From: Llenza, Charles [mailto:Charles.Llenza@ee.doe.gov] 

Sent: Wednesday, August 20, 2008 7:18 PM 

To: Edwards, Brenda 

Cc: Carr, Belinda; Jeffers, Debbie DOE; Dabney, Marcus DOE; Poston, Mona 

Subject: Notice of Public Meeting: Commercial Refrigeration Equipment (CRE) Notice of Proposed Rulemaking 

(NOPR) - 08/12/2008 

Importance: High 

Ladies and Gentlemen: 

On Tuesday, August 12, 2008, the Department of Energy (DOE) issued a Notice of Proposed 

Rulemaking (NOPR) Regarding Energy Conservation Standards for Commercial Ice-Cream 

Freezers; Self-Contained Commercial Refrigerators, Commercial Freezers, and Commercial 

Refrigerator-Freezers without Doors; and Remote Condensing Commercial Refrigerators, 

Commercial Freezers, and Commercial Refrigerator-Freezers (CRE) and a Related Public 

Meeting notice. Please see the attached issued CRE NOPR for details(CRE_NOPR_2008-

08-12.pdf). 

DOE will hold an informal public meeting, on Tuesday, September 23, 2008, to discuss the 

proposed energy conservation standards as issued in the CRE NOPR. The public meeting 

will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-069, 1000 

Independence Avenue, SW, Washington, D.C. 20585-0121 from 9:00 AM to 5:00 PM EST. 

Additional information is available at the DOE website: 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/refrig_equip_nopr_mtg

.html

If you have any additional questions please contact: 

Charles Llenza 

Project Manager/Engineer 

Appliance Standards Team 

Building Technologies Program 

Energy Efficiency and Renewable Energy 

US Department of Energy 

(202)586-2192(work) 

(202)287-1590(fax) 

Charles.Llenza@ee.doe.gov

CONFIDENTIALITY NOTICE

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 EE-2006-STD-0126 COMMENT 22.1
Billing Code 6450-01-P 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket No. EE-2006-STD-0126] 

RIN 1904-AB59 

Energy Conservation Program for Commercial and Industrial Equipment: Energy 

Conservation Standards for Commercial Ice-Cream Freezers; Self-Contained Commercial 

Refrigerators, Commercial Freezers, and Commercial Refrigerator-Freezers without 

Doors; and Remote Condensing Commercial Refrigerators, Commercial Freezers, and 

Commercial Refrigerator-Freezers 

 

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. 

ACTION: Notice of proposed rulemaking and notice of public meeting. 

SUMMARY: The Energy Policy and Conservation Act prescribes energy conservation 

standards for certain commercial and industrial equipment, and requires the Department of 

Energy (DOE) to administer an energy conservation program for this equipment. In this notice, 

DOE is proposing new energy conservation standards for commercial ice-cream freezers; selfcontained commercial refrigerators, commercial freezers, and commercial refrigerator- freezers 

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

 EE-2006-STD-0126 COMMENT 22.1
2

commercial refrigerator-freezers. DOE is also announcing a public meeting on its proposed 

standards. 

DATES: DOE will hold a public meeting on Tuesday, September 23, 2008, from 9:00 a.m. to 

5:00 p.m. in Washington, DC. DOE must receive requests to speak at the public meeting no later 

than 4:00 p.m., Tuesday, September 9, 2008 DOE must receive a signed original and an 

electronic copy of statements to be given at the public meeting no later than 4:00 p.m., Tuesday, 

September 16, 2008. 

DOE will accept comments, data, and information regarding the notice of proposed 

rulemaking (NOPR) before and after the public meeting, but no later than [INSERT DATE 60 

DAYS AFTER FEDERAL REGISTER PUBLICATION]. See Section Error! Reference 

source not found., “Public Participation,” of this NOPR for details. 

ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal 

Building, Room 8E-089, 1000 Independence Avenue, SW, Washington, DC 20585-0121. Please 

note that foreign nationals visiting DOE Headquarters are subject to advance security screening 

procedures, requiring a 30-day advance notice. If you are a foreign national and wish to 

participate in the public meeting, please inform DOE as soon as possible by contacting Ms. 

Brenda Edwards at (202) 586-2945 so that the necessary procedures can be completed. 

 

 EE-2006-STD-0126 COMMENT 22.1
 Any comments submitted must identify the NOPR for commercial refrigeration 

equipment, and provide docket number EE-2006-STD-0126 and/or RIN number 1904-AB59. 

Comments may be submitted using any of the following methods: 

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for 

submitting comments. 

• E-mail: commercialrefrigeration.rulemaking@ee.doe.gov. Include docket number EE2006-STD-0126 and/or RIN 1904-AB59 in the subject line of the message. 

• Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies 

Program, Mailstop EE-2J, 1000 Independence Avenue, SW, Washington, DC 20585-

0121. Telephone: (202) 586-2945. Please submit one signed original paper copy. 

• Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building 

Technologies Program, 950 L’Enfant Plaza, SW, 6th Floor, Washington, DC 20024. 

Please submit one signed original paper copy. 

 For detailed instructions on submitting comments and additional information on the 

rulemaking process, see Section VII, “Public Participation,” of this document. 

 

Docket: For access to the docket to read background documents or comments received, 

visit the U.S. Department of Energy, Resource Room of the Building Technologies Program, 950 

L’Enfant Plaza, SW, 6th Floor, Washington, DC, 20024, (202) 586-2945, between 9:00 a.m. and 

4:00 p.m., Monday through Friday, except Federal holidays. Please call Ms. Brenda Edwards at 

the above telephone number for additional information regarding visiting the Resource Room. 

 EE-2006-STD-0126 COMMENT 22.1
Please note: DOE’s Freedom of Information Reading Room (Room 1E-190 at the Forrestal 

Building) no longer houses rulemaking materials. 

FOR FURTHER INFORMATION CONTACT: 

Mr. Charles Llenza, U.S. Department of Energy, Building Technologies Program, EE-2J, 1000 

Independence Avenue, SW, Washington, DC 20585-0121, (202) 586-2192, 

Charles.Llenza@ee.doe.gov. 

Ms. Francine Pinto, Esq., U.S. Department of Energy, Office of General Counsel, GC-72, 1000 

Independence Avenue, SW, Washington, DC 20585-0121, (202) 586-9507, 

Francine.Pinto@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

I. Summary of the Proposed Rule

II. Introduction

A. Overview

B. Authority

C. Background 

1. Current Standards

2. History of Standards Rulemaking for Commercial Refrigeration Equipment

III. General Discussion

A. Test Procedures

B. Technological Feasibility

1. General

2. Maximum Technologically Feasible Levels 

C. Energy Savings

1. Determination of Savings

2. Significance of Savings

D. Economic Justification

1. Specific Criteria

a. Economic Impact on Manufacturers and Commercial Customers

b. Life-Cycle Costs 

c. Energy Savings 

d. Lessening of Utility or Performance of Equipment

e. Impact of Any Lessening of Competition

 EE-2006-STD-0126 COMMENT 22.1
f. Need of the Nation to Conserve Energy

g. Other Factors

2. Rebuttable Presumption

IV. Methodology and Discussion of Comments

A. Market and Technology Assessment 

1. Definitions Related to Commercial Refrigeration Equipment

a. Air Curtain Angle Definition

b. Door Angle Definition

2. Equipment Classes

B. Engineering Analysis

1. Approach

2. Equipment Classes Analyzed

3. Analytical Models

a. Cost Model

b. Energy Consumption Model

c. Design Options

4. Baseline Models

5. Engineering Analysis Results

C. Markups to Determine Equipment Price

D. Energy Use Characterization

E. Life-Cycle Cost and Payback Period Analyses

1. Manufacturer Selling Price

2. Increase in Selling Price

3. Markups

4. Installation Costs

5. Energy Consumption

6. Electricity Prices

7. Electricity Price Trends

8. Repair Costs 

9. Maintenance Costs

10. Lifetime

11. Discount Rate

12. Payback Period

F. Shipments Analysis

G. National Impact Analysis

1. Base Case and Standards Case Forecasted Efficiencies

2. Annual Energy Consumption, Total Installed Cost, Maintenance Cost, and Repair Costs

3. Escalation of Electricity Prices

4. Electricity Site-to-Source Conversion

H. Life-Cycle Cost Sub-Group Analysis

I. Manufacturer Impact Analysis

1. Overview

a. Phase 1, Industry Profile

b. Phase 2, Industry Cash-Flow Analysis

c. Phase 3, Sub-Group Impact Analysis

2. Government Regulatory Impact Model Analysis

 EE-2006-STD-0126 COMMENT 22.1
3. Manufacturer Interviews

a. Key Issues

4. Government Regulatory Impact Model Key Inputs and Scenarios

a. Base Case Shipments Forecast

b. Standards Case Shipments Forecast

c. Markup Scenarios

d. Equipment and Capital Conversion Costs

J. Utility Impact Analysis

K. Employment Impact Analysis

L. Environmental Assessment 

V. Analytical Results

A. Trial Standard Levels

1. Miscellaneous Equipment

B. Economic Justification and Energy Savings

1. Economic Impacts on Commercial Customers

a. Life-Cycle Cost and Payback Period 

b. Rebuttable Presumption Payback

c. Life-Cycle Cost Sub-Group Analysis

2. Economic Impacts on Manufacturers

a. Industry Cash-Flow Analysis Results

b. Cumulative Regulatory Burden

c. Impacts on Employment

d. Impacts on Manufacturing Capacity

e. Impacts on Sub-Groups of Manufacturers

3. National Impact Analysis

a. Amount and Significance of Energy Savings

b. Net Present Value

c. Impacts on Employment

4. Impact on Utility or Performance of Equipment

5. Impact of Any Lessening of Competition

6. Need of the Nation to Conserve Energy

7. Other Factors

C. Proposed Standard

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

B. Review Under the Regulatory Flexibility Act/Initial Regulatory Flexibility Analysis

C. Review Under the Paperwork Reduction Act

D. Review Under the National Environmental Policy Act

E. Review Under Executive Order 13132

F. Review Under Executive Order 12988

G. Review Under the Unfunded Mandates Reform Act of 1995

H. Review Under the Treasury and General Government Appropriations Act, 1999

I. Review Under Executive Order 12630

J. Review Under the Treasury and General Government Appropriations Act, 2001

K. Review Under Executive Order 13211

L. Review Under the Information Quality Bulletin for Peer Review

 EE-2006-STD-0126 COMMENT 22.1
VII. Public Participation

A. Attendance at Public Meeting

B. Procedure for Submitting Requests to Speak

C. Conduct of Public Meeting

D. Submission of Comments

E. Issues on Which DOE Seeks Comment

VIII. Approval of the Office of the Secretary

I. Summary of the Proposed Rule 

 The Energy Policy and Conservation Act, as amended, (EPCA) specifies that any new or 

amended energy conservation standard the U.S. Department of Energy (DOE) prescribes for the 

equipment covered by this notice shall be designed to “achieve the maximum improvement in 

energy efficiency . . . which the Secretary determines is technologically feasible and 

economically justified.” (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) Furthermore, the new or 

amended standard must “result in significant conservation of energy.” (42 U.S.C. 6295(o)(3)(B) 

and 6316(e)(1)) In accordance with these and other statutory criteria discussed in this notice, 

DOE proposes to adopt new energy conservation standards for commercial ice-cream freezers; 

self-contained commercial refrigerators, commercial freezers, and commercial refrigeratorfreezers without doors; and remote condensing commercial refrigerators, commercial freezers, 

and commercial refrigerator-freezers.1 The proposed standards, shown in Table I-1, would apply 

to all commercial refrigeration equipment manufactured on or after January 1, 2012, and offered 

for sale in the United States. 42 U.S.C. 6313(c)(4)(A) 

 

1

 These types of equipment are referred to collectively hereafter as ‘‘commercial refrigeration equipment.’’ 

 EE-2006-STD-0126 COMMENT 22.1
Table I-1 Proposed Standard Levels 

Equipment 

Class2

Proposed Standard 

Level *,** 

Equipment 

Class 

Proposed Standard 

Level 

VOP.RC.M 0.82 x TDA + 4.07 VCT.RC.I 0.71 x TDA + 3.05 

SVO.RC.M 0.83 x TDA + 3.18 HCT.RC.M 0.16 x TDA + 0.13 

HZO.RC.M 0.35 x TDA + 2.88 HCT.RC.L 0.34 x TDA + 0.26 

VOP.RC.L 2.28 x TDA + 6.85 HCT.RC.I 0.4 x TDA + 0.31 

HZO.RC.L 0.57 x TDA + 6.88 VCS.RC.M 0.11 x V + 0.26 

VCT.RC.M 0.25 x TDA + 1.95 VCS.RC.L 0.23 x V + 0.54 

VCT.RC.L 0.6 x TDA + 2.61 VCS.RC.I 0.27 x V + 0.63 

SOC.RC.M 0.51 x TDA + 0.11 HCS.RC.M 0.11 x V + 0.26 

VOP.SC.M 1.74 x TDA + 4.71 HCS.RC.L 0.23 x V + 0.54 

SVO.SC.M 1.73 x TDA + 4.59 HCS.RC.I 0.27 x V + 0.63 

HZO.SC.M 0.77 x TDA + 5.55 SOC.RC.L 1.08 x TDA + 0.22 

HZO.SC.L 1.92 x TDA + 7.08 SOC.RC.I 1.26 x TDA + 0.26 

VCT.SC.I 0.73 x TDA + 3.29 VOP.SC.L 4.37 x TDA + 11.82 

VCS.SC.I 0.38 x V + 0.88 VOP.SC.I 5.55 x TDA + 15.02 

HCT.SC.I 0.56 x TDA + 0.43 SVO.SC.L 4.34 x TDA + 11.51 

SVO.RC.L 2.28 x TDA + 6.85 SVO.SC.I 5.52 x TDA + 14.63 

VOP.RC.I 2.9 x TDA + 8.7 HZO.SC.I 2.44 x TDA + 9 

SVO.RC.I 2.9 x TDA + 8.7 SOC.SC.I 1.76 x TDA + 0.36 

HZO.RC.I 0.72 x TDA + 8.74 HCS.SC.I 0.38 x V + 0.88 *

 “TDA” is the total display area of the case, as measured in the Air-Conditioning and Refrigeration Institute (ARI) 

Standard 1200-2006, Appendix D. 

** “V” is the volume of the case, as measured in ARI Standard 1200-2006, Appendix C. 

 DOE’s analyses indicate that the proposed energy conservation standards, trial standard 

level (TSL) 4 (see Section V.A for a detailed description of TSLs), would save a significant 

amount of energy—an estimated 0.83 quadrillion British thermal units (Btu), or quads, of 

cumulative energy over 30 years (2012-2042). The economic impacts on commercial consumers 

(i.e., the average life-cycle cost (LCC) savings) are positive for all equipment classes. 

 

 The cumulative national net present value (NPV) of the proposed standards at TSL 4 

 

2

 For this rulemaking, equipment class designations consist of a combination (in sequential order separated by 

periods) of: (1) an equipment family code (VOP=vertical open, SVO=semivertical open, HZO=horizontal open, 

VCT=vertical transparent doors, VCS=vertical solid doors, HCT=horizontal transparent doors, HCS=horizontal 

solid doors, or SOC=service over counter); (2) an operating mode code (RC=remote condensing or SC=selfcontained); and ( 3) a rating temperature code (M=medium temperature (38°F), L=low temperature (0°F), or I=icecream temperature (-15°F)). For example, “VOP.RC.M” refers to the “vertical open, remote condensing, medium 

temperature” equipment class. See discussion below and chapter 3 of the TSD, market and technology assessment, 

for a more detailed explanation of the equipment class terminology. 

 EE-2006-STD-0126 COMMENT 22.1
from 2012 to 2042, ranges from $1.1 billion (at a seven percent discount rate) to $3.24 billion (at 

a three percent discount rate), in 2007$. This is the estimated total value of future operating cost 

savings minus the estimated increased equipment costs, discounted to 2007$. The benefits and 

costs of the standard can also be expressed in terms of annualized 2007$ values over the forecast 

period 2012 through 2062. Using a 7 percent discount rate for the annualized cost analysis, the 

cost of the standard is estimated to be $109 million per year in increased equipment and 

installation costs while the annualized benefits are expected to be $214 million per year in 

reduced equipment operating costs. Using a 3 percent discount rate, the annualized cost of the 

standard is expected to be $92 million per year while the annualized benefits of today's standard 

are expected to be $234 million per year. See Section V.B.3 for additional details. If DOE 

adopts the proposed standards, it expects manufacturers will lose 8 to 35 percent of the industry 

net present value (INPV), which is approximately $40 to $180 million. 

DOE estimates that the proposed standards will have environmental benefits leading to 

reductions in greenhouse gas emissions (i.e., cumulative (undiscounted) emission reductions) of 

44 million tons (Mt) of carbon dioxide (CO2) from 2012 to 2042.3 Most of the energy saved is 

electricity. In addition, DOE expects the energy savings from the proposed standards to 

eliminate the need for approximately 640 megawatts (MW) of generating capacity by 2042. 

These results reflect DOE’s use of energy price projections from the U.S. Energy Information 

Administration (EIA)’s Annual Energy Outlook 2007 (AEO2007).4

 

3

 Additionally, the standards would result in 17 thousand tons (kt) of nitrogen oxides (NOX) emissions reductions or 

generate a similar amount of NOX emissions allowance credits in areas where such emissions are subject to 

regulatory or voluntary emissions caps. 

4

 DOE intends to use EIA’s AEO2008 to generate the results for the final rule. The AEO2008 Early Release 

contains reference case energy price forecasts which shows higher commercial electricity prices at the national level 

compared with the AEO2007 on a real (inflation adjusted) basis. If these early release energy prices remain 

 EE-2006-STD-0126 COMMENT 22.1
DOE proposes that TSL 4 represents the maximum improvement in energy efficiency 

that is technologically feasible and economically justified. DOE proposes that the benefits to the 

Nation of TSL 4 (energy savings, commercial consumer average LCC savings, national NPV 

increase, and emission reductions) outweigh the costs (loss of manufacturer INPV) and is 

therefore proposing TSL 4 as the energy conservation standards for commercial refrigeration 

equipment in this NOPR. TSL 4 is technologically feasible because the technologies required to 

achieve these levels already exist. 

In this NOPR, DOE proposes that TSL 5 is not economically justified because, under the 

current circumstances, DOE believes that the benefits to the Nation of TSL 5 (energy savings, 

commercial consumer average LCC savings, and emission reductions) do not outweigh the costs 

(national NPV decrease and loss of manufacturer INPV). DOE’s analyses indicate that TSL 5 

would save a greater amount of energy than TSL 4—an estimated 1.21 quadrillion quads of 

cumulative energy over 30 years (2012-2042). At TSL 5, while the economic impacts on 

commercial consumers (i.e., LCC savings and NPV) are still positive for the majority of 

equipment classes, the impacts on commercial customers for five classes (VOP.RC.M, 

VOP.SC.M, SVO.RC.M, SVO.SC.M, and SOC.RC.M) are negative. The life-cycle cost savings 

are negative for three classes and NPV results for each of these five classes are negative. 

 The cumulative NPV at TSL 5, from 2012 to 2042, ranges from -$200 million (at a seven 

percent discount rate) to $1.16 billion (at a three percent discount rate), in 2007$. Using a 7 

 unchanged in the final release, then incorporation of the AEO 2008 forecasts would likely result in reduced payback 

periods and greater life-cycle cost savings and greater national net present value for the proposed standards. 

 EE-2006-STD-0126 COMMENT 22.1
percent discount rate, the annualized cost of the standard is estimated to be $285 million per year 

in increased equipment and installation costs while the annualized benefits are expected to be 

$266 million per year in reduced equipment operating costs. Using a 3 percent discount rate, the 

annualized cost of the standard is expected to be $241 million per year while the annualized 

benefits are expected to be $292 million per year. See Section V.B.3 for additional details. At 

TSL 5, DOE expects manufacturers will lose 3 to 56 percent of the industry net present value 

INPV, which is approximately $18 to $285 million. 

DOE based its estimates of the economic impacts referenced above on current costs for 

energy improving technologies used in commercial refrigeration equipment. A key technology 

for energy savings benefits in most commercial refrigeration equipment is the use of solid state 

lighting (i.e., light emitting diodes or LEDs). At current LED prices, the life-cycle cost savings 

at TSL 5 are substantially lower than TSL 3 and TSL 4 for several equipment classes. For 

example, the average per unit LCC savings for the VOP.RC.M equipment class is $1,551 at TSL 

3, but this number falls by $1,785 to -$234 when moving to TSL 5. When accounting for the 

projected volume of sales for these equipment classes in 2012, the net effect of moving from 

TSL 3 to TSL 5 is a decrease in LCC savings of $130 million per year. To achieve the same or 

greater LCC savings at TSL 5 as other efficiency levels (e.g., TSL 3 or 4), for all equipment 

classes, average LED costs would need to decrease by almost 45 percent. 

While considerable information is available that suggests LED costs are likely to decline 

more than assumed in DOE’s analysis, DOE believes it must have a higher degree of confidence 

of further cost reductions than assumed in today’s proposed rule. In this NOPR, DOE projected 

 EE-2006-STD-0126 COMMENT 22.1
future LED costs based on DOE’s Multi-Year Program Plan5

, which are consistent with 

historical LED price reductions between 2000 and 2007. The Multi-Year Program Plan projects 

that LED chip costs will continue to decrease at a compound annual growth rate (CAGR) of 

approximately -27 percent between 2007 and 2012, which represents a price reduction of 80 

percent over that time period. Since LED chips are only a portion of the total LED system (other 

components include power supply and the LED fixture), the 80 percent reduction in chip costs 

contributes to an estimated decrease in total LED system cost of approximately 50 percent by 

2012, assuming the costs of the power supply and LED fixtures do not change significantly. 

Such a decrease in cost would be sufficient for TSL 5 to achieve LCC savings equal to or greater 

than other TSLs. 

DOE examined whether the projected LED costs presented in the Multi-Year Program 

Plan and used in this NOPR are consistent with publicly available empirical historical cost data. 

DOE reviewed available price data for the LED market and found that between 2000 and 2007, 

white-light LEDs had a CAGR ranging from approximately -18 to -31 percent. DOE’s LED cost 

projection (i.e., -27 percent CAGR) falls within the range of CAGRs observed. DOE expanded 

its examination by comparing this projected trend to the red-light LED market, which is a related 

technology, with cost information spanning approximately three decades (i.e., 1973 to 2005). 

DOE found that the CAGR of red-light LED costs was -22 percent over this longer time span. 

The trend in red-light LED costs derived from empirical data over this longer time period is of a 

similar magnitude to DOE’s projected costs for white-light LEDs. Due to the technological 

 

5

 U.S. Department of Energy, Solid-State Lighting Research and Development, Multi-Year Program Plan FY’09-

FY’14. This document was prepared under the direction of a Technical Committee from the Next Generation 

Lighting Initiative Alliance (NGLIA). Information about the NGLIA and its members is available at 

www.nglia.org. 

 EE-2006-STD-0126 COMMENT 22.1
similarities between red-light LEDs and white-light LEDs, DOE believes that the historical cost 

reductions for red-light LEDs are indicative of future cost reductions for white-light LEDs. 

Furthermore, the white-light LED market is undergoing a massive expansion and growth phase, 

with significant investment, new products and innovative applications for LED technology, 

including illumination of commercial refrigeration equipment. See Section V.C of this NOPR 

and Appendix B of the technical support document (TSD) for more detail on the cost projection 

and DOE's validation of those estimates. DOE seeks comment on the extent to which these price 

trends are indicative of what can be expected for commercial refrigeration equipment LED 

lighting from 2007 to 2012 and the extent to which the cost reduction observed for red-light 

LEDs is relevant to DOE’s cost projections for white-light LEDs. DOE also seeks comment on 

the extent to which stakeholders expect projected LED cost reductions would occur, the timing 

of the projected LED cost reductions, and the certainty of the projected LED cost reductions. 

Finally, considering the rapid development of LED technology and the steady reductions in cost, 

DOE seeks comment on the extent to which manufacturers would adopt LED technology into the 

design of commercial refrigeration equipment in the absence of standards. 

DOE also performed sensitivity analyses of the effect of projected cost reductions in LED 

lighting systems on LCC and NPV. Incorporation of DOE LED lighting system cost projections 

of a 50 percent decline by 2012 shift the calculated NPV, for 2012-2042, from -$200 million to a 

positive $1.62 billion at a seven percent discount rate, for TSL 5. See Section V.C of this NOPR 

or Chapter 8 of the TSD for additional details. 

TSL 5 is estimated to have environmental benefits leading to reductions in greenhouse 

 EE-2006-STD-0126 COMMENT 22.1
gas emissions of 63 Mt of CO2 from 2012 to 2042. Additionally, TSL 5 would result in 23 kt of 

NOX emissions reductions or generate a similar amount of NOX emissions allowance credits in 

areas where such emissions are subject to emissions caps. Most of the energy saved is 

electricity. In addition, DOE expects the energy savings from the proposed standards to 

eliminate the need for approximately 930 MW of generating capacity by 2042. 

Although DOE has tentatively rejected TSL 5 because, under the current circumstances, 

it tentatively found that the benefits to the Nation do not outweigh the costs, and therefore does 

not consider TSL 5 economically justified, DOE expects that LED costs will decline 

substantially over the next 4-5 years and could have a dramatic effect on the economic impacts 

described above. Therefore, DOE requests data or information that could provide a greater level 

of confidence that the projected LED cost reductions will occur and DOE will assess that data 

in determining whether to further consider TSL 5 in its final rule analysis. 

II. Introduction 

A. Overview 

 DOE proposes to set energy conservation standards for commercial refrigeration 

equipment at the levels shown in Table I-1. The proposed standards would apply to equipment 

manufactured on or after January 1, 2012, and offered for sale in the United States. DOE has 

tentatively found that the standards would save a significant amount of energy (see Section 

III.C.2) and result in a cleaner environment. In the 30-year period after the new standard 

becomes effective, the Nation would tentatively save 0.83 quads of primary energy. These 

energy savings also would tentatively result in significantly reduced emissions of air pollutants 

 EE-2006-STD-0126 COMMENT 22.1
and greenhouse gases associated with electricity production, by avoiding the emission of 44 Mt 

of CO2 and 17 kt of NOX. In addition, DOE expects the standard to prevent the construction of 

the new power plants that would be necessary to produce approximately 640 MW by 2042. In 

total, DOE tentatively estimates the net present value to the Nation of this standard to be $1.1 

billion from 2012 to 2042 in 2007$. 

 

 Commercial customers would see benefits from the proposed standards. Although DOE 

expects the price of the higher efficiency commercial refrigeration equipment to be 

approximately 11 percent higher than the average price of this equipment today, weighted by 

shipments across equipment classes, the energy efficiency gains would result in lower energy 

costs, saving customers about 26 percent per year on their energy bills. Based on DOE’s LCC 

analysis, DOE tentatively estimates that the mean payback period for the higher efficiency 

commercial refrigeration equipment would be between a low of 1.4 to a high of 6.1 years. In 

addition, when the net results of these price increases and energy cost savings are summed over 

the lifetime of the higher efficiency equipment, customers could save approximately $690 to 

$3800, depending on equipment class, compared to their expenditures on today’s baseline 

commercial refrigeration equipment. 

B. Authority 

 Title III of EPCA sets forth a variety of provisions designed to improve energy 

efficiency. Part A of Title III (42 U.S.C. 6291-6309) provides for the Energy Conservation 

Program for Consumer Products Other Than Automobiles. Part A-1 of Title III (42 U.S.C. 

6311–6317) establishes a similar program for certain types of commercial and industrial 

 EE-2006-STD-0126 COMMENT 22.1
equipment.6

 The Energy Policy Act of 2005 (EPACT 2005), Pub. L. 109–58, included an 

amendment to Part A-1 requiring that DOE prescribe energy conservation standards for the 

commercial refrigeration equipment that is the subject of this rulemaking. (EPACT 2005, 

Section 136(c); 42 U.S.C. 6313(c)(4)(A)) Hence, DOE publishes today’s notice of proposed 

rulemaking (NOPR) pursuant to Part A-1, which provides definitions, test procedures, labeling 

provisions, energy conservation standards, and the authority to require information and reports 

from manufacturers. The test procedures for commercial refrigeration equipment appear at Title 

10 Code of Federal Regulations (CFR) Sections 431.63 and 431.64. 

EPCA provides criteria for prescribing new or amended standards for covered equipment. 

As indicated above, any new or amended standard for commercial refrigeration equipment must 

be designed to achieve the maximum improvement in energy efficiency that is technologically 

feasible and economically justified.7

 (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) But EPCA 

precludes DOE from adopting any standard that would not result in significant conservation of 

energy. (42 U.S.C. 6295(o)(3) and 6316(e)(1)) Moreover, DOE may not prescribe a standard 

for certain equipment if no test procedure has been established for that equipment, or if DOE 

determines by rule that the standard is not technologically feasible or economically justified, and 

that such standard will not result in significant conservation of energy. (42 U.S.C. 6295(o)(3) 

and 6316(e)(1)) EPCA also provides that, in deciding whether a standard is economically 

justified, DOE must determine whether the benefits of the standard exceed its burdens after 

 

6

 This part was originally titled Part C, however, it was renamed Part A-1 after Part B of Title III was repealed by 

EPACT 2005. 

7

 This notice concerns types of “covered equipment” as that term is defined in EPCA, (42 U.S.C. 6311(1)(E)) in 

Part A-1, Certain Industrial Equipment. Therefore, when DOE quotes from, paraphrases or describes general 

provisions in Part A, for instance, 42 U.S.C. 6295(o), it substitutes the term “equipment” for “product” when the 

latter term appears in those provisions. (See 42 U.S.C. 6316 (a)(3)) 

 EE-2006-STD-0126 COMMENT 22.1
receiving comments on the proposed standard. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) To 

the greatest extent practicable, DOE must consider the following seven factors: 

(I) the economic impact of the standard on manufacturers and consumers of the equipment 

subject to the standard; 

(II) the savings in operating costs throughout the estimated average life of the covered 

equipment in the type (or class) compared to any increase in the price, initial charges, or 

maintenance expenses for the equipment that are likely to result from the imposition of the 

standard; 

(III) the total projected amount of energy savings likely to result directly from the imposition 

of the standard; 

(IV) any lessening of the utility or the performance of the covered equipment likely to result 

from the imposition of the standard; 

(V) the impact of any lessening of competition, as determined in writing by the Attorney 

General, that is likely to result from the imposition of the standard; 

(VI) the need for national energy conservation; and 

(VII) other factors the Secretary considers relevant. 

Id.

Furthermore, the Secretary may not prescribe an amended or new standard if interested 

persons have established by a preponderance of the evidence that the standard is likely to result 

in the unavailability in the United States of any equipment type (or class) with 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) 

 EE-2006-STD-0126 COMMENT 22.1
and 6316(e)(1)) In addition, there is a rebuttable presumption that a standard level is 

economically justified if the Secretary finds that “the additional cost to the consumer of 

purchasing equipment 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) and 6316(e)(1)) The rebuttable presumption test is an alternative path 

to establishing economic justification. 

Section 325(q)(1) of EPCA addresses the situation where DOE sets a standard for a type 

or class of covered equipment that has two or more groups of covered equipment. DOE must 

specify a different standard level than that which applies generally to such equipment “for any 

group of covered equipment which have the same function or intended use, if . . . equipment 

within such group – (A) consume a different kind of energy from that consumed by other 

covered equipment within such type (or class); or (B) have a capacity or other performancerelated feature which other equipment within such type (or class) do not have and such feature 

justifies a higher or lower standard” than applies or will apply to the other equipment. (42 

U.S.C. 6295(q)(1) and 6316(e)(1)) In determining whether a performance-related feature justifies 

a different standard for a group of equipment, DOE must “consider such factors as the utility to 

the consumer of such a feature” and other factors DOE deems appropriate. Any rule prescribing 

such a standard must include an explanation of the basis on which a higher or lower level was 

established. (42 U.S.C. 6295(q)(2) and 6316(e)(1)) 

 EE-2006-STD-0126 COMMENT 22.1
Finally, Federal energy conservation requirements for commercial equipment generally 

supersede State laws or regulations concerning energy conservation testing, labeling, and 

standards for such equipment. (42 U.S.C. 6316 (a)–(b)) For the commercial refrigeration 

equipment covered by this rulemaking, Federal energy conservation requirements will supersede 

all such State laws or regulations beginning on the date of publication of the Federal standards, 

except that any state or local standard issued before that time will be superseded only when the 

Federal standards take effect. (42 U.S.C. 6316(e)(3)) Furthermore, DOE can grant waivers of 

preemption to any State laws or regulations that are superseded in accordance with the 

procedures and other provisions of Section 327(d) of the Act. (42 U.S.C. 6297(d) and 

6316(e)(3)) 

C. Background 

1. Current Standards 

There are no national energy conservation standards for the commercial refrigeration 

equipment covered by this rulemaking. EPACT 2005 did amend EPCA to establish energy 

conservation standards that will apply to certain other types of commercial refrigerators, freezers, 

and refrigerator-freezers when manufactured on or after January 1, 2010. (42 U.S.C. 6313(c)(2)-

(3)) Those standards are not at issue in this rulemaking. 

2. History of Standards Rulemaking for Commercial Refrigeration Equipment 

 On August 8, 2005, Section 136(c) of EPACT 2005 amended EPCA, in part to direct 

DOE to issue energy conservation standards for the equipment covered by this rulemaking, 

which standards would apply to equipment manufactured on or after January 1, 2012. (42 U.S.C. 

 EE-2006-STD-0126 COMMENT 22.1
6313(c)(4)(A)) Section 136(a)(3) of EPACT 2005 also amended EPCA, by adding definitions 

for terms relevant to this equipment. (42 U.S.C. 6311(9)) In defining the term “commercial 

refrigerator, freezer, and refrigerator-freezer, EPCA states that this refrigeration equipment is 

connected to either a self-contained condensing unit or to a remote condensing unit. 42 U.S.C. 

6311 (9)(A)(vii). Subsequently, EPCA defines the terms “remote condensing unit” and “selfcontained condensing unit.” 42 U.S.C. 6311 (9)(E)-(F). These are the two condenser 

configurations of equipment covered by this rulemaking. 

 On December 19, 2006, the Energy Independence and Security Act of 2007 (EISA 2007) 

was signed into law by the President. This legislation affected some of the products for which 

DOE had rulemakings underway. However, it did not create any additional requirements for 

commercial refrigeration equipment. 

As an initial step to comply with EPCA’s mandate to issue standards for commercial 

refrigeration equipment, and to commence this rulemaking, on April 25, 2006, DOE published 

notice of a public meeting and of the availability of its Framework Document for this 

rulemaking. 71 FR 23876. The Framework Document described the procedural and analytical 

approaches that DOE anticipated using to evaluate energy conservation standards for commercial 

refrigeration equipment, and identified various issues to be resolved in conducting the 

rulemaking. DOE held a public meeting on May 16, 2006 to present the contents of the 

Framework Document, describe the analyses it planned to conduct during the rulemaking, obtain 

public comment on these subjects, and inform and facilitate interested persons’ involvement in 

the rulemaking. DOE also gave interested persons an opportunity, after the public meeting, to 

 EE-2006-STD-0126 COMMENT 22.1
submit written statements in response to the Framework Document. DOE received five 

statements. 

On July 26, 2007, DOE published an advance notice of proposed rulemaking (ANOPR) 

concerning energy conservation standards for commercial refrigeration equipment. 72 FR 

41161. In the ANOPR, DOE described and sought comment on its proposed equipment classes 

for this rulemaking, and on the analytical framework, models, and tools (e.g., LCC and national 

energy savings (NES) spreadsheets) that DOE used to analyze the impacts of energy 

conservation standards for commercial refrigeration equipment. In conjunction with the 

ANOPR, DOE also published on its website the complete ANOPR TSD. The TSD included the 

results of DOE’s preliminary (1) engineering analysis, (2) markups analysis to determine 

equipment price, (3) energy use characterization, (4) LCC and payback period (PBP) analyses, 

(5) NES and national impact analyses (NIA), and (6) manufacturer impact analysis (MIA). In 

the ANOPR, DOE requested comment on these results, and on a range of other issues. These 

issues included equipment classes, definitions for air-curtain angle and door angle, case lighting 

operating hours, operation and maintenance practices, equipment lifetime, LCC baseline levels, 

NIA base case, base case and standards case forecasts, differential impact of new standards on 

future shipments, selection of standard levels for post-ANOPR analysis, the equation that 

expresses the energy conservation standards, and the nature of standards for commercial 

refrigerator-freezers. 

 DOE held a public meeting in Washington, DC on August 23, 2007, to present the 

methodology and results of the ANOPR analyses, and to solicit both oral and written comments 

 EE-2006-STD-0126 COMMENT 22.1
from the interested persons who attended. Public comment focused on DOE’s assumptions, 

approach, and equipment class breakdown, and are addressed in detail in this NOPR. 

III. General Discussion 

A. Test Procedures 

On December 8, 2006, DOE published a final rule in which it adopted American National 

Standards Institute (ANSI)/Air-Conditioning and Refrigeration Institute (ARI) Standard 1200-

2006, Performance Rating of Commercial Refrigerated Display Merchandisers and Storage 

Cabinets, as the DOE test procedure for this equipment. 71 FR 71340, 71369-70; 10 CFR 

431.63-431.64. ANSI/ARI Standard 1200-2006 contains rating temperature specifications of 

38° F (±2° F) for commercial refrigerators and refrigerator compartments, 0° F (±2° F) for 

commercial freezers and freezer compartments, and -5° F (±2° F) for commercial ice-cream 

freezers. The standard also requires performance tests to be conducted according to the 

American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) 

Standard 72-2005, Method of Testing Commercial Refrigerators and Freezers. In this final rule, 

DOE also adopted a -15° F (±2° F) rating temperature for commercial ice-cream freezers. 71 FR 

71370. In addition, DOE adopted ANSI/Association of Home Appliance Manufacturers 

(AHAM) Standard HRF-1-2004, Energy, Performance and Capacity of Household Refrigerators, 

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

71 FR 71369-70. 

 EE-2006-STD-0126 COMMENT 22.1
B. Technological Feasibility 

1. General 

DOE considers design options technologically feasible if industry already uses these 

options or if research has progressed to the development of a working prototype. “Technologies 

incorporated in commercially available equipment or in working prototypes will be considered 

technologically feasible.” 10 CFR Part 430, Subpart C, Appendix A, Section 4(a)(4)(i). 

In each standards rulemaking, DOE conducts a screening analysis, which it bases on 

information it has gathered regarding all current technology options and prototype designs. In 

consultation with interested parties, DOE develops a list of design options for consideration in 

the rulemaking. All technologically feasible design options are candidates in this initial 

assessment. Early in the process, DOE eliminates from consideration any design option (a) that 

is not practicable to manufacture, install, or service; (b) that will have adverse impacts on 

equipment utility or availability; or (c) for which there are health or safety concerns that cannot 

be resolved. Chapter 4 of the TSD accompanying this notice contains a description of the 

screening analysis for this rulemaking. 

In the ANOPR, DOE eliminated five of the technologies considered in the market and 

technology assessment: (1) air-curtain design, (2) thermoacoustic refrigeration, (3) magnetic 

refrigeration, (4) electro-hydrodynamic heat exchangers, and (5) copper rotor motors. Because 

all five of these technologies are in the research stage, DOE believes that they would not be 

practicable to manufacture, install and service on the scale necessary to serve the relevant market 

at the time of the effective date of the standard. In addition, because these technologies are in the 

 EE-2006-STD-0126 COMMENT 22.1
research stage, DOE cannot assess whether they would have any adverse impacts on utility to 

significant subgroups of consumers, result in the unavailability of any types of equipment, or 

present any significant adverse impacts on health or safety. Therefore, DOE did not consider 

these technologies as design options for improving the energy efficiency of commercial 

refrigeration equipment. DOE believes that all the efficiency levels discussed in today’s notice 

are technologically feasible because there is equipment either in the market or in working 

prototypes at all of the efficiency levels analyzed. See Chapter 4 of the TSD for further 

discussion of the screening analysis. 

2. Maximum Technologically Feasible Levels 

In deciding whether to adopt a new standard for a type or class of commercial 

refrigeration equipment, DOE must “determine the maximum improvement in energy efficiency 

or maximum reduction in energy use that is technologically feasible” for such equipment. (42 

U.S.C. 6295(p)(1) and 6316(e)(1)) If such standard is not designed to achieve such efficiency or 

use, the Secretary shall state the reasons such is the case in the proposed rule. Id. For this 

rulemaking, DOE determined that the values in Table III-1 represent the energy use levels that 

would achieve the maximum reductions in energy use that are technologically feasible at this 

time for commercial refrigeration equipment. DOE identified these “max-tech” levels for the 

equipment classes analyzed as part of the engineering analysis (Chapter 5 of the TSD). For each 

equipment class, DOE applied the most efficient design options available for energy-consuming 

components. These levels are set forth in TSL 5. 

 EE-2006-STD-0126 COMMENT 22.1
Table III-1 “Max-Tech” Energy Use Levels

Equipment Class 

“Max-Tech” Level 

kilowatt hours per day 

(kWh/day) Equipment Class 

“Max-Tech” Level 

kilowatt hours per day 

(kWh/day) 

VOP.RC.M 0.68 x TDA + 4.07 VCT.RC.I 0.71 x TDA + 3.05 

SVO.RC.M 0.69 x TDA + 3.18 HCT.RC.M 0.16 x TDA + 0.13 

HZO.RC.M 0.35 x TDA + 2.88 HCT.RC.L 0.34 x TDA + 0.26 

VOP.RC.L 2.28 x TDA + 6.85 HCT.RC.I 0.4 x TDA + 0.31 

HZO.RC.L 0.57 x TDA + 6.88 VCS.RC.M 0.11 x V + 0.26 

VCT.RC.M 0.25 x TDA + 1.95 VCS.RC.L 0.23 x V + 0.54 

VCT.RC.L 0.6 x TDA + 2.61 VCS.RC.I 0.27 x V + 0.63 

SOC.RC.M 0.39 x TDA + 0.11 HCS.RC.M 0.11 x V + 0.26 

VOP.SC.M 1.57 x TDA + 4.71 HCS.RC.L 0.23 x V + 0.54 

SVO.SC.M 1.58 x TDA + 4.59 HCS.RC.I 0.27 x V + 0.63 

HZO.SC.M 0.77 x TDA + 5.55 SOC.RC.L 0.83 x TDA + 0.22 

HZO.SC.L 1.92 x TDA + 7.08 SOC.RC.I 0.97 x TDA + 0.26 

VCT.SC.I 0.73 x TDA + 3.29 VOP.SC.L 3.95 x TDA + 11.82 

VCS.SC.I 0.38 x V + 0.88 VOP.SC.I 5.02 x TDA + 15.02 

HCT.SC.I 0.56 x TDA + 0.43 SVO.SC.L 3.98 x TDA + 11.51 

SVO.RC.L 2.28 x TDA + 6.85 SVO.SC.I 5.06 x TDA + 14.63 

VOP.RC.I 2.9 x TDA + 8.7 HZO.SC.I 2.44 x TDA + 9. 

SVO.RC.I 2.9 x TDA + 8.7 SOC.SC.I 1.35 x TDA + 0.36 

HZO.RC.I 0.72 x TDA + 8.74 HCS.SC.I 0.38 x V + 0.88 

C. Energy Savings 

1. Determination of Savings 

DOE used the NES spreadsheet to estimate energy savings. The spreadsheet forecasts 

energy savings over the period of analysis for TSLs relative to the base case. DOE quantified the 

energy savings attributable to an energy conservation standard as the difference in energy 

consumption between the trial standards case and the base case. The base case represents the 

forecast of energy consumption in the absence of new mandatory efficiency standards. The NES 

spreadsheet model is described in Section IV.G of this notice and in Chapter 11 of the TSD 

accompanying this notice. 

 

 EE-2006-STD-0126 COMMENT 22.1
 The NES spreadsheet model calculates the energy savings in site energy or kilowatt hours 

(kWh). Site energy is the energy directly consumed at building sites by commercial refrigeration 

equipment. DOE expresses national energy savings in terms of the source energy savings, which 

are the energy savings used to generate and transmit the energy consumed at the site. Chapter 11 

of the TSD contains a table of factors used to convert kWh to Btu. DOE derives these 

conversion factors, which change with time, from DOE’s EIA’s AEO2007. 

2. Significance of Savings 

For commercial refrigeration equipment, EPCA prohibits DOE from adopting a standard 

that would not result in significant additional energy savings. (42 U.S.C. 6295(o)(3)(B) and 

6316(e)(1)) While the term “significant” is not defined in the Act, the U.S. Court of Appeals, in 

Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), 

indicated that Congress intended significant energy savings in this context to be savings that 

were not “genuinely trivial.” The estimated energy savings for all of the trial standard levels 

considered in this rulemaking are nontrivial, and therefore DOE considers them significant 

within the meaning of Section 325 of the Act. 

D. Economic Justification 

1. Specific Criteria 

As noted earlier, EPCA provides seven factors to be evaluated in determining whether an 

energy conservation standard is economically justified. The following sections discuss how 

 EE-2006-STD-0126 COMMENT 22.1
DOE has addressed each factor thus far in this rulemaking. (42 U.S.C. 6295(o)(2)(B)(i) and 

6316 (e)(1)) 

a. Economic Impact on Manufacturers and Commercial Customers 

DOE uses an annual cash-flow approach in determining the quantitative impacts of a new 

or amended standard on manufacturers. This includes both a short-term assessment based on the 

cost and capital requirements between the announcement of a regulation and when the regulation 

comes into effect, and a long-term assessment. Impacts analyzed include INPV, cash flows by 

year, and changes in revenue and income. Next, DOE analyzes and reports the impacts on 

different types of manufacturers, with particular attention to impacts on small manufacturers. 

DOE then considers the impact of standards on domestic manufacturer employment, 

manufacturing capacity, plant closures, and loss of capital investment. Finally, DOE takes into 

account the cumulative impact of regulations on manufacturers. 

For commercial consumers, measures of economic impact are generally the changes in 

installed cost and annual operating costs, i.e., the LCC. Chapter 6 of the TSD presents the LCC 

of the equipment at each TSL. The LCC is one of the seven factors to be considered in 

determining the economic justification for a new or amended standard. (42 U.S.C. 

6295(o)(2)(B)(i)(II) and 6316 (e)(1)) It is discussed in the paragraphs that follow. 

b. Life-Cycle Costs 

The LCC is the sum of the purchase price, including the installation and operating 

expense (i.e., operating energy, maintenance, and repair expenditures) discounted over the 

lifetime of the equipment. To determine the purchase price including installation, DOE 

 EE-2006-STD-0126 COMMENT 22.1
estimated the markups that distributors and contractors add to the manufacturer selling price 

(MSP); DOE also estimated installation costs from an analysis of commercial refrigeration 

equipment installation costs for each equipment class. DOE determined that preventative 

maintenance costs do not depend on efficiency but that repair costs increase with efficiency and 

that the cost of replacement lighting fixtures (“lighting maintenance”) increased with higher 

efficiency. See Sections IV.E.8 and IV.E.9 for more detail. In estimating operating energy 

costs, DOE used average effective commercial electricity prices at the State level from the EIA 

publication, State Energy Consumption, Price, and Expenditure Estimates. DOE modified the 

2006 average commercial electricity prices to reflect the average electricity prices for each of the 

four types of businesses examined in this analysis. The LCC analysis compares the LCCs of 

equipment designed to meet possible energy conservation standards with the LCCs of equipment 

likely to be installed in the absence of standards. The LCC analysis also identifies a range of 

energy price forecasts for the electricity prices used in the economic analyses and provides 

results showing the sensitivity of the LCC results to these price forecasts. 

 Recognizing that each commercial building that uses commercial refrigeration equipment 

is unique, DOE analyzed variability and uncertainty by performing the LCC and PBP 

calculations for two prototype commercial buildings (i.e., stores) and four types of businesses 

(two types of businesses for each prototype store). The first store prototype is a large grocery 

store, which encompasses supermarkets and wholesaler/retailer multi-line stores such as big-box 

stores, warehouse stores, and supercenters. The second prototype is a small store, which 

encompasses convenience stores and small specialty stores such as meat markets; wine, beer, and 

liquor stores; and convenience stores associated with gasoline stations. Various types of 

 EE-2006-STD-0126 COMMENT 22.1
commercial refrigeration equipment can serve a given type of store’s refrigeration needs. DOE 

gives the LCC savings as a distribution, with a mean value and a range. DOE developed average 

discount rates for each of four business types analyzed, ranging from 5.1 to 8.4 percent for the 

calculations, and assumed that the customer purchases the equipment in 2012. Chapter 8 of the 

TSD contains the details of the LCC calculations. 

c. Energy Savings 

While significant energy conservation is a separate statutory requirement for imposing an 

energy conservation standard, EPCA requires DOE, in determining the economic justification of 

such 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) and 6316(e)(1)) DOE used the NES 

spreadsheet results in its consideration of total projected savings. Section IV.G.1 of this notice 

discusses the savings figures. 

d. Lessening of Utility or Performance of Equipment 

In establishing equipment classes, evaluating design options, and assessing the impact of 

potential standard levels, DOE tried to avoid having new standards for commercial refrigeration 

equipment lessen the utility or performance of the equipment under consideration in this 

rulemaking. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(e)(1)) None of the proposed trial 

standard levels considered in this rulemaking involve changes in equipment design or unusual 

installation requirements that would reduce the utility or performance of the equipment. See 

Chapter 4 and Chapter 16 of the TSD for more detail. 

 EE-2006-STD-0126 COMMENT 22.1
e. Impact of Any Lessening of Competition 

EPCA directs DOE to consider any lessening of competition likely to result from 

standards. It directs the Attorney General to determine in writing the impact, if any, of any 

lessening of competition likely to result from imposition of a proposed standard. (42 U.S.C. 

6295(o)(2)(B)(i)(V)and (ii); and 6316(e)(1)) DOE has transmitted a written request to the 

Attorney General soliciting a written determination on this issue. 

f. Need of the Nation to Conserve Energy 

The non-monetary benefits of the proposed standard are likely to be reflected in 

improvements to the security and reliability of the Nation’s energy system. Reductions in the 

overall demand for energy will reduce the Nation’s reliance on foreign sources of energy and 

increase reliability of the Nation’s electricity system. DOE conducts a utility impact analysis to 

show the reduction in installed generation capacity. Reduced power demand (including peak 

power demand) generally improves the security and reliability of the energy system. 

 The proposed standard also is likely to result in improvements to the environment. In 

quantifying these improvements, DOE has defined a range of primary energy conversion factors 

and associated emission reductions based on the generation that energy conservation standards 

displaced. DOE reports the environmental effects from each trial standard level for this 

equipment in the environmental assessment in the TSD. (42. U.S.C. 6295(o)(2)(B)(i)(VI) and 

6316(e)(1)) 

 EE-2006-STD-0126 COMMENT 22.1
g. Other Factors 

EPCA allows the Secretary of Energy, in determining whether a standard is economically 

justified, to consider any other factors the Secretary deems to be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII) and 6316(e)(1)) Under this provision, DOE considered LCC impacts on 

identifiable groups of customers, such as customers of different business types, who may be 

disproportionately affected by any national energy conservation standard level. In particular, 

DOE examined the LCC impact on independent small grocery/convenience store businesses 

where both higher discount rates and lack of access to national account equipment purchases 

might disproportionately affect those businesses types when compared to the overall commercial 

refrigeration equipment market. 

2. Rebuttable Presumption 

Another criterion for determining whether a standard level is economically justified is the 

following rebuttable presumption test: 

If the Secretary finds that the additional cost to the consumer of purchasing equipment 

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, there shall be a 

rebuttable presumption that such standard level is economically justified. A 

determination by the Secretary that such criterion is not met shall not be taken into 

consideration in the Secretary’s determination of whether a standard is economically 

justified. (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(e)(1)) 

 EE-2006-STD-0126 COMMENT 22.1
If the initial price of equipment increases due to a conservation standard, and the 

consumer would recover the increase in energy savings in less than three years through reduced 

energy costs resulting from the standard, then DOE presumes that such standard is economically 

justified. This presumption of economic justification can be rebutted upon a proper showing. 

The rebuttable presumption payback calculation is discussed in Sections III.D.2 and V.B.1.b of 

this NOPR. 

IV. Methodology and Discussion of Comments 

DOE used two spreadsheet tools to determine the impact of energy conservation 

standards on the Nation. The first spreadsheet calculates LCCs and payback periods of potential 

new energy conservation standards. The second provides shipments forecasts and then 

calculates national energy savings and net present value impacts of potential new energy 

conservation standards. DOE also assessed manufacturer impacts, largely through use of the 

Government Regulatory Impact Model (GRIM). 

Additionally, DOE estimated the impacts of energy conservation standards for 

commercial refrigeration equipment on utilities and the environment. DOE used a version of 

EIA’s National Energy Modeling System (NEMS) for the utility and environmental analyses. 

The NEMS model simulates the energy economy of the United States and has been developed 

over several years by the EIA primarily for the purpose of preparing the Annual Energy Outlook 

(AEO). The NEMS produces a widely known baseline forecast for the Nation through 2025 that 

 EE-2006-STD-0126 COMMENT 22.1
is available on the DOE website. The version of NEMS used for efficiency standards analysis is 

called NEMS-BT,8

 and is based on the AEO2007 version with minor modifications. The NEMS 

offers a sophisticated picture of the effect of standards, since its scope allows it to measure the 

interactions between the various energy supply and demand sectors and the economy as a whole. 

A. Market and Technology Assessment 

When beginning an energy conservation standards rulemaking, DOE develops 

information that provides an overall picture of the market for the equipment concerned, including 

the purpose of the equipment, the industry structure, and market characteristics. 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 

rulemaking (Chapter 3 of the TSD) include equipment classes, manufacturers, quantities, and 

types of equipment sold and offered for sale, retail market trends, and regulatory and nonregulatory programs. 

1. Definitions Related to Commercial Refrigeration Equipment 

a. Air Curtain Angle Definition 

For equipment without doors, an air curtain divides the refrigerated compartment from 

the ambient space. DOE stated in the ANOPR that the orientation of the air curtain affects the 

energy consumption of both remote condensing and self-contained equipment, and that 

 

8

 The EIA approves use of the name NEMS to describe only an AEO version of the model without any modification 

to code or data. Because the present analysis entails some minor code modifications and runs the model under 

various policy scenarios that deviate from AEO assumptions, the name NEMS-BT refers to the model used here. 

For more information on NEMS, refer to The National Energy Modeling System: An Overview 1998. DOE/EIA–

0581 (98), February, 1998. BT is DOE’s Building Technologies Program. NEMS-BT was formerly called NEMSBRS. 

 EE-2006-STD-0126 COMMENT 22.1
equipment without doors can be broadly categorized by the angle of the air curtain. DOE 

considered defining the air-curtain angle as “the angle between a vertical line and the line formed 

by the points at the center of the discharge air grille and the center of the return air grille, when 

viewed in cross-section.” DOE presented this definition in the ANOPR, 72 FR 41173, and for 

discussion at the ANOPR public meeting, and requested feedback. 

ARI and Edison Electric Institute (EEI) recommended that DOE slightly modify its 

definition of air-curtain angle to “the angle formed between a vertical line and the line formed by 

the points at the inside edge of the discharge air opening and the inside edge of the return air 

opening, when viewed in cross-section.” For equipment without doors and without a discharge 

air grille or discharge air honeycomb, the air curtain should be defined as “the angle between a 

vertical line extended down from the highest point on the manufacturer’s recommended load 

limit line and the same load limit line.” (ARI, No. 18 at p. 2 and EEI, No. 15 at p. 2) DOE 

recognizes that these proposed definitions are consistent with industry-approved standards and is 

therefore including the suggested modifications to the definition for air-curtain angle in today’s 

proposed rule. 

b. Door Angle Definition 

For equipment with doors, DOE stated in the ANOPR that the orientation of the doors 

affects the energy consumption, and that equipment with doors can be broadly categorized by the 

angle of the door. DOE considered defining door angle as “the angle between a vertical line and 

the line formed by the plane of the door, when viewed in cross-section.” 72 FR 41174. DOE 

 EE-2006-STD-0126 COMMENT 22.1
also presented this definition for discussion at the ANOPR public meeting and requested 

feedback. 

While stakeholders agreed with DOE’s proposed definition of door angle flat doors, it 

was not clear how DOE would define the door angle for curved doors such as those found on 

service over-the-counter cases. True stated that curved door angle should be defined by forming 

a plane between “the end plane and the end peak in-section.” (Public Meeting Transcript, No. 

13.5 at p. 59) Southern California Edison (SCE) suggested defining door angle for curved doors 

in the way air-curtain angle is defined, by the angle formed between the vertical and a line drawn 

between the top and bottom edges. (Public Meeting Transcript, No. 13.5 at p. 59) DOE is 

proposing its original definition of door angle for cases with flat doors. For cases with curved 

doors, DOE is not clear what True’s intent was in defining door angle, and no clarification was 

made in True’s written comments. DOE believes the approach suggested by SCE is appropriate 

because it accounts for the complex geometry of curved doors while still remaining consistent 

with the existing definition for air-curtain angle. Therefore, DOE is proposing to define door 

angle as “the angle formed between a vertical line and the straight line drawn by connecting the 

top and bottom points where the display area glass joins the cabinet, when the equipment is 

viewed in cross-section.” 

 

2. Equipment Classes 

When establishing energy conservation standards, DOE generally divides covered 

equipment into equipment classes by the type of energy used, capacity, or other performance-

 EE-2006-STD-0126 COMMENT 22.1
related features that affect efficiency. Different energy conservation standards may apply to 

different equipment classes. (42 U.S.C. 6295(q) and 6316(e)(1)) 

Commercial refrigerators, commercial freezers, and commercial refrigerator-freezers can 

be divided into various equipment classes categorized largely by physical characteristics that 

affect energy efficiency. Some of these characteristics delineate the categories of equipment 

covered by this rulemaking.9 Most affect the merchandise that the equipment can be used to 

display, and how the customer can access that merchandise. Key physical characteristics that 

affect energy efficiency are the operating temperature, the presence or absence of doors (i.e., 

closed cases or open cases), the type of doors used (i.e., transparent or solid), the angle of the 

door or air-curtain (i.e., horizontal, semivertical, or vertical) and the type of condensing unit (i.e., 

remote or self-contained). As discussed in the ANOPR, 72 FR 41173-77, and below, DOE has 

developed equipment classes in this rulemaking by (1) dividing commercial refrigerators, 

commercial freezers, and commercial refrigerator-freezers into equipment families, (2) 

subdividing these families based on condensing unit configurations and rating temperature 

designations, and (3) identifying the resulting classes that are within each of the three equipment 

categories covered by this rulemaking. 

DOE divided covered equipment into eight equipment families, which are shown in 

Table IV-1. Following the ANOPR, DOE did not receive any comments that it believes 

 

9

 “Commercial refrigerators, commercial freezers, and commercial refrigerator-freezers” is a type of covered 

commercial equipment. For purposes of discussion only in this proceeding, DOE uses the term “categories” to 

designate groupings of “commercial refrigeration equipment.” The categories of equipment are: self-contained 

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

condensing commercial refrigerators, commercial freezers, and commercial refrigerator-freezers; and commercial 

ice-cream freezers. DOE will analyze specific equipment classes that fall within these general categories and set 

appropriate standards. 

 EE-2006-STD-0126 COMMENT 22.1
warranted changes to the eight equipment families proposed in the ANOPR and therefore, the 

eight families are unchanged. The two issues related to equipment family designations are 

discussed below. 

Table IV-1 Equipment Family Designations 

Equipment Family Description 

Vertical Open (VOP) Equipment without doors and an air-curtain ≥ 0° and < 10° from the 

vertical 

Semivertical Open (SVO) Equipment without doors and an air-curtain angle ≥ 10° and < 80° from 

the vertical 

Horizontal Open (HZO) Equipment without doors and an air-curtain angle ≥ 80° from the 

vertical 

Vertical Closed Transparent (VCT) Equipment with hinged or sliding transparent doors and a door angle < 

45° 

Horizontal Closed Transparent (HCT) Equipment with hinged or sliding transparent doors and a door angle ≥

45° 

Vertical Closed Solid (VCS) Equipment with hinged or sliding solid (opaque) doors and a door angle 

< 45° 

Horizontal Closed Solid (HCS) Equipment with hinged or sliding solid (opaque) doors and a door angle 

≥ 45° 

Service Over Counter (SOC) Equipment with sliding or hinged doors intended for use by sales 

personnel and fixed or hinged glass for displaying merchandise 

Within each of the eight equipment families is equipment that has one of the two 

condensing unit configurations, which are shown in Table IV-2. Because these are the only two 

condensing unit configurations used in commercial refrigeration equipment, and since DOE did 

not receive any comments on these configurations following the ANOPR, DOE did not make 

any changes. 

Table IV-2 Condensing Unit Configuration 

Condensing Unit Configuration Description 

Remote Condensing (RC) 

Condensing unit is remotely located from the refrigerated equipment and 

consists of one or more refrigerant compressors, refrigerant condensers, 

condenser fans and motors, and factory-supplied accessories 

Self-Contained (SC) 

Condensing unit is an integral part of the refrigerated equipment and 

consists of one or more refrigerant compressors, refrigerant condensers, 

condenser fans and motors, and factory-supplied accessories 

 EE-2006-STD-0126 COMMENT 22.1
DOE is also organizing equipment classes based on the three operating temperature 

ranges shown in Table IV-3. Based on the temperature at which the equipment is designed to 

operate, it will fall into one of these operating temperature ranges. This is identified as Issue 3

under “Issues on Which DOE Seeks Comment” in Section VII.E of this NOPR. 

Each temperature range coincides with a rating temperature used in the test procedure 

final rule for the different equipment types. 10 CFR 431.64. Following the ANOPR, DOE did 

not receive any comments regarding the rating temperature designations proposed in the 

ANOPR, and therefore DOE did not make any changes to the rating temperature designations. 

Table IV-3 Rating Temperature Designations 

Operating Temperature (°F) Rating Temperature (°F) Description 

≥ 32 (M) 38 Medium temperature (refrigerators) 

< 32 and > -5 (L) 0 Low temperature (freezers) 

≤ -5 (I) -15 Ice-cream temperature (ice-cream freezers) 

In the ANOPR, DOE responded to several comments and presented a discussion (Section 

II.A.2) of the air-curtain angle ranges used to delineate vertical, semivertical, and horizontal 

equipment families without doors (VOP, SVO, and HZO). 72 FR 41173-74. In comments 

received following the Framework document publication, some stakeholders felt that the aircurtain angle ranges used in the data provided by ARI might encourage manufacturers to 

redesign equipment to take advantage of less stringent standards. Specifically, the stakeholders 

were concerned that manufacturers of VOP.RC.M equipment (a high-volume equipment class) 

would make slight alterations in their designs that would shift the equipment to the SVO.RC.M 

equipment class. If this shift occurred for a large number of models, and if standards for 

SVO.RC.M equipment were significantly less stringent than standards for VOP.RC.M 

 EE-2006-STD-0126 COMMENT 22.1
equipment, a significant amount of energy savings would be avoided. In other words, energy 

savings will be less than if that equipment was not modified and remained under the vertical 

classification. DOE responded to these comments in the ANOPR, concurring with stakeholders’ 

concerns, and requesting any relevant data or feedback regarding the ranges of air-curtain angle 

proposed in the ANOPR. No further comments were received on this issue following the 

ANOPR. DOE is proposing standards for the SVO.RC.M equipment class that are virtually 

equivalent to standards for the VOP.RC.M equipment class (see the proposed rule language of 

this NOPR). As a result, DOE believes that the proposed standards eliminate motivation for 

market shifts between these equipment classes. However, to assure that no changes to the aircurtain ranges for the VOP, SVO, and HZO equipment families are warranted, DOE seeks 

comment on the possibility of market shifts between equipment classes based on the proposed 

standards. 

As discussed in the ANOPR, 72 FR 41174 and during the ANOPR public meeting, DOE 

stated that it was considering defining two equipment families each for equipment with solid and 

transparent doors, based on door angles of 0° to 45° (vertical) and 45° to 90° (horizontal). EEI 

stated that DOE should consider revising its definition of door angle, because it is unclear 

whether a door angle of 45° to be vertical or horizontal. (Public Meeting Transcript, No. 13.5 at 

p. 58) DOE agrees with EEI that its previous designation did not specify what equipment family 

a unit with a 45° door angle would fall under. Therefore, DOE has tentatively decided that it will 

designate vertical equipment with transparent or solid doors as “equipment with hinged or 

sliding doors and a door angle less than 45°,” and horizontal equipment with transparent or solid 

doors as “equipment with hinged or sliding doors and a door angle greater than or equal to 45°.” 

 EE-2006-STD-0126 COMMENT 22.1
DOE is considering 38 of the 48 equipment classes shown in Table IV-4.

10 The 

equipment classes are organized by equipment family, compressor operating mode, and rating 

temperature. The right-hand column in Table IV-4 with the heading “Equipment Class 

Designation” identifies each of the 48 equipment classes with a particular set of letters. The first 

three letters for each class represent its equipment family. The next two letters represent the 

condensing unit configuration. The last letter represents the rating temperature. Table IV-1

through Table IV-3 set forth the meaning of the equipment class lettering designations. 

 

10 identifies 48 classes of commercial refrigerators, commercial freezers, and commercial refrigeratorfreezers. Of the 48 classes, 10 classes are identified by asterisks. EPCA has already established energy 

conservation standards for these 10 classes, (42 U.S.C. 6313(c)(2)-(3)) which are not covered under this rulemaking. 

Table IV-4

 EE-2006-STD-0126 COMMENT 22.1
Table IV-4 Commercial Refrigeration Equipment Classes

Equipment Family Condensing Unit 

Configuration 

Operating 

Temperature 

(°F) 

Equipment Class 

Designation 

≥ 32 VOP.RC.M 

Remote < 32 and > -5 VOP.RC.L 

≤ -5 VOP.RC.I 

≥ 32 VOP.SC.M 

< 32 and > -5 VOP.SC.L 

Vertical Open 

Self-Contained 

≤ -5 VOP.SC.I 

≥ 32 SVO.RC.M 

Remote < 32 and > -5 SVO.RC.L 

≤ -5 SVO.RC.I 

≥ 32 SVO.SC.M 

< 32 and > -5 SVO.SC.L 

Semivertical Open 

Self-Contained 

≤ -5 SVO.SC.I 

≥ 32 HZO.RC.M 

Remote < 32 and > -5 HZO.RC.L 

≤ -5 HZO.RC.I 

≥ 32 HZO.SC.M 

< 32 and > -5 HZO.SC.L 

Horizontal Open 

Self-Contained 

≤ -5 HZO.SC.I 

≥ 32 VCT.RC.M 

Remote < 32 and > -5 VCT.RC.L 

≤ -5 VCT.RC.I 

≥ 32 VCT.SC.M* 

< 32 and > -5 VCT.SC.L* 

Vertical Closed 

Transparent 

Self-Contained 

≤ -5 VCT.SC.I 

≥ 32 HCT.RC.M 

Remote < 32 and > -5 HCT.RC.L 

≤ -5 HCT.RC.I 

≥ 32 HCT.SC.M* 

< 32 and > -5 HCT.SC.L* 

Horizontal Closed 

Transparent 

Self-Contained 

≤ -5 HCT.SC.I 

≥ 32 VCS.RC.M 

Remote < 32 and > -5 VCS.RC.L 

≤ -5 VCS.RC.I 

≥ 32 VCS.SC.M* 

< 32 and > -5 VCS.SC.L* 

Vertical Closed 

Solid 

Self-Contained 

≤ -5 VCS.SC.I 

≥ 32 HCS.RC.M 

Remote < 32 and > -5 HCS.RC.L 

≤ -5 HCS.RC.I 

≥ 32 HCS.SC.M* 

< 32 and > -5 HCS.SC.L* 

Horizontal Closed 

Solid 

Self-Contained 

≤ -5 HCS.SC.I 

≥ 32 SOC.RC.M 

Remote < 32 and > -5 SOC.RC.L 

≤ -5 SOC.RC.I 

≥ 32 SOC.SC.M* 

< 32 and > -5 SOC.SC.L* 

Service Over 

Counter 

Self-Contained 

≤ -5 SOC.SC.I 

* These equipment classes are covered by standards established in EPCA and are not covered under this 

rulemaking. (42 U.S.C. 6313(c)(2)-(3))

 EE-2006-STD-0126 COMMENT 22.1
 

EPCA contains standards for self-contained commercial refrigerators, commercial 

freezers and commercial refrigerator-freezers with doors (42 U.S.C. 6313(c)(2)-(3)); this 

equipment is not included in this rulemaking. Equipment classes already covered by EPCA, and 

therefore not included in this rulemaking, are indicated with asterisks in Table IV-4. DOE has 

based the designations of these possible equipment classes on the classification methodology 

presented in Table IV-1 through Table IV-3. 

Table IV-5 presents the equipment classes covered under this rulemaking, organized by 

the three equipment categories. 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-5 Commercial Refrigeration Equipment Classes by Category

Equipment 

Category 

Condensing Unit 

Configuration Equipment Family 

Operating 

Temperature 

(°F) 

Equipment 

Class 

Designation 

≥ 32 VOP.RC.M Vertical Open < 32 and > -5 VOP.RC.L 

≥ 32 SVO.RC.M Semivertical Open < 32 and > -5 SVO.RC.L 

≥ 32 HZO.RC.M Horizontal Open < 32 and > -5 HZO.RC.L 

≥ 32 VCT.RC.M Vertical Closed Transparent < 32 and > -5 VCT.RC.L 

≥ 32 HCT.RC.M Horizontal Closed Transparent < 32 and > -5 HCT.RC.L 

≥ 32 VCS.RC.M Vertical Closed Solid < 32 and > -5 VCS.RC.L 

≥ 32 HCS.RC.M Horizontal Closed Solid < 32 and > -5 HCS.RC.L 

≥ 32 SOC.RC.M 

Remote 

Condensing 

Commercial 

Refrigerators, 

Commercial 

Freezers, and 

Commercial 

RefrigeratorFreezers 

Remote 

Service Over Counter < 32 and > -5 SOC.RC.L 

≥ 32 VOP.SC.M Vertical Open < 32 and > -5 VOP.SC.L 

≥ 32 SVO.SC.M Semivertical Open < 32 and > -5 SVO.SC.L 

≥ 32 HZO.SC.M 

Self-Contained 

Commercial 

Refrigerators, 

Commercial 

Freezers, and 

Commercial 

RefrigeratorFreezers without 

Doors 

Self-Contained 

Horizontal Open < 32 and > -5 

HZO.SC.L 

Vertical Open VOP.RC.I 

Semivertical Open SVO.RC.I 

Horizontal Open HZO.RC.I 

Vertical Closed Transparent VCT.RC.I 

Horizontal Closed Transparent HCT.RC.I 

Vertical Closed Solid VCS.RC.I 

Horizontal Closed Solid HCS.RC.I 

Remote 

Service Over Counter SOC.RC.I 

Vertical Open VOP.SC.I 

Semivertical Open SVO.SC.I 

Horizontal Open HZO.SC.I 

Vertical Closed Transparent VCT.SC.I 

Horizontal Closed Transparent HCT.SC.I 

Vertical Closed Solid VCS.SC.I 

Horizontal Closed Solid HCS.SC.I 

Commercial IceCream Freezers 

Self-Contained 

Service Over Counter 

≤ -5 

SOC.SC.I 

 EE-2006-STD-0126 COMMENT 22.1
B. Engineering Analysis 

The engineering analysis develops cost-efficiency relationships to show the 

manufacturing costs of achieving increased efficiency. DOE has identified the following three 

methodologies to generate the manufacturing costs needed for the engineering analysis: (1) the 

design option approach, which provides the incremental costs of adding design options to a 

baseline model that will improve its efficiency; (2) the efficiency-level approach, which provides 

the relative costs of achieving increases in energy efficiency levels without regard to the 

particular design options used to achieve such increases; and (3) the cost-assessment (or reverse 

engineering) approach, which provides “bottom-up” manufacturing cost assessments for 

achieving various levels of increased efficiency based on detailed cost data for parts and 

material, labor, shipping/packaging, and investment for models that operate at particular 

efficiency levels. 

1. Approach 

In the ANOPR engineering analysis, the primary methodology was an efficiency-level 

approach, supplemented by a design option approach. DOE analyzed only the 15 equipment 

classes with shipment volumes greater than 100 per year. The basis of the approach was four 

industry-supplied cost-efficiency curves for the four equipment classes shipped most frequently 

(i.e., VCT.RC.L, VOP.RC.M, SVO.RC.M, and HZO.RC.L). See Section IV.F for shipment 

data. DOE developed these classes using an efficiency-level approach. DOE supplemented 

these industry-supplied curves with 15 curves it developed using a design option approach. Four 

of DOE’s curves were intended only for comparison with the industry-supplied curves, as 

verification of the industry data. The other 11 curves formed the basis of analysis for the other 

 EE-2006-STD-0126 COMMENT 22.1
11 analyzed equipment classes. The ANOPR provides more details on this approach. 72 FR 

41180. 

During the ANOPR public meeting and subsequent comment period, stakeholders raised 

concerns over using industry-supplied data as the basis of the engineering analysis. ARI stated 

that the intent was to use the industry curves only to validate DOE’s design option analysis, not 

to use them directly in the analysis. (Public Meeting Transcript, No. 13.5 at p. 91) The 

American Council for an Energy Efficient Economy (ACEEE) stated that rulemakings have 

always used industry curves when they were available. (Public Meeting Transcript, No. 13.5 at 

p. 91) ARI stated that the industry data represents an average and covers the range of available 

equipment, but not all manufacturers’ equipment would span the whole range. ARI also stated 

that as few as three manufacturers submitted data for some of the cost-efficiency curves, while in 

the best cases there were up to seven. ARI explained that three manufacturers might not 

represent the entire industry. (Public Meeting Transcript, No. 13.5 at pp. 94-95) Hussmann 

stated that it doesn’t know, for example, how many shelf lights other manufacturers included in 

the data they submitted to ARI, and therein lies some of the danger of using an industry average. 

(Public Meeting Transcript, No. 13.5 at p. 95) Regarding the HZO.RC.L equipment class, EEI 

stated that DOE’s data does not appear to have the same range as ARI’s data. (Public Meeting 

Transcript, No. 13.5 at p. 93) Copeland also questioned whether the cost-efficiency curves from 

industry made sense [because they did not appear to be ordered in terms of increasing payback]. 

(Public Meeting Transcript, No. 13.5 at p. 149) ACEEE noted that the analytically derived price 

points for several equipment classes are significantly higher than the industry-supplied data at 

high efficiency, and suggested that DOE reexamine this data. (ACEEE, No. 16 at p. 2) ARI 

 EE-2006-STD-0126 COMMENT 22.1
stated that DOE’s design option approach appears to be technically sound, and that the ARI costefficiency curves are only available for a limited number of equipment classes. For consistency, 

ARI recommended that DOE base its analysis solely on DOE’s analytically derived curves. 

(ARI, No. 18 at p. 6) 

As mentioned above, DOE used the four cost-efficiency curves11 provided by ARI as the 

basis for its ANOPR engineering analysis. DOE was not aware of ARI’s intent that they be used 

only to validate DOE’s own analysis, or of ARI’s concerns that the data may have been 

insufficient for some classes. DOE agrees with stakeholders that using the analytically derived 

curves (a design option approach) for all equipment classes would be more consistent and 

provide more transparency . Although the efficiency-level and design option approaches have 

been used together in other rulemakings, DOE recognizes the challenges in using the industrysupplied data as the primary engineering analysis approach in this rulemaking. The ARI data 

cannot be disaggregated for public review, since doing so would disclose sensitive manufacturer 

information. This prevents a rigorous investigation of any discrepancies or irregularities in data 

submitted by the manufacturers. At the ANOPR public meeting, Hussmann mentioned lighting 

levels as one example of a design feature that could cause discrepancies among data from 

different manufacturers. In the design option approach, data on design features that affect 

performance (such as lighting) are available for interested persons to review and comment on, 

along with other assumptions and calculations. The aggregation of industry data seems to have 

resulted in cost-efficiency curves that lack the marked cost increases at higher levels of 

efficiency that are typical of the cost-efficiency relationship. The industry-supplied curves 

 

11 These four curves applied to the following four equipment classes: VCT.RC.L, VOP.RC.M, SVO.RC.M, and 

HZO.RC.L. These represent the equipment classes with the highest shipment volumes. 

 EE-2006-STD-0126 COMMENT 22.1
tended to be “flatter” than those developed by DOE, and in some cases appear to have efficiency 

levels that were not in order of increasing payback, as noted by Copeland. DOE believes the 

flatness of the industry curves may account for some of the discrepancies in pricing between the 

industry-supplied and analytically derived data, as noted by ACEEE. 

The extent of the industry-supplied data was also cause for concern. ARI’s statement that 

not all manufacturers’ equipment would span the whole range of efficiency levels is consistent 

with EEI’s concern that the data derived using DOE’s design option approach did not span the 

same range as the industry data. Because of overlapping ranges of efficiency of manufacturers’ 

data, the overall cost-efficiency data reported by ARI spans a range that in some cases is greater 

than the range covered by DOE’s design option data. DOE realizes this could raise a concern 

that its analysis is incomplete, for example by neglecting design options that could account for 

additional increases in efficiency, and thus an increase in the span of efficiencies covered. 

However, based on the comments received, DOE believes the extra range in the ARI data is 

instead largely due to inconsistencies in the manufacturer data submitted to ARI, such as lighting 

levels. A smaller portion of the extra range may also be attributable to subtle aspects of design 

and manufacturing (e.g., airflow and air-curtain design) that have an insignificant impact on 

performance and that cannot be modeled accurately in the design option approach. DOE 

appreciates the feedback from ARI that the design option approach appears sound, and believes 

that the design option data is more accurate in depicting the cost-efficiency relationship for 

commercial refrigeration equipment. 

 EE-2006-STD-0126 COMMENT 22.1
 For the NOPR engineering analysis, DOE analyzed the same 15 equipment classes as in 

the ANOPR analysis, but used only a design option approach. That approach is identical to the 

one used in the ANOPR, involving consultation with outside experts, review of publicly 

available cost and performance information, and modeling of equipment cost and energy 

consumption, but DOE applied it to all 15 equipment classes analyzed. The industry-supplied 

data developed using an efficiency-level approach is used only as a check on DOE’s data. DOE 

believes this approach is more reliable, and affords the public full transparency of assumptions 

and results and the ability to perform independent analyses for verification. See Chapter 5 of the 

TSD for more detail. 

2. Equipment Classes Analyzed 

For the NOPR, DOE did not make any changes to the equipment classes directly analyzed 

in the ANOPR engineering analysis. Because of the large number of equipment classes in this 

rulemaking, DOE did not directly analyze all equipment classes using the design option 

approach. DOE maintained the same equipment class prioritization used in the ANOPR. 

Equipment classes with more than 100 units shipped per year (“primary” classes), as well as the 

VOP.RC.L12 equipment class, were directly analyzed. Table IV-6 lists these equipment classes, 

which represent approximately 98 percent of the shipments of commercial refrigeration 

equipment reported by ARI. 

 

12 The VOP.RC.L equipment class was reported as having zero shipments in the ARI shipment data, but was 

included in the analysis based on recommendations from manufacturers. During interviews conducted for the 

NOPR, manufacturers reported to DOE their individual shipment numbers for the VOP.RC.L class. Regardless of 

the actual shipment volume, DOE believes there are significantly more than 100 annual shipments of the VOP.RC.L 

equipment class. 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-6 Equipment Classes Directly Analyzed in the Engineering Analysis

Equipment 

Class Description 

VOP.RC.M Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature 

VOP.RC.L Vertical Freezer without Doors with a Remote Condensing Unit, Low Temperature 

SVO.RC.M Semi-Vertical Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature 

HZO.RC.M Horizontal Refrigerator without Doors with a Remote Condensing Unit, Medium Temperature 

HZO.RC.L Horizontal Freezer without Doors with a Remote Condensing Unit, Low Temperature 

VCT.RC.M Vertical Refrigerator with Transparent Doors with a Remote Condensing Unit, Medium Temperature 

VCT.RC.L Vertical Freezer with Transparent Doors with a Remote Condensing Unit, Low Temperature 

SOC.RC.M Service Over Counter Refrigerator with a Remote Condensing Unit, Medium Temperature 

VOP.SC.M Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature 

SVO.SC.M Semi-Vertical Refrigerator without Doors with a Self-Contained Condensing Unit, Medium 

Temperature 

HZO.SC.M Horizontal Refrigerator without Doors with a Self-Contained Condensing Unit, Medium Temperature 

HZO.SC.L Horizontal Freezer without Doors with a Self-Contained Condensing Unit, Low Temperature 

VCT.SC.I Vertical Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, IceCream Temperature 

VCS.SC.I Vertical Ice-Cream Freezer with Solid Doors with a Self-Contained Condensing Unit, Ice-Cream 

Temperature 

HCT.SC.I Horizontal Ice-Cream Freezer with Transparent Doors with a Self-Contained Condensing Unit, IceCream Temperature 

3. Analytical Models 

In the design option approach, DOE used models to develop estimates of cost and energy 

consumption for each equipment class at each efficiency level. DOE used a cost model to 

estimate the manufacturer production cost (MPC) in dollars, and an energy consumption model 

to estimate the daily energy consumption in kWh for each of the 15 primary equipment classes 

analyzed. 

a. Cost Model 

Development of the cost model involved the disassembly of a self-contained refrigerator 

with transparent doors, an analysis of the materials and manufacturing processes, and the 

development of a parametric spreadsheet model flexible enough to cover all equipment classes. 

The manufacturing cost model estimated MPC and reported it in aggregated form to maintain 

 EE-2006-STD-0126 COMMENT 22.1
confidentiality of sensitive cost data. DOE obtained input from stakeholders on the MPC 

estimates and assumptions to confirm accuracy. The cost model was used for 7 of the 15 

examined equipment classes and the results were extended to 6 of the remaining examined 

equipment classes. The cost of the remaining two equipment classes was estimated using 

available manufacturer list price (MLP) information discounted to MPC. Details of the cost 

model are provided in chapter 5 of the TSD. 

Following the ANOPR, no comments were received regarding DOE’s cost model, and 

therefore no significant changes were made to the methodology used in the NOPR analysis. One 

change was made to the manufacturer markup assumption, which is discussed below. 

One key element of DOE’s cost model concerned features and structural elements 

common in commercial refrigeration equipment, but that would not affect the energy use of the 

equipment. Development of this part of the cost model involved disassembling a self-contained 

refrigerator with transparent doors, analyzing the materials and manufacturing processes, and 

developing a parametric spreadsheet model flexible enough to cover all equipment classes. The 

other key part of the cost model estimated the costs of particular features or design options that 

would affect the energy use of the equipment. DOE obtained input from stakeholders on the 

MPC estimates and assumptions to confirm their accuracy. DOE used the cost model for 7 of the 

15 examined equipment classes and extended the results to 6 of the remaining examined 

equipment classes. DOE estimated the cost of the remaining two equipment classes using 

available manufacturer list price (MLP) information reduced to MPC. Chapter 5 of the TSD 

provides details of the cost model. 

 EE-2006-STD-0126 COMMENT 22.1
A manufacturer markup is applied to the MPC estimates to arrive at the MSP. This is the 

price of equipment sold at which the manufacturer can recover both production and nonproduction costs and can earn a profit. DOE calculated the manufacturer markup as the market 

share weighted average value for the industry. For the ANOPR, DOE developed this 

manufacturer markup by examining several major commercial refrigeration equipment 

manufacturers’ gross margin information from annual reports and the Securities and Exchange 

Commission (SEC) 10-K reports. The manufacturers DOE analyzed account for approximately 

80 percent of the market, and each company is a subsidiary of a more diversified parent company 

that manufactures equipment other than commercial refrigeration equipment. Because the 10-K 

reports do not provide gross margin information at the subsidiary level, the estimated markups 

represent the average markups that the parent company applies over its entire range of equipment 

offerings and does not necessarily represent the manufacturer markup of the subsidiary. 

The ANOPR analysis indicated that the average manufacturer markup is 1.39. However, 

DOE adjusted the markups to be more representative of the industry following discussions with 

manufacturers during the MIA interviews (Chapter 13). An aggregation of the MIA interview 

responses gives a market share weighted average manufacturer markup value of 1.32. For the 

NOPR, DOE used this revised manufacturer markup with the MPC values from the engineering 

analysis to arrive at the MSP values used in the GRIM. 

As explained in the ANOPR, DOE received industry-supplied curves from ARI in the 

form of daily energy consumption versus MLP, both normalized by total display area (TDA). 

 EE-2006-STD-0126 COMMENT 22.1
Since DOE developed its analytically derived curves in the form of calculated daily energy 

consumption (CDEC) versus MSP, it was necessary for DOE to estimate an industry list price 

markup so that it could make comparisons between the two sets of curves. The industry list price 

markup is a markup to the selling price that provides the list price. To make comparisons 

between the analytically derived and industry-supplied cost-efficiency curves, DOE discounted 

the industry data with the list price markup and normalized the analytically derived curves by 

TDA. 

Manufacturers typically offer a discount from the MLP, which depends on factors such as 

the relationship with the customer and the volume and type of equipment being purchased. For 

the estimate of list price markup, DOE relied on information gathered on self-contained 

commercial refrigeration equipment, since list price information is readily available and typically 

published by manufacturers of this equipment. A review of the data shows that the list price 

markup is typically 2.0 (i.e., manufacturers will typically sell their equipment for 50 percent off 

the published list price). DOE further verified the estimate by obtaining list price quotes from 

several remote condensing equipment manufacturers. During manufacturer interviews, some 

commercial refrigeration equipment manufacturers agreed with the 2.0 markup estimate, while 

others stated the estimate was somewhat high. Although the list price markup can vary 

significantly by manufacturer and by customer, DOE believes the estimated list price markup of 

2.0 is representative of the industry. DOE applied this markup to all equipment classes. 

 EE-2006-STD-0126 COMMENT 22.1
DOE did not receive any additional comments or information indicating that revision of 

the cost model used in the ANOPR analysis is warranted. Therefore DOE has adhered to that 

model in the NOPR analysis. 

b. Energy Consumption Model 

The energy consumption model estimates the daily energy consumption of commercial 

refrigeration equipment at various performance levels using a design options approach. The 

model is specific to the categories of equipment covered under this rulemaking, but is 

sufficiently generalized to model the energy consumption of all covered equipment classes. For 

a given equipment class, the model estimates the daily energy consumption for the baseline and 

the energy consumption of several levels of performance above the baseline. The model is used 

to calculate each performance level separately. 

In developing the energy consumption model, DOE made general assumptions about the 

analysis methodology and specific numerical assumptions regarding load components and design 

options. DOE based its energy consumption estimates on new equipment tested in a controlledenvironment chamber in accordance with ANSI/ARI Standard 1200-2006, the DOE test 

procedure for commercial refrigeration equipment, which references the ANSI/ASHRAE 

Standard 72-2005 test method.13 Once Federal standards for this equipment become operative, 

manufacturers will be required to test units with this test method, which specifies a certain 

ambient temperature, humidity, light level, and other requirements. This test method, however, 

contains no specification as to the operating hours of the display case lighting, and DOE’s energy 

consumption model considers the operating hours to be 24 hours per day (i.e., that lights are on 

 

13 The test procedures are found at 10 CFR 431.64. 

 EE-2006-STD-0126 COMMENT 22.1
continuously). This assumption is consistent with the lighting operating time assumption used in 

the energy use characterization (see Section IV.D). Chapter 5 of the TSD discusses further the 

assumptions used in the energy consumption model. 

The energy consumption model calculates CDEC as having two major components: 

compressor energy consumption and component energy consumption (expressed as kWh/day). 

Component energy consumption is the sum of the direct electrical energy consumption of fan 

motors, lighting, defrost and drain heaters, anti-sweat heaters, and pan heaters. Compressor 

energy consumption is calculated from the total refrigeration load (expressed in Btu/h) and one 

of two compressor models: one version for remote condensing equipment and one for selfcontained equipment. The total refrigeration load is a sum of the component load and the nonelectric load. The component load is the sum of the heat emitted by evaporator fan motors, 

lighting, defrost and drain heaters, and anti-sweat heaters inside and adjacent to the refrigerated 

space (condenser fan motors and pan heaters are outside of the refrigerated space and do not 

contribute to the component heat load). The non-electric load is the sum of the heat contributed 

by radiation through glass and openings, heat conducted through walls and doors, and sensible 

and latent loads from warm, moist air infiltration through openings. Chapter 5 of the TSD 

discusses component energy consumption, compressor energy consumption, and load models. 

DOE made one change to the methodology of calculating the radiation load for cases 

without doors (VOP, SVO, and HZO equipment families). In the ANOPR analysis, the view 

factor14 from the interior of the case to the walls of the test chamber was estimated as 0.025. 

This value was kept as a constant for all cases and sizes in the ANOPR analysis, but it is clear 

 

14 A view factor is the proportion of all radiation that leaves one surface and strikes another. 

 EE-2006-STD-0126 COMMENT 22.1
this value should change somewhat as the geometry and the overall size of the case changes. For 

the NOPR, DOE calculated the view factor separately for each equipment class depending on the 

geometry specific to the baseline design specifications of that class. The view factor from the 

case to the room is calculated as the ratio of TDA (i.e., the area of the plane separating the case 

from the room) to the test chamber wall surface area. 

Stakeholders raised questions regarding DOE’s method of calculating the infiltration 

load15 for commercial refrigeration equipment. Carrier asserted that DOE’s method of using 

defrost water to model infiltration has limitations. Carrier pointed out that as the case is run at 

higher suction temperatures, the coil has a tendency to run as a wet coil and does not retain much 

of the moisture on its exterior. Typically on manufacturer specification sheets, defrost meltwater 

is only the water that comes out during a defrost period, and Carrier noted that there may be 

additional water that would come off the coil between defrost periods. Carrier believes DOE 

may be underestimating the infiltration load using information from the specification sheets, and 

estimated that the infiltration load is typically around 75 percent of total cooling water. Carrier 

questioned whether or not DOE compared its estimates with the calculated infiltration loads. 

(Public Meeting Transcript, No. 13.5 at p. 83) Hussmann stated that when it publishes data for 

defrost meltwater, it does so for the sole purpose of sizing sewer lines and not for estimating the 

infiltration load. (Public Meeting Transcript, No. 13.5 at p. 85) 

In the ANOPR analysis, DOE calculated infiltration load using empirical defrost 

meltwater data obtained from manufacturers’ detailed specification sheets. DOE assumed that 

defrost meltwater could be correlated with infiltration load, given certain known parameters such 

 

15 The mass of warm ambient store air that displaces the cold air inside of the case. 

 EE-2006-STD-0126 COMMENT 22.1
as ambient relative humidity. This methodology was calibrated with detailed refrigeration load 

data obtained from Southern California Edison for several large-volume equipment classes. 

DOE agrees with the assessment made by stakeholders and has altered its methodology 

accordingly. In the NOPR engineering design specifications, defrost meltwater (in pounds per 

hour, lbs/hr) is replaced with infiltrated air (also in lbs/hr) for all equipment classes. DOE 

estimated infiltrated air by using manufacturers’ detailed specification sheets, recognizing that 

infiltration load is the only load component that cannot be directly calculated. Using physical 

parameters about each case, the other load components (internal load, conduction load, radiation 

load) are calculated. DOE subtracted these load components from the listed total refrigeration 

load, and it is assumed that the remaining load is due to infiltration. Chapter 5 of the TSD 

provides more details of the change to this methodology. 

At the public meeting, stakeholders expressed concern over the refrigerants DOE used in 

the analysis. EEI asked if hydrofluorocarbon (HFC) refrigerants were already assumed to be in 

use in the baseline. (Public Meeting Transcript, No. 13.5 at p. 97) ARI stated that most of the 

data it provided to DOE was based on such refrigerants and no changes are expected in that 

regard. (Public Meeting Transcript, No. 13.5 at p. 97) In its analysis, DOE assumed that HFC 

refrigerants are already fully in use for commercial refrigeration equipment. For all remote 

condensing equipment, in accordance with the DOE test procedure in ANSI/ARI Standard 1200-

2006, DOE assumes the use of a compressor using an HFC refrigerant (i.e., R-404A). Likewise, 

all of the compressors DOE used in modeling self-contained equipment use either R-404A or R134A, another HFC refrigerant. 

 EE-2006-STD-0126 COMMENT 22.1
c. Design Options 

In the market and technology assessment for the ANOPR, DOE defined an initial list of 

technologies that have the potential to reduce the energy consumption of commercial 

refrigeration equipment. In the screening analysis for the ANOPR, DOE screened out some of 

these technologies based on four screening criteria: technological feasibility; practicability to 

manufacture, install and service; impacts on equipment utility or availability; and impacts on 

health or safety. 72 FR 41179-80. The remaining technologies became inputs to the ANOPR 

engineering analysis as design options. However, for reasons described in the ANOPR, DOE did 

not incorporate all of these technologies as design options in the energy consumption model. 72 

FR 41182-83. Stakeholders commented that some of these technologies should be included in 

the NOPR engineering analysis, and recommended additional design options DOE should 

consider. Comments pertaining to each suggested technology and DOE’s response are provided 

below. As a general comment about design options, ACEEE stated that some design options that 

were screened out should be considered for further analysis and that prevalence in the 

marketplace is not necessarily a good reason to screen out a design option. (Public Meeting 

Transcript, No. 13.5 at p. 62) DOE screened out five technologies in the ANOPR screening 

analysis. These are air-curtain design, thermoacoustic refrigeration, magnetic refrigeration, 

electro-hydrodynamic heat exchangers, and copper rotor motors. All five of these design options 

were screened out because they are in the research stage and would not be practical to 

manufacture, install, and service. Since the publication of the ANOPR, DOE is not aware of any 

significant changes to the status of these technologies, and has not included them in the NOPR 

analysis. 

 EE-2006-STD-0126 COMMENT 22.1
ACEEE recommended that variable-speed compressors be included in the analysis. 

(ACEEE, No. 16 at p. 2) EEI also suggested that DOE consider the use of variable-speed drives 

for compressors. (EEI, No. 15 at p. 2) Variable-speed compressors could potentially improve the 

efficiency of commercial refrigeration equipment classes that are self-contained units without 

doors and self-contained ice-cream freezers. Variable-speed compressors can reduce energy 

consumption under real-world conditions by matching cooling capacity to the refrigeration load, 

which can change due to variations in ambient conditions and product loading. This load 

matching allows for a more constant temperature inside the case, eliminating the large 

fluctuations in temperature that are typical of single-speed compressors. The stability in 

temperature allows manufacturers to design equipment with higher evaporator temperatures, 

improving compressor efficiency. However, the energy-saving benefit of variable-speed 

compressors is not clear under ANSI/ASHRAE Standard 72-2005, because it is a steady-state 

test for commercial refrigeration equipment. Further, DOE is not aware of any test data showing 

the energy savings benefit of variable speed compressors in the types of equipment covered in 

this rule. Certain test data does exist for walk-ins and residential refrigerators, but DOE does not 

believe that this data can be used to predict the performance of variable-speed compressors in 

commercial refrigeration equipment. Therefore, DOE did not include variable-speed 

compressors as a design option in its engineering analysis. 

ACEEE recommended that variable-speed evaporator fans be included in the analysis. 

(ACEEE, No. 16 at p. 2) San Diego Gas & Electric Company (SDGE) also recommended that 

DOE include in its analysis the energy savings, cost-effectiveness, and feasibility of such fans for 

enclosed refrigeration equipment served by remote refrigeration compressors. (SDGE, No. 22 at 

 EE-2006-STD-0126 COMMENT 22.1
p. 2) SCE recommended that DOE consider the cost-effectiveness of variable-speed evaporator 

fans for this equipment. SCE asserted that variable-speed fan control was a very effective and 

cost-effective means of increasing refrigerated warehouse efficiency and should be applicable to 

commercial refrigeration equipment as well. SCE stated that this reduces the energy 

consumption of the fan and the amount of load that the refrigerant must reject. SCE also noted 

that its work in support of California building and appliance standards showed variable-speed 

controls on evaporator fans had approximately one-year simple paybacks in both refrigerated 

warehouses and small walk-in coolers. (Public Meeting Transcript, No. 13.5 at p. 69 and SCE, 

No. 19 at p. 3) EEI also suggested that DOE consider the use of variable-speed drives for 

evaporator fans and compressors. (EEI, No. 15 at p. 2) 

Variable-speed evaporator fans can operate at speeds that match changing conditions in 

the case. DOE recognizes that the use of these fans provides some opportunity for energy 

savings, because the buildup and removal of frost creates differing pressure drops across the 

evaporator coil. Theoretically, less fan power is required when the coil is free of frost. 

Additionally, when an evaporator fan operates at variable speeds, the coil would operate at a 

more stable temperature during the period of frost build-up. However, the effectiveness of the 

air curtain in equipment without doors is very sensitive to changes in airflow, so fan motor 

controllers would likely disrupt air curtains. DOE believes the likely disturbance to the air 

curtain, which would lead to higher infiltration loads and higher overall energy consumption, 

would negate the use of evaporator fan motor controllers in equipment without doors, even if 

there were some reduction in fan energy use. In addition, the ANSI/ASHRAE Standard 72-2005 

test method is a steady-state test for commercial refrigeration equipment, so similar to variable-

 EE-2006-STD-0126 COMMENT 22.1
speed compressors, the energy-saving benefit of variable-speed fans is not clear. Therefore, 

DOE did not include variable-speed fans as a design option in its engineering analysis. 

ACEEE recommended that remote ballast location be included in the analysis. (ACEEE, 

No. 16 at p. 2) Fluorescent lamp ballasts generate heat, and their relocation outside the 

refrigerated space can reduce energy consumption by lessening the refrigeration load on the 

compressor. However, for the majority of commercial refrigeration equipment currently 

manufactured, ballasts are already located in electrical trays outside of the refrigerated space, in 

either the base or top of the equipment. The notable exceptions are the equipment classes in the 

VCT equipment family, where ballasts are most often located on the interior of each door 

mullion. Most commercial refrigeration equipment manufacturers purchase doors for VCT units 

that are preassembled with the entire lighting system in place rather than configured for separate 

ballasts. DOE believes that most commercial refrigeration equipment manufacturers choose 

these kinds of doors because it would be labor intensive and time consuming to relocate these 

ballasts at the factory, and because of the additional cost and labor of wiring separate ballasts. 

Manufacturers have indicated that the potential energy savings are also small, since modern 

electronic ballasts are very efficient and typically contribute only a few watts (W) each to the 

refrigeration load. Because (1) lamp ballasts are already located externally on most equipment; 

(2) most units that have internally located lamp ballasts use preassembled lighting systems; and 

(3) potential energy savings are small, DOE did not consider remote relocation of ballasts as a 

design option in its engineering analysis. 

 EE-2006-STD-0126 COMMENT 22.1
ACEEE recommended that improved insulation be included in the analysis. (ACEEE, 

No. 15 at p. 2) Potential improvements to insulation material used in commercial refrigeration 

equipment cabinets include better polyurethane foams and vacuum panels. In consultation with 

insulation material manufacturers, DOE determined that there are no significant differences in 

“grades” of insulation material, so equipment manufacturers are already using the best 

commercially available foam materials in their equipment. Vacuum panels are an alternative 

form of insulation; however, they may degrade in performance in time as small leaks develop. 

Based on knowledge of typical manufacturing practices, DOE also believes it would be 

impractical to use vacuum panels to construct commercial refrigeration equipment, because they 

cannot be penetrated by fasteners, and do not provide the rigidity of “foamed-in-place” 

polyurethane insulation panels. Thicker insulation is another possible option, but could be 

problematic because it would likely result in either a reduced volume for the refrigerated space 

or an increase in the overall size of the equipment cabinet. Reducing the volume of the 

refrigerated space could affect the utility of the equipment, and because the outer dimensions of 

commercial refrigeration equipment are often limited (e.g., by interior dimensions of shipping 

containers), it is often not practical to increase the overall size of the cabinet. For all these 

reasons, DOE did not consider insulation thickness increases or improvements as a design option 

in its ANOPR engineering analysis. 

However, DOE did add increases in insulation thickness as a design option in the NOPR 

engineering analysis, because it now believes this is a cost-effective option in several equipment 

types, most notably self-contained ice-cream freezers with doors. DOE understands that in 

equipment classes where conduction makes up a significant portion of the total refrigeration 

 EE-2006-STD-0126 COMMENT 22.1
load, a modest increase in insulation thickness can lead to small, but significant energy savings. . 

In relatively large units, which make up the largest portion of the shipments of commercial 

refrigeration equipment, even if such added insulation results in reduction of the refrigerated 

volume, any such reduction would not be substantial. DOE does not foresee any impact on the 

availability of this type of equipment from the use of increased insulation that would trigger 

EPCA’s prohibition at 42 U.S.C. 6295(o)(4) and 6316(e)(1). As to smaller units, DOE assumes 

that their outer dimensions are less constrained than the dimensions of larger units, and that 

therefore manufacturers could accommodate a small increase in insulation thickness, and 

maintain the amount of refrigerated volume, by making a small increase in the overall size of the 

cabinet. Therefore, in the NOPR, DOE modeled a 1⁄2-inch increase in insulation thickness for all 

equipment classes. When implemented as a design option, this increase in thickness was added 

to the baseline value of insulation thickness and DOE recalculated the conduction load. DOE 

based the cost of increasing the insulation thickness on a sunk cost per unit, considering foam 

fixture engineering and tooling costs, production line lifetime, and number of fixtures and units 

produced. Chapter 5 of the TSD provides details of the assumptions DOE used to calculate the 

additional cost of insulation thickness increases. 

ACEEE recommended that DOE include defrost cycle control in the analysis. (ACEEE, 

No. 16 at p. 2) Defrost cycle control can reduce energy consumption by reducing the frequency 

and duration of defrost periods. The majority of equipment currently manufactured already uses 

partial defrost cycle control in the form of cycle termination control. However, defrost cycle 

initiation is still scheduled at regular intervals. Full defrost cycle control would involve 

detecting frost buildup and initiating defrost. As described in the market and technology 

 EE-2006-STD-0126 COMMENT 22.1
assessment (Chapter 3 of the TSD), this could be accomplished through an optical sensor or by 

sensing the temperature differential across the evaporator coil. However, both methods are 

unreliable due to problems with fouling of the coil from dust and other surface contaminants. 

This becomes more of an issue as the display case ages. Because of these issues, DOE did not 

consider defrost cycle control as a design option in its engineering analysis. 

 

SCE asserted that doors should be considered a design option for open units, and that 

open units without doors should be held to energy consumption standards at levels warranted for 

units with doors. (Public Meeting Transcript, No. 13.5 at p. 44) SCE advocates, in essence, that 

manufacture of new, open commercial refrigeration equipment be discontinued and replaced by 

manufacture of equipment with doors. It stated that this would be a cost-effective way of saving 

substantial amounts of energy. (SCE, No. 19 at p. 2) Although SCE did not state it explicitly, 

DOE understands that its main argument for advocating that doors be considered for open cases 

is that doors should be regarded as a design option and not a feature, such that there are not 

separate equipment classes for equipment with and without doors. 

DOE acknowledges SCE’s position. Substantial, cost-effective energy savings might 

well result from standards that would, in effect, require the manufacture of commercial 

refrigeration equipment with doors instead of without. DOE has not considered such standards 

in this proceeding, however, nor has it studied their potential energy savings or economic 

justification (including the extent of their impact on product utility), because it believes EPCA 

precludes their adoption. First, DOE believes that, for commercial refrigeration equipment, the 

existence or lack of doors (i.e., whether the case is open or closed) does affect the utility of the 

 EE-2006-STD-0126 COMMENT 22.1
equipment to its owner and user, and therefore is a “feature” as that term is used in 42 U.S.C. 

6295(o)(4) and 6316(e)(1). Because a standard based on combining open and closed equipment 

classes would result in the unavailability of open cases, as described above, such a standard 

would violate EPCA’s prohibition against any standard that would “result in the unavailability” 

of equipment with “features . . . that are substantially the same” as those currently available in 

the United States. (42 U.S.C. 6295(o)(4) and 6316(e)(1)) Second, EPCA prescribes energy 

conservation standards for self-contained equipment with doors, and mandates that DOE issue 

standard levels for “self-contained commercial refrigerators, freezers, and refrigerator- freezers 

without doors.” (42 U.S.C. 6313(c)(2)-(4)) The latter equipment is one of the subjects of this 

rulemaking. Hence, the plain language of EPCA covers standards for commercial refrigeration 

equipment with and without doors. DOE must follow this legislative mandate. For these reasons, 

DOE did not consider doors as a design option for open equipment in its engineering analysis. 

The design options DOE considered in the NOPR engineering analysis are: 

• higher efficiency lighting and ballasts for the VOP, SVO, HZO, and SOC equipment 

families (horizontal fixtures); 

• higher efficiency lighting and ballasts for the VCT equipment family (vertical fixtures); 

• higher efficiency evaporator fan motors; 

• increased evaporator surface area; 

• increased insulation thickness; 

• improved doors for the VCT equipment family, low temperature; 

• improved doors for the VCT equipment family, medium temperature; 

• improved doors for the HCT equipment family, ice-cream temperature; 

 EE-2006-STD-0126 COMMENT 22.1
• improved doors for the SOC equipment family, medium temperature; 

• higher efficiency condenser fan motors (for self-contained equipment only); 

• increased condenser surface area (for self-contained equipment only); and 

• higher efficiency compressors (for self-contained equipment only).16

At the public meeting and during the comment period, stakeholders raised concerns about 

some of the design option data DOE used in its analysis and about DOE’s depiction of some of 

the design options. Several stakeholders were concerned with the lighting design option data. 

Zero Zone stated that DOE’s estimate of the incremental increase in cost for light emitting diode 

(LED) lighting was too low. (Public Meeting Transcript, No. 13.5 at p. 89) ARI seemed to 

agree with Zero Zone’s assessment, stating that DOE appears to have significantly 

underestimated the incremental cost for LED lighting by about 50 percent. 

DOE revised its cost assumption for LED lighting used in the VOP, SVO, HZO, and 

SOC equipment families (horizontal four-foot fixtures) and the VCT equipment family (vertical 

5-foot fixtures). For the ANOPR, DOE based LED lighting costs on an LED retrofit case study, 

but DOE revised some of its assumptions for the NOPR based on conversations with 

manufacturers of LED chips and LED fixtures. Specifically, DOE revised its assumptions on the 

relative weight of the costs of LED chips, power supplies, and the balance of fixture (which 

includes labor). These changes cause the original equipment manufacturer (OEM) cost (i.e., the 

cost to commercial refrigeration equipment manufacturers) of LED fixtures to increase for both 

horizontal and vertical fixtures. DOE believes the cost estimates for LED fixtures are now more 

 

16 Improvements to the condensing unit are not considered for remote condensing equipment, since the test 

procedure and standard apply only to the cabinet and not the condensing unit. 

 EE-2006-STD-0126 COMMENT 22.1
accurate and are consistent with the costs commercial refrigeration equipment manufacturers 

would experience in today’s market at mass-production volumes. Further discussion of the 

assumptions used to calculate LED fixture costs are provided in Chapter 5 of the TSD. 

Although DOE found that current LED costs are higher than originally estimated in the 

ANOPR analysis, through a closer examination of cost data for currently available LEDs, DOE 

recognizes that LED technology has historically exceeded DOE’s efficiency and cost targets. In 

this NOPR, DOE conducted a sensitivity study that analyzed future LED costs based on DOE’s 

Multi-Year Program Plan17, which are consistent with historical LED price reductions between 

2000 and 2007 (see Appendix B of the TSD). The Multi-Year Program Plan projects that LED 

chip costs will continue to decrease at a compound annual growth rate (CAGR) of approximately 

-27 percent between 2007 and 2012, which represents a price reduction of 80 percent over that 

time period. Also in agreement, EIA’s NEMS uses a technology characterization for LED light 

sources, which show that LED chip costs are expected to decline by approximately 71 percent 

for the same time period. Since LED chips are only a portion of the total LED system (other 

components include power supply and the LED fixture), the 80 percent reduction in chip costs 

contributes to an estimated decrease in total LED system cost of approximately 50 percent by 

2012, assuming the costs of the power supply and LED fixtures do not change significantly. 

DOE examined whether the projected LED costs presented in the Multi-Year Program 

Plan and used in this NOPR are consistent with publicly available empirical historical cost data. 

 

17 U.S. Department of Energy, Solid-State Lighting Research and Development, Multi-Year Program Plan FY’09-

FY’14. This document was prepared under the direction of a Technical Committee from the Next Generation 

Lighting Initiative Alliance (NGLIA). Information about the NGLIA and its members is available at 

www.nglia.org. 

 EE-2006-STD-0126 COMMENT 22.1
DOE reviewed available price data for the LED market and found that between 2000 and 2007, 

white-light LEDs had a CAGR ranging from approximately -18 to -31 percent. DOE’s LED cost 

projection (i.e., -27 percent CAGR) falls within the range of CAGRs observed. 

DOE expanded its examination by comparing this projected trend to the red-light LED 

market, which is a related technology, with price information spanning approximately three 

decades (i.e., 1973 to 2005). DOE found that the CAGR of red-light LED costs was -22 percent 

over this longer time span. The trend in red-light LED costs derived from empirical data over 

this longer time period is of a similar magnitude to DOE’s projected costs for white-light LEDs. 

Due to the technological similarities between red-light LEDs and white-light LEDs, DOE 

believes that the historical cost reductions for red-light LEDs are indicative of future cost 

reductions for white-light LEDs. Furthermore, the white-light LED market is undergoing a 

massive expansion and growth phase, with significant investment, new products and innovative 

applications for LED technology, including illumination of commercial refrigeration equipment. 

See Section V.C of this NOPR and Appendix B of the TSD for more detail on the cost projection 

and DOE's validation of those estimates. DOE seeks comment on the extent to which these price 

trends are indicative of what can be expected for commercial refrigeration equipment LED 

lighting from 2007 to 2012 and the extent to which the cost reduction observed for red-light 

LEDs is relevant to DOE’s cost projections for white-light LEDs. Also, in order to consider that 

LED costs are to decline more than assumed in this analysis, DOE will need more information 

than currently available on the extent, timing, and certainty of such further price reductions. 

Finally, DOE seeks comment on the extent to which manufacturers would adopt LED technology 

into the design of commercial refrigeration equipment in the absence of standards considering 

 EE-2006-STD-0126 COMMENT 22.1
the rapid development of LED technology and the steady reductions in cost. See Section VII.E.1

for details. 

The design option data for doors on VCT equipment were another area of concern for 

stakeholders. Zero Zone stated that the incremental increase in cost for high-efficiency doors 

(particularly cooler doors) seemed too high. (Public Meeting Transcript, No. 13.5 at p. 89) 

ACEEE also indicated that DOE’s costs for high-efficiency doors are too high. (ACEEE, No. 16 

at p. 2) ARI stated that it does not believe that the door used in DOE’s analysis (one that uses no 

energy) is available in the market today. According to ARI, high-efficiency door models 

currently in the market have no heat in the door, but the frame installed in the case uses at least 

40 W per door. ARI also stated that this option is not available to manufacturers in all 

applications because it is not intended for stores that operate outside a condition of 75° F dry 

bulb and 55 percent relative humidity, which requires higher wattage anti-condensate heaters in 

the doors/frames. (ARI, No. 18 at p. 6) Zero Zone made similar comments, stating that building 

humidity could be an issue in the use and functionality of higher efficiency doors without 

heaters. Zero Zone also recommended that DOE revise its analysis and use 40 W per door for 

the high-efficiency medium temperature frame, and that high-efficiency doors should be dropped 

from the analysis because they can result in condensate and water on the floor, such that they are 

not safe to use in a number of stores. (Public Meeting Transcript, No. 13.5 at p. 119 and Zero 

Zone, No. 17 at p. 2) 

DOE did not revise its costs for doors on VCT equipment. After reviewing the 

information collected for the ANOPR analysis, DOE concluded that its preliminary cost 

 EE-2006-STD-0126 COMMENT 22.1
estimates were reasonable. Notwithstanding the stakeholder observations just set forth, none of 

them provided any specific additional data that would warrant revision of DOE’s cost 

assessments, and DOE is not aware of such data. However, DOE revised the values for the antisweat heater power for glass doors for VCT.RC.L and VCT.RC.I equipment in the NOPR 

engineering analysis. Based on discussion with manufacturers and data from manufacturer 

specification sheets, the anti-sweat heater power for both the baseline and high-efficiency doors 

was increased (from 160 W to 200 W for baseline doors and from 60 W to 110 W for highefficiency doors). DOE also revised the anti-sweat heater power for glass doors for VCT.RC.M 

equipment in the NOPR engineering analysis based on comments and data received from 

manufacturer specification sheets. DOE increased the anti-sweat heater power for both the 

baseline doors (from 60 W to 100 W) and high-efficiency doors (from 0 W to 50 W). See 

Chapter 5 of the TSD for more detail. 

Regarding the compressor design options, Emerson noted that possible efficiency 

improvements for compressors in self-contained units may be too optimistic. True believes that 

because the test procedure is not steady-state (due to door openings), variable-speed compressors 

may be an effective design option. (Public Meeting Transcript, No. 13.5 at p. 75) However, 

True also noted that few variable-speed compressors are available in the appropriate power 

range, but that their development is continuing. (Public Meeting Transcript, No. 13.5 at p. 76) 

Emerson also believes that high-efficiency compressors may not be readily available and that it 

may be particularly hard to find compressors capable of this level of increased efficiency for low 

temperature equipment. (Public Meeting Transcript, No. 13.5 at p. 65) For the NOPR, DOE 

revised the assumptions it used to estimate the changes in cost and efficiency for high-efficiency, 

 EE-2006-STD-0126 COMMENT 22.1
single-speed compressors. Based on discussions with manufacturers and other experts, DOE 

concluded that the assumptions used in the ANOPR analysis (a 10 percent increase in cost results 

in a 20 percent reduction in energy use) overstated the actual efficiency gains that are possible 

for today’s compressors. Therefore, DOE now assumes that a five percent increase in cost 

would result in a 10 percent reduction in compressor energy use. Per-dollar efficiency gains are 

equivalent with these new assumptions, but the overall magnitude of power reduction and the 

cost premium are reduced. This change affects only the self-contained equipment classes 

analyzed in the engineering analysis. 

Additionally, in the NOPR analysis, DOE revised the capacity values used to select selfcontained compressors in the energy consumption model. DOE’s energy consumption model 

selects the most appropriate compressor by comparing each compressor’s capacity to the total 

refrigeration load in the case multiplied by the compressor oversize factor. Because compressor 

capacity is dependent on the conditions the compressor is tested at (compressor manufacturers 

provide capacity data over a range of conditions), it is important to select the compressor 

capacity based on the same conditions used to calculate total refrigeration load. For the ANOPR 

analysis, DOE listed capacity at standard ASHRAE rating conditions. However, the standard 

rating conditions used in the ASHRAE 540-2004 standard differ from the operating conditions 

used in the model, and each set of conditions results in different capacity values.18 Because the 

standard conditions and modeled conditions differed, the model typically overestimated the 

capacity of the selected compressors. To compensate, DOE adjusted the compressor oversize 

 

18 ASHRAE Standard 540-2004 lists standard rating conditions for hermetic refrigeration compressors. For 

medium-temperature equipment, compressors are rated at 20°F suction dewpoint, 120°F discharge dewpoint, 40°F 

return gas, and 0°F subcooling. For low-temperature equipment, compressors are rated at -10°F suction dewpoint, 

120°F discharge dewpoint, 40°F return gas, and 0°F subcooling. For ice-cream-temperature equipment, 

compressors are rated at -25°F suction dewpoint, 105°F discharge dewpoint, 40°F return gas, and 0°F subcooling. 

 EE-2006-STD-0126 COMMENT 22.1
factor to an unrealistic level (typically 1) in order for the ANOPR model to select the correct 

compressor. For the NOPR, DOE used capacities based on the same conditions used to calculate 

total refrigeration load and revised the oversize factor (typically 1.4 in the NOPR model) for all 

self-contained equipment classes to maintain the selection of the correct compressor size. See 

Chapter 5 of the TSD for more detail. 

In the analysis for the ANOPR, the calculation of LED energy use assumed that the LED 

lighting fixtures at the ends of VCT cases were identical to those between doors. With 

fluorescent fixtures, manufacturers install the same lamp regardless of whether it is at the end of 

the case (attached to an end mullion) or between doors (attached to an interior mullion). This 

causes excess light at the ends of the case. The light output of a single lamp between two doors 

is directed in both directions (i.e., behind two doors), whereas lamps at the ends direct light only 

on the contents behind the end door. LED fixtures are inherently scalable, so manufacturers can 

install an LED fixture in the end mullion that uses fewer LEDs than fixtures in interior mullions. 

In the NOPR analysis, the calculation assumes single-row LED fixtures are used in the end 

mullions and that these fixtures use roughly 75 percent of the energy of double-row fixtures in 

interior mullions. See Chapter 5 of the TSD for more detail. 

4. Baseline Models 

As mentioned above, the engineering analysis estimates the incremental costs for 

equipment with efficiency levels above the baseline in each equipment class. DOE was not able 

to identify a voluntary or industry standard that provided a minimum baseline efficiency 

requirement for commercial refrigeration equipment. Therefore, it was necessary for DOE to 

 EE-2006-STD-0126 COMMENT 22.1
determine baseline specifications for each equipment class to define the energy consumption and 

cost of the typical, baseline equipment. These specifications include dimensions, number of 

components, temperatures, nominal power ratings, and other case features that affect energy 

consumption, as well as a basic case cost (the cost of a piece of equipment not including the 

major efficiency-related components such as lights, fan motors, and evaporator coils). 

DOE established baseline specifications for each equipment class modeled in the 

engineering analysis by reviewing available manufacturer data, selecting several representative 

units from available manufacturer data, and then aggregating the physical characteristics of the 

selected units. This process created a unit representative of commercial refrigeration equipment 

currently being offered for sale in each equipment class, with average characteristics for physical 

parameters (e.g., volume, TDA), and minimum performance of energy-consuming components 

(e.g., fans, lighting). DOE used the cost model to develop the basic case cost for each equipment 

class. See Appendix B of the TSD for these specifications. 

Zero Zone expressed concern over DOE’s method for calculating the internal case 

volume. Zero Zone suggested that DOE update its analysis to use ARI Standard 1200 for 

calculating the internal volume of a case. This standard calculates internal volume using the 

internal height and depth of the case from the inside of the door to the rear wall or rear duct. 

This is typically how the industry calculates internal volume. (Zero Zone, No. 17 at p. 1) 

In its engineering analysis, DOE followed the methodology in ANSI/ARI STANDARD 

1200-2006 when calculating the refrigerated volume parameter used in the baseline design 

 EE-2006-STD-0126 COMMENT 22.1
specifications. DOE used the internal height and depth of the case from inside of the door to the 

rear wall. No subtractions were made for shelving or other protrusions within the case interior 

envelope. 

At the public meeting, Zero Zone expressed concern over the lighting technology for the 

baseline models in each equipment class. Zero Zone stated that T12 lighting is no longer used in 

closed cases, and that T8 lighting is now the baseline for those cases. (Public Meeting 

Transcript, No. 13.5 at p. 88) Further, Zero Zone reiterated in writing that the baseline lighting 

for cases with a vertical transparent door should be T8. (Zero Zone, No. 17 at p. 3) DOE has 

changed the baseline specifications and is now using T8 lighting in the analysis of baseline 

models. 

Stakeholders raised concerns over the accuracy of some of the data used for the baseline 

models. Zero Zone stated that the TDA for VCT.RC.L and VCT.RC.M cases may be incorrect, 

and that the sum of the TDA for each door did not equal the TDA of the entire case for these two 

equipment classes. (Zero Zone, No. 17 at p. 3) 

In the NOPR analysis, DOE made several revisions to the baseline specifications. 

Appendix B of the TSD shows changes to baseline design specifications relative to the ANOPR 

analysis. DOE revised the TDA for VCT.RC.L and VCT.RC.M equipment so that the sum of 

the display area of the doors matches the TDA of the case. The baseline models used in the 

NOPR analysis are more representative of actual equipment than those DOE used in the ANOPR 

analysis, but in some situations, the changes to baseline characteristics affected the baseline 

 EE-2006-STD-0126 COMMENT 22.1
energy consumption significantly compared to the ANOPR. Four equipment classes 

(HZO.RC.M, HZO.SC.M, HZO.SC.L, and VCS.SC.I) had changes that resulted in a significant 

increase in the baseline energy consumption, and one equipment class (SOC.RC.M) had changes 

that resulted in a decrease in the baseline energy consumption. See Appendix B of the TSD for 

more detail. 

For the ANOPR analysis, DOE calculated a baseline energy usage of 0.16 kWh/ft2 for the 

HZO.RC.M equipment class. During manufacturer interviews, some manufacturers stated that 

this seemed unreasonably low. DOE reviewed the data it presented in the ANOPR TSD, as to 

the energy consumption of equipment on the market and realized that its figure for baseline 

energy usage for HZO.RC.M cases was well below the amounts indicated by the market data. 

DOE identified problems with the ANOPR design specifications for the HZO.RC.M equipment 

class, namely a lack of electric defrost and a mismatch between the size of the case (TDA) and 

the amount of infiltration load. For the NOPR analysis, DOE revised its baseline design 

specifications for this equipment to include electric defrost based on discussions with 

manufacturers during the MIA interviews and a review of market data. Although electric defrost 

is not always required on HZO.RC.M cases, about two-thirds of such equipment on the market 

use electric defrost. Based on manufacturer interviews, DOE understands there are lower 

infiltration loads (on a per-TDA basis) in horizontal open cases because of the natural “well” of 

cold air that tends to sit inside the case. In contrast, for a vertical or semivertical open case, the 

cold air tends to spill out of the opening under the influence of gravity. With a lower infiltration 

load for a given TDA, there is less heat available to melt frost from the evaporator coil using offcycle defrost. Thus, most HZO.RC.M case designs necessitate the use of electric resistance 

 EE-2006-STD-0126 COMMENT 22.1
heating for defrost. DOE also revised the specifications for the HZO.RC.M equipment class to 

include a higher infiltration load (in accordance with the updated infiltration methodology), and 

updated dimensions. In the ANOPR analysis, DOE used defrost meltwater to estimate the 

infiltration load. In accordance with the updated infiltration methodology, DOE used 

refrigeration load data to calculate the baseline infiltration load, which was higher than the load 

estimated using meltwater data in the ANOPR analysis (Chapter 5 for details). DOE also revised 

the dimensions of the HZO.RC.M class to reflect a somewhat smaller case size that was more 

representative of cases currently on the market. This change involved reducing the TDA, 

volume, wall area, and case interior surface area, all of which DOE matched to the infiltration 

load and other case components. See Appendix B of the TSD for more detail. 

For the HZO.SC.M and HZO.SC.L equipment classes, DOE made changes similar to 

those described in the preceding paragraph. These two equipment classes are in the same 

equipment family as the HZO.RC.M equipment class, so they share similarities to that class (e.g., 

having the same cabinet). Because of a lack of detailed data for the HZO.SC.M and HZO.SC.L 

equipment classes, DOE based its baseline specifications on the HZO.RC.M equipment class, 

making reasonable adjustments for design features specific to self-contained equipment. In 

particular, self-contained equipment has a lower compressor energy efficiency ratio (EER), and 

an added drain pan heater to evaporate defrost meltwater. Similar to the HZO.RC.M class, the 

change in infiltration load calculation led to a higher infiltration load for the HZO.SC.M class. 

DOE also added electric defrost to the HZO.SC.M class and increased the anti-sweat heater load. 

For the HZO.SC.L class, electric defrost was already included, since it is necessary for lowtemperature equipment. However, DOE revised the infiltration load in accordance with the 

 EE-2006-STD-0126 COMMENT 22.1
change in methodology and increased the anti-sweat heater load. See Appendix B of the TSD 

for more detail. 

Discussions during the manufacturer interviews revealed that in the ANOPR analysis, the 

baseline energy usage for the VCS.SC.I equipment class was unrealistically low. Therefore, in 

the NOPR analysis, DOE made revisions that increased energy usage in the baseline equipment 

for this class. DOE was unable to verify the accuracy of the baseline specifications in the 

ANOPR analysis, because of a lack of publicly available performance data for this class. For the 

NOPR, DOE revised its baseline assumptions to reflect a two-door case instead of the three-door 

model analyzed in the ANOPR. DOE believes this change more accurately reflects the current 

market for VCS.SC.I cases and is more in line with the electric defrost power level. DOE 

increased infiltration load somewhat relative to the ANOPR specifications and added anti-sweat 

power. See Appendix B of the TSD for more detail. 

5. Engineering Analysis Results 

The results of the engineering analysis are reported as cost-efficiency data (or “curves”) in 

the form of CDEC (in kWh) versus MSP (in dollars), both normalized by TDA (or volume for 

the VCS.SC.I equipment class). DOE created 15 cost-efficiency curves in the engineering 

analysis. Table IV-7 presents data for these curves. See Chapter 5 of the TSD for additional 

detail on the engineering analysis and comparisons of DOE’s analytically derived curves to 

industry-supplied curves. See Appendix B of the TSD for complete cost-efficiency results. 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-7 Engineering Analysis Cost-Efficiency Results

Efficiency Level 

Baseline 1 2 3 4 5 6 7 8 9 10 

MSP/TDA 

[$/ft2] $113.17 $113.61 $114.67 $134.42 $135.24 $147.83 $149.55 - - - - VCT.RC.L 

CDEC/TDA 

[kWh/day/ft2] 1.07 1.04 1.01 0.72 0.71 0.65 0.64 - - - - 

MSP/TDA 

 [$/ft2] $79.12 $79.76 $81.30 $82.90 $87.59 $88.58 $129.36 - - - - 

VOP.RC.M CDEC/TDA 

[kWh/day/ft2] 1.09 1.04 0.98 0.95 0.89 0.89 0.76 - - - - 

MSP/TDA 

 [$/ft2] $95.10 $95.67 $97.04 $98.56 $102.91 $141.73 $143.06 - - - - 

SVO.RC.M CDEC/TDA 

[kWh/day/ft2] 1.09 1.04 0.99 0.96 0.91 0.78 0.77 - - - - 

MSP/TDA 

 [$/ft2] $93.63 $94.12 $95.31 $97.40 $98.56 - - - - - - 

HZO.RC.L CDEC/TDA 

[kWh/day/ft2] 0.83 0.80 0.77 0.73 0.72 - - - - - - 

MSP/TDA 

 [$/ft2] $129.23 $129.92 $131.58 $133.95 $135.56 - - - - - - 

HZO.RC.M CDEC/TDA 

[kWh/day/ft2] 0.59 0.54 0.48 0.45 0.44 - - - - - - 

MSP/TDA 

 [$/ft2] $103.23 $103.67 $104.72 $120.28 $121.10 $133.69 $134.71 - - - - 

VCT.RC.M CDEC/TDA 

[kWh/day/ft2] 0.51 0.49 0.46 0.35 0.34 0.29 0.28 - - - - 

MSP/TDA 

 [$/ft2] $143.54 $145.32 $149.62 $156.20 $157.02 $158.21 $179.07 - - - - 

VOP.RC.L CDEC/TDA 

[kWh/day/ft2] 2.99 2.84 2.65 2.54 2.52 2.51 2.44 - - - - 

MSP/TDA 

 [$/ft2] $146.36 $146.81 $147.88 $149.08 $150.33 $180.77 $181.81 $187.79 - - - 

SOC.RC.M CDEC/TDA 

[kWh/day/ft2] 0.62 0.59 0.55 0.53 0.51 0.41 0.41 0.40 - - - 

MSP/TDA 

 [$/ft2] $145.66 $146.49 $147.25 $148.39 $150.23 $155.87 $157.96 $160.71 $179.11 $226.80 $230.37 

VOP.SC.M CDEC/TDA 

[kWh/day/ft2] 2.65 2.54 2.50 2.46 2.41 2.30 2.27 2.24 2.06 1.89 1.89 

MSP/TDA 

 [$/ft2] $138.92 $139.82 $140.27 $140.71 $141.78 $146.81 $147.88 $149.57 $165.98 $205.92 $210.08 

SVO.SC.M CDEC/TDA 

[kWh/day/ft2] 2.59 2.47 2.44 2.43 2.40 2.30 2.28 2.26 2.09 1.95 1.94 

MSP/TDA 

 [$/ft2] $154.04 $155.38 $155.85 $156.99 $161.97 $162.44 $178.69 $179.83 $184.26 - - 

HZO.SC.L CDEC/TDA 

[kWh/day/ft2] 3.22 3.03 3.00 2.96 2.80 2.79 2.54 2.53 2.51 - - 

MSP/TDA 

 [$/ft2] $132.19 $132.87 $133.34 $134.48 $134.96 $137.83 $147.19 $148.33 $152.76 - - 

HZO.SC.M CDEC/TDA 

[kWh/day/ft2] 1.60 1.52 1.49 1.45 1.44 1.38 1.26 1.24 1.23 - - 

MSP/TDA 

 [$/ft2] $202.29 $203.93 $205.04 $225.93 $228.61 $239.00 - - - - - 

HCT.SC.I CDEC/TDA 

[kWh/day/ft2] 1.42 1.29 1.24 0.72 0.69 0.65 - - - - 

MSP/TDA 

 [$/ft2] $134.76 $135.45 $135.88 $136.94 $138.95 $145.51 $165.26 $165.70 $181.45 $182.50 $184.55 

VCT.SC.I CDEC/TDA 

[kWh/day/ft2] 1.75 1.66 1.61 1.55 1.45 1.32 0.97 0.97 0.87 0.87 0.86 

MSP/Vr

 [$/ft3] $43.38 $43.61 $43.91 $44.48 $45.03 $46.82 $47.06 $48.17 $48.74 - - 

VCS.SC.I CDEC/Vr

[kWh/day/ft3] 0.57 0.54 0.51 0.47 0.45 0.41 0.41 0.40 0.40 - - 

 EE-2006-STD-0126 COMMENT 22.1
C. Markups to Determine Equipment Price 

This section explains how DOE developed the distribution channel markups it used 

(Chapter 6 of the TSD). DOE used these markups, along with sales taxes, installation costs, and 

the MSPs developed in the engineering analysis, to arrive at the final installed equipment prices 

for baseline and higher efficiency commercial refrigeration equipment. As explained in the 

ANOPR, 72 FR 41184, and as shown in Table IV-8, DOE defined three distribution channels for 

commercial refrigeration equipment to describe how the equipment passes from the 

manufacturer to the customer. 

Table IV-8 Distribution Channel Market Shares for Commercial Refrigeration Equipment 

Channel 1 Channel 2 Channel 3 

Manufacturer Manufacturer, Wholesaler Manufacturer, Wholesaler, 

Contractor 

Customer Customer Customer 

Remote Condensing 

Equipment 70% 15% 15% 

Self-Contained 

Equipment 30% 35% 35% 

For the ANOPR analysis, DOE estimated shares of 86 percent, 7 percent, and 7 percent 

for the manufacturer, manufacturer/wholesaler, and manufacturer/wholesaler/contractor channels 

respectively, for all commercial refrigeration equipment, based on market estimates from 

consultants. At the ANOPR public meeting, ARI and Carrier commented that the breakdown 

should be changed to 70 percent, 15 percent, and 15 percent among the three channels, 

respectively, for remote condensing equipment and 30 percent, 35 percent, and 35 percent, 

respectively, for self-contained equipment. (Public Meeting Transcript, No. 13.5 at p. 122; ARI, 

No. 18 at p. 7) No other alternative estimates were provided of shipments through these 

 EE-2006-STD-0126 COMMENT 22.1
distribution channels. Therefore, in the NOPR, DOE decided to modify the breakdown and it 

recalculated the overall markups using the same procedure described in the ANOPR (72 FR 

41184), but based upon the industry comments from ARI and Carrier. The new overall baseline 

and incremental markups for sales to supermarkets within each distribution channel are shown in 

Table IV-9, Table IV-10, Table IV-11, and, Table IV-12 respectively. Chapter 6 of the TSD 

provides additional details on markups. 

Table IV-9 Baseline Markups by Distribution Channel Including Sales Tax for SelfContained Equipment in Supermarkets 

Wholesaler 

Mechanical 

Contractor 

(includes 

wholesaler) 

National Account 

(manufacturerdirect) Overall 

Distributor(s) 

Markup 1.436 2.182 1.218 1.631 

Sales Tax 1.068 1.068 1.068 1.068 

Overall Markup 1.533 2.330 1.300 1.742 

 

Table IV-10 Baseline Markups by Distribution Channel Including Sales Tax for Remote 

Condensing Equipment in Supermarkets 

Wholesaler 

Mechanical 

Contractor 

(includes 

wholesaler) 

National Account 

(manufacturerdirect) Overall 

Distributor(s) 

Markup 1.436 2.182 1.218 1.395 

Sales Tax 1.068 1.068 1.068 1.068 

Overall Markup 1.533 2.330 1.300 1.490 

Table IV-11 Incremental Markups by Distribution Channel Including Sales Tax for SelfContained Equipment in Supermarkets 

Wholesaler 

Mechanical 

Contractor 

(includes 

wholesaler) 

National Account 

(manufacturerdirect) 

Overall 

Distributor(s) 

Markup 1.107 1.362 1.054 1.180 

Sales Tax 1.068 1.068 1.068 1.068 

Overall Markup 1.182 1.454 1.125 1.260 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-12 Incremental Markups by Distribution Channel Including Sales Tax for 

Remote Condensing Equipment in Supermarkets 

Wholesaler 

Mechanical 

Contractor 

(includes 

wholesaler) 

National Account 

(manufacturerdirect) 

Overall 

Distributor(s) 

Markup 1.107 1.362 1.054 1.108 

Sales Tax 1.068 1.068 1.068 1.068 

Overall Markup 1.182 1.454 1.125 1.183 

D. Energy Use Characterization 

The energy use characterization estimates the annual energy consumption of commercial 

refrigeration equipment systems (including the remote condensing units). This estimate is used 

in the subsequent LCC and PBP analyses (Chapter 8 of the TSD) and NIA (Chapter 11 of the 

TSD). DOE estimated the energy consumption of the 15 equipment classes analyzed in the 

engineering analysis (Chapter 5 of the TSD) using the relevant test procedure. DOE then 

validated these energy consumption estimates with annual whole-building simulation modeling 

of selected equipment classes and efficiency levels. One of the key assumptions in both the 

engineering analysis and the whole-building simulation in the ANOPR analysis was that the 

display case lighting operated 24 hours per day. DOE conducted a limited sensitivity analysis to 

explore how variation in display case lighting operating hours affected the energy savings. The 

sensitivity analysis showed that energy savings fell as lighting operating hours were reduced for 

all equipment classes that used display case lighting. The magnitude of this effect depended on 

the equipment class. 

At the ANOPR public meeting, SCE stated that it was studying display case lighting and 

will gladly share results of the study with DOE as soon as the study is done. (Public Meeting 

Transcript, No. 13.5 at p. 117) Hussman stated that with today’s low-temperature cabinets, store 

 EE-2006-STD-0126 COMMENT 22.1
owners won’t turn those lights off because they may not come back on when they are so cold. 

(Public Meeting Transcript, No. 13.5 at p. 118) Hill Phoenix stated that turning off fluorescent 

lights at night can lead to maintenance issues because of moisture infiltration, so it is typical to 

leave the lights on all night. LEDs don’t have that problem. They agreed that 24-hour lighting is 

not a bad assumption. (Public Meeting Transcript, No. 13.5 at p. 118) Another manufacturer, 

Zero Zone, also agreed that 24 hours is a valid assumption for case lighting operating hours. 

(Zero Zone, No. 17 at p. 4) ARI recommended that the DOE analysis be based on 24 hours perday-operation as this represents the worst-case scenario and many stores are open for 24 hours. 

(ARI, No. 18 at p. 4) Based on these comments, DOE decided to leave the assumption of display 

case lighting operating hours of 24 hours per day unchanged for the NOPR analysis. Additional 

detail on the energy use characterization can be found in Chapter 7 of the TSD. 

DOE also requested comments on other operational factors that might be encountered in 

the field that would differ from that found in the relevant test procedure, the relative frequency of 

these factors, and how it could account for them in its energy analysis. DOE received a 

comment from the Chinese delegation to the World Trade Organization stating that it should 

consider all kinds of on-site factors in operation and maintenance practices of the commercial 

refrigerating equipment when evaluating the optional standard class of the equipment. (China, 

No. 20 at pp. 3-4) No specifics on what these factors might be or how to take them into account 

were provided, however. Chapter 7 of the TSD provides additional detail on the energy use 

characterization. 

 EE-2006-STD-0126 COMMENT 22.1
E. Life-Cycle Cost and Payback Period Analyses 

In response to the requirements of Section 325(o)(2)(B)(i) of EPCA, DOE conducted 

LCC and PBP analyses to evaluate the economic impacts of possible new commercial 

refrigeration equipment standards on individual customers. This section describes the LCC and 

PBP analyses and the spreadsheet model DOE used for analyzing the economic impacts of 

possible standards on individual commercial customers. Details of the spreadsheet model, and of 

all the inputs to the LCC and PBP analyses, are in TSD Chapter 8. DOE conducted the LCC and 

PBP analyses using a spreadsheet model developed in Microsoft Excel for Windows 2003. 

The LCC is the total cost for a unit of commercial refrigeration equipment, over the life 

of the equipment, including purchase and installation expense and operating costs (energy 

expenditures and maintenance). To compute the LCC, DOE summed the installed price of the 

equipment and its lifetime operating costs discounted to the time of purchase. The PBP is the 

change in purchase expense due to a given energy conservation standard divided by the change 

in first-year operating cost that results from the standard. DOE expresses PBP in years. 

Otherwise stated, the payback period is the number of years it would take for the customer to 

recover the increased costs of a higher-efficiency product through energy savings. DOE 

measures the changes in LCC and in PBP associated with a given energy use standard level 

relative to a base case forecast of equipment energy use. The base case forecast reflects the 

market in the absence of mandatory energy conservation standards. 

The data inputs to the PBP calculation are the purchase expense (otherwise known as the 

total installed customer cost or first cost) and the annual operating costs for each selected design. 

 EE-2006-STD-0126 COMMENT 22.1
The inputs to the equipment purchase expense were the equipment price and the installation cost, 

with appropriate markups. The inputs to the operating costs were the annual energy 

consumption, the electricity price, and the repair and maintenance costs. The PBP calculation 

uses the same inputs as the LCC analysis but, since it is a simple payback, the operating cost is 

for the year the standard takes effect, assumed to be 2012. For each efficiency level analyzed, 

the LCC analysis required input data for the total installed cost of the equipment, the operating 

cost, and the discount rate. 

Table IV-13 summarizes the inputs and key assumptions used to calculate the customer 

economic impacts of various energy consumption levels. Equipment price, installation cost, and 

baseline and standard design selection affect the installed cost of the equipment. Annual energy 

use, electricity costs, electricity price trends, and repair and maintenance costs affect the 

operating cost. The effective date of the standard, the discount rate, and the lifetime of 

equipment affect the calculation of the present value of annual operating cost savings from a 

proposed standard. Table IV-13 also shows how DOE modified these inputs and key 

assumptions for the NOPR, relative to the ANOPR. 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-13 Summary of Inputs and Key Assumptions Used in the LCC and PBP Analyses 

Input Description Changes for NOPR 

Baseline Manufacturer Selling Price 

Price charged by manufacturer to 

either a wholesaler or large customer 

for baseline equipment. 

Data reflects updated engineering 

analysis 

Standard-Level Manufacturer 

Selling Price Increases 

Incremental change in manufacturer 

selling price for equipment at each 

of the higher efficiency standard 

levels. 

Data reflects updated engineering 

analysis 

Markups and Sales Tax 

Associated with converting the 

manufacturer selling price to a 

customer price (Chapter 6 of TSD). 

Markups updated based on revised 

distribution channel shipment 

estimates 

Installation Price 

Cost to the customer of installing the 

equipment. This includes labor, 

overhead, and any miscellaneous 

materials and parts. The total 

installed cost equals the customer 

equipment price plus the installation 

price. 

Installation prices for remote 

condensing and self-contained 

equipment revised based on ANOPR 

comments. 

Equipment Energy Consumption 

Site energy use associated with the 

use of commercial refrigeration 

equipment, which includes only the 

use of electricity by the equipment 

itself. 

Data reflects updated engineering 

analysis for each efficiency level. 

Electricity Prices 

Average commercial electricity price 

($/kWh) in each State and for four 

classes of commercial customers, as 

determined from EIA data for 2003$ 

converted to 2006$. 

Electricity prices updated to 2007$ 

using Electricity EIA Monthly 

Electricity Database for base 

commercial electricity prices; and 

AEO2007 to convert 2006 prices to 

2007 prices. 

Electricity Price Trends Used the AEO2006 reference case to 

forecast future electricity prices. 

Used the AEO2007 reference case to 

forecast future electricity prices. 

Maintenance Costs 

Labor and material costs associated 

with maintaining the commercial 

refrigeration equipment (e.g., 

cleaning heat exchanger coils, 

checking refrigerant charge levels, 

lamp replacement). 

No change in methodology. Lamp 

replacement costs reflect updated 

engineering analysis costs and are in 

2007$ 

Repair Costs 

Labor and material costs associated 

with repairing or replacing 

components that have failed. Based 

on a fixed percentage of baseline 

equipment costs 

Repair costs in NOPR reflect 

estimates of individual component 

life and cost to replace. Repair costs 

increase with increasing component 

costs. 

Equipment Lifetime 

Age at which the commercial 

refrigeration equipment is retired 

from service (estimated to be 10 

years). 

Average equipment life for small 

grocery and convenience stores 

adjusted to 15 years. 

Discount Rate 

Rate at which future costs are 

discounted to establish their present 

value to commercial refrigeration 

equipment users. 

Updated to 2007 version of the 

Damodaran website with very little 

change to discount rates. 

Rebound Effect A rebound effect was not taken into 

account in the LCC analysis 

No change 

 EE-2006-STD-0126 COMMENT 22.1
The following sections contain brief discussions of the methods underlying each input 

and key assumption in the LCC analysis. Where appropriate, DOE also summarizes comments 

on these inputs and assumptions and explains how it took these comments into consideration. 

1. Manufacturer Selling Price 

The baseline MSP is the price charged by manufacturers to either a wholesaler/distributor 

or very large customer for equipment meeting existing energy use (or baseline) levels. The MSP 

includes a markup that converts the MPC to MSP. DOE obtained the baseline MSPs through 

industry-supplied efficiency-level data supplemented with a design option analysis. Refer to 

Chapter 5 of the TSD for details. 

DOE developed MSPs for equipment classes consisting of eight possible equipment 

families, two possible condensing unit configurations (remote condensing and self-contained), 

and three possible operating temperature ranges. Not all covered equipment classes have 

significant actual shipments (Chapter 3 of the TSD). DOE carried out the LCC and PBP 

analyses on the 15 primary equipment classes identified earlier. DOE estimated the MSP for 

each primary equipment class between the baseline efficiency level and for four to seven 

additional more-efficient levels. Refer to Chapter 5 of the TSD for details. 

DOE was not able to identify data on relative shipments for equipment classes by 

efficiency level, and DOE did not find equivalent data in the literature or studies. DOE 

designated the equipment with the highest energy use as Level 1, and selected this as the baseline 

equipment. 

 EE-2006-STD-0126 COMMENT 22.1
In the ANOPR analysis, DOE requested feedback on whether the Level 1 baseline is 

valid for the LCC analysis, and if not, what changes should be made to provide a more realistic 

baseline level. DOE also asked whether a distribution of efficiencies should be used to establish 

the baseline for the LCC analysis. 72 FR 41193, 41208. DOE received comments on the 

engineering analysis and the use of the analytically derived curves versus the industry-supplied 

curves. DOE modified the engineering analysis, which resulted in a modified Level 1 baseline. 

See Section IV.B for details. 

ARI stated that it would try to provide energy efficiency distribution data to DOE, but 

was unable to provide that data in time for the NOPR. (Public Meeting Transcript, No. 13.5 at p. 

143) EEI stated that Electric Power Research Institute (EPRI) end use studies might provide 

some data that could be used to establish distributions. (Public Meeting Transcript, No. 13.5 at 

p. 141) ACEEE suggested that DOE check with the Northwest Energy Efficiency Alliance for 

possible energy efficiency distribution data. (Public Meeting Transcript, No. 13.5 at p. 142) 

However, ARI agreed with DOE’s approach to use the Level 1 data established in the 

engineering analysis as the appropriate baseline for DOE’s LCC analysis. DOE was able to 

explore some of the data available with the Northwest Energy Efficiency Alliance; however, the 

available data generally provides only frequency of use of specific design features and not 

energy use. Based on this, DOE chose to continue to use the Level 1 energy efficiency level as 

the baseline efficiency level for the LCC analysis. See Chapter 8 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
2. Increase in Selling Price 

The standard level MSP increase is the change in MSP associated with producing 

equipment at lower energy consumption levels associated with higher standards. DOE 

developed MSP increases associated with decreasing equipment energy consumption (or higher 

efficiency) levels through a combination of energy consumption level and design-option 

analyses. See Chapter 5 of the TSD for details. DOE developed MSP increases as a function of 

equipment energy consumption for each of the 15 equipment classes. Although the engineering 

analysis produced up to 11 energy consumption levels, depending on equipment class, the LCC 

and PBP analyses used only up to eight selected energy consumption levels. 

3. Markups 

As discussed earlier, overall markups are based on one of three distribution channels and 

the calculation of baseline and incremental markups. The distribution channels defined in the 

ANOPR were also used for the NOPR analysis, but DOE modified the relative fractions of 

shipments through each distribution channel based on stakeholder input. See Section IV.C, 

Markups to Determine Equipment Price, for details. 

4. Installation Costs 

In the ANOPR, DOE derived installation costs for commercial refrigeration equipment 

from data provided in RS Means Mechanical Cost Data.19 RS Means provides estimates on the 

person-hours required to install commercial refrigeration equipment and the labor rates 

associated with the type of crew required to install the equipment. DOE developed separate 

 

19 RS Means Company, Inc. 2005. Mechanical Cost Data 28th Annual Edition. Kingston, Massachusetts. 

 EE-2006-STD-0126 COMMENT 22.1
installation costs for self-contained and remote condensing equipment. DOE considered the 

installation costs to be fixed, independent of the cost or efficiency of the equipment. Although 

the LCC spreadsheet allows for alternative scenarios, DOE did not find a basis for changing its 

basic premise for the ANOPR analysis. 

DOE received comments on the RS Means installation costs. Zero Zone commented that 

the installation costs seem low, and that it tracks installation costs and would provide installation 

cost data to DOE. (Public Meeting Transcript, No. 13.5 at p. 133) Separately, Zero Zone 

provided installation costs of $2,000 and $750, respectively, for remote condensing and selfcontained equipment. DOE has decided to use these cost data in the NOPR analysis. Zero Zone 

also stated that a high-efficiency case installation isn’t going to cost significantly more than a 

standard case unless there are more controls to tune and adjust. SCE stated that if the installation 

cost doesn’t change with the equipment efficiency, then it doesn’t affect the relative life-cycle 

cost. (Public Meeting Transcript, No. 13.5 at p. 117) 

The total installed cost is the sum of the equipment price and the installation cost. DOE 

derived the customer equipment price for any given standard level by multiplying the baseline 

MSP by the baseline markup and adding to it the product of the incremental MSP and the 

incremental markup. Because MSPs, markups, and the sales tax can take on a variety of values 

depending on location, the resulting total installed cost for a particular standard level will not be 

a single-point value, but a distribution of values. See Chapter 8 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
5. Energy Consumption 

The electricity consumed by the commercial refrigeration equipment was based on the 

engineering analysis estimates as described previously in Section IV.B. No change was made to 

the ANOPR methodology. 

6. Electricity Prices 

Electricity prices are necessary to convert the electric energy savings into energy cost 

savings. Because of the wide variation in electricity consumption patterns, wholesale costs, and 

retail rates across the country, it is important to consider regional differences in electricity prices. 

DOE used average commercial electricity prices at the State level from the EIA Monthly 

Electricity Database.20 The 2006 prices were then converted to 2007$ using AEO2007. 

Different kinds of businesses typically use electricity in different amounts at different 

times of the day, week, and year, and therefore face different effective prices. To make this 

adjustment, DOE used the 2003 Commercial Building Energy Consumption Survey (CBECS) 

data to identify the average prices the four kinds of businesses in this analysis paid compared 

with the average prices all commercial customers paid. The ratios of prices paid by the four 

types of businesses to the national average commercial prices seen in the 2003 CBECS were 

used as multiplying factors to increase or decrease the average commercial 2006 price data 

previously developed. Once the electricity prices for the four types of businesses were adjusted, 

the resulting prices were used in the analysis. 

 

20 EIA form 826. Annual 1991 through 2006, Jan-Feb 2007. 

http://www.eia.doe.gov/cneaf/electricity/page/data.html. Accessed May 29, 2007. 

 EE-2006-STD-0126 COMMENT 22.1
To obtain a weighted-average national electricity price, the prices paid by each business 

in each State was weighted by the estimated sales of frozen and refrigerated food products, 

which also serves as the distribution of commercial refrigeration equipment units in each State, 

to each prototype building. The State/business type weights are the probabilities that a given 

commercial refrigeration equipment unit shipped will be operated with a given electricity price. 

For evaluation purposes, the prices and weights can be depicted as a cumulative probability 

distribution. The effective electricity prices range from approximately 5 cents per kWh to 

approximately 22 cents per kWh. 

During the ANOPR public meeting, EEI concurred with the DOE analysis that shows 

grocery stores and food markets having lower electric prices than typical commercial facilities. 

(EEI, No. 15 at p. 3) DOE continued to use the same approach to develop electric prices for the 

NOPR analysis; however, DOE updated electric costs to 2007$. The section below describes the 

development and use of State-average electricity prices by building type; Chapter 8 of the TSD 

provides more detail. 

7. Electricity Price Trends 

The electricity price trend provides the relative change in electricity prices for future 

years to 2030. Estimating future electricity prices is difficult, especially considering that many 

States are attempting to restructure the electricity supply industry. DOE applied the AEO2007 

reference case as the default scenario and extrapolated the trend in values from 2020 to 2030 of 

the forecast to establish prices in 2030 to 2042. This method of extrapolation is in line with 

methods the EIA uses to forecast fuel prices for the Federal Energy Management Program 

 EE-2006-STD-0126 COMMENT 22.1
(FEMP). DOE provided a sensitivity analysis of the life-cycle cost savings and PBP results to 

future electricity price scenarios using both the AEO2007 high-growth and low-growth forecasts 

in Chapter 8 of the TSD. ACEEE suggested that the NOPR economic analysis be recalculated 

using AEO2008 price forecasts. (ACEEE, No. 16 at p. 2) However, the AEO2008 was not 

available when DOE was completing the NOPR analysis. DOE used the most recent AEO 

forecast available (AEO2007) when it performed the LCC analysis for the NOPR. 

8. Repair Costs 

The equipment repair cost is the cost to the customer of replacing or repairing 

components in commercial refrigeration equipment that have failed. For the ANOPR analysis, 

DOE calculated the annualized repair cost for baseline efficiency equipment using the following 

expression: 

 RC = k x EQP/LIFE 

where 

RC = repair cost in dollars 

k = fraction of equipment price (estimated to be 0.5) 

EQP = baseline equipment price in dollars, and 

LIFE = average lifetime of the equipment in years (estimated to be 10 years for large grocery 

and multi-line retail chains and 15 years for small grocery and convenience stores) 

 EE-2006-STD-0126 COMMENT 22.1
DOE placed replacement of lighting components (lamps and ballasts) under maintenance 

expenses since the typical lamp life is known and commonly considered a maintenance item by 

customers of commercial refrigeration equipment. 

Because data were not available for how repair costs vary with equipment efficiency, 

DOE held repair costs constant as the default scenario for the ANOPR LCC and PBP analyses. 

DOE received several comments on the use of constant repair costs for higher efficiency 

equipment. Carrier stated that while it had no data to support this, higher efficiency design 

options--like adding controls--could cost more to repair, and it encouraged DOE to find more 

accurate repair costs that would correlate with more sophisticated controls. (Public Meeting 

Transcript, No. 13.5 at p. 135) Carrier felt that making repair costs proportional was better than 

making them flat. ARI stated that the assumption that repair costs are constant and do not vary 

with equipment efficiency is incorrect. (ARI, No. 18 at p. 7) Industry experience indicates that 

higher efficiency equipment is more expensive to repair because it uses more sophisticated and 

more expensive components. If actual cost data are not available, ARI recommended that DOE 

assume the repair cost to increase as a function of equipment cost. True stated that many routine 

maintenance items are affected by higher efficiency fan motors and lighting systems. (Public 

Meeting Transcript, No. 13.5 at p. 136) Hill Phoenix stated that higher maintenance costs would 

be incurred with almost any new technology. (Public Meeting Transcript, No. 13.5 at p. 136) 

However, True Manufacturing also stated that no data exists as to whether components such as 

energy efficient motors would have the same lifetime or costs as existing components. (Public 

Meeting Transcript, No. 13.5 at p. 138) ACEEE stated that it would caution against a straight 

ratio of repair cost to initial purchase cost; for controls this might be appropriate, but it shouldn’t 

 EE-2006-STD-0126 COMMENT 22.1
affect repair costs for heat exchangers. (Public Meeting Transcript, No. 13.5 at p. 137) ACEEE 

suggested that any measures requiring increased repair costs be treated on a measure-by-measure 

basis. (ACEEE, No. 16 at p. 3) 

To address comments on repair costs, DOE contacted users and manufacturers of 

commercial refrigeration equipment to determine typical repair frequency for components used 

in commercial refrigeration equipment. Based on this review, DOE estimated replacement 

frequencies for five key components that appear to represent the most common repairs, and for 

which higher efficiency and more costly components were used in the engineering analysis for 

higher efficiency commercial refrigeration equipment. DOE then annualized the expected costs 

for these components at each efficiency level and added these component costs to the baseline 

repair cost estimates. This resulted in repair costs that increase with higher efficiency 

equipment. Refer to Chapter 8 of the TSD for details. 

9. Maintenance Costs 

DOE estimated the annualized maintenance costs for commercial refrigeration equipment 

from data in RS Means Facilities Maintenance & Repair Cost Data.21 RS Means provides 

estimates on the person-hours, labor rates, and materials required to maintain commercial 

refrigeration equipment on a semi-annual basis. DOE used a single figure of $160/year (2007$) 

for preventive maintenance for all classes of commercial refrigeration equipment based on data 

from RS Means. Because data were not available to indicate whether, and if so, how, 

maintenance costs vary with equipment efficiency, DOE held preventive maintenance costs 

 

21 RS Means Company, Inc. 2006. Means Costworks 2006: Facility Maintenance & Repair Cost Data. Kingston, 

Massachusetts. 

 EE-2006-STD-0126 COMMENT 22.1
constant even as equipment efficiency increased. Lamp replacement and other lighting 

maintenance activities are required maintenance for commercial refrigeration equipment, which 

DOE considered to be separate from preventive maintenance, and were not itemized in the 

preventive maintenance activities described by RS Means. Different commercial refrigeration 

equipment classes have different numbers of lamps (and ballasts), and many of the efficiency 

options DOE considered in the engineering analysis involved changes to the lighting 

configuration (lamp, ballast, or use of LED lighting systems). Because the lighting 

configurations can vary by energy consumption level, DOE estimated the relative maintenance 

costs for lighting for each case type for which a design-option analysis was performed. DOE 

estimated the frequency of failure and replacement of individual lighting components, estimated 

the cost of replacement in the field, and developed an annualized maintenance cost based on the 

sum of the total lighting maintenance costs (in 2007$) over the estimated life of the equipment 

divided by the estimated life of the equipment. 

DOE based costs for fluorescent lamp and ballast replacements on a review of the OEM 

costs used in the engineering analysis, RS Means estimates, cost data from Grainger, Inc., and 

previous studies. DOE estimated the costs of field replacement using labor cost hours from RS 

Means Electrical Cost Data22 for typical lamp or ballast replacement for other lighting fixtures 

using a 150-percent multiplier on OEM costs for lamps and ballasts (provided in the engineering 

analysis spreadsheets) to reflect retail pricing. See Chapter 8 of the TSD for details. 

Fluorescent lamp and ballast technology is mature, so DOE made no change in inflationadjusted costs for these components. However, because of rapid technological improvement, 

 

22 RS Means Company, Inc. 2005. 2005 RS Means Electrical Cost Data. Kingston, Massachusetts. 

 EE-2006-STD-0126 COMMENT 22.1
costs for LED lamps are declining. DOE estimated the cost for field replacement of LED 

lighting fixtures (believed to occur approximately 6 years after the effective date of the standard, 

or 2018) at 140 percent of the OEM cost of LED lighting fixtures (2007 MPC cost in 2007$), 

plus installation. This estimate includes installation labor and all retail markups for replacement 

fixtures. This estimate of replacement LED costs was based on 2007 OEM prices for LED 

fixtures, but with additional contractor markups for replacement fixtures similar to that used for 

fluorescent light ballasts and lamps (150 percent of OEM costs). In addition, because of the 

rapid development of LED technology and the projected OEM cost reductions for LED systems, 

DOE performed an LCC sensitivity analysis that examined the impact of reducing the cost of the 

LED replacement fixtures in 2018 by 50 percent of the cost used in the base analysis.23 DOE 

recognizes that both life and cost estimates for LED replacement are projections and seeks 

comment on how it can best estimate the price for replacement LED fixture costs in the LCC 

analysis. This is identified as Issue 1 under “Issues on Which DOE Seeks Comment” in Section 

VII.E of this NOPR. Chapter 8 of the TSD provides details on the development of maintenance 

costs. 

10. Lifetime 

DOE defines lifetime as the age when a commercial refrigeration equipment unit is 

retired from service. In its ANOPR analysis, DOE based equipment lifetime on discussions with 

industry experts and other stakeholders, as well as a review of estimates in the subject literature. 

DOE concluded that a typical lifetime of 10 years is appropriate for commercial refrigeration 

equipment. In commenting on the ANOPR analysis, ARI stated that, on average, equipment 

 

23 DOE anticipates a reduction in installed cost of LED systems over time. The projected reduction in price for 

LED systems is provided and discussed in Sections V.C and IV.B.3.c of this NOPR and Appendix B of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
lifetime is approximately 10 years. ARI noted, however, that properly installed and maintained 

equipment typically has a useful life longer than end-use customers retain it due to retail store 

customer business models and competitive demands to upgrade and remodel stores. (ARI, No. 

18 at p. 5) Zero Zone stated that door cases may be changed in store remodels every 10 years at 

larger chains, but small independent chains will use cases for 20 years. (Zero Zone, No. 17 at p. 

4) True stated that most self-contained equipment has a life expectancy of 7 to 12 years, 

although it regularly services equipment that is 25 years old. (Public Meeting Transcript, No. 

13.5 at p. 98) For the NOPR analysis, DOE used an average life of 10 years for large grocery 

and multi-line retailers, but modified the lifetime in the LCC analysis to use a longer average 15-

year life for the small grocery and convenience store business types, consistent with stakeholder 

comments and equipment life estimates from industry experts regarding smaller stores and 

independent grocers and chains. See Chapter 3 of the TSD for more detail. 

Commercial refrigeration equipment units are typically replaced when stores are 

renovated, which is before the units would have physically worn out. Therefore, there is a used 

equipment market for commercial refrigeration equipment. Due to the difficulty of incorporating 

used equipment into grocery store display case line-ups, the salvage value to the original 

purchaser is very low. Therefore, the ANOPR LCC analysis did not take the used equipment 

market into account. This methodology was also maintained in the NOPR LCC analysis. 

 EE-2006-STD-0126 COMMENT 22.1
11. Discount Rate 

The discount rate is the rate at which future expenditures are discounted to establish their 

present value. DOE derived the discount rates for the LCC analysis by estimating the cost of 

capital for companies that purchase commercial refrigeration equipment. The cost of capital is 

commonly used to estimate the present value of cash flows to be derived from a typical company 

project or investment. Most companies use both debt and equity capital to fund investments, so 

their cost of capital is the weighted average of the cost to the company of equity and debt 

financing. 

DOE estimated the cost of equity financing by using the Capital Asset Pricing Model 

(CAPM). The CAPM, among the most widely used models to estimate the cost of equity 

financing, considers the cost of equity to be proportional to the amount of systematic risk 

associated with a company. The cost of equity financing tends to be high when a company faces 

a large degree of systematic risk, and it tends to be low when the company faces a small degree 

of systematic risk. 

To estimate the weighted average cost of capital (WACC) (including the weighted 

average cost of debt and equity financing) of commercial refrigeration equipment purchasers, 

DOE used a sample of companies involved in grocery and multi-line retailing drawn from a 

database of 7,319 U.S. companies on the Damodaran Online website. The WACC approach 

taken to determine discount rates takes into account the current tax status of the individual firms 

on an overall corporate basis. DOE did not evaluate the marginal effects of increased costs (and 

thus depreciation due to higher cost equipment on the overall tax status). 

 EE-2006-STD-0126 COMMENT 22.1
DOE used a sample of 17 companies to represent the purchasers of commercial 

refrigeration equipment. For each company in the sample, DOE derived the cost of debt, percent 

debt financing, and systematic company risk from information provided by Damodaran Online. 

DOE estimated the cost of debt financing from the long-term Government bond rate (4.39 

percent) and the standard deviation of the stock price. The cost of capital for small, independent 

grocers; convenience store franchisees; gasoline station owner-operators; and others with more 

limited access to capital is more difficult to determine. Individual credit-worthiness varies 

considerably, and some franchisees have access to the financial resources of the franchising 

corporation. However, personal contacts with a sample of commercial bankers yielded an 

estimate for the small operator weighted cost of capital of about 200 to 300 basis points (2 

percent to 3 percent) above the rates for large grocery chains. A central value equal to the 

weighted average of large grocery chains, plus 250 basis points (2.5 percent), was used for small 

operators. Deducting expected inflation from the cost of capital provides the estimates of the 

real discount rate by ownership category. The average after-tax discount rate, weighted by the 

percentage shares of total purchases of commercial refrigeration equipment, is 5.87 percent for 

large grocery stores, 5.11 percent for multi-line retailers, and 8.37 percent for convenience stores 

and convenience stores associated with gasoline stations. DOE received no comments on the 

discount rates developed in the ANOPR but took advantage of the availability of 2007 financial 

data to update the discount rate assumptions in the NOPR. See Chapter 8 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
12. Payback Period 

The PBP is the amount of time it takes the customer to recover the incrementally higher 

purchase cost of more energy efficient equipment as a result of lower operating costs. 

Numerically, the PBP is the ratio of the increase in purchase cost (i.e., from a less efficient 

design to a more efficient design) to the decrease in annual operating expenditures. This type of 

calculation is known as a “simple” PBP, because it does not take into account changes in 

operating cost over time or the time value of money, that is, the calculation is done at an 

effective discount rate of zero percent. 

The equation for PBP is: 

 PBP =∆IC/∆OC

where 

PBP = payback period in years, 

∆IC = difference in the total installed cost between the more efficient standard level equipment 

(energy consumption levels 2, 3, etc.) and the baseline (energy consumption level 1) 

equipment, and 

∆OC = difference in annual operating costs. 

The data inputs to the PBP analysis are the total installed cost of the equipment to the 

customer for each energy consumption level and the annual (first-year) operating costs for each 

energy consumption level. The inputs to the total installed cost are the equipment price and the 

installation cost. The inputs to the operating costs are the annual energy cost, the annual repair 

 EE-2006-STD-0126 COMMENT 22.1
cost, and the annual maintenance cost. The PBP uses the same inputs as the LCC analysis, 

except that electricity price trends and discount rates are not required. Since the PBP is a 

“simple” (undiscounted) payback, the required electricity cost is only for the year in which a new 

energy conservation standard is to take effect—in this case, 2012. The electricity price used in 

the PBP calculation of electricity cost was the price projected for 2012, expressed in 2007$, but 

not discounted to 2007. Discount rates are not used in the PBP calculation. 

PBP is one of the economic indicators that DOE uses when assessing economic impact to 

a customer. PBP does not take into account the time value of money explicitly (e.g., through a 

discount factor), the life of the efficiency measure, or changing fuel costs over time. In addition, 

because PBP takes into account the cumulative energy and first-cost impact of a set of efficiency 

measures, it can be sensitive to the baseline level assumed. In addition, what is deemed an 

acceptable payback period can vary. By contrast, when examining LCC savings by efficiency 

levels, there is generally a maximum LCC savings point (minimum LCC efficiency level) 

indicative of maximum economic benefit to the customer. The selection of the baseline 

efficiency level does not affect the identification of the minimum LCC efficiency level, although 

a baseline efficiency is used when calculating net LCC savings or costs. DOE considers both 

LCC and PBP as related to the seven factors discussed in Section II.B to determine whether a 

standard is economically justified and whether the benefits of an energy conservation standard 

will exceed its burdens to the greatest extent practicable. However, because LCC uses an 

explicit discount rate, takes into account changing energy prices, and does not require selection 

of a baseline efficiency level, it is considered by DOE to be a better indicator of the likely 

economic impacts on consumers. 

 EE-2006-STD-0126 COMMENT 22.1
 

F. Shipments Analysis 

One of the more important components of any estimate of the future impact of a standard 

is equipment shipments. DOE developed forecasts of shipments for the base case and standards 

cases and includes those forecasts in the NES spreadsheet. The shipments portion of the 

spreadsheet forecasts shipments of commercial refrigeration equipment from 2012 to 2042. 

DOE developed shipments forecasts for the 15 primary equipment classes by accounting for the 

shipments to replace the existing stock of commercial refrigeration equipment, commercial 

refrigeration shipments into new commercial floor spaces, and old equipment removed through 

demolitions. Chapter 10 of the TSD provides additional details on the shipments forecasts. 

The results of the shipments analysis are driven primarily by historical shipments data for 

the 15 equipment classes of commercial refrigeration equipment, DOE estimates of average 

equipment life, relative shipment estimates to each of the four business types, the existing total 

floor space in food sales buildings, and the anticipated growth in food sales floor space estimated 

in EIA’s NEMS. The model estimates that, in each year, the existing stock of commercial 

refrigeration equipment either ages by one year or is worn out and replaced. In addition, new 

equipment can be shipped into new commercial floor space, and old equipment can be removed 

through demolitions. DOE chose to preserve the capability to analyze all efficiency levels 

analyzed in the LCC in the NIA. 

The shipments analysis is a description of commercial refrigeration equipment stock 

flows as a function of year and age. While there are 15 equipment classes, the shipment analysis 

 EE-2006-STD-0126 COMMENT 22.1
treats each category of equipment independently such that future shipments in any one class are 

unaffected by shipments in any other equipment classes and the relative fraction of shipments in 

each product class compared to all commercial refrigeration equipment shipments is assumed to 

be constant over time. DOE recognizes that a retailer of refrigerated or frozen food can choose 

to use different classes of commercial refrigeration equipment to sell the same food product as 

long as the equipment is in the required temperature range (i.e. refrigerator, freezer, or ice-cream 

temperature range). The decision to adopt one equipment class over another within the same 

temperature range will depend on first costs, operating costs, and the perceived ability to 

merchandise product. In addition, relative sales refrigerated versus frozen foods could change in 

the future. However, DOE had no information with which to develop and calibrate a shipments 

model incorporating these factors. 

DOE formulated the equations used in the analysis as updates of the distribution of stock 

in any given year, as a function of age, to the following year using the following steps: 

1. DOE first converted the equipment units to linear feet of display space cooled by 

those units by taking the national statistics on sales of equipment and calculating 

equipment capacity per linear foot of retail grocery building display space. 

2. DOE used this calculation of existing stock, and the average age of the equipment, as 

a basis for calculating replacement sales. 

3. DOE subtracted replacement sales from historical total sales statistics to calculate 

new sales of commercial refrigeration equipment. 

4. DOE forecasted new sales as a function of new construction of retail food sales space. 

 EE-2006-STD-0126 COMMENT 22.1
5. DOE recorded sales of new and replacement equipment by the year sold, and 

depreciated each annual vintage over the estimated life of the equipment. 

6. DOE allocated sales in each year to the 15 equipment classes in proportion to their 

relative historical sales. 

In response to DOE’s presentation of the ANOPR shipment analysis, the public made two 

primary comments. True stated that while food sales buildings are probably representative of 

remote condensing equipment, as much as 25 percent of the self-contained market goes into 

unusual conditions, but that the majority does end up in some sort of food-sales type application. 

(Public Meeting Transcript, No. 13.5 at p. 165) However, in a follow-up conversation, True 

agreed that for self-contained equipment without doors, which is the majority of the selfcontained equipment covered in this rulemaking, the amount of equipment not shipped to food 

sales buildings represents a very small fraction of the total market. DOE concluded that it was 

therefore unnecessary to include other business types or building categories for the analysis of 

self-contained equipment to be valid and representative. 

Other stakeholders commented on the assumption of zero shipments in the ANOPR for 

the VOP.RC.L equipment class based on the submitted ARI shipment data. (Public Meeting 

Transcript, No. 13.5 at p. 164) ARI, in turn, stated that zero values in its data submittal to DOE 

may represent an equipment class where only one or two manufacturers have shipments. These 

data were excluded to maintain confidentiality. (Public Meeting Transcript, No. 13.5 at p. 52) 

To address these issues, DOE estimated the shipments for the VOP.RC.L equipment class at five 

 EE-2006-STD-0126 COMMENT 22.1
percent of the similarly designed VOP.RC.M equipment class based on information provided in 

manufacturer interviews. 

Finally, DOE received comments on the impact of the used equipment market on 

shipments in the presence of new equipment standards. True stated that DOE should consider 

how long existing low-efficiency equipment will be in service. (Public Meeting Transcript, No. 

13.5 at p. 98) As you drive the cost higher, the life expectancy of existing equipment increases. 

ACEEE countered, however, that the issue of used equipment has come up in other rulemakings. 

Customers may use existing equipment longer, but the average was only one or two years more, 

which has a small impact on the energy savings projected through 2042. It may be more of a 

factor in the manufacturer impact analysis, because that could affect sales in at least the first 

year. (Public Meeting Transcript, No. 13.5 at p. 102) 

True stated that the used equipment market is often ignored. As you drive costs of capital 

up, you drive the need for low-end users to buy used equipment and that the higher the cost per 

unit, the more the used equipment market thrives. True stated that this is very significant in the 

restaurant industry, where studies suggest that 90 percent of all new non-chain restaurants fail 

within the first year. Most of these businesses are buying used equipment. (Public Meeting 

Transcript, No. 13.5 at p. 202-207) EEI suggested that, if possible, DOE should investigate the 

use of used versus new equipment in restaurants, and make sure that new standards do not 

increase the purchase of older, less efficient equipment. (EEI, No. 15 at p. 2) 

 EE-2006-STD-0126 COMMENT 22.1
Follow-up conversations with True lead DOE to believe that it is unnecessary to take the 

restaurant business type into account since it is not a large market for the equipment covered 

under this rulemaking. DOE determined that it would not try to account for life extension in the 

NIA. While DOE recognizes that there may be some initial life extension for existing markets 

for some customers, no data are available to forecast the frequency and amount of life extension 

that might occur within the industry. DOE agrees with ACEEE that this would result in a 

relatively small impact on energy savings and, given that it would also reduce expenditures for 

new equipment, would have an even smaller impact on calculated NPV. For the NOPR analysis, 

DOE did not assume an initial decrease in sales and life extension for commercial refrigeration 

equipment covered in this rulemaking. 

Table IV-14 shows the results of the shipments analysis for the 15 commercial 

refrigeration equipment classes for the base case (baseline efficiency level or Level 1). As 

equipment purchase price increases with higher efficiency levels, a drop in shipments can be 

expected relative to the base case. However, as annual energy consumption is reduced, there is 

potentially a countering effect of increased equipment sales due to more frequent installations 

and use of commercial refrigeration equipment by retailers (a potential rebound effect). 

Although there is a provision in the spreadsheet for a change in projected shipments in response 

to efficiency level increases (or energy consumption level decreases), DOE has no information 

with which to calibrate such a relationship. No such data was provided in comments on the 

ANOPR analysis. Therefore, for the NOPR analysis, DOE assumed that the overall shipments 

do not change in response to the changing TSLs. Additional details on the shipments analysis 

can be found in Chapter 10 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-14 Forecasted Shipments for Commercial Refrigeration Equipment, 2012−2042, 

(Base Case)

Equipment Thousands of Linear Feet Shipped by Year and Equipment Class 

Class 2012 2015 2020 2025 2030 2035 2040 2042 Cumulative 

VOP.RC.M 451 436 451 464 497 531 582 604 15,270 

VOP.RC.L 23 22 23 23 25 27 29 30 763 

VOP.SC.M 30 29 30 31 33 36 39 41 1,027 

VCT.RC.M 32 31 32 33 35 38 42 43 1,091 

VCT.RC.L 448 433 448 461 494 527 578 600 15,167 

VCT.SC.I 11 11 11 11 12 13 14 15 374 

VCS.SC.I 3 3 3 3 3 3 4 4 93 

SVO.RC.M 344 332 344 354 379 405 444 460 11,647 

SVO.SC.M 45 44 45 47 50 53 59 61 1,537 

SOC.RC.M 87 84 87 89 96 102 112 116 2,936 

HZO.RC.M 53 51 53 54 58 62 68 71 1,790 

HZO.RC.L 166 161 166 171 183 196 214 222 5,627 

HZO.SC.M 4 4 4 4 4 5 5 5 132 

HZO.SC.L 8 8 8 8 9 10 10 11 274 

HCT.SC.I 36 35 36 37 39 42 46 48 1,214 

G. National Impact Analysis 

 The NIA assesses future NES and the national economic impacts of different efficiency 

levels. The analysis measures economic impacts using the NPV metric (i.e., future amounts 

discounted to the present) of total commercial customer costs and savings expected to result from 

new standards at specific efficiency levels. 

 

To make the analysis more accessible and transparent to the public, DOE used an Excel 

spreadsheet model to calculate the energy savings and the national economic costs and savings 

from new standards. Excel is the most widely used spreadsheet calculation tool in the United 

States and there is general familiarity with its basic features. Thus, DOE’s use of Excel as the 

basis for the spreadsheet models provides interested persons with access to the models within a 

familiar context. In addition, the TSD and other documentation that DOE provides during the 

 EE-2006-STD-0126 COMMENT 22.1
rulemaking help explain the models and how to use them, and interested persons can review 

DOE’s analyses by changing various input quantities within the spreadsheet. 

Unlike the LCC analysis, the NES spreadsheet does not use distributions for inputs or 

outputs. DOE examined sensitivities by applying different scenarios. DOE used the NES 

spreadsheet to perform calculations of national energy savings and NPV using the annual energy 

consumption and total installed cost data from the LCC analysis and estimates of national 

shipments for each of the 15 primary commercial refrigeration equipment classes. DOE 

forecasted the energy savings, energy cost savings, equipment costs, and NPV of benefits for all 

primary commercial refrigeration equipment classes from 2012 through 2062. The forecasts 

provided annual and cumulative values for all four output parameters. 

DOE calculated the NES by subtracting energy use under a standards scenario from 

energy use in a base case (no new standards) scenario. Energy use is reduced when a unit of 

commercial refrigeration equipment in the base case efficiency distribution is replaced by a more 

efficient piece of equipment. Energy savings for each equipment class are the same national 

average values as calculated in the LCC and payback period spreadsheet. However, these results 

are normalized on a per-unit-length basis by equipment class and applied to the total annual 

estimated shipments in terms of line-up length of all equipment with the class. Table IV-15

shows key inputs to the NIA. Chapter 11 of the TSD provides additional information about the 

NES spreadsheet. 

 EE-2006-STD-0126 COMMENT 22.1
Table IV-15 Summary of National Energy Savings and Net Present Value Inputs 

Input Data Description Changes for NOPR 

Shipments 

Annual shipments from shipments 

model (Chapter 10, Shipments 

Analysis). 

Shipments model modified to use a 

distribution of equipment lifetimes 

based on a 10-year average life in 

large grocery and multi-line retail, 

and a 15-year average life in small 

grocery and convenience stores. 

Estimates for shipments for the 

VOP.RC.L equipment class were 

added and are provided. 

Effective Date of Standard 2012 No change. 

Base Case Efficiencies 

Distribution of base case shipments 

by efficiency level. 

No change in methodology to derive 

base case shipments by efficiency 

level. 

Standards Case Efficiencies

Distribution of shipments by 

efficiency level for each standards 

case. Standards case annual market 

shares by efficiency level remain 

constant over time for the base case 

and each standards case. 

No change in methodology to derive 

shipments by efficiency level in each 

standards case. 

Annual Energy Consumption per 

Linear Foot 

Annual weighted-average values are 

a function of energy consumption 

level, which are established in the 

engineering analysis (Chapter 5 of 

the TSD). Converted to a per linear 

foot basis. 

No change in methodology. Energy 

consumption estimates reflect 

updates to NOPR engineering 

analysis. 

Total Installed Cost per Linear Foot 

Annual weighted-average values are 

a function of energy consumption 

level (Chapter 8 of the TSD). 

Converted to a per linear foot basis. 

No change in methodology. 

Installed costs reflect updates to 

NOPR LCC. 

Repair Cost per Linear Foot 

Annual weighted-average values are 

constant with energy consumption 

level (Chapter 8 of the TSD). 

Converted to a per linear foot basis. 

No change in methodology. Repair 

costs reflected updates to NOPR 

LCC. 

Maintenance Cost per Linear Foot 

Annual weighted-average value 

equals $156 (Chapter 8 of the TSD), 

plus lighting maintenance cost. 

Converted to a per linear foot basis. 

No change in methodology, but 

annual weighted-average value 

updated to $160 in 2007$. 

Escalation of Electricity Prices 

EIA AEO2006 forecasts (to 2030) 

and extrapolation for beyond 2030 

(Chapter 8 of the TSD). 

EIA AEO2007 forecasts (to 2030) 

and extrapolation for beyond 2030 

(Chapter 8 of the TSD). 

Electricity Site-to-Source 

Conversion 

Conversion varies yearly and is 

generated by DOE/EIA’s NEMS* 

program (a time series conversion 

factor; includes electric generation, 

transmission, and distribution 

losses). 

Conversion factor varies yearly and 

is generated by EIA’s NEMS model. 

Includes the impact of electric 

generation, transmission, and 

distribution losses. 

Discount Rate 3 and 7 percent real. No change. 

Present Year Future costs are discounted to year 

2007. 

Future costs are discounted to year 

2008. 

Rebound Effect 

A rebound effect (due to changes in 

shipments resulting from standards) 

was not considered in the NIA. 

No change. 

 EE-2006-STD-0126 COMMENT 22.1
1. Base Case and Standards Case Forecasted Efficiencies 

A key component of DOE’s estimates of NES and NPV are the energy efficiencies for 

shipped equipment that it forecasts over time for the base case (without new standards) and for 

each standards case. The forecasted efficiencies represent the distribution of energy efficiency of 

the equipment under consideration that is shipped over the forecast period (i.e., from the 

assumed effective date of a new standard to 30 years after the standard becomes effective). 

The annual per-unit energy consumption is the site energy consumed by a commercial 

refrigeration equipment unit per year. The annual energy consumption is directly tied to the 

efficiency of the unit. Thus, knowing the efficiency of a commercial refrigeration equipment 

unit determines the corresponding annual energy consumption. DOE determined annual 

forecasted market shares by efficiency level that, in turn, enabled determination of shipmentweighted annual energy consumption values. 

Because no data were available on market shares broken down by efficiency level, DOE 

determined market shares by efficiency level for commercial refrigeration based on its own 

analysis. DOE first converted 2005 shipment information by equipment class into market shares 

by equipment class, and then adapted a cost-based method similar to that used in the NEMS to 

estimate market shares for each equipment class by efficiency level. This cost-based method 

relied on cost data developed in the engineering and life-cycle cost analyses, as well as economic 

purchase criteria data taken directly from NEMS. From those market shares and projections of 

shipments by equipment class, DOE developed the future efficiency scenarios for a base case 

(i.e., without new standards) and for various standards cases (i.e., with new standards). DOE did 

 EE-2006-STD-0126 COMMENT 22.1
not have data to calibrate this approach to actual market shipments by efficiency level. DOE 

requested comment on this approach to generating market shares by efficiency level in the 

ANOPR. 

Commenting on the distribution of market efficiency, ARI stated that experience with 

other equipment tells us that the majority of the shipments are usually at the lower end of the 

curve of the highest efficiency. ARI was surprised that DOE had only 25 percent or 30 percent 

of the shipments at that efficiency level. They also cautioned DOE that the industry-supplied 

curves are cost curves and do not mean that such equipment is on the market today. As Section 

IV.E, Life-Cycle Cost, discusses, ARI offered to try to provide data on the distribution of 

efficiencies in current equipment but was not able to do so. (Public Meeting Transcript, No. 13.5 

at p. 143) Other stakeholders, such as EEI and ACEEE, suggested possible avenues that DOE 

could examine but did not have data DOE could use to establish a distribution of efficiencies. 

(Public Meeting Transcript, No. 13.5 at p. 141-142; p. 173) Because of the lack of data on 

market shipments by efficiency level, DOE chose to continue to use the ANOPR approach to 

estimate shipments by efficiency level. 

DOE developed base case efficiency forecasts based on the estimated market shares by 

equipment class and efficiency level. Because there are no historical data to indicate how 

equipment efficiencies or relative equipment class preferences have changed over time, DOE 

predicted that forecasted market shares would remain frozen at the 2012 efficiency level until the 

end of the forecast period (30 years after the effective date, 2042). DOE requested comments on 

this assumption. 

 EE-2006-STD-0126 COMMENT 22.1
Copeland commented that since DOE plans to update the forecast in five years, no one 

can really figure out what that distribution of efficiency in the future looks like. (Public Meeting 

Transcript, No. 13.5 at p. 175) EEI suggested DOE make further contacts with national accounts 

that use commercial refrigeration equipment. No suggestions for improving this assumption 

were received. For the NOPR, DOE continued to use the assumption of flat market shares by 

efficiency level for the forecast period. 

For its determination of standards case forecasted efficiencies, DOE used a “roll-up” 

scenario to establish the market shares by efficiency level for 2012, the year that standards 

become effective. Information available to DOE suggests that equipment shipments with 

efficiencies in the base case that did not meet the standard level under consideration would roll 

up to meet the new standard level, and that all equipment efficiencies in the base case that were 

above the standard level under consideration would not be affected. Emerson commented that a 

standard brings some compression in the distribution of efficiencies. (Public Meeting Transcript, 

No. 13.5 at p. 175) However, ARI stated the roll-up scenario best represents what is likely to 

happen when energy conservation standards take effect. (ARI, No. 18 at p. 5) DOE continued to 

use the roll-up scenario for the NOPR analysis. 

Finally, DOE recognizes that baseline efficiency trends can change if equipment costs are 

different than those projected. For example, if LED prices drop more than assumed in the 

engineering analysis, consumer demand for equipment with LEDs could change. DOE seeks 

 EE-2006-STD-0126 COMMENT 22.1
comment on whether shipments of equipment with LEDs would change if LED costs drop and if 

so, the extent and timing of such shipment changes. See Section VII.E.1. 

2. Annual Energy Consumption, Total Installed Cost, Maintenance Cost, and Repair Costs 

The difference in shipments by equipment efficiency level between the base and 

standards cases was the basis for determining the reduction in per-unit annual energy 

consumption that could result from new standards. The commercial refrigeration equipment 

stock in a given year is the total linear footage of commercial refrigeration equipment shipped 

from earlier years that survive in the given year. The NES spreadsheet model keeps track of the 

total linear footage of commercial refrigeration equipment units shipped each year and estimates 

the total commercial refrigeration equipment stock for each year. The annual energy 

consumption by efficiency level for each equipment category comes from the LCC analysis and 

is converted to a per-linear-foot basis by dividing by the length of the specific equipment 

analyzed in the engineering analysis. Similarly, the total installed cost, maintenance cost, and 

repair costs for each efficiency level for each equipment class analyzed in the LCC are converted 

to a per linear foot basis. Using the total estimated shipments and total estimated stock by 

equipment category and efficiency level, DOE calculates the annual energy consumption for the 

commercial refrigeration equipment stock in each year, the maintenance and repair costs 

associated with the equipment stock, and the total installed costs associated with new shipments 

in each year based on the standards scenario and associated distribution of shipments by 

efficiency level. 

 EE-2006-STD-0126 COMMENT 22.1
3. Escalation of Electricity Prices 

DOE uses the most recent AEO reference case to forecast energy prices for standard 

rulemakings. For the ANOPR, DOE used the AEO2006 reference case forecasts to estimate 

future electricity prices. ACEEE commented that it would like DOE to use the AEO2008 

forecasts for the NOPR analysis. (ACEEE, No. 16 at p. 2) However, this forecast was not 

available when DOE completed the NOPR analysis. DOE used the AEO2007 reference case 

forecasts for future electricity prices, extended out to the end of the analysis period. DOE 

extrapolated the trend in values from 2020 to 2030 of the forecast to establish prices for the 

remainder of the analysis period. DOE intends to update its analysis for the final rule to reflect 

the AEO 2008 electricity price forecasts when final versions of these price forecasts are 

available. An AEO Revised Early Release for the AEO 2008 reference case only has indicated 

that the reference case electricity prices are higher in real (inflation adjusted) terms and if this 

holds true in the final release it would generally result in more favorable economics for higher 

efficiency standard levels (i.e. shorter payback periods, greater life-cycle cost savings, and 

greater national net present value). 

4. Electricity Site-to-Source Conversion 

The site-to-source conversion factor is a multiplier used for converting site energy 

consumption, expressed in kWh, into primary or source energy consumption, expressed in 

quadrillion Btu (quads). The site-to-source conversion factor accounts for losses in electricity 

generation, transmission, and distribution. For the ANOPR, DOE used site-to-source conversion 

factors based on U.S. average values for the commercial sector, calculated from AEO2006, 

Table A5. The average conversion factors vary over time, due to projected changes in electricity 

 EE-2006-STD-0126 COMMENT 22.1
generation sources (i.e., the power plant types projected to provide electricity to the country). 

For the NOPR, DOE developed marginal site-source conversion factors that relate the national 

electrical energy savings at the point of use to the fuel savings at the power plant. These factors 

use the NEMS model and the examination of the corresponding energy savings from standards 

scenarios considered in DOE’s utility analysis (Chapter 14 of the TSD). The conversion factors 

vary over time, due to projected changes in electricity generation sources (i.e., the power plant 

types projected to provide electricity to the country) and power plant dispatch scenarios. 

Average U.S. conversion factors were used in the ANOPR because the utility analysis which is 

used to determine marginal conversion factors appropriate to efficiency standards for 

commercial refrigeration equipment occurs in the NOPR stage of DOE’s analysis. 

To estimate NPV, DOE calculated the net impact each year as the difference between 

total operating cost savings (including electricity, repair, and maintenance cost savings) and 

increases in total installed costs (including MSP, sales taxes, distribution channel markups, and 

installation cost). DOE calculated the NPV of each TSL over the life of the equipment using 

three steps. First, DOE determined the difference between the equipment costs under the TSL 

and the base case to calculate the net equipment cost increase resulting from the TSL. Second, 

DOE determined the difference between the base case operating costs and the TSL operating 

costs to calculate the net operating cost savings from the TSL. Third, DOE determined the 

difference between the net operating cost savings and the net equipment cost increase to 

calculate the net savings (or expense) for each year. DOE then discounted the annual net savings 

(or expenses) for commercial refrigeration equipment purchased on or after 2012 to 2008, and 

summed the discounted values to determine the NPV of a TSL. An NPV greater than zero shows 

 EE-2006-STD-0126 COMMENT 22.1
net savings (i.e., the TSL would reduce overall customer expenditures relative to the base case in 

present value terms). An NPV less than zero indicates that the TSL would result in a net 

increase in customer expenditures in present value terms. 

H. Life-Cycle Cost Sub-Group Analysis 

In analyzing the potential impact of new or amended standards on commercial customers, 

DOE evaluates the impact on identifiable groups (i.e., sub-groups) of customers, such as 

different types of businesses that may be disproportionately affected by a National standard 

level. For this rulemaking, DOE identified independent small grocery and convenience stores as 

a commercial refrigeration equipment customer sub-group that could be disproportionately 

affected, and examined the impact of proposed standards on this group. 

DOE determined the impact on this commercial refrigeration equipment customer subgroup using the LCC spreadsheet model. DOE conducted the LCC and PBP analyses for 

commercial refrigeration equipment customers. The standard LCC and PBP analyses (described 

in Section IV.E) includes various types of businesses that use commercial refrigeration 

equipment. The LCC spreadsheet model allows for the identification of one or more sub-groups 

of businesses, which can then be analyzed by sampling only each such sub-group. The results of 

DOE’s LCC sub-group analysis are summarized in Section V.B.1.c and described in detail in 

Chapter 12 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
I. Manufacturer Impact Analysis 

1. Overview 

 DOE performed an MIA to estimate the financial impact of energy conservation 

standards on manufacturers of commercial refrigeration equipment, and to assess the impact of 

such standards on employment and manufacturing capacity. The MIA has both quantitative and 

qualitative aspects. The quantitative part of the MIA relies on the GRIM, an industry-cash-flow 

model customized for this rulemaking. The GRIM inputs are information regarding the industry 

cost structure, shipments, and revenues. This includes information from many of the analyses 

described above, such as manufacturing costs and prices from the engineering analysis and 

shipments forecasts. The key GRIM output is the industry net present value (INPV). The model 

estimates the financial impact of energy conservation standards by comparing changes in INPV 

between the base case and the various trial standard levels. Different sets of assumptions 

(scenarios) will produce different results. The qualitative part of the MIA addresses factors such 

as equipment characteristics, characteristics of particular firms, and market and equipment 

trends, and includes assessment of the impacts of standards on sub-groups of manufacturers. 

Chapter 13 of the TSD outlines the complete MIA. 

 DOE conducted the MIA for commercial refrigeration equipment in three phases. Phase 

1, Industry Profile, consisted of preparing an industry characterization, including data on market 

share, sales volumes and trends, pricing, employment, and financial structure. Phase 2, Industry 

Cash Flow Analysis, focused on the industry as a whole. In this phase, DOE used the GRIM to 

prepare an industry cash-flow analysis. Using publicly available information developed in Phase 

1, DOE adapted the GRIM's generic structure to perform an analysis of commercial refrigeration 

 EE-2006-STD-0126 COMMENT 22.1
equipment energy conservation standards. In Phase 3, Sub-Group Impact Analysis, DOE 

conducted interviews with manufacturers representing the majority of domestic commercial 

refrigeration equipment sales. This group included large and small manufacturers, providing a 

representative cross-section of the industry. During these interviews, DOE discussed 

engineering, manufacturing, procurement, and financial topics specific to each company and 

obtained each manufacturer's view of the industry. The interviews provided valuable 

information DOE used to evaluate the impacts of an energy conservation standard on 

manufacturer cash flows, manufacturing capacities, and employment levels. For more detail on 

the manufacturer impact analysis, refer to Chapter 13 of the TSD. 

a. Phase 1, Industry Profile 

In Phase 1 of the MIA, DOE prepared a profile of the commercial refrigeration equipment 

industry based on the market and technology assessment prepared for this rulemaking. Before 

initiating the detailed impact studies, DOE collected information on the present and past 

structure and market characteristics of the commercial refrigeration equipment industry. The 

information DOE collected at that time included market share, equipment shipments, markups, 

and cost structure for various manufacturers. The industry profile includes further detail on 

equipment characteristics, estimated manufacturer market shares, the financial situation of 

manufacturers, trends in the number of firms, the market, and equipment characteristics of the 

commercial refrigeration equipment industry. 

The industry profile included a top-down cost analysis of commercial refrigeration 

equipment manufacturers that DOE used to derive cost and preliminary financial inputs for the 

 EE-2006-STD-0126 COMMENT 22.1
GRIM (e.g., revenues; material, labor, overhead, and depreciation expenses; selling, general, and 

administrative expenses (SG&A); and research and development (R&D) expenses). DOE also 

used public sources of information to further calibrate its initial characterization of the industry, 

including U.S. Securities and Exchange Commission (SEC) 10–K reports, Standard & Poor’s 

(S&P) stock reports, and corporate annual reports. 

b. Phase 2, Industry Cash-Flow Analysis 

Phase 2 of the MIA focused on the financial impacts of energy conservation standards on 

the industry. Higher energy conservation standards can affect a manufacturer’s cash flow in 

three distinct ways, resulting in: (1) a need for increased investment; (2) higher production costs 

per unit; and (3) altered revenue by virtue of higher per-unit prices and changes in sales values. 

To quantify these impacts in Phase 2 of the MIA, DOE used the GRIM to perform a cash-flow 

analysis of commercial refrigeration equipment manufacturers. In performing these analyses, 

DOE used the financial values derived during Phase 1 and the shipment scenarios used in the 

NES analyses. 

c. Phase 3, Sub-Group Impact Analysis 

Using average cost assumptions to develop an industry-cash-flow estimate is not adequate 

for assessing differential impacts among sub-groups of manufacturers. For example, small 

manufacturers, niche equipment manufacturers, or manufacturers exhibiting a cost structure that 

largely differs from the industry average could be more negatively affected. DOE used the 

results of the industry characterization analysis (in Phase 1) to group manufacturers that exhibit 

similar characteristics. 

 EE-2006-STD-0126 COMMENT 22.1
During the interview process, DOE discussed the potential sub-groups and sub-group 

members it identified for the analysis. DOE encouraged the manufacturers to recommend subgroups or characteristics that are appropriate for the sub-group analysis. DOE identified small 

commercial refrigeration equipment manufacturers as a potential manufacturing sub-group. 

DOE found that small business manufacturers generally have the same concerns as large 

manufacturers regarding energy conservation standards. In addition, DOE found no significant 

differences in the R&D emphasis or marketing strategies between small business manufacturers 

and large manufacturers. Therefore, for the equipment classes comprised primarily of small 

business manufacturers, DOE believes the GRIM analysis, which models each equipment class 

separately, is representative of the small business manufacturers affected by standards. 

2. Government Regulatory Impact Model Analysis 

As mentioned above, DOE uses the GRIM to quantify changes in cash flow that result in 

a higher or lower industry value. The GRIM analysis uses a standard annual cash-flow analysis 

that incorporates manufacturer prices, manufacturing costs, shipments, and industry financial 

information. The GRIM models changes in costs, distribution of shipments, investments, and 

associated margins that would result from new regulatory conditions (in this case, standard 

levels). The GRIM spreadsheet uses a number of inputs to arrive at a series of annual cash 

flows, beginning with the base year of the analysis, 2007, and continuing to 2042. DOE 

calculated INPVs by summing the stream of annual discounted cash flows during this period. 

 EE-2006-STD-0126 COMMENT 22.1
DOE used the GRIM to calculate cash flows using standard accounting principles and 

compare changes in INPV between a base case and different TSLs (the standards cases). 

Essentially, the difference in INPV between the base case and a standards case represents the 

financial impact of the energy conservation standards on manufacturers. DOE collected this 

information from a number of sources, including publicly available data and interviews with 

manufacturers (Chapter 13 of the TSD). 

3. Manufacturer Interviews 

As part of the MIA, DOE discussed potential impacts of energy conservation standards 

with manufacturers responsible for a majority of commercial refrigeration equipment sales. The 

manufacturers interviewed manufacture close to 90 percent of the commercial refrigeration 

equipment on the market. These interviews were in addition to those DOE conducted as part of 

the engineering analysis. The interviews provided valuable information that DOE used to 

evaluate the impacts of energy conservation standards on manufacturers’ cash flows, 

manufacturing capacities, and employment levels. 

a. Key Issues 

Manufacturers identified the following key issues for DOE to consider in developing 

energy conservation standards: 

• Meeting Standards. Manufacturers expressed concern that they would have 

difficulty meeting certain efficiency levels for certain equipment classes. First, 

some manufacturers stated that they could not meet or would have extreme 

 EE-2006-STD-0126 COMMENT 22.1
difficulty meeting any of the possible efficiency levels presented during 

interviews for self-contained equipment (e.g., horizontal open units). One 

manufacturer stated that due to the small number of parts in the self-contained 

equipment, efficiency improvements are constrained to these parts and are 

therefore limited. The same manufacturer stated that it already implements the 

most efficient options on the market that are available within its price range. For 

some manufacturers, self-contained equipment represents only a small portion of 

their business. These manufacturers make more remote condensing equipment 

and simply convert the design into self-contained units. Second, some 

manufacturers stated that they could not meet efficiency levels 3 and 4 for 

medium-temperature equipment (e.g., SOC.RC.M, VCT.RC.M, VOP.RC.M), and 

that they would need advances in technology to achieve these levels by 2012. 

One manufacturer stated that it does not manufacture any equipment in the 

VOP.RC.M equipment class that meets DOE’s baseline level. 

• Customer Needs. Manufacturers are concerned that increased equipment 

efficiency will come at the expense of equipment functionality, utility, and 

customizability. The commercial refrigeration equipment industry is focused on 

customers’ need to sell products, and customers place a higher priority on 

marketing and displaying their goods than they do on energy efficiency. 

Customers demand high levels of customization to differentiate themselves from 

other retail stores. They do not want to lose any functionality or utility in their 

equipment, such as display area, that affects their ability to sell products. Often, 

 EE-2006-STD-0126 COMMENT 22.1
• Customer Awareness. Manufacturers expressed concern that their retail 

customers are not sufficiently aware of pending energy conservation standards 

and the impacts these standards may have on their purchasing decisions. The 

supermarket industry is a low-margin industry, which places much emphasis on 

low-first-cost equipment. Manufacturers believe that many customers may not be 

able to handle an increase in equipment price effectively since they operate with a 

fixed budget, or a fixed amount of capital available for purchasing commercial 

refrigeration equipment. Manufacturers stated that customers with a fixed capital 

budget would tend to extend refurbishment periods and cut back on equipment 

growth to deal with the increase in price of higher efficiency equipment, which 

manufacturers say will reduce annual sales of commercial refrigeration 

 EE-2006-STD-0126 COMMENT 22.1
equipment. Manufacturers expect that smaller stores and even small regional 

chains will feel significant financial pressure when faced with the increase in 

prices. Single family-owned stores and local stores in large cities may have no 

capital budget with which to replace existing cases with cases that are 30 percent 

to 50 percent higher in price. Manufacturers stated that a reduction in sales would 

lead to employee layoffs since labor is proportional to units sold, not equipment 

price. Manufacturers also stated that customers have usually been unwilling to 

adopt energy efficiency improvements unless there is a 12-month payback period 

or less. 

• Equipment Classes. Manufacturers expressed concern regarding how equipment 

they manufacture would be categorized in DOE’s equipment classes. 

Manufacturers stated that certain pieces of low-volume equipment they 

manufacture do not easily fit into DOE’s equipment classes, and other pieces of 

equipment are excluded from coverage. For example, custom pieces of 

equipment, especially hybrid or combination units, do not easily fall within the 

DOE equipment classes since they could be classified in more than one category. 

A self-contained case with a service over counter upper portion and an open lower 

portion could be classified as a self-contained service over counter unit as well as 

a self-contained open unit. Another example is wedges—transition pieces placed 

at the corners of a case lineup. These do not have a reasonable TDA and 

therefore do not have meaningful energy consumption levels when normalized to 

TDA. Some manufacturers stated that low-volume equipment that cannot meet 

 EE-2006-STD-0126 COMMENT 22.1
• Component Manufacturers. Manufacturers expressed concern that they have little 

control over the options available and the price they pay for components used to 

manufacture commercial refrigeration equipment. Commercial refrigeration 

equipment manufacturers purchase many of the components needed to build the 

equipment and therefore rely heavily on component manufacturers to deliver 

parts, such as doors, motors, fans, and lights. However, commercial refrigeration 

equipment manufacturers state that higher efficiency components may not be 

readily available to meet standards. For example, the high-efficiency compressors 

needed for self-contained equipment to meet energy conservation standards may 

not be readily available. Manufacturers said that the compressors they purchase 

for commercial refrigeration are left over from the white goods (home appliances) 

industry since that industry has a much higher sales volume compared to 

commercial refrigeration equipment. Also, manufacturers stated that component 

 EE-2006-STD-0126 COMMENT 22.1
suppliers set their own pricing, and manufacturers have no control over this. 

Manufacturers are concerned about what prices they would have to pay for higher 

efficiency components in the future. 

4. Government Regulatory Impact Model Key Inputs and Scenarios 

a. Base Case Shipments Forecast 

The GRIM estimates manufacturer revenues based on total unit shipment forecasts and 

the distribution of these values by efficiency level. Changes in the efficiency mix at each 

standard level are a key driver of manufacturer finances. For this analysis, the GRIM used the 

NES shipments forecasts from 2007 to 2042. Total shipments forecasted by the NES for the 

base case in 2012 are shown in Table IV-16 and further discussed in this section of today’s 

Notice. 

Table IV-16 Total NES-Forecasted Shipments in 2012 (Number of Units)

Equipment Class Total Industry Shipments 

VOP.RC.M 37,607 

VOP.RC.L 1,880 

VOP.SC.M 7,585 

VCT.RC.M 2,533 

VCT.RC.L 35,184 

VCT.SC.I 2,571 

VCS.SC.I 637 

SVO.RC.M 28,685 

SVO.SC.M 11,357 

SOC.RC.M 7,231 

HZO.RC.M 4,408 

HZO.RC.L 13,859 

HZO.SC.M 976 

HZO.SC.L 2,024 

HCT.SC.I 10,487 

 EE-2006-STD-0126 COMMENT 22.1
In the shipments analysis, DOE also estimated the distribution of efficiencies in the base 

case for commercial refrigeration equipment (Chapter 10 of the TSD). Table IV-17 shows one 

example of the distribution of efficiencies in the base case for the VOP.RC.M equipment class. 

The distribution of efficiencies in the base case for other equipment classes are shown in Chapter 

10 of the TSD. 

Table IV-17 GRIM Distribution of Shipments in the Base Case for VOP.RC.M 

TSL 

(CDEC/TDA - kWh/day/ft2

)

Baseline 

1.09 

TSL 1 

0.98 

TSL 2 

0.95 

TSL 3 

0.89 

TSL 4* 

0.89 

TSL 5 

0.76 

Distribution of Shipments (%) 17.6 36.3 16.6 14.0 14.0 15.6 

* For VOP.RC.M, TSL 4 is set at the same efficiency level as TSL 3. Therefore, the shipment distribution is the 

same for both of these TSLs. 

b. Standards Case Shipments Forecast 

For each standards case, DOE assumed that shipments at efficiencies below the projected 

standard levels were most likely to roll up to those efficiency levels in response to an energy 

conservation standard. This scenario assumes that demand for high-efficiency equipment is a 

function of its price without regard to the standard level. See Chapter 12 of the TSD for 

additional details. 

c. Markup Scenarios 

 To understand how baseline and more efficient equipment are differentiated, DOE 

reviewed manufacturer catalogs and information gathered by manufacturers. To estimate the 

manufacturer price of the equipment sold, DOE applied markups to the production costs. For the 

analysis, DOE considered different markup scenarios, based on manufacturer input, for 

commercial refrigeration equipment. Scenarios were used to bound the range of expected 

equipment prices following new energy conservation standards. For each equipment class, DOE 

used the markup scenarios that best characterized the prevailing markup conditions and 

 EE-2006-STD-0126 COMMENT 22.1
described the range of market responses manufacturers expect as a result of new energy 

conservation standards. DOE learned from interviews with manufacturers that the majority of 

manufacturers only offer one equipment line. A single equipment line means that there is no 

markup used to differentiate baseline equipment from premium equipment. 

After discussions with manufacturers, DOE believes its adoption of standards for 

commercial refrigeration equipment would likely result in one of two distinct markup scenarios: 

preservation-of-gross-margin-percentage or preservation-of-operating-profit. Under the 

preservation-of-gross-margin-percentage scenario, DOE applied a single uniform gross margin 

percentage markup across all efficiency levels. As production cost increases with efficiency, this 

scenario implies that the absolute dollar markup will increase. DOE assumed the non-production 

cost markup—which includes SG&A expenses, R&D expenses, interest, and profit—to be 1.32. 

Manufacturers believe it is optimistic to assume that as their production costs increase in 

response to an efficiency standard, they would be able to maintain the same gross margin 

percentage markup. Therefore, DOE assumes that this scenario represents a high bound to 

industry profitability under an energy conservation standard. 

Gross margin is defined as revenues less cost of goods sold. The implicit assumption 

behind this markup scenario is that the industry can maintain its gross margin from the baseline 

(in absolute dollars) after the standard. The industry would do so by passing through its 

increased production costs to customers without passing through its increased R&D and selling, 

general, and administrative expenses so the gross profit per unit is the same in absolute dollars. 

DOE implemented this scenario in the GRIM by setting the production cost markups for each 

 EE-2006-STD-0126 COMMENT 22.1
TSL to yield approximately the same gross margin in the standards cases in the year standard are 

effective (2012) as is yielded in the base case. 

d. Equipment and Capital Conversion Costs 

New efficiency standards typically cause manufacturers to incur one-time conversion 

costs to bring their production facilities and equipment designs into compliance with the new 

regulation. For the purpose of the MIA, DOE classified these one-time conversion costs into 

three major groups. Capital conversion expenditures are one-time investments in property, plant, 

and equipment to adapt or change existing production facilities so that new equipment designs 

can be fabricated and assembled under the new regulation. Equipment conversion expenditures 

are one-time investments in research, development, testing, and marketing focused on creating 

equipment designs that comply with the new efficiency standard. Stranded assets are equipment 

or tooling that become obsolete as a result of new regulation. 

During the MIA interviews, DOE asked manufacturers for their estimates of the 

conversion costs they would incur due to new energy conservation standards. DOE then used the 

costs provided by each manufacturer and their respective market shares to develop estimates for 

the conversion costs of the entire industry at varying TSLs. Chapter 13 of the TSD summarizes 

these estimates. 

J. Utility Impact Analysis 

 The utility impact analysis estimates the effects of reduced energy consumption due to 

improved equipment efficiency on the utility industry. This utility analysis consists of a 

 EE-2006-STD-0126 COMMENT 22.1
comparison between forecast results for a case comparable to the AEO2007 reference case and 

forecasts for policy cases incorporating each of the commercial refrigeration equipment TSLs. 

DOE analyzed the effects of proposed standards on electric utility industry generation 

capacity and fuel consumption using a variant of the EIA's NEMS. NEMS, which is available on 

the DOE website, is a large, multi-sector, partial-equilibrium model of the U.S. energy sector. 

EIA uses NEMS to produce its AEO, a widely recognized baseline energy forecast for the United 

States. DOE used a variant known as NEMS-BT. The NEMS-BT is run similarly to the 

AEO2007 NEMS, except that commercial refrigeration equipment energy usage is reduced by 

the amount of energy (by fuel type) saved due to the TSLs. DOE obtained the inputs of national 

energy savings from the NES spreadsheet model. For the final rule, DOE intends to report utility 

analysis results using a version of NEMS-BT based on the AEO2008 NEMS. 

DOE conducted the utility analysis as policy deviations from the AEO2007, applying the 

same basic set of assumptions. In the utility analysis, DOE reported the changes in installed 

capacity and generation by fuel type that result for each TSL, as well as changes in end-use 

electricity sales. Chapter 14 of the TSD provides details of the utility analysis methods and 

results. 

K. Employment Impact Analysis 

 Employment impact is one of the factors that DOE considers in selecting a standard. 

Employment impacts include direct and indirect impacts. Direct employment impacts are any 

changes in the number of employees for commercial refrigeration equipment manufacturers, 

 EE-2006-STD-0126 COMMENT 22.1
their suppliers, and related service firms. Indirect impacts are those changes of employment in 

the larger economy that occur due to the shift in expenditures and capital investment caused by 

the purchase and operation of more efficient commercial refrigeration equipment. The MIA in 

this rulemaking addresses only the direct employment impacts on manufacturers of commercial 

refrigeration equipment. Chapter 15 of the TSD describes other, primarily indirect, employment 

impacts. 

Indirect employment impacts from commercial refrigeration equipment standards consist 

of the net jobs created or eliminated in the national economy, other than in the manufacturing 

sector being regulated, as a consequence of (1) reduced spending by end users on electricity 

(offset to some degree by the increased spending on maintenance and repair); (2) reduced 

spending on new energy supply by the utility industry; (3) increased spending on the purchase 

price of new commercial refrigeration equipment; and (4) the effects of those three factors 

throughout the economy. DOE expects the net monetary savings from standards to be redirected 

to other forms of economic activity. DOE also expects these shifts in spending and economic 

activity to affect the demand for labor. 

In developing this proposed rule, DOE estimated indirect national employment impacts 

using an input/output model of the U.S. economy, called ImSET (Impact of Sector Energy 

Technologies), developed by DOE’s Building Technologies Program. ImSET is a personalcomputer-based, economic-analysis model that characterizes the interconnections among 188 

sectors of the economy as national input/output structural matrices, using data from the U.S. 

Department of Commerce’s 1997 Benchmark U.S. input-output table. The ImSET model 

 EE-2006-STD-0126 COMMENT 22.1
estimates changes in employment, industry output, and wage income in the overall U.S. 

economy resulting from changes in expenditures in various sectors of the economy. DOE 

estimated changes in expenditures using the NES spreadsheet. ImSET then estimated the net 

national indirect employment impacts of potential commercial refrigeration equipment efficiency 

standards on employment by sector. In comments on the ANOPR, Zero Zone asked if DOE was 

going to contact second tier suppliers (e.g., door suppliers, fluorescent lighting suppliers, shaded 

pole motor suppliers) regarding employment impacts. (Public Meeting Transcript, No. 13.5 at 

pp. 230-231) ARI noted that this had been done in the central air conditioning rulemaking. 

(Public Meeting Transcript, No. 13.5 at p. 231) 

DOE stated that the ImSET tool would not be able to address this in detail, but that it has 

been done within the MIA for other equipment. In the public meeting, DOE commented that 

there would be impacts from standards, but the effective date is different from the issuance date 

partly to allow time for adjustments in manufacturing. 

The ImSET input/output model suggests that the proposed commercial refrigeration 

equipment efficiency standards could increase the net demand for labor in the economy and the 

gains would most likely be very small relative to total national employment. DOE therefore 

concludes that the proposed commercial refrigeration equipment standards are only likely to 

produce employment benefits that are sufficient to fully offset any adverse impacts on 

employment in the commercial refrigeration equipment industry. For more details on the 

employment impact analysis, see Chapter 15 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
L. Environmental Assessment 

 DOE has prepared a draft Environmental Assessment (EA) pursuant to the National 

Environmental Policy Act and the requirements of 42 U.S.C. 6295(o)(2)(B)(i)(VI) and 

6316(e)(1)(A), to determine the environmental impacts of the proposed standards. Specifically, 

DOE estimated the reduction in power plant emissions of CO2, NOx, and mercury (Hg) using the 

NEMS-BT computer model. However, the Environmental Assessment (Chapter 16 of the TSD) 

does not include the estimated reduction in power plant emissions of SO2 because, DOE has 

determined that due to the presence of national caps on SO2 emissions as addressed below, any 

such reduction resulting from an energy conservation standard would not affect the overall level 

of SO2 emissions in the United States. 

The NEMS-BT is run similarly to the AEO2007 NEMS, except that commercial 

refrigeration equipment energy use is reduced by the amount of energy saved (by fuel type) due 

to the TSLs. DOE obtained the inputs of national energy savings from the NES spreadsheet 

model. For the environmental analysis, the output is the forecasted physical emissions. The net 

benefit of the standard is the difference between emissions estimated by NEMS-BT and the 

AEO2007 Reference Case. The NEMS-BT tracks CO2 emissions using a detailed module that 

provides results with broad coverage of all sectors and inclusion of interactive effects. For the 

final rule, DOE intends to revise the emissions analysis using the AEO2008 NEMS model using 

the process outlined above. 

The Clean Air Act Amendments of 1990 set an emissions cap on SO2 for all power 

generation. The attainment of this target, however, is flexible among generators and is enforced 

 EE-2006-STD-0126 COMMENT 22.1
through the use of emissions allowances and tradable permits. As a result, accurate simulation of 

SO2 trading tends to imply that the effect of energy conservation standards on physical emissions 

will be near zero because emissions will always be at, or near, the ceiling. Thus, it is unlikely 

that there will be an SO2 environmental benefit from electricity savings as long as there is 

enforcement of the emissions ceilings. 

Although there may not be an actual reduction in SO2 emissions from electricity savings, 

there still may be an economic benefit from reduced demand for SO2 emission allowances. 

Electricity savings decrease the generation of SO2 emissions from power production, which can 

decrease the need to purchase or generate SO2 emissions allowance credits, and decrease the 

costs of complying with regulatory caps on emissions. 

Like SO2, future emissions of NOx and Hg would have been subject to emissions caps 

under the Clean Air Interstate Act and Clean Air Mercury Rule. As discussed later, these rules 

have been vacated by a Federal court. DOE calculated a forecast of reductions for these 

emissions under an uncapped scenario. DOE assumes that the uncapped emissions reduction 

estimate would have corresponded generally to the generation of emissions allowance credits 

under an emissions cap scenario. 

V. Analytical Results 

A. Trial Standard Levels 

DOE selected between four and eight energy consumption levels for each commercial 

refrigeration equipment class in the LCC analysis. Based on the results of the LCC analysis, 

 EE-2006-STD-0126 COMMENT 22.1
DOE selected five trial standard levels above the baseline level for each equipment class for the 

NOPR stage of the rulemaking. The range of TSLs selected includes the most energy efficient 

combination of design options with a positive NPV at the seven percent discount rate, and the 

combination of design options with the minimum LCC. Additionally, TSLs were selected that 

filled large gaps between the baseline and the level with the minimum LCC. 

Because of the size variation within each equipment class and the use of daily energy 

consumption as the efficiency metric, DOE presented a methodology to express efficiency 

standards in terms of a normalizing metric. This allows for a single energy conservation 

standard to be used for a broad range of equipment sizes within a given equipment class. DOE 

proposed the use of TDA as the normalizing metric for equipment with display capability. For 

equipment classes without display capability (e.g., equipment with solid doors), DOE proposed 

the use of internal volume as the normalizing metric. See Chapter 9 of the TSD for more detail. 

True commented that all self-contained units (including any open units) should be tested 

using volume as a normalizing factor to provide a straight comparison between open and closeddoor self-contained units. (Public Meeting Transcript, No. 13.5 at pp. 202-207) DOE 

understands the usefulness of comparing self-contained equipment with and without doors on the 

basis of volume. However, the self-contained equipment covered in this rulemaking is 

frequently installed in supermarkets and convenience stores, where its primary purpose is to 

display and merchandise food. The most common application of remote condensing equipment 

is also in supermarkets and convenience stores. Therefore, DOE believes that, with respect to 

the purpose of equipment, the self-contained equipment covered in this rulemaking is more 

 EE-2006-STD-0126 COMMENT 22.1
similar to remote condensing equipment than other self-contained equipment (i.e., equipment 

with doors). DOE discussed this issue with manufacturers, and determined that TDA is the most 

appropriate normalization metric for the self-contained equipment covered in this rulemaking, 

since that is the metric used for remote condensing equipment. 

DOE expressed the ANOPR efficiency levels in terms of a normalized energy 

consumption using these normalization factors. DOE proposed equations for final standards that 

would have maximum energy consumption for equipment whose display area is directly 

proportional to TDA. DOE also suggested that for equipment normalized to volume, it might be 

necessary to develop equations that use offset factors to account for a potential non-linear 

variation of energy consumption with volume. At the ANOPR public meeting and during the 

comment period, stakeholders expressed concerns about the size of equipment DOE analyzed as 

the representative model for each equipment class. Zero Zone stated that its analysis indicates 

that using a two-door case as the baseline (for the VCT.RC.L class) is more reasonable because 

of the end effects in those cases. Zero Zone reported a 10 percent increase in energy 

consumption per door for a two-door case with the same design features as a five-door case. A 

two-door case consumes more energy per door than a five-door case because of the lighting and 

end effects. Zero Zone noted that if the standard is based on a five-door case, it will penalize any 

smaller cabinet, and could eliminate smaller cases from production due to their size. (Public 

Meeting Transcript, No. 13.5 at p. 87) At the public meeting, Zero Zone stated that it would give 

some thought to what should be used for a representative model⎯a two-door case, or some 

combination of two-door and five-door cases. Zero Zone also noted that not all manufacturers 

make all case sizes. (Public Meeting Transcript, No. 13.5 at p. 88) Later, in a written comment, 

 EE-2006-STD-0126 COMMENT 22.1
Zero Zone recommended that DOE base its analysis on the smaller case models instead of the 

larger case models to avoid accidentally outlawing smaller cases. (Zero Zone, No. 17 at p. 3) 

 ARI commented that it generally agrees with the approach proposed by DOE for characterizing 

energy conservation standards for commercial refrigeration equipment, and offered to work with 

DOE in developing appropriate offset factors. (ARI, No. 18 at p. 6) 

For the NOPR, DOE developed offset factors as a way to adjust the energy efficiency 

requirements for smaller-sized equipment in each equipment class analyzed. These offset factors 

account for certain components of the refrigeration load (such as the conduction end effects) that 

remain constant even when equipment sizes vary. These constant loads affect smaller cases 

disproportionately. The offset factors are intended to approximate these constant loads and 

provide a fixed end point, corresponding to a zero TDA or zero volume case, in an equation that 

describes the relationship between energy consumption and the corresponding TDA or volume 

metric. See Chapter 5 of the TSD for further details on the development of these offset factors 

for each equipment class. This is identified as Issue 4 under “Issues on Which DOE Seeks 

Comment” in Section VII.E of this NOPR. 

DOE preserved the general methodology and themes it used for the selection of 

efficiency levels in the ANOPR in establishing specific efficiency levels for equipment classes. 

These levels are based on the results of the updated LCC analysis and make up the TSLs used in 

the NOPR. Table V-1 shows the TSL levels DOE selected for energy use for the equipment 

classes analyzed. TSL 5 is the max-tech level for each equipment class. TSL 4 is the maximum 

efficiency level with a positive NPV at the seven percent discount rate, except for VOP.RC.M, 

 EE-2006-STD-0126 COMMENT 22.1
where the minimal difference in energy efficiency between the minimum life cycle cost level as 

determined by the LCC analysis and the maximum efficiency level with positive NPV prompted 

DOE to select the minimum life-cycle cost level in preference to the maximum level with 

positive NPV. TSL 4 is a combination of the efficiency levels selected for TSL 3 and TSL 5. 

For a given equipment class, the efficiency levels selected for TSL 4 are either equivalent to that 

of TSL 3 or that of TSL 5. TSL 3 is the efficiency level that provides the minimum life-cycle 

cost as determined by the LCC analysis. TSL 2 and TSL 1 represent lower efficiency levels that 

fill in the gap between the current baseline and the levels determined to have the minimum LCC. 

Table V-2 shows the same TSL levels in terms of proposed equations that establish a 

maximum daily energy consumption (MEC) limit through a linear equation of the form: 

MEC = A x TDA + B (for equipment using TDA as a normalizing metric) 

or 

MEC = A x V + B (for equipment using volume as a normalizing metric) 

Coefficients A and B are uniquely derived for each equipment class based on the 

calculated offset factor B (see Chapter 5 of the TSD for offset factors) and the equation slope A, 

which would be used to describe the efficiency requirements for equipment of different sizes 

within the same equipment class. Chapter 9 of the TSD explains the methodology DOE used for 

selecting trial standard levels and developing the coefficients shown in Table V-2. 

 EE-2006-STD-0126 COMMENT 22.1
Table V-1 Trial Standard Levels for Analyzed Equipment Expressed in Terms of Daily 

Energy Consumption

Trial Standard Level in Order of Efficiency Trial Standard Levels for Equipment Analyzed Expressed 

in Terms of Energy Consumption (kWh/day) Equipment 

Class 

Test 

Metric Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M CDEC 

kWh/day Level 1 Level 3 Level 4 Level 5 Level 5 Level 7 57.90 51.99 50.68 47.69 47.69 40.26 

VOP.RC.L CDEC 

kWh/day Level 1 Level 3 Level 4 Level 6 Level 7 Level 7 133.60 118.44 113.28 112.00 108.77 108.77 

VOP.SC.M TDEC* 

kWh/day Level 1 Level 3 Level 5 Level 6 Level 6 Level 8 39.60 35.95 33.38 30.70 30.70 28.17 

VCT.RC.M CDEC 

kWh/day Level 1 Level 2 Level 3 Level 5 Level 7 Level 7 33.18 31.77 30.00 22.27 18.51 18.51 

VCT.RC.L CDEC 

kWh/day Level 1 Level 3 Level 4 Level 5 Level 7 Level 7 69.31 65.73 46.90 46.36 41.85 41.85 

VCT.SC.I TDEC 

kWh/day Level 1 Level 4 Level 5 Level 7 Level 8 Level 8 45.63 34.40 25.31 22.74 22.37 22.37 

VCS.SC.I TDEC 

kWh/day Level 1 Level 3 Level 5 Level 8 Level 8 Level 8 16.95 14.53 12.24 10.19 10.19 10.19 

SVO.RC.M CDEC 

kWh/day Level 1 Level 3 Level 4 Level 5 Level 5 Level 7 43.56 39.58 38.59 36.34 36.34 30.97 

SVO.SC.M TDEC 

kWh/day Level 1 Level 3 Level 5 Level 6 Level 6 Level 8 33.11 30.66 28.87 26.74 26.74 24.87 

SOC.RC.M CDEC 

kWh/day Level 1 Level 2 Level 3 Level 5 Level 5 Level 8 31.70 30.01 27.93 26.24 26.24 20.17 

HZO.RC.M CDEC 

kWh/day Level 1 Level 2 Level 3 Level 4 Level 5 Level 5 19.63 17.89 15.73 14.69 14.54 14.54 

HZO.RC.L CDEC 

kWh/day Level 1 Level 3 Level 4 Level 5 Level 5 Level 5 38.38 35.30 33.41 32.97 32.97 32.97 

HZO.SC.M TDEC 

kWh/day Level 1 Level 3 Level 5 Level 7 Level 8 Level 8 19.23 17.85 16.51 14.93 14.81 14.81 

HZO.SC.L TDEC 

kWh/day Level 1 Level 3 Level 5 Level 7 Level 8 Level 8 38.69 36.02 33.52 30.31 30.14 30.14 

HCT.SC.I TDEC 

kWh/day Level 1 Level 3 Level 4 Level 5 Level 6 Level 6 7.25 6.37 3.70 3.53 3.32 3.32 

* “TDEC” is total daily energy consumption of the case. 

Table V-2 Trial Standard Levels Expressed in Terms of Equations and Coefficients for 

Each Primary Equipment Class 

Equipment Trial Standard Levels for Primary Equipment Classes Analyzed

Class 

Test 

Metric Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M CDEC 

kWh/day 1.01 x TDA + 4.07 0.9 x TDA + 4.07 0.87 x TDA + 4.07 0.82 x TDA + 4.07 0.68 x TDA + 4.07 0.82 x TDA + 4.07 

VOP.RC.L CDEC 

kWh/day 2.84 x TDA + 6.85 2.5 x TDA + 6.85 2.38 x TDA + 6.85 2.35 x TDA + 6.85 2.28 x TDA + 6.85 2.28 x TDA + 6.85 

VOP.SC.M TDEC 

kWh/day 2.34 x TDA + 4.71 2.09 x TDA + 4.71 1.92 x TDA + 4.71 1.74 x TDA + 4.71 1.57 x TDA + 4.71 1.74 x TDA + 4.71 

VCT.RC.M CDEC 

kWh/day 0.48 x TDA + 1.95 0.46 x TDA + 1.95 0.43 x TDA + 1.95 0.31 x TDA + 1.95 0.25 x TDA + 1.95 0.25 x TDA + 1.95 

VCT.RC.L CDEC 

kWh/day 1.03 x TDA + 2.61 0.97 x TDA + 2.61 0.68 x TDA + 2.61 0.67 x TDA + 2.61 0.6 x TDA + 2.61 0.6 x TDA + 2.61 

VCT.SC.I TDEC 

kWh/day 1.63 x TDA + 3.29 1.2 x TDA + 3.29 0.85 x TDA + 3.29 0.75 x TDA + 3.29 0.73 x TDA + 3.29 0.73 x TDA + 3.29 

VCS.SC.I TDEC 

kWh/day 0.55 x V + 0.88 0.49 x V + 0.88 0.43 x V + 0.88 0.38 x V + 0.88 0.38 x V + 0.88 0.38 x V + 0.88 

SVO.RC.M CDEC 

kWh/day 1.01 x TDA + 3.18 0.91 x TDA + 3.18 0.89 x TDA + 3.18 0.83 x TDA + 3.18 0.69 x TDA + 3.18 0.83 x TDA + 3.18 

SVO.SC.M TDEC 

kWh/day 2.23 x TDA + 4.59 2.04 x TDA + 4.59 1.9 x TDA + 4.59 1.73 x TDA + 4.59 1.58 x TDA + 4.59 1.73 x TDA + 4.59 

SOC.RC.M CDEC 

kWh/day 0.62 x TDA + 0.11 0.59 x TDA + 0.11 0.55 x TDA + 0.11 0.51 x TDA + 0.11 0.39 x TDA + 0.11 0.51 x TDA + 0.11 

HZO.RC.M CDEC 

kWh/day 0.51 x TDA + 2.88 0.45 x TDA + 2.88 0.39 x TDA + 2.88 0.36 x TDA + 2.88 0.35 x TDA + 2.88 0.35 x TDA + 2.88 

HZO.RC.L CDEC 

kWh/day 0.68 x TDA + 6.88 0.62 x TDA + 6.88 0.58 x TDA + 6.88 0.57 x TDA + 6.88 0.57 x TDA + 6.88 0.57 x TDA + 6.88 

HZO.SC.M TDEC 

kWh/day 1.14 x TDA + 5.55 1.02 x TDA + 5.55 0.91 x TDA + 5.55 0.78 x TDA + 5.55 0.77 x TDA + 5.55 0.77 x TDA + 5.55 

HZO.SC.L TDEC 

kWh/day 2.63 x TDA + 7.08 2.41 x TDA + 7.08 2.2 x TDA + 7.08 1.94 x TDA + 7.08 1.92 x TDA + 7.08 1.92 x TDA + 7.08 

HCT.SC.I TDEC 

kWh/day 1.33 x TDA + 0.43 1.16 x TDA + 0.43 0.64 x TDA + 0.43 0.61 x TDA + 0.43 0.56 x TDA + 0.43 0.56 x TDA + 0.43 

 EE-2006-STD-0126 COMMENT 22.1
In addition to the 15 primary equipment classes analyzed, DOE intends to establish 

standards for the remaining 23 secondary equipment classes of commercial refrigeration 

equipment covered in this rulemaking that were not directly analyzed in the engineering analysis 

due to low annual shipments (less than 100 units per year). DOE’s approach involves extension 

multipliers developed using both the 15 primary equipment classes analyzed and a set of focused 

matched-pair analyses. In addition, DOE believes that standards for certain primary equipment 

classes can be directly applied to other similar secondary equipment classes. Chapter 5 of the 

TSD discusses the development of the extension multipliers and the set of focused matched-pair 

analyses. 

Using this approach, DOE developed an additional set of TSLs for these secondary 

equipment classes that corresponds to each of the equations shown in Table V-2 at each TSL. 

Table V-3 shows this additional set of corresponding TSL levels. The levels shown in Table V-3

do not necessarily reflect the minimum life-cycle cost or max-tech efficiency levels for these 

equipment classes, and do not reflect TSLs that DOE has analyzed in its impact analyses. The 

primary purpose of presenting these levels in this section is to provide interested persons with the 

range of efficiency standards that DOE is considering for these secondary equipment classes. 

This is identified as Issue 5 under “Issues on Which DOE Seeks Comment” in Section VII.E of 

this NOPR. 

 EE-2006-STD-0126 COMMENT 22.1
Table V-3 Trial Standard Levels Expressed in Terms of Equations and Coefficients for 

Each Secondary Equipment Class 

Equipment Trial Standard Levels for Secondary Equipment Classes Analyzed

Class 

Test 

Metric Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

SVO.RC.L CDEC 

kWh/day 2.84 x TDA + 6.85 2.5 x TDA + 6.85 2.38 x TDA + 6.85 2.35 x TDA + 6.85 2.28 x TDA + 6.85 2.28 x TDA + 6.85 

VOP.RC.I CDEC 

kWh/day 3.6 x TDA + 8.7 3.17 x TDA + 8.7 3.03 x TDA + 8.7 2.99 x TDA + 8.7 2.9 x TDA + 8.7 2.9 x TDA + 8.7 

SVO.RC.I CDEC 

kWh/day 3.6 x TDA + 8.7 3.17 x TDA + 8.7 3.03 x TDA + 8.7 2.99 x TDA + 8.7 2.9 x TDA + 8.7 2.9 x TDA + 8.7 

HZO.RC.I CDEC 

kWh/day 0.87 x TDA + 8.74 0.78 x TDA + 8.74 0.73 x TDA + 8.74 0.72 x TDA + 8.74 0.72 x TDA + 8.74 0.72 x TDA + 8.74 

VCT.RC.I CDEC 

kWh/day 1.2 x TDA + 3.05 1.14 x TDA + 3.05 0.8 x TDA + 3.05 0.79 x TDA + 3.05 0.71 x TDA + 3.05 0.71 x TDA + 3.05 

HCT.RC.M CDEC 

kWh/day 0.39 x TDA + 0.13 0.34 x TDA + 0.13 0.19 x TDA + 0.13 0.18 x TDA + 0.13 0.16 x TDA + 0.13 0.16 x TDA + 0.13 

HCT.RC.L CDEC 

kWh/day 0.81 x TDA + 0.26 0.71 x TDA + 0.26 0.39 x TDA + 0.26 0.37 x TDA + 0.26 0.34 x TDA + 0.26 0.34 x TDA + 0.26 

HCT.RC.I CDEC 

kWh/day 0.95 x TDA + 0.31 0.83 x TDA + 0.31 0.46 x TDA + 0.31 0.43 x TDA + 0.31 0.4 x TDA + 0.31 0.4 x TDA + 0.31 

VCS.RC.M CDEC 

kWh/day 0.16 x V + 0.26 0.14 x V + 0.26 0.13 x V + 0.26 0.11 x V + 0.26 0.11 x V + 0.26 0.11 x V + 0.26 

VCS.RC.L CDEC 

kWh/day 0.33 x V + 0.54 0.3 x V + 0.54 0.26 x V + 0.54 0.23 x V + 0.54 0.23 x V + 0.54 0.23 x V + 0.54 

VCS.RC.I CDEC 

kWh/day 0.39 x V + 0.63 0.35 x V + 0.63 0.31 x V + 0.63 0.27 x V + 0.63 0.27 x V + 0.63 0.27 x V + 0.63 

HCS.RC.M CDEC 

kWh/day 0.16 x V + 0.26 0.14 x V + 0.26 0.13 x V + 0.26 0.11 x V + 0.26 0.11 x V + 0.26 0.11 x V + 0.26 

HCS.RC.L CDEC 

kWh/day 0.33 x V + 0.54 0.3 x V + 0.54 0.26 x V + 0.54 0.23 x V + 0.54 0.23 x V + 0.54 0.23 x V + 0.54 

HCS.RC.I CDEC 

kWh/day 0.39 x V + 0.63 0.35 x V + 0.63 0.31 x V + 0.63 0.27 x V + 0.63 0.27 x V + 0.63 0.27 x V + 0.63 

SOC.RC.L CDEC 

kWh/day 1.3 x TDA + 0.22 1.23 x TDA + 0.22 1.15 x TDA + 0.22 1.08 x TDA + 0.22 0.83 x TDA + 0.22 1.08 x TDA + 0.22 

SOC.RC.I CDEC 

kWh/day 1.52 x TDA + 0.26 1.44 x TDA + 0.26 1.34 x TDA + 0.26 1.26 x TDA + 0.26 0.97 x TDA + 0.26 1.26 x TDA + 0.26 

VOP.SC.L TDEC 

kWh/day 5.87 x TDA + 11.82 5.25 x TDA + 11.82 4.82 x TDA + 11.82 4.37 x TDA + 11.82 3.95 x TDA + 11.82 4.37 x TDA + 11.82 

VOP.SC.I TDEC 

kWh/day 7.45 x TDA + 15.02 6.68 x TDA + 15.02 6.13 x TDA + 15.02 5.55 x TDA + 15.02 5.02 x TDA + 15.02 5.55 x TDA + 15.02 

SVO.SC.L TDEC 

kWh/day 5.59 x TDA + 11.51 5.11 x TDA + 11.51 4.76 x TDA + 11.51 4.34 x TDA + 11.51 3.98 x TDA + 11.51 4.34 x TDA + 11.51 

SVO.SC.I TDEC 

kWh/day 7.11 x TDA + 14.63 6.5 x TDA + 14.63 6.05 x TDA + 14.63 5.52 x TDA + 14.63 5.06 x TDA + 14.63 5.52 x TDA + 14.63 

HZO.SC.I TDEC 

kWh/day 3.34 x TDA + 9. 3.06 x TDA + 9. 2.8 x TDA + 9. 2.46 x TDA + 9. 2.44 x TDA + 9. 2.44 x TDA + 9. 

SOC.SC.I TDEC 

kWh/day 2.13 x TDA + 0.36 2.02 x TDA + 0.36 1.88 x TDA + 0.36 1.76 x TDA + 0.36 1.35 x TDA + 0.36 1.76 x TDA + 0.36 

HCS.SC.I TDEC 

kWh/day 0.55 x V + 0.88 0.49 x V + 0.88 0.43 x V + 0.88 0.38 x V + 0.88 0.38 x V + 0.88 0.38 x V + 0.88 

1. Miscellaneous Equipment 

In the ANOPR, DOE proposed as part of its commercial refrigeration equipment test 

procedure that all equipment be tested at one of three rating temperatures: 38° F for 

refrigerators, 0° F for freezers, and -15° F for ice-cream freezers. Zero Zone, Hill Phoenix, 

Carrier/Tyler Refrigeration, and True expressed concern because they produce equipment that is 

not designed to operate at these designated rating temperatures. (Public Meeting Transcript, No. 

13.5 at pp. 28-33) ARI stated that DOE should not require all equipment to be tested at these 

 EE-2006-STD-0126 COMMENT 22.1
three rating temperatures alone. Doing so may require manufacturers to produce equipment that 

is less efficient solely for the purpose of meeting a specific rating condition, thus defeating the 

intent of the regulation. (ARI, No. 18 at p. 4) Hill Phoenix and True stated that the equipment 

they manufacture that is unable to meet these rating temperatures is only one percent to two 

percent of their shipments. Hill Phoenix added that, if possible, it would prefer to avoid the 

excessive paperwork of applying for waivers for equipment that cannot meet the three rating 

temperatures in the test procedure. (Public Meeting Transcript, No. 13.5 at p. 33) 

Zero Zone recommended developing regulations that apply to the special circumstances 

of the rating temperature (Zero Zone, No. 17 at p. 2) and that DOE should consider developing 

additional rating temperatures. (Public Meeting Transcript, No. 13.5 at p. 28) ACEEE 

suggested that DOE develop a method to interpolate the standard based on the standards at the 

three official rating temperatures. (ACEEE, No. 16 at p. 2) ARI recommended that any 

equipment specifically designed to hold temperatures higher than the rating temperature should 

be tested at its application temperature, but must still meet the energy standard for its respective 

equipment class. (ARI, No. 18 at p. 4) 

The DOE test procedure for commercial refrigeration equipment specifies three rating 

temperatures, 38° F, 0° F, and -15° F, that are required to be used in the testing of this 

equipment, each applied to designated equipment classes. 71 FR 71357. Since all of this 

equipment must be tested at one of these three rating temperatures, any manufacturer that is 

unable to test such equipment at its designated rating temperature, must request a test procedure 

waiver from DOE pursuant to the provisions described in 10 CFR 431.401. If the equipment is 

 EE-2006-STD-0126 COMMENT 22.1
unable to meet the maximum daily energy consumption (MDEC) limit for its designated 

equipment class, a manufacturer can petition DOE’s Office of Hearing and Appeals (OHA) for 

exception relief from the energy conservation standard pursuant to OHA’s authority under 

section 504 of the DOE Organization Act (42 U.S.C. 7194), as implemented at subpart B of 10 

CFR part 1003. OHA grants such relief on a case-by-case basis if it determines that a 

manufacturer has demonstrated that meeting the standard would cause hardship, inequity, or 

unfair distributions of burdens. DOE believes that the majority of equipment covered by this 

rulemaking can be tested using the three specified rating temperatures (38° F, 0° F, and -15° F) 

provided in the test procedure. 

Certain types of equipment meet the definition of “commercial refrigeration equipment” 

(Section 136(a)(3) of EPACT 2005), but do not fall directly into any of the 38 equipment classes 

defined in the market and technology assessment. One of these types is hybrid cases, where two 

or more compartments are in different equipment families and are contained in one cabinet. 

Another is refrigerator-freezers, which have two compartments in the same equipment family but 

with different operating temperatures. Hybrid refrigerator-freezers, where two or more 

compartments are in different equipment families and have different operating temperatures, may 

also exist. Another is wedge cases, which form miter transitions (a corner section between two 

refrigerated display merchandisers) between standard display case lineups. DOE is proposing 

language that will allow manufacturers to determine appropriate standard levels for these types 

of equipment. 

 EE-2006-STD-0126 COMMENT 22.1
An example of a pure hybrid case (one with two or more compartments in different 

equipment families and at the same temperature) is a unit with one open and one closed mediumtemperature compartment, such as those seen in coffee shops that merchandise baked goods and 

beverages. These hybrid cases may be either self-contained or remote condensing, and may be 

cooled by one or more condensing units. They may also have one evaporator cooling both 

compartments or one evaporator feeding each compartment separately. 

An example of a refrigerator-freezer is a unit with doors where one compartment operates 

at medium temperature and one compartment operates at low temperature. Remote condensing 

commercial refrigerator-freezers (with and without doors) and self-contained commercial 

refrigerator-freezers without doors may operate in one of two ways. First, they may operate as 

separate chilled and frozen compartments with evaporators fed by two sets of refrigerant lines or 

two compressors. Second, they may operate as separate chilled and frozen compartments fed by 

one set of low-temperature refrigerant lines (with evaporator pressure regulator (EPR) valves or 

similar devices used to raise the evaporator pressure) or one compressor. 

An example of a hybrid refrigerator-freezer is a unit with one open compartment at 

medium temperature and one closed compartment at low temperature. As with pure hybrid 

cases, these cases may be either self-contained or remote condensing, and may be cooled by one 

or more condensing units. In the case of remote condensing equipment, they may operate as 

separate chilled and frozen compartments with evaporators fed by two sets of refrigerant lines or 

two compressors. Or they may operate as separate chilled and frozen compartments fed by one 

 EE-2006-STD-0126 COMMENT 22.1
set of low-temperature refrigerant lines (with EPR valves or similar devices used to raise the 

evaporator pressure of one compartment) or one compressor. 

During the ANOPR public meeting, stakeholders commented on how to handle these 

types of cases. True suggested that for self-contained refrigerator-freezer equipment, DOE 

should use a weighted average of the minimum standard requirements for the freezer and 

refrigerator. This is the present standard used in California and Canada, and [EPACT] 2005 for 

self-contained equipment with doors: 1.63 times freezer volume plus the refrigerated volume 

gives you a number [adjusted volume]. (Public Meeting Transcript, No. 13.5 at p. 215) 

Copeland followed up on the True comment on refrigerator-freezers, suggesting that a 

refrigerator-freezer standard for remote cases should be simple, and that they should be treated as 

if they have two separate compressors. (Public Meeting Transcript, No. 13.5 at p. 215) Zero 

Zone stated that a manufacturer could build equipment with one or two separate suction lines. If 

it is built with one, measure the suction pressure for that one and base the EER on that suction 

pressure, without concern for what is happening upstream of the case. (Public Meeting 

Transcript, No. 13.5 at p. 215) 

DOE has reviewed the comments and is proposing the following language for requiring 

manufacturers to meet standards for hybrid cases, refrigerator-freezers, and hybrid refrigerator 

freezers: 

• For commercial refrigeration equipment with two or more compartments (hybrid 

refrigerators, hybrid freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator 

 EE-2006-STD-0126 COMMENT 22.1
freezers), the MDEC for each model shall be the sum of the MDEC values for all of its 

compartments. For each compartment, measure the TDA or volume of that compartment, 

and determine the appropriate equipment class based on that compartment’s equipment 

family, condensing unit configuration, and designed operating temperature. The MDEC 

limit for each compartment shall be the calculated value obtained by entering that 

compartment’s TDA or volume into the standard equation in subsection (d)(1) for that 

compartment’s equipment class. Measure the calculated daily energy consumption 

(CDEC) or total daily energy consumption (TDEC) for the entire case as follows: 

o For remote condensing commercial hybrid refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid refrigerator-freezers, where two or more 

independent condensing units each separately cool only one compartment, 

measure the total refrigeration load of each compartment separately according to 

the ANSI/ASHRAE Standard 72-2005 test procedure. Calculate compressor 

energy consumption (CEC) for each compartment using Table 1 in ANSI/ARI 

Standard 1200-2006 using the saturated evaporator temperature for that 

compartment. The calculated daily energy consumption (CDEC) for the entire 

case shall be the sum of the CEC for each compartment, fan energy consumption 

(FEC), lighting energy consumption (LEC), anti-condensate energy consumption 

(AEC), defrost energy consumption (DEC), and condensate evaporator pan 

energy consumption (PEC) (as measured in ANSI/ARI Standard 1200-2006). 

 EE-2006-STD-0126 COMMENT 22.1
o For remote condensing commercial hybrid refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid refrigerator-freezers, where two or more 

compartments are cooled collectively by one condensing unit, measure the total 

refrigeration load of the entire case according to the ANSI/ASHRAE Standard 72-

2005 test procedure. Calculate a weighted saturated evaporator temperature for 

the entire case by (i) multiplying the saturated evaporator temperature of each 

compartment by the volume of that compartment (as measured in ANSI/ARI 

Standard 1200-2006), (ii) summing the resulting values for all compartments, and 

(iii) dividing the resulting total by the total volume of all compartments. 

Calculate the CEC for the entire case using Table 1 in ANSI/ARI Standard 1200-

2006, using the total refrigeration load and the weighted average saturated 

evaporator temperature. The CDEC for the entire case shall be the sum of the 

CEC, FEC, LEC, AEC, DEC, and PEC. 

o For self-contained commercial hybrid refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid refrigerator-freezers, measure the total daily 

energy consumption (TDEC) for the entire case according to the ANSI/ASHRAE 

Standard 72-2005 test procedure. 

• For remote-condensing and self-contained wedge cases, measure the CDEC or TDEC 

according to the ANSI/ASHRAE Standard 72-2005 test procedure. The MDEC for each 

model shall be the amount derived by incorporating into the standards equation in 

subsection (d)(1) for the appropriate equipment class a value for the TDA that is the 

 EE-2006-STD-0126 COMMENT 22.1
product of (1) the vertical height of the air-curtain (or glass in a transparent door) and (2) 

the largest overall width of the case, when viewed from the front. This is identified as 

Issue 6 under “Issues on Which DOE Seeks Comment” in Section VII.E of this NOPR. 

B. Economic Justification and Energy Savings 

1. Economic Impacts on Commercial Customers 

a. Life-Cycle Cost and Payback Period 

To evaluate the economic impact of the TSLs on customers, DOE conducted an LCC 

analysis for each level. More efficient commercial refrigeration equipment would affect 

customers in two ways: annual operating expense would decrease and purchase price would 

increase. DOE analyzed the net effect by calculating the LCC. Inputs used for calculating the 

LCC include total installed costs (i.e., equipment price plus installation costs), annual energy 

savings, average electricity costs by customer, energy price trends, repair costs, maintenance 

costs, equipment lifetime, and discount rates. 

DOE’s LCC and PBP analyses provided five outputs for each TSL that are reported in 

Table V-4 through Table V-18. The first three outputs are the proportion of commercial 

refrigeration equipment purchases where the purchase of a standard-compliant piece of 

equipment would create a net LCC increase, no impact, or a net LCC savings for the customer. 

DOE used the estimated distribution of shipments by efficiency level for each equipment class to 

determine the affected customers. The fourth output is the average net LCC savings from 

standard-compliant equipment. The fifth output is the average PBP for the customer investment 

in standard-compliant equipment. The payback period is the number of years it would take for 

 EE-2006-STD-0126 COMMENT 22.1
the customer to recover through energy savings the increased costs of higher efficiency 

equipment compared with the purchase of baseline efficiency equipment. 

Table V-4 Summary LCC and PBP Results for VOP.RC.M Equipment Class

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 63 

Equipment with No Change in LCC (%) 65 47 30 30 2 

Equipment with Net LCC Savings (%) 35 53 70 70 34 

Mean LCC Savings ($) 1,201 1,143 1,551 1,551 -234 

Mean Payback Period (years) 0.9 1.5 2.2 2.2 9.7 

Table V-5 Summary LCC and PBP Results for VOP.RC.L Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 68 52 22 8 8 

Equipment with Net LCC Savings (%) 32 48 78 92 92 

Mean LCC Savings ($) 3,132 4,005 4,089 3,364 3,364 

Mean Payback Period (years) 0.8 1.2 1.3 3.0 3.0 

Table V-6 Summary LCC and PBP Results for VOP.SC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 19 

Equipment with No Change in LCC (%) 65 32 17 17 3 

Equipment with Net LCC Savings (%) 35 68 83 83 78 

Mean LCC Savings ($) 758 1,065 1,342 1,342 703 

Mean Payback Period (years) 0.8 1.8 2.7 2.7 5.9 

Table V-7 Summary LCC and PBP Results for VCT.RC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 19 19 

Equipment with No Change in LCC (%) 79 57 25 7 7 

Equipment with Net LCC Savings (%) 21 43 75 74 74 

Mean LCC Savings ($) 286 581 1,107 867 867 

Mean Payback Period (years) 0.9 1.4 4.6 6.1 6.1 

Table V-8 Summary LCC and PBP Results for VCT.RC.L Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 60 40 28 8 8 

Equipment with Net LCC Savings (%) 40 60 72 92 92 

Mean LCC Savings ($) 676 3,594 3,662 3,546 3,546 

Mean Payback Period (years) 1.2 2.6 2.6 3.7 3.7 

 EE-2006-STD-0126 COMMENT 22.1
Table V-9 Summary LCC and PBP Results for VCT.SC.I Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 52 37 15 7 7 

Equipment with Net LCC Savings (%) 48 63 85 93 93 

Mean LCC Savings ($) 2,305 3,806 3,841 3,818 3,818 

Mean Payback Period (years) 1.1 1.7 2.4 2.5 2.5 

Table V-10 Summary LCC and PBP Results for VCS.SC.I Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 76 49 11 11 11 

Equipment with Net LCC Savings (%) 24 51 89 89 89 

Mean LCC Savings ($) 640 1,191 1,565 1,565 1,565 

Mean Payback Period (years) 0.4 0.6 1.4 1.4 1.4 

Table V-11 Summary LCC and PBP Results for SVO.RC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 62 

Equipment with No Change in LCC (%) 62 42 24 24 4 

Equipment with Net LCC Savings (%) 38 58 76 76 34 

Mean LCC Savings ($) 810 782 1,106 1,106 -170 

Mean Payback Period (years) 0.8 1.5 2.1 2.1 9.7 

Table V-12 Summary LCC and PBP Results for SVO.SC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 17 

Equipment with No Change in LCC (%) 67 34 19 19 4 

Equipment with Net LCC Savings (%) 33 66 81 81 79 

Mean LCC Savings ($) 527 756 988 988 516 

Mean Payback Period (years) 0.7 1.6 2.6 2.6 5.9 

Table V-13 Summary LCC and PBP Results for SOC.RC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 71 

Equipment with No Change in LCC (%) 83 66 32 32 5 

Equipment with Net LCC Savings (%) 17 34 68 68 24 

Mean LCC Savings ($) 363 759 819 819 -673 

Mean Payback Period (years) 0.6 0.9 1.9 1.9 12.6 

 EE-2006-STD-0126 COMMENT 22.1
Table V-14 Summary LCC and PBP Results for HZO.RC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 80 60 39 19 19 

Equipment with Net LCC Savings (%) 20 40 61 81 81 

Mean LCC Savings ($) 376 792 942 917 917 

Mean Payback Period (years) 0.6 0.9 1.4 1.8 1.8 

Table V-15 Summary LCC and PBP Results for HZO.RC.L Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 59 39 19 19 19 

Equipment with Net LCC Savings (%) 41 61 81 81 81 

Mean LCC Savings ($) 593 927 971 971 971 

Mean Payback Period (years) 1.1 1.5 1.8 1.8 1.8 

Table V-16 Summary LCC and PBP Results for HZO.SC.M Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 73 45 21 10 10 

Equipment with Net LCC Savings (%) 27 55 79 90 90 

Mean LCC Savings ($) 312 551 759 721 721 

Mean Payback Period (years) 0.4 1.1 2.0 2.5 2.5 

Table V-17 Summary LCC and PBP Results for HZO.SC.L Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 73 45 21 10 10 

Equipment with Net LCC Savings (%) 27 55 79 90 90 

Mean LCC Savings ($) 610 1,094 1,585 1,559 1,559 

Mean Payback Period (years) 0.4 0.9 1.6 1.9 1.9 

Table V-18 Summary LCC and PBP Results for HCT.SC.I Equipment Class 

Trial Standard Level 

1 2 3 4 5 

Equipment with Net LCC Increase (%) 0 0 0 0 0 

Equipment with No Change in LCC (%) 64 46 30 14 14 

Equipment with Net LCC Savings (%) 36 54 70 86 86 

Mean LCC Savings ($) 192 692 710 693 693 

Mean Payback Period (years) 0.7 1.5 1.6 2.1 2.1 

 For three equipment classes (VOP.RC.M, SVO.RC.M, and SOC.RC.M) TSL 5 resulted 

in a negative LCC savings compared with the purchase of baseline equipment. For all other 

equipment classes, TSL 5 showed positive LCC savings. DOE noted that for equipment classes 

 EE-2006-STD-0126 COMMENT 22.1
with lighting, the inclusion of LED lighting at TSL 5 had a significant impact on the calculated 

LCC savings. For equipment classes without lighting (i.e., VCS.SC.I, HZO.RC.L, HZO.SC.M, 

HZO.SC.L, HCT.SC.I), the LCC savings at TSL 5 was either identical to that of TSL 3, or less 

(between $17 and $38 over the life of the equipment). However, for equipment classes with 

lighting the difference in the LCC calculated between TSL 3 and TSL 5 varied from $23 for 

VCT.SC.I to $1785 for VOP.RC.M. When compared to TSL 3, the estimated reduction in LCC 

savings for TSL 5 was most pronounced for the three medium temperature equipment classes 

identified above as having negative LCC compared to the baseline (VOP.RC.M, SOC.RC.M, and 

SVO.RC.M), varying between $1276 and $1785 dollars. For three additional equipment classes 

(VOP.RC.L, SVO.SC.M, and VOP.SC.M), when compared to TSL 3, the difference in LCC was 

greater than $500. DOE noted that these are all medium temperature cases with the exception of 

VOP.RC.L, which is a small sales volume unit, similar in design to a medium temperature 

VOP.RC.M case. 

The inclusion of LED lighting systems result in an incremental increase in installed price. 

It also increases annualized lighting maintenance cost, since LED lights were assumed to be 

replaced after 50,000 hours or 5.7 years of steady operation. DOE performed two sensitivity 

analyses of the effect of projected cost reductions in LED lighting systems on LCC. These 

analyses involved five equipment classes: VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M, 

and SOC.RC.M. In the first sensitivity analysis, DOE determined the reduction in LED fixture 

cost, applied to the installed price in 2012, that would be necessary to reduce the average LCC 

for TSL 5 to a level equivalent to the LCC savings at TSL 3, the maximum LCC level. DOE 

determined that for these five equipment classes, a LED cost reduction ranging from 37 percent 

 EE-2006-STD-0126 COMMENT 22.1
to 44 percent, depending on equipment class, would provide an LCC at TSL 5 equivalent to that 

at TSL 3. 

 In the second sensitivity analysis, DOE presumed that the cost for replacement LED 

fixtures in 2018 would be reduced by 50 percent of the cost assumed in the base LCC analysis, 

and then calculated the reduction in LED fixture cost necessary by 2012 to reduce the average 

LCC for TSL 5 to a level that provided equivalent LCC savings as TSL 3. DOE determined that 

for these five equipment classes an LED cost reduction ranging from 29 percent to 40 percent, 

depending on equipment class, would provide a LCC at TSL 5 equivalent to that at TSL 3. 

Based on these analyses, DOE concluded that a reduction in LED fixture costs of 

approximately 45 percent would be sufficient to result in the maximum LCC savings for all five 

equipment classes at TSL 5. DOE estimated that this reduction in LED fixture costs would also 

increase LCC savings for all other equipment classes with installed lighting at TSL 5. DOE 

estimates that for all equipment classes to achieve their maximum LCC savings at TSL 5, LED 

fixture costs must decrease by at least 45 percent. DOE concluded that a reduction in LED costs 

of less than 45 percent could result in only certain commercial refrigeration equipment classes 

achieving their maximum LCC savings at TSL 5. 

b. Rebuttable Presumption Payback 

As discussed above, EPCA provides a rebuttable presumption that an energy 

conservation standard is economically justified if the increased purchase cost for the equipment 

that meets the standard is less than three times the value of the first year energy savings resulting 

 EE-2006-STD-0126 COMMENT 22.1
from the standard. DOE calculated a rebuttable presumption payback period for each TSL to 

determine if DOE could presume that a standard at that level is economically justified. Rather 

than using distributions for input values, DOE used discrete values and, as required by EPCA, 

based the calculation on the DOE commercial refrigeration equipment test procedure 

assumptions. As a result, DOE calculated a single rebuttable presumption payback value for 

each standard level, and not a distribution of payback periods. 

To evaluate the rebuttable presumption, DOE estimated the additional customer price of a 

more efficient, standard-compliant unit using the average customer markup, and compared this 

cost to the value of the energy saved during the first year of operation of the equipment as 

determined by ANSI/ARI Standard 1200-2006. DOE interprets that the increased cost of 

purchasing a standard-compliant unit includes the cost of installing the equipment for use by the 

purchaser. DOE calculated the rebuttable presumption PBP, or the ratio of the value of the 

increased installed price above the baseline efficiency level to the first year’s energy cost 

savings. When this PBP is less than three years, the rebuttable presumption is satisfied; when 

this PBP is equal to or more than three years, the rebuttable presumption is not satisfied. 

Rebuttable presumption PBPs were calculated based on single-point national average 

values for installed costs and energy prices appropriate to commercial refrigeration equipment. 

Equipment prices are based on a shipment-weighted average distribution markup for remote 

condensing equipment or self-contained equipment, as applied to the MSP for each equipment 

class. The installed cost is based on the national average equipment price and the national 

average installation cost for remote condensing or self-contained equipment as appropriate. 

 EE-2006-STD-0126 COMMENT 22.1
Average first-year energy costs were calculated as the product of the annual energy consumption 

used in the LCC and the shipment-weighted national-average electricity price, which was 

calculated using the shipment weights for the four business types using commercial refrigeration 

equipment. 

The equation for the rebuttable PBP is: 

 PBP =∆IC/∆EC

where 

PBP = payback period in years, 

∆IC = difference in the total installed cost between the more efficient standard level equipment 

(energy consumption levels 2, 3, etc.) and the baseline (energy consumption level 1) 

equipment, and 

∆EC = difference in annual energy costs. 

PBPs are expressed in years. PBPs greater than the life of the equipment means that the 

increased total installed cost of the more efficient equipment is not recovered in reduced 

operating costs for the more efficient equipment. The rebuttable presumption PBPs differ from 

the other PBPs calculated in the LCC analysis (see Section IV.E.12 of this NOPR) because they 

do not include maintenance or repair costs and they are based on single point values instead of 

distributions for installation costs or energy costs. The baseline efficiency level for the 

rebuttable presumption calculation is the baseline established in the engineering analysis. 

 EE-2006-STD-0126 COMMENT 22.1
Table V-19 shows the nationally averaged rebuttable presumption paybacks calculated 

for all equipment classes and efficiency levels. The highest efficiency level with a rebuttable 

presumption payback of less than three years is also shown in Table V-19 for each equipment 

class. For eight equipment classes, the rebuttable presumption criteria were satisfied at all TSLs. 

At TSL 4, the rebuttable presumption criteria are satisfied for 13 equipment classes. At TSL 3, 

the rebuttable presumption criteria are satisfied for 14 equipment classes. At TSL 2, the 

rebuttable presumption criteria were satisfied for all equipment classes. However, while DOE 

has examined the rebuttable presumption PBPs, DOE has not determined economic justification 

for any of the standard levels analyzed based on the ANOPR rebuttable presumption analysis. 

The economic justification for each TSL for each equipment class will take into account the 

more detailed analysis of the economic impacts of increased efficiency pursuant to Section 

325(o)(2)(B)(i) of EPCA. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) 

 EE-2006-STD-0126 COMMENT 22.1
Table V-19 Rebuttable Presumption Payback Periods by Efficiency Level and Equipment 

Class 

Rebuttable Presumption Payback Period (Years) Equipment 

Type Level 1 Level 2 Level 3 Level 4 Level 5 

Highest TSL 

with PBP < 3 

Years 

VOP.RC.M 0.8 1.1 1.7 1.7 5.9 4 

VOP.RC.L 0.7 1.1 1.2 2.5 2.5 5 

VOP.SC.M 0.8 1.5 2.3 2.3 4.5 4 

VCT.RC.M 0.8 1.2 4.1 5.4 5.4 2 

VCT.RC.L 1.0 2.4 2.4 3.3 3.3 3 

VCT.SC.I 1.0 1.6 2.2 2.3 2.3 5 

VCS.SC.I 0.4 0.6 1.3 1.3 1.3 5 

SVO.RC.M 0.8 1.1 1.7 1.7 5.9 4 

SVO.SC.M 0.6 1.3 2.2 2.2 4.5 4 

SOC.RC.M 0.5 0.8 1.4 1.4 7.1 4 

HZO.RC.M 0.5 0.8 1.2 1.6 1.6 5 

HZO.RC.L 1.0 1.3 1.6 1.6 1.6 5 

HZO.SC.M 0.4 1.0 1.9 2.3 2.3 5 

HZO.SC.L 0.3 0.8 1.5 1.7 1.7 5 

HCT.SC.I 0.7 1.4 1.5 2.0 2.0 5 

c. Life-Cycle Cost Sub-Group Analysis 

Using the LCC spreadsheet model, DOE estimated the impact of the TSLs on the 

following customer sub-group: small businesses. For the retail food sales business, the Small 

Business Association (SBA) defines as small businesses supermarkets and other grocery stores 

and convenience stores with less than $25 million in total annual sales. For specialty stores (e.g. 

meat markets, bakeries, fish and seafood markets), this limit is set at less than $6.5 million in 

annual sales. According to the Food Marketing Institute, the average supermarket had sales of 

approximately $15 million in 2006, so a small business could be represented by one to two 

average-size supermarkets or a chain of smaller grocery or convenience stores. The Food 

Marketing Institute defines independent stores as a retailer with one to ten stores, so most small 

supermarkets or grocery businesses as defined by SBA would be classified as independent 

 EE-2006-STD-0126 COMMENT 22.1
grocery stores by the industry. A somewhat larger chain of convenience stores could still be 

classified as a small business. 

DOE estimated the LCC and PBP for small food sales businesses defined by SBA by 

presuming that most small business customers could be represented by the analysis performed 

for small grocery and convenience store owners. DOE assumed, however, that the smaller, 

independent grocery and convenience store chains may not have access to national accounts, but 

would instead purchase equipment primarily through distributors and grocery wholesalers. DOE 

modified the distribution channels for remote condensing and self-contained equipment to these 

small businesses as follows: 

• For remote condensing equipment, 15 percent of the sales were assumed to pass 

through a manufacturer-to-distributor-to-contractor-to-customer channel, and 85 

percent were assumed to be purchased through a manufacturer-to-distributor-tocustomer channel. 

• For self-contained equipment, 35 percent of sales were assumed to pass through a 

manufacturer-to-distributor-to-contractor-to-customer channel, and 65 percent 

were assumed to be purchased through a manufacturer-to-distributor-to-customer 

channel. 

In both cases, the distribution chain markups were calculated accordingly. Table V-20

shows the mean LCC savings from proposed energy conservation standards for the small 

business sub-group, and Table V-21 shows the mean payback period (in years) for this sub-

 EE-2006-STD-0126 COMMENT 22.1
group. More detailed discussion on the LCC sub-group analysis and results can be found in 

Chapter 12 of the TSD. 

Table V-20 Mean Life-Cycle Cost Savings for Commercial Refrigeration Equipment 

Purchased by LCC Sub-Group (Small Business) (2007$)*

Equipment Class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 1,536 1,524 2,096 2,096 564 

VOP.RC.L 3,995 5,158 5,301 4,688 4,688 

VOP.SC.M 968 1,413 1,840 1,840 1,308 

VCT.RC.M 366 757 1,689 1,625 1,625 

VCT.RC.L 876 4,842 4,941 5,042 5,042 

VCT.SC.I 2,957 4,981 5,155 5,151 5,151 

VCS.SC.I 805 1,511 2,031 2,031 2,031 

SVO.RC.M 1,036 1,044 1,492 1,492 400 

SVO.SC.M 669 994 1,346 1,346 953 

SOC.RC.M 461 973 1,107 1,107 (175) 

HZO.RC.M 476 1,013 1,221 1,202 1,202 

HZO.RC.L 766 1,206 1,274 1,274 1,274 

HZO.SC.M 393 708 1,005 974 974 

HZO.SC.L 766 1,394 2,069 2,052 2,052 

HCT.SC.I 244 898 925 919 919 *

 Numbers in parentheses indicate negative savings 

Table V-21 Mean Payback Period for Commercial Refrigeration Equipment Purchased by 

LCC Sub-Group (Small Business) (Years) 

Equipment Class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

VOP.RC.M 0.8 1.3 2.0 2.0 8.5 

VOP.RC.L 0.7 1.1 1.2 2.7 2.7 

VOP.SC.M 0.8 1.6 2.4 2.4 5.2 

VCT.RC.M 0.8 1.3 4.2 5.6 5.6 

VCT.RC.L 1.1 2.4 2.4 3.4 3.4 

VCT.SC.I 1.0 1.6 2.1 2.2 2.2 

VCS.SC.I 0.4 0.6 1.3 1.3 1.3 

SVO.RC.M 0.8 1.3 1.9 1.9 8.5 

SVO.SC.M 0.6 1.4 2.3 2.3 5.2 

SOC.RC.M 0.5 0.8 1.7 1.7 10.8 

HZO.RC.M 0.5 0.8 1.2 1.6 1.6 

HZO.RC.L 1.0 1.4 1.7 1.7 1.7 

HZO.SC.M 0.4 1.0 1.8 2.3 2.3 

HZO.SC.L 0.3 0.8 1.5 1.7 1.7 

HCT.SC.I 0.6 1.3 1.4 1.9 1.9 

 EE-2006-STD-0126 COMMENT 22.1
For commercial refrigeration equipment, the LCC and PBP impacts for small businesses 

are similar to those of all customers as a whole. While the discount rate for small grocery stores 

is higher than that for commercial refrigeration equipment customers as a whole and equipment 

prices are higher due to the higher markups, these small business customers appear to retain 

commercial refrigeration equipment over longer periods, and generally, smaller stores tend to 

pay higher electrical prices. The average LCC savings for the small business sub-group is 

slightly higher than that calculated for the average commercial refrigeration equipment customer, 

and the average PBP is slightly shorter than the national average. DOE tentatively concluded 

that the small food sales businesses as defined by SBA will not experience economic impacts 

significantly different or more negative than those impacts on food sales businesses as a whole. 

2. Economic Impacts on Manufacturers 

DOE performed an MIA to estimate the impact of amended energy conservation standards 

on commercial refrigeration equipment manufacturers (Chapter 13 of the TSD). 

a. Industry Cash-Flow Analysis Results 

Table V-22 and Table V-23 show the MIA results for each TSL using both markup 

scenarios described above for commercial refrigeration equipment.24

 

24 The MIA estimates the impacts on commercial refrigeration equipment manufacturers of equipment in the entire 

range of equipment classes (i.e., the MIA results in Table V-22 and Table V-23 take into consideration the impacts 

on manufacturers of equipment from all equipment classes). 

 EE-2006-STD-0126 COMMENT 22.1
Table V-22 Manufacturer Impact Analysis for the Commercial Refrigeration Equipment 

Industry Under the Preservation of Gross Margin Percentage Markup Scenario

Preservation of Gross Margin Percentage Markup Scenario with a Rollup Shipment Scenario 

Efficiency Level 

 Units Base Case 1 2 3 4 5 

INPV 2007$ Millions 510 510 517 493 471 493 

2007$ Millions - (0) 6 (17) (40) (18) Change in INPV (%) - 0.00% 1.22% -3.30% -7.76% -3.49% 

Energy Conservation 

Standards Equipment 

Conversion Expenses 

2007$ Millions - 0.5 2.8 20.6 40.4 51.6 

Energy Conservation 

Standards Capital 

Investments 

2007$ Millions - 0.8 5.0 36.3 71.2 90.8 

Total Investment 

Required 2007$ Millions - 1.3 7.8 57.0 111.6 142.4 

Table V-23 Manufacturer Impact Analysis for the Commercial Refrigeration Equipment 

Industry Under the Preservation of Operating Profit Markup Scenario 

Preservation of Operating Profit Markup Scenario with a Rollup Shipment Scenario 

Efficiency Level 

 Units Base Case 1 2 3 4 5 

INPV 2007$ Millions 510 447 423 382 330 226 

2007$ Millions - (63) (88) (129) (180) (285) Change in INPV (%) - -12.34% -17.16% -25.20% -35.32% -55.77% 

Energy Conservation 

Standards Equipment 

Conversion Expenses 

2007$ Millions - 0.5 2.8 20.6 40.4 51.6 

Energy Conservation 

Standards Capital 

Investments 

2007$ Millions - 0.8 5.0 36.3 71.2 90.8 

Total Investment 

Required 2007$ Millions - 1.3 7.8 57.0 111.6 142.4 

 

At TSL 1, the impact on INPV and cash flow varies greatly depending on the 

manufacturers and their ability to pass on MPC increases to the customer. DOE estimated the 

impacts in INPV at TSL 1 to range from approximately no impact to -$63 million, which is a 

change in INPV of zero percent to -12.34 percent. At this level, the industry cash flow is $50.9 

million, which is nearly the same as the base case value of $51.4 million in the year leading up to 

the standards. Since DOE estimates that more than 80 percent of the equipment being sold is 

already at or above this level, manufacturers that currently meet TSL 1 will not have to make 

 EE-2006-STD-0126 COMMENT 22.1
additional modifications to their equipment lines to conform to the energy conservation 

standards. DOE expects the lower end of the impacts to be reached, because manufacturers will 

be able to fully recover the increase in manufacturer production cost from customers. Therefore, 

DOE expects that industry revenues and costs will not be significantly negatively affected at TSL 

1. 

At TSL 2, the impact on INPV and cash flow continues to vary depending on the 

manufacturers and their ability to pass on MPC increases to the customer. DOE estimated the 

impacts in INPV at TSL 2 to range from approximately $6 million to -$88 million, which is a 

change in INPV of 1.22 percent to -17.16 percent. At this level, the industry cash flow decreases 

by approximately 6 percent, to $48.2 million, compared to the base case value of $51.4 million in 

the year leading up to the standards. DOE estimates that roughly 45 percent of the equipment 

being sold is already at or above this level. The required higher level of efficiency will cause 

some manufactures to modify their equipment lines to conform to the energy conservation 

standards. DOE does not expect industry revenues and costs to be affected significantly as long 

as manufacturers fully recover the increase in manufacturer production cost from customers. 

The positive INPV value is explained by the assumption that MSP increases due to higher costs 

of the equipment, so that manufacturers fully recover and even surpass the investments needed to 

achieve this level. 

At TSL 3, DOE estimated the impacts in INPV to range from approximately -$17 million 

to -$129 million, which is a change in INPV of -3.3 percent to -25.2 percent. At this level, the 

industry cash flow decreases by approximately 45.5 percent, to $28 million, compared to the 

 EE-2006-STD-0126 COMMENT 22.1
base case value of $51.4 million in the year leading up to the standards. Based on information 

submitted by industry, the majority of manufacturers would require a complete redesign of their 

equipment, and therefore DOE expects that commercial refrigeration equipment manufacturers 

will have some difficulty fully passing on larger MPC increases to customers. Manufacturers 

expect that the actual impacts will be closer to the higher end of the range of impacts (i.e., a drop 

of 25.2 percent in INPV). 

At TSL 4, DOE estimated the impacts on INPV to range from -$40 million to -$180 

million, which is a change in INPV of approximately -7.76 percent to -35.32 percent. At this 

level, the industry cash flow decreases by approximately 89.3 percent to $5.5 million, compared 

to the base case value of $51.4 million in the year leading up to the standards. TSL 4 was 

created as a combination of TSL 3 (minimum LCC) and TSL 5 (max-tech). Manufacturers were 

not directly asked about this combination TSL during interviews. However, DOE estimated the 

range of impacts at TSL 4 based on the expected impacts manufacturers reported for TSL 3 and 

TSL 5. Since manufacturers expect that the actual impacts will be closer to the higher range of 

impacts at TSL 3 and TSL 5, DOE expects that the actual impacts for TSL 4 will also be at the 

higher range (i.e., a drop of 35.32 percent in INPV). 

At TSL 5 (max-tech), DOE estimated the impacts in INPV to range from -$18 million to 

-$285 million, which is a change in INPV of approximately -3.49 percent to -55.77 percent. At 

this level, the industry cash flow decreases by approximately 114 percent to -$7.2 million, 

compared to the base case value of $51.4 million in the year leading up to the standards. At 

 EE-2006-STD-0126 COMMENT 22.1
higher TSLs, manufacturers have more difficulty fully passing on larger MPC increases to 

customers, and therefore manufacturers expect that the actual impacts will be closer to the higher 

end of the range of impacts (i.e., a drop of 55.77 percent in INPV). Currently, there is only one 

model being manufactured at these efficiency levels for most equipment classes, and some 

equipment classes have no equipment at these levels. At TSL 5, DOE recognizes that there is a 

risk of very large negative impacts if manufacturers’ expectations are accurate about reduced 

profit margins. During the interviews, manufacturers expressed great concern at the possibility 

of requiring an entire equipment line to be manufactured at the max- tech levels. 

b. Cumulative Regulatory Burden 

 While any one regulation may not impose a significant burden on manufacturers, the 

combined effects of several 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 the energy conservation regulations on commercial refrigeration 

equipment, several other Federal regulations and pending regulations apply to commercial 

refrigeration equipment and other equipment produced by the same manufacturers or parent 

companies. DOE recognizes that each regulation can significantly affect manufacturers’ 

financial operations. Multiple regulations affecting the same manufacturer can quickly strain 

manufacturers’ profits and possibly cause an exit from the market. An example of these 

additional regulations is the U.S. Environmental Protection Agency (EPA)-mandated phaseout of 

hydrochlorofluorocarbons (HCFCs) and the potential residential central air conditioners and heat 

 EE-2006-STD-0126 COMMENT 22.1
pumps Federal energy conservation standard. Table V-24 provides the timetables for these 

mandatory or potential regulations. DOE believes that the cumulative burden of the HCFC 

phaseout is minimal because much of the commercial refrigeration equipment industry has 

already initiated the transition to HFC refrigerants. As shown in Section IV.B.3 above, ARI 

stated that the data it provided to DOE was based on HFC refrigerants, and DOE therefore used 

HFC refrigerants in its analysis. DOE is aware of the industry’s transition to HFC refrigerants, 

but requests comment on any cumulative regulatory burdens from the combined effects of 

impending regulations that may affect manufacturers. 

Table V-24 Federal Regulation Timetables 

Regulation Key Affected Appliance Effective Date 

Potential DOE energy 

conservation standards 

Central air conditioners and heat 

pumps (residential) 

06/2011 

Potential DOE energy 

conservation standards 

Room air conditioners 06/2011 

EPA phaseout of HCFC 

refrigerant on new equipment 

Room and residential central air 

conditioners, and commercial air 

conditioners 

01/2010 

EPA phaseout of HCFC blowing 

agents on new equipment 

Commercial refrigeration 

equipment 

01/2010 

 Production of foam insulation uses a blowing agent. The EPA strategy for meeting U.S. 

obligations under the Montreal Protocol requires the United States to phase out the production 

and use of HCFC blowing agents. HCFC-22 and HCFC-142b will be phased out on January 1, 

2010. This affects equipment manufacturing in the United States after this date and causes 

manufacturers to switch to other blowing agents with no ozone depletion potential. 

 DOE recognizes that some parent companies of commercial refrigeration equipment 

manufacturers could also be affected by the potential energy conservation standards for central 

air conditioners and heat pumps and for room air conditioners. Additional investments necessary 

 EE-2006-STD-0126 COMMENT 22.1
to meet these potential standards could have significant impacts on manufacturers of commercial 

refrigeration equipment. DOE seeks comment on the magnitude of impacts for cumulative 

regulatory burden on manufacturers for potential energy conservation standards for central air 

conditioners and heat pumps and for room air conditioners. 

c. Impacts on Employment 

DOE used the GRIM to assess the impacts of energy conservation standards on 

commercial refrigeration equipment employment. DOE used statistical data from the U.S. 

Census Bureau’s 2006 Annual Survey of Manufactures, the results of the engineering analysis, 

and interviews with manufacturers to estimate the inputs necessary to calculate industry-wide 

labor expenditures and employment levels. 

Currently the vast majority of commercial refrigeration equipment is manufactured in the 

U.S. Based on the GRIM results and interviews with manufactures, DOE expects that there 

would be positive direct employment impacts among domestic commercial refrigeration 

equipment manufacturers for TSL 1 through TSL 5. This conclusion ignores the possible 

relocation of domestic jobs to lower-labor-cost countries which may occur independently of new 

standards or may be influenced by the level of investments required by new standards. Because 

the labor impacts in the GRIM do not take relocation into account, the labor impacts would be 

different if manufacturers chose to relocate to lower cost countries. Manufactures stated that, 

although there are no current plans to relocate production facilities, at higher TSLs there would 

be increased pressure to cut costs, which could result in relocation. Chapter 13 of the TSD 

 EE-2006-STD-0126 COMMENT 22.1
further discusses the employment impacts and exhibits the actual changes in employment levels 

by TSL. 

The conclusions in this section are independent of any conclusions regarding 

employment impacts from the broader U.S. economy estimated in the Employment Impact 

Analysis. These impacts are documented in Chapter 15 of this TSD. 

d. Impacts on Manufacturing Capacity 

 According to the majority of commercial refrigeration equipment manufacturers, new 

energy conservation standards will not significantly affect manufacturers’ production capacity. 

Any necessary redesign of commercial refrigeration equipment will not change the fundamental 

assembly of the equipment. However, manufacturers anticipate some minor changes to tooling. 

Thus, DOE believes manufacturers will be able to maintain manufacturing capacity levels and 

continue to meet market demand under new energy conservation standards. 

e. Impacts on Sub-Groups of Manufacturers 

 As discussed above, using average cost assumptions to develop an industry cash-flow 

estimate is not adequate for assessing differential impacts among sub-groups of manufacturers. 

Small manufacturers, niche equipment manufacturers, or manufacturers exhibiting a cost 

structure that differs largely from the industry average could be affected differently. DOE used 

the results of the industry characterization to group manufacturers exhibiting similar 

characteristics. 

 EE-2006-STD-0126 COMMENT 22.1
 DOE evaluated the impact of new energy conservation standards on small businesses, as 

defined by the SBA for the commercial refrigeration equipment industry, as manufacturing 

enterprises with 750 or fewer employees. DOE shared the interview guides with small 

commercial refrigeration equipment manufacturers and tailored specific questions for them. 

During DOE’s interviews, small manufacturers suggested that the impacts of standards on them 

would not differ from impacts on larger companies within the industry (Chapter 13 of the TSD). 

3. National Impact Analysis 

a. Amount and Significance of Energy Savings 

To estimate the energy savings through 2042 due to new energy conservation standards, 

DOE compared the energy consumption of commercial refrigeration equipment under the base 

case to energy consumption of commercial refrigeration equipment under a new standard. The 

energy consumption calculated in the NIA is source energy, taking into account energy losses in 

the generation and transmission of electricity as discussed in Section IV.J. 

DOE tentatively determined the amount of energy savings at each of the 5 TSLs being 

considered for the 15 primary equipment class analyzed and aggregated the results. Table V-25

shows the forecasted aggregate national energy savings for all 15 equipment classes at each TSL. 

The table also shows the magnitude of the estimated energy savings if the savings are discounted 

at seven percent and three percent. Each TSL considered in this rulemaking would result in 

significant energy savings, and the amount of savings increases with higher energy conservation 

standards (Chapter 11 of the TSD). 

 EE-2006-STD-0126 COMMENT 22.1
Table V-25 Summary of Cumulative National Energy Savings for Commercial 

Refrigeration Equipment (Energy Savings for Units Sold from 2012 to 2042) 

Primary National Energy Savings (quads) 

(sum of all equipment classes)

Trial Standard Level Undiscounted 3% Discounted 7% Discounted

1 0.141 0.073 0.034 

2 0.545 0.284 0.132 

3 0.715 0.372 0.173 

4 0.832 0.433 0.201 

5 1.208 0.630 0.292 

DOE reports both undiscounted and discounted values of energy savings. Each TSL 

analyzed results in additional energy savings, ranging from an estimated 0.141 quads to 1.208 

quads for TSLs 1 through 5 (undiscounted). 

b. Net Present Value 

The net present value analysis is a measure of the cumulative benefit or cost of standards 

to the Nation. In accordance with the Office of Management and Budget (OMB)’s guidelines on 

regulatory analysis (OMB Circular A-4, Section E, September 17, 2003), DOE calculated an 

estimated NPV using both a seven percent and a three percent real discount rate. The seven 

percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. 

economy, and reflects the returns to real estate and small business capital as well as corporate 

capital. DOE used this discount rate to approximate the opportunity cost of capital in the private 

sector, since recent OMB analysis has found the average rate of return to capital to be near this 

rate. In addition, DOE used the three percent rate to capture the potential effects of standards on 

private consumption (e.g., through higher prices for equipment and purchase of reduced amounts 

of energy). This rate represents the rate at which society discounts future consumption flows to 

their present value. This rate can be approximated by the real rate of return on long-term 

Government debt (e.g., the yield on Treasury notes minus the annual rate of change in the 

 EE-2006-STD-0126 COMMENT 22.1
Consumer Price Index), which has averaged about three percent on a pre-tax basis for the last 30 

years. 

Table V-27 shows the estimated cumulative NPV for commercial refrigeration equipment 

resulting from the sum of the NPV calculated for each of the 15 primary equipment classes 

analyzed. Table V-27 assumes the AEO2007 reference case forecast for electricity prices. At a 

seven percent discount rate, TSL 1-4 show positive cumulative NPVs. The highest NPV is 

provided by TSL 3 at $1.20 billion. TSL 4 provided $1.10 billion, close to that of TSL 3. TSL 5 

showed a negative NPV at -$200 million, the result of negative NPV observed in five equipment 

classes (VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M, and SOC.RC.M). DOE determined 

through a sensitivity analysis that a 50 percent reduction in LED fixture costs, applied to 

equipment sold during the analysis period starting in 2012, would yield a NPV of $1.62 billion 

for TSL 5.25 

At a three percent discount rate, all TSLs showed a positive NPV, with the highest NPV 

provided at TSL 3 (i.e., $3.25 billion). TSL 4 provided a near equivalent NPV at $3.24 billion. 

TSL 5 provided a NPV of $1.16 billion dollars. Three equipment classes (VOP.RC.M, 

SVO.RC.M, and SOC.RC.M) were estimated to have negative NPVs at a three percent discount 

rate at TSL 5. DOE determined through a sensitivity analysis that a 50 percent reduction in LED 

fixture costs, applied to all equipment sold during the analysis period starting in 2012, would 

result in the greatest NPV at TSL 5 with $4.76 billion. 

 

25 DOE anticipates a reduction in installed cost of LED systems over time. The projected reduction in price for LED 

systems is provided and discussed in Sections V.C and IV.B.3.c of this NOPR and Appendix B of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
DOE also determined that a six percent reduction in LED system costs by 2012 would be 

sufficient to provide a positive NPV at TSL 5 in aggregate across all equipment classes at a 

seven percent discount rate. DOE recognizes that the aggregate six percent reduction in LED 

system costs could be attained by 2012 because of the rapid development of LED technology. In 

addition, DOE expects that a 50 percent reduction in LED system costs is possible in 2012, given 

the projections discussed previously, and considers a 50 percent reduction likely to occur by 

2018 as examined in the LCC LED replacement cost sensitivity analysis. 

Table V-26 shows the estimated NPV results at TSL 5, for projected LED system cost 

reductions of six percent and 50 percent. 

 

Table V-26 Summary of Net Present Value Results with LED System Cost Sensitivity* 

TSL 5 TSL 5 Including 6% LED 

System Cost Reduction 

TSL 5 Including 50% LED 

System Cost Reduction 

(0.20) 0.03 1.62 

NPV (2007$billion): 

7% Discount Rate 

3% Discount Rate 1.16 1.62 4.76 

* Parentheses indicate negative (-) values. 

In addition to the reference case, DOE examined the NPV under the AEO2007 highgrowth and low-growth electricity price forecasts. The results of this examination can be found 

in Chapter 11 of the TSD. 

 EE-2006-STD-0126 COMMENT 22.1
Table V-27 Summary of Cumulative Net Present Value for Commercial Refrigeration 

Equipment - AEO2007 Reference Case

NPV* (billion 2007$)

Trial Standard Level 7% Discount Rate 3% Discount Rate

1 0.33 0.82 

2 0.98 2.59 

3 1.20 3.25 

4 1.10 3.24 

5 (0.20) 1.16 

* Numbers in parentheses indicate negative NPV, i.e., a net cost. 

c. Impacts on Employment 

DOE develops general estimates of the indirect employment impacts of proposed 

standards on the economy. As discussed above, DOE expects energy conservation standards for 

commercial refrigeration equipment to reduce energy bills for commercial customers, and the 

resulting net savings to be redirected to other forms of economic activity. DOE also realizes that 

these shifts in spending and economic activity could affect the demand for labor. To estimate 

these effects, DOE used an input/output model of the U.S. economy using Bureau of Labor 

Statistics (BLS) data (as described in Section IV.K; see Chapter 15 of the TSD for details). 

This input/output model suggests the proposed commercial refrigeration equipment 

energy conservation standards are likely to slightly increase the net demand for labor in the 

economy. Neither the BLS data nor the input/output model used by DOE includes the quality or 

wage level of the jobs. As shown in Table V-28, DOE estimates that net indirect employment 

impacts from a proposed commercial refrigeration equipment standard are likely to be very 

small. The net increase in jobs is so small that it would be imperceptible in national labor 

statistics and might be offset by other, unanticipated effects on employment. 

 EE-2006-STD-0126 COMMENT 22.1
Table V-28 Net National Change in Indirect Employment, Jobs in 2042 

Trial Standard Net National Change in Jobs

Level 2012 2022 2032 2042 

1 0 324 448 505 

2 -6 1,270 1,744 1,970 

3 -15 1,680 2,312 2,606 

4 -94 2,204 3,047 3,434 

5 -315 3,317 4,607 5,187 

Maximum Job 

Impact -315 3,317 4,607 5,187 

4. Impact on Utility or Performance of Equipment 

In performing the engineering analysis, DOE considered design options that would not 

lessen the utility or performance of the individual classes of equipment. (42 U.S.C. 

6295(o)(2)(B)(i)(IV) and 6316(e)(1)) As presented in the screening analysis (Chapter 4 of the 

TSD), DOE did not consider design options that reduce the utility of the equipment. Because no 

design options were considered that reduce utility, DOE tentatively concluded that none of the 

efficiency levels proposed for commercial refrigeration equipment reduce the utility or 

performance of the equipment. 

5. Impact of Any Lessening of Competition 

EPCA directs DOE to consider any lessening of competition that is likely to result from 

standards. It directs the Attorney General to determine in writing the impact, if any, of any 

lessening of competition likely to result from a proposed standard. (42 U.S.C. 

6295(o)(2)(B)(i)(V) and 6316(e)(1)) To assist the Attorney General in making such a 

determination, DOE has provided the Department of Justice (DOJ) with copies of this Notice and 

the TSD for review. During MIA interviews, domestic manufacturers indicated that foreign 

manufacturers have entered the commercial refrigeration equipment market over the past several 

years. Manufacturers also stated that while there has been significant consolidation with 

 EE-2006-STD-0126 COMMENT 22.1
supermarket chains, little or no consolidation has occurred among commercial refrigeration 

manufacturers in recent years. DOE believes that these trends will continue to happen in this 

market regardless of the proposed standard level chosen. 

6. Need of the Nation to Conserve Energy 

An improvement in the energy efficiency of commercial refrigeration equipment is likely 

to improve the security of the Nation’s energy system by reducing overall demand for energy, 

and thus reduce the Nation’s reliance on foreign sources of energy. Reduced demand may also 

improve the reliability of the electricity system, particularly during peak-load periods. As a 

measure of this reduced demand, DOE expects the proposed standards (TSL 4) to prevent the 

need for the construction of new power plants totaling approximately 643 MW of electricity 

generation capacity in 2042. 

Enhanced energy efficiency also produces environmental benefits. The expected energy 

savings from higher commercial refrigeration equipment standards will reduce the emissions of 

air pollutants and greenhouse gases associated with energy production and fossil fuel usage. 

Table V-29 shows estimated cumulative CO2, NOx, and Hg emissions reductions for all the 

commercial refrigeration equipment classes over the forecast period. The expected energy 

savings from commercial refrigeration equipment standards will reduce the emissions of 

greenhouse gases associated with energy production, and it may reduce the cost of maintaining 

nationwide emissions standards and constraints. 

 EE-2006-STD-0126 COMMENT 22.1
Table V-29 Summary of Emissions Reductions for Commercial Refrigeration Equipment 

(cumulative reductions for equipment, 2012 to 2042) 

Trial Standard Levels 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Emissions Reductions 

CO2 (Mt) 7.37 28.47 37.37 43.50 63.17 

NOx (kt) 2.74 10.58 13.88 16.16 23.47 

Hg (t) 0.09 0.36 0.47 0.54 0.80 

 Mt = million metric tons 

 kt = thousand tons

 t = tons 

The estimated cumulative CO2, NOx, and Hg emission reductions for the proposed 

standard are 43.5 Mt, 16.16 kt, and 0.54 t, respectively, for all 15 equipment classes over the 

period from 2012 to 2042. However, TSL 5 provides the greatest reduction of emissions of all 

the TSLs considered. In the environmental assessment (Chapter 16 of the TSD), DOE reports 

estimated annual changes in CO2, NOx, and Hg emissions attributable to each TSL. As 

discussed in Section IV.L, DOE does not report SO2 emissions reduction from power plants 

because reductions from an energy conservation standard would not affect the overall level of 

SO2 emissions in the United States due to the emissions caps for SO2. 

The NEMS-BT modeling assumed that NOX would be subject to the Clean Air Interstate 

Rule (CAIR) issued by the U.S. Environmental Protection Agency on March 10, 2005.26 70 FR 

25162 (May 12, 2005). On July 11, 2008, the U.S. Court of Appeals for the District of Columbia 

Circuit (D.C. Circuit) issued its decision in North Carolina v. Environmental Protection 

Agency,

27 in which the court vacated the CAIR. If left in place, the CAIR would have 

permanently capped emissions of NOX in 28 eastern States and the District of Columbia. As 

with the SO2 emissions cap, a cap on NOX emissions would have meant that equipment energy 

conservation standards are not likely to have a physical effect on NOX emissions in States 

 

26 See http://www.epa.gov/cleanairinterstaterule/. 27 Case No. 05-1244, 2008 WL 2698180 at *1 (D.C. Cir. July 11, 2008). 

 EE-2006-STD-0126 COMMENT 22.1
covered by the CAIR caps. While the caps would have meant that physical emissions reductions 

in those States would not have resulted from the energy conservation standards we are proposing 

today, the standards might have produced an environmental-related economic impact in the form 

of lower prices for emissions allowance credits, if large enough. DOE notes that the estimated 

total reduction in NOX emissions, including projected emissions or corresponding allowance 

credits in States covered by the CAIR cap was between 0.004 and 0.034 percent of the 

nationwide NOx emissions as a whole, percentages that DOE estimated were too small to affect 

allowance prices for NOx under the CAIR. 

Even though the D.C. Circuit vacated the CAIR, DOE notes that the D.C. Circuit left 

intact EPA's 1998 NOX SIP Call rule, which capped seasonal (summer) NOx emissions from 

electric generating units and other sources in 23 jurisdictions and gave those jurisdictions the 

option to participate in a cap and trade program for those emissions. See 63 Fed. Reg. 57356, 

57359 (Oct. 27, 1998).28 Accordingly, DOE is considering whether changes are needed to its 

plan for addressing the issue of NOX reduction. DOE invites public comment on how the agency 

 

28 In the NOx SIP Call rule, EPA found that sources in the District of Columbia and 22 “upwind” states (States) were 

emitting NOx (an ozone precursor) at levels that significantly contributed to “downwind” states not attaining the 

ozone NAAQS or at levels that interfered with states in attainment maintaining the ozone NAAQS. In an effort to 

ensure that “downwind” states attain or continue to attain the ozone NAAQS, EPA established a region-wide cap for 

NOx emissions from certain large combustion sources and set a NOx emissions budget for each State. Unlike the 

cap that CAIR would have established, the NOx SIP Call Rule’s cap only constrains seasonal (summer time) 

emissions. In order to comply with the NOx SIP Call Rule, States could elect to participate in the NOx Budget 

Trading Program. Under the NOx Budget Trading Program, each emission source is required to have one allowance 

for each ton of NOx emitted during the ozone season. States have flexibility in how they allocate allowances 

through their State Implementation Plans but States must remain within the EPA-established budget. Emission 

sources are allowed to buy, sell and bank NOx allowances as appropriate. It should be noted that, on April 16, 2008, 

EPA determined that Georgia is no longer subject to the NOx SIP Call rule. 

 EE-2006-STD-0126 COMMENT 22.1
should address this issue, including how it might value NOX emissions for States now that the 

CAIR has been vacated.29

With regard to mercury emissions, DOE is able to report an estimate of the physical 

quantity changes in mercury emissions associated with an energy conservation standard. Based 

on the NEMS-BT modeling, Hg emissions show a slight decrease in the period from 2012 to 

2042. These changes in Hg emissions, as shown in Table V-29, are extremely small with a range 

of between 0.02 and 0.14 percent of national base case emissions depending on TSL. 

The NEMS-BT model assumed that mercury emissions would be subject to EPA’s Clean 

Air Mercury Rule30 (CAMR), which would have permanently capped emissions of mercury for 

new and existing coal-fired plants in all States by 2010. Similar to SO2 and NOx, DOE assumed 

that under such a system, energy conservation standards would result in no physical effect on 

these emissions, but might result in an environmental-related economic benefit in the form of a 

lower price for emissions allowance credits, if large enough. DOE estimated that the change in 

Hg emissions from standards would not be large enough to influence allowance prices under 

CAMR. 

 

On February 8, 2008, the D.C. Circuit issued its decision in New Jersey. v. 

Environmental Protection Agency,

31 in which the Court, among other actions, vacated the 

CAMR referenced above. Accordingly, DOE is considering whether changes are needed to its 

 

29 In anticipation of CAIR replacing the NOx SIP Call Rule, many States adopted sunset provisions for their plans 

implementing the NOx SIP Call Rule. The impact of the NOx SIP Call Rule on NOx emissions will depend, in part, 

on whether these implementation plans are reinstated. 30 70 FR 28606 (May 18, 2005). 

31 No. 05-1097, 2008 WL 341338, at *1 (D.C. Cir. Feb. 8, 2008). 

 EE-2006-STD-0126 COMMENT 22.1
plan for addressing the issue of mercury emissions in light of the D.C. Circuit’s decision. DOE 

invites public comment on addressing mercury emissions in this rulemaking. 

DOE is considering taking into account a monetary benefit of CO2 emission reductions 

associated with this rulemaking. During the preparation of its most recent review of the state of 

climate science, the Intergovernmental Panel on Climate Change (IPCC) identified various 

estimates of the present value of reducing carbon-dioxide emissions by one ton over the life that 

these emissions would remain in the atmosphere. The estimates reviewed by the IPCC spanned a 

range of values. In the absence of a consensus on any single estimate of the monetary value of 

CO2 emissions, DOE used an estimate identified by the study cited in Summary for 

Policymakers prepared by Working Group II of the IPCC’s Fourth Assessment Report to 

estimate the potential monetary value of the CO2 reductions likely to result from the standards 

under consideration in this rulemaking. 

The estimated year-by-year reductions in CO2 emissions were converted into monetary 

values ranging from the $0 and $14 per ton. These monetary estimates were based on an 

assumption of no benefit to an average benefit value reported by the IPCC and the values include 

a range of discount factors used in their development.32 Based on DOE’s consideration of the 

 

32According to the IPCC, the mean social cost of carbon (SCC) reported in studies published in peer-reviewed 

journals was US$43 per ton of carbon. This translates into about $12 per ton of carbon dioxide. The social costs 

estimated represented the discounted present value of increasing (or decreasing) current emissions of carbon dioxide 

(or an equivalent greenhouse gas) by one ton. The literature review (Tol 2005) from which this mean was derived 

did not report the year in which these dollars are denominated. However, since the underlying studies spanned 

several years on either side of 2000, the estimate is often treated as year 2000 dollars. Updating that estimate to 

2007 dollars yields a SCC of $14 per ton of carbon dioxide. Tol concluded that when only peer-reviewed studies 

published in recognized journals are considered, “...climate change impacts may be very uncertain but is unlikely 

that the marginal damage costs of carbon dioxide emissions exceed $50 per tonne carbon [about $14 per metric ton 

of CO2 or about $12.66 per short ton][emphasis added].” He also concluded that the costs may be substantially 

lower than $50 per tonne of C. Tol’s survey showed that 10 percent of the SCC estimates were actually negative, so 

that a lower bound of zero is not unreasonable.. 

 EE-2006-STD-0126 COMMENT 22.1
IPCC report, DOE escalated the average benefit value per ton in real 2007$ at 2.4 percent per 

year. The resulting estimates of the potential range of benefits associated with the reduction of 

CO2 emissions are reflected in Table V-30. 

Table V-30 Preliminary Estimates of Savings from CO2 Emissions Reductions under 

Considered Commercial Refrigeration Equipment Trial Standard Levels 

TSL Estimated Total 

CO2 (Mt) Emission 

Reductions 

Value of Estimated CO2

Emission Reductions Based 

on IPCC Range (Million $) at 

7% Discount Rate 

Value of Estimated CO2

Emission Reductions Based 

on IPCC Range (Million $) at 

3% Discount Rate 

1 7.37 0 to 43 0 to 93 

2 28.47 0 to 166 0 to 361 

3 37.37 0 to 218 0 to 473 

4 43.50 0 to 253 0 to 551 

5 63.17 0 to 368 0 to 800 

DOE relied on the average of the IPCC reported estimate as an upper bound on the 

benefits resulting from reducing each metric ton of U.S. CO2 emissions. It is important to note 

that estimate of the $14 per ton of CO2 represents an average value of worldwide impacts from 

potential climate impacts caused by CO2 emissions, and is not confined to impacts likely to occur 

within the U.S. In contrast, most of the other estimates of costs and benefits of increasing the 

efficiency of commercial refrigeration equipment discussed in this proposal include only the 

economic values of impacts that would be experienced in the U.S. Consequently, as DOE 

considers a monetary value for CO2 emission reductions, the value might be restricted to a 

representation of those cost/benefits likely to be experienced in the United States. Currently, 

there are no estimated values for the U.S. benefits likely to result from CO2 emission reductions. 

However, DOE expects that, if such values were developed, DOE would use those U.S. benefit 

values, and not world benefit values, in its analysis. DOE further expects that, if such values 

 EE-2006-STD-0126 COMMENT 22.1
were developed, they would be lower than comparable global values. DOE invites public 

comment on the above discussion of CO2. 

 DOE also investigated the potential monetary impact resulting from the impact of 

today’s efficiency standards on SO2, NOx, and mercury (Hg) emissions. As previously stated, 

DOE’s analysis assumed the presence of nationwide emission caps on SO2 and caps on NOx

emissions in the 28 states covered by the CAIR caps. In the presence of emission caps, DOE 

concluded that no physical reductions in total sector emissions would occur, however DOE’s 

estimates for reduction of these emissions could correspond to incremental changes in the prices 

of emissions allowances in cap-and-trade emissions markets rather than to physical emissions 

reductions. For SO2, the changes in annual emissions from today’s rule would be less than 0.03 

percent of the annual SO2 allowances, a change that DOE estimated is too small to influence 

allowance prices. Similarly, for NOx, in the 28 CAIR states, the emissions savings from today’s 

rule would be less than 0.018 percent of NOx allowances, also a change that DOE also estimated 

is too small to influence allowance prices. 

 In DOE’s analysis, for 22 non-CAIR states emissions of NOx from electricity generation 

were not controlled by a regulatory cap. By 2012, DOE projected that the NOx emissions in the 

non-CAIR states would be about 25 percent of the national total.33 Mercury emissions are also 

 

33 U.S. NOx emissions have been trending downward steadily since 1995, falling from 31.5 million tons in 1995 to 

15.2 million in 2006 (EIA 2007). Although non-CAIR states’ emissions have also fallen, the emissions in the CAIR 

states have fallen more rapidly; thus, the CAIR states’ percentage of the total has also fallen from 87.4% in 1997 to 

80.9% in 2006. For purposes of this analysis, DOE assumed that the CAIR states percentage of emissions continues 

to decline until it reaches 75 percent in 2012. Seventy-five percent of emissions reductions are allocated to the 

CAIR states thereafter. Consequently non-CAIR state emissions would be about 25% of the total. [Reference: EIA 

(Energy Information Administration). 2007. Estimated Emissions for U.S. Electric Power Industry by State, 1990-

2006. State Historical Tables for 2006 

 EE-2006-STD-0126 COMMENT 22.1
not controlled by a regulatory cap. For these two emissions, DOE estimated the national 

monetized benefits of emissions reductions from today’s rule based on environmental damage 

estimates from the literature. Non-CAIR emissions would not be controlled by an emissions cap 

so those emissions would actually be reduced by the PTAC-PTHP energy savings. Available 

estimates suggest a very wide range of monetary values for NOx emissions, ranging from $370 

per ton to $3,800 per ton of NOx from stationary sources, measured in 2001 dollars34 or a range 

of $432 per ton to $4,441 per ton in 2007 dollars. The basic science linking mercury emissions 

from power plants to impacts on humans is considered highly uncertain. However, DOE located two 

estimates of the environmental damages of mercury based on two estimates of the adverse 

impact of childhood exposure to methyl mercury on IQ for American children, and subsequent 

loss of lifetime economic productivity resulting from these IQ losses. The high end estimate is 

based on an estimate of the current aggregate cost of the loss of IQ that results from exposure of 

American children of U.S. power plant origin of $1.3 billion per year in year 2000$, which 

works out to $32.6 million per ton emitted per year (2007$).35 The low-end estimate was 

$664,000 per ton emitted in 2004$ or $729,000 per ton in 2007$), which DOE derived from a 

published evaluation of mercury control using different methods and assumptions from the first 

study, but also based on the present value of the lifetime earnings of children exposed.36 The 

resulting estimates of the potential range of the present value benefits associated with the 

 Released: October 26, 2007. Next Update: October 2008 

http://www.eia.doe.gov/cneaf/electricity/epa/emission_state.xls] 34 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, 

Local, and Tribal Entities. Office of Management and Budget Office of Information and Regulatory Affairs, 

Washington, D.C. 

35 Trasande, L., et al., “Applying Cost Analyses to Drive Policy that Protects Children” 1076 ANN. N.Y. ACAD. 

SCI. 911 (2006).

36 Ted Gayer and Robert Hahn, Designing Environmental Policy: Lessons from the Regulation of Mercury 

Emissions, Regulatory Analysis 05-01. AEI-Brookings Joint Center For Regulatory Studies, Washington, D.C., 31 pp., 2004. 

A version of this paper was published in the Journal of Regulatory Economics in 2006. The estimate was derived by 

back-calculating the annual benefits per ton from the net present value of benefits reported in the study. 

 EE-2006-STD-0126 COMMENT 22.1
reduction of NOx in the 22 non-CAIR states and national reductions in Hg emissions are 

reflected in Table V.31 and Table V.32 

Table V.31 Preliminary Estimates of Monetary Savings from Reductions of Hg (Nation) 

and NOx (Non-CAIR States) by Trial Standard Level at a 7% Discount Rate. 

Standard 

Size TSL 

Estimated 

Cumulative NOx 

(kt) Emission 

Reductions* 

Value of Estimated 

NOx Emission 

Reductions (Million 

2007$) 

Estimated 

Cumulative Hg 

(tons) Emission 

Reductions* 

Value of Estimated Hg 

Emission Reductions 

 (Million 2007$) 

1 2.74 $0.1 - $0.6 0.09 $0.0 - $0.1 

2 10.58 $0.2 - $2.3 0.36 $0.0 - $0.5 

3 13.88 $0.3 - $3.0 0.47 $0.0 - $0.6 

4 16.16 $0.3 - $3.5 0.54 $0.0 - $0.7 

5 23.47 $0.5 - $5.1 0.80 $0.0 - $1.0 

* Values in Table V.31 may not appear to sum to the cumulative values in Table V-29 due to rounding. 

Table V.32 Preliminary Estimates of Monetary Savings from Reductions of Hg (Nation) 

and NOx (Non-CAIR States) by Trial Standard Level at a 3% Discount Rate. 

Standard 

Size TSL 

Estimated 

Cumulative NOx 

(kt) Emission 

Reductions* 

Value of Estimated 

NOx Emission 

Reductions (Million 

2007$) 

Estimated 

Cumulative 

Hg (tons) 

Emission 

Reductions 

Value of Estimated 

Hg Emission 

Reductions (Million 

2007$) 

1 2.74 $0.1 - $1.5 0.09 $0.0 - $1.0 

2 10.58 $0.5 - $5.6 0.36 $0.1 - $3.9 

3 13.88 $0.7 - $7.4 0.47 $0.1 - $5.1 

4 16.16 $0.8 - $8.6 0.54 $0.1 - $5.9 

5 23.47 $1.2 - $12.5 0.80 $0.2 - $8.6 

* Values in Table V.32 may not appear to sum to the cumulative values in Table V-29 due to rounding. 

As discussed above, with the D.C. Circuit vacating the CAIR, DOE is considering how it 

should address the issue of NOX reduction and corresponding monetary valuation. DOE invites 

public comment on how the agency should address this issue, including how to value NOX

emissions for States in the absence of the CAIR. 

 EE-2006-STD-0126 COMMENT 22.1
7. Other Factors 

 EPCA allows the Secretary of Energy, in determining whether a standard is economically 

justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 

6295(o)(2)(B)(i)(VII) and 6316(e)(1)) Under this provision, DOE considered LCC impacts on 

identifiable groups of customers, such as customers of different business types, who may be 

disproportionately affected by any national energy conservation standard level. DOE also 

considered the reduction in generated capacity that could result from the imposition of any 

national energy conservation standard level. 

C. Proposed Standard 

EPCA specifies that any new or amended energy conservation standard for any type (or 

class) of covered equipment shall be designed to achieve the maximum improvement in energy 

efficiency that the Secretary determines is technologically feasible and economically justified. 

(42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) In determining whether a standard is economically 

justified, the Secretary must determine whether the benefits of the standard exceed its burdens. 

(42 U.S.C. 6295(o)(2)(B)(i) and 6316(e)(1)) The new or amended standard must “result in 

significant conservation of energy.” (42 U.S.C. 6295(o)(3)(B) and 6316(e)(1)) 

DOE considered the impacts of standards at each of five trial standard levels, beginning 

with the most efficient level (TSL 5) and worked down to a level where DOE determined the 

benefits of potential standards outweighed the burdens of potential standards. To aid the reader 

as DOE discusses the benefits and/or burdens of each TSL, Table V-33 presents a summary of 

quantitative analysis results for each TSL based on the assumptions and methodology discussed 

 EE-2006-STD-0126 COMMENT 22.1
above. This table presents the results or, in some cases, a range of results, for each TSL. The 

range of values reported in this table for industry impacts represents the results for the different 

markup scenarios that DOE used to estimate manufacturer impacts. 

Table V-33 Summary of Results Based Upon the AEO2007 Reference Case Energy Price 

Forecast* 

TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

Primary Energy Saved (quads) 0.141 0.545 0.715 0.832 1.208 

7% Discount Rate 0.034 0.132 0.173 0.201 0.292 

3% Discount Rate 0.073 0.284 0.372 0.433 0.603 

Generation Capacity Reduction 

(GW)** 

0.109 0.421 0.552 0.643 0.934 

0.33 0.98 1.20 1.10 (0.20) 

NPV (2007$billion): 

7% Discount Rate 

3% Discount Rate 0.82 2.59 3.25 3.24 1.16 

Industry Impacts 

Industry NPV (2007$ million) 

Industry NPV (% Change) 

0 – (63) 

0 – (12) 

6 – (88) 

1 – (17) 

(17) – (129) 

(3) – (25) 

(40) – (180) 

(8) – (35) 

(18) – (285) 

(3) – (56) 

Cumulative Emissions Impacts†:

 CO2 (Mt) 7.37 28.47 37.37 43.50 63.17 

 NOx (kt) 2.74 10.58 13.88 16.16 23.47 

 Hg (t) 0.09 0.36 0.47 0.54 0.80 

Life-Cycle Cost

 Net Savings (%) 17 - 48 34 - 68 61 - 89 68 – 93 24 – 93 

 Net Increase (%) 0 0 0 0 – 19 0 – 71 

 No Change (%) 52 - 83 32 - 66 11 – 39 7 – 32 2 – 19 

 Mean LCC Savings (2007$) 192 - 3132 551 - 4005 710 - 4089 693 - 3818 (673) - 3818 

 Mean PBP (yrs) 0.4 - 1.2 0.6 - 2.6 1.3 - 4.6 1.4 – 6.1 1.4 - 12.6 

* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated. 

** Change in installed generation capacity by the year 2042 based on AEO2007 Reference Case. 

†

 CO2 emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power 

plants as well as production of emissions allowance credits where NOx emissions are subject to emissions caps. 

First, DOE considered TSL 5, the most efficient level for all equipment classes. TSL 5 

would likely save an estimated 1.208 quads of energy through 2042, an amount DOE considers 

significant. Discounted at seven percent, the projected energy savings through 2042 would be 

0.292 quads. For the Nation as a whole, DOE projects that TSL 5 would result in a net decrease 

of $200 million in NPV, using a discount rate of seven percent. Five equipment classes 

(VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M, and SOC.RC.M) show negative NPV at TSL 

5. The emissions reductions at TSL 5 are 63.17 Mt of CO2 and up to 23.47 kt of NOx. DOE 

 EE-2006-STD-0126 COMMENT 22.1
also estimates that under TSL 5, total generating capacity in 2042 will decrease compared to the 

base case by 0.934 gigawatts (GW). 

At TSL 5, DOE projects that the average commercial refrigeration equipment customer 

will experience a reduction in LCC compared to the baseline for 12 of the 15 equipment classes 

analyzed, while three equipment classes (VOP.RC.M, SVO.RC.M, SOC.RC.M) experienced an 

increase in LCC. These three equipment classes are among the five identified above that DOE 

showed had negative NPV. The two additional classes, SVO.SC.M and VOP.SC.M, had positive 

LCC savings at TSL 5, but at substantially reduced values compared to those shown at TSL 4 or 

TSL 3. LCC savings for all 15 equipment classes vary from negative (-$673) to positive $3,818. 

At TSL 5, DOE estimates the fraction of customers experiencing LCC increases will vary 

between 0 and 71 percent depending on equipment class. The mean payback period for the 

average commercial refrigeration equipment customer at TSL 5 compared to the baseline level is 

projected to be between 1.4 and 12.6 years, depending on equipment class. 

At higher TSLs, manufacturers have a more difficult time fully passing on larger 

increases in MPC to customers, and therefore manufacturers expect the higher end of the range 

of impacts to be reached at TSL 5 (i.e., a drop of 55.77 percent in INPV). At TSL 5, there is the 

risk of very large negative impacts on the industry if manufacturers’ profit margins are reduced. 

Manufacturers expressed great concern at the possibility of having to manufacture an entire 

equipment line at the max-tech levels, because customers put a much higher priority on 

marketing and displaying their goods than they do on energy efficiency. For this reason, 

manufacturers fear that they will be unable to recover the additional cost incurred from 

 EE-2006-STD-0126 COMMENT 22.1
producing the most efficient equipment possible. See Section IV.I for additional manufacturer 

concerns. 

After carefully considering the analysis and weighing the benefits and burdens of TSL 5, 

DOE tentatively concludes that the estimated benefits of energy savings and related benefits 

would not outweigh the potential $200 million net economic cost to the Nation (at the seven 

percent discount rate), as well as the economic burden on consumers and the potential negative 

impact on manufacturers through reduction in INPV. 

As discussed above, DOE proposes to reject TSL 5 because DOE finds that the benefits 

to the Nation of TSL 5 (energy savings, commercial consumer average LCC savings, and 

emission reductions) do not outweigh the costs (national NPV decrease and loss of manufacturer 

INPV), and, therefore, DOE proposes that TSL 5 is not economically justified. This proposal 

reflects DOE’s tentative conclusion that there remains too much uncertainty regarding the timing 

and extent of anticipated reductions in LED costs to justify standards at the TSL 5 level. While 

considerable information is available that suggests LED costs are likely to decline more than 

assumed in DOE’s analysis (see discussion in sections IV.B.3.c, V.B.1.a, and V.B.3.b), DOE 

believes that it must have a higher degree of confidence that the timing and extent of such further 

costs reductions will warrant higher standards before it imposes such requirements. DOE is 

soliciting public comments on these and other issues, and will reconsider this tentative 

conclusion during the development of its final rule. (See Section VII.E.1) 

As mentioned above, if LED system costs achieve the 50 percent reduction projection by 

2012, the estimated NPV at TSL 5 would be a positive $1.62 billion at a seven percent discount 

 EE-2006-STD-0126 COMMENT 22.1
rate and $4.76 billion at the three percent discount rate, and is likely to result in a net benefit. 

DOE requests comment on whether the benefits of TSL 5 would outweigh the burdens of TSL 5, 

considering the potential impacts of future LED cost projections. This is identified as Issue 7

under “Issues on Which DOE Seeks Comment” in Section VII.E of this NOPR. DOE also seeks 

comment on the extent to which stakeholders expect projected LED cost reductions would occur, 

the timing of the projected LED cost reductions, and the certainty of the projected LED cost 

reductions. Also, considering the rapid development of LED technology and the steady 

reductions in cost, DOE seeks comment on the extent to which manufacturers would adopt LED 

technology into the design of commercial refrigeration equipment in the absence of standards. 

DOE then considered TSL 4, which provides for all equipment classes the maximum 

efficiency levels that the analysis showed to have positive NPV to the Nation. TSL 4 would 

likely save an estimated 0.832 quads of energy through 2042, an amount DOE considers 

significant. Discounted at seven percent, the projected energy savings through 2042 would be 

0.201 quads. For the Nation as a whole, DOE projects that TSL 4 would result in a net increase 

of $1.10 billion in NPV, using a discount rate of seven percent. The estimated emissions 

reductions at TSL 4 are 43.50 Mt of CO2 and up to 16.16 kt of NOx. Total generating capacity 

in 2042 is estimated to decrease compared to the base case by 0.643 GW under TSL 4. 

At TSL 4, DOE projects that the average commercial refrigeration equipment customer 

will experience a reduction in LCC compared to the baseline for all 15 equipment classes 

analyzed, ranging from $693 to $3,818 depending on equipment class. The mean payback 

 EE-2006-STD-0126 COMMENT 22.1
period for the average commercial refrigeration equipment customer at TSL 4 is projected to be 

between 1.4 and 6.1 years compared to the purchase of baseline equipment. 

As is the case with TSL 5, DOE believes the majority of manufacturers would need to 

completely redesign most equipment offered for sale, and therefore DOE expects that 

commercial refrigeration manufacturers will have some difficulty fully passing on larger MPC 

increases to customers. Similar to TSL 5, manufacturers expect the higher end of the range of 

impacts to be reached at TSL 4 (i.e., a drop of 35.3 percent in INPV). However, compared to the 

baseline, all 15 equipment classes showed significant positive life-cycle cost savings on a 

national average basis and few customers experienced an increase in LCC with a standard at TSL 

4 compared with purchasing baseline equipment. The payback periods calculated for all 

equipment classes were lower than the life of the equipment. 

After carefully considering the analysis and weighing the benefits and burdens of TSL 4, 

DOE proposes that TSL 4 represents the maximum improvement in energy efficiency that is 

technologically feasible and economically justified and that the estimated benefits to the Nation 

outweigh the costs. DOE proposes that TSL 4 is technologically feasible because the 

technologies required to achieve these levels are already in existence. Therefore, DOE is 

proposing TSL 4 as the energy conservation standards for commercial refrigeration equipment in 

this NOPR. 

However, for the reasons discussed above, DOE also requests comments on whether it 

should adopt TSL 5 for all or some of the equipment classes. 

 EE-2006-STD-0126 COMMENT 22.1
VI. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

DOE has determined that today’s regulatory action is an “economically significant” 

action under Section 3(f)(1) of Executive Order 12866, “Regulatory Planning and Review.” 58 

FR 51735 (October 4, 1993). The Executive Order requires that each agency identify in writing 

the specific market failure or other specific problem that it intends to address that warrants new 

agency action, as well as assess the significance of that problem to determine whether any new 

regulation is warranted. Executive Order 12866, §1(b)(1). 

In the ANOPR for this rulemaking, DOE requested feedback and data on a number of 

issues related to Executive Order 12866 and the existence of a market failure in the commercial 

refrigeration equipment industry. This request included 1) data on, and suggestions for testing 

the existence and extent of, potential market failures to complete an assessment in the proposed 

rule of the significance of any failures; 2) data on the efficiency levels of existing commercial 

refrigeration equipment in use by store type; 3) comment on the Federal ENERGYSTAR

program and its penetration into the commercial refrigeration equipment market as a resource on 

the availability and benefits of energy efficient refrigeration units; 4) data on owner-occupied 

buildings versus leased/non-owner occupied buildings for given store types and their associated 

use of high-efficiency equipment; and 5) comment on the weight that should be given to these 

factors in DOE’s determination of the maximum efficiency level at which the total benefits are 

likely to exceed the total burdens resulting from a DOE standard. Following publication of the 

 EE-2006-STD-0126 COMMENT 22.1
ANOPR and subsequent public comment period, DOE did not receive any feedback related to 

these requests. 

Much of the industry segment that uses commercial refrigeration equipment tends to be 

large grocery stores, multi-line retailers, small grocery stores, or convenience stores. DOE 

believes that these owners may lack corporate direction on energy policy. The transaction costs 

for these owners to research, purchase, and install optimum efficiency equipment options are too 

high to make such action commonplace. DOE believes that there is a lack of information about 

energy efficiency opportunities in the commercial refrigeration equipment market available to 

these owners. Unlike residential heating and air conditioning equipment, commercial 

refrigeration equipment is not included in energy labeling programs such as the Federal Trade 

Commission’s energy labeling program. Furthermore, the energy use of this equipment depends 

on usage. Information is not readily available for the owners to make a decision on whether 

improving the energy efficiency of commercial refrigeration equipment is cost-effective. DOE 

seeks data on the efficiency levels of existing commercial refrigeration equipment in use by 

owners, electricity price, and equipment class. Being part of the food merchandising industry, 

energy efficiency and energy cost savings are not the primary drivers of the business, as is 

selling food products to shoppers. This may incur transaction costs, thus preventing access to 

capital to finance energy efficiency investment. 

Today’s action also required a regulatory impact analysis (RIA) and, under the Executive 

Order, was subject to review by the Office of Information and Regulatory Affairs (OIRA) in the 

OMB. DOE presented to OIRA for review the draft proposed rule and other documents prepared 

for this rulemaking, including the RIA, and has included these documents in the rulemaking 

 EE-2006-STD-0126 COMMENT 22.1
record. They are available for public review in the Resource Room of the Building Technologies 

Program, 950 L’Enfant Plaza, SW, 6th Floor, Washington, DC 20024, (202) 586-9127, between 

9:00 a.m. and 4:00 p.m., Monday through Friday, except Federal holidays. 

The RIA is contained in the TSD prepared for the rulemaking. The RIA consists of (1) a 

statement of the problem addressed by this regulation and the mandate for Government action; 

(2) a description and analysis of the feasible policy alternatives to this regulation; (3) a 

quantitative comparison of the impacts of the alternatives; and (4) the national economic impacts 

of the proposed standard. 

The RIA calculates the effects of feasible policy alternatives to commercial refrigeration 

equipment standards and provides a quantitative comparison of the impacts of the alternatives. 

DOE evaluated the alternatives in terms of their ability to achieve significant energy savings at 

reasonable cost, and compared it to the effectiveness of the proposed rule. DOE analyzed these 

alternatives using a series of regulatory scenarios as input to the NES/shipments model for 

commercial refrigeration equipment, which DOE modified to provide inputs for these voluntary 

measures. 

DOE identified the following major policy alternatives for achieving increased 

commercial refrigeration equipment energy efficiency: 

• No new regulatory action 

• Commercial customer rebates 

 EE-2006-STD-0126 COMMENT 22.1
• Commercial customer tax credits 

DOE evaluated each alternative’s ability to achieve significant energy savings at 

reasonable cost (Table VI-1), and compared it to the effectiveness of the proposed rule. 

Table VI-1 Non-Regulatory Alternatives to Standards 

Net Present Value** 

(billion 2007$) Policy Alternatives 

Energy 

Savings*

(quads) 7% 

Discount Rate 

3% 

Discount Rate 

No New Regulatory Action 0 0 0 

Commercial Customer Rebates 0.099 0.139 0.315 

Commercial Customer Tax Credits† 0.084 0.178 0.381 

Today's Standards at TSL 4 0.832 1.10 3.24 *

 Energy savings are in source quads. 

** Net present value is the value in the present of a time series of costs and savings. DOE determined the net present 

value from 2012 to 2062 in billions of 2007$. 

†

 These are example values for TSL 3. 

The net present value amounts shown in Table VI-1 refer to the NPV for commercial 

customers. The following paragraphs discuss each policy alternative listed in Table VI-1. (See 

Chapter 17 of the TSD, Regulatory Impact Analysis, for further details.) 

No new regulatory action. The case in which no regulatory action is taken for 

commercial refrigeration equipment constitutes the base case (or No Action) scenario. By 

definition, no new regulatory action yields zero energy savings and a net present value of zero 

dollars. 

Commercial Customer Rebates. DOE modeled the impact of the customer rebate policy 

by determining the increased customer participation rate due to the rebates (i.e., the percent 

increase in customers purchasing high-efficiency equipment). DOE modeled a national rebate 

program after existing utility rebate programs that provide incentives for incorporating high-

 EE-2006-STD-0126 COMMENT 22.1
efficiency technologies into commercial refrigeration equipment. The reduction in retail cost of 

the higher efficiency cases was calculated and the methodology developed for the NIA used to 

assess relative shipments by efficiency level was used to assess relative shipments by efficiency 

level under the rebate scenario. DOE applied the resulting increase in market share of efficient 

units to the NES spreadsheet model to estimate the resulting NES and NPV for the rebate 

scenario with respect to the base case. 

Commercial Customer Tax Credits. DOE assumed a commercial or industrial customer 

Federal tax credit patterned after the tax credits created in EPACT 2005. EPACT 2005 provided 

tax credits to customers who purchase and install specific products such as energy efficient 

windows, insulation, doors, roofs, and heating and cooling equipment. DOE presumed the 

presence of a certification or other program that could be used to identify high-efficiency 

commercial refrigeration equipment by energy consumption, and assumed TSL 3 as a likely 

candidate level for a tax credit incentive, given that it was the minimum LCC level. DOE then 

reviewed the incremental customer price increase to reach TSL 3 from the baseline for all 15 

equipment classes. For 12 of the equipment classes, the incremental cost was between 6.1 and 

21.3 percent. For three equipment classes (SOC.RC.M, HZO.RC.M, HZO.RC.L), the 

incremental cost was less than five percent. In its tax credit analysis, DOE assumed a flat tax 

credit equal to five percent of the customer price for equipment sold at TSL 3 or higher for each 

primary equipment class, with the exception of SOC.RC.M, HZO.RC.M, and HZO.RC.L. DOE 

assumed a 100 percent application rate for the tax credit from commercial refrigeration 

equipment customers and reduced the retail equipment price by five percent for TSL 3, TSL 4, 

and TSL 5 for the 12 equipment classes. The reductions in retail cost of commercial 

 EE-2006-STD-0126 COMMENT 22.1
refrigeration equipment at these levels was calculated and the methodology developed for the 

NIA used to assess relative shipments by efficiency level under the tax credit scenario. DOE 

applied the resulting increase in market share of efficient units to the NES spreadsheet model to 

estimate the resulting NES and NPV for the tax credit scenario with respect to the base case. To 

see results for tax credits for equipment meeting or exceeding TSL 5, see the Regulatory Impact 

Analysis of the TSD. 

Performance Standards. Each of the non-regulatory alternatives must be gauged against 

the performance standards DOE is proposing in this proposed rule. DOE also considered, but 

did not analyze, the potential of bulk Government purchases and early replacement incentive 

programs as alternatives to the proposed standards. In the case of bulk Government purchases, 

commercial refrigeration equipment is a very small part of the total market and the volume of 

high-efficiency equipment purchases that the Federal Government might make would have very 

limited impact on improving the overall market efficiency of commercial refrigeration 

equipment. In the case of replacement incentives, several policy options exist to promote early 

replacement, including a direct national program of customer incentives, incentives paid to 

utilities to promote an early replacement program, market promotions through equipment 

manufacturers, and replacement of Federally owned equipment. Previous analysis by DOE of 

methods to promote early replacement for other covered equipment have suggested that the 

energy savings realized through a one-time early replacement of existing stock equipment has 

not resulted in energy savings commensurate to the cost to run and administer the program. As a 

consequence, DOE did not analyze this option in detail. 

 EE-2006-STD-0126 COMMENT 22.1
As Table VI-1 indicates, none of the alternatives DOE examined would save as much 

energy as today’s proposed rule. Also, several of the alternatives would require new enabling 

legislation, since authority to carry out those alternatives does not exist. The tax credit scenario 

would also require the development of a database of commercial refrigeration equipment that 

would meet or exceed the TSL 3 efficiency level in order to determine compliance with the tax 

credit. 

B. Review Under the Regulatory Flexibility Act/Initial Regulatory Flexibility Analysis 

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 Executive Order 

13272, “Proper Consideration of Small Entities in Agency Rulemaking” 67 FR 53461 (August 

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 

General Counsel’s website, http://www.gc.doe.gov. 

Small businesses, as defined by the Small Business Administration (SBA) for the 

commercial refrigeration equipment manufacturing industry, are manufacturing enterprises with 

750 employees or fewer. DOE used the small business size standards published on January 31, 

1996, as amended, by the SBA to determine whether any small entities would be required to 

comply with the rule. 61 FR 3286 and codified at 13 CFR Part 121. The size standards are listed 

 EE-2006-STD-0126 COMMENT 22.1
by North American Industry Classification System (NAICS) code and industry description. 

Commercial refrigeration equipment manufacturing is classified under NAICS 333415. 

Prior to issuing this notice of proposed rulemaking, DOE interviewed two small 

businesses affected by the rulemaking. DOE also obtained information about small business 

impacts while interviewing manufacturers that exceed the small business size threshold of 750 

employees. 

DOE reviewed ARI’s listing of its commercial refrigeration equipment manufacturer 

members and surveyed the industry to develop a list of all domestic manufacturers. DOE also 

asked stakeholders and ARI representatives within the industry if they were aware of any other 

small business manufacturers. DOE then examined publicly available data and contacted 

manufacturers, when needed, to determine if they meet the SBA’s definition of a small 

manufacturing facility and if their manufacturing facilities are located within the United States. 

Based on this analysis, DOE identified nine small manufacturers of commercial refrigeration 

equipment. DOE conducted on-site interviews with two small manufacturers who agreed to be 

interviewed to determine if there are differential impacts on these companies that may result 

from new energy conservation standards. 

DOE found that, in general, small manufacturers have the same concerns as large 

manufacturers regarding new energy conservation standards. DOE summarized the key issues 

for commercial refrigeration equipment manufacturers in Section IV.I.3.a of today’s notice. 

Both manufacturers echoed the same concerns regarding new energy conservation standards as 

 EE-2006-STD-0126 COMMENT 22.1
the larger manufacturers, including investments needed to meet standards, meeting customer 

needs, equipment sales, and coverage of niche equipment. Specifically, DOE found no 

significant differences in the R&D emphasis or marketing strategies between small business 

manufacturers and large manufacturers. Therefore, for the equipment classes manufactured 

primarily by the small businesses, DOE believes the GRIM analysis, which models each 

equipment class separately, is representative of the small businesses affected by standards. The 

qualitative and quantitative GRIM results are summarized in Section V.B.2 of today’s notice. 

DOE reviewed the standard levels considered in today’s notice of proposed rulemaking 

under the provisions of the Regulatory Flexibility Act and the procedures and policies published 

on February 19, 2003. Based on this review, DOE has prepared an IRFA for this rulemaking. 

The IRFA describes potential impacts on small businesses associated with commercial 

refrigeration equipment design and manufacturing. 

The potential impacts on commercial refrigeration equipment manufacturers are 

discussed in the following sections. DOE has transmitted a copy of this IRFA to the Chief 

Counsel for Advocacy of the Small Business Administration for review. 

1. Reasons for the proposed rule 

Part A-1 of Title III of EPCA addresses the energy efficiency of certain types of 

commercial and industrial equipment. (42 U.S.C. 6311-6317) EPACT 2005, Pub. L. 109–58, 

included an amendment to Part A-1 requiring that DOE prescribe energy conservation standards 

for the commercial refrigeration equipment that is the subject of this rulemaking. (EPACT 2005, 

 EE-2006-STD-0126 COMMENT 22.1
Section 136(c); 42 U.S.C. 6313(c)(4)(A)) Hence, DOE is proposing in today’s notice, energy 

conservation standards for commercial ice-cream freezers; self-contained commercial 

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

remote condensing commercial refrigerators, commercial freezers, and commercial refrigeratorfreezers. 

2. Objectives of, and legal basis for, the proposed rule 

EPCA provides that any new or amended standard for commercial refrigeration 

equipment must be designed to achieve the maximum improvement in energy efficiency that is 

technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 6316(e)(1)) 

But EPCA precludes DOE from adopting any standard that would not result in significant 

conservation of energy. (42 U.S.C. 6295(o)(3) and 6316(e)(1)) Moreover, DOE may not 

prescribe a standard for certain equipment if no test procedure has been established for that 

equipment, or if DOE determines by rule that the standard is not technologically feasible or 

economically justified, and that such standard will not result in significant conservation of 

energy. (42 U.S.C. 6295(o)(3) and 6316(e)(1)) EPCA also provides that, in deciding whether a 

standard is economically justified, DOE must determine whether the benefits of the standard 

exceed its burdens after receiving comments on the proposed standard. (42 U.S.C. 

6295(o)(2)(B)(i) and 6316(e)(1)) To determine whether economic justification exists, DOE 

reviews comments received and conducts analysis to determine whether the economic benefits of 

the proposed standard exceed the burdens to the greatest extent practicable, taking into 

consideration seven factors set forth in 42 U.S.C. 6295(o)(2)(B) and 6316(e)(1) (see Section II.B

of this preamble). 

 EE-2006-STD-0126 COMMENT 22.1
EPCA also states that the Secretary may not prescribe an amended or new standard if 

interested persons have established by a preponderance of the evidence that the standard is likely 

to result in the unavailability in the United States of any equipment type (or class) with 

performance characteristics (including reliability), features, sizes, capacities, and volumes that 

are substantially the same as those generally available in the United States. (42 U.S.C. 6295 

(o)(4) and 6316(e)(1)) Further information concerning the background of this rulemaking is 

provided in Chapter 1 of the TSD. 

3. Description and estimated number of small entities regulated 

DOE reviewed ARI’s listing of commercial refrigeration equipment manufacturer 

members and surveyed the industry to develop a list of every manufacturer. DOE also asked 

stakeholders and ARI representatives within the industry if they were aware of any other small 

business manufacturers. DOE then looked at publicly available data and contacted 

manufacturers, where needed, to determine if they meet the SBA’s definition of a small business 

manufacturing facility and have their manufacturing facilities located within the U.S. Based on 

this analysis, DOE estimates that there are nine small commercial refrigeration equipment 

manufacturers. See Chapter 13 of the TSD for further discussion about the methodology used in 

DOE’s manufacturer impact analysis and its analysis of small-business impacts. 

4. Description and estimate of compliance requirements 

Potential impacts on manufacturers, including small businesses, come from impacts 

associated with commercial refrigeration equipment design and manufacturing. The margins 

 EE-2006-STD-0126 COMMENT 22.1
and/or market share of manufacturers, including small businesses, in the commercial 

refrigeration equipment industry could be negatively impacted in the long term by the standard 

levels under consideration in this notice of proposed rulemaking, specifically TSL 4. The level 

of research and development needed to meet energy conservation standards increases with more 

stringent energy conservation standards. DOE expects that small manufacturers will have more 

difficulty funding the required research and development necessary to meet energy conservation 

standards than larger manufacturers. Therefore, at proposed TSL 4, as opposed to lower TSLs, 

small manufacturers would have less flexibility in choosing a design path. However, as 

discussed under subsection 6 (Significant alternatives to the rule) below, DOE expects that the 

differential impact on small commercial refrigeration equipment manufacturers (versus large 

businesses) would be smaller in moving from proposed TSL 1 to proposed TSL 2 than it would 

be in moving from proposed TSL 4 to proposed TSL 5. The rationale for DOE’s expectation is 

best discussed in a comparative context and is therefore elaborated upon in subsection 6 

(Significant alternatives to the rule). As discussed in the introduction to this IRFA, DOE expects 

that the differential impact associated with commercial refrigeration equipment design and 

manufacturing on small businesses would be negligible. 

5. Duplication, overlap, and conflict with other rules and regulations 

DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the 

rule being considered today. 

6. Significant alternatives to the rule 

The primary alternatives to the proposed rule considered by DOE are the other TSLs 

 EE-2006-STD-0126 COMMENT 22.1
besides the one being considered today, proposed TSL 4. In addition to the other TSLs 

considered, the TSD associated with this proposed rule includes a report referred to in Section 

VI.A in the preamble as the regulatory impact analysis (RIA- discussed earlier in this report and 

in detail in the TSD). This report discusses the following policy alternatives: 1) no new 

regulatory action, 2) commercial customer rebates, and 3) commercial customer tax credits. The 

energy savings of these regulatory alternatives are one to two orders of magnitude smaller than 

those expected from the standard levels under consideration. The range of economic impacts of 

these regulatory alternatives is an order of magnitude smaller than the range of impacts expected 

from the standard levels under consideration. 

The commercial refrigeration equipment industry is highly customized. Customers 

demand high levels of customization from commercial refrigeration equipment manufacturers to 

differentiate themselves from other retail stores. They do not want to lose any functionality or 

utility in their equipment, such as display area, because this affects their ability to merchandise 

products. Often, the customer’s desire for easy consumer access requires equipment that is less 

energy efficient. They also do not want to lose any flexibility in design choices, such as lighting 

options. All manufacturers, including small businesses, would have to develop designs to enable 

compliance to higher TSLs. Product redesign costs tend to be fixed and do not scale with sales 

volume. Thus, small manufacturers would be at a relative disadvantage at higher TSLs because 

research and development efforts would be on the same scale as those for larger companies, but 

these expenses would be recouped over smaller sales volumes. 

At proposed TSL 5, the max-tech level, manufacturers stated their concerns over the 

 EE-2006-STD-0126 COMMENT 22.1
ability to be able to produce equipment by the future effective date of the standard. At proposed 

TSL 5, DOE estimates that the majority of manufacturers would be negatively impacted. Based 

on manufacturer interviews, some manufacturers stated that they could not meet proposed TSL 5 

for medium-temperature equipment, and that they would need technological innovation to 

achieve these levels by 2012. Manufacturers believe that setting standards at the maximum level 

will affect their customers’ ability to merchandise products by limiting the flexibility in choosing 

design options. For example, at TSL 5 specifically, the use of LED lighting technology may be 

necessary to meet the proposed levels for many equipment classes. Manufacturers expect that 

having limited choices in design options would commoditize the industry and reduce profit 

margins. This concern was echoed by all manufacturers, not just small business manufacturers. 

For the proposed standard, TSL 4, and for alternative TSLs, TSL 1 through 3, DOE 

expects that impacts to small manufacturers would be less than the impacts described above for 

TSL 5. At lower TSLs, the differential impacts to small manufacturers are diminished because 

research and development efforts are less at lower TSLs. Chapter 12 of the TSD contains 

additional information about the impact of this rulemaking on manufacturers. As mentioned 

above, the other policy alternatives (no new regulatory action, commercial customer rebates, and 

commercial customer tax credits) are described in Section VI.A of the preamble and in the 

Regulatory Impact Analysis, Chapter 17 of the TSD. Since the impacts of these policy 

alternatives are lower than the impacts described above for TSL 5, DOE expects that the impacts 

to small manufacturers would also be less than the impacts described above for the proposed 

standard levels. DOE requests comment on the impacts to small business manufacturers for 

these and any other possible alternatives to the proposed rule. DOE will consider any comments 

 EE-2006-STD-0126 COMMENT 22.1
received regarding impacts to small business manufacturers for all the alternatives identified, 

including those in the RIA, for the Final Rule. 

C. Review Under the Paperwork Reduction Act 

This rulemaking will impose no new information or record keeping requirements. 

Accordingly, OMB clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 

3501 et seq.) 

D. Review Under the National Environmental Policy Act 

DOE is preparing an environmental assessment of the impacts of the proposed rule. DOE 

is preparing an environmental assessment of the impacts of the proposed rule. The assessment 

will include an examination of the potential effects of emission reductions likely to result from 

the rule in the context of global climate change as well as other types of environmental impacts. 

DOE anticipates completing a Finding of No Significant Impact (FONSI) before publishing the 

final rule on commercial refrigeration equipment, pursuant to the National Environmental Policy 

Act of 1969 (42 U.S.C. 4321 et seq.), the regulations of the Council on Environmental Quality 

(40 CFR Parts 1500–1508), and DOE’s regulations for compliance with the National 

Environmental Policy Act (10 CFR Part 1021). 

E. Review Under Executive Order 13132 

Executive Order 13132, Federalism, 64 FR 43255 (August 4, 1999) imposes certain 

requirements on agencies formulating and implementing policies or regulations that preempt 

State law or that have federalism implications. The Executive Order requires agencies to 

 EE-2006-STD-0126 COMMENT 22.1
examine the constitutional and statutory authority supporting any action that would limit the 

policymaking discretion of the States and 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 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 today’s proposed rule and has 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 equipment that is the subject of today’s proposed 

rule. States can petition DOE for exemption from such preemption to the extent, and based on 

criteria, set forth in EPCA. (42 U.S.C. 6297(d) and 6316(b)(2(D)) 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 Executive Order 12988, Civil Justice Reform (61 FR 4729, February 

7, 1996) imposes on Federal agencies the general duty to adhere to the following requirements: 

(1) eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) 

provide a clear legal standard for affected conduct rather than a general standard and promote 

simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires 

that Executive agencies make every reasonable effort to ensure that the regulation (1) clearly 

 EE-2006-STD-0126 COMMENT 22.1
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 Executive Order 12988. 

G. Review Under the Unfunded Mandates Reform Act of 1995 

DOE reviewed this regulatory action under Title II of the Unfunded Mandates Reform 

Act of 1995 (Pub. L. 104-4) (UMRA), which requires each Federal agency to assess the effects 

of Federal regulatory actions on State, local and Tribal governments and the private sector. 

Today’s final rule may impose expenditures of $100 million or more on the private sector. It 

does not contain a Federal intergovernmental mandate. 

Section 202 of UMRA authorizes an 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 the notice of final 

 EE-2006-STD-0126 COMMENT 22.1
rulemaking and the "Regulatory Impact Analysis" section of the TSD for this final 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. DOE is required to select from those alternatives the 

most cost-effective and least burdensome alternative that achieves the objectives of the rule 

unless DOE publishes an explanation for doing otherwise or the selection of such an alternative 

is inconsistent with law. As required by sections 325(o), 345(a) and 342(c)(4)(A) of EPCA (42 

U.S.C. 6295(o), 6316(a) and 6313(c)(4)(A)), today’s proposed rule would establish energy 

conservation standards for commercial refrigeration equipment that are designed to achieve the 

maximum improvement in energy efficiency that DOE has determined to be both technologically 

feasible and economically justified. A full discussion of the alternatives considered by DOE is 

presented in the "Regulatory Impact Analysis" section of the TSD for today’s final 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 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. 

 EE-2006-STD-0126 COMMENT 22.1
I. Review Under Executive Order 12630 

DOE has determined, under Executive Order 12630, Governmental Actions and 

Interference with Constitutionally Protected Property Rights, 53 FR 8859 (March 18, 1988), that 

this regulation 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 

The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) 

provides for agencies to review most disseminations of information to the public under 

guidelines established by each agency pursuant to general guidelines issued by OMB. The 

OMB’s guidelines were published at 67 FR 8452 (February 22, 2002), and DOE’s guidelines 

were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today’s Notice 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 

Executive Order 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 the OIRA, 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 

promulgated 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 

 EE-2006-STD-0126 COMMENT 22.1
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. 

Today’s regulatory action would not have a significant adverse effect on the supply, 

distribution, or use of energy and, therefore, is not a significant energy action. Accordingly, 

DOE has not prepared a Statement of Energy Effects. 

L. Review Under the Information Quality Bulletin for Peer Review 

On December 16, 2004, the OMB, in consultation with the Office of Science and 

Technology (OSTP), issued its Final Information Quality Bulletin for Peer Review (Bulletin). 

70 FR 2664 (January 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 rulemakings analyses are “influential 

scientific information.” The Bulletin defines “influential scientific information” 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 2667 (January 14, 2005). 

In response to OMB’s Bulletin, DOE conducted formal, in-progress peer reviews of the 

energy conservation standards development process and analyses and has prepared a Peer 

 EE-2006-STD-0126 COMMENT 22.1
Review Report pertaining to the energy conservation standards rulemaking analyses. The 

Energy Conservation Standards Rulemaking Peer Review Report dated February 2007 has been 

disseminated and is available at http://www.eere.energy.gov/buildings/appliance_standards/

peer_review.html. 

VII. Public Participation 

A. Attendance at Public Meeting 

The time, date and location of the public meeting are provided in the DATES and 

ADDRESSES sections at the beginning of this document. Anyone who wants to attend the 

public meeting must notify Ms. Brenda Edwards at (202) 586-2945. As explained in the 

ADDRESSES section, foreign nationals visiting DOE headquarters are subject to advance 

security screening procedures. 

B. Procedure for Submitting Requests to Speak 

 Any person who has an interest in today's Notice, or who is a representative of a group or 

class of persons that has an interest in these issues, may request an opportunity to make an oral 

presentation. Please hand-deliver requests to speak to the address shown under the heading 

“Hand Delivery/Courier” in the ADDRESSES section of this NOPR, between 9:00 a.m. and 

4:00 p.m., Monday through Friday, except Federal holidays. Also, requests may be sent by mail 

to the address shown under the heading “Postal Mail” in the ADDRESSES section of this 

NOPR, or by e-mail to Brenda.Edwards@ee.doe.gov. 

 EE-2006-STD-0126 COMMENT 22.1
 Persons requesting to speak should briefly describe the nature of their interest in this 

rulemaking and provide a telephone number for contact. DOE asks persons selected to be heard 

to submit a copy of their statements at least two weeks before the public meeting, either in 

person, by postal mail, or by e-mail as described in the preceding paragraph. Please include an 

electronic copy of your statement on a computer diskette or compact disk when delivery is by 

postal mail or in person. Electronic copies must be in WordPerfect, Microsoft Word, Portable 

Document Format (PDF), or text (American Standard Code for Information Interchange 

(ASCII)) file format. At its discretion, DOE may permit any person who cannot supply an 

advance copy of his or her statement to participate, if that person has made alternative 

arrangements with the Building Technologies Program. In such situations, the request to give an 

oral presentation should ask for alternative arrangements. 

C. Conduct of Public Meeting 

DOE will designate a DOE official to preside at the public meeting and may also use a 

professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type 

public hearing, but DOE will conduct it in accordance with 5 U.S.C. 553 and Section 336 of 

EPCA. (42 U.S.C. 6306) A court reporter will be present to record and transcribe the 

proceedings. DOE reserves the right to schedule the order of presentations and to establish the 

procedures governing the conduct of the public meeting. After the public meeting, interested 

parties may submit further comments about the proceedings, and any other aspect of the 

rulemaking, until the end of the comment period. 

 EE-2006-STD-0126 COMMENT 22.1
 The public meeting will be conducted in an informal, conference style. DOE will present 

summaries of comments received before the public meeting, allow time for presentations by 

participants, and encourage all interested parties to share their views on issues affecting this 

rulemaking. Each participant will be allowed to make a prepared general statement (within time 

limits determined by DOE) before discussion of a particular topic. DOE will permit other 

participants to comment briefly on any general statements. 

 At the end of all prepared statements on a topic, DOE will permit participants to clarify 

their statements briefly and comment on statements made by others. Participants should be 

prepared to answer questions by DOE and by other participants concerning these issues. DOE 

representatives may also ask questions of participants concerning other matters relevant to the 

public meeting. The official conducting the public meeting will accept additional comments or 

questions from those attending, as time permits. The presiding official will announce any further 

procedural rules or modification of the above procedures that may be needed for proper conduct 

of the public meeting. 

 DOE will make the entire record of this proposed rulemaking, including the transcript 

from the public meeting, available for inspection at the U.S. Department of Energy, Resource 

Room of the Building Technologies Program, 950 L’Enfant Plaza, SW, 6th Floor, Washington, 

DC, 20024, (202) 586-2945, between 9:00 a.m. and 4:00 p.m., Monday through Friday, except 

Federal holidays. Any person may purchase a copy of the transcript from the transcribing 

reporter. 

 EE-2006-STD-0126 COMMENT 22.1
D. Submission of Comments 

DOE will accept comments, data, and information regarding all aspects of this NOPR 

before or after the public meeting, but no later than the date provided at the beginning of this 

notice of proposed rulemaking. Please submit comments, data, and information electronically to 

the following e-mail address: commercialrefrigeration.rulemaking@ee.doe.gov. Submit 

electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format and avoid the 

use of special characters or any form of encryption. Comments in electronic format should be 

identified by the docket number EE-2006-STD-0126 and/or RIN 1904-AB59, and whenever 

possible carry the electronic signature of the author. Absent an electronic signature, comments 

submitted electronically must be followed and authenticated by submitting a signed original 

paper document. No telefacsimiles (faxes) will be accepted.

 Under 10 CFR Part 1004.11, any person submitting information that he or she believes to 

be confidential and exempt by law from public disclosure should submit two copies: one copy of 

the document including all the information believed to be confidential, and one copy of the 

document 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. 

 Factors of interest to DOE when evaluating requests to treat submitted information as 

confidential include (1) a description of the items; (2) whether and why such items are 

customarily treated as confidential within the industry; (3) whether the information is generally 

known by, or available from, other sources; (4) whether the information has previously been 

 EE-2006-STD-0126 COMMENT 22.1
made available to others without obligation concerning its confidentiality; (5) an explanation of 

the competitive injury to the submitting person which would result from public disclosure; (6) 

when such information might lose its confidential character due to the passage of time; and (7) 

why disclosure of the information would be contrary to the public interest. 

E. Issues on Which DOE Seeks Comment 

DOE is particularly interested in receiving comments and views of interested parties 

concerning: 

1. LED Price Projections 

TSL 5 has an estimated -$200 million burden on the Nation. DOE recognizes that 

anticipated reductions in LED lighting costs by the effective date of the rule could shift the NPV, 

at the seven percent discount rate, for TSL 5 from a negative NPV (-$200 million) to a positive 

NPV. DOE calculated that a reduction in LED system cost of six percent would be sufficient to 

ensure a slightly positive aggregate NPV at TSL 5, at the seven percent discount rate, when 

compared with the base case. DOE fully expects that the aggregate six percent reduction in LED 

system costs could be attained and even exceeded by 2012 because of the rapid development of 

LED technology. Furthermore, if LED system costs achieve the 50 percent reduction projection, 

the NPV at a seven percent discount rate for TSL 5 would be substantially positive. DOE 

requests data or information on projected LED cost reductions and basis for such projections. 

DOE also seeks comment on its consideration of projected LED prices. DOE also seeks 

comment on the extent to which stakeholders expect projected LED cost reductions would occur, 

the timing of the projected LED cost reductions, and the certainty of the projected LED cost 

 EE-2006-STD-0126 COMMENT 22.1
reductions. Also, considering the rapid development of LED technology and the steady 

reductions in cost, DOE seeks comment on the extent to which manufacturers would adopt LED 

technology into the design of commercial refrigeration equipment in the absence of standards. 

DOE recognizes that LED system replacement costs assumed in its LCC analysis would also be 

affected by projected LED cost reductions and seeks comment on how it can best predict the cost 

for LED fixture replacements in the LCC analysis. (See Section V.C of this NOPR for further 

details.) 

2. Base Case Efficiency 

DOE recognizes that baseline efficiency trends can change if equipment costs are 

different than those projected. For example, if LED prices drop more than assumed in the 

engineering analysis, consumer demand for LED-equipped equipment could change. DOE seeks 

comment on whether shipments of LED-equipped equipment would change if LED costs drop 

and if so, the extent and timing of such shipment changes. See Section IV.G.1. 

3. Operating Temperature Ranges 

One factor in determining which equipment class a commercial refrigeration equipment 

unit belongs to is its designed operating temperature. DOE is organizing equipment classes 

based on three operating temperature ranges. Medium temperature equipment operates at or 

above 32° F, low temperature equipment operates at temperatures below 32° F and greater than 

5 ° F, and ice-cream temperature equipment operates at or below -15° F. DOE seeks comment 

on the temperatures selected to categorize equipment classes. (See Section IV.A.2 of this NOPR 

for further details.) 

 EE-2006-STD-0126 COMMENT 22.1
4. Offset Factors 

 For the NOPR, DOE developed offset factors as a way to adjust the energy efficiency 

requirements for smaller-sized equipment in each equipment class analyzed. These offset factors 

account for certain components of the refrigeration load (such as the conduction end effects) that 

remain constant even when equipment sizes vary. These constant loads affect smaller cases 

disproportionately. The offset factors are intended to approximate these constant loads and 

provide a fixed end point, corresponding to a zero TDA or zero volume case, in an equation that 

describes the relationship between energy consumption and the corresponding TDA or volume 

metric. DOE seeks comment on the use of offset factors and the methodology used to calculate 

them. (See Section V.A of this NOPR and Chapter 5 of the TSD for further details.) 

5. Extension of Standards 

 DOE developed an extension approach to applying the standards developed for these 15 

primary equipment classes to the remaining 23 secondary classes. This approach involves 

extension multipliers developed using both the 15 primary equipment classes analyzed and a set 

of focused matched-pair analyses. DOE believes that standards for certain primary equipment 

classes can be directly applied to other similar secondary equipment classes. DOE seeks 

comment on its approach to extending the results of the engineering analysis to the 23 secondary 

equipment classes. (See Section V.A of this NOPR and Chapter 5 of the TSD for further 

details.) 

 EE-2006-STD-0126 COMMENT 22.1
6. Standards for Hybrid Cases and Wedges 

 There are certain types of equipment that meet the definition of commercial refrigeration 

equipment (Section 136(a)(3) of EPACT 2005), but do not fall easily into any of the 38 

equipment classes defined in the market and technology assessment. One of these types is 

hybrid cases, where two or more compartments are in different equipment families and contained 

in one cabinet. Another is refrigerator-freezers, which have two compartments in the same 

equipment family but with different operating temperatures. There may also exist hybrid 

refrigerator-freezers, where two or more compartments are in different equipment families and 

have different operating temperatures. Another is wedge cases, which form miter transitions 

between standard display case lineups. DOE seeks comment on proposed language that will 

allow manufacturers to determine appropriate standard levels for these types of equipment. (See 

Section V.A.1 of this NOPR for further details.) 

7. Standard Levels 

If, based on comment, DOE were to revise the LED system costs as described above 

(section V.C) the economic impacts of TSL 5 would change. DOE seeks comments on its 

consideration of TSL 5 and whether the benefits would outweigh the burdens. 

 EE-2006-STD-0126 COMMENT 22.1
 EE-2006-STD-0126 COMMENT 22.1
List of Subjects in 10 CFR Part 431 

Administrative practice and procedure, Energy conservation, Household appliances. 

For the reasons set forth in the preamble, Chapter II of Title 10, Code of Federal Regulations, 

Part 431 is proposed to be amended to read as set forth below. 

PART 431 - ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 

INDUSTRIAL EQUIPMENT 

1. The authority citation for part 431 continues to read as follows: 

 Authority: 42 U.S.C. 6291-6317. 

2. Section 431.62 of subpart C is amended by adding in alphabetical order new definitions for 

“air-curtain angle,” “door angle,” “commercial hybrid refrigerator, freezer, and refrigeratorfreezer,” “vertical closed,” “vertical open,” and “wedge case” to read as follows: 

§ 431.62 Definitions concerning commercial refrigerators, freezers and refrigerator-

 freezers. 

Air-curtain angle means: 

1) For equipment without doors and without a discharge air grille or discharge air 

honeycomb, the angle between a vertical line extended down from the highest point on the 

 EE-2006-STD-0126 COMMENT 22.1
manufacturer’s recommended load limit line and the load limit line itself, when the equipment is 

viewed in cross-section; and 

2) For all other equipment without doors, the angle formed between a vertical line and the 

straight line drawn by connecting the point at the inside edge of the discharge air opening with 

the point at inside edge of the return air opening, when the equipment is viewed in cross-section. 

* * * * * 

Commercial hybrid refrigerator, freezer, and refrigerator-freezer means a commercial 

refrigerator, freezer, or refrigerator-freezer that has two or more chilled and/or frozen 

compartments that are (1) in two or more different equipment families, (2) contained in one 

cabinet and (3) sold as a single unit. 

* * * * * 

Door angle means: 

1) For equipment with flat doors, the angle between a vertical line and the line formed by 

the plane of the door, when the equipment is viewed in cross-section; and 

2) For equipment with curved doors, the angle formed between a vertical line and the 

straight line drawn by connecting the top and bottom points where the display area glass joins the 

cabinet, when the equipment is viewed in cross-section. 

* * * * * 

Horizontal Closed means equipment with hinged or sliding doors and a door angle 

greater than or equal to 45°. 

* * * 

Horizontal Open means equipment without doors and an air-curtain angle greater than or 

equal to 80° from the vertical. 

 EE-2006-STD-0126 COMMENT 22.1
* * * * * 

Semivertical Open means equipment without doors and an air-curtain angle greater than 

or equal to 10° and less than 80° from the vertical. 

* * * * * 

Vertical Closed means equipment with hinged or sliding doors and a door angle less than 

45°. 

Vertical Open means equipment without doors and an air-curtain angle greater than or 

equal to 0° and less than 10° from the vertical. 

Wedge case means a commercial refrigerator, freezer, or refrigerator-freezer that forms 

the transition between two regularly-shaped display cases. 

3. Section 431.66 of subpart C is amended by adding new paragraphs (a)(3) and (d) to read as 

follows: 

§431.66 Energy conservation standards and their effective dates.

(a) * * * 

(3) The term “TDA” means the total display area (ft2

) as defined in the AirConditioning and Refrigeration Institute Standard 1200-2006. 

* * * * * 

 EE-2006-STD-0126 COMMENT 22.1
 (d) Each commercial refrigerator, freezer, and refrigerator-freezer with a selfcontained condensing unit and without doors; commercial refrigerator, freezer, and refrigeratorfreezer with a remote condensing unit; and commercial ice-cream freezer, manufactured on or 

after January 1, 2012, shall have a daily energy consumption (in kilowatt hours per day) that 

does not exceed the levels specified: 

 (1) For equipment other than hybrid equipment, refrigerator-freezers or wedge cases: 

 EE-2006-STD-0126 COMMENT 22.1
Equipment 

Category 

Condensing 

Unit 

Configuration 

Equipment Family Rating 

Temp. (°F) 

Operating Temp. 

(°F) 

Equipment 

Class 

Designation* 

Maximum Daily 

Energy 

Consumption 

(kWh/day) 

Vertical Open 38 (M) ≥ 32 VOP.RC.M 0.82 x TDA + 4.07 

(VOP) 0 (L) > -5 and < 32 VOP.RC.L 2.28 x TDA + 6.85 

Semivertical Open 38 (M) ≥ 32 SVO.RC.M 0.83 x TDA + 3.18 

(SVO) 0 (L) > -5 and < 32 SVO.RC.L 2.28 x TDA + 6.85 

Horizontal Open 38 (M) ≥ 32 HZO.RC.M 0.35 x TDA + 2.88 

(HZO) 0 (L) > -5 and < 32 HZO.RC.L 0.57 x TDA + 6.88 

Vertical Closed 38 (M) ≥ 32 VCT.RC.M 0.25 x TDA + 1.95 

Transparent (VCT) 0 (L) > -5 and < 32 VCT.RC.L 0.6 x TDA + 2.61 

Horizontal Closed 38 (M) ≥ 32 HCT.RC.M 0.16 x TDA + 0.13 

Transparent (HCT) 0 (L) > -5 and < 32 HCT.RC.L 0.34 x TDA + 0.26 

Vertical Closed Solid 38 (M) ≥ 32 VCS.RC.M 0.11 x V + 0.26 

(VCS) 0 (L) > -5 and < 32 VCS.RC.L 0.23 x V + 0.54 

Horizontal Closed 38 (M) ≥ 32 HCS.RC.M 0.11 x V + 0.26 

Solid (HCS) 0 (L) > -5 and < 32 HCS.RC.L 0.23 x V + 0.54 

38 (M) ≥ 32 SOC.RC.M 0.51 x TDA + 0.11 

Remote 

Condensing 

Commercial 

Refrigerators 

and 

Commercial 

Freezers 

Remote 

(RC) 

Service Over Counter 

(SOC) 0 (L) > -5 and < 32 SOC.RC.L 1.08 x TDA + 0.22 

Vertical Open 38 (M) ≥ 32 VOP.SC.M 1.74 x TDA + 4.71 

(VOP) 0 (L) > -5 and < 32 VOP.SC.L 4.37 x TDA + 11.82 

Semivertical Open 38 (M) ≥ 32 SVO.SC.M 1.73 x TDA + 4.59 

(SVO) 0 (L) > -5 and < 32 SVO.SC.L 4.34 x TDA + 11.51 

38 (M) ≥ 32 HZO.SC.M 0.77 x TDA + 5.55 

Self-Contained 

Commercial 

Refrigerators 

and 

Commercial 

Freezers 

without Doors 

Self-Contained 

(SC) 

Horizontal Open 0 (L) > -5 and < 32 HZO.SC.L 1.92 x TDA + 7.08 

Vertical Open 

(VOP) VOP.RC.I 2.9 x TDA + 8.7 

Semivertical Open 

(SVO) SVO.RC.I 2.9 x TDA + 8.7 

Horizontal Open 

(HZO) HZO.RC.I 0.72 x TDA + 8.74 

Vertical Closed 

Transparent (VCT) VCT.RC.I 0.71 x TDA + 3.05 

Horizontal Closed 

Transparent (HCT) HCT.RC.I 0.4 x TDA + 0.31 

Vertical Closed Solid 

(VCS) VCS.RC.I 0.27 x V + 0.63 

Horizontal Closed 

Solid (HCS) HCS.RC.I 0.27 x V + 0.63 

Remote 

(RC) 

Service Over Counter 

(SVO) SOC.RC.I 1.26 x TDA + 0.26 

Vertical Open 

(VOP) VOP.SC.I 5.55 x TDA + 15.02 

Semivertical Open 

(SVO) SVO.SC.I 5.52 x TDA + 14.63 

Horizontal Open 

(HZO) HZO.SC.I 2.44 x TDA + 9. 

Vertical Closed 

Transparent (VCT) VCT.SC.I 0.73 x TDA + 3.29 

Horizontal Closed 

Transparent (HCT) HCT.SC.I 0.56 x TDA + 0.43 

Vertical Closed Solid 

(VCS) VCS.SC.I 0.38 x V + 0.88 

Horizontal Closed 

Solid (HCS) HCS.SC.I 0.38 x V + 0.88 

Commercial 

Ice-Cream 

Freezers 

Self-Contained 

(SC) 

Service Over Counter 

(SVO) 

-15 (I) ≤ -5 

SOC.SC.I 1.76 x TDA + 0.36 

*The meaning of the letters in this column is indicated in the three columns to the left. 

 

 EE-2006-STD-0126 COMMENT 22.1
(2) For commercial refrigeration equipment with two or more compartments (hybrid 

refrigerators, hybrid freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator freezers), 

the maximum daily energy consumption (MDEC) for each model shall be the sum of the MDEC 

values for all of its compartments. For each compartment, measure the TDA or volume of that 

compartment, and determine the appropriate equipment class based on that compartment’s 

equipment family, condensing unit configuration, and designed operating temperature. The 

MDEC value for each compartment shall be the amount derived by entering that compartment’s 

TDA or volume into the standard equation in paragraph (d)(1) of this section for that 

compartment’s equipment class. Measure the calculated daily energy consumption (CDEC) or 

total daily energy consumption (TDEC) for the entire case: 

 

 (i) For remote condensing commercial hybrid refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid refrigerator-freezers, where two or more independent 

condensing units each separately cool only one compartment, measure the total refrigeration load 

of each compartment separately according to the ANSI/ASHRAE Standard 72-2005 test 

procedure. Calculate compressor energy consumption (CEC) for each compartment using Table 

1 in ANSI/ARI Standard 1200-2006 using the evaporator temperature for that compartment. The 

calculated daily energy consumption (CDEC) for the entire case shall be the sum of the CEC for 

each compartment, fan energy consumption (FEC), lighting energy consumption (LEC), anticondensate energy consumption (AEC), defrost energy consumption (DEC), and condensate 

evaporator pan energy consumption (PEC) (as measured in ANSI/ARI Standard 1200-2006). 

 EE-2006-STD-0126 COMMENT 22.1
223

 (ii) For remote condensing commercial hybrid refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid refrigerator-freezers, where two or more compartments are 

cooled collectively by one condensing unit, measure the total refrigeration load of the entire case 

according to the ANSI/ASHRAE Standard 72-2005 test procedure. Calculated a weighted 

saturated evaporator temperature for the entire case by (A) multiplying the saturated evaporator 

temperature of each compartment by the volume of that compartment (as measured in ANSI/ARI 

Standard 1200-2006), (B) summing the resulting values for all compartments, and (C) dividing 

the resulting total by the total volume of all compartments. Calculate the CEC for the entire case 

using Table 1 in ANSI/ARI Standard 1200-2006, using the total refrigeration load and the 

weighted average saturated evaporator temperature. The CDEC for the entire case shall be the 

sum of the CEC, FEC, LEC, AEC, DEC, and PEC. 

 (iii) For self-contained commercial hybrid refrigerators, hybrid freezers, hybrid 

refrigerator-freezers, and non-hybrid refrigerator-freezers, measure the total daily energy 

consumption (TDEC) for the entire case according to the ANSI/ASHRAE Standard 72-2005 test 

procedure. 

 (3) For remote-condensing and self-contained wedge cases, measure the CDEC or TDEC 

according to the ANSI/ASHRAE Standard 72-2005 test procedure. The MDEC for each model 

shall be the amount derived by incorporating into the standards equation in paragraph (d)(1) of 

this section for the appropriate equipment class a value for the TDA that is the product of (i) the 

vertical height of the air-curtain (or glass in a transparent door) and (ii) the largest overall width 

of the case, when viewed from the front. 

 EE-2006-STD-0126 COMMENT 22.1