level would operate in fanonly mode 30 percent of cooling mode 

hours. For ELs that meet or exceed the 

ENERGY STAR level, DOE assumed a 

reduction in the amount of time the unit 

spent in fan-only mode based on the 

ENERGY STAR Version 4.2 for room 

ACs criterion requiring that the unit run 

in off-cycle fan mode less than 17 

percent of the time spent in off-cycle 

mode. Thus, for ELs that meet or exceed 

the ENERGY STAR efficiency level, 

DOE assumed units would operate in 

fan-only mode 5 percent of cooling 

mode hours. DOE welcomes feedback 

on its approach and any additional data 

that can be provided to estimate the 

amount of time spent in fan-only mode. 

DOE notes that the Federal Trade 

Commission is responsible for the 

information included on the yellow 

EnergyGuide labels. 

Edison Electric Institute (‘‘EEI’’) noted 

that, in northern climates, many 

consumers unplug their units or even 

take them out of the windows during 

the wintertime, meaning the 8,000 

standby hours value used in the annual 

energy use calculation formula could be 

an overestimate. EEI suggested gathering 

more data on this. (EEI, Public Meeting 

Transcript, No. 18 at pp. 51–52) 

DOE agrees that many consumers 

unplug their room AC units in the noncooling seasons in northern climates. 

However, DOE is not aware of reliable, 

publicly available data for hours spent 

in standby and off modes in room ACs. 

DOE recognizes that a room AC may be 

unplugged for a certain percentage of 

time, and, therefore, will not be in either 

standby mode or off mode. For the 

purposes of this NOPR analysis, DOE 

estimates that approximately half of 

room ACs are unplugged for half of the 

year. The ‘‘unplugged’’ time associated 


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20630 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

31The Room Air Conditioning Life-Cycle Cost 

Analysis Spreadsheets (EERE–2014–BT–STD–0059– 

0010) can be found at beta.regulations.gov/ 

document/EERE-2014-BT-STD-0059-0010. 

32National Oceanic and Atmospheric 

Administration. Quality Controlled Local Climate 

Data. www.ncdc.noaa.gov/cdo-web/. 

with these units is averaged over all 

units. DOE estimates active mode based 

on RECS inputs and time spent in fanonly mode based on available data for 

portable ACs. Standby hours comprise 

the remaining time. See chapter 7 of the 

NOPR TSD for further discussion. 

The California IOUs noted that, in the 

LCC Excel spreadsheet downloaded 

from DOE’s website, for product class 

(‘‘PC’’) 2, the cooling mode operating 

hours are 2,922 hours, but for PC 3, the 

cooling mode operating hours are only 

217 hours.31 The California IOUs 

expressed concern at the cooling mode 

operating hour difference between PC 2 

and PC 3. (California IOUs, Public 

Meeting Transcript, No. 18 at pp. 55–56) 

DOE’s LCC spreadsheet model uses a 

Monte Carlo simulation in its LCC 

calculations. Operating hours vary for 

each house in the household sample 

and are used as an input into the LCC 

calculations. The hours mentioned in 

the California IOUs comment represent 

the operating hours for one household 

in the sample and are not representative 

of the full household sample, or an 

entire Monte Carlo simulation. The 

average hours of use for the full sample 

used for each product class can be 

found in chapter 7 of the NOPR TSD. 

Appliance Standards Awareness 

Project (‘‘ASAP’’), Rice, California IOUs, 

NEEA, and the Joint Commenters 

encouraged DOE to investigate 

modifications to the energy use model 

to account for potential energy savings 

by variable-speed units. ASAP stated 

that variable-speed units would be able 

to reduce cycling losses in addition to 

providing additional part-load benefits. 

(ASAP, Public Meeting Transcript, No. 

18 at p. 54) Rice noted that DOE’s 

energy use methodology in the June 

2020 Preliminary Analysis does not 

capture the benefits of part load 

operation and suggested applying a 

performance adjustment factor (‘‘PAF’’) 

for ELs with variable-speed 

compressors. (Rice, No. 25 at p. 2) NEEA 

and the California IOUs further stated 

the energy use model in the June 2020 

Preliminary Analysis only used the fullload energy EER of the compressors to 

calculate energy savings, meaning the 

analysis does not capture any 

inefficiencies due to single-speed 

compressor cycling at part load. 

(California IOUs, No. 23 at p. 2; NEEA, 

No. 24 at p. 5) The Joint Commenters 

noted that in addition to significantly 

reducing cycling losses, variable-speed 

operation improves heat exchanger 

effectiveness at reduced cooling loads, 

resulting in additional energy savings. 

(Joint Commenters, No. 20 at pp. 3–4) 

For this NOPR analysis, DOE 

modified its approach to calculating 

energy use for models that use a 

variable-speed compressor to account 

for the reduced energy consumption 

during part load operation. Unlike 

single-speed compressors, variablespeed compressors have the ability to 

operate at part load depending on the 

cooling load. The amount of the time 

spent in part load operation will depend 

on the local climate of the household or 

business operating the room AC. For 

example, room ACs in milder climates 

will spend more time in part load 

operation relative to a household in a 

hot climate where a compressor is likely 

to run at maximum load. DOE 

accounted for geographic-dependent 

climate variability by calculating U.S. 

State-dependent PAFs using historical 

climate data spanning the period from 

2008–2016 from the National Oceanic 

and Atmospheric Administration.32 For 

each state in the U.S., DOE performed 

a temperature bin analysis to calculate 

within the cooling season (June through 

August) the fraction of time the outdoor 

dry bulb temperature was in one of four 

temperature bins: 80–84 degrees 

Fahrenheit (‘‘°F’’), 85–89 °F, 90–94 °F, 

and 95–99 °F. DOE then calculated the 

corresponding PAF for each state using 

the methodology developed for variablespeed drive units in the test procedure 

and applied the PAF to the EER at full 

load. DOE requests feedback on its 

approach to calculating the energy-use 

of variable-speed compressors and 

would welcome field metered data to 

further investigate the varying amounts 

of energy use due to single-speed and 

variable-speed units. 

Rice stated that the off-cycle energy 

use term in the June 2020 Preliminary 

Analysis energy-use model is 

inappropriate for a variable-speed room 

AC. Rice stated that it should be 

modified to account for lower standby 

energy usage due to longer run times in 

the cooling season for variable-speed 

units in meeting the cooling season 

load. Rice notes that since DOE’s 

calculation of energy use in cooling 

mode assumes operation at full rated 

cooling capacity, it is inappropriate for 

use in the standby energy use term for 

variable-speed room ACs. (Rice, No. 25 

at p. 2) 

DOE’s test procedure requires that the 

low compressor speed at the low test 

condition achieve a capacity that is 47– 

57 percent of the ‘‘peak’’ rated capacity. 

Therefore, DOE would not expect a 

variable-speed compressor unit to enter 

off-cycle mode above loads 47 percent 

of the rated capacity, which is close to 

a representative of outdoor temperature 

conditions of 82 °F. In this NOPR 

analysis, DOE calculates the energy use 

of variable-speed units using a 

geographic-dependent performance 

adjustment factor to account for time the 

unit spends at partial load. DOE is 

unaware of a data-set that would allow 

for the estimation of the change in 

cooling run time of variable-speed units 

relative to a single-speed unit. DOE 

welcomes any available information or 

data that can be used to improve 

assumptions in the energy use model. 

The California IOUs noted that DOE 

uses EER to estimate average annual 

energy use, however, only CEER is 

listed for each energy use results tables 

in chapter 7 of the preliminary TSD. To 

minimize confusion that CEER was used 

to calculate the average annual energy 

use, the California IOUs recommended 

that DOE add EER to energy use tables 

along with the corresponding CEER for 

each EL. (California IOUs, No. 23 at p. 

3) 

DOE has included both EER and CEER 

in the energy use results tables in the 

NOPR TSD. 

Chapter 7 of the NOPR TSD provides 

details on DOE’s energy use analysis for 

room ACs. 

F. Life-Cycle Cost and Payback Period 

Analysis 

DOE conducted LCC and PBP 

analyses to evaluate the economic 

impacts on individual consumers of 

potential energy conservation standards 

for room ACs. The effect of new or 

amended energy conservation standards 

on individual consumers usually 

involves a reduction in operating cost 

and an increase in purchase cost. DOE 

used the following two metrics to 

measure consumer impacts: 

b The LCC is the total consumer 

expense of an appliance or product over 

the life of that product, consisting of 

total installed cost (manufacturer selling 

price, distribution chain markups, sales 

tax, and installation costs) plus 

operating costs (expenses for energy use, 

maintenance, and repair). To compute 

the operating costs, DOE discounts 

future operating costs to the time of 

purchase and sums them over the 

lifetime of the product. 

b The PBP is the estimated amount 

of time (in years) it takes consumers to 

recover the increased purchase cost 

(including installation) of a moreefficient product through lower 

operating costs. DOE calculates the PBP 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20631 

33 DOE will update all the 2015 RECS data to 

2020 RECS if it is available prior to the final rule. 

Similarly, DOE will update all 2012 CBECS data to 

2018 CBECS when it becomes available. 

34Crystal BallTM is commercially-available 

software tool to facilitate the creation of these types 

of models by generating probability distributions 

and summarizing results within Excel, available at 

www.oracle.com/middleware/technologies/ 

crystalball.html (last accessed August 31, 2021). 

by dividing the change in purchase cost 

at higher efficiency levels by the change 

in annual operating cost for the year that 

amended or new standards are assumed 

to take effect. 

For any given efficiency level, DOE 

measures the change in LCC relative to 

the LCC in the no-new-standards case, 

which reflects the estimated efficiency 

distribution of room ACs in the absence 

of new or amended energy conservation 

standards. In contrast, the PBP for a 

given efficiency level is measured 

relative to the baseline product. 

For each considered efficiency level 

in each product class, DOE calculated 

the LCC and PBP for a nationally 

representative set of housing units and 

commercial buildings. As stated 

previously, DOE developed household 

samples from the 2015 RECS 33 and 

commercial building samples from the 

2012 CBECS. For each sample 

household or building, DOE determined 

the energy consumption for the room 

AC and the appropriate energy price. By 

developing a representative sample of 

households and commercial buildings, 

the analysis captured the variability in 

energy consumption and energy prices 

associated with the use of room ACs. 

Inputs to the calculation of total 

installed cost include the cost of the 

product—which includes MPCs, 

manufacturer markups, retailer and 

distributor markups, and sales taxes— 

and installation costs. Inputs to the 

calculation of operating expenses 

include annual energy consumption, 

energy prices and price projections, 

repair and maintenance costs, product 

lifetimes, and discount rates. DOE 

created distributions of values for 

product lifetime, discount rates, and 

sales taxes, with probabilities attached 

to each value, to account for their 

uncertainty and variability. 

The computer model DOE uses to 

calculate the LCC and PBP relies on a 

Monte Carlo simulation to incorporate 

uncertainty and variability into the 

analysis. The Monte Carlo simulations 

randomly sample input values from the 

probability distributions and room AC 

user samples. For this rulemaking, the 

Monte Carlo approach is implemented 

in MS Excel together with the Crystal 

BallTM add-on.34 The model calculated 

the LCC and PBP for products at each 

efficiency level for 10,000 housing units 

or commercial buildings per simulation 

run. The analytical results include a 

distribution of 10,000 data points 

showing the range of LCC savings for a 

given efficiency level relative to the nonew-standards case efficiency 

distribution. In performing an iteration 

of the Monte Carlo simulation for a 

given consumer, product efficiency is 

chosen based on its probability. If the 

chosen product efficiency is greater than 

or equal to the efficiency of the standard 

level under consideration, the LCC and 

PBP calculation reveals that a consumer 

is not impacted by the standard level. 

By accounting for consumers who 

already purchase more-efficient 

products, DOE avoids overstating the 

potential benefits from increasing 

product efficiency. 

DOE calculated the LCC and PBP for 

all consumers of room ACs as if each 

were to purchase a new product in the 

expected year of required compliance 

with new or amended standards. 

Amended standards would apply to 

room ACs manufactured 3 years after 

the date on which any new or amended 

standard is published. (42 U.S.C. 

(m)(4)(A)(i)) For purposes of its analysis, 

DOE used 2026 as the first year of 

compliance with any amended 

standards for room ACs. 

Table IV.3 summarizes the approach 

and data DOE used to derive inputs to 

the LCC and PBP calculations. The 

subsections that follow provide further 

discussion. Details of the spreadsheet 

model, and of all the inputs to the LCC 

and PBP analyses, are contained in 

chapter 8 of the NOPR TSD and its 

appendices. 


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Table IV.3 Summarv of Inputs and Methods for the LCC and PBP Analysis* 

In nuts Source/Method 

Product Cost 

Installation Costs 

Annual Energy Use 

Energy Prices 

Energy Price Trends 

Repair and 

Maintenance Costs 

Product Lifetime 

Discount Rates 

Compliance Date 

Derived by multiplying MPCs by manufacturer and retailer markups and sales 

tax, as appropriate. Used historical data to derive a price scaling index to 

project product costs. 

Assumed no change with efficiencv level. 

The total annual energy use by operating mode multiplied by the hours per 

year in each mode. 

Variability: Based on the 2015 RECS and 2012 CBECS. 

Electricity: Based on Edison Electric Institute data for 2020. 

Variabilitv: Regional energy prices determined for each Census Division. 

Based onAEO 2021 price projections by Census Division. 

Assumed no change with efficiency level for maintenance costs. Repair costs 

estimated for each product class and efficiencv level. 

Weibull probability distribution developed from historical shipments, 

American Housinz Survey and RECS, with an average lifetime of 9 years 

Approach involves identifying all possible debt or asset classes that might be 

used to purchase the considered appliances, or might be affected indirectly. 

Primary data source was the Federal Reserve Board's Survey of Consumer 

Finances. 

2026 

* References for the data sources mentioned m this table are provided m the sections followmg the table or m chapter 8 

of the NOPR TSD. 
20632 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

35Room air-conditioners and dehumidifiers, 

except portable dehumidifiers PPI series ID: 

PCU3334153334156; www.bls.gov/ppi/. 

36Air-conditioning, refrigeration, and forced air 

heating equipment manufacturing, Primary 

Products PPI series ID: PCU333415333415P; 

www.bls.gov/ppi/. 

37Semiconductors and related device 

manufacturing PPI series ID: PCU334413334413; 

www.bls.gov/ppi/. 

38 Ganeshalingam, M., Ni, C., and Yang, H-C. 

2021. A Retrospective Analysis of the 2011 Direct 

Final Rule for Room Air Conditioners. Lawrence 

Berkeley National Laboratory. LBNL-2001413. 

39Edison Electric Institute. Typical Bills and 

Average Rates Report. 2020. Winter 2020, Summer 

2020: Washington, DC. 

1. Product Cost 

To calculate consumer product costs, 

DOE multiplied the MPCs developed in 

the engineering analysis by the markups 

described previously (along with sales 

taxes). DOE used different markups for 

baseline products and higher-efficiency 

products because DOE applies an 

incremental markup to the increase in 

MSP associated with higher-efficiency 

products. 

Economic literature and historical 

data suggest that the real costs of many 

products may trend downward over 

time according to ‘‘learning’’ or 

‘‘experience’’ curves. Experience curve 

analysis implicitly includes factors such 

as efficiencies in labor, capital 

investment, automation, materials 

prices, distribution, and economies of 

scale at an industry-wide level. To 

derive the learning rate parameter for 

room ACs that utilize single-speed 

compressors, DOE obtained historical 

Producer Price Index (‘‘PPI’’) data for 

room ACs from the Bureau of Labor 

Statistics (‘‘BLS’’). A PPI specific to 

‘‘room air-conditioners and 

dehumidifiers, except portable 

dehumidifiers’’ was available for the 

time period between 1990 and 2009.35

After 2009, PPI data was only available 

for the broader product family of 

‘‘refrigeration and forced air heating 

equipment,’’ which includes room ACs, 

spanning the years 2010–2020.36

Inflation-adjusted price indices were 

calculated by dividing the PPI series by 

the gross domestic product index from 

Bureau of Economic Analysis for the 

same years. Using data from 1990–2020, 

the estimated learning rate (defined as 

the fractional reduction in price 

expected from each doubling of 

cumulative production) is 25 percent. 

The Joint Commenters suggested an 

analysis with learning rates associated 

with specific technology options or 

components. (Joint Commenters, No. 20 

at pp. 4–5) 

DOE considered the inclusion of 

variable-speed compressors as a 

technology option in EL 4 and EL 5. To 

develop future prices specific for that 

technology, DOE applied a different 

price trend to the controls portion of the 

variable-speed compressors that 

contributes to the price increments 

moving from EL 3 (an efficiency level 

achieved with the highest efficiency 

single-speed compressor) to EL 4 and EL 

5. DOE used PPI data on 

‘‘semiconductors and related device 

manufacturing’’ between 1967 and 2020 

to estimate the historic price trend of 

electronic components in the control.37

The regression performed as an 

exponential trend line fit results in an 

R-square of 0.99, with an annual price 

decline rate of 6.3 percent. See chapter 

8 of the NOPR TSD for further details 

on this topic. 

The Joint Commenters noted that 

DOE’s estimate of the learning rate for 

room ACs is likely a conservative 

estimate of how prices will decline over 

time. (Joint Commenters, No. 20 at pp. 

4–5) 

A retrospective analysis of the April 

2011 Direct Final Rule for room ACs 38

compared the room AC average modellevel price changes based on webscraped retail price data from 2013 to 

2017 (ex-post data) and the price factor 

index for the corresponding period 

derived in the April 2011 Direct Final 

Rule (ex-ante data). The result shows 

that the ex-ante data and ex-post data 

share similar price declining trends, and 

thus provide independent validation of 

the experience curve methodology 

adopted by DOE in the rulemaking 

analysis. To account for the 

uncertainties in the experience curve 

estimation, DOE also considered two 

alternative product price forecasts for 

room ACs (a high price decline and a 

low price decline scenarios and 

estimated their impacts on the 

consumer NPV for various standard 

levels (see section IV.H.3 of this 

document for details). 

DOE requests comments on its 

assumption and methodology for 

determining equipment price trends. 

2. Installation Cost 

Installation cost includes labor, 

overhead, and any miscellaneous 

materials and parts needed to install the 

product. As in the June 2020 

Preliminary Analysis, DOE found no 

evidence that installation costs would 

be impacted with increased efficiency 

levels and, thus, did not include 

installation costs in the LCC calculation. 

3. Annual Energy Consumption 

For each sampled household or 

business, DOE determined the energy 

consumption for a room AC at different 

efficiency levels using the approach 

described previously in section IV.E of 

this document. 

a. Rebound Effect 

Higher-efficiency room ACs reduce 

the operating costs for a consumer, 

which can lead to greater use of room 

ACs. A direct rebound effect occurs 

when a product that is made more 

efficient is used more intensively, such 

that the expected energy savings from 

the efficiency improvement may not 

fully materialize. At the same time, 

consumers benefit from increased 

utilization of products due to rebound. 

Overall consumer welfare (taking into 

account additional costs and benefits) is 

generally understood to increase from 

rebound. DOE did not find any data on 

the rebound effect that is specific to 

room ACs. In the April 2011 Direct 

Final Rule, DOE estimated a rebound of 

15 percent for room ACs for the NIA but 

did not include rebound in the LCC 

analysis. 76 FR 22454, 22511. Given the 

uncertainty and lack of data specific to 

room ACs, DOE did not include the 

rebound effect in the LCC analysis for 

this NOPR. DOE does include rebound 

in the NIA for a conservative estimate of 

national energy savings and the 

corresponding impact to consumer NPV. 

As in the April 2011 Direct Final Rule, 

DOE used a rebound effect of 15 percent 

for room ACs. See sections IV.H.2 and 

IV.H.3 of this document for further 

details on how the rebound effect is 

applied in the NIA. 

4. Energy Prices 

Because marginal electricity price 

more accurately captures the 

incremental savings associated with a 

change in energy use from higher 

efficiency, it provides a better 

representation of incremental change in 

consumer costs than average electricity 

prices. Therefore, DOE applied average 

electricity prices for the energy use of 

the product purchased at baseline 

efficiency, and marginal electricity 

prices for the incremental change in 

energy use associated with the other 

efficiency levels considered. 

DOE derived annual electricity prices 

in 2020 for each census division using 

data from EEI Typical Bills and Average 

Rates reports.39 For the residential 

sector, DOE used the EEI data to define 

a marginal price as the ratio of the 

change in the bill to the change in 

energy consumption. For the 

commercial sector, marginal prices 

depend on both the change in electricity 

consumption and the change in monthly 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20633 

40Energy Information Administration. Annual 

Energy Outlook 2021 with Projections to 2050. 

Washington, DC. Available at www.eia.gov/ 

forecasts/aeo/. 

41The implicit discount rate is inferred from a 

consumer purchase decision between two otherwise 

identical goods with different first cost and 

operating cost. It is the interest rate that equates the 

increment of first cost to the difference in net 

present value of lifetime operating cost, 

incorporating the influence of several factors: 

Transaction costs; risk premiums and response to 

uncertainty; time preferences; interest rates at 

which a consumer is able to borrow or lend. 

42U.S. Board of Governors of the Federal Reserve 

System. Survey of Consumer Finances. 1995, 1998, 

2001, 2004, 2007, 2010, 2013, 2016, and 2019. (Last 

accessed August 20, 2021.) www.federalreserve.gov/ 

econresdata/scf/scfindex.htm. 

peak-coincident demand. DOE used the 

EEI data to estimate both marginal 

energy charges and marginal demand 

charges. 

DOE calculated weighted-average 

values for average and marginal price 

for the nine census divisions for both 

the residential and commercial sectors. 

As the EEI data are published separately 

for summer and winter, DOE calculated 

seasonal prices for each division and 

sector. See chapter 8 of the NOPR TSD 

for details. 

To estimate energy prices in future 

years, DOE multiplied the average 

regional energy prices by a projection of 

annual change in national-average 

residential and commercial energy price 

in AEO 2021.40 AEO 2021 has an end 

year of 2050. To estimate electricity 

price trends after 2050, DOE used the 

average annual rate of change in 

electricity price from 2035 through 

2050. 

Rice suggested that consideration be 

given to showing energy cost 

information for both economy and cool 

mode settings to account for units with 

higher efficiency blower motor/fan 

assemblies that would have lower 

energy costs relative to less efficient 

blowers/fans in off-cycle mode. (Rice, 

No. 25 at p. 3) 

As described in section IV.E of this 

document, DOE includes the energy 

contribution of fan-mode including time 

spent in off-cycle mode. DOE 

determines energy costs for the full 

range of product classes and efficiency 

levels. 

5. Maintenance and Repair Costs 

Repair costs are associated with 

repairing or replacing product 

components that have failed in an 

appliance; maintenance costs are 

associated with maintaining the 

operation of the product. Typically, 

small incremental increases in product 

efficiency produce no, or only minor, 

changes in repair and maintenance costs 

compared to baseline efficiency 

products. In this NOPR analysis, DOE 

did not include maintenance costs in 

the LCC. 

In the June 2020 Preliminary 

Analysis, DOE assumed that repair 

frequencies are low and increase for the 

higher-capacity units due to more 

expensive equipment costs. DOE 

assumed that 1 percent of small-sized 

units (below 8,000 Btu/h), 2 percent of 

medium-sized units (8,000 to 20,000 

Btu/h), and 3 percent of large-sized 

units (above 20,000 Btu/h) are 

maintained or repaired each year. DOE 

assumed that an average service call and 

repair/maintenance takes about 1 hour 

for small and medium-sized units and 2 

hours for large units, and that the 

average material cost is equal to one-half 

of the incremental equipment cost. DOE 

maintains these assumptions in the 

NOPR analysis. 

6. Product Lifetime 

For room ACs, DOE developed a 

distribution of lifetimes from which 

specific values are assigned to the 

appliances in the samples. DOE 

conducted an analysis of actual lifetime 

in the field using a combination of 

historical shipments data, the stock of 

the considered appliances in the 

American Housing Survey, and 

responses in RECS on the age of the 

appliances in the homes. The data 

allowed DOE to estimate a survival 

function, which provides an average 

appliance lifetime. This analysis yielded 

a lifetime probability distribution with 

an average lifetime for room ACs of 

approximately 9 years. See chapter 8 of 

the NOPR TSD for further details. 

7. Discount Rates 

In the calculation of the LCC, DOE 

applies discount rates appropriate to 

residential and commercial sectors to 

estimate the present value of future 

operating costs. DOE estimated a 

distribution of residential and 

commercial discount rates for room ACs 

based on consumer financing costs and 

the opportunity cost of consumer funds 

(for the residential sector) and cost of 

capital of publicly traded firms (for the 

commercial sector). 

For households, DOE applies 

weighted-average discount rates 

calculated from consumer debt and 

asset data, rather than marginal or 

implicit discount rates.41 DOE notes that 

the LCC does not analyze the appliance 

purchase decision, so the implicit 

discount rate is not relevant in this 

model. The LCC estimates net present 

value over the lifetime of the product, 

so the appropriate discount rate will 

reflect the general opportunity cost of 

household funds, taking this time scale 

into account. Given the long time 

horizon modeled in the LCC, the 

application of a marginal interest rate 

associated with an initial source of 

funds is inaccurate. Regardless of the 

method of purchase, consumers are 

expected to continue to rebalance their 

debt and asset holdings over the LCC 

analysis period, based on the 

restrictions consumers face in their debt 

payment requirements and the relative 

size of the interest rates available on 

debts and assets. DOE estimates the 

aggregate impact of this rebalancing 

using the historical distribution of debts 

and assets. 

To establish residential discount rates 

for the LCC analysis, DOE identified all 

relevant household debt or asset classes 

in order to approximate a consumer’s 

opportunity cost of funds related to 

appliance energy cost savings. It 

estimated the average percentage shares 

of the various types of debt and equity 

by household income group using data 

from the Federal Reserve Board’s Survey 

of Consumer Finances 42 (‘‘SCF’’) for 

1995, 1998, 2001, 2004, 2007, 2010, 

2013, 2016, and 2019. Using the SCF 

and other sources, DOE developed a 

distribution of rates for each type of 

debt and asset by income group to 

represent the rates that may apply in the 

year in which amended standards 

would take effect. DOE assigned each 

sample household a specific discount 

rate drawn from one of the distributions. 

The average rate across all types of 

household debt and equity and income 

groups, weighted by the shares of each 

type, is 4.3 percent. See chapter 8 of the 

NOPR TSD for further details on the 

development of consumer discount 

rates. 

For commercial-sector room ACs, 

DOE used the cost of capital 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 the cost of capital is the 

weighted-average cost to the firm of 

equity and debt financing. This 

corporate finance approach is referred to 

as the weighted-average cost of capital. 

DOE used currently available economic 

data in developing discount rates. 

8. Energy Efficiency Distribution in the 

No-New-Standards Case 

To accurately estimate the share of 

consumers that would be affected by a 

potential energy conservation standard 

at a particular efficiency level, DOE’s 

LCC analysis considered the projected 

distribution (market shares) of product 

efficiencies under the no-new-standards 


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20634 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

43 Ganeshalingam, M., Ni, C., and Yang, H-C. 

2021. A Retrospective Analysis of the 2011 Direct 

Final Rule for Room Air Conditioners. Lawrence 

Berkeley National Laboratory. LBNL-2001413. 

44Bass, F. M. A New Product Growth Model for 

Consumer Durables. Management Science. 1969. 

15(5): pp. 215–227. 

case (i.e., the case without amended or 

new energy conservation standards). 

DOE utilized confidential 2019 

shipments data disaggregated by 

product class and efficiency provided 

by AHAM in response to the June 2020 

Preliminary Analysis to estimate the 

efficiency distribution in 2019. In the 

preliminary analysis, DOE assumed an 

annual 0.25 percent increase in 

shipment-weighted CEER to develop the 

efficiency distribution in 2026. The 

efficiency trend used in this NOPR is 

supported by a retrospective analysis of 

the April 2011 Direct Final Rule which 

used a similar efficiency trend.43 For 

this NOPR, DOE assumed this trend 

applied to efficiency levels with singlespeed compressors (EL 0, EL 1, EL 2, 

and EL 3). DOE assumed the adoption 

of variable-speed technologies (EL 4 and 

EL 5) would follow a Bass diffusion 

curve which describes how new 

technologies diffuse into the consumer 

market.44 DOE assumed that shipments 

to variable-speed technologies would 

account for 5 percent of shipments in 

each product class by 2026. The 

estimated market shares for the no-newstandards case for room ACs in 2026 are 

shown in Table IV.4 through Table IV.6 

of this document. See chapter 8 of the 

NOPR TSD for further information on 

the derivation of the efficiency 

distributions. 

BILLING CODE 6450–01–P 


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Table IV.4 Room Air Conditioners without Reverse Cycle and with Louvered Sides: 

No-New-Standards Case Market Shares in 2026 

<6,000 Btu/h (PCl) 6,000-7,999 Btu/h 8,000-13,999 Btu/h 

(PC2) (PC3) Efficiency Efficiency Efficiency Efficiency Market Level Market Market Share CEER Share% CEER Share% CEER % 

Baseline 11.0 7.7% 11.0 0.0% 10.9 0.0% 

1 11.4 85.2% 11.4 74.6% 11.4 31.1% 

2 12.1 2.1% 12.1 18.3% 12.0 63.0% 

3 13.1 0.0% 13.7 2.1% 14.3 0.9% 

4 16.0 5.0% 16.0 5.0% 16.0 5.0% 

5 20.2 0.0% 20.2 0.0% 22.4 0.0% 

14,000-19,999 Btu/h 20,000-27,999 Btu/h >=28,000 Btu/h 

Efficiency (PC4) (PC5a) (PC5b) 

Efficiency Efficiency Efficiency Market Level Market Market 

Share% Share% Share 

CEER CEER CEER % 

Baseline 10.7 0.0% 9.4 0.0% 9.0 40.3% 

1 11.1 0.0% 9.8 8.7% 9.4 45.7% 

2 11.8 94.7% 10.3 86.2% 9.9 9.0% 

3 14.0 0.3% 11.8 0.0% 10.3 0.0% 

4 16.0 5.0% 13.8 5.0% 13.2 5.0% 

5 20.6 0.0% 19.1 0.0% 16.7 0.0% 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20635 

BILLING CODE 6450–01–C 

DOE requests feedback on its 

approach to projecting the efficiency 

distribution in 2026. 

9. Payback Period Analysis 

The payback period is the amount of 

time it takes the consumer to recover the 

additional installed cost of moreefficient products, compared to baseline 

products, through energy cost savings. 

Payback periods are expressed in years. 

Payback periods that exceed the life of 

the product mean that the increased 

total installed cost is not recovered in 

reduced operating expenses. 

The inputs to the PBP calculation for 

each efficiency level are the change in 

total installed cost of the product and 

the change in the first-year annual 

operating expenditures relative to the 

baseline. The PBP calculation uses the 

same inputs as the LCC analysis, except 

that discount rates are not needed. 

As noted previously, EPCA 

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 first 

year’s energy savings resulting from the 

standard, as calculated under the 

applicable test procedure. (42 U.S.C. 

6295(o)(2)(B)(iii)) For each considered 

efficiency level, DOE determined the 

value of the first year’s energy savings 

by calculating the energy savings in 

accordance with the applicable DOE test 

procedure, and multiplying those 

savings by the average energy price 

projection for the year in which 

compliance with the amended standards 

would be required. 


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Table IV.5 Room Air Conditioners without Reverse Cycle and without Louvered 

Sides: No-New-Standards Case Market Shares in 2026 

8,000-10,999 Btu/h 11,000-13,999 Btu/h 14,000-19,999 

Efficiency (PC Sa) (PC8b) Btu/h (PC9) 

Level 

Efficiency Market Efficiency Market Efficiency Market 

Share Share Share 

CEER % CEER % CEER % 

Baseline 9.6 0.0% 9.50 0.0% 9.3 39.1% 

1 10.1 11.4% 10.00 0.0% 9.7 46.9% 

2 10.6 83.6% 10.50 94.3% 10.2 9.0% 

3 12.3 0.0% 12.32 0.7% 10.9 0.0% 

4 14.1 5.0% 12.80 5.0% 13.7 5.0% 

5 18.7 0.0% 19.09 0.0% 16.6 0.0% 

Table IV.6 Room Air Conditioners with Reverse Cycle, Casement-Slider: No-NewStandards Case Market Shares in 2026 

w/Louvers (PCll) wo/ Louvers (PC12) Casement-Slider 

Efficiency (PC16) 

Level <20,000 Btu/h <14,000 Btu/h 

Efficiency Market Efficiency Market Efficiency Market 

CEER Share% CEER Share CEER Share 

% % 

Baseline 9.8 50.7% 9.3 39.1% 10.4 34.4% 

1 10.4 35.2% 9.7 46.9% 10.8 51.6% 

2 10.8 9.0% 10.2 9.0% 11.4 9.0% 

3 12.3 0.0% 11.3 0.0% 13.2 0.0% 

4 14.4 5.0% 13.7 5.0% 15.3 5.0% 

5 18.7 0.0% 16.2 0.0% 19.7 0.0% 
20636 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

45 DOE uses data on manufacturer shipments as 

a proxy for national sales, as aggregate data on sales 

are lacking. In general, one would expect a close 

correspondence between shipments and sales. 

46Fujita, K. (2015) Estimating Price Elasticity 

using Market-Level Appliance Data. Lawrence 

Berkeley National Laboratory, LBNL–188289. 

47 Ganeshalingam, M., Ni, C., and Yang, H-C. 

2021. A Retrospective Analysis of the 2011 Direct 

Final Rule for Room Air Conditioners. Lawrence 

Berkeley National Laboratory. LBNL-2001413. 48The NIA accounts for impacts in the 50 states. 

G. Shipments Analysis 

DOE uses projections of annual 

product shipments to calculate the 

national impacts of potential amended 

or new energy conservation standards 

on energy use, NPV, and future 

manufacturer cash flows.45 The 

shipments model takes an accounting 

approach, tracking market shares of 

each product class and the vintage of 

units in the stock. Stock accounting uses 

product shipments as inputs to estimate 

the age distribution of in-service 

product stocks for all years. The age 

distribution of in-service product stocks 

is a key input to calculations of both the 

NES and NPV, because operating costs 

for any year depend on the age 

distribution of the stock. 

Total shipments for room ACs are 

developed by considering the demand 

from replacements for units in stock that 

fail and the demand from first-time 

owners in existing households. DOE 

calculated shipments due to 

replacements using the retirement 

function developed for the LCC 

analysis. DOE calculated shipments due 

to first-time owners in existing 

households using estimates from room 

AC saturation in RECS 2015 and 

projections of housing stock from AEO 

2021. See chapter 8 of the NOPR TSD 

for details. 

DOE considers the impacts on 

shipments from changes in product 

purchase price and operating cost 

associated with higher energy efficiency 

levels using a price elasticity and an 

efficiency elasticity. As in the June 2020 

Preliminary Analysis, DOE employs a 

0.2-percent efficiency elasticity rate and 

a price elasticity of ¥0.45 in its 

shipments model. These values are 

based on analysis of aggregated data for 

five residential appliances including 

room ACs.46 The market impact is 

defined as the difference between the 

product of price elasticity of demand 

and the change in price due to a 

standard level, and the product of the 

efficiency elasticity and the change in 

operating costs due to a standard level. 

ASAP and the Joint Commenters 

noted that the efficiency elasticity was 

omitted from chapter 9 of the 

preliminary TSD. (ASAP, Public 

Meeting Transcript, No. 18 at pp. 94–95; 

Joint Commenters, No. 20 at p. 5) ASAP 

and the Joint Commenters encouraged 

DOE to confirm and clarify whether the 

efficiency elasticity is considered in 

calculating the standards-case 

shipments. (Joint Commenters, No. 20 at 

p. 5) 

Chapter 9 of the NOPR TSD has been 

updated to display the impact of the 

price and efficiency elasticity in 

calculating the standards-case 

shipments. 

AHAM recommended that DOE do as 

it generally does and rely on shipmentweighted data in its analysis and 

provided DOE data for 2019 shipments 

by product class. (AHAM, No. 19 at p. 

9) 

DOE appreciates the 2019 shipments 

by product class and efficiency level 

provided by AHAM and has updated 

the NOPR to reflect the AHAM data. 

NEEA noted that DOE’s shipment 

projections are likely low and do not 

follow the market’s historical trends— 

DOE’s analysis showed a very small 

growth in annual shipments through 

2052 to a peak of approximately 8.5 

million units per year. NEEA stated that 

this slow growth trend does not match 

the historic growth seen in the room AC 

market. For the number of replacement 

units, NEEA recommended that DOE 

amend its analysis to consider early 

retirement of units driven by new 

features, such as increased efficiency 

and smart rooms ACs, which could 

increase the number of shipments. For 

new units, NEEA recommended that 

DOE consider an increasing market 

penetration factor to account for the 

growth of room AC use in climates 

where cooling has not been needed 

traditionally. (NEEA, No. 24 at pp. 5–6) 

DOE notes that between 2014 and 

2019, room AC shipments have been 

approximately 7 million units with no 

clear indication of steady growth over 

that period. DOE determines the 

replacement market from lifetime 

estimates of room ACs. Early retirement 

of units to purchase more efficient and/ 

or units with additional features are 

currently accounted for in the lifetime 

distribution. A retrospective analysis of 

the April 2011 Direct Final Rule for 

room ACs,47 which also accounted for 

shipments due to replacements and 

first-time owners, generally found that 

DOE projections matched with AHAM 

shipments data in 2017 and 2018. DOE 

acknowledges that a warming climate 

could increase purchase of room ACs in 

climates where cooling has not been 

needed traditionally, but it is not aware 

of any data that would facilitate an 

accurate estimate of this future demand. 

DOE welcomes shipments data that 

include markets in addition to 

replacement and first-time user markets. 

Chapter 9 of the NOPR TSD provides 

additional details on the shipments 

analysis. 

DOE requests comment on its general 

methodology for estimating shipments. 

H. National Impact Analysis 

The NIA assesses the NES and the 

NPV from a national perspective of total 

consumer costs and savings that would 

be expected to result from new or 

amended standards at specific efficiency 

levels.48 (‘‘Consumer’’ in this context 

refers to consumers of the product being 

regulated.) DOE calculates the NES and 

NPV for the potential standard levels 

considered based on projections of 

annual product shipments, along with 

the annual energy consumption and 

total installed cost data from the energy 

use and LCC analyses. For the present 

analysis, DOE projected the energy 

savings, operating cost savings, product 

costs, and NPV of consumer benefits 

over the lifetime of room ACs sold from 

2026 through 2055. 

DOE evaluates the impacts of new or 

amended standards by comparing a case 

without such standards with standardscase projections. The no-new-standards 

case characterizes energy use and 

consumer costs for each product class in 

the absence of new or amended energy 

conservation standards. For this 

projection, DOE considers historical 

trends in efficiency and various forces 

that are likely to affect the mix of 

efficiencies over time. DOE compares 

the no-new-standards case with 

projections characterizing the market for 

each product class if DOE adopted new 

or amended standards at specific energy 

efficiency levels (i.e., the TSLs or 

standards cases) for that class. For the 

standards cases, DOE considers how a 

given standard would likely affect the 

market shares of products with 

efficiencies greater than the standard. 

DOE uses a spreadsheet model to 

calculate the energy savings and the 

national consumer costs and savings 

from each TSL. Interested parties can 

review DOE’s analyses by changing 

various input quantities within the 

spreadsheet. The NIA spreadsheet 

model uses typical values (as opposed 

to probability distributions) as inputs. 

Table IV.7 summarizes the inputs and 

methods DOE used for the NIA analysis 

for the NOPR. Discussion of these 

inputs and methods follows the table. 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20637 

49 Ganeshalingam, M., Ni, C., and Yang, H-C. 

2021. A Retrospective Analysis of the 2011 Direct 

Final Rule for Room Air Conditioners. Lawrence 

Berkeley National Laboratory. LBNL–2001413. 

See chapter 10 of the NOPR TSD for 

further details. 

1. Product Efficiency Trends 

A key component of the NIA is the 

trend in energy efficiency projected for 

the no-new-standards case and each of 

the standards cases. Section IV.F.7 of 

this document describes how DOE 

developed an energy efficiency 

distribution for the no-new-standards 

case (which yields a shipment-weighted 

average efficiency) for each of the 

considered product classes for the year 

of anticipated compliance with an 

amended or new standard. To project 

the trend in efficiency absent amended 

standards for room ACs over the entire 

shipments projection period, DOE 

assumed that market share for ELs with 

variable-speed technologies would 

follow a Bass diffusion curve, while the 

shipment-weighted CEER for ELs with 

single-speed compressors would 

increase annually by 0.25 percent in 

CEER based on historical trends in 

shipment-weighted efficiency.49 The 

approach is further described in chapter 

10 of the NOPR TSD. 

In its reference scenario, DOE 

assumed that variable-speed 

technologies would comprise 25 percent 

of the market by the end of the analysis 

period (2055). DOE also performed 

sensitivity scenarios assuming a low 

penetration of variable-speed 

technologies (10 percent of the market 

in 2055) and a high penetration of 

variable-speed technologies (50 percent 

of the market in 2055). The results of 

these scenarios can be found in 

appendix 10E of the NOPR TSD. DOE 

requests comment on its approach to 

projecting market share for variablespeed technologies over the course of 

the analysis period. 

For the standards cases, DOE used a 

‘‘roll-up’’ scenario to establish the 

shipment-weighted efficiency for the 

year that standards are assumed to 

become effective in 2026. In the year of 

compliance, the market shares of 

products in the no-new-standards case 

that do not meet the standard under 

consideration would ‘‘roll up’’ to the 

minimum EL that meets the standard, 

and the market share of products above 

the standard would remain unchanged. 

As in the no-new-standards case, DOE 

assumed an annual increase of 0.25 

percent in CEER over the analysis 

period for ELs with single-speed 

technology. 

The Joint Commenters noted that data 

on sales over the past decade suggest 

that the ‘‘roll-up’’ scenario considered 

by DOE may underestimate the savings 

from amended standards and suggested 

DOE consider reevaluating the use of 

the ‘‘roll-up’’ scenario for estimating the 

market distribution of each efficiency 

level following the adoption of a 

standard. (Joint Commenters, No. 20 at 

p. 5) 

DOE acknowledges multiple drivers 

in the room AC market, one of which is 

the amended standard process. 

Although DOE uses a roll-up to allocate 

market share by efficiency level in the 

year a standard is enacted, an efficiency 

trend is applied in subsequent years in 

the standards case to account for the 

observed historical trends in efficiency. 

See chapter 10 of the NOPR TSD for 

details. 

2. National Energy Savings 

The national energy savings analysis 

involves a comparison of national 

energy consumption of the considered 

products between each potential 

standards case (TSL) and the case with 

no new or amended energy conservation 

standards. DOE calculated the national 

energy consumption by multiplying the 

number of units (stock) of each product 

(by vintage or age) by the unit energy 

consumption (also by vintage). DOE 

calculated annual NES based on the 

difference in national energy 

consumption for the no-new standards 

case and for each higher efficiency 

standard case. DOE estimated energy 

consumption and savings based on site 

energy and converted the electricity 

consumption and savings to primary 

energy (i.e., the energy consumed by 

power plants to generate site electricity) 

using annual conversion factors derived 


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T a e bl IV . 7 S ummary o fl nputs an dM et h d f o s or t e h N at10na . I I mpact A I na1ys1s 

Inouts Method 

Shipments Annual shipments from shipments model. 

Compliance Date of Standard 2026 

Bass diffusion curve to allocate shipments to ELs with 

Efficiency Trends variable-speed technology and annual 0.25% increase in 

shipment-weighted CEER for ELs with single-speed 

technology. 

Annual Energy Consumption per Unit Calculated for each efficiency level based on inputs from 

energy use analysis. 

Total Installed Cost per Unit Calculated for each efficiency level based on inputs from the 

LCC analysis. 

Repair and Maintenance Cost per Unit Calculated for each efficiency level on inputs from the LCC 

analysis. 

Electricity Price Estimated average and marginal electricity prices from the 

LCC analysis based on EEi data. 

Electricity Price Trends AEO 2021 projections (to 2050) and extrapolation using a fixed 

annual rate of price change between 2035 and 2050 thereafter. 

Energy Site-to-Primary and FFC A time-series conversion factor based onAEO 2021. Conversion 

Discount Rate 3 percent and 7 percent 

Present Year 2021 
20638 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

50Sorrell, S., J. Dimitropoulos, M. Sommerville. 

2009. Empirical estimates of the direct rebound 

effect: A review. Energy Policy 37 (2009) 1356– 

1371. 

51For more information on NEMS, refer to The 

National Energy Modeling System: An Overview 

2009, DOE/EIA–0581(2009), October 2009. 

Available at www.eia.gov/forecasts/aeo/index.cfm. 

52United States Office of Management and 

Budget. Circular A–4: Regulatory Analysis. 

from AEO 2021. Cumulative energy 

savings are the sum of the NES for each 

year over the timeframe of the analysis. 

Use of higher-efficiency products is 

occasionally associated with a direct 

rebound effect, which refers to an 

increase in utilization of the product 

due to the reduction in operating cost 

induced by improved efficiency. A 

direct rebound effect occurs when a 

product that is made more efficient is 

used more intensively, reducing 

expected energy savings from the 

efficiency improvement. At the same 

time, consumers can benefit from 

increased utilization of products due to 

the direct rebound effect. DOE did not 

find any data on the rebound effect 

specific to room ACs, but it applied a 

rebound effect of 15 percent as 

suggested by Sorrell et al.50 and was 

done in the April 2011 Direct Final 

Rule. The calculated NES at each 

efficiency level is therefore reduced by 

15 percent. DOE also included the 

rebound effect in the NPV analysis 

accounting for the additional net benefit 

from increased room AC usage as 

described in section IV.H.3 of this 

document. 

In 2011, in response to the 

recommendations of a committee on 

‘‘Point-of-Use and Full-Fuel-Cycle 

Measurement Approaches to Energy 

Efficiency Standards’’ appointed by the 

National Academy of Sciences, DOE 

announced its intention to use FFC 

measures of energy use and greenhouse 

gas and other emissions in the national 

impact analyses and emissions analyses 

included in future energy conservation 

standards rulemakings. 76 FR 51281 

(Aug. 18, 2011). After evaluating the 

approaches discussed in the August 18, 

2011 notice, DOE published a statement 

of amended policy in which DOE 

explained its determination that EIA’s 

National Energy Modeling System 

(‘‘NEMS’’) is the most appropriate tool 

for its FFC analysis and its intention to 

use NEMS for that purpose. 77 FR 49701 

(Aug. 17, 2012). NEMS is a public 

domain, multi-sector, partial 

equilibrium model of the U.S. energy 

sector 51 that EIA uses to prepare its 

Annual Energy Outlook. The FFC factors 

incorporate losses in production and 

delivery in the case of natural gas 

(including fugitive emissions) and 

additional energy used to produce and 

deliver the various fuels used by power 

plants. The approach used for deriving 

FFC measures of energy use and 

emissions is described in appendix 10B 

of the NOPR TSD. 

EEI suggested incorporating the AEO 

full-fuel-cycle conversion for DOE’s 

next update. (EEI, Public Meeting 

Transcript, No. 18 at pp. 83–84) 

For this NOPR analysis, DOE reports 

the full-fuel-cycle energy savings in its 

NIA using inputs from AEO 2021. See 

chapter 10 of the NOPR TSD for a full 

description. 

3. Net Present Value Analysis 

The inputs for determining the NPV 

of the total costs and benefits 

experienced by consumers are (1) total 

annual installed cost, (2) total annual 

operating costs (energy costs and repair 

and maintenance costs), and (3) a 

discount factor to calculate the present 

value of costs and savings. DOE 

calculates net savings each year as the 

difference between the no-newstandards case and each standards case 

in terms of total savings in operating 

costs versus total increases in installed 

costs. DOE calculates operating cost 

savings over the lifetime of each product 

shipped during the projection period. 

As discussed in section IV.F.6 of this 

document, DOE developed room AC 

price trends based on historical PPI 

data. DOE applied the same trends to 

project prices for each product class at 

each considered efficiency level. By 

2055, the end date of the analysis 

period, the average single-speed 

compressor room AC price is projected 

to drop 23 percent and the variablespeed compressor room AC price is 

projected to drop about 37 percent 

relative to 2020. DOE’s projection of 

product prices is described in appendix 

10C of the NOPR TSD. 

To evaluate the effect of uncertainty 

regarding the price trend estimates, DOE 

investigated the impact of alternate 

product price projections on the 

consumer NPV for the considered TSLs 

for room ACs. In addition to the default 

price trend, DOE considered high and 

low product price sensitivity cases. In 

the high price scenario, DOE based the 

price decline of the non-variable speed 

controls portion on room AC PPI data 

limited to the period between the period 

1990–2009, which shows a faster price 

decline relative to the full time series. 

For the variable-speed controls portion, 

DOE used a faster price decline derived 

from the lower bound of the 95 percent 

confidence interval fitting PPI data for 

semiconductors. In the low price 

decline scenario, DOE assumed a 

constant price for the non-variablespeed controls portion of the price and 

a slower price decline estimate for the 

variable-speed controls portion derived 

from the upper bound of the 95 percent 

confidence interval fitting PPI data for 

semiconductors over the analysis 

period. The derivation of these price 

trends and the results of these 

sensitivity cases are described in 

appendix 10C of the NOPR TSD. The 

operating cost savings are energy cost 

savings, which are calculated using the 

estimated energy savings in each year 

and the projected price of electricity. To 

estimate energy prices in future years, 

DOE multiplied the average regional 

energy prices by the projection of 

annual national-average residential and 

commercial energy price changes in the 

Reference case from AEO 2021, which 

has an end year of 2050. For the years 

after 2050, DOE used the average annual 

rate of change in electricity price from 

2035 through 2050. As part of the NIA, 

DOE also analyzed scenarios that used 

inputs from variants of the AEO 2021 

Reference case that have lower and 

higher economic growth. Those cases 

have lower and higher energy price 

trends compared to the Reference case. 

NIA results based on these cases are 

presented in appendix 10C of the NOPR 

TSD. 

As described in section IV.H.2 of this 

document, DOE assumed a 15 percent 

rebound from an increase in utilization 

of the product arising from the increase 

in efficiency (i.e., the direct rebound 

effect). In considering the consumer 

welfare gained due to the direct rebound 

effect, DOE accounted for change in 

consumer surplus attributed to 

additional cooling from the purchase of 

a more efficient unit. Overall consumer 

welfare is generally understood to be 

enhanced from rebound. The net 

consumer impact of the rebound effect 

is included in the calculation of 

operating cost savings in the consumer 

NPV results. See appendix 10F of the 

NOPR TSD for details on DOE’s 

treatment of the monetary valuation of 

the rebound effect. DOE requests 

comments on its approach to 

monetizing the impact of the rebound 

effect. 

In calculating the NPV, DOE 

multiplies the net savings in future 

years by a discount factor to determine 

their present value. For this NOPR, DOE 

estimated the NPV of consumer benefits 

using both a 3-percent and a 7-percent 

real discount rate. DOE uses these 

discount rates in accordance with 

guidance provided by the Office of 

Management and Budget (‘‘OMB’’) to 

Federal agencies on the development of 

regulatory analysis.52 The discount rates 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20639 

September 17, 2003. Section E. Available at obama

whitehouse.archives.gov/omb/circulars_a004_a-4/ 

(last accessed June 15, 2021). 

53www.sec.gov/edgar/searchedgar/ 

companysearch.html. 

54www.census.gov/programs-surveys/qpc/data/ 

tables.html. 

55 app.dnbhoovers.com. 

for the determination of NPV are in 

contrast to the discount rates used in the 

LCC analysis, which are designed to 

reflect a consumer’s perspective. 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 

‘‘social rate of time preference,’’ which 

is the rate at which society discounts 

future consumption flows to their 

present value. 

I. Consumer Subgroup Analysis 

In analyzing the potential impact of 

new or amended energy conservation 

standards on consumers, DOE evaluates 

the impact on identifiable subgroups of 

consumers that may be 

disproportionately affected by a new or 

amended national standard. The 

purpose of a subgroup analysis is to 

determine the extent of any such 

disproportional impacts. DOE evaluates 

impacts on particular subgroups of 

consumers by analyzing the LCC 

impacts and PBP for those particular 

consumers from alternative standard 

levels. For this NOPR, DOE analyzed the 

impacts of the considered standard 

levels on two subgroups: (1) Lowincome households and (2) senior-only 

households. The analysis used subsets 

of the 2015 RECS sample composed of 

households that meet the criteria for the 

two subgroups and shows the 

percentages of those both negatively and 

positively impacted. DOE used the LCC 

and PBP spreadsheet model to estimate 

the impacts of the considered efficiency 

levels on these subgroups for product 

classes with a sufficient sample size in 

2015 RECS to perform a Monte Carlo 

analysis. Chapter 11 of the NOPR TSD 

describes the consumer subgroup 

analysis. 

J. Manufacturer Impact Analysis 

1. Overview 

DOE performed a MIA to estimate the 

impacts of amended energy 

conservation standards on 

manufacturers of room ACs. The MIA 

has both quantitative and qualitative 

aspects and includes analyses of 

projected industry cash flows, the INPV, 

investments in research and 

development (‘‘R&D’’) and 

manufacturing capital, and domestic 

manufacturing employment. 

Additionally, the MIA seeks to 

determine how amended energy 

conservation standards might affect 

manufacturing capacity and 

competition, as well as how standards 

contribute to overall regulatory burden. 

Finally, the MIA serves to identify any 

disproportionate impacts on 

manufacturer subgroups, including 

small business manufacturers. 

The quantitative part of the MIA 

primarily relies on the Government 

Regulatory Impact Model (‘‘GRIM’’), an 

industry cash flow model with inputs 

specific to this rulemaking. The key 

GRIM inputs include data on the 

industry cost structure, unit production 

costs, product shipments, manufacturer 

markups, and investments in R&D and 

manufacturing capital required to 

produce compliant products. The key 

GRIM outputs are the INPV, which is 

the sum of industry annual cash flows 

over the analysis period, discounted 

using the industry-weighted average 

cost of capital, and the impact to 

domestic manufacturing employment. 

The model uses standard accounting 

principles to estimate the impacts of 

more-stringent energy conservation 

standards on a given industry by 

comparing changes in INPV and 

domestic manufacturing employment 

between a no-new-standards case and 

the various standards cases (TSLs). To 

capture the uncertainty relating to 

manufacturer pricing strategies 

following amended standards, the GRIM 

estimates a range of possible impacts 

under different manufacturer markup 

scenarios. 

The qualitative part of the MIA 

addresses manufacturer characteristics 

and market trends. Specifically, the MIA 

considers such factors as a potential 

standard’s impact on manufacturing 

capacity, competition within the 

industry, the cumulative impact of other 

Federal product-specific regulations, 

and impacts on manufacturer 

subgroups. The complete MIA is 

outlined in chapter 12 of the NOPR 

TSD. 

DOE conducted the MIA for this 

proposed rulemaking in three phases. In 

Phase 1 of the MIA, DOE prepared a 

profile of the room AC manufacturing 

industry based on publicly available 

data and information from its market 

and technology assessment, engineering 

analysis, and shipments analysis. This 

preparation included a top-down 

analysis of room AC manufacturers that 

DOE used to derive preliminary 

financial parameters for the GRIM (e.g., 

materials, labor, overhead, and 

depreciation expenses; selling, general, 

and administrative expenses (‘‘SG&A’’); 

and R&D expenses). DOE also used 

public sources of information to further 

calibrate its initial characterization of 

the room AC manufacturing industry, 

including company filings of form 10– 

K from the SEC,53 corporate annual 

reports, the April 2011 Direct Final 

Rule, and the U.S. Census Bureau’s 

Economic Census.54 DOE also relied on 

subscription-based resources such as 

reports from Dun & Bradstreet.55

In Phase 2 of the MIA, DOE prepared 

a framework industry cash-flow analysis 

to quantify the potential impacts of 

amended energy conservation 

standards. The GRIM uses several 

factors to determine a series of annual 

cash flows starting with the 

announcement of the standard and 

extending over a 30-year period 

following the compliance date of the 

standard. These factors include annual 

expected revenues, costs of sales, SG&A 

and R&D expenses, taxes, and capital 

expenditures. In general, energy 

conservation standards can affect 

manufacturer cash flow in three distinct 

ways: (1) Creating a need for increased 

investment, (2) raising production costs 

per unit, and (3) altering revenue due to 

higher per-unit prices and changes in 

sales volumes. 

In addition, during Phase 2, DOE 

developed interview guides to distribute 

to manufacturers of room ACs in order 

to develop other key GRIM inputs, 

including product and capital 

conversion costs, and to gather 

additional information on the 

anticipated effects of energy 

conservation standards on revenues, 

direct employment, capital assets, 

industry competitiveness, and subgroup 

impacts. 

In Phase 3 of the MIA, DOE 

conducted structured, detailed 

interviews with representative 

manufacturers. During these interviews, 

DOE discussed engineering, 

manufacturing, procurement, and 

financial topics to validate assumptions 

used in the GRIM and to identify key 

issues or concerns. See section IV.J.3 of 

this document for a description of the 

key issues raised by manufacturers 

during the interviews. As part of Phase 

3, DOE also evaluated subgroups of 

manufacturers that may be 

disproportionately impacted by 

amended standards or that may not be 

accurately represented by the average 

cost assumptions used to develop the 

industry cash flow analysis. Such 

manufacturer subgroups may include 

small business manufacturers, lowvolume manufacturers, niche players, 

and/or manufacturers exhibiting a cost 

structure that largely differs from the 


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industry average. DOE identified one 

subgroup for a separate impact analysis: 

Small business manufacturers. The 

small business subgroup is discussed in 

section VII.B of this document, ‘‘Review 

under the Regulatory Flexibility Act’’ 

and in chapter 12 of the NOPR TSD. 

2. Government Regulatory Impact Model 

and Key Inputs 

DOE uses the GRIM to quantify the 

changes in cash flow due to amended 

standards that result in a higher or 

lower industry value. The GRIM uses a 

standard, annual discounted cash-flow 

analysis that incorporates manufacturer 

costs, markups, shipments, and industry 

financial information as inputs. The 

GRIM models changes in costs, 

distribution of shipments, investments, 

and manufacturer margins that could 

result from an amended energy 

conservation standard. The GRIM 

spreadsheet uses the inputs to arrive at 

a series of annual cash flows, beginning 

in 2021 (the base year of the MIA 

analysis) and continuing to 2055. DOE 

calculated INPVs by summing the 

stream of annual discounted cash flows 

during this period. For manufacturers of 

room ACs, DOE used a real discount 

rate of 7.2 percent, which was derived 

from public financial data and then 

modified according to feedback received 

during manufacturer interviews. 

The GRIM calculates cash flows using 

standard accounting principles and 

compares changes in INPV between the 

no-new-standards case and each 

standards case. The difference in INPV 

between the no-new-standards case and 

a standards case represents the financial 

impact of the amended energy 

conservation standard on 

manufacturers. As discussed previously, 

DOE developed critical GRIM inputs 

using a number of sources, including 

publicly available data, results of the 

engineering analysis, and information 

gathered during the course of 

manufacturer interviews. The GRIM 

results are presented in section V.B.2 of 

this document. Additional details about 

the GRIM, the discount rate, and other 

financial parameters can be found in 

chapter 12 of the NOPR TSD. 

a. Manufacturer Production Costs 

Manufacturing more efficient 

equipment is typically more expensive 

than manufacturing baseline equipment 

due to the use of more complex 

components, which are typically more 

costly than baseline components. The 

changes in the MPCs of covered 

products can affect the revenues, gross 

margins, and cash flow of the industry. 

DOE models the relationship between 

efficiency and MPCs as a part of its 

engineering analysis. For a complete 

description of the MPCs, see chapter 5 

of the NOPR TSD. 

b. Shipments Projections 

The GRIM estimates manufacturer 

revenues based on total unit shipment 

projections and the distribution of those 

shipments by product class and by 

efficiency level. Changes in sales 

volumes and efficiency mix over time 

can significantly affect manufacturer 

finances. For this analysis, the GRIM 

uses the NIA’s annual shipment 

projections derived from the shipments 

analysis. See chapter 9 of the NOPR 

TSD for additional details on DOE’s 

shipments projections. 

c. Product and Capital Conversion Costs 

Amended energy conservation 

standards could cause manufacturers to 

incur conversion costs to bring their 

production facilities and equipment 

designs into compliance. DOE evaluated 

the level of conversion-related 

expenditures that would be needed to 

comply with each considered efficiency 

level in each product class. For the MIA, 

DOE classified these conversion costs 

into two major groups: (1) Product 

conversion 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 

amended energy conservation 

standards. Capital conversion costs are 

investments in property, plant, and 

equipment necessary to adapt or change 

existing production facilities such that 

new compliant product designs can be 

fabricated and assembled. All 

conversion-related investments occur 

between the year of publication of the 

final rule and the year by which 

manufacturers must comply with the 

new standard. 

To calculate the MPCs for room ACs 

at and above the baseline, DOE 

performed teardowns for representative 

units. The data generated from these 

analyses were then used to estimate the 

capital investments in equipment, 

tooling, and conveyor required of 

original equipment manufacturers 

(‘‘OEMs’’) at each efficiency level, 

taking into account such factors as 

product design, raw materials, 

purchased components, and fabrication 

method. Changes in equipment, tooling, 

and conveyer were used to estimate 

capital conversion costs. Additionally, 

capital conversion costs accounted for 

investments in appearance tooling made 

by manufacturers that are not OEMs. 

DOE relied on feedback from industry 

to evaluate the product conversion costs 

industry would likely incur at the 

considered standard levels. DOE 

integrated feedback from manufacturers, 

both OEM and non-OEM, on redesign 

effort and staffing to estimate product 

conversion cost. Manufacturer numbers 

were aggregated to protect confidential 

information. 

The conversion cost figures used in 

the GRIM can be found in section V.B.2 

of this document. For additional 

information on the capital and product 

conversion costs, see chapter 12 of the 

NOPR TSD. 

d. Manufacturer Markup Scenarios 

MSPs include direct manufacturing 

production costs (i.e., labor, materials, 

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 non-production 

cost markups to the MPCs estimated in 

the engineering analysis for each 

product class and efficiency level. 

Modifying these markups in the 

standards case yields different sets of 

impacts on manufacturers. For the MIA, 

DOE modeled two standards-case 

manufacturer markup scenarios to 

represent uncertainty regarding the 

potential impacts on prices and 

profitability for manufacturers following 

the implementation of amended energy 

conservation standards: (1) A 

preservation of gross margin percentage 

markup scenario, and (2) a preservation 

of per-unit operating profit markup 

scenario. These scenarios lead to 

different manufacturer markup values 

that, when applied to the MPCs, result 

in varying revenue and cash flow 

impacts. 

Under the preservation of gross 

margin percentage scenario, DOE 

applied a single uniform ‘‘gross margin 

percentage’’ markup across all efficiency 

levels, which assumes that 

manufacturers would be able to 

maintain the same amount of profit as 

a percentage of revenues at all efficiency 

levels within a product class. As 

manufacturer production costs increase 

with efficiency, this scenario implies 

that the absolute dollar markup will 

increase as well. DOE assumed the 

industry-average manufacturer 

markup—which includes SG&A 

expenses, R&D expenses, interest, and 

profit—to be 1.26 for room ACs. 

Manufacturers tend to believe it is 

optimistic to assume that they would be 

able to maintain the same gross margin 

percentage markup as their production 

costs increase, particularly for 

minimally efficient products. Therefore, 

DOE assumes that this scenario 

represents a high bound to industry 


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56For the June 2020 Preliminary Analysis, DOE 

analyzed five efficiency levels as part of its 

engineering analysis. In response to stakeholder 

comments to the preliminary analysis, DOE 

analyzed an additional efficiency level in the NOPR 

engineering analysis between EL 3 and the maxtech level (EL 4 in the preliminary analysis, now 

EL 5 for this NOPR). 

57The Office of the United States Trade 

Representative (‘‘USTR’’) released a list of Chinese 

imports subject to new tariffs on September 18, 

Continued 

profitability under an amended energy 

conservation standard. 

In the preservation of operating profit 

scenario, as the cost of production goes 

up under a standards case, 

manufacturers are generally required to 

reduce their markups to a level that 

maintains base-case operating profit. 

DOE implemented this scenario in the 

GRIM by lowering the manufacturer 

markups at each TSL to yield 

approximately the same earnings before 

interest and taxes in the standards case 

as in the no-new-standards case in the 

year after the compliance date of the 

amended standards. The implicit 

assumption behind this manufacturer 

markup scenario is that the industry can 

only maintain its operating profit in 

absolute dollars after the standard. A 

comparison of industry financial 

impacts under the two markup 

scenarios is presented in section V.B.2.a 

of this document. 

3. Manufacturer Interviews 

DOE interviewed manufacturers 

representing approximately 40 percent 

of the basic models in DOE’s 

Compliance Certification Database 

(‘‘CCD’’). Participants included OEMs 

and importers. 

In interviews, DOE asked 

manufacturers to describe their major 

concerns regarding potential increases 

in energy conservation standards for 

room ACs. The following section 

highlights manufacturer concerns that 

helped inform the projected potential 

impacts of an amended standard on the 

industry. Manufacturer interviews are 

conducted under non-disclosure 

agreements (‘‘NDAs’’), so DOE does not 

document these discussions in the same 

way that it does public comments in the 

comment summaries and DOE’s 

responses throughout the rest of this 

document. 

a. Compressor Availability 

For the June 2020 Preliminary 

Analysis, DOE selected EL 3 levels to 

represent an intermediate efficiency 

between EL 2 (the ENERGY STAR level) 

and EL 4 (the max-tech level) 56 that 

could be reached with single-speed 

compressor designs for all product 

classes. 85 FR 36512. In interviews, 

manufacturers raised concerns about the 

ability to meet the preliminary analysis’ 

CEER values at EL 3 without the use of 

variable-speed compressors. 

Manufacturers asserted that the singlespeed compressors necessary to meet 

the preliminary analysis EL 3 levels are 

not available to all manufacturers and 

encouraged DOE to base EL 3 on 

compressors that are widely available 

on the market. 

b. Physical Design Constraints 

Manufacturers noted that through-thewall (‘‘TTW’’) products are designed to 

fit specific sleeve sizes and the market 

requires replacement products to fit 

existing sleeves. Additionally, window 

units are constrained by average 

window dimensions. Further, 

manufacturers noted that they design 

the boxed product to meet either 50 

pound (‘‘lb’’) or 150 lb weight 

thresholds, reflecting requirements 

related to worker safety standards, 

parcel delivery service thresholds, and 

customer utility. Manufacturers noted 

that maintaining existing product 

dimensions is an important feature to 

their end-users, particularly in the 

replacement market. 

c. Cost Increases and Component 

Shortages 

Manufacturers noted that recent 

increases in raw material prices, 

escalating shipping and transportation 

costs, and limited component 

availability all affect manufacturer 

production costs. As a result, cost 

estimates based on historic 5-year 

averages would underestimate current 

production costs. 

4. Discussion of MIA Comments 

In response to the June 2020 

Preliminary Analysis, interested parties 

submitted written comments addressing 

several topics including cumulative 

regulatory burden. 

AHAM and GEA commented that 

DOE should include proposed changes 

to both standards and refrigerants, as 

well as the economic impact of U.S. 

tariffs on Chinese imports, when 

determining the cumulative regulatory 

burden placed on manufacturers. 

AHAM and GEA also urged DOE to 

incorporate the financial results of 

cumulative regulatory burden analysis 

into the GRIM to account for the time 

and resources needed to comply with 

concurrent regulations. (AHAM, No. 19 

at pp. 12 and 17–19; GEA No. 26 at p. 

2) 

DOE analyzes cumulative regulatory 

burden pursuant to 10 CFR part 430, 

subpart C, appendix A. Pursuant to 

appendix A, the Department will 

recognize and consider the overlapping 

effects on manufacturers of new or 

revised DOE standards and other 

Federal regulatory actions affecting the 

same products or equipment. The 

results of this analysis can be found in 

section V.B.2.e of this document. DOE 

endeavors to provide analyses that take 

market conditions and the effect of other 

Federal regulatory actions into account, 

such as the U.S. tariffs on Chinese 

imports and the transition to alternative 

refrigerants. DOE incorporates these 

factors into their range of analyses, 

including the market and technology 

assessment, screening analysis, 

engineering analysis, energy usage 

analysis, NIA, and MIA. 

In consideration of AHAM’s comment 

on the possibility that California may 

prohibit HFCs and the resulting 

transition to alternative refrigerants 

(AHAM, No. 40 at p. 12), DOE evaluated 

potential impacts of CARB’s proposed 

750 GWP limit on the energy efficiency 

of new room ACs. This State regulation 

is specific to the products regulated by 

this NOPR and would require redesign 

of the covered product. Based on 

interviews and through review of 

market data, DOE found that all but one 

OEM is producing R–32 room AC 

models. Additionally, based on 

interview feedback, all OEMs intend to 

transition entirely to R–32 room ACs by 

2023 regardless of DOE actions related 

to the energy conservation standards for 

room ACs. Thus, DOE did not consider 

the redesign costs related to R–32 to be 

conversion costs, as the change in 

refrigerant is independent of DOE 

actions related to any amended energy 

conservation standards. 

DOE is aware of one OEM still in the 

process of redesigning room ACs to 

make use of R–32 and to comply with 

the requirements in Underwriters 

Laboratories (‘‘UL’’) Standard UL 

60335–2–40, ‘‘Household and Similar 

Electrical Appliances—Safety—Part 2– 

40: Particular Requirements for 

Electrical Heat Pumps, Air-Conditioners 

and Dehumidifiers’’ (‘‘UL 60335–2–40’’) 

for their products that are manufactured 

in-house. To account for these 

investments, DOE incorporated an 

estimate of the on-going costs for that 

business into its GRIM. 

Regarding U.S. tariffs on Chinese 

imports, tariff levels have escalated in 

recent years. At the time of the April 

2011 Direct Final Rule, most room ACs 

imported into the U.S. were 

manufactured in China. Since that time, 

the Section 301 tariffs on room ACs 

increased to 10 percent in September 

2018 and to 25 percent in May 2019.57


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2018. The tariffs were set at 10 percent and had an 

effective date of September 24, 2018. Room ACs fall 

under Harmonized Tariffs Schedule (‘‘HTS’’) code 

8415.10.30, ‘‘Window or wall type air conditioning 

machines, self-contained,’’ and were subject to 

those tariffs. The USTR press release on the 

adoption of the tariffs and the affected imports can 

be found at: ustr.gov/about-us/policy-offices/pressoffice/press-releases/2018/september/ustr-finalizestariffs-200. The Notice of Modification of Section 

301 can be found at: ustr.gov/sites/default/files/ 

enforcement/301Investigations/ 

83%20FR%2047974.pdf. 

Initially, the tariffs on room ACs were set to 

increase to 25 percent on January 1, 2019. The 

increase was delayed in subsequent negotiations. 

Ultimately the USTR raised tariffs on room ACs to 

25 percent on May 10, 2019. The USTR press 

release on the increase in tariffs can be found at: 

ustr.gov/sites/default/files/enforcement/ 

301Investigations/83%20FR%2047974.pdf. The 

Notice of Modification of Section 301 can be found 

at: ustr.gov/sites/default/files/enforcement/ 

301Investigations/84_FR_20459.pdf. 

58www.epa.gov/sites/production/files/2016-09/ 

documents/emission-factors_nov_2015_v2.pdf (last 

accessed June 14, 2021). 

59For further information, see the Assumptions to 

AEO 2021 report that sets forth the major 

assumptions used to generate the projections in the 

Annual Energy Outlook. Available at www.eia.gov/ 

outlooks/aeo/assumptions/ (last accessed June 14, 

2021). 

60CSAPR requires states to address annual 

emissions of SO2 and NOX, precursors to the 

formation of fine particulate matter (PM2.5) 

pollution, in order to address the interstate 

transport of pollution with respect to the 1997 and 

2006 PM2.5 National Ambient Air Quality Standards 

(‘‘NAAQS’’). CSAPR also requires certain states to 

address the ozone season (May–September) 

emissions of NOX, a precursor to the formation of 

ozone pollution, in order to address the interstate 

transport of ozone pollution with respect to the 

1997 ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). 

EPA subsequently issued a supplemental rule that 

included an additional five states in the CSAPR 

ozone season program; 76 FR 80760 (Dec. 27, 2011) 

(Supplemental Rule). 

As result of tariffs, as noted by AHAM, 

‘‘some manufacturers have had to shift 

production to other countries to avoid 

the tariffs.’’ (AHAM, No. 19 at pp. 18– 

19) DOE understands that these 

products are now made in countries in 

East Asia and Southeast Asia not subject 

to Section 301 tariffs. However, due to 

uncertainty about the exact countries of 

origin, DOE’s engineering analysis 

continues to rely on data based on a 

Chinese point of origin. To revise MPCs 

to account for points of origin outside of 

China, DOE would require information 

on the countries of manufacture and 5- 

year averages for key inputs, such as 

fully burdened production labor wage 

rates and local raw material prices, used 

to develop MPCs. 

To better model the impact of Section 

301 tariffs on room AC products that 

continue to be manufactured in China, 

DOE requires additional information 

about the portion of products still 

manufactured in China and how the 

tariffs are absorbed by the entities along 

the room AC value chain, such as the 

foreign OEMs, U.S. importers, retailers, 

and consumers. Increases in retail price 

may affect consumer purchasing 

decisions, as captured by the price 

sensitivity modeled in the shipments 

analysis. 

Additional details about cumulative 

regulatory burden and requests for 

comment can be found in section 

V.B.2.d of this document. 

K. Emissions Analysis 

The emissions analysis consists of 

two components. The first component 

estimates the effect of potential energy 

conservation standards on power sector 

and site (where applicable) combustion 

emissions of CO2, NOX, SO2, and Hg. 

The second component estimates the 

impacts of potential standards on 

emissions of two additional greenhouse 

gases, CH4 and N2O, as well as the 

reductions to emissions of other gases 

due to ‘‘upstream’’ activities in the fuel 

production chain. These upstream 

activities comprise extraction, 

processing, and transporting fuels to the 

site of combustion. 

The analysis of power sector 

emissions of CO2, NOX, SO2, and Hg 

uses marginal emissions factors that 

were derived from data in AEO 2021, as 

described in section IV.M of this 

document. Details of the methodology 

are described in the appendices to 

chapters 13 and 15 of the NOPR TSD. 

Power sector emissions of CO2, CH4, 

and N2O are estimated using Emission 

Factors for Greenhouse Gas Inventories 

published by the EPA.58 The FFC 

upstream emissions are estimated based 

on the methodology described in 

chapter 15 of the NOPR TSD. The 

upstream emissions include both 

emissions from extraction, processing, 

and transportation of fuel, and 

‘‘fugitive’’ emissions (direct leakage to 

the atmosphere) of CH4 and CO2. 

The emissions intensity factors are 

expressed in terms of physical units per 

megawatt-hours (‘‘MWh’’) or million 

British thermal units (‘‘MMBtu’’) of site 

energy savings. Total emissions 

reductions are estimated using the 

energy savings calculated in the 

national impact analysis. 

1. Air Quality Regulations Incorporated 

in DOE’s Analysis 

DOE’s no-new-standards case for the 

electric power sector reflects the AEO 

2021, which incorporates the projected 

impacts of existing air quality 

regulations on emissions. AEO 2021 

generally represents current legislation 

and environmental regulations, 

including recent government actions 

that were in place at the time of 

preparation of AEO 2021, including the 

emissions control programs discussed in 

the following paragraphs.59

SO2 emissions from affected electric 

generating units (‘‘EGUs’’) are subject to 

nationwide and regional emissions capand-trade programs. Title IV of the 

Clean Air Act sets an annual emissions 

cap on SO2 for affected EGUs in the 48 

contiguous States and the District of 

Columbia (D.C.). (42 U.S.C. 7651 et seq.) 

SO2 emissions from numerous States in 

the eastern half of the United States are 

also limited under the Cross-State Air 

Pollution Rule (‘‘CSAPR’’). 76 FR 48208 

(Aug. 8, 2011). CSAPR requires these 

States to reduce certain emissions, 

including annual SO2 emissions, and 

went into effect as of January 1, 2015.60

AEO 2021 incorporates implementation 

of CSAPR, including the update to the 

CSAPR ozone season program emission 

budgets and target dates issued in 2016, 

81 FR 74504 (Oct. 26, 2016). 

Compliance with CSAPR is flexible 

among EGUs and is enforced through 

the use of tradable emissions 

allowances. Under existing EPA 

regulations, any excess SO2 emissions 

allowances resulting from the lower 

electricity demand caused by the 

adoption of an efficiency standard could 

be used to permit offsetting increases in 

SO2 emissions by another regulated 

EGU. 

However, beginning in 2016, SO2

emissions began to fall as a result of 

implementation of the Mercury and Air 

Toxics Standards (‘‘MATS’’) for power 

plants. 77 FR 9304 (Feb. 16, 2012). In 

the MATS final rule, EPA established a 

standard for hydrogen chloride as a 

surrogate for acid gas hazardous air 

pollutants (‘‘HAP’’), and also 

established a standard for SO2 (a nonHAP acid gas) as an alternative 

equivalent surrogate standard for acid 

gas HAP. The same controls are used to 

reduce HAP and non-HAP acid gas; 

thus, SO2 emissions are being reduced 

as a result of the control technologies 

installed on coal-fired power plants to 

comply with the MATS requirements 

for acid gas. To continue operating, coal 

power plants must have either flue gas 

desulfurization or dry sorbent injection 

systems installed. Both technologies, 

which are used to reduce acid gas 

emissions, also reduce SO2 emissions. 

Because of the emissions reductions 

under the MATS, it is unlikely that 

excess SO2 emissions allowances 

resulting from the lower electricity 

demand would be needed or used to 

permit offsetting increases in SO2

emissions by another regulated EGU. 

Therefore, energy conservation 

standards that decrease electricity 


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generation would generally reduce SO2

emissions. DOE estimated SO2

emissions reduction using emissions 

factors based on AEO2021. 

CSAPR also established limits on NOX

emissions for numerous States in the 

eastern half of the United States. Energy 

conservation standards would have 

little effect on NOX emissions in those 

States covered by CSAPR emissions 

limits if excess NOX emissions 

allowances resulting from the lower 

electricity demand could be used to 

permit offsetting increases in NOX

emissions from other EGUs. In such 

case, NOX emissions would remain near 

the limit even if electricity generation 

goes down. A different case could 

possibly result, depending on the 

configuration of the power sector in the 

different regions and the need for 

allowances, such that NOX emissions 

might not remain at the limit in the case 

of lower electricity demand. In this case, 

energy conservation standards might 

reduce NOX emissions in covered 

States. Despite this possibility, DOE has 

chosen to be conservative in its analysis 

and has maintained the assumption that 

standards will not reduce NOX

emissions in States covered by CSAPR. 

Energy conservation standards would be 

expected to reduce NOX emissions in 

the States not covered by CSAPR. DOE 

used AEO 2021 data to derive NOX

emissions factors for the group of States 

not covered by CSAPR. 

The MATS limit mercury emissions 

from power plants, but they do not 

include emissions caps and, as such, 

DOE’s energy conservation standards 

would be expected to slightly reduce Hg 

emissions. DOE estimated mercury 

emissions reduction using emissions 

factors based on AEO 2021, which 

incorporates the MATS. 

L. Monetizing Emissions Impacts 

As part of the development of this 

proposed rule, for the purpose of 

complying with the requirements of 

Executive Order 12866, DOE considered 

the estimated monetary benefits from 

the reduced emissions of CO2, CH4, N2O, 

NOX, and SO2 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 

consumer benefit, DOE considered the 

reduced emissions expected to result 

over the lifetime of products shipped in 

the projection period for each TSL. This 

section summarizes the basis for the 

values used for monetizing the 

emissions benefits and presents the 

values considered in this NOPR. 

On March 16, 2022, the Fifth Circuit 

Court of Appeals (No. 22–30087) 

granted the federal government’s 

emergency motion for stay pending 

appeal of the February 11, 2022, 

preliminary injunction issued in 

Louisiana v. Biden, No. 21–cv–1074– 

JDC–KK (W.D. La.). As a result of the 

Fifth Circuit’s order, the preliminary 

injunction is no longer in effect, 

pending resolution of the federal 

government’s appeal of that injunction 

or a further court order. Among other 

things, the preliminary injunction 

enjoined the defendants in that case 

from ‘‘adopting, employing, treating as 

binding, or relying upon’’ the interim 

estimates of the social cost of 

greenhouse gases—which were issued 

by the Interagency Working Group on 

the Social Cost of Greenhouse Gases on 

February 26, 2021—to monetize the 

benefits of reducing greenhouse gas 

emissions. In the absence of further 

intervening court orders, DOE will 

revert to its approach prior to the 

injunction and present monetized 

benefits where appropriate and 

permissible under law. DOE requests 

comment on how to address the climate 

benefits and other non-monetized 

effects of the proposal. 

1. Monetization of Greenhouse Gas 

Emissions 

For the purpose of complying with 

the requirements of Executive Order 

12866, DOE estimates the monetized 

benefits of the reductions in emissions 

of CO2, CH4, and N2O by using a 

measure of the social cost (‘‘SC’’) of each 

pollutant (e.g., SC–GHGs). These 

estimates represent the monetary value 

of the net harm to society associated 

with a marginal increase in emissions of 

these pollutants in a given year, or the 

benefit of avoiding that increase. These 

estimates are intended to include (but 

are not limited to) climate-changerelated changes in net agricultural 

productivity, human health, property 

damages from increased flood risk, 

disruption of energy systems, risk of 

conflict, environmental migration, and 

the value of ecosystem services. DOE 

exercises its own judgment in 

presenting monetized climate benefits 

as recommended by applicable 

Executive orders and guidance, and 

DOE would reach the same conclusion 

presented in this proposed rulemaking 

in the absence of the social cost of 

greenhouse gases, including the 

February 2021 Interim Estimates 

presented by the Interagency Working 

Group on the Social Cost of Greenhouse 

Gases. DOE exercises its own judgment 

in presenting monetized climate 

benefits as recommended by applicable 

Executive Orders, and DOE would reach 

the same conclusion presented in this 

notice in the absence of the social cost 

of greenhouse gases, including the 

February 2021 Interim Estimates 

presented by the Interagency Working 

Group on the Social Cost of Greenhouse 

Gases. 

DOE estimated the global social 

benefits of CO2, CH4, and N2O 

reductions (i.e., SC–GHGs) using the 

estimates presented in the Technical 

Support Document: Social Cost of 

Carbon, Methane, and Nitrous Oxide 

Interim Estimates under Executive 

Order 13990 published in February 

2021 by the Interagency Working Group 

on the Social Cost of Greenhouse Gases 

(IWG) (IWG, 2021). The SC–GHGs is the 

monetary value of the net harm to 

society associated with a marginal 

increase in emissions in a given year, or 

the benefit of avoiding that increase. In 

principle, SC–GHGs includes the value 

of all climate change impacts, including 

(but not limited to) changes in net 

agricultural productivity, human health 

effects, property damage from increased 

flood risk and natural disasters, 

disruption of energy systems, risk of 

conflict, environmental migration, and 

the value of ecosystem services. The 

SC–GHGs therefore, reflects the societal 

value of reducing emissions of the gas 

in question by one metric ton. The SC– 

GHGs is the theoretically appropriate 

value to use in conducting benefit-cost 

analyses of policies that affect CO2, N2O 

and CH4 emissions. As a member of the 

IWG involved in the development of the 

February 2021 SC–GHG TSD), the DOE 

agrees that the interim SC–GHG 

estimates represent the most appropriate 

estimate of the SC–GHG until revised 

estimates have been developed 

reflecting the latest, peer-reviewed 

science. 

The SC–GHGs estimates presented 

here were developed over many years, 

using transparent process, peerreviewed methodologies, the best 

science available at the time of that 

process, and with input from the public. 

Specifically, in 2009, an interagency 

working group (IWG) that included the 

DOE and other executive branch 

agencies and offices was established to 

ensure that agencies were using the best 

available science and to promote 

consistency in the social cost of carbon 

(SC–CO2) values used across agencies. 

The IWG published SC–CO2 estimates 

in 2010 that were developed from an 

ensemble of three widely cited 

integrated assessment models (IAMs) 

that estimate global climate damages 

using highly aggregated representations 

of climate processes and the global 

economy combined into a single 

modeling framework. The three IAMs 

were run using a common set of input 

assumptions in each model for future 


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population, economic, and CO2

emissions growth, as well as 

equilibrium climate sensitivity (ECS)—a 

measure of the globally averaged 

temperature response to increased 

atmospheric CO2 concentrations. These 

estimates were updated in 2013 based 

on new versions of each IAM. In August 

2016 the IWG published estimates of the 

social cost of methane (SC–CH4) and 

nitrous oxide (SC–N2O) using 

methodologies that are consistent with 

the methodology underlying the SC– 

CO2 estimates. The modeling approach 

that extends the IWG SC–CO2 

methodology to non-CO2 GHGs has 

undergone multiple stages of peer 

review. The SC–CH4 and SC–N2O 

estimates were developed by Marten et 

al. (2015) and underwent a standard 

double-blind peer review process prior 

to journal publication. In 2015, as part 

of the response to public comments 

received to a 2013 solicitation for 

comments on the SC–CO2 estimates, the 

IWG announced a National Academies 

of Sciences, Engineering, and Medicine 

review of the SC–CO2 estimates to offer 

advice on how to approach future 

updates to ensure that the estimates 

continue to reflect the best available 

science and methodologies. In January 

2017, the National Academies released 

their final report, Valuing Climate 

Damages: Updating Estimation of the 

Social Cost of Carbon Dioxide, and 

recommended specific criteria for future 

updates to the SC–CO2 estimates, a 

modeling framework to satisfy the 

specified criteria, and both near-term 

updates and longer-term research needs 

pertaining to various components of the 

estimation process (National 

Academies, 2017). Shortly thereafter, in 

March 2017, President Trump issued 

Executive Order 13783, which 

disbanded the IWG, withdrew the 

previous TSDs, and directed agencies to 

ensure SC–CO2 estimates used in 

regulatory analyses are consistent with 

the guidance contained in OMB’s 

Circular A–4, ‘‘including with respect to 

the consideration of domestic versus 

international impacts and the 

consideration of appropriate discount 

rates’’ (E.O. 13783, Section 5(c)). 

On January 20, 2021, President Biden 

issued Executive Order 13990, which reestablished the IWG and directed it to 

ensure that the U.S. Government’s 

estimates of the social cost of carbon 

and other greenhouse gases reflect the 

best available science and the 

recommendations of the National 

Academies (2017). The IWG was tasked 

with first reviewing the SC–GHG 

estimates currently used in Federal 

analyses and publishing interim 

estimates within 30 days of the E.O. that 

reflect the full impact of GHG 

emissions, including by taking global 

damages into account. The interim SC– 

GHG estimates published in February 

2021, specifically the SC–CH4 

estimates, are used here to estimate the 

climate benefits for this proposed 

rulemaking. The E.O. instructs the IWG 

to undertake a fuller update of the SC– 

GHG estimates by January 2022 that 

takes into consideration the advice of 

the National Academies (2017) and 

other recent scientific literature. 

The February 2021 SC–GHG TSD 

provides a complete discussion of the 

IWG’s initial review conducted under 

E.O. 13990. In particular, the IWG found 

that the SC–GHG estimates used under 

E.O. 13783 fail to reflect the full impact 

of GHG emissions in multiple ways. 

First, the IWG found that a global 

perspective is essential for SC–GHG 

estimates because it fully captures 

climate impacts that affect the United 

States and which have been omitted 

from prior U.S.-specific estimates due to 

methodological constraints. Examples of 

omitted effects include direct effects on 

U.S. citizens, assets, and investments 

located abroad, supply chains, and 

tourism, and spillover pathways such as 

economic and political destabilization 

and global migration. In addition, 

assessing the benefits of U.S. GHG 

mitigation activities requires 

consideration of how those actions may 

affect mitigation activities by other 

countries, as those international 

mitigation actions will provide a benefit 

to U.S. citizens and residents by 

mitigating climate impacts that affect 

U.S. citizens and residents. If the United 

States does not consider impacts on 

other countries, it is difficult to 

convince other countries to consider the 

impacts of their emissions on the United 

States. As a member of the IWG 

involved in the development of the 

February 2021 SC–GHG TSD, DOE 

agrees with this assessment and, 

therefore, in this proposed rule DOE 

centers attention on a global measure of 

SC–CH4. This approach is the same as 

that taken in DOE regulatory analyses 

from 2012 through 2016. Prior to that, 

in 2008 DOE presented Social Cost of 

Carbon (SCC) estimates based on values 

the Intergovernmental Panel on Climate 

Change (IPCC) identified in literature at 

that time. As noted in the February 2021 

SC–GHG TSD, the IWG will continue to 

review developments in the literature, 

including more robust methodologies 

for estimating a U.S.-specific SC–GHG 

value, and explore ways to better inform 

the public of the full range of carbon 

impacts. As a member of the IWG, DOE 

will continue to follow developments in 

the literature pertaining to this issue. 

Second, the IWG found that the use of 

the social rate of return on capital (7 

percent under current OMB Circular A– 

4 guidance) to discount the future 

benefits of reducing GHG emissions 

inappropriately underestimates the 

impacts of climate change for the 

purposes of estimating the SC–GHG. 

Consistent with the findings of the 

National Academies (2017) and the 

economic literature, the IWG continued 

to conclude that the consumption rate of 

interest is the theoretically appropriate 

discount rate in an intergenerational 

context (IWG 2010, 2013, 2016a, 2016b), 

and recommended that discount rate 

uncertainty and relevant aspects of 

intergenerational ethical considerations 

be accounted for in selecting future 

discount rates. As a member of the IWG 

involved in the development of the 

February 2021 SC–GHG TSD, DOE 

agrees with this assessment and will 

continue to follow developments in the 

literature pertaining to this issue. 

While the IWG works to assess how 

best to incorporate the latest, peer 

reviewed science to develop an updated 

set of SC–GHG estimates, it set the 

interim estimates to be the most recent 

estimates developed by the IWG prior to 

the group being disbanded in 2017. The 

estimates rely on the same models and 

harmonized inputs and are calculated 

using a range of discount rates. As 

explained in the February 2021 SC– 

GHG TSD, the IWG has recommended 

that agencies to revert to the same set of 

four values drawn from the SC–GHG 

distributions based on three discount 

rates as were used in regulatory analyses 

between 2010 and 2016 and subject to 

public comment. For each discount rate, 

the IWG combined the distributions 

across models and socioeconomic 

emissions scenarios (applying equal 

weight to each) and then selected a set 

of four values recommended for use in 

benefit-cost analyses: An average value 

resulting from the model runs for each 

of three discount rates (2.5 percent, 3 

percent, and 5 percent), plus a fourth 

value, selected as the 95th percentile of 

estimates based on a 3 percent discount 

rate. The fourth value was included to 

provide information on potentially 

higher-than-expected economic impacts 

from climate change. As explained in 

the February 2021 SC–GHG TSD, and 

DOE agrees, this update reflects the 

immediate need to have an operational 

SC–GHG for use in regulatory benefitcost analyses and other applications that 

was developed using a transparent 

process, peer-reviewed methodologies, 

and the science available at the time of 

that process. Those estimates were 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20645 

61For example, the February 2021 TSD discusses 

how the understanding of discounting approaches 

suggests that discount rates appropriate for 

intergenerational analysis in the context of climate 

change may be lower than 3 percent. 

62See EPA, Revised 2023 and Later Model Year 

Light-Duty Vehicle GHG Emissions Standards: 

Regulatory Impact Analysis, Washington, DC, 

December 2021. Available at: https://www.epa.gov/ 

system/files/documents/2021-12/420r21028.pdf 

(last accessed January 13, 2022). 

63 Interagency Working Group on Social Cost of 

Greenhouse Gases, Technical Support Document: 

Social Cost of Carbon, Methane, and Nitrous Oxide. 

Interim Estimates Under Executive Order 13990, 

Washington, DC, February 2021. 

www.whitehouse.gov/wp-content/uploads/2021/ 

02/TechnicalSupportDocument_SocialCostof

CarbonMethaneNitrousOxide.pdf?source=email. 

subject to public comment in the 

context of dozens of proposed 

rulemakings as well as in a dedicated 

public comment period in 2013. 

DOE’s derivations of the SC–GHG 

(i.e., SC–CO2, SC–N2O, and SC–CH4) 

values used for this NOPR are discussed 

in the following sections, and the results 

of DOE’s analyses estimating the 

benefits of the reductions in emissions 

of these pollutants are presented in 

section V.B.6 of this document. 

a. Social Cost of Carbon 

The SC–CO2 values used for this 

NOPR were generated using the values 

presented in the 2021 update from the 

IWG’s February 2021 TSD. Table IV.8 

shows the updated sets of SC–CO2

estimates from the latest interagency 

update in 5-year increments from 2020 

to 2050. The full set of annual values 

used is presented in Appendix 14A of 

the NOPR TSD. For purposes of 

capturing the uncertainties involved in 

regulatory impact analysis, DOE has 

determined it is appropriate to include 

all four sets of SC–CO2 values, as 

recommended by the IWG.61

In calculating the potential global 

benefits resulting from reduced CO2

emissions, DOE used the values from 

the 2021 interagency report, adjusted to 

2020$ using the implicit price deflator 

for gross domestic product (‘‘GDP’’) 

from the Bureau of Economic Analysis. 

For each of the four sets of SC–CO2

cases specified, the values for emissions 

in 2020 were $14, $51, $76, and $152 

per metric ton avoided (values 

expressed in 2020$). DOE derived 

values after 2050 based on the trend in 

2020–2050 in each of the four cases in 

the IWG update. DOE derived values 

from 2051 to 2070 based on estimates 

published by EPA.62 These estimates are 

based on methods, assumptions, and 

parameters identical to the 2020–2050 

estimates published by the IWG. DOE 

derived values after 2070 based on the 

trend in 2060–2070 in each of the four 

cases in the IWG update. 

DOE multiplied the CO2 emissions 

reduction estimated for each year by the 

SC–CO2 value for that year in each of 

the four cases. To calculate a present 

value of the stream of monetary values, 

DOE discounted the values in each of 

the four cases using the specific 

discount rate that had been used to 

obtain the SC–CO2 values in each case. 

See chapter 13 for the annual emissions 

reduction. See appendix 14A for the 

annual SC–CO2 values. 

b. Social Cost of Methane and Nitrous 

Oxide 

The SC–CH4 and SC–N2O values used 

for this NOPR were generated using the 

values presented in the 2021 update 

from the IWG.63 Table IV.9 shows the 

updated sets of SC–CH4 and SC–N2O 

estimates from the latest interagency 

update in 5-year increments from 2020 

to 2050. The full set of annual values 

used is presented in appendix 14A of 

the NOPR TSD. To capture the 

uncertainties involved in regulatory 

impact analysis, DOE has determined it 

is appropriate to include all four sets of 

SC–CH4 and SC–N2O values, as 

recommended by the IWG. 


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Table IV.8 Annual SC-CO2 Values from 2021 Interagency Update, 2020-2050 

2020$ oer Metric Ton CO2) 

Discount Rate 

Year 5% 3% 2.5% 3% 

Average Average Average 

95th 

percentile 

2020 14 51 76 152 

2025 17 56 83 169 

2030 19 62 89 187 

2035 22 67 96 206 

2040 25 73 103 225 

2045 28 79 110 242 

2050 32 85 116 260 
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64Estimating the Benefit per Ton of Reducing 

PM2.5 Precursors from 21 Sectors. www.epa.gov/ 

benmap/estimating-benefit-ton-reducing-pm25- 

precursors-21-sectors. 

65As defined in the U.S. Census Bureau’s 2016 

Annual Survey of Manufactures, production 

workers include ‘‘Workers (up through the linesupervisor level) engaged in fabricating, processing, 

assembling, inspecting, receiving, packing, 

DOE multiplied the CH4 and N2O 

emissions reduction estimated for each 

year by the SC–CH4 and SC–N2O 

estimates for that year in each of the 

cases. To calculate a present value of the 

stream of monetary values, DOE 

discounted the values in each of the 

cases using the specific discount rate 

that had been used to obtain the SC–CH4

and SC–N2O estimates in each case. See 

chapter 13 of the NOPR TSD for the 

annual emissions reduction. See 

appendix 14A of the NOPR TSD for the 

annual SC–CH4 and SC–N2O values. 

2. Monetization of Other Air Pollutants 

For this NOPR, DOE estimated the 

monetized value of NOX and SO2

emissions reductions from electricity 

generation using the latest benefit-perton estimates for that sector from the 

EPA’s Benefits Mapping and Analysis 

Program.64 DOE used EPA’s values for 

PM2.5-related benefits associated with 

NOX and SO2 and for ozone-related 

benefits associated with NOX for 2025, 

2030, 2035 and 2040, calculated with 

discount rates of 3 percent and 7 

percent. DOE used linear interpolation 

to define values for the years not given 

in the 2025 to 2040 period; for years 

beyond 2040 the values are held 

constant. DOE derived values specific to 

the sector for room ACs using a method 

described in appendix 14B of the NOPR 

TSD. 

DOE multiplied the emissions 

reduction (in tons) in each year by the 

associated $/ton values, and then 

discounted each series using discount 

rates of 3 percent and 7 percent as 

appropriate. 

The SCoC Commenters presented 

reasons why DOE should, as it has in 

the past, monetize the full climate 

benefits of greenhouse gas emissions 

reductions, using the best available 

estimates, which were derived by the 

Interagency Working Group on the 

Social Cost of Greenhouse Gases. The 

SCoC Commenters also stated that DOE 

should factor these benefits into its 

choice of the maximum efficiency level 

that is economically justified, consistent 

with its statutory requirement to assess 

the national need to conserve energy 

under the Energy Policy and 

Conservation Act. (SCoC, No. 21 at p. 1) 

On March 16, 2022, the Fifth Circuit 

Court of Appeals (No. 22–30087) 

granted the federal government’s 

emergency motion for stay pending 

appeal of the February 11, 2022, 

preliminary injunction issued in 

Louisiana v. Biden, No. 21–cv–1074– 

JDC–KK (W.D. La.). As a result of the 

Fifth Circuit’s order, the preliminary 

injunction is no longer in effect, 

pending resolution of the federal 

government’s appeal of that injunction 

or a further court order. Among other 

things, the preliminary injunction 

enjoined the defendants in that case 

from ‘‘adopting, employing, treating as 

binding, or relying upon’’ the interim 

estimates of the social cost of 

greenhouse gases—which were issued 

by the Interagency Working Group on 

the Social Cost of Greenhouse Gases on 

February 26, 2021—to monetize the 

benefits of reducing greenhouse gas 

emissions. In the absence of further 

intervening court orders, DOE will 

revert to its approach prior to the 

injunction and present monetized 

benefits where appropriate and 

permissible under law. 

M. Utility Impact Analysis 

The utility impact analysis estimates 

several effects on the electric power 

generation industry that would result 

from the adoption of new or amended 

energy conservation standards. The 

utility impact analysis estimates the 

changes in installed electrical capacity 

and generation that would result for 

each TSL. The analysis is based on 

published output from the NEMS 

associated with AEO 2021. NEMS 

produces the AEO Reference case, as 

well as a number of side cases that 

estimate the economy-wide impacts of 

changes to energy supply and demand. 

For the current analysis, impacts are 

quantified by comparing the levels of 

electricity sector generation, installed 

capacity, fuel consumption and 

emissions in the AEO 2021 Reference 

case and various side cases. Details of 

the methodology are provided in the 

appendices to chapters 13 and 15 of the 

NOPR TSD. 

The output of this analysis is a set of 

time-dependent coefficients that capture 

the change in electricity generation, 

primary fuel consumption, installed 

capacity and power sector emissions 

due to a unit reduction in demand for 

a given end use. These coefficients are 

multiplied by the stream of electricity 

savings calculated in the NIA to provide 

estimates of selected utility impacts of 

potential new or amended energy 

conservation standards. 

N. Employment Impact Analysis 

DOE considers employment impacts 

in the domestic economy as one factor 

in selecting a proposed standard. 

Employment impacts from new or 

amended energy conservation standards 

include both direct and indirect 

impacts. Direct employment impacts are 

any changes in the number of 

production and non-production 

employees of manufacturers of the 

products subject to standards.65 The 


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Table IV.9 Annual SC-CH4 and SC-N20 Values from 2021 Interagency Update, 2020--2050 

12020$ per Metric Ton) 

SC-CH4 SC-N20 

Discount Rate and Statistic Discount Rate and Statistic 

5% 3% 2.5% 3% 5% 3% 2.5% 3% 

Average Average Average 95th Average Average Average 95th 

Year percentile percentile 

2020 670 1500 2000 3900 5800 18000 27000 48000 

2025 800 1700 2200 4500 6800 21000 30000 54000 

2030 940 2000 2500 5200 7800 23000 33000 60000 

2035 llOO 2200 2800 6000 9000 25000 36000 67000 

2040 1300 2500 3100 6700 10000 28000 39000 74000 

2045 1500 2800 3500 7500 12000 30000 42000 81000 

2050 1700 3100 3800 8200 13000 33000 45000 88000 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20647 

warehousing, shipping (but not delivering), 

maintenance, repair, janitorial, guard services, 

product development, auxiliary production for 

plant’s own use (e.g., power plant), record keeping, 

and other closely associated services (including 

truck drivers delivering ready-mixed concrete)’’ 

Non-production workers are defined as 

‘‘Supervision above line-supervisor level, sales 

(including a driver salesperson), sales delivery 

(truck drivers and helpers), advertising, credit, 

collection, installation, and servicing of own 

products, clerical and routine office functions, 

executive, purchasing, finance, legal, personnel 

(including cafeteria, etc.), professional and 

technical.’’ 

66See U.S. Department of Commerce–Bureau of 

Economic Analysis. Regional Multipliers: A User 

Handbook for the Regional Input-Output Modeling 

System (RIMS II). 1997. U.S. Government Printing 

Office: Washington, DC. Available at www.bea.gov/ 

scb/pdf/regional/perinc/meth/rims2.pdf. 

67Livingston, O.V., S.R. Bender, M.J. Scott, and 

R.W. Schultz. ImSET 4.0: Impact of Sector Energy 

Technologies Model Description and User Guide. 

2015. Pacific Northwest National Laboratory: 

Richland, WA. PNNL–24563. 

MIA addresses those impacts. Indirect 

employment impacts are changes in 

national employment that occur due to 

the shift in expenditures and capital 

investment caused by the purchase and 

operation of more-efficient appliances. 

Indirect employment impacts from 

standards consist of the net jobs created 

or eliminated in the national economy, 

other than in the manufacturing sector 

being regulated, caused by (1) reduced 

spending by consumers on energy, (2) 

reduced spending on new energy supply 

by the utility industry, (3) increased 

consumer spending on the products to 

which the new standards apply and 

other goods and services, and (4) the 

effects of those three factors throughout 

the economy. 

One method for assessing the possible 

effects on the demand for labor of such 

shifts in economic activity is to compare 

sector employment statistics developed 

by the Labor Department’s BLS. BLS 

regularly publishes its estimates of the 

number of jobs per million dollars of 

economic activity in different sectors of 

the economy, as well as the jobs created 

elsewhere in the economy by this same 

economic activity. Data from BLS 

indicate that expenditures in the utility 

sector generally create fewer jobs (both 

directly and indirectly) than 

expenditures in other sectors of the 

economy.66 There are many reasons for 

these differences, including wage 

differences and the fact that the utility 

sector is more capital-intensive and less 

labor-intensive than other sectors. 

Energy conservation standards have the 

effect of reducing consumer utility bills. 

Because reduced consumer 

expenditures for energy likely lead to 

increased expenditures in other sectors 

of the economy, the general effect of 

efficiency standards is to shift economic 

activity from a less labor-intensive 

sector (i.e., the utility sector) to more 

labor-intensive sectors (e.g., the retail 

and service sectors). Thus, the BLS data 

suggest that net national employment 

may increase due to shifts in economic 

activity resulting from energy 

conservation standards. 

DOE estimated indirect national 

employment impacts for the standard 

levels considered in this NOPR using an 

input/output model of the U.S. economy 

called Impact of Sector Energy 

Technologies version 4 (‘‘ImSET’’).67

ImSET is a special-purpose version of 

the ‘‘U.S. Benchmark National InputOutput’’ (‘‘I–O’’) model, which was 

designed to estimate the national 

employment and income effects of 

energy-saving technologies. The ImSET 

software includes a computer-based I–O 

model having structural coefficients that 

characterize economic flows among 187 

sectors most relevant to industrial, 

commercial, and residential building 

energy use. 

DOE notes that ImSET is not a general 

equilibrium forecasting model, and that 

the uncertainties involved in projecting 

employment impacts, especially 

changes in the later years of the 

analysis. Because ImSET does not 

incorporate price changes, the 

employment effects predicted by ImSET 

may over-estimate actual job impacts 

over the long run for this rule. 

Therefore, DOE used ImSET only to 

generate results for near-term 

timeframes, where these uncertainties 

are reduced. For more details on the 

employment impact analysis, see 

chapter 16 of the NOPR TSD. 

V. Analytical Results and Conclusions 

The following section addresses the 

results from DOE’s analyses with 

respect to the considered energy 

conservation standards for room ACs. It 

addresses the TSLs examined by DOE, 

the projected impacts of each of these 

levels if adopted as energy conservation 

standards for room ACs, and the 

standards levels that DOE is proposing 

to adopt in this NOPR. Additional 

details regarding DOE’s analyses are 

contained in the NOPR TSD supporting 

this document. 

A. Trial Standard Levels 

In general, DOE typically evaluates 

potential amended standards for 

products and equipment by grouping 

individual efficiency levels for each 

class into TSLs. Use of TSLs allows DOE 

to identify and consider manufacturer 

cost interactions between the product 

classes, to the extent that there are such 

interactions, and market cross elasticity 

from consumer purchasing decisions 

that may change when different 

standard levels are set. DOE analyzed 

the benefits and burdens of five TSLs for 

room ACs. DOE developed TSLs that 

combine efficiency levels for each 

analyzed product class. DOE presents 

the results for the TSLs in this 

document, while the results for all 

efficiency levels that DOE analyzed are 

in the NOPR TSD. 

Table V.1 presents the TSLs and the 

corresponding efficiency levels that 

DOE has identified for potential 

amended energy conservation standards 

for room ACs. TSL 5 represents the maxtech energy efficiency for all product 

classes and corresponds to EL 5. TSL 4 

corresponds to EL 4 for all product 

classes, consistent with the 

implementation of commercially 

available variable-speed compressors 

based on the current availability of 

variable speed compressors at cooling 

capacities ≥ 8,000 Btu/h. However, as of 

2022, there are no models commercially 

available that incorporate variable-speed 

compressors for cooling capacities less 

than 8,000 Btu/h, and the uncertainties 

of the possibilities of incorporating 

variable-speed compressors in smaller 

units may have the potential to 

eliminate room ACs with the smallest 

cooling capacities from the market. TSL 

3, therefore, is constructed with EL 4 for 

product classes with cooling capacities 

≥ 8,000 Btu/h, corresponding to the 

inclusion of commercially available 

variable-speed compressors, and EL 3 

for cooling capacities < 8,000 Btu/h, 

corresponding to the incorporation of 

maximum energy efficient single-speed 

compressors. TSL 2 corresponds to EL 3 

for all product classes and represents 

room ACs with the maximum energy 

efficient single-speed compressor. TSL 1 

corresponds to EL 2 for all product 

classes and represents the current 

ENERGY STAR level. 

BILLING CODE 6450–01–P 


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68Efficiency levels that were analyzed for this 

NOPR are discussed in section IV.C.3 of this 

document. Results by efficiency level are presented 

in the NOPR TSD chapters 8, 10, and 12. 

DOE constructed the TSLs for this 

NOPR to include ELs representative of 

ELs with similar characteristics (i.e., 

using similar technologies and/or 

efficiencies, and having roughly 

comparable equipment availability). The 

use of representative ELs provided for 

greater distinction between the TSLs. 

While representative ELs were included 

in the TSLs, DOE considered all 

efficiency levels as part of its analysis 

but did not include all efficiency levels 

in the TSLs.68 DOE did not consider a 

TSL with EL 1 because DOE’s projected 

efficiency distribution indicated a 

significant portion of the market would 

meet or exceed EL 1 in the no-newstandards case by the compliance year 

leading to smaller national energy 

savings and lower LCC savings for a 

standard set at EL 1 relative to EL 2. As 

such, the least efficient level considered 

for TSLs in this NOPR is EL 2. 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Individual 

Consumers 

DOE analyzed the economic impacts 

on room AC consumers by looking at 

the effects that potential amended 

standards at each TSL would have on 

the LCC and PBP. DOE also examined 

the impacts of potential standards on 

selected consumer subgroups. These 

analyses are discussed in the following 

sections. 

a. Life-Cycle Cost and Payback Period 

In general, higher-efficiency products 

affect consumers in two ways: (1) 

Purchase price increases and (2) annual 

operating costs decrease. Inputs used for 

calculating the LCC and PBP include 

total installed costs (i.e., product price 

plus installation costs), and operating 

costs (i.e., annual energy use, energy 

prices, energy price trends, repair costs, 

and maintenance costs). The LCC 

calculation also uses product lifetime 

and a discount rate. Chapter 8 of the 

NOPR TSD provides detailed 

information on the LCC and PBP 

analyses. 

Table V.2 through Table V.25 show 

the LCC and PBP results for the TSLs 

considered for each product class. In the 

first of each pair of tables, the simple 

payback is measured relative to the 

baseline product. In the second of each 

pair of tables, impacts are measured 

relative to the efficiency distribution in 

the no-new-standards case in the 

compliance year (see section IV.F.8 of 

this document). Because some 

consumers purchase products with 

higher efficiency in the no-newstandards case, the average savings are 

less than the difference between the 

average LCC of the baseline product and 

the average LCC at each TSL. The 

savings refer only to consumers who are 

affected by a standard at a given TSL. 

Those who already purchase a product 


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Table V.1 Trial Standard Levels for Room Air Conditioners 

Product Class TSL 1 TSL2 TSL3 TSL4 TSL5 

CEER (Btu/Wh) 

Room AC without reverse cycle, with louvered sides 

<6,000 Btu/h (PC 1) 12.1 13.1 13.1 16.0 20.2 

6,000 to 7,999 Btu/h (PC 2) 12.1 13.7 13.7 16.0 20.2 

8,000 to 13,999 Btu/h (PC 3) 12.0 14.3 16.0 16.0 22.4 

14,000 to 19,999 Btu/h (PC 4) 11.8 14.0 16.0 16.0 20.6 

20,000 to 27,999 Btu/h (PC 5a) 10.3 11.8 13.8 13.8 19.1 

>28,000 Btu/h (PC 5b) 9.9 10.3 13.2 13.2 16.7 

Room AC without reverse cycle, without louvered sides 

<6,000 Btu/h (PC 6) 11.0 12.8 12.8 14.7 19.4 

6,000 to 7,999 Btu/h (PC 7) 11.0 12.8 12.8 14.7 19.4 

8,000 to 10,999 Btu/h (PC 8a) 10.6 12.3 14.1 14.1 18.7 

11,000 to 13,999 Btu/h (PC 8b) 10.5 12.3 13.9 13.9 19.1 

14,000 to 19,999 Btu/h (PC 9) 10.2 10.9 13.7 13.7 16.6 

>20,000 Btu/h (PC 10) 10.3 11.0 13.8 13.8 16.8 

Room AC with reverse cycle, with louvered sides 

<20,000 Btu/h (PC 11) 10.8 12.3 14.4 14.4 18.7 

>20,000 Btu/h (PC 13) 10.2 11.7 13.7 13.7 18.9 

Room AC with reverse cycle, without louvered sides 

<14,000 Btu/h (PC 12) 10.2 11.3 13.7 13.7 16.2 

>14,000 Btu/h (PC 14) 9.6 11.2 12.8 12.8 17.5 

Casement 

Casement-Only (PC 15) 10.5 12.2 13.9 13.9 18.1 

Casement-Slide (PC 16) 11.4 13.2 15.3 15.3 19.7 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20649 

with efficiency at or above a given TSL 

are not affected. Consumers for whom 

the LCC increases at a given TSL 

experience a net cost. 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.027</GPH> EP07AP22.028</GPH> EP07AP22.029</GPH>

Table V.2 Average LCC and PBP Results for Room Air Conditioners PC 1, Without 

R C everse .ye I e an d WI ·th L L ouvers, ess th an 6 000 Bt /h ' u 

Average Costs 

2020$ Simple 

EL TSL CEER First Year's Lifetime Payback Installed 

Cost Operating Operating LCC years 

Cost Cost 

0 - 11.0 $370.65 $62.66 $468.55 $839.20 -

1 - 11.4 $372.06 $61.05 $456.64 $828.70 0.9 

2 1 12.1 $374.95 $55.09 $412.42 $787.37 0.6 

3 2,3 13.1 $379.10 $51.10 $382.87 $761.97 0.7 

4 4 16.0 $464.91 $42.09 $316.27 $781.19 4.6 

5 5 20.2 $477.52 $34.22 $257.85 $735.38 3.8 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.3 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 1, Without Reverse Cycle and with Louvers, Less than 6,000 

Btu/h 

Life-Cycle Cost Savine:s 

TSL CEER Average LCC Savings . Percent of Consumers that 

2020$ Exnerience Net Cost 

- 11.4 $0.82 0% 

1 12.1 $39.28 1% 

23 13.1 $63.49 3% 

4 16.0 $45.25 40% 

5 20.2 $91.06 32% 

* The savrngs represent the average LCC for affected consumers. 

Table V.4 Average LCC and PBP Results for Room Air Conditioners PC 2, Without 

R C everse ,ye I e an d WI ·th L 6 ouvers, 000-7 999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 11.0 $407.59 $81.06 $616.44 $1,024.03 - 1 - 11.4 $409.87 $78.35 $595.94 $1,005.81 0.8 

2 1 12.1 $413.43 $71.82 $546.61 $960.05 0.6 

3 2,3 13.7 $421.94 $64.22 $489.11 $911.04 0.9 

4 4 16.0 $511.73 $54.87 $418.34 $930.08 4.0 

5 5 20.2 $562.03 $44.64 $341.01 $903.04 4.2 

Note: The results for each TSL are calculated assumrng that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 
20650 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.030</GPH> EP07AP22.031</GPH> EP07AP22.032</GPH>

Table V.5 Average LCC Savings Relative to the No-New-Standards Case for Room 

A' Ir C on d'f 1 10ners PC 2 W'th t R C I d 'th L 6 000 7 999 Bt /h ' I OU everse .ye e an WI ouvers, ' - ' u 

Life-Cycle Cost Savine:s 

TSL CEER Average LCC Savings . Percent of Consumers that 

2020$ Experience Net Cost 

- 11.4 $0.00 0% 

1 12.1 $34.23 2% 

2,3 13.7 $80.02 5% 

4 16.0 $62.00 40% 

5 20.2 $89.03 43% 

* The savmgs represent the average LCC for affected consumers. 

Table V.6 Average LCC and PBP Results for Room Air Conditioners PC 3, Without 

R C everse ;ye 1 e, w1 "th L d ouvere S'd 1 es, an d 8 000-13 999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 10.9 $512.47 $104.95 $792.93 $1,305.40 - 1 - 11.4 $514.75 $101.34 $765.80 $1,280.55 0.6 

2 1 12.0 $518.90 $92.17 $697.03 $1,215.93 0.5 

3 2 14.3 $532.62 $78.23 $592.36 $1,124.98 0.8 

4 3,4 16.0 $616.54 $67.97 $514.54 $1,131.08 2.8 

5 5 22.4 $675.20 $50.21 $381.46 $1,056.67 3.0 

Note: The results for each TSL are calculated assummg that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.7 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 3, Without Reverse Cycle, with Louvered Sides, and 8,000-

13,999 Btu/h 

Life-Cycle Cost Savine;s 

TSL CEER Average LCC Savings * Percent of Consumers that 

2020$ Exoerience Net Cost 

- 11.4 $0.00 0% 

1 12.0 $19.31 0% 

2 14.3 $104.92 4% 

3,4 16.0 $99.14 30% 

5 22.4 $173.55 30% 

* The savings represent the average LCC for affected consumers. 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20651 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.033</GPH> EP07AP22.034</GPH> EP07AP22.035</GPH>

Table V.8 Average LCC and PBP Results for Room Air Conditioners PC 4, Without 

R everse C I d ,ye e an WI ·th L ouvers, 14 000--19 999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER First Year's Lifetime Payback Installed 

Cost Operating Operating LCC years 

Cost Cost 

0 - 10.7 $642.61 $120.26 $903.35 $1,545.97 -

1 - 11.1 $644.60 $116.98 $878.91 $1,523.51 0.6 

2 1 11.8 $651.70 $106.07 $797.78 $1,449.48 0.6 

3 2 14.0 $662.16 $90.20 $679.66 $1,341.82 0.7 

4 3,4 16.0 $769.44 $76.52 $577.36 $1,346.80 2.9 

5 5 20.6 $813.45 $60.04 $454.84 $1,268.29 2.8 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.9 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 4, Without Reverse Cycle and with Louvers, 14,000-19,999 

Btu/h 

Life-Cvcle Cost Savin2s 

TSL CEER Average LCC Savings . Percent of Consumers that 

2020$ Experience Net Cost 

- 11.1 $0.00 0% 

1 11.8 $0.00 0% 

2 14.0 $102.30 1% 

3,4 16.0 $97.49 35% 

5 20.6 $176.00 32% 

* The savings represent the average LCC for affected consumers. 

Table V.10 Average LCC and PBP Results for Room Air Conditioners PC 5a, 

W0

th t R C I d 0I OU everse .ye e an WI th L ouvers, 20 000--27 999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 9.4 $800.55 $145.28 $1,057.96 $1,858.52 -

1 - 9.8 $803.27 $139.93 $1,019.56 $1,822.83 0.5 

2 1 10.3 $819.84 $129.42 $944.08 $1,763.92 1.2 

3 2 11.8 $831.48 $113.20 $827.62 $1,659.10 1.0 

4 3,4 13.8 $938.90 $91.54 $670.41 $1,609.31 2.6 

5 5 19.1 $1,011.43 $65.92 $486.74 $1,498.16 2.7 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 
20652 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.036</GPH> EP07AP22.037</GPH> EP07AP22.038</GPH>

Table V.11 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 5a, Without Reverse Cycle and with Louvers, 20,000-27,999 

Btu/h 

Life-Cycle Cost Savings 

TSL CEER Average LCC Savings * Percent of Consumers that 

2020$ Exoerience Net Cost 

- 9.8 $0.00 0% 

1 10.3 $5.28 1% 

2 11.8 $105.03 2% 

3,4 13.8 $152.52 32% 

5 19.1 $263.67 34% 

* The savings represent the average LCC for affected consumers. 

Table V.12 Average LCC and PBP Results for Room Air Conditioners PCs 5b, 

W"th I OU t R everse C I d .ye e an WI "th L G ouvers, rea t er th an 28 000 Bt /h ' u 

Average Costs 

2020$ Simple 

EL TSL CEER First Year's Lifetime Payback Installed Operating Operating LCC years Cost Cost Cost 

0 - 9.0 $848.65 $176.79 $1,288.42 $2,137.07 -

1 - 9.4 $851.46 $169.46 $1,235.83 $2,087.29 0.4 

2 1 9.9 $855.66 $156.16 $1,140.31 $1,995.97 0.3 

3 2 10.3 $859.12 $148.64 $1,086.31 $1,945.43 0.4 

4 3,4 13.2 $998.92 $110.63 $811.63 $1,810.54 2.3 

5 5 16.7 $1,049.36 $87.20 $643.64 $1,693.01 2.2 

Note: The results for each TSL are calculated assummg that all conswners use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.13 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 5b, Without Reverse Cycle and with Louvers, Greater than 

28,000 Btu/h 

Life-Cvcle Cost Savin2:s 

TSL CEER Average LCC Savings * Percent of Consumers that 

2020$ Exoerience Net Cost 

- 9.4 $20.50 0% 

1 9.9 $99.12 0% 

2 10.3 $147.14 0% 

3,4 13.2 $275.19 24% 

5 16.7 $392.72 25% 

* The savings represent the average LCC for affected consumers. 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20653 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.039</GPH> EP07AP22.040</GPH> EP07AP22.041</GPH>

Table V.14 Average LCC and PBP Results for Room Air Conditioners PC Sa, 

w·th I OU t R C l d everse ,ye e an WI ·th OU t L d ouvere s· I d es, 8 000-10 999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER First Year's Lifetime Payback Installed 

Cost Operating Operating LCC years 

Cost Cost 

0 - 9.6 $526.19 $106.80 $806.94 $1,333.14 -

1 - 10.1 $529.28 $102.12 $771.88 $1,301.16 0.7 

2 I 10.6 $532.73 $94.84 $717.22 $1,249.95 0.5 

3 2 12.3 $543.73 $82.19 $622.28 $1,166.01 0.7 

4 3,4 14.1 $649.32 $69.87 $528.88 $1,178.20 3.3 

5 5 18.7 $681.04 $53.86 $408.91 $1,089.95 2.9 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.15 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC Sa, Without Reverse Cycle and without Louvered Sides, 8,000-

10,999 Btu/h 

Life-Cvcle Cost Savin2s 

TSL CEER Average LCC Savings . Percent of Consumers that 

2020$ Experience Net Cost 

- 10.1 $0.00 0% 

1 10.6 $5.67 0% 

2 12.3 $85.72 4% 

3,4 14.1 $74.28 37% 

5 18.7 $162.53 29% 

* The savings represent the average LCC for affected consumers. 

Table V.16 Average LCC and PBP Results for Room Air Conditioners PC Sb, 

w·th I OU t R C l d everse ,ye e an WI ·th OU t L ouvere d s·d I es, 11000-13999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 9.5 $575.83 $131.04 $989.84 $1,565.68 - 1 - 10.0 $578.86 $125.53 $948.49 $1,527.35 0.5 

2 1 10.5 $582.99 $114.83 $868.19 $1,451.18 0.4 

3 2 12.3 $595.41 $99.04 $749.68 $1,345.10 0.6 

4 3,4 13.9 $684.21 $85.02 $643.37 $1,327.58 2.4 

5 5 19.1 $731.28 $63.62 $483.08 $1,214.36 2.3 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 
20654 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.042</GPH> EP07AP22.043</GPH> EP07AP22.044</GPH>

Table V.17 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC Sb, Without Reverse Cycle and without Louvered Sides, 

11,000-13,999 Btu/h 

Life-Cycle Cost Savings 

TSL CEER Average LCC Savings * Percent of Consumers that 

2020$ Exoerience Net Cost 

- 10.0 $0.00 0% 

1 10.5 $0.00 0% 

2 12.3 $100.02 3% 

3,4 13.9 $116.89 26% 

5 19.1 $230.10 23% 

* The savings represent the average LCC for affected consumers. 

Table V.18 Average LCC and PBP Results for Room Air Conditioners PC 9, 

W"th I OU t R C everse ,ye I e an d WI "th OU t L d ouvere S"d 1 es, 14 000-19 999 Bt /h ' ' u 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 9.3 $719.11 $117.88 $883.56 $1,602.67 - 1 - 9.7 $722.16 $113.34 $849.88 $1,572.04 0.7 

2 1 10.2 $730.98 $104.87 $787.15 $1,518.13 0.9 

3 2 10.9 $736.20 $98.41 $739.24 $1,475.44 0.9 

4 3,4 13.7 $836.63 $75.96 $572.18 $1,408.81 2.8 

5 5 16.6 $865.13 $63.30 $478.47 $1,343.60 2.7 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.19 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 9, Without Reverse Cycle and without Louvered Sides, 14,000-

19,999 Btu/h 

Life-Cvcle Cost Savin2s 

TSL CEER Average LCC Savings . Percent of Consumers that 

2020$ Exoerience Net Cost 

- 9.7 $11.98 1% 

1 10.2 $58.37 3% 

2 10.9 $98.98 2% 

3,4 13.7 $162.64 24% 

5 16.6 $227.85 24% 

* The savings represent the average LCC for affected consumers. 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20655 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.045</GPH> EP07AP22.046</GPH> EP07AP22.047</GPH>

Table V.20 Average LCC and PBP Results for Room Air Conditioners PC 11, With 

R everse C l d .ye e an WI ·th L d ouvere s·d I es, l ess th an 20 000 Bt /h ' u 

Average Costs 

2020$ Simple 

EL TSL CEER First Year's Lifetime Payback Installed 

Cost Operating Operating LCC years 

Cost Cost 

0 - 9.8 $576.42 $105.97 $808.00 $1,384.41 -

1 - 10.4 $580.33 $100.68 $767.83 $1,348.17 0.7 

2 l 10.8 $584.09 $92.59 $706.50 $1,290.59 0.6 

3 2 12.3 $595.08 $82.32 $628.54 $1,223.62 0.8 

4 3,4 14.4 $692.20 $69.57 $531.79 $1,223.99 3.2 

5 5 18.7 $737.07 $55.29 $423.44 $1,160.51 3.2 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Table V.21 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 11, With Reverse Cycle and with Louvered Sides, less than 

20,000 Btu/h 

Life-Cvcle Cost Savin2s 

TSL CEER Average LCC Savings . Percent of Consumers that 

2020$ Experience Net Cost 

- 10.4 $18.13 2% 

1 10.8 $67.57 2% 

2 12.3 $131.52 4% 

34 14.4 $131.12 30% 

5 18.7 $194.60 31% 

* The savings represent the average LCC for affected consumers. 

Table V.22 Average LCC and PBP Results for Room Air Conditioners PC 12, With 

R C l d 0

everse ;ye e an WI th OU t L d ouvere S. I d l es, ess th an 14 000 Bt /h ' u 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 9.3 $641.40 $87.09 $655.95 $1,297.35 - 1 - 9.7 $644.16 $83.90 $632.10 $1,276.26 0.9 

2 1 10.2 $652.09 $77.88 $587.01 $1,239.10 1.2 

3 2 11.3 $659.94 $71.00 $535.57 $1,195.51 1.2 

4 3,4 13.7 $714.83 $57.84 $436.71 $1,151.54 2.5 

5 5 16.2 $741.39 $49.73 $376.08 $1,117.48 2.7 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The 

PBP is measured relative to the baseline product. 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 
20656 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

69Product Classes 4, 5a, 5b, and 9 account for 

approximately 9 percent of the total room AC 

market. 

b. Consumer Subgroup Analysis 

In the consumer subgroup analysis, 

DOE estimated the impact of the 

considered TSLs on low-income 

households and senior-only households 

for product classes with a sufficient 

sample size in RECS to perform a Monte 

Carlo analysis. DOE was unable to 

conduct a consumer subgroup analysis 

for Product Classes 4, 5a, 5b, and 9 for 

either low-income households or senioronly households due to insufficient 

sample size and does not report results 

for those product classes.69 Table V.26 

through Table V.41 compare the average 

LCC savings, PBP, percent of consumers 

negatively impacted, and percent of 

consumers positively impacted at each 

efficiency level for the consumer 

subgroups, along with corresponding 

values for the entire residential 

consumer sample for product classes 

with a sufficient sample size. In most 

cases, the values for low-income 

households and senior-only households 

at the considered efficiency levels are 

not substantially different from the 

average for all households. Chapter 11 

of the NOPR TSD presents the complete 

LCC and PBP results for the subgroups. 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.048</GPH> EP07AP22.049</GPH> EP07AP22.050</GPH>

Table V.23 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 12, With Reverse Cycle and without Louvered Sides, less than 

14,000 Btu/h 

Life-Cycle Cost Savings 

TSL CEER Average LCC Savings * Percent of Consumers that 

2020$ Exoerience Net Cost 

- 9.7 $8.12 2% 

1 10.2 $39.97 7% 

2 11.3 $81.20 7% 

3,4 13.7 $122.74 20% 

5 16.2 $156.81 24% 

* The savings represent the average LCC for affected consumers. 

Table V.24 Average LCC and PBP Results for Room Air Conditioners PC 16, 

Casement-Slider 

Average Costs 

2020$ Simple 

EL TSL CEER 

Installed First Year's Lifetime Payback 

Cost Operating Operating LCC years 

Cost Cost 

0 - 10.4 $501.23 $86.26 $656.88 $1,158.11 - 1 - 10.8 $503.64 $83.42 $635.46 $1,139.09 0.8 

2 1 11.4 $507.10 $76.33 $581.83 $1,088.93 0.6 

3 2 13.2 $516.42 $67.41 $514.31 $1,030.73 0.8 

4 3,4 15.3 $616.56 $57.41 $438.70 $1,055.26 4.0 

5 5 19.7 $641.98 $45.89 $351.50 $993.49 3.5 

Average 

Lifetime 

years 

9.3 

9.3 

9.3 

9.3 

9.3 

9.3 

Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is 

measured relative to the baseline product. 

Table V.25 Average LCC Savings Relative to the No-New-Standards Case for Room 

Air Conditioners PC 16, Casement-Slider 

Life-Cycle Cost Savings 

TSL CEER Average LCC Savings * Percent of Consumers that 

2020$ Exoerience Net Cost 

- 10.8 $6.42 2% 

1 11.4 $49.45 2% 

2 13.2 $104.75 4% 

3,4 15.3 $81.33 38% 

5 19.7 $143.10 34% 

* The savings represent the average LCC for affected consumers. 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20657 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.051</GPH> EP07AP22.052</GPH> EP07AP22.053</GPH>

Table V.26 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC 1, Without Reverse Cycle and with Louvers, Less 

than 6,000 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low- Senior-Only All EL TSL Income Households+ Households** Householdst Households Households** Householdst 

1 - $0.86 - $0.79 0.9 

2 1 $40.12 - $37.74 0.6 

3 2,3 $64.92 - $60.91 0.7 

4 4 $52.08 - $39.15 4.5 

5 5 $98.55 - $83.08 3.8 

• The savings represent the average LCC for affected consumers. Negative values denoted in parentheses. 

+ Low-income households represent 60.0 percent of all households for this product class. 

•• Insufficient sample size to conduct subgroup analysis. 

-

-

-

-

-

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

0.9 

0.6 

0.8 

5.0 

4.1 

Table V.27 Comparison of Percent of Impacted Consumers for Consumer Subgroups and 

All Households: Room Air Conditioners PC 1, Without Reverse Cycle and with Louvers, 

Less than 6,000 Btu/h 

Percent of Consumers that Percent of Consumers that 

Experience Net Cost ExDerience Net Benefit 

Low-Income Senior-Only All Low- Senior-Only All EL TSL Income Households+ Households** Householdst Households Households** Householdst 

1 - 0% - 0% 8% 

2 1 0% - 1% 93% 

3 2,3 0% - 2% 95% 

4 4 35% - 41% 60% 

5 5 26% - 32% 74% 

+ Low-mcome households represent 60.0 percent of all households for this product class. 

•• Insufficient sample size to conduct subgroup analysis. 

t Results for residential consumers only and exclude results from commercial consumers. 

-

-

-

-

-

Table V.28 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC 2, Without Reverse Cycle and with Louvers, 

6,000--7,999 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low-Income Senior-Only 

8% 

92% 

93% 

54% 

68% 

All EL TSL Households:!: Households§ Householdst Households Households Householdst 

1 - $0.00 $0.00 $0.00 0.8 0.7 

2 1 $36.28 $41.20 $35.27 0.6 0.5 

3 2,3 $84.74 $96.89 $82.61 0.8 0.7 

4 4 $67.05 $88.31 $65.64 3.9 3.5 

5 5 $98.48 $130.37 $95.14 4.2 3.7 

• The savmgs represent the average LCC for affected consumers. Negative values denoted m parentheses. 

+ Low-income households represent 50.1 percent of all households for this product class. 

§ Senior-only households represent 24.7 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

0.8 

0.6 

0.9 

4.0 

4.2 
20658 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.054</GPH> EP07AP22.055</GPH> EP07AP22.056</GPH>

Table V.29 Comparison of Percent of Impacted Consumers for Consumer Subgroups and 

All Households: Room Air Conditioners PC 2, Without Reverse Cycle and with Louvers, 

6,000-7,999 Btu/h 

Percent of Consumers that Percent of Consumers that 

Exoerience Net Cost Exoerience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households:!: Households§ Householdst Households Households Householdst 

1 - 0% 0% 0% 0% 

2 1 1% 2% 1% 74% 

3 23 3% 5% 4% 90% 

4 4 38% 31% 38% 58% 

5 5 40% 33% 41% 60% 

+ Low-income households represent 50.1 percent of all households for this product class. 

§ Senior-only households represent 24.7 percent of all households for this product class. 

t Results for residential consumers only. 

0% 0% 

72% 73% 

88% 89% 

64% 57% 

67% 59% 

Table V.30 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC 3, Without Reverse Cycle, with Louvered Sides, 

and 8,000-13,999 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households:!: Households§ Householdst Households Households Householdst 

1 - $0.00 $0.00 $0.00 0.6 0.7 

2 1 $22.44 $17.94 $18.66 0.5 0.6 

3 2 $122.51 $96.97 $101.79 0.7 0.8 

4 3,4 $122.56 $81.51 $94.44 2.6 3.2 

5 5 $218.31 $148.90 $165.48 2.7 3.3 

• The savmgs represent the average LCC for affected consumers. Negative values denoted m parentheses. 

+ Low-income households represent 25.7 percent of all households for this product class. 

§ Senior-only households represent 26.6 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

Table V.31 Comparison of Percent of Impacted Consumers for Consumer 

Subgroups and All Households: Room Air Conditioners PC 3, Without Reverse 

C ,ye 1 e, w1 ·th L d ouvere s·d 1 es, an d 8 000-13 999 Bt /h ' ' u 

Percent of Consumers that Percent of Consumers that 

Exoerience Net Cost Exoerience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only 

0.7 

0.5 

0.8 

3.0 

3.2 

All EL TSL Households:!: Households§ Households t Households Households Households t 

1 - 0% 0% 0% 0% 

2 1 0% 0% 0% 30% 

3 2 4% 6% 4% 90% 

4 34 28% 38% 29% 67% 

5 5 27% 40% 30% 73% 

+ Low-income households represent 25.7 percent of all households for this product class. 

§ Senior-only households represent 26.6 percent of all households for this product class. 

t Results for residential consumers only. 

0% 0% 

30% 30% 

88% 90% 

57% 66% 

60% 70% 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20659 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.057</GPH> EP07AP22.058</GPH> EP07AP22.059</GPH>

Table V.32 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC Sa, Without Reverse Cycle and without 

Louvered Sides, 8,000--10,999 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households+ Households§ Householdst Households Households Householdst 

1 - $0.00 $0.00 $0.00 0.6 0.7 

2 1 $6.90 $5.42 $5.55 0.5 0.6 

3 2 $100.26 $79.59 $83.45 0.6 0.8 

4 3,4 $96.07 $57.33 $70.43 3.0 3.7 

5 5 $203.50 $139.26 $155.62 2.7 3.2 

• The savmgs represent the average LCC for affected consumers. Negative values denoted m parentheses. 

+ Low-income households represent 25.7 percent of all households for this product class. 

§ Senior-only households represent 26.6 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

Table V.33 Comparison of Percent of Impacted Consumers for Consumer 

Subgroups and All Households: Room Air Conditioners PC Sa, Without Reverse 

C I ,ye e an d WI ·th OU t L d ouvere s·d 1 es, 8 000--10 999 Bt /h ' ' u 

Percent of Consumers that Percent of Consumers that 

Experience Net Cost Experience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only 

0.7 

0.6 

0.8 

3.5 

3.1 

All EL TSL Households+ Households§ Householdst Households Households Householdst 

1 - 0% 0% 0% 0% 

2 1 0% 0% 0% 11% 

3 2 4% 5% 3% 91% 

4 3,4 35% 46% 36% 61% 

5 5 26% 38% 28% 74% 

+ Low-mcome households represent 25.7 percent of all households for this product class. 

§ Senior-only households represent 26.6 percent of all households for this product class. 

t Results for residential consumers only. 

0% 0% 

11% 11% 

91% 92% 

50% 59% 

62% 72% 

Table V.34 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC Sb, Without Reverse Cycle and without Louvered 

Sides, 11,000--13,999 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

EL TSL Low-Income Senior-Only All Low-Income Senior-Only 

Households+ Households§ Householdst Households Households 

1 - $0.00 $0.00 $0.00 0.5 0.6 

2 1 $0.00 $0.00 $0.00 0.4 0.5 

3 2 $117.02 $92.83 $97.18 0.5 0.7 

4 3,4 $141.94 $96.54 $111.99 2.2 2.6 

5 5 $280.86 $201.36 $221.12 2.1 2.6 

• The savmgs represent the average LCC for affected consumers. Negative values denoted m parentheses. 

+ Low-income households represent 25.7 percent of all households for this product class. 

§ Senior-only households represent 26.6 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

All 

Householdst 

0.6 

0.5 

0.7 

2.5 

2.5 
20660 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.060</GPH> EP07AP22.061</GPH> EP07AP22.062</GPH>

Table V.35 Comparison of Percent of Impacted Consumers for Consumer Subgroups and 

All Households: Room Air Conditioners PC Sb, Without Reverse Cycle and without 

Louvered Sides, 11,000--13,999 Btu/h 

Percent of Consumers that Percent of Consumers that 

Experience Net Cost Experience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households:!: Households§ Householdst Households Households Householdst 

1 - 0% 0% 0% 0% 

2 1 0% 0% 0% 0% 

3 2 3% 4% 3% 91% 

4 3,4 24% 34% 25% 71% 

5 5 20% 31% 22% 80% 

+ Low-income households represent 25.7 percent of all households for this product class. 

§ Senior-only households represent 26.6 percent of all households for this product class. 

t Results for residential consumers only. 

0% 0% 

0% 0% 

90% 91% 

61% 70% 

69% 78% 

Table V.36 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC 11, With Reverse Cycle and with Louvered Sides, 

less than 20,000 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households:!: Households§ Households t Households Households Households t 

1 - $21.00 $19.73 $18.57 0.7 0.7 

2 1 $77.89 $73.55 $69.29 0.5 0.5 

3 2 $152.91 $143.97 $135.03 0.7 0.7 

4 3,4 $160.90 $146.67 $136.12 2.9 3.0 

5 5 $241.86 $220.82 $202.33 2.8 3.0 

• The savings represent the average LCC for affected consumers. Negative values denoted in parentheses. 

+ Low-income households represent 39 .4 percent of all households for this product class. 

§ Senior-only households represent 25.0 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

0.7 

0.6 

0.8 

3.2 

3.2 

Table V.37 Comparison of Percent of Impacted Consumers for Consumer Subgroups and 

All Households: Room Air Conditioners PC 11, With Reverse Cycle and with Louvered 

Sides, less than 20,000 Btu/h 

Percent of Consumers that Percent of Consumers that 

Exoerience Net Cost Exoerience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households:!: Households§ Households t Households Households Households t 

1 - 1% 2% 2% 49% 

2 1 1% 2% 1% 85% 

3 2 3% 5% 3% 93% 

4 34 24% 30% 27% 72% 

5 5 24% 31% 28% 76% 

+ Low-income households represent 39 .4 percent of all households for this product class. 

§ Senior-only households represent 25.0 percent of all households for this product class. 

t Results for residential consumers only. 

49% 49% 

83% 84% 

90% 92% 

65% 68% 

69% 72% 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20661 


khammond on DSKJM1Z7X2PROD with PROPOSALS4EP07AP22.063</GPH> EP07AP22.064</GPH> EP07AP22.065</GPH>

Table V.38 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC 12, With Reverse Cycle and without Louvered 

Sides, less than 14,000 Btu/h 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households+ Households§ Households t Households Households Households t 

1 - $9.52 $9.75 $8.10 0.8 0.8 

2 1 $46.78 $47.40 $39.96 1.1 1.0 

3 2 $94.76 $96.18 $81.15 1.1 1.0 

4 3,4 $142.91 $146.29 $122.08 2.4 2.3 

5 5 $186.10 $190.33 $156.32 2.5 2.5 

• The savmgs represent the average LCC for affected consumers. Negative values denoted m parentheses. 

+ Low-income households represent 41.1 percent of all households for this product class. 

§ Senior-only households represent 25.1 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

0.9 

1.2 

1.2 

2.6 

2.8 

Table V.39 Comparison of Percent of Impacted Consumers for Consumer Subgroups and 

All Households: Room Air Conditioners PC 12, With Reverse Cycle and without Louvered 

Sides, less than 14,000 Btu/h 

Percent of Consumers that Percent of Consumers that 

Experience Net Cost Experience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households+ Households§ Householdst Households Households Householdst 

1 - 1% 2% 1% 38% 

2 1 4% 8% 6% 82% 

3 2 4% 8% 6% 90% 

4 3,4 16% 20% 19% 79% 

5 5 19% 23% 22% 81% 

+ Low-mcome households represent 41.1 percent of all households for this product class. 

§ Senior-only households represent 25.1 percent of all households for this product class. 

t Results for residential consumers only. 

37% 

78% 

87% 

75% 

77% 

Table V.40 Comparison of LCC Savings and PBP for Consumer Subgroups and All 

Households: Room Air Conditioners PC 16, Casement-Slider 

Average Life-Cycle Cost Savings . Simple Payback Period 

2020$ vears 

Low-Income Senior-Only All Low-Income Senior-Only 

38% 

80% 

89% 

76% 

78% 

All EL TSL Households:!: Households§ Householdst Households Households Householdst 

1 - $7.03 $7.33 $6.38 0.8 0.8 

2 1 $55.02 $57.23 $49.31 0.5 0.5 

3 2 $ll7.04 $121.97 $104.50 0.7 0.7 

4 34 $94.78 $100.47 $80.20 3.8 3.7 

5 5 $167.19 $176.90 $142.02 3.3 3.2 

• The savings represent the average LCC for affected consumers. Negative values denoted in parentheses. 

+ Low-income households represent 44.9 percent of all households for this product class. 

§ Senior-only households represent 21.4 percent of all households for this product class. 

t The savings represent results of residential consumers only and exclude results from commercial consumers. 

0.9 

0.6 

0.8 

4.2 

3.6 
20662 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

c. Rebuttable Presumption Payback 

As discussed in section II.A of this 

document, EPCA establishes a 

rebuttable presumption that an energy 

conservation standard is economically 

justified if the increased purchase cost 

for a product that meets the standard is 

less than three times the value of the 

first-year energy savings resulting from 

the standard. (42 U.S.C. 

6295(o)(2)(B)(iii)) In calculating a 

rebuttable presumption payback period 

for each of the considered TSLs, DOE 

used discrete values, and, as required by 

EPCA, based the energy use calculation 

on the DOE test procedure for room 

ACs. In contrast, the PBPs presented in 

section V.B.1.a of this document were 

calculated using distributions that 

reflect the range of energy use in the 

field. 

Table V.42 presents the rebuttablepresumption payback periods for the 

considered TSLs for room ACs. While 

DOE examined the rebuttablepresumption criterion, it considered 

whether the standard levels considered 

for the NOPR are economically justified 

through a more detailed analysis of the 

economic impacts of those levels, 

pursuant to 42 U.S.C. 6295(o)(2)(B)(i), 

that considers the full range of impacts 

to the consumer, manufacturer, Nation, 

and environment. The results of that 

analysis serve as the basis for DOE to 

definitively evaluate the economic 

justification for a potential standard 

level, thereby supporting or rebutting 

the results of any preliminary 

determination of economic justification. 


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Table V.41 Comparison of Percent of Impacted Consumers for Consumer Subgroups and 

All Households: Room Air Conditioners PC 16, Casement-Slider 

Percent of Consumers that Percent of Consumers that 

Experience Net Cost Experience Net Benefit 

Low-Income Senior-Only All Low-Income Senior-Only All EL TSL Households+ Households§ Householdst Households Households Householdst 

1 - 1% 3% 2% 32% 

2 1 1% 3% 2% 84% 

3 2 3% 7% 4% 92% 

4 3,4 33% 36% 37% 62% 

5 5 28% 32% 32% 72% 

+ Low-mcome households represent 44.9 percent of all households for this product class. 

§ Senior-only households represent 21.4 percent of all households for this product class. 

t Results for residential consumers only. 

T a e bl V . 42 Rb e utta bl e-P resumption Pb ay ac kP. er10 d s 

31% 

83% 

88% 

60% 

68% 

Trial Standard Level 

Product Class 

1 2 3 4 

years 

PCl: Room Air Conditioners, without reverse cycle, with 1.0 1.0 1.0 7.0 louvered sides and less than 6,000 Btu/h 

PC2: Room Air Conditioners, without reverse cycle, with 0.9 1.0 1.0 5.4 louvered sides and 6 000 to 7,999 Btu/h 

PC3: Room Air Conditioners, without reverse cycle, with 0.6 0.8 3.5 3.5 louvered sides and 8 000 to 13 999 Btu/h 

PC4: Room Air Conditioners, without reverse cycle, with 0.6 0.5 2.5 2.5 louvered sides and 14 000 to 19 999 Btu/h 

PC5a: Room Air Conditioners, without reverse cycle, with 0.8 0.5 1.8 1.8 louvered sides and 20 000 to 27 999 Btu/h 

PC5b: Room Air Conditioners, without reverse cycle, with 0.2 0.2 1.5 1.5 louvered sides, and 28,000 Btu/h or more 

PC8a: Room Air Conditioners, without reverse cycle, without 0.6 0.7 3.8 3.8 louvered sides, and 8,000 to 10,999 Btu/h 

PC8b: Room Air Conditioners, without reverse cycle, without 0.5 0.6 2.8 2.8 louvered sides, and 11,000 to 13,999 Btu/h 

PC9: Room Air Conditioners, without reverse cycle, without 0.7 0.6 2.2 2.2 louvered sides, and 14,000 to 19,999 Btu/h 

PCl 1: Room Air Conditioners, with reverse cycle, with 0.7 0.8 3.8 3.8 louvered sides, and less than 20,000 Btu/h 

PC12: Room Air Conditioners, with reverse cycle, without 1.3 1.1 3.1 3.1 louvered sides, and less than 14,000 Btu/h 

PC16: Room Air Conditioners, Casement-Slider 0.7 0.8 4.8 4.8 

32% 

84% 

91% 

58% 

68% 

5 

5.3 

5.2 

3.1 

2.2 

1.6 

1.4 

3.0 

2.4 

1.9 

3.3 

2.9 

3.9 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20663 

2. Economic Impacts on Manufacturers 

DOE performed an MIA to estimate 

the impact of amended energy 

conservation standards on 

manufacturers of room ACs. The 

following section describes the expected 

impacts on manufacturers at each 

considered TSL. Chapter 12 of the 

NOPR TSD explains the analysis in 

further detail. 

a. Industry Cash Flow Analysis Results 

In this section, DOE provides GRIM 

results from the analysis, which 

examines changes in the industry that 

would result from a standard. The 

following tables summarize the 

estimated financial impacts of potential 

amended energy conservation standards 

on manufacturers of room ACs, as well 

as the conversion costs that DOE 

estimates manufacturers of room ACs 

would incur at each TSL. 

The impact of potential amended 

energy conservation standards were 

analyzed under two markup scenarios: 

(1) The preservation of gross margin 

percentage; and (2) the preservation of 

operating profit, as discussed in section 

IV.J.2.d of this document. The 

preservation of gross margin percentage 

scenario provides the upper bound 

while the preservation of operating 

profits scenario results in the lower (or 

more severe) bound to impacts of 

potential amended standards on 

industry. 

Each of the modeled scenarios results 

in a unique set of cash flows and 

corresponding INPV for each TSL. INPV 

is the sum of the discounted cash flows 

to the industry from the base year 

through the end of the analysis period 

(2021–2055). The ‘‘change in INPV’’ 

results refer to the difference in industry 

value between the no-new-standards 

case and standards case at each TSL. To 

provide perspective on the short-run 

cash flow impact, DOE includes a 

comparison of free cash flow between 

the no-new-standards case and the 

standards case at each TSL in the year 

before amended standards would take 

effect. This figure provides an 

understanding of the magnitude of the 

required conversion costs relative to the 

cash flow generated by the industry in 

the no-new-standards case. 

Conversion costs are one-time 

investments for manufacturers to bring 

their manufacturing facilities and 

product designs into compliance with 

potential amended standards. As 

described in section IV.J.2.c of this 

document, conversion cost investments 

occur between the year of publication of 

the final rule and the year by which 

manufacturers must comply with the 

new standard. The conversion costs can 

have a significant impact on the shortterm cash flow on the industry and 

generally result in lower free cash flow 

in the period between the publication of 

the final rule and the compliance date 

of potential amended standards. 

Conversion costs are independent of the 

manufacturer markup scenarios and are 

not presented as a range in this analysis. 

BILLING CODE 6450–01–C 

At TSL 1, the standard is set to 

existing ENERGY STAR levels (EL 2) for 

all product classes. DOE estimates the 

change in INPV to be minimal under 

both manufacturer markup scenarios. 

INPV is expected to range from ¥0.8 

percent to ¥0.5 percent. At this level, 

free cash flow is estimated to decrease 

by 8.0 percent compared to the no-newstandards case value of $72.6 million in 

the year 2025, the year before the 

standards year. DOE’s shipments 

analysis estimates approximately 75 

percent of current shipments meet this 

level. At TSL 1, DOE does not expect 

industry to adopt new or larger chassis 

sizes. Capital conversion costs may be 

necessary for incremental updates in 

tooling. Product conversion costs are 

driven by specification, sourcing, and 

testing of more efficient compressors. 

DOE estimates capital conversion costs 

of $10.6 million and product conversion 

costs of $3.0 million. Conversion costs 

total $13.6 million. 

At TSL 2, the standard reflects an 

efficiency level attainable by units with 

the most efficient R–32 single-speed 

compressor on the market, in 

combination with other design options, 


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Table V.43 Manufacturer Impact Analysis Results for the Room Air Conditioner 

Industry* 

Units No New TSLl TSL2 TSLJ TSL4 TSL5 STDs Case 

1,072 1,053 1,016 968 611 

INPV $MM 1,081 to to to to to 

1,075 1,078 1,165 1,247 992 

Change in (0.8) (2.5) (6.0) (10.4) (43.5) 

% - to to to to to INPV (0.5) (0.3) 7.8 15.4 (8.2) 

Free Cash $MM 72.6 66.8 60.0 64.1 62.8 (139.3) Flow (2025) 

Change in 

Free Cash % - (8.0) (17.3) (11.7) (13.5) (291.7) 

Flow (2025) 

Conversion $MM 13.6 29.1 22.8 26.7 475.9 Costs -

*Negative values denoted by parentheses. 
20664 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

70Capital conversion costs and product 

conversion costs may not sum to total due to 

independent rounding. 

for all product classes (EL 3). DOE 

estimates the change in INPV to range 

from ¥2.5 percent to ¥0.3 percent. At 

this level, free cash flow is estimated to 

decrease by 17.3 percent compared to 

the base-case value in the year before 

the standards year. DOE’s shipments 

analysis estimates approximately 30 

percent of current shipments meet this 

level. At TSL 2, DOE does not expect 

industry to adopt new or larger chassis 

designs. Capital conversion costs may 

be necessitated by the incorporation of 

additional design options, such as the 

inclusion of sub-cooling. Product 

conversion costs are driven by the need 

to redesign models to incorporate more 

efficient single-speed compressors as 

well as other design options. DOE 

estimates capital conversion costs of 

$24.3 million and product conversion 

costs of $4.8 million. Conversion costs 

total $29.1 million. 

At TSL 3, the standard varies based by 

product class. For product classes with 

cooling capacities less than 8,000 Btu/ 

h, the standard reflects an efficiency 

level attainable by units with the most 

efficient R–32 single-speed compressor 

on the market (EL 3) in combination 

with other design options. For product 

classes with cooling capacities greater 

than or equal to 8,000 Btu/h, the 

standard reflects an efficiency level 

consistent with the implementation 

commercially available variable-speed 

compressors (EL 4). DOE estimates the 

change in INPV to range from ¥6.0 

percent to 7.8 percent. At this level, free 

cash flow is estimated to decrease by 

11.7 percent compared to the base-case 

value in the year before the standards 

year. DOE’s shipments analysis 

estimates approximately 1 percent of 

current shipments meet this level. 

At this level, DOE does not expect 

industry to adopt new or larger chassis 

designs. For product classes with 

cooling capacities greater than or equal 

to the 8,000 Btu/h threshold, additional 

capital conversion costs may be 

necessary to adjust appearance tooling. 

DOE anticipates greater redesign efforts 

and product conversion costs as 

manufacturers move these products to 

variable-speed compressor designs. DOE 

estimates capital conversion costs of 

$6.2 million and product conversion 

costs of $16.6 million. Conversion costs 

total $22.8 million. 

In interviews and through review of 

market data, DOE found that all but one 

OEM currently produce R–32 room AC 

models. Additionally, based on 

interview feedback, all OEMs intend to 

entirely transition to R–32 room ACs by 

2023 regardless of DOE actions related 

to the energy conservation standards for 

room ACs. Thus, DOE did not consider 

the redesign costs related to R–32 as 

conversion costs that are the result of 

any amended energy conservation 

standards. However, DOE does take 

costs associated with the transition to 

low-GWP refrigerants into account in its 

modeling of the GRIM, as discussed in 

the cumulative regulatory burden 

portion of this notice in section V.B.2.d 

of this document. 

At TSL 4, the standard reflects the 

efficiency consistent with the 

implementation of commercially 

available variable-speed compressors for 

all product classes (EL 4). DOE 

estimates the change in INPV to range 

from ¥10.4 percent to 15.4 percent. At 

this level, free cash flow is estimated to 

decrease by 13.5 percent compared to 

the base-case value in the year before 

the standards year. DOE’s shipments 

analysis estimates that less than 1 

percent of current shipments meet this 

level. At this level, DOE does not expect 

industry to adopt new or larger chassis 

designs. Capital conversion costs may 

be necessary for adjustments in 

appearance tooling. Compared to lower 

ELs, DOE anticipates significantly 

greater redesign efforts and product 

conversion costs as manufacturers move 

all products to variable-speed 

compressor designs. Based on DOE’s 

CCD, DOE estimates that OEMs would 

need to redesign all product platforms 

to meet the efficiency levels required by 

TSL 4. DOE estimates capital conversion 

costs of $6.0 million and product 

conversion costs of $20.7 million. 

Conversion costs total $26.7 million. 

At TSL 5, the standard reflects maxtech efficiency (EL 5) for all product 

classes. DOE estimates the change in 

INPV to range from ¥43.5 percent to 

¥8.2 percent. At this level, free cash 

flow is estimated to decrease by 291.7 

percent compared to the base-case value 

in the year before the standards year. In 

DOE’s review of the market, no models 

currently meet this level. DOE estimates 

capital conversion costs of $455.0 

million and product conversion costs of 

$20.8 million. Conversion costs total 

$475.9 million.70

At this level, DOE expects significant 

changes to chassis size for both window 

and TTW units. As a result, capital 

conversion costs increase significantly 

as manufacturers adjust equipment and 

tooling to accommodate new 

dimensions. As with EL 4, DOE 

anticipates significant redesign efforts 

and product conversion costs as 

manufacturers move all products to 

variable-speed compressor designs. 

OEMs would need to redesign all 

product platforms to meet the efficiency 

levels required by TSL 5. 

At TSL 5, the large conversion costs 

result in a free cash flow dropping 

below zero in the years before the 

standard year. The negative free cash 

flow calculation indicates 

manufacturers may need to access cash 

reserves or outside capital to finance 

conversion efforts. 

b. Direct Impacts on Employment 

DOE’s research indicates no room ACs 

are currently made in domestic 

production facilities. DOE expects that 

amended standards would have no 

impact on domestic production 

employment, which would remain at 

zero. Manufacturers maintain offices in 

the United States to handle design, 

marketing, technical support, and other 

business needs. Large changes in total 

annual shipments may lead to 

companies reducing their nonproduction room AC staff. However, 

DOE’s shipments model does not 

forecast substantial changes in total 

annual shipments for the standards 

case. If total shipments remain relatively 

steady DOE would not expect any 

change to non-production employment 

as a result of amended standards. See 

section IV.G of this document for 

additional details on DOE’s shipments 

analysis. 

c. Impacts on Manufacturing Capacity 

In interviews, manufacturers noted 

that the majority of room ACs are 

manufactured overseas by high-volume 

manufacturers producing product for a 

range of international markets. 

Manufacturers had few concerns about 

production line constraints below the 

max-tech level. However, at the maxtech level, some manufacturers noted 

concerns about having sufficient 

technical resources to oversee the 

redesign and testing of all room AC 

products to incorporate variable-speed 

technology. 

Additionally, DOE notes that the most 

efficient variable-speed compressors 

that were implemented in the NOPR 

analysis are offered by only a single 

manufacturer. Based on public 

information, DOE was unable to 

determine the availability and pricing of 

these compressors. Given the lack of 

information regarding availability of 

these highest efficiency variable-speed 

compressors and the limited number of 

variable-speed compressors rated at or 

near the efficiency of compressors 

considered for the max-tech efficiency 

level, there may not be sufficient 

availability of the highest efficiency 

variable-speed compressors to meet the 


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Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20665 

entire industry’s production capacity 

needs at all cooling capacities of room 

ACs at EL 5. 

d. Impacts on Subgroups of 

Manufacturers 

Using average cost assumptions to 

develop industry cash-flow estimates 

may not capture the differential impacts 

among subgroups of manufacturers. 

Small manufacturers, niche players, or 

manufacturers exhibiting a cost 

structure that differs substantially from 

the industry average could be affected 

disproportionately. DOE investigated 

small businesses as a manufacturer 

subgroup that could be 

disproportionally impacted by energy 

conservation standards and could merit 

additional analysis. DOE did not 

identify any other adversely impacted 

manufacturer subgroups for this 

proposed rulemaking based on the 

results of the industry characterization. 

DOE analyzes the impacts on small 

businesses in a separate analysis in 

section VII.B of this document as part of 

the Regulatory Flexibility Analysis. For 

a discussion of the impacts on the small 

business manufacturer subgroup, see the 

Regulatory Flexibility Analysis in 

section VI.B of this document and 

chapter 12 of the NOPR TSD. 

e. Cumulative Regulatory Burden 

One aspect of assessing manufacturer 

burden involves looking at the 

cumulative impact of multiple DOE 

standards and the product-specific 

regulatory actions of other Federal 

agencies that affect the manufacturers of 

a covered product or equipment. While 

any one regulation may not impose a 

significant burden on manufacturers, 

the combined effects of several existing 

or impending regulations may have 

serious consequences for some 

manufacturers, groups of manufacturers, 

or an entire industry. Assessing the 

impact of a single regulation may 

overlook this cumulative regulatory 

burden. In addition to energy 

conservation standards, other 

regulations can significantly affect 

manufacturers’ financial operations. 

Multiple regulations affecting the same 

manufacturer can strain profits and lead 

companies to abandon product lines or 

markets with lower expected future 

returns than competing products. For 

these reasons, DOE conducts an analysis 

of cumulative regulatory burden as part 

of its rulemakings pertaining to 

appliance efficiency. DOE requests 

information regarding the impact of 

cumulative regulatory burden on 

manufacturers of room ACs associated 

with multiple DOE standards or 

product-specific regulatory actions of 

other Federal agencies. 

DOE evaluates product-specific 

regulations that will take effect 

approximately 3 years before or after the 

2026 compliance date of any amended 

energy conservation standards for room 

ACs. This information is presented in 

Table V.44. 

BILLING CODE 6450–01–P 


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20666 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

BILLING CODE 6450–01–C 

In addition to the Federal, productspecific cumulative regulatory burden 

described above, DOE considered the 

impacts of other factors in its review of 

burdens that could lead to industry 

constraints. 

CARB’s proposed 750 GWP limit for 

new room air conditioning equipment: 


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Table V.44 Compliance Dates and Expected Conversion Expenses of Federal 

Energy Conservation Standards Affecting Room Air Conditioner Manufacturers 

Number of Industry Industry 

Federal Energy Number of Manufacturers Approx. Conversion Conversion 

Conservation Manufacturers* Affected from Standards Costs Costs/ 

Standard Today's Rule** Year (Millions $) Product 

Revenue*** 

Commercial Warm $7.5 1.7% Air Furnaces to 

81 FR2420 16 1 2023 $22.2 to 

(January 15, 2016) (2014$) 5.1%t 

Small, Large, and 

Very Large 

Commercial 

Package Air 29 4 2018 and $520.8 4.9% Conditioning and 2023t (2014$) 

Heating Equipment 

81 FR2420 

(Januarv 15, 2016) 

Residential Central 

Air Conditioners $342.6 and Heat Pumps 51 8 2023 (2015$) 0.5% 

82FR 1786 

(Januarv 6, 2017) 

Portable Air 

Conditioners 11 5 2025 $320.9 6.7% 85 FR 1378 (2015$) 

(Januarv 10, 2020) 

Commercial 

Packaged Boilers 43 1 2023 $21.2 2.3% 85 FR 1592 (2015$) 

(Januarv 10, 2020) 

* This column presents the total number of manufacturers identified in the energy conservation standard 

rule contributing to cumulative regulatory burden. 

** This column presents the number of manufacturers producing room AC equipment that are also listed as 

manufacturers in the listed energy conservation standard contributing to cumulative regulatory burden. 

*** This column presents industry conversion costs as a percentage of product revenue during the 

conversion period. Industry conversion costs are the upfront investments manufacturers must make to sell 

compliant products/equipment. The revenue used for this calculation is the revenue from just the covered 

product/equipment associated with each row. The conversion period is the time frame over which 

conversion costs are made and lasts from the publication year of the final rule to the compliance year of the 

fmal rule. The conversion period typically ranges from 3 to 5 years, depending on the energy conservation 

standard. 

tLow and high conversion cost scenarios were analyzed as part of this Direct Final Rule. The range of 

estimated conversion expenses presented here reflects those two scenarios. 

tToe Direct Final Rule for Small, Large, and Very Large Commercial Package Air Conditioning and 

Heating Equipment adopts an amended standard in 2018 and a higher amended standard in 2023. The 

conversion costs are spread over an 8-year conversion period ending in 2022, with over 80 percent of the 

conversion costs occurring between 2019 and 2022. 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20667 

71ww3.arb.ca.gov/board/res/2020/res20-37.pdf. 

72UL 60335–2–40 includes safety requirements 

for the use of flammable refrigerants in the covered 

product. Standard for Household and Similar 

Electrical Appliances—Safety—Part 2–40: 

Requirements for Electrical Heat Pumps, AirConditioners and Dehumidifiers. UL 60335–2–40, 

Edition 3:2019. Northbrook, IL: Underwriters’ 

Laboratories. 

73U.S. Office of Management and Budget. 

Circular A–4: Regulatory Analysis. September 17, 

2003. https://obamawhitehouse.archives.gov/omb/ 

circulars_a004_a-4/. 

DOE evaluated potential impacts of 

CARB’s proposed 750 GWP limit for 

new room ACs that would take effect in 

2023.71 This proposed State regulation 

is specific to the products regulated by 

this NOPR. Based on manufacturer 

interviews, DOE understands that all 

OEMs and major manufacturers intend 

to transition their complete portfolio of 

room AC offerings for the U.S. market to 

R–32 refrigerant to meet CARB’s 

proposed requirement by 2023. DOE’s 

research and testing indicates that the 

transition to R–32 would likely not have 

a negative impact on product efficiency. 

DOE is aware of one OEM still in the 

process of redesigning room ACs to 

make use of R–32, including compliance 

with the relevant safety standard UL 

60335–2–40.72 The on-going effort to 

transition its room AC product lines to 

make use of R–32 requires a level of 

investment beyond the typical annual 

R&D expenditures. To account for these 

investments, both the product 

development to make use of R–32 and 

product updates to meet UL 60335–2– 

40, DOE has attempted to incorporate 

the on-going cost into its GRIM. DOE 

did not receive any quantitative 

estimates of the cost of the transition to 

R–32. For modeling purposes, DOE 

assumed that the transition to R–32 

would require a doubling of R&D 

expenditures (2.2 percent of revenue) 

annually in the period between the base 

year and the compliance of the analysis 

for that business. This value is based on 

qualitative statements made by the 

OEM. 

DOE requests comment on the 

magnitude of costs associated with 

transitioning room AC models to lowGWP refrigerants, such as R–32, along 

with the associated UL costs that would 

be incurred between the publication of 

this NOPR and the proposed 

compliance date of amended standards. 

Quantification and categorization of 

these costs, such as engineering efforts, 

testing lab time, UL certification costs, 

and capital investments, would enable 

DOE to refine its analysis. 

Section 301 tariffs on certain Chinese 

goods: 

Regarding U.S. tariffs on Chinese 

imports, tariff levels have escalated in 

recent years. At the time of the April 

2011 Direct Final Rule, most room ACs 

imported into the United States were 

manufactured in China. Since that time, 

as discussed above, the Section 301 

tariffs on room ACs increased to 10 

percent in September 2018 and to 25 

percent in May 2019. As result of tariffs, 

as noted by AHAM, ‘‘some 

manufacturers have had to shift 

production to other countries to avoid 

the tariffs.’’ (AHAM, No. 19 at pp. 18– 

19) DOE understands that these 

products are now made in countries in 

East Asia and Southeast Asia not subject 

to Section 301 tariffs. However, due to 

uncertainty about the exact countries of 

origin, DOE’s engineering analysis 

continues to rely on data based on a 

Chinese point of origin. To revise MPCs 

to account for points of origin outside of 

China, DOE would require information 

on the countries of manufacture and 5- 

year averages for key inputs used to 

develop manufacturer production costs, 

such as fully-burdened production labor 

wage rates and local raw material prices. 

To better model the impact of Section 

301 tariffs on room ACs that continue to 

be manufactured in China, DOE requires 

additional information about the portion 

of products still manufactured there and 

how the tariffs are absorbed by the 

entities along the room AC value chain, 

such as the foreign OEMs, U.S. 

importers, retailers, and consumers. 

Increases in retail price may affect 

consumer purchasing decisions, as 

captured by the price sensitivity 

modeled in the shipments analysis. 

DOE requests comment on the 

percentage of room ACs manufactured 

outside of China and the countries of 

origin, as well as information on the 

country-specific fully-burdened labor 

rates and key raw material prices. 

DOE requests comment on the impact 

of tariffs on pricing at each step in the 

distribution chain, as well as the 

percentage change in retail price paid by 

the consumer as result of Section 301 

tariffs. 

3. National Impact Analysis 

This section presents DOE’s estimates 

of the national energy savings and the 

NPV of consumer benefits that would 

result from each of the TSLs considered 

as potential amended standards. 

a. Significance of Energy Savings 

To estimate the energy savings 

attributable to potential amended 

standards for room ACs, DOE compared 

their energy consumption under the nonew-standards case to their anticipated 

energy consumption under each TSL. 

The savings are measured over the 

entire lifetime of products purchased in 

the 30-year period that begins in the 

year of anticipated compliance with 

amended standards (2026–2055). Table 

V.45 presents DOE’s projections of the 

national energy savings for each TSL 

considered for room ACs. The savings 

were calculated using the approach 

described in section IV.H.2 of this 

document. 

OMB Circular A–4 73 requires 

agencies to present analytical results, 

including separate schedules of the 

monetized benefits and costs that show 

the type and timing of benefits and 

costs. Circular A–4 also directs agencies 

to consider the variability of key 

elements underlying the estimates of 

benefits and costs. For this proposed 

rulemaking, DOE undertook a 

sensitivity analysis using 9 years, rather 

than 30 years, of product shipments. 


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Table V.45 Cumulative National Energy Savings for Room Air Conditioners; 30 

Years of Shipments (2026-2055) 

Trial Standard Level 

1 2 3 4 5 

quads 

Primary enernv savings 0.28 0.91 1.35 1.79 3.31 

FFC energv savings 0.29 0.94 1.40 1.86 3.44 
20668 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

74Section 325(m) of EPCA requires DOE to review 

its standards at least once every 6 years, 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. While 

adding a 6-year review to the 3-year compliance 

period adds up 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 

yield to the 6-year backstop. 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 products, the compliance 

period is 5 years rather than 3 years. 

75U.S. Office of Management and Budget. 

Circular A–4: Regulatory Analysis. September 17, 

2003. https://obamawhitehouse.archives.gov/omb/ 

circulars_a004_a-4/. 

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.74 The review timeframe 

established in EPCA is generally not 

synchronized with the product lifetime, 

product manufacturing cycles, or other 

factors specific to room ACs. Thus, such 

results are presented for informational 

purposes only and are not indicative of 

any change in DOE’s analytical 

methodology. The NES sensitivity 

analysis results based on a 9-year 

analytical period are presented in Table 

V.46. The impacts are counted over the 

lifetime of room ACs purchased in 

2026–2034. 

b. Net Present Value of Consumer Costs 

and Benefits 

DOE estimated the cumulative NPV of 

the total costs and savings for 

consumers that would result from the 

TSLs considered for room ACs. In 

accordance with OMB’s guidelines on 

regulatory analysis,75 DOE calculated 

NPV using both a 7-percent and a 3- 

percent real discount rate. Table V.47 

shows the consumer NPV results with 

impacts counted over the lifetime of 

products purchased in 2026–2055. 

The NPV results based on the 

aforementioned 9-year analytical period 

are presented in Table V.48. The 

impacts are counted over the lifetime of 

products purchased in 2026–2034. As 

mentioned previously, such results are 

presented for informational purposes 

only and are not indicative of any 

change in DOE’s analytical methodology 

or decision criteria. 

The previous results reflect the use of 

a default trend to estimate the change in 

price for room ACs over the analysis 

period (see section IV.F.6 of this 

document). DOE also conducted a 

sensitivity analysis that considered one 

scenario with a low price decline and 

one scenario with a higher rate of price 

decline than the reference case. The 

results of these alternative cases are 

presented in appendix 10C of the NOPR 

TSD. In the high-price-decline case, the 

NPV of consumer benefits is higher than 

in the default case. In the fixed price 

case, the NPV of consumer benefits is 

lower than in the default case. 

c. Indirect Impacts on Employment 

It is estimated that amended energy 

conservation standards for room ACs 

would reduce energy expenditures for 

consumers of those products, with the 

resulting net savings being redirected to 

other forms of economic activity. These 


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Table V.46 Cumulative National Energy Savings for Room Air Conditioners; 

9 Years of Shipments (2026-2034) 

Trial Standard Level 

1 2 3 4 5 

quads 

Primary energv savings 0.11 0.37 0.51 0.65 1.08 

FFC energy savings 0.12 0.38 0.53 0.67 1.12 

Table V.47 Cumulative Net Present Value of Consumer Benefits for Room Air 

Conditioners; 30 Years of Shipments (2026-2055) 

Trial Standard Level 

Discount Rate 1 I 2 I 3 I 4 I 5 

billion 2020$ 

3 percent 2.71 I 8.55 I 10.56 I 12.21 I 22.59 

7 percent 1.35 I 4.25 I 4.83 I 5.21 I 9.64 

Table V.48 Cumulative Net Present Value of Consumer Benefits for Room Air 

Conditioners; 9 Years of Shipments (2026-2034) 

Trial Standard Level 

Discount Rate 1 I 2 I 3 I 4 I 5 

billion 2020$ 

3 percent 1.40 I 4.41 I 4.78 I 4.98 I 8.99 

7 percent 0.87 I 2.70 I 2.76 I 2.69 I 4.95 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20669 

expected shifts in spending and 

economic activity could affect the 

demand for labor. As described in 

section IV.N of this document, DOE 

used an input/output model of the U.S. 

economy to estimate indirect 

employment impacts of the TSLs that 

DOE considered. There are uncertainties 

involved in projecting employment 

impacts, especially changes in the later 

years of the analysis. Therefore, DOE 

generated results for near-term 

timeframes (2026–2035), where these 

uncertainties are reduced. 

The results suggest that the proposed 

standards would be likely to have a 

negligible impact on the net demand for 

labor in the economy. The net change in 

jobs is so small that it would be 

imperceptible in national labor statistics 

and might be offset by other, 

unanticipated effects on employment. 

Chapter 16 of the NOPR TSD presents 

detailed results regarding anticipated 

indirect employment impacts. 

4. Impact on Utility or Performance of 

Products 

As discussed in section III.E.1.d of 

this document, DOE has tentatively 

concluded that the standards proposed 

in this NOPR would not lessen the 

utility or performance of the room ACs 

under consideration in this proposed 

rulemaking. 

5. Impact of Any Lessening of 

Competition 

DOE considered any lessening of 

competition that would be likely to 

result from new or amended standards. 

As discussed in section III.E.1.e of this 

document, the Attorney General 

determines the impact, if any, of any 

lessening of competition likely to result 

from a proposed standard, and transmits 

such determination in writing to the 

Secretary, together with an analysis of 

the nature and extent of such impact. To 

assist the Attorney General in making 

this determination, DOE has provided 

DOJ with copies of this NOPR and the 

accompanying TSD for review. DOE will 

consider DOJ’s comments on the 

proposed rule in determining whether 

to proceed to a final rule. DOE will 

publish and respond to DOJ’s comments 

in that document. DOE invites comment 

from the public regarding the 

competitive impacts that are likely to 

result from this proposed rule. In 

addition, stakeholders may also provide 

comments separately to DOJ regarding 

these potential impacts. See the 

ADDRESSES section for information to 

send comments to DOJ. 

6. Need of the Nation To Conserve 

Energy 

Enhanced energy efficiency, where 

economically justified, improves the 

Nation’s energy security, strengthens the 

economy, and reduces the 

environmental impacts (costs) of energy 

production. Reduced electricity demand 

due to energy conservation standards is 

also likely to reduce the cost of 

maintaining the reliability of the 

electricity system, particularly during 

peak-load periods. Chapter 15 of the 

NOPR TSD presents the estimated 

impacts on electricity generating 

capacity, relative to the no-newstandards case, for the TSLs that DOE 

considered in this proposed rulemaking. 

Energy conservation resulting from 

potential energy conservation standards 

for room ACs is expected to yield 

environmental benefits in the form of 

reduced emissions of certain air 

pollutants and greenhouse gases. Table 

V.49 provides DOE’s estimate of 

cumulative emissions reductions 

expected to result from the TSLs 

considered in this rulemaking. The 

emissions were calculated using the 

multipliers discussed in section IV.K of 

this document. DOE reports annual 

emissions reductions for each TSL in 

chapter 13 of the NOPR TSD. 

BILLING CODE 6450–01–P 


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Table V.49 Cumulative Emissions Reduction for Room Air Conditioners Shipped in 

2026-2055 

Trial Standard Level 

1 2 3 4 5 

Power Sector Emissions 

CO2 (million metric tons) 9.74 31.08 46.13 61.03 112.32 

SO2 (thousand tons) 3.98 12.68 18.82 24.90 45.83 

NOx (thousand tons) 3.98 12.71 18.80 24.83 45.55 

Hg (tons) 0.02 0.08 0.11 0.15 0.27 

CH4 (thousand tons) 0.71 2.28 3.37 4.45 8.16 

N2O (thousand tons) 0.10 0.32 0.47 0.62 1.13 

Upstream Emissions 

CO2 (million metric tons) 0.72 2.29 3.42 4.53 8.36 

SO2 (thousand tons) 0.05 0.17 0.26 0.34 0.63 

NOx (thousand tons) 10.66 33.97 50.61 67.08 123.95 

Hg (tons) 0.00 0.00 0.00 0.00 0.00 

CH4 (thousand tons) 70.73 225.37 335.89 445.30 823.18 

N2O (thousand tons) 0.00 0.01 0.02 0.02 0.04 

Total FFC Emissions 

CO2 (million metric tons) 10.46 33.37 49.55 65.55 120.68 

SO2 (thousand tons) 4.03 12.86 19.08 25.24 46.45 

NOx (thousand tons) 14.64 46.68 69.41 91.92 169.50 

Hg (tons) 0.02 0.08 0.11 0.15 0.28 

CH4 (thousand tons) 71.44 227.64 339.26 449.75 831.34 

N2O (thousand tons) 0.10 0.33 0.49 0.64 1.18 
20670 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

As part of the analysis for this 

rulemaking, DOE estimated monetary 

benefits likely to result from the 

reduced emissions of CO2 that DOE 

estimated for each of the considered 

TSLs for room ACs. Section IV.L of this 

document discusses the SC–CO2 values 

that DOE used. Table V.50 presents the 

value of CO2 emissions reduction at 

each TSL. 

As discussed in section IV.L.1.b of 

this document, DOE estimated monetary 

benefits likely to result from the 

reduced emissions of CH4 and N2O that 

DOE estimated for each of the 

considered TSLs for room ACs. Table 

V.51 presents the value of the CH4

emissions reduction at each TSL, and 

Table V.52 presents the value of the N2O 

emissions reduction at each TSL. 

DOE is well aware that scientific and 

economic knowledge about the 

contribution of CO2 and other GHG 

emissions to changes in the future 

global climate and the potential 

resulting damages to the world economy 

continues to evolve rapidly. Thus, any 

value placed on reduced GHG emissions 

in this proposed rulemaking is subject 

to change. That said, because of omitted 

damages, DOE agrees with the IWG that 

these estimates most likely 

underestimate the climate benefits of 

greenhouse gas reductions. DOE, 

together with other Federal agencies, 


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Table V.50 Present Social Value of CO2 Emissions Reduction for Room Air 

C on d'f 1 10ners Sh' 1ppe d. m 2026 2055 -

SC-CO2 Case 

Discount Rate and Statistics 

TSL 5% 3% 2.5% 3% 

Average Average Average 95th percentile 

million 2020$ 

1 99.0 418.0 650.4 1272.0 

2 317.7 1,339.3 2,082.1 4,076.6 

3 464.4 1,969.6 3,067.2 5,993.9 

4 609.2 2,592.3 4,040.8 7,888.1 

5 1,101.6 4,721.6 7,374.2 14,364.6 

Table V.51 Present Social Value of Methane Emissions Reduction for Room Air 

C on d'f 1 10ners Sh' 1ppe d. m 2026 2055 -

SC-CH4 Case 

Discount Rate and Statistics 

TSL 5% 3% 2.5% 3% 

Average Average Average 95th percentile 

million 2020$ 

1 30.5 88.3 122.5 234.2 

2 98.0 282.2 391.2 749.3 

3 143.9 418.0 580.6 1,109.1 

4 189.3 552.3 767.8 1,464.9 

5 344.3 1,014.1 1,412.8 2,688.2 

Table V.52 Present Social Value of Nitrous Oxide Emissions Reduction for Room 

A' Ir C on d' It10ners . Sh' 1ppe d. m 2026 2055 -

SC-N20 Case 

Discount Rate and Statistics 

TSL 5% 3% 2.5% 3% 

Avera2:e Avera2:e Avera2:e 95th oercentile 

million 2020$ 

1 0.37 1.44 2.21 3.82 

2 1.18 4.60 7.09 12.22 

3 1.72 6.75 10.42 17.95 

4 2.25 8.88 13.72 23.61 

5 4.06 16.14 24.99 42.94 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20671 

will continue to review methodologies 

for estimating the monetary value of 

reductions in CO2 and other GHG 

emissions. This ongoing review will 

consider the comments on this subject 

that are part of the public record for this 

and other rulemakings, as well as other 

methodological assumptions and issues. 

DOE notes that the proposed standards 

would be economically justified even 

without inclusion of monetized benefits 

of reduced GHG emissions. 

DOE also estimated the monetary 

value of the economic benefits 

associated with SO2 emissions 

reductions anticipated to result from the 

considered TSLs for room ACs. The 

dollar-per-ton values that DOE used are 

discussed in section IV.L.2 of this 

document. Table V.53 presents the 

present value for SO2 for each TSL 

calculated using 7-percent and 3- 

percent discount rates. 

DOE also estimated the monetary 

value of the economic benefits 

associated with NOX emissions 

reductions anticipated to result from the 

considered TSLs for room ACs. The 

dollar-per-ton values that DOE used are 

discussed in section IV.L.2 of this 

document. Table V.54 presents the 

present value for NOX emissions 

reduction for each TSL calculated using 

7-percent and 3-percent discount rates. 

The benefits of reduced CO2, CH4, and 

N2O emissions are collectively referred 

to as climate benefits. The benefits of 

reduced SO2 and NOX emissions are 

collectively referred to as health 

benefits. For the time series of estimated 

monetary values of reduced emissions, 

see chapter 14 of the NOPR TSD. 

7. Other Factors 

The Secretary of Energy, in 

determining whether a standard is 

economically justified, may consider 

any other factors that the Secretary 

deems to be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII)) No other factors 

were considered in this analysis. 

8. Summary of National Economic 

Impacts 

Table V.55 presents the NPV values 

that result from adding the monetized 

estimates of the potential economic, 

climate, and health benefits resulting 

from reduced GHG, SO2, and NOX

emissions to the NPV of consumer 

benefits calculated for each TSL 

considered in this rulemaking. The 

consumer benefits are domestic U.S. 

monetary savings that occur as a result 

of purchasing the covered room ACs, 

and are measured for the lifetime of 

products shipped in 2026–2055. The 

climate benefits associated with reduced 

GHG emissions resulting from the 

adopted standards are global benefits, 

and are also calculated based on the 

lifetime of room ACs shipped in 2026– 

2055. The climate benefits associated 

with four SC–GHG estimates are shown. 

DOE does not have a single central SC– 

GHG point estimate and it emphasizes 

the importance and value of considering 

the benefits calculated using all four 

SC–GHG estimates. 

BILLING CODE 6450–01–C 


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Table V.53 Present Value of S02 Emissions Reduction for Room Air Conditioners 

Sh. 1ppe d ID . 2026--2055 

SC-S02 Case 

TSL 7% Discount Rate I 3% Discount Rate 

million 2020$ 

1 106.3 236.2 

2 343.0 758.4 

3 492.2 1,109.7 

4 639.2 1,456.8 

5 1,130.5 2,639.1 

Table V.54 Present Value of NOx Emissions Reduction for Room Air Conditioners 

Sh. 1ppe d ID . 2026--2055 

SC-NOx Case 

TSL 7% Discount Rate I 3 % Discount Rate 

million 2020$ 

1 285.7 643.9 

2 922.2 2,067.7 

3 1,326.6 3,032.6 

4 1,724.1 3,985.0 

5 3,056.7 7,236.1 
20672 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

76P.C. Reiss and M.W. White. Household 

Electricity Demand, Revisited. Review of Economic 

Studies. 2005. 72(3): pp. 853–883. doi: 10.1111/ 

0034–6527.00354. 

77Sanstad, A.H. Notes on the Economics of 

Household Energy Consumption and Technology 

Choice. 2010. Lawrence Berkeley National 

Laboratory. www1.eere.energy.gov/buildings/ 

appliance_standards/pdfs/consumer_ee_theory.pdf 

(last accessed June 16, 2021). 

The national operating cost savings 

are domestic U.S. monetary savings that 

occur as a result of purchasing the 

covered room ACs, and are measured for 

the lifetime of products shipped in 

2026–2055. The benefits associated with 

reduced GHG emissions achieved as a 

result of the adopted standards are also 

calculated based on the lifetime of room 

ACs shipped in 2026–2055. 

C. Conclusion 

When considering new or amended 

energy conservation standards, the 

standards that DOE adopts for any type 

(or class) of covered product must 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)) In determining whether a 

standard is economically justified, the 

Secretary must determine whether the 

benefits of the standard exceed its 

burdens by, to the greatest extent 

practicable, considering the seven 

statutory factors discussed previously. 

(42 U.S.C. 6295(o)(2)(B)(i)) The new or 

amended standard must also result in 

significant conservation of energy. (42 

U.S.C. 6295(o)(3)(B)) 

For this NOPR, DOE considered the 

impacts of amended standards for room 

ACs at each TSL, beginning with the 

maximum technologically feasible level, 

to determine whether that level was 

economically justified. Where the maxtech 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 refers 

to this process as the ‘‘walk-down’’ 

analysis. 

To aid the reader as DOE discusses 

the benefits and/or burdens of each TSL, 

tables in this section 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. These include 

the impacts on identifiable subgroups of 

consumers who may be 

disproportionately affected by a national 

standard and impacts on employment. 

DOE also notes that the economics 

literature provides a wide-ranging 

discussion of how consumers trade off 

upfront costs and energy savings in the 

absence of government intervention. 

Much of this literature attempts to 

explain why consumers appear to 

undervalue energy efficiency 

improvements. There is evidence that 

consumers undervalue future energy 

savings as a result of (1) a lack of 

information, (2) a lack of sufficient 

salience of the long-term or aggregate 

benefits, (3) a lack of sufficient savings 

to warrant delaying or altering 

purchases, (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 (for example, 

between renters and owners, or builders 

and purchasers). Having less than 

perfect foresight and a high degree of 

uncertainty about the future, consumers 

may trade off these types of investments 

at a higher than expected rate between 

current consumption and uncertain 

future energy cost savings. 

In DOE’s current regulatory analysis, 

potential changes in the benefits and 

costs of a regulation due to changes in 

consumer purchase decisions are 

included in two ways. First, if 

consumers forego the purchase of a 

product in the standards case, this 

decreases sales for product 

manufacturers, and the impact on 

manufacturers attributed to lost revenue 

is included in the MIA. Second, DOE 

accounts for energy savings attributable 

only to products actually used by 

consumers in the standards case; if a 

standard decreases the number of 

products purchased by consumers, this 

decreases the potential energy savings 

from an energy conservation standard. 

DOE provides estimates of shipments 

and changes in the volume of product 

purchases in chapter 9 of the NOPR 

TSD. However, DOE’s current analysis 

does not explicitly control for 

heterogeneity in consumer preferences, 

preferences across subcategories of 

products or specific features, or 

consumer price sensitivity variation 

according to household income.76

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 energy 

conservation standard, DOE is 

committed to developing a framework 

that can support empirical quantitative 

tools for improved assessment of the 

consumer welfare impacts of appliance 

standards. DOE has posted a paper that 

discusses the issue of consumer welfare 

impacts of appliance energy 

conservation standards, and potential 

enhancements to the methodology by 

which these impacts are defined and 

estimated in the regulatory process.77

DOE welcomes comments on how to 

more fully assess the potential impact of 

energy conservation standards on 

consumer choice and how to quantify 

this impact in its regulatory analysis in 

future rulemakings. 


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Table V.55 NPV of Consumer Benefits Combined with Monetized Climate and 

Health Benefits from Emissions Reductions (billions 2020$) 

Catee:ory TSLl TSL2 TSLJ TSL4 TSL5 

3% discount rate for NPV of Consumer and Health Ben~f,ts (bi/,lion 2020$ 

5% d.r., Average SC-GHG case 3.7 11.8 15.3 18.5 33.9 

3% d.r., Average SC-GHG case 4.1 13.0 17.1 20.8 38.2 

2.5% d.r., Average SC-GHG case 4.4 13.9 18.4 22.5 41.3 

3% d.r., 95th percentile SC-GHG case 5.1 16.2 21.8 27.0 49.6 

7% discount rate for NPV of Consumer and Health Benefits (bi/,lion 2020$ 

5% d.r .. Average SC-GHG case 1.9 5.9 7.3 8.4 15.3 

3% d.r., Average SC-GHG case 2.3 7.1 9.0 10.7 19.6 

2.5% d.r. Average SC-GHG case 2.5 8.0 10.3 12.4 22.6 

3% d.r. 95th percentile SC-GHG case 3.3 10.4 13.8 16.9 30.9 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20673 

1. Benefits and Burdens of TSLs 

Considered for Room AC Standards 

Table V.56 and Table V.57 summarize 

the quantitative impacts estimated for 

each TSL for room ACs. The national 

impacts are measured over the lifetime 

of room ACs purchased in the 30-year 

period that begins in the anticipated 

year of compliance with amended 

standards (2026–2055). The energy 

savings, emissions reductions, and 

value of emissions reductions refer to 

full-fuel-cycle results. DOE exercises its 

own judgment in presenting monetized 

climate benefits as recommended in 

applicable Executive Orders and DOE 

would reach the same conclusion 

presented in this notice in the absence 

of the social cost of greenhouse gases, 

including the February 2021 Interim 

Estimates presented by the Interagency 

Working Group on the Social Cost of 

Greenhouse Gases. The efficiency levels 

contained in each TSL are described in 

section V.A of this document. 

BILLING CODE 6450–01–P 


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20674 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


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Table V.56 Summary of Analytical Results for Room Air Conditioner TSLs: 

National Im pacts 

Cate~ory TSL 1 TSL2 TSL3 TSL4 TSL5 

Cumulative FFC National Enerl!V Savim1:s ( auads) 

Quads 0.29 0.94 1.40 1.86 3.44 

Cumulative FFC Emissions Reduction (Total FFC Emissions) 

CO2 (million metric tons) 10.5 33.4 49.5 65.6 120.7 

S02 (thousand tons) 4.0 12.9 19.1 25.2 46.5 

NOx (thousand tons) 14.6 46.7 69.4 91.9 169.5 

Hg (tons) 0.0 0.1 0.1 0.1 OJ 

CH4 (thousand tons) 71.4 227.6 339.3 449.7 831.3 

N2O (thousand tons) 0.1 0.3 0.5 0.6 1.2 

Present Value of Monetized Benefits and Costs (3% discount rate billion 2020$) 

Consumer Operating Cost Savings 2.93 9.47 13.87 18.25 33.49 

Climate Benefits* 0.51 1.63 2.39 3.15 5.75 

Health Benefits** 0.88 2.83 4.14 5.44 9.88 

Total Benefitsj 4.32 13.92 20.41 26.85 49.12 

Consumer Incremental Product Costs:t 0.22 0.92 3.31 6.04 10.90 

Consumer Net Benefits 2.71 8.55 10.56 12.21 22.59 

Total Net Benefits 4.10 13.00 17.10 20.81 38.22 

Present Value of Moneti:,:ed Benefits and Costs (7% discount rate billion.\ 2020$ 

Consumer Operating Cost Savings 1.48 4.79 6.89 8.96 16.06 

Climate Benefits* 0.51 1.63 2.39 3.15 5.75 

Health Benefits** 0.39 1.27 1.82 2J6 4.19 

Total Benefitsj 2.38 7.68 11.10 14.48 25.99 

Consumer Incremental Product Costs! 0.12 0.54 2.05 3.75 6.42 

Consumer Net Benefits 1.35 4.25 4.83 5.21 9.64 

Total Net Benefits 2.25 7.14 9.05 10.73 19.58 

Note: This table presents the costs and benefits associated with room ACs shipped in 2026-2055. These results include 

benefits to consumers which accrue after 2055 from the products shipped in 2026-2055. 

* Climate benefits are calculated using four ditlerent estimates of the social cost of carbon (SC-CO2), methane (SCCH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th 

percentile at 3 percent discount rate), as shown in Table V.50 through Table V.52. Together these represent the global 

social cost of greenhouse gases (SC-GHG ). For presentational purposes of this table, the climate benefits associated 

with the average SC-GHG at a 3 percent discount rate are shown, but the Depmtment does not have a single central SCGHG point estimate. See section IV.L of this document for more details. 

** Health benefits arc calculated using benefit-per-ton values for NOx and SO2. DOE is currently only monetizing (for 

802 and NOx) PM2 s pnxursor health benefits and (for NOx) ozone precursor health benefits, but will continue lo 

assess the ability to monetize other effects such as health benefits from reductions in direct PMz.s emissions. The health 

benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details. 

i Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits 

for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but 

tl1e Department does not have a single central SC-GHG point estimate. DOE emphasizes tl1e importm1ce m1d value of 

considering the benefits calculated using all four SC-GHG estimates. See Table V.55 for net benefits using all four 

SC-GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal 

govermnent's emergency motion for stay pending appeal of the Febmary 11, 2022, preliminary injunction issued in 

Louisiana v. Eiden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, fue preliminary 

injunction is no longer in effect, pending resolution of the federal government's appeal oftliat injunction or a fmther 

court order. Among other things, the preliminary injunction enjoined the defendants in that case from 

"adopting, employing, treating as binding, or relying upon" fue interin1 estin1ates of the social cost of greenhouse 

gases-which were issued by fue Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 

2021-to monetize fue benefits of reducing greenhouse gas emissions. In the absence of fmther intervening court 

orders, DOE will revert to its approach prior to the injunction and present monetized benefits where appropriate and 

permissible under law. 

:j: Costs include incremental equipment costs as well as installation costs. 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20675 


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Table V.57 Summary of Analytical Results for Room Air Conditioner TSLs: 

M anu f acturer an dC onsumer I mpacts 

Category TSLl TSL2 TSL3 TSL4 TSL5 

Manufacturer Impacts 

Industry NPV (million 2020$) (No-new- 1,072 1,053 1,016 968 611 

to to to to to standards case TNPV = 1,081) 1,075 1,078 1,165 1,247 992 

(0.8) (2.5) (6.0) (10.4) (43.5) 

Industry NPV (% change) to to to to to 

(0.5) (0.3) 7.8 15.4 (8.2) 

Consumer Avera!!e LCC Savin2s (2020$) 

PC 1: Room Air Conditioners, without reverse 

cycle, with louvered sides, and less than 6,000 $39.28 $63.49 $63.49 $45.25 $91.06 

Btu/h 

PC2: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 6,000 to 7,999 $34.23 $80.02 $80.02 $62.00 $89.03 

Btu/h 

PC3: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 8,000 to 13,999 $19.31 $104.92 $99.14 $99.14 $173.55 

Btu/h 

PC4: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 14,000 to $0.00 $102.30 $97.49 $97.49 $176.00 

19,999 Btu/h 

PC5a: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 20,000 to $5.28 $105.03 $152.52 $152.52 $263.67 

27,999 Btu/h 

PC5b: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 28,000 Btu/h or $99.12 $147.14 $275.19 $275.19 $392.72 

more 

PC8a: Room Air Conditioners, without reverse 

cycle, without louvered sides, and 8,000 to $5.67 $85.72 $74.28 $74.28 $162.53 

10,999 Btu/h 

PC8b: Room Air Conditioners, without reverse 

cycle, without louvered sides, and 11,000 to $0.00 $100.02 $116.89 $116.89 $230.10 

13,999 Btu/h 

PC9: Room Air Conditioners, without reverse 

cycle, without louvered sides, and 14,000 to $58.37 $98.98 $162.64 $162.64 $227.85 

19,999 Btu/h 

PC 11: Room Air Conditioners, with reverse 

cycle, with louvered sides, and less than 20,000 $67.57 $131.52 $131.12 $131.12 $194.60 

Btu/h 

PC12: Room Air Conditioners, with reverse 

cycle, without louvered sides, and less than $39.97 $81.20 $122.74 $122.74 $156.81 

14,000 Btu/h 

PC16: Room Air Conditioners, Casement- $49.45 $104.75 $81.33 $81.33 $143.10 Slider 

Shipment-Weighted Average * $27.35 $85.73 $85.64 $76.04 $133.84 

Consumer Simple PBP (years) 

PC l: Room Air Conditioners, without reverse 

cycle, with louvered sides, and less than 6,000 0.6 0.7 0.7 4.6 3.8 

Btu/h 

PC2: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 6,000 to 7,999 0.6 0.9 0.9 4.0 4.2 

Btu/h 
20676 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 


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Category TSLl TSL2 TSL3 TSL4 TSL5 

PC3: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 8,000 to 13,999 0.5 0.8 2.8 2.8 3.0 

Btu/h 

PC4: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 14,000 to 0.6 0.7 2.9 2.9 2.8 

19,999 Btu/h 

PC5a: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 20,000 to 1.2 1.0 2.6 2.6 2.7 

27,999 Btu/h 

PC5b: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 28,000 Btu/h or 0.3 0.4 2.3 2.3 2.2 

more 

PC8a: Room Air Conditioners, without reverse 

cycle, without louvered sides, and 8,000 to 0.5 0.7 3.3 3.3 2.9 

10,999 Btu/h 

PC8b: Room Air Conditioners, without reverse 

cycle, without louvered sides, and 11,000 to 0.4 0.6 2.4 2.4 2.3 

13,999 Btu/h 

PC9: Room Air Conditioners, without reverse 

cycle, without louvered sides, and 14,000 to 0.9 0.9 2.8 2.8 2.7 

19,999 Btu/h 

PC 11: Room Air Conditioners, with reverse 

cycle, with louvered sides, and less than 20,000 0.6 0.8 3.2 3.2 3.2 

Btu/h 

PC12: Room Air Conditioners, with reverse 

cycle, without louvered sides, and less than 1.2 1.2 2.5 2.5 2.7 

14,000 Btu/h 

PC16: Room Air Conditioners, Casement- 0.6 0.8 4.0 4.0 3.5 Slider 

Shiprnent-Weighted Average . 0.6 0.8 1.7 3.6 3.4 

Percent of Consumers that Experience a Net Cost 

PC 1: Room Air Conditioners, without reverse 

cycle, with louvered sides, and less than 6,000 1% 3% 3% 40% 32% 

Btu/h 

PC2: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 6,000 to 7,999 2% 5% 5% 40% 43% 

Btu/h 

PC3: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 8,000 to 13,999 0% 4% 30% 30% 30% 

Btu/h 

PC4: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 14,000 to 0% 1% 35% 35% 32% 

19,999 Btu/h 

PC5a: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 20,000 to 1% 2% 32% 32% 34% 

27,999 Btu/h 

PC5b: Room Air Conditioners, without reverse 

cycle, with louvered sides, and 28,000 Btu/h or 0% 0% 24% 24% 25% 

more 

PC8a: Room Air Conditioners, without reverse 0% 4% 37% 37% 29% 

cycle, without louvered sides, and 8,000 to 

10,999 Btu/h 

PC8b: Room Air Conditioners, without reverse 0% 3% 26% 26% 23% 

cycle, without louvered sides, and 11,000 to 

13,999 Btu/h 
Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 20677 

BILLING CODE 6450–01–C 

DOE first considered TSL 5, which 

represents the max-tech efficiency 

levels. TSL 5 would save an estimated 

3.44 quads of energy, an amount DOE 

considers significant. Under TSL 5, the 

NPV of consumer benefit would be 

$9.64 billion using a discount rate of 7 

percent, and $22.59 billion using a 

discount rate of 3 percent. 

The cumulative emissions reductions 

at TSL 5 are 120.7 Mt of CO2, 46.5 

thousand tons of SO2, 169.5 thousand 

tons of NOX, 0.3 tons of Hg, 831.3 

thousand tons of CH4, and 1.2 thousand 

tons of N2O. The estimated monetary 

value of the GHG emissions reduction 

(associated with the average SC–GHG at 

a 3-percent discount rate) at TSL 5 is 

$5.75 billion. The estimated monetary 

value of the health benefits from 

reduced SO2 and NOX emissions at TSL 

5 is $4.19 billion using a 7-percent 

discount rate and $9.88 billion using a 

3-percent discount rate. 

Using a 7-percent discount rate for 

consumer benefits and costs, health 

benefits from reduced SO2 and NOX

emissions, and the 3-percent discount 

rate case for climate benefits from 

reduced GHG emissions, the estimated 

combined monetized NPV at TSL 5 is 

$19.58 billion. Using a 3-percent 

discount rate for all consumer and 

emissions benefits and costs, the 

estimated combined monetized NPV at 

TSL 5 is $38.22 billion. The estimated 

total monetized NPV is provided for 

additional information; however, DOE 

primarily relies upon the consumer NPV 

when determining whether a standard 

level is economically justified. 

At TSL 5, the shipment-weighted 

average LCC savings is $133.84. The 

simple payback period is 3.4 years. The 

fraction of consumers experiencing a net 

LCC cost is 33 percent. 

At TSL 5, the projected change in 

manufacturer INPV ranges from a 

decrease of $470.1 million to a decrease 

of $88.4 million, which corresponds to 

decreases of 43.5 percent and 8.2 

percent, respectively. At this level, free 

cash flow is estimated to decrease by 

291.7 percent compared to the base-case 

value in the year before the standards 

year. Conversion costs total $475.9 

million. 

As discussed in sections IV.C.1–2 of 

this document, DOE believes there is 

uncertainty regarding the estimated 

compressor cost and availability of the 

highest efficiency variable-speed 

compressors across the full range of 

capacities at TSL 5, particularly in the 

smaller capacity room ACs. These 

uncertainties stem from the fact that the 

efficiency level for TSL 5 is obtained by 

using the highest efficiency variablespeed compressors that are currently 

available to be incorporated into room 

ACs at the time the analysis was 

competed. In addition, variable speed 

compressors representing these 

efficiencies are manufactured by just 

one manufacturer. It is unclear whether 

the highest efficiency variable-speed 

compressors will be available to all 

manufacturers of room ACs since there 

is only a single supplier at this time. In 

addition, these highest efficiency 

variable-speed compressors are not 

currently available in the full range of 

capacities, which could limit the 

current product offerings by 

manufacturers. Furthermore, due to the 

single supplier for these highest 

efficiency variable-speed compressors 

and their unknown manufacturing 

volume and potential bottlenecks for 

ramp-up manufacturing capabilities, 

there is a likelihood that there may not 

be sufficient supply to meet the demand 

of the market for the full range of 

cooling capacities for room ACs, should 

TSL 5 be selected. This may have the 

potential to eliminate room ACs of 

certain cooling capacities from the 

market as well impact the overall 

number of room ACs available on the 

market should TSL 5 be selected. 

The Secretary tentatively concludes 

that at TSL 5 for room ACs, the benefits 

of energy savings, positive NPV of 

consumer benefits, emission reductions, 

and the estimated monetary value of the 

climate and health benefits would be 

outweighed by the impacts on 

manufacturers, including the conversion 

costs and profit margin impacts that 

could result in a large reduction in 

INPV, and the potential for product 

unavailability due to limitations in key 

components such as the highest 

efficiency variable-speed compressors 

necessary to reach the max-tech 

efficiency levels. Consequently, the 

Secretary has tentatively concluded that 

TSL 5 is not economically justified. 

Then DOE considered TSL 4. TSL 4 

would save an estimated 1.86 quads of 

energy, an amount DOE considers 

significant. Under TSL 4, the NPV of 

consumer benefit would be $5.21 billion 

using a discount rate of 7 percent, and 

$12.21 billion using a discount rate of 

3 percent. 

The cumulative emissions reductions 

at TSL 4 are 65.6 Mt of CO2, 25.2 

thousand tons of SO2, 91.9 thousand 

tons of NOX, 0.1 tons of Hg, 449.7 

thousand tons of CH4, and 0.6 thousand 

tons of N2O. The estimated monetary 

value of the GHG emissions reduction 

(associated with the average SC–GHG at 

a 3-percent discount rate) at TSL 4 is 

$3.15 billion. The estimated monetary 

value of the health benefits from 

reduced SO2 and NOX emissions at TSL 

4 is $2.36 billion using a 7-percent 

discount rate and $5.44 billion using a 

3-percent discount rate. 

Using a 7-percent discount rate for 

consumer benefits and costs, health 

benefits from reduced SO2 and NOX


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Category TSLl TSL2 TSL3 TSL4 TSL5 

PC9: Room Air Conditioners, without reverse 3% 2% 24% 24% 24% 

cycle, without louvered sides, and 14,000 to 

19,999 Btu/h 

PC 11: Room Air Conditioners, with reverse 2% 4% 30% 30% 31% 

cycle, with louvered sides, and less than 20,000 

Btu/h 

PC12: Room Air Conditioners, with reverse 7% 7% 20% 20% 24% 

cycle, without louvered sides, and less than 

14,000 Btu/h 

PC16: Room Air Conditioners, Casement- 2% 4% 38% 38% 34% 

Slider 

Shipment-Weighted Average * 1% 3% 16% 36% 33% 

Parentheses indicate negative (-) values. 

* Weighted by shares of each product class in total projected shipments in 2026. 
20678 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

emissions, and the 3-percent discount 

rate case for climate benefits from 

reduced GHG emissions, the estimated 

combined monetized NPV at TSL 4 is 

$10.73 billion. Using a 3-percent 

discount rate for all consumer and 

emissions benefits and costs, the 

estimated combined monetized NPV at 

TSL 4 is $20.81 billion. The estimated 

total monetized NPV is provided for 

additional information; however, DOE 

primarily relies upon the consumer NPV 

when determining whether a standard 

level is economically justified. 

At TSL 4, the shipment-weighted 

average LCC impact is a savings of 

$76.04. The shipment-weighted simple 

payback period is 3.6 years. The fraction 

of consumers experiencing a net LCC 

cost is 36 percent. 

At TSL 4, the projected change in 

manufacturer INPV ranges from a 

decrease of $112.9 million to an 

increase of $166.5 million, which 

corresponds to a decrease of 10.4 

percent and an increase of 15.4 percent, 

respectively. At this level, free cash flow 

is estimated to decrease by 13.5 percent 

compared to the base-case value in the 

year before the standards year. 

Conversion costs total $26.7 million. 

TSL 4 represents commercially 

available room ACs that implement 

variable-speed compressors, based on 

models with cooling capacities greater 

than 8,000 Btu/h. However, for room 

ACs with the smallest cooling capacities 

(i.e., less than 8,000 Btu/h), 

uncertainties exist regarding both the 

availability of variable-speed 

compressors that can be integrated into 

these smaller-size units and the 

feasibility of incorporating these 

variable-speed compressors with related 

components into a more spaceconstrained chassis than for largercapacity room ACs. There are no models 

commercially available that incorporate 

variable-speed compressors for cooling 

capacities less than 8,000 Btu/h, and the 

uncertainties may have the potential to 

eliminate room ACs with the smallest 

cooling capacities from the market, 

should TSL 4 be selected. While there 

are similarly no room ACs currently on 

the market with variable-speed 

compressors at cooling capacities 

greater than 22,000 Btu/h, other air 

conditioning products with such 

cooling capacities (e.g., mini-split air 

conditioners) do exist in the U.S. 

market, thereby not giving rise to the 

same uncertainties as for the smallest 

cooling capacities. 

The Secretary tentatively concludes 

that at TSL 4 for room ACs, the benefits 

of energy savings, positive NPV of 

consumer benefits, emission reductions, 

and the estimated monetary value of the 

climate and health benefits would be 

outweighed by the impacts on 

manufacturers, including the conversion 

costs and profit margin impacts that 

could result in a reduction in INPV and 

potential unavailability of key 

components for small-capacity product 

classes. Consequently, the Secretary has 

tentatively concluded that TSL 4 is not 

economically justified. 

DOE then considered TSL 3, which 

would save an estimated 1.40 quads of 

energy, an amount DOE considers 

significant. Under TSL 3, the NPV of 

consumer benefit would be $4.83 billion 

using a discount rate of 7 percent, and 

$10.56 billion using a discount rate of 

3 percent. 

The cumulative emissions reductions 

at TSL 3 are 49.5 Mt of CO2, 19.1 

thousand tons of SO2, 69.4 thousand 

tons of NOX, 0.1 tons of Hg, 339.3 

thousand tons of CH4, and 0.5 thousand 

tons of N2O. The estimated monetary 

value of the climate benefits from 

reduced GHG emissions (associated 

with the average SC–GHG at a 3-percent 

discount rate) at TSL 3 is $2.39 billion. 

The estimated monetary value of the 

health benefits from reduced SO2 and 

NOX emissions at TSL 3 is $1.82 billion 

using a 7-percent discount rate and 

$4.14 billion using a 3-percent discount 

rate. 

Using a 7-percent discount rate for 

consumer benefits and costs, SO2

reduction benefits, and NOX reduction 

benefits, and the 3-percent discount rate 

for GHG social costs, the estimated 

combined monetized NPV at TSL 3 is 

$9.05 billion. Using a 3-percent 

discount rate for all consumer and 

emissions benefits and costs, the 

estimated combined monetized NPV at 

TSL 3 is $17.10 billion. The estimated 

total monetized NPV is provided for 

additional information; however, DOE 

primarily relies upon the consumer NPV 

when determining whether a standard 

level is economically justified. 

At TSL 3, the shipment-weighted 

average LCC impact is a savings of 

$85.64. The shipment-weighted simple 

payback period is 1.7 years. The fraction 

of consumers experiencing a net LCC 

cost is 16 percent. 

At TSL 3, the projected change in 

manufacturer INPV ranges from a 

decrease of $64.5 million to an increase 

of $84.1 million, which corresponds to 

a decrease of 6.0 percent and an 

increase of 7.8 percent, respectively. At 

this level, free cash flow is estimated to 

decrease by 11.7 percent compared to 

the base-case value in the year before 

the standards year. Conversion costs 

total $22.8 million. 

After considering the analysis and 

weighing the benefits and burdens, the 

Secretary has tentatively concluded that 

a standard set at TSL 3 for room ACs 

would be economically justified. At this 

TSL, the average LCC savings for room 

AC consumers is positive. An estimated 

16 percent of room AC consumers 

would experience a net cost. The FFC 

national energy savings are significant 

and the NPV of consumer benefits is 

positive using both a 3-percent and 

7-percent discount rate. Notably, the 

benefits to consumers vastly outweigh 

the cost to manufacturers. At TSL 3, the 

NPV of consumer benefits, even 

measured at the more conservative 

discount rate of 7 percent, is over 75 

times higher than the maximum 

estimated manufacturers’ loss in INPV. 

The positive LCC savings—a different 

way of quantifying consumer benefits— 

reinforces this conclusion. The standard 

levels at TSL 3 are economically 

justified even without weighing the 

estimated monetary value of emissions 

reductions. When those monetized 

climate benefits from GHG emissions 

reductions and health benefits from SO2

and NOX emissions reductions are 

included—representing $2.39 billion in 

climate benefits (associated with the 

average SC–GHG at a 3-percent discount 

rate), and $4.14 billion (using a 

3-percent discount rate) or $1.82 billion 

(using a 7-percent discount rate) in 

health benefits—the rationale becomes 

stronger still. 

As stated, DOE conducts a ‘‘walkdown’’ analysis to determine the TSL 

that represents the maximum 

improvement in energy efficiency that is 

technologically feasible and 

economically justified as required under 

EPCA. The walk-down is not a 

comparative analysis, as a comparative 

analysis would result in the 

maximization of net benefits instead of 

energy savings that are technologically 

feasible and economically justified and 

would be contrary to the statute. 86 FR 

70892, 70908. Although DOE has not 

conducted a comparative analysis to 

select the proposed energy conservation 

standards, DOE notes that as compared 

to TSL 4 and TSL 5, TSL 3 has higher 

average LCC savings, smaller 

percentages of consumer experiencing a 

net cost, a lower maximum decrease in 

INPV, and lower manufacturer 

conversion costs. 

Accordingly, the Secretary has 

tentatively concluded that TSL 3 would 

offer the maximum improvement in 

efficiency that is technologically 

feasible and economically justified and 

would result in the significant 

conservation of energy. Although results 

are presented here in terms of TSLs, 

DOE analyzes and evaluates all possible 

ELs for each product class in its 


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analysis. For room ACs with cooling 

capacities greater than or equal to 8,000 

Btu/h, TSL 3 corresponds to EL 4, the 

highest efficiency level below max-tech, 

incorporating commercially available 

variable-speed compressors. The 

variable-speed compressor required to 

achieve the max-tech efficiency level is 

currently available from only a single 

manufacturer, leading to the likelihood 

there may not be sufficient supply at 

that efficiency level to meet the demand 

of the market for the full range of 

cooling capacities for room ACs. For 

room ACs with cooling capacities less 

than 8,000 Btu/h, TSL 3 corresponds to 

EL 3, incorporating the maximum 

available energy efficient single-speed 

compressors. Both EL 4 and EL 5 for 

room ACs with cooling capacities less 

than 8,000 Btu/h incorporate variablespeed compressors based off of 

modeling of available compressors for 

models with cooling capacities greater 

than or equal to 8,000 Btu/h. 

Uncertainties exist at those efficiency 

levels regarding both the availability of 

variable-speed compressors that can be 

integrated into these smaller-size units 

and the feasibility of incorporating these 

variable-speed compressors with related 

components into a more spaceconstrained chassis than for largercapacity room ACs. There are no models 

commercially available that incorporate 

variable-speed compressors for cooling 

capacities less than 8,000 Btu/h. The 

proposed standard levels at TSL 3 

results in positive LCC savings for all 

product classes, significantly reduce the 

number of consumers experiencing a net 

cost, and reduce the decrease in INPV 

and conversion costs to the point where 

DOE has tentatively concluded they are 

economically justified, as discussed for 

TSL 3 in the preceding paragraphs. 

Therefore, based on the previous 

considerations, DOE proposes to adopt 

the energy conservation standards for 

room ACs at TSL 3. The proposed 

amended energy conservation standards 

for room ACs, which are expressed as 

CEER and include the rounded cooling 

capacity product class descriptions 

discussed in section IV.A.1 of this 

document, are shown in Table V.58. 

BILLING CODE 6450–01–P 

2. Annualized Benefits and Costs of the 

Proposed Standards 

The benefits and costs of the proposed 

standards can also be expressed in terms 

of annualized values. The annualized 

net benefit is (1) the annualized national 

economic value (expressed in 2020$) of 

the benefits from operating products 

that meet the proposed standards 

(consisting primarily of operating cost 

savings from using less energy, minus 

increases in product purchase costs, and 

(2) the annualized monetary value of the 


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Table V.58 Proposed Amended Energy Conservation Standards for Room Air 

Conditioners for TSL 3 

Product Class Proposed Standard 

CEER(Btu/h) 

Room AC without reverse cycle, with louvered sides 

<6,000 Btu/h (1) 13.1 

6,000 to 7,900 Btu/h (2) 13.7 

8,000 to 13,900 Btu/h (3) 16.0 

14,000 to 19,900 Btu/h (4) 16.0 

20,000 to 27,900 Btu/h (Sa) 13.8 

2:28,000 Btu/h (Sb) 13.2 

Room AC without reverse cycle, without louvered sides 

<6,000 Btu/h (6) 12.8 

6,000 to 7,900 Btu/h (7) 12.8 

8,000 to 10,900 Btu/h (8a) 14.1 

11,000 to 13,900 Btu/h (8b) 13.9 

14,000 to 19,900 Btu/h (9) 13.7 

2:20,000 Btu/h (10) 13.8 

Room AC with reverse cycle, with louvered sides 

<20,000 Btu/h (11) 14.4 

2:20,000 Btu/h (13) 13.7 

Room AC with reverse cycle, without louvered sides 

<14,000 Btu/h (12) 13.7 

2:14,000 Btu/h (14) 12.8 

Casement 

Casement-Only (15) 13.9 

Casement-Slider (16) 15.3 
20680 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

benefits of GHGs, NOX, and SO2

emission reductions. 

Table V.59 shows the annualized 

values for room ACs under TSL 3, 

expressed in 2020$. The results under 

the primary estimate are as follows. 

Using a 7-percent discount rate for 

consumer benefits and costs and health 

benefits from reduced SO2 and NOX, 

and the 3-percent discount rate case for 

climate benefits from reduced GHG 

emissions, the estimated cost of the 

proposed standards for room ACs is 

$216.9 million per year in increased 

equipment costs, while the estimated 

annual benefits are $727.5 million in 

reduced operating costs, $137.5 million 

in climate benefits, and $192.1 million 

in monetized health benefits. In this 

case, the net monetized benefit amounts 

to $840.2 million per year. 

Using a 3-percent discount rate for all 

benefits and costs, the estimated cost of 

the proposed standards for room ACs is 

$190.1 million per year in increased 

equipment costs, while the estimated 

annual benefits are $796.7 million in 

reduced operating costs, $137.5 million 

in climate benefits, and $237.9 million 

in monetized health benefits. In this 

case, the net monetized benefit amounts 

to $982.0 million per year. 


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BILLING CODE 6450–01–C 


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Table V.59 Annualized Benefits and Costs of Proposed Energy Conservation 

Standards for Room Air Conditioners (TSL 3) 

Million 2020$/year 

Primary Estimate Low-Net-Benefits High-NetEstimate Benefits Estimate 

3% discount rate 

Consumer Operating Cost Savings 796.7 751.9 847.8 

Climate Benefits* 137.5 134.2 140.4 

Health Benefits** 237.9 232.3 242.7 

Total Benefitst 1,172.0 1,118.4 1,230.9 

Consumer Incremental Product Costst 190.1 213.2 163.1 

Net Benefits 982.0 905.2 1,067.7 

7% discount rate 

Consumer Operating Cost Savings 727.5 693.3 768.4 

Climate Benefits* 137.5 134.2 140.4 

Health Benefits** 192.1 188.1 195.7 

Total Benefitst 1,057.1 1,015.6 1,104.4 

Consumer Incremental Product Costst 216.9 240.0 190.0 

Net Benefits 840.2 775.7 914.5 

Note: This table presents the costs and benefits associated ,vith roomACs shipped in 2026-2055. These results include 

benefits to consumers which accrue after 2055 from the products shipped in 2026-2055. 

* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane (SCCH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th 

percentile at 3 percent discount rate). Together these represent the global social cost of greenhouse gases (SC-GHG ). 

For presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3 percent 

discounl rale are shown, bul lhe Deparlmenl does nol have a single cenlntl SC-GHG poinl eslimale, and il emphasizes 

the importance and value of considering the benefits calculated using all four SC-GHG estimates. See section IV.L of 

this document for more details. 

** Health benefits are calculated using benefit-per-ton values for NOx and SO2. DOE is currently only monetizing (for 

SO2 and NOx) PM2.5 precursor health benefits and (for NOx) ozone precursor health benefits, but will continue to 

assess the ability to monetize other effects such as health benefits from reductions in direct PM2.5 emissions. The health 

benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this docU111ent for more details. 

t Total and net benefits include consU111er, climate, and health benefits. For presentation purposes, total and net benefits 

for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but 

the Department does not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of 

considering the benefits calculated using all four SC-GHG estimates On March 16, 2022, the Fifth Circuit Court of 

Appeals (No. 22-30087) granted the federal government's emergency motion for stay pending appeal ofthe February 

11, 2022, preliminary injunction issued in Louisiana v. Eiden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the 

Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of the federal government's 

appeal of that injunction or a further court order. Among other things, the preliminary injunction eitjoined the 

defendants in that case from "adopting, employing, treating as binding, or relying upon" the interim estimates 

of the social cost of greenhouse gases-which were issued by the Interagency Working Group on the Social Cost of 

Greenhouse Gases on February 26, 2021-to monetize the benefits of reducing greenhouse gas emissions. In the 

absence of further intervening court orders, DOE will revert to its approach prior to the injunction and present 

monetized benefits where appropriate and permissible under law. 

i Costs include incremental equipment costs as well as installation costs. 
20682 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

VI. Cooling Capacity Verification 

DOE is proposing to add the cooling 

capacity of room ACs to 10 CFR 429.134 

to help regulated entities understand 

how DOE will determine the product 

class that applies to a given basic model 

in the context of an enforcement 

investigation. DOE is proposing a 

similar approach that it has adopted for 

portable air conditioners, packaged 

terminal air conditioners and heat 

pumps, and dehumidifiers. More 

specifically, DOE is going to compare 

the mean of the tested cooling capacity 

from the units of a given basic model 

that DOE has tested for enforcement 

rounded to the nearest hundred to the 

certified cooling capacity by the 

manufacturer. DOE will use the certified 

cooling capacity of the manufacturer if 

the mean of the DOE tested units is 

within 5 percent of the certified cooling 

capacity. If the manufacturer does not 

have a valid certification, including if 

the certified cooling capacity was 

incorrectly certified, or the certified 

cooling capacity is found to be outside 

of the 5 percent tolerance, DOE will use 

the rounded mean of the DOE tested 

units within the enforcement sample to 

determine the applicable product class 

and energy conservation standard for 

this particular basic model. DOE 

believes these proposed provisions 

provide additional clarity and 

transparency to the enforcement 

process. The proposal can be found in 

10 CFR 429.134 and DOE seeks 

comment on this approach. 

VII. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Orders 

12866 and 13563 

Section 1(b)(1) of Executive Order 

(‘‘E.O.’’) 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 the 

proposed standards set forth in this 

NOPR are intended to address are as 

follows: 

(1) Insufficient information and the high 

costs of gathering and analyzing relevant 

information leads some consumers to miss 

opportunities to make cost-effective 

investments in energy efficiency. 

(2) In some cases, the benefits of moreefficient equipment are not realized due to 

misaligned incentives between purchasers 

and users. An example of such a case is when 

the equipment purchase decision is made by 

a building contractor or building owner who 

does not pay the energy costs. 

(3) There are external benefits resulting 

from improved energy efficiency of 

appliances and equipment that are not 

captured by the users of such products. 

These benefits include externalities related to 

public health, environmental protection, and 

national energy security that are not reflected 

in energy prices, such as reduced emissions 

of air pollutants and greenhouse gases that 

impact human health and global warming. 

The Administrator of the Office of 

Information and Regulatory Affairs 

(‘‘OIRA’’) in the OMB has determined 

that the proposed regulatory action is a 

significant regulatory action under 

section (3)(f) of Executive Order 12866. 

Accordingly, pursuant to section 

6(a)(3)(B) of the Order, DOE has 

provided to OIRA: (i) The text of the 

draft regulatory action, together with a 

reasonably detailed description of the 

need for the regulatory action and an 

explanation of how the regulatory action 

will meet that need; and (ii) An 

assessment of the potential costs and 

benefits of the regulatory action, 

including an explanation of the manner 

in which the regulatory action is 

consistent with a statutory mandate. 

DOE has included these documents in 

the rulemaking record. 

In addition, the Administrator of 

OIRA has determined that the proposed 

regulatory action is an ‘‘economically’’ 

significant regulatory action under 

section (3)(f)(1) of E.O. 12866. 

Accordingly, pursuant to section 

6(a)(3)(C) of the Order, DOE has 

provided to OIRA an assessment, 

including the underlying analysis, of 

benefits and costs anticipated from the 

regulatory action, together with, to the 

extent feasible, a quantification of those 

costs; and an assessment, including the 

underlying analysis, of costs and 

benefits of potentially effective and 

reasonably feasible alternatives to the 

planned regulation, and an explanation 

why the planned regulatory action is 

preferable to the identified potential 

alternatives. These assessments can be 

found in the technical support 

document for this proposed rulemaking. 

DOE has also reviewed this regulation 

pursuant to E.O. 13563, issued on 

January 18, 2011. 76 FR 3281 (Jan. 21, 

2011). E.O. 13563 is supplemental to 

and explicitly reaffirms the principles, 

structures, and definitions governing 

regulatory review established in E.O. 

12866. To the extent permitted by law, 

agencies are required by E.O. 13563 to 

(1) propose or adopt a regulation only 

upon a reasoned determination that its 

benefits justify its costs (recognizing 

that some benefits and costs are difficult 

to quantify); (2) tailor regulations to 

impose the least burden on society, 

consistent with obtaining regulatory 

objectives, taking into account, among 

other things, and to the extent 

practicable, the costs of cumulative 

regulations; (3) select, in choosing 

among alternative regulatory 

approaches, those approaches that 

maximize net benefits (including 

potential economic, environmental, 

public health and safety, and other 

advantages; distributive impacts; and 

equity); (4) to the extent feasible, specify 

performance objectives, rather than 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and (5) identify and assess 

available alternatives to direct 

regulation, including providing 

economic incentives to encourage the 

desired behavior, such as user fees or 

marketable permits, or providing 

information upon which choices can be 

made by the public. 

DOE emphasizes as well that E.O. 

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, 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, this NOPR is 

consistent with these principles, 

including the requirement that, to the 

extent permitted by law, benefits justify 

costs and that net benefits are 

maximized. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis (‘‘IRFA’’) for any rule that by 

law must be proposed for public 

comment, unless the agency certifies 

that the rule, if promulgated, will not 

have a significant economic impact on 

a substantial number of small entities. 

As required by E.O. 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 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s website (energy.gov/gc/officegeneral-counsel). 

DOE reviewed this proposed rule 

under the provisions of the Regulatory 

Flexibility Act and the procedures and 

policies published on February 19, 

2003. DOE certifies that the proposed 


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78 regulations.doe.gov/certification-data/ 

#q=Product_Group_s%3A*. 

79 cacertappliances.energy.ca.gov/Pages/ 

ApplianceSearch.aspx. 

80 energystar.gov/productfinder/. 

81 app.dnbhoovers.com. 

82https://www.rheem.com/about/news-releases/ 

rheem-acquires-friedrich-air-conditioning 

(published August 30, 2021). 

rule, if adopted, would not have 

significant economic impact on a 

substantial number of small entities. 

The factual basis of this certification is 

set forth in the following paragraphs. 

In accordance with EPCA, DOE is 

publishing this NOPR as part of the 

legislated 6-year review of energy 

conservation standards for room ACs. 

(42 U.S.C. 6295(m)) The current room 

AC energy conservation standards were 

implemented by a direct final rule 

published on April 21, 2011 (76 FR 

22454) and subsequently confirmed on 

August 24, 2011. 76 FR 52854. 

Compliance with those standards has 

been required since June 1, 2014. 76 FR 

52852. Pursuant to EPCA, any new or 

amended energy conservation standard 

must be designed to achieve the 

maximum improvement in energy 

efficiency that DOE determines is 

technologically feasible and 

economically justified. (42 U.S.C. 

6295(o)(2)(A)) Furthermore, the new or 

amended standard must result in a 

significant conservation of energy. (42 

U.S.C. 6295(o)(3)(B)) EPCA also 

provides that not later than 6 years after 

issuance of any final rule establishing or 

amending a standard, DOE must publish 

either a notice of determination that 

standards for the product do not need to 

be amended, or a notice of proposed 

rulemaking including new proposed 

energy conservation standards 

(proceeding to a final rule, as 

appropriate). (42 U.S.C. 6295(m)) 

For manufacturers of room ACs, the 

Small Business Administration (‘‘SBA’’) 

has set a size threshold, which defines 

those entities classified as ‘‘small 

businesses’’ for the purposes of the 

statute. DOE used the SBA’s small 

business size standards to determine 

whether any small entities would be 

subject to the requirements of the rule. 

(See 13 CFR part 121.) The size 

standards are listed by North American 

Industry Classification System 

(‘‘NAICS’’) code and industry 

description and are available at 

www.sba.gov/document/support--tablesize-standards. Manufacturing of room 

ACs is classified under NAICS 333415, 

‘‘Air-Conditioning and Warm Air 

Heating Equipment and Commercial 

and Industrial Refrigeration Equipment 

Manufacturing.’’ The SBA sets a 

threshold of 1,250 employees or fewer 

for an entity to be considered as a small 

business for this category. 

To estimate the number of companies 

that could be small business 

manufacturers of products covered by 

this proposed rulemaking, DOE 

conducted a market survey using public 

information and subscription-based 

company reports to identify potential 

small manufacturers. DOE’s research 

involved DOE’s Compliance 

Certification Database (‘‘CCD’’),78

California Energy Commission’s 

Modernized Appliance Efficiency 

Database System (‘‘MAEDbS’’),79

ENERGY STAR Product Finder,80

individual company websites, and 

market research tools (e.g., reports from 

Dun & Bradstreet 81) to create a list of 

companies that manufacture, produce, 

import, or assemble the 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 identified eight OEMs of room 

AC products sold in the United States. 

Upon initial review, one OEM was 

identified as a small manufacturer based 

in the United States. However, in 

August 2021, a large manufacturer 

acquired the small manufacturer.82

Following that acquisition, no domestic 

room AC OEMs qualify as a small 

business. Given the lack of small 

entities with a direct compliance 

burden, DOE certifies that the proposed 

rule would not have ‘‘a significant 

economic impact on a substantial 

number of small entities.’’ DOE requests 

comment on this certification 

conclusion. 

DOE has submitted a certification and 

supporting statement of factual basis to 

the Chief Counsel for Advocacy of the 

Small Business Administration for 

review under 5 U.S.C. 605(b). 

C. Review Under the Paperwork 

Reduction Act 

Manufacturers of room ACs must 

certify to DOE that their products 

comply with any applicable energy 

conservation standards. In certifying 

compliance, manufacturers must test 

their products according to the DOE test 

procedures for room ACs, including any 

amendments adopted for those test 

procedures. DOE has established 

regulations for the certification and 

recordkeeping requirements for all 

covered consumer products and 

commercial equipment, including room 

ACs. 76 FR 12422 (Mar. 7, 2011); 80 FR 

5099 (Jan. 30, 2015). The collection-ofinformation requirement for the 

certification and recordkeeping is 

subject to review and approval by OMB 

under the Paperwork Reduction Act 

(‘‘PRA’’). This requirement has been 

approved by OMB under OMB control 

number 1910–1400. Public reporting 

burden for the certification is estimated 

to average 35 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 

DOE is analyzing this proposed 

regulation in accordance with the 

National Environmental Policy Act of 

1969 (‘‘NEPA’’) and DOE’s NEPA 

implementing regulations (10 CFR part 

1021). DOE’s regulations include a 

categorical exclusion for rulemakings 

that establish energy conservation 

standards for consumer products or 

industrial equipment. 10 CFR part 1021, 

subpart D, appendix B5.1. DOE 

anticipates that this rulemaking 

qualifies for categorical exclusion B5.1 

because it is a rulemaking that 

establishes energy conservation 

standards for consumer products or 

industrial equipment, none of the 

exceptions identified in categorical 

exclusion B5.1(b) apply, no 

extraordinary circumstances exist that 

require further environmental analysis, 

and it otherwise meets the requirements 

for application of a categorical 

exclusion. See 10 CFR 1021.410. DOE 

will complete its NEPA review before 

issuing the final rule. 

E. Review Under Executive Order 13132 

E.O. 13132, ‘‘Federalism,’’ 64 FR 

43255 (Aug. 10, 1999), imposes certain 

requirements on Federal agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have federalism implications. The 

Executive order requires agencies to 

examine the constitutional and statutory 

authority supporting any action that 

would limit the policymaking discretion 

of the States and to carefully assess the 

necessity for such actions. The 

Executive order also requires agencies to 

have an accountable process to ensure 

meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications. On March 14, 2000, DOE 


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20684 Federal Register / Vol. 87, No. 67 / Thursday, April 7, 2022 / Proposed Rules 

published a statement of policy 

describing the intergovernmental 

consultation process it will follow in the 

development of such regulations. 65 FR 

13735. DOE has examined this proposed 

rule and has tentatively determined that 

it would not have a substantial direct 

effect on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government. EPCA 

governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the products 

that are the subject of this 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) Therefore, no 

further action is required by Executive 

Order 13132. 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of E.O. 

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, (3) provide a clear 

legal standard for affected conduct 

rather than a general standard, and (4) 

promote simplification and burden 

reduction. 61 FR 4729 (Feb. 7, 1996). 

Regarding the review required by 

section 3(a), section 3(b) of E.O. 12988 

specifically requires that executive 

agencies make every reasonable effort to 

ensure that the regulation: (1) Clearly 

specifies the preemptive effect, if any, 

(2) clearly specifies any effect on 

existing Federal law or regulation, (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction, (4) 

specifies the retroactive effect, if any, (5) 

adequately defines key terms, and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of Executive Order 12988 requires 

executive agencies to review regulations 

in light of applicable standards in 

section 3(a) and section 3(b) to 

determine whether they are met or it is 

unreasonable to meet one or more of 

them. DOE has completed the required 

review and determined that, to the 

extent permitted by law, this proposed 

rule meets the relevant standards of E.O. 

12988. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (‘‘UMRA’’) requires 

each Federal agency to assess the effects 

of Federal regulatory actions on State, 

local, and Tribal governments and the 

private sector. Public Law 104–4, 

section 201 (codified at 2 U.S.C. 1531). 

For a proposed regulatory action likely 

to result in a rule that may cause the 

expenditure by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector of $100 million or more 

in any one year (adjusted annually for 

inflation), section 202 of UMRA requires 

a Federal agency to publish a written 

statement that estimates the resulting 

costs, benefits, and other effects on the 

national economy. (2 U.S.C. 1532(a), (b)) 

The UMRA also requires a Federal 

agency to develop an effective process 

to permit timely input by elected 

officers of State, local, and Tribal 

governments on a proposed ‘‘significant 

intergovernmental mandate,’’ and 

requires an agency plan for giving notice 

and opportunity for timely input to 

potentially affected small governments 

before establishing any requirements 

that might significantly or uniquely 

affect them. On March 18, 1997, DOE 

published a statement of policy on its 

process for intergovernmental 

consultation under UMRA. 62 FR 

12820. DOE’s policy statement is also 

available at energy.gov/sites/prod/files/ 

gcprod/documents/umra_97.pdf. 

Although this proposed rule does not 

contain a Federal intergovernmental 

mandate, it may require expenditures of 

$100 million or more in any one year by 

the private sector. Such expenditures 

may include: (1) Investment in research 

and development and in capital 

expenditures by room AC manufacturers 

in the years between the final rule and 

the compliance date for the new 

standards and (2) incremental 

additional expenditures by consumers 

to purchase higher-efficiency room ACs, 

starting at the compliance date for the 

applicable standard. 

Section 202 of UMRA authorizes a 

Federal agency to respond to the content 

requirements of UMRA in any other 

statement or analysis that accompanies 

the proposed rule. (2 U.S.C. 1532(c)) 

The content requirements of section 

202(b) of UMRA relevant to a private 

sector mandate substantially overlap the 

economic analysis requirements that 

apply under section 325(o) of EPCA and 

Executive Order 12866. The 

SUPPLEMENTARY INFORMATION section of 

this NOPR and the TSD for this 

proposed rule respond to those 

requirements. 

Under section 205 of UMRA, the 

Department is obligated to identify and 

consider a reasonable number of 

regulatory alternatives before 

promulgating a rule for which a written 

statement under section 202 is required. 

(2 U.S.C. 1535(a)) DOE is required to 

select from those alternatives the most 

cost-effective and least burdensome 

alternative that achieves the objectives 

of the proposed rule unless DOE 

publishes an explanation for doing 

otherwise, or the selection of such an 

alternative is inconsistent with law. As 

required by 42 U.S.C. 6295(m), this 

proposed rule would establish amended 

energy conservation standards for room 

ACs that are designed to achieve the 

maximum improvement in energy 

efficiency that DOE has determined to 

be both technologically feasible and 

economically justified, as required by 42 

U.S.C. 6295(o)(2)(A) and 42 U.S.C. 

6295(o)(3)(B). A full discussion of the 

alternatives considered by DOE is 

presented in chapter 17 of the TSD for 

this proposed rule. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any rule 

that may affect family well-being. This 

proposed rule would not have any 

impact on the autonomy or integrity of 

the family as an institution. 

Accordingly, DOE has concluded that it 

is not necessary to prepare a Family 

Policymaking Assessment. 

I. Review Under Executive Order 12630 

Pursuant to E.O. 12630, 

‘‘Governmental Actions and Interference 

with Constitutionally Protected Property 

Rights,’’ 53 FR 8859 (Mar. 15, 1988), 

DOE has determined that this proposed 

rule would not result in any takings that 

might require compensation under the 

Fifth Amendment to the U.S. 

Constitution. 

J. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

Section 515 of the Treasury and 

General Government Appropriations 

Act, 2001 (44 U.S.C. 3516 note) provides 

for Federal agencies to review most 

disseminations of information to the 

public under information quality 

guidelines established by each agency 

pursuant to general guidelines issued by 

OMB. OMB’s guidelines were published 

at 67 FR 8452 (Feb. 22, 2002), and 

DOE’s guidelines were published at 67 


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83The 2007 ‘‘Energy Conservation Standards 

Rulemaking Peer Review Report’’ is available at the 

following website: energy.gov/eere/buildings/

downloads/energy-conservation-standardsrulemaking-peer-review-report-0. 

FR 62446 (Oct. 7, 2002). Pursuant to 

OMB Memorandum M–19–15, 

Improving Implementation of the 

Information Quality Act (April 24, 

2019), DOE published updated 

guidelines which are available at 

www.energy.gov/sites/prod/files/2019/

12/f70/DOE%20Final%20Updated

%20IQA%20Guidelines%20Dec

%202019.pdf. DOE has reviewed this 

NOPR under the OMB and DOE 

guidelines and has concluded that it is 

consistent with applicable policies in 

those guidelines. 

K. Review Under Executive Order 13211 

E.O. 13211, ‘‘Actions Concerning 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use,’’ 66 

FR 28355 (May 22, 2001), requires 

Federal agencies to prepare and submit 

to OIRA at OMB, a Statement of Energy 

Effects for any proposed significant 

energy action. A ‘‘significant energy 

action’’ is defined as any action by an 

agency that promulgates or is expected 

to lead to promulgation of a final rule, 

and that (1) is a significant regulatory 

action under Executive Order 12866, or 

any successor order; and (2) is likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy, or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed significant energy action, 

the agency must give a detailed 

statement of any adverse effects on 

energy supply, distribution, or use 

should the proposal be implemented, 

and of reasonable alternatives to the 

action and their expected benefits on 

energy supply, distribution, and use. 

DOE has tentatively concluded that 

this regulatory action, which proposes 

amended energy conservation standards 

for room ACs, is not a significant energy 

action because the proposed standards 

are not likely to have a significant 

adverse effect on the supply, 

distribution, or use of energy, nor has it 

been designated as such by the 

Administrator at OIRA. Accordingly, 

DOE has not prepared a Statement of 

Energy Effects on this proposed rule. 

L. Information Quality 

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 2664, 2667. 

In response to OMB’s Bulletin, DOE 

conducted formal peer reviews of the 

energy conservation standards 

development process and the analyses 

that are typically used and has prepared 

a report describing that peer review.83

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. DOE has 

determined that the peer-reviewed 

analytical process continues to reflect 

current practice, and the Department 

followed that process for developing 

energy conservation standards in the 

case of the present rulemaking. 

VIII. Public Participation 

A. Attendance at the Webinar 

The time, date, and location of the 

webinar are listed in the DATES and 

ADDRESSES sections at the beginning of 

this document. If no participants 

register for the webinar then it will be 

cancelled. Webinar registration 

information, participant instructions, 

and information about the capabilities 

available to webinar participants will be 

published on DOE’s website: https://

www1.eere.energy.gov/buildings/

appliance_standards/standards.aspx?

productid=52. Participants are 

responsible for ensuring their systems 

are compatible with the webinar 

software. 

B. Procedure for Submitting Prepared 

General Statements for Distribution 

Any person who has an interest in the 

topics addressed in this document, or 

who is representative of a group or class 

of persons that has an interest in these 

issues, may request an opportunity to 

make an oral presentation at the 

webinar. Requests may be sent by email 

to the Appliance and Equipment 

Standards Program, U.S. Department of 

Energy, Building Technologies Office, 

Mailstop EE–5B 1000 Independence 

Avenue SW, Washington, DC 20585– 

0121, or 

ApplianceStandardsQuestions@

ee.doe.gov. Persons who wish to speak 

should include with their request a 

computer file in WordPerfect, Microsoft 

Word, PDF, or text (ASCII) file format 

that briefly describes the nature of their 

interest in this rulemaking and the 

topics they wish to discuss. Such 

persons should also provide a daytime 

telephone number where they can be 

reached. 

Persons requesting to speak should 

briefly describe the nature of their 

interest in this rulemaking and provide 

a telephone number for contact. DOE 

requests persons selected to make an 

oral presentation to submit an advance 

copy of their statements at least two 

weeks before the webinar. At its 

discretion, DOE may permit persons 

who cannot supply an advance copy of 

their statement to participate, if those 

persons have made advance alternative 

arrangements with the Building 

Technologies Office. As necessary, 

requests to give an oral presentation 

should ask for such alternative 

arrangements. 

C. Conduct of the Public Meeting 

DOE will designate a DOE official to 

preside at the webinar/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 webinar/public 

meeting. There shall not be discussion 

of proprietary information, costs or 

prices, market share, or other 

commercial matters regulated by U.S. 

anti-trust laws. After the webinar/public 

meeting, interested parties may submit 

further comments on the proceedings, as 

well as on any aspect of the rulemaking, 

until the end of the comment period. 

The public meeting will be conducted 

in an informal, conference style. DOE 

will present summaries of comments 

received before the webinar/public 

meeting, allow time for prepared general 

statements by participants, and 

encourage all interested parties to share 

their views on issues affecting this 

proposed rulemaking. Each participant 

will be allowed to make a general 

statement (within time limits 


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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. 

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 

webinar/public meeting will accept 

additional comments or questions from 

those attending, as time permits. The 

presiding official will announce any 

further procedural rules or modification 

of the previous procedures that may be 

needed for the proper conduct of the 

webinar/public meeting. 

A transcript of the webinar/public 

meeting will be included in the docket, 

which can be viewed as described in the 

Docket section at the beginning of this 

document and will be accessible on the 

DOE website. In addition, any person 

may buy a copy of the transcript from 

the transcribing reporter. 

D. Submission of Comments 

DOE will accept comments, data, and 

information regarding this proposed 

rule before or after the public meeting, 

but no later than the date provided in 

the DATES section at the beginning of 

this proposed rule. Interested parties 

may submit comments, data, and other 

information using any of the methods 

described in the ADDRESSES section at 

the beginning of this document. 

Submitting comments via 

www.regulations.gov. The 

www.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 this 

information to contact you. If DOE 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, DOE may not be 

able to consider your comment. 

However, your contact information 

will be publicly viewable if you include 

it in the comment itself or in any 

documents attached to your comment. 

Any information that you do not want 

to be publicly viewable should not be 

included in your comment, nor in any 

document attached to your comment. 

Otherwise, persons viewing comments 

will see only first and last names, 

organization names, correspondence 

containing comments, and any 

documents submitted with the 

comments. 

Do not submit to www.regulations.gov 

information for which disclosure is 

restricted by statute, such as trade 

secrets and commercial or financial 

information (hereinafter referred to as 

Confidential Business Information 

(‘‘CBI’’)). Comments submitted through 

www.regulations.gov cannot be claimed 

as CBI. Comments received through the 

website will waive any CBI claims for 

the information submitted. For 

information on submitting CBI, see the 

Confidential Business Information 

section. 

DOE processes submissions made 

through www.regulations.gov before 

posting. Normally, comments will be 

posted within a few days of being 

submitted. However, if large volumes of 

comments are being processed 

simultaneously, your comment may not 

be viewable for up to several weeks. 

Please keep the comment tracking 

number that www.regulations.gov 

provides after you have successfully 

uploaded your comment. 

Submitting comments via email. 

Comments and documents submitted 

via email also will be posted to 

www.regulations.gov. If you do not want 

your personal contact information to be 

publicly viewable, do not include it in 

your comment or any accompanying 

documents. Instead, provide your 

contact information in a cover letter. 

Include your first and last names, email 

address, telephone number, and 

optional mailing address. The cover 

letter will not be publicly viewable as 

long as it does not include any 

comments. 

Include contact information each time 

you submit comments, data, documents, 

and other information to DOE. No 

telefacsimiles (‘‘faxes’’) will be 

accepted. 

Comments, data, and other 

information submitted to DOE 

electronically should be provided in 

PDF (preferred), Microsoft Word or 

Excel, WordPerfect, or text (ASCII) file 

format. Provide documents that are not 

secured, that are written in English, and 

that are free of any defects or viruses. 

Documents should not contain special 

characters or any form of encryption 

and, if possible, they should carry the 

electronic signature of the author. 

Campaign form letters. Please submit 

campaign form letters by the originating 

organization in batches of between 50 to 

500 form letters per PDF or as one form 

letter with a list of supporters’ names 

compiled into one or more PDFs. This 

reduces comment processing and 

posting time. 

Confidential Business Information. 

Pursuant 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 two well-marked 

copies: one copy of the document 

marked ‘‘confidential’’ including all the 

information believed to be confidential, 

and one copy of the document marked 

‘‘non-confidential’’ with the information 

believed to be confidential deleted. DOE 

will make its own determination about 

the confidential status of the 

information and treat it according to its 

determination. 

It is DOE’s policy that all comments 

may be included in the public docket, 

without change and as received, 

including any personal information 

provided in the comments (except 

information deemed to be exempt from 

public disclosure). 

E. Issues on Which DOE Seeks Comment 

Although DOE welcomes comments 

on any aspect of this proposal, DOE is 

particularly interested in receiving 

comments and views of interested 

parties concerning the following issues: 

(1) DOE seeks comment on the 

proposal to not make any changes to 

room AC product classes. See section 

IV.A.1 of this document. 

(2) DOE seeks comment on whether 

evaporator air recirculation should be 

included in the engineering analysis. 

See section IV.A.2.a of this document. 

(3) DOE seeks comment on the 

updated single-speed compressor 

maximum efficiency estimates. See 

section IV.A.2.b of this document. 

(4) DOE seeks comment on the 

approach to alternative refrigerants in 

this engineering analysis. See section 

IV.A.2.c of this document. 

(5) DOE seeks comment on the 

technologies screened out in the NOPR 

screening analysis. See section IV.B.1 of 

this document. 

(6) DOE requests comment on the new 

efficiency level (EL 4) in the engineering 

analysis. See section IV.C.1.b of this 

document. 

(7) DOE seeks comment on the 

approach to design EL 3 as the level 

reached by the most efficient singlespeed room ACs. See section IV.C.1.b of 

this document. 

(8) DOE requests comment on the 

incremental MPCs from the NOPR 

engineering analysis. See section IV.C.3 

of this document. 

(9) DOE welcomes feedback on its 

approach to estimating fan-only use 


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operating hours and any additional data 

that can be provided to estimate the 

amount of time spent in fan-only mode. 

See section IV.E of this document. 

(10) DOE requests feedback on its 

approach to calculating the energy-use 

of variable-speed compressors and 

would welcome field metered data to 

further investigate the varying amounts 

of energy use due to single-speed and 

variable-speed units. See section IV.E of 

this document. 

(11) DOE requests comments on its 

assumption and methodology for 

determining equipment price trends. 

See section IV.F.1 of this document. 

(12) DOE requests feedback on its 

approach to projecting the efficiency 

distribution in 2026. See section IV.F.8 

of this document. 

(13) DOE welcomes shipments data 

that include markets in addition to 

replacement and first-time user markets. 

See section IV.G of this document. 

(14) DOE requests comment on its 

general methodology for estimating 

shipments. See section IV.G of this 

document. 

(15) DOE requests comment its 

approach to projecting market share for 

variable-speed technologies over the 

course of the analysis period. See 

section IV.H.1 of this document. 

(16) DOE requests comment on its 

approach to monetizing the impact of 

the rebound effect in standards cases. 

See section IV.H.3 of this document. 

(17) DOE requests comment on the 

magnitude of costs associated with 

transitioning room AC models to lowGWP refrigerants, such as R–32, along 

with the associated UL costs that would 

be incurred between the publication of 

this NOPR and the proposed 

compliance date of amended standards. 

Quantification and categorization of 

associated costs, such as engineering 

efforts, test lab time, UL certification 

costs, and capital investments, would 

enable DOE to refine its analysis. See 

section V.B.2.d of this document. 

(18) DOE requests information 

regarding the impact of cumulative 

regulatory burden on manufacturers of 

room ACs associated with multiple DOE 

standards or product-specific regulatory 

actions of other Federal agencies. See 

section V.B.2.d of this document. 

(19) DOE requests comment on the 

percentage of room ACs manufactured 

outside of China and the countries of 

origin, as well as information on the 

country-specific fully-burdened labor 

rates and key raw material prices. 

(20) DOE requests comment on the 

impact of tariffs on pricing at each step 

in the distribution chain, as well as the 

percentage change in retail price paid by 

the consumer as a result of Section 301 

tariffs. See section V.B.2.e of this 

document. 

(21) DOE requests comment on the 

certification conclusion. 

Additionally, DOE welcomes 

comments on other issues relevant to 

the conduct of this rulemaking that may 

not specifically be identified in this 

document. 

IX. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this notice of proposed 

rulemaking. 

List of Subjects 

10 CFR Part 429 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Household appliances, Reporting and 

recordkeeping requirements. 

10 CFR Part 430 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Household appliances, Imports, 

Intergovernmental relations, Small 

businesses. 

Signing Authority 

This document of the Department of 

Energy was signed on March 28, 2022, 

by Kelly J. Speakes-Backman, Principal 

Deputy Assistant Secretary for Energy 

Efficiency and Renewable Energy, 

pursuant to delegated authority from the 

Secretary of Energy. That document 

with the original signature and date is 

maintained by DOE. For administrative 

purposes only, and in compliance with 

requirements of the Office of the Federal 

Register, the undersigned DOE Federal 

Register Liaison Officer has been 

authorized to sign and submit the 

document in electronic format for 

publication, as an official document of 

the Department of Energy. This 

administrative process in no way alters 

the legal effect of this document upon 

publication in the Federal Register. 

Signed in Washington, DC, on March 31, 

2022. 

Treena V. Garrett, 

Federal Register Liaison Officer, U.S. 

Department of Energy. 

For the reasons set forth in the 

preamble, DOE proposes to amend parts 

429 and 430 of chapter II, subchapter D, 

of title 10 of the Code of Federal 

Regulations, as set forth below: 

PART 429—CERTIFICATION, 

COMPLIANCE, AND ENFORCEMENT 

FOR CONSUMER PRODUCTS AND 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for part 429 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317; 28 U.S.C. 

2461 note. 

■ 2. Section 429.134 is amended by 

adding paragraph(s) to read as follows: 

§ 429.134 Product-specific enforcement 

provisions. 

* * * * * 

(s) Room air conditioners. Verification 

of cooling capacity. DOE will measure 

the cooling capacity of each unit DOE 

tests pursuant to the test requirements 

of 10 CFR part 430. DOE will calculate 

the mean of the test results, rounded to 

the nearest hundred, and compare it to 

the value of cooling capacity certified by 

the manufacturer for the basic model. 

The certified cooling capacity will be 

considered valid only if the basic model 

is properly certified pursuant to this 

part, and the rounded mean from testing 

pursuant to this section is within five 

percent of the cooling capacity reported 

in the manufacturer’s most recent valid 

certification report at the time of DOE’s 

assessment test. 

(1) If the certified cooling capacity is 

valid, DOE will use the certified cooling 

capacity as the basis for identifying the 

correct product class for the basic model 

and the minimum combined energy 

efficiency ratio allowed for the basic 

model. 

(2) If the certified cooling capacity is 

not valid, DOE will use the mean 

measured cooling capacity of the units 

in the sample, rounded to the nearest 

hundred, as the basis for identifying the 

correct product class for the basic model 

and the minimum combined energy 

efficiency ratio allowed for the basic 

model. 

PART 430—ENERGY CONSERVATION 

PROGRAM FOR CONSUMER 

PRODUCTS 

■ 3. The authority citation for part 430 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6309; 28 U.S.C. 

2461 note. 

■ 4. Section 430.32 is amended by 

revising paragraph (b) to read as follows: 

§ 430.32 Energy and water conservation 

standards and their compliance dates. 

* * * * * 

(b) Room air conditioners. 

The following standards remain in 

effect from June 1, 2014 until [date 3 

years after publication of the final rule]: 


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Equipment class Combined energy 

efficiency ratio 

(1) Without reverse cycle, with louvered sides, and with a certified cooling capacity * less than 6,000 Btu/h ............................ 11.0 

(2) Without reverse cycle, with louvered sides and with a certified cooling capacity of 6,000 to 7,999 Btu/h ............................ 11.0 

(3) Without reverse cycle, with louvered sides and with a certified cooling capacity of 8,000 to 13,999 Btu/h .......................... 10.9 

(4) Without reverse cycle, with louvered sides and with a certified cooling capacity of 14,000 to 19,999 Btu/h ........................ 10.7 

(5)(A) Without reverse cycle, with louvered sides and with a certified cooling capacity of 20,000 Btu/h to 27,999 Btu/h .......... 9.4 

(5)(B) Without reverse cycle, with louvered sides and with a certified cooling capacity of 28,000 Btu/h or more ...................... 9.0 

(6) Without reverse cycle, without louvered sides, and with a certified cooling capacity less than 6,000 Btu/h ......................... 10.0 

(7) Without reverse cycle, without louvered sides and with a certified cooling capacity of 6,000 to 7,999 Btu/h ....................... 10.0 

(8)(A) Without reverse cycle, without louvered sides and with a certified cooling capacity of 8,000 to 10,999 Btu/h ................ 9.6 

(8)(B) Without reverse cycle, without louvered sides and with a certified cooling capacity of 11,000 to 13,999 Btu/h .............. 9.5 

(9) Without reverse cycle, without louvered sides and with a certified cooling capacity of 14,000 to 19,999 Btu/h ................... 9.3 

(10) Without reverse cycle, without louvered sides and with a certified cooling capacity of 20,000 Btu/h or more .................... 9.4 

(11) With reverse cycle, with louvered sides, and with a certified cooling capacity less than 20,000 Btu/h ............................... 9.8 

(12) With reverse cycle, without louvered sides, and with a certified cooling capacity less than 14,000 Btu/h .......................... 9.3 

(13) With reverse cycle, with louvered sides, and with a certified cooling capacity of 20,000 Btu/h or more ............................. 9.3 

(14) With reverse cycle, without louvered sides, and with a certified cooling capacity of 14,000 Btu/h or more ........................ 8.7 

(15) Casement-Only ...................................................................................................................................................................... 9.5 

(16) Casement-Slider ..................................................................................................................................................................... 10.4 

* The certified cooling capacity is determined by the manufacturer in accordance with 10 CFR 429.15(a)(3). 

The following standards apply to 

products manufactured starting [Date 3 

years after publication of the final rule]: 

Equipment class Combined energy 

efficiency ratio 

(1) Without reverse cycle, with louvered sides, and with a certified cooling capacity* less than 6,000 Btu/h ............................. 13.1 

(2) Without reverse cycle, with louvered sides and with a certified cooling capacity of 6,000 to 7,900 Btu/h ............................ 13.7 

(3) Without reverse cycle, with louvered sides and with a certified cooling capacity of 8,000 to 13,900 Btu/h .......................... 16.0 

(4) Without reverse cycle, with louvered sides and with a certified cooling capacity of 14,000 to 19,900 Btu/h ........................ 16.0 

(5)(A) Without reverse cycle, with louvered sides and with a certified cooling capacity of 20,000 Btu/h to 27,900 Btu/h .......... 13.8 

(5)(B) Without reverse cycle, with louvered sides and with a certified cooling capacity of 28,000 Btu/h or more ...................... 13.2 

(6) Without reverse cycle, without louvered sides, and with a certified cooling capacity less than 6,000 Btu/h ......................... 12.8 

(7) Without reverse cycle, without louvered sides and with a certified cooling capacity of 6,000 to 7,900 Btu/h ....................... 12.8 

(8)(A) Without reverse cycle, without louvered sides and with a certified cooling capacity of 8,000 to 10,900 Btu/h ................ 14.1 

(8)(B) Without reverse cycle, without louvered sides and with a certified cooling capacity of 11,000 to 13,900 Btu/h .............. 13.9 

(9) Without reverse cycle, without louvered sides and with a certified cooling capacity of 14,000 to 19,900 Btu/h ................... 13.7 

(10) Without reverse cycle, without louvered sides and with a certified cooling capacity of 20,000 Btu/h or more .................... 13.8 

(11) With reverse cycle, with louvered sides, and with a certified cooling capacity less than 20,000 Btu/h ............................... 14.4 

(12) With reverse cycle, without louvered sides, and with a certified cooling capacity less than 14,000 Btu/h .......................... 13.7 

(13) With reverse cycle, with louvered sides, and with a certified cooling capacity of 20,000 Btu/h or more ............................. 13.7 

(14) With reverse cycle, without louvered sides, and with a certified cooling capacity of 14,000 Btu/h or more ........................ 12.8 

(15) Casement-Only ...................................................................................................................................................................... 13.9 

(16) Casement-Slider ..................................................................................................................................................................... 15.3 

* The certified cooling capacity is determined by the manufacturer in accordance with 10 CFR 429.15(a)(3). 

* * * * * 

[FR Doc. 2022–07141 Filed 4–6–22; 8:45 am] 

BILLING CODE 6450–01–P 


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