[6450 01-P] 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket Number: EERE–2006–BT–STD–0125] 

RIN 1904–AB58 

Energy Conservation Program: Energy Conservation Standards for Refrigerated 

Bottled or Canned Beverage Vending Machines 

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

ACTION: Final rule. 

SUMMARY: The U.S. Department of Energy (DOE) is adopting new energy 

conservation standards for refrigerated bottled or canned beverage vending machines. 

DOE has determined that energy conservation standards for these types of equipment 

would result in significant conservation of energy, and are technologically feasible and 

economically justified. 

DATES: The effective date of this rule is [INSERT DATE 60 DAYS FROM DATE 

OF PUBLICATION]. The standards established in today’s final rule will be applicable 

starting [INSERT DATE 3 YEARS FROM DATE OF PUBLICATION]. The 

incorporation by reference of certain publications listed in this rule was approved by the 

Director of the Federal Register on [INSERT DATE 60 DAYS FROM DATE OF 

PUBLICATION]. 

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EERE-2006-BT-STD-0125 COMMENT 71
ADDRESSES: For access to the docket to read background documents, the technical 

support document, transcripts of the public meetings in this proceeding, 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 a.m. and 4 p.m., Monday through Friday, except Federal 

holidays. Please call Brenda Edwards at the above telephone number for additional 

information regarding visiting the Resource Room. (Note: DOE’s Freedom of 

Information Reading Room no longer houses rulemaking materials.) You may also obtain 

copies of certain previous rulemaking documents in this proceeding (i.e., framework 

document, advance notice of proposed rulemaking, notice of proposed rulemaking), draft 

analyses, public meeting materials, and related test procedure documents from the Office 

of Energy Efficiency and Renewable Energy’s website at http://www1.eere.energy.gov/ 

buildings/appliance_standards/commercial/beverage_machines.html. 

FOR FURTHER INFORMATION CONTACT: 

Charles Llenza, U.S. Department of Energy, Energy Efficiency and Renewable 

Energy, Building Technologies Program, EE–2J, 1000 Independence Avenue, SW., 

Washington, DC 20585-0121, (202) 586-2192, Charles.Llenza@ee.doe.gov. 

Francine Pinto, Esq., U.S. Department of Energy, Office of General Counsel, GC72, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-9507, 

Francine.Pinto@hq.doe.gov. 

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EERE-2006-BT-STD-0125 COMMENT 71
SUPPLEMENTARY INFORMATION: None. 

Table of Contents 

I. Summary of the Final Rule and Its Benefits 

A. The Standard Levels 

B. Benefits to Customers of Beverage Vending Machines 

C. Impact on Manufacturers 

D. National Benefits 

II. Introduction 

A. Authority 

B. Background 

1. History of Standards Rulemaking for Beverage Vending Machine 

Equipment 

2. Miscellaneous Rulemaking Issues 

III. General Discussion 

A. Test Procedures 

B. Technological Feasibility 

1. General 

2. Maximum Technologically Feasible Levels 

C. Energy Savings 

D. Economic Justification 

1. Specific Criteria 

2. Rebuttable Presumption 

IV. Methodology and Discussion of Comments on Methodology 

A. Market and Technology Assessment 

1. Definitions Related to Refrigerated Beverage Vending Machines 

2. Equipment Classes 

B. Screening Analysis 

C. Engineering Analysis 

1. Approach 

2. Analytical Models 

D. Markups to Determine Equipment Price 

E. Energy Use Characterization 

F. Life-Cycle Cost and Payback Period Analyses 

G. Shipments Analysis 

1. Split Incentives 

2. Sustainability of Sales Less than 100 Thousand Units 

3. Distribution of Equipment Classes and Sizes 

4. Future Sales Decline 

H. National Impact Analysis 

1. Choice of Discount Rate 

2. Discounting of Physical Values 

I. Life-Cycle Cost Subgroup Analysis 

J. Manufacturer Impact Analysis 

K. Utility Impact Analysis 

L. Employment Impact Analysis 

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EERE-2006-BT-STD-0125 COMMENT 71
M. Environmental Assessment 

N. Monetizing Carbon Dioxide and Other Emissions Impacts 

V. Discussion of Other Comments 

A. Information and Assumptions Used in Analyses 

1. Engineering Analysis 

B. Benefits and Burdens 

VI. Analytical Results and Conclusions 

A. Trial Standard Levels 

B. Significance of Energy Savings 

C. Economic Justification 

1. Economic Impact on Commercial Customers 

2. Economic Impact on Manufacturers 

3. National Impact Analysis 

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 

D. Conclusion 

1. Class A Equipment 

2. Class B Equipment 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

B. Review Under the Regulatory Flexibility Act 

1. Need for and Objectives of the Final Rule 

2. Significant Issues Raised by Public Comments 

3. Description and Estimated Number of Small Entities Regulated 

4. Description and Estimate of Reporting, Recordkeeping, and Other 

Compliance Requirements 

5. Steps DOE Has Taken to Minimize the Economic Impact on Small 

Manufacturers 

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 

M. Congressional Notification 

VIII. Approval of the Office of the Secretary 

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EERE-2006-BT-STD-0125 COMMENT 71
I. Summary of the Final Rule and Its Benefits 

A. The Standard Levels 

The Energy Policy and Conservation Act, as amended (42 U.S.C. 6295 et seq.; 

EPCA), directs the Department of Energy (DOE) to establish mandatory energy 

conservation standards for refrigerated bottled or canned beverage vending machines. 

(42 U.S.C. 6295(v)(1), (2) and (3)) These types of equipment are referred to collectively 

hereafter as “beverage vending machines.” Any such standard must 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 standard must “result in significant 

conservation of energy.” (42 U.S.C. 6295(o)(3)(B)) The standards in today’s final rule, 

which apply to all beverage vending machines, satisfy these requirements. Currently, no 

mandatory Federal energy conservation standards exist for the beverage vending machine 

equipment covered by this rulemaking. 

Table I.1 shows the standard levels that DOE is adopting today. These standards 

will apply to all beverage vending machines manufactured for sale in the United States, 

or imported to the United States, starting 3 years after publication of the final rule. 

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EERE-2006-BT-STD-0125 COMMENT 71
 

Table I.1 Standard Levels for Beverage Vending Machines 

Equipment Class* 

Proposed Standard Level** 

Maximum Daily Energy Consumption (MDEC) 

kWh/day*** 

A MDEC = 0.055 x V + 2.56† 

B MDEC = 0.073 x V + 3.16†† 

*

 See section IV.A.2 of the NOPR for a discussion of equipment classes. ** “V” is the refrigerated volume (ft3

) of the refrigerated bottled or canned beverage vending machine, as 

measured by the American National Standards Institute (ANSI)/Association of Home Appliance 

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

Refrigerator-Freezers and Freezers.” V is the volume of the case, as measured in ARI Standard 1200-2006, 

Appendix C. *** Kilowatt hours per day. †

 Trial Standard Level (TSL) 6.

†† TSL 3. 

B. Benefits to Customers of Beverage Vending Machines 

Table I.2 indicates the impacts on commercial customers of today’s standards. 

Table I.2 Implications of New Standards for Commercial Customers 

Equipment 

Class 

Energy 

Conservation 

Standard 

Total Installed 

Cost 

$ 

Total Installed 

Cost Increase 

$ 

Life-Cycle 

Cost Savings 

$ 

Payback 

Period 

years 

Class A TSL 6 2,935 233 277 4.1 

Class B TSL 3 2,070 86 37 6.8 

The economic impacts on commercial customers (i.e., the average life-cycle cost 

[LCC] savings) are positive for most equipment classes. For example, fully cooled (Class 

A) medium-capacity vending machines—the most common type currently being sold— 

have installed prices of $2,625 and annual energy costs of $188, respectively at national 

average values. To meet the new standards, DOE estimates that the installed prices of 

such equipment will be $2,864, an increase of $239, which will be offset by annual 

energy savings of approximately $69 and an increase in maintenance and repair cost of 

$13. 

C. Impact on Manufacturers 

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EERE-2006-BT-STD-0125 COMMENT 71
Using a real corporate discount rate of 7 percent, DOE estimates the industry net 

present value (INPV) of the beverage vending machine industry to be $44.1 million for 

Class A units, and $33.7 million for Class B units (both figures in 2008$). For Class A 

machines, DOE expects the impact of today’s standards on the INPV of manufacturers of 

beverage vending machines to be a loss of 18.0 to 25.1 percent ($7.9 million to $11.1 

million) for Class A machines and a loss of 1.9 to 3.5 percent ($0.6 million to $1.2 

million) for Class B machines. Based on DOE’s interviews with manufacturers of 

beverage vending machines, DOE expects minimal plant closings or loss of employment 

as a result of the standards. 

D. National Benefits 

DOE estimates that the standards will save approximately 0.159 quads 

(quadrillion, or 1015) British thermal units (Btu) of energy over 30 years (2012–2042). 

This is equivalent to all the energy consumed by more than 830 thousand American 

households in a single year. 

By 2042, DOE expects energy savings from the standards to eliminate the need 

for approximately 0.118 new 1,000-megawatt (MW) power plants. These energy savings 

will result in cumulative greenhouse gas emission reductions of approximately 9.6 

million metric tons (Mt) of carbon dioxide (CO2), an amount equal to that produced by 

approximately 2.0 million cars every year. Additionally, the standards will help alleviate 

air pollution by resulting in 3.28 kilotons (kt) of cumulative nitrogen oxide (NOX) 

emission reductions and between 0 and 0.188 tons of cumulative mercury (Hg) emission 

reductions from 2012–2042. The estimated net present monetary values of these 

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EERE-2006-BT-STD-0125 COMMENT 71
emissions reductions (expressed in 2007$) are between $5.5 and $266.3 million for CO2, 

(expressed in 2007$), $354,000 and $3.6 million for NOX (expressed in 2007$), and $0 

and $1.5 million for Hg (expressed in 2007$) at a 7-percent discount rate (discounted to 

2009). At a 3 percent discount rate, the estimated net present values of these emissions 

reductions are between $11.3 and $543.5 million (2007$) for CO2, $749,000 and $7.7 

million (2007$) for NOX, and $0 and $3.2 million (2007$) for Hg. 

The national NPV of the standards is $0.182 billion using a 7 percent discount 

rate and $0.476 billion using a 3 percent discount rate, cumulative from 2012–2057 in 

2008$. This is the estimated total value of future savings minus the estimated increased 

equipment costs, discounted to 2009. 

The benefits and costs of today’s final rule can also be expressed in terms of 

annualized (2008$) values from 2012–2042. Separate estimates of values for Class A and 

Class B equipment are shown in Table I.3 and Table I.4, respectively. In each table, the 

annualized monetary values are the sum of the annualized national economic value of 

operating savings benefits (energy, maintenance and repair), expressed in 2008$, plus the 

monetary values of the benefits of carbon dioxide emission reductions, otherwise known 

as the Social Cost of Carbon (SCC) expressed as $19 per metric ton of carbon dioxide, in 

2007$. The $19 value is a central interim value from a recent interagency process. The 

derivation of this value is discussed in section VI.C.6. Although summing the value of 

operating savings to the values of CO2 reductions provides a valuable perspective, please 

note the following: 1) the national operating savings are domestic U.S. consumer 

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EERE-2006-BT-STD-0125 COMMENT 71
monetary savings found in market transactions while the CO2 value is based on a range 

of estimates of imputed marginal social cost of carbon from $1.14 to $55 per metric ton 

(2007$), which are meant to reflect, for the most part, the global benefits of carbon 

dioxide reductions; 2) the national operating savings are measured in 2008$ while the 

CO2 saving are measured in 2007$; and 3) the assessments of operating savings and CO2 

savings are performed with different computer models, leading to different time frames 

for analysis. The present value of national operating savings is measured for the period 

2012-2057 (31 years from 2012 to 2042 inclusive, plus the lifetime of the longest-lived 

equipment shipped in the 31st year), then converted the annualized equivalent for the 31 

years. The value of CO2, on the other hand is meant to reflect the present value of all 

future climate related impacts, even those beyond 2057. 

Using a 7 percent discount rate for the annualized cost analysis, the combined cost 

of the standards established in today’s final rule for Class A and Class B beverage 

vending machines is $24.0 million per year in increased equipment and installation costs, 

while the annualized benefits are $41.8 million per year in reduced equipment operating 

costs and $9.0 million in CO2 reductions, for a net benefit of $26.8 million per year. 

Using a 3 percent discount rate, the cost of the standards established in today’s final rule 

is $23.1 million per year in increased equipment and installation costs, while the benefits 

of today’s standards are $49.1 million per year in reduced operating costs and $10.3 

million in CO2 reductions, for a net benefit of $36.3 million per year. The separate 

estimates of values for Class A and Class B equipment are shown in Table I.3 and Table 

I.4 respectively. 

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EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

Table I.3 Annualized Benefits and Costs for Class A Equipment 

Category 

Primary 

Estimate 

(AEO 

Reference 

Case) 

Low 

Estimate 

(Low 

Growth 

Case) 

High 

Estimate 

(High 

Growth 

Case) 

Units 

Year 

Dollars Disc 

Period 

Covered 

Benefits 

Annualized 

Monetized 

(millions$/year) 

37.7 34.2 40.0 2008 7% 31 

44.2 39.9 46.8 2008 3% 31 

Annualized 

Quantified 

0.25 CO2 

(Mt) 

0.25 CO2 

(Mt) 

0.25 CO2 

(Mt) NA 7% 31 

0.07 NOx 

(kt) 

0.07 NOx 

(kt) 

0.07 NOx 

(kt) NA 7% 31 

0.004 Hg 

(t) 

0.004 Hg 

(t) 

0.004 Hg 

(t) NA 7% 31 

0.26 CO2 

(Mt) 

0.26 CO2 

(Mt) 

0.26 CO2 

(Mt) NA 3% 31 

0.039 NOx 

(kt) 

0.039 

NOx (kt) 

0.039 

NOx (kt) NA 3% 31 

0.005 Hg 

(t) 

0.005 Hg 

(t) 

0.005 Hg 

(t) NA 3% 31 

CO2 Monetized 

Value (at $19/Metric 

Ton, millions$/year) 

7.9 7.9 7.9 2007 7% 31 

9.0 9.0 9.0 2007 3% 31 

Total Monetary 

Benefits 

(millions$/year)* 

45.5 42.1 47.9 2008&2007 7% 31 

53.2 48.9 55.8 2008&2007 3% 31 

Qualitative 

Costs 

Annualized 

Monetized 

(millions$/year) 

19.6 19.6 19.6 2008 7% 31 

18.8 18.8 18.8 2008 3% 31 

Qualitative 

Net Benefits/Costs 

Annualized 

Monetized, including 

Carbon Benefits* 

(million$/year) 

26.0 22.6 28.4 2008&2007 7% 31 

34.4 30.1 36.9 2008&2007 3% 31 

Qualitative 

*Per the above discussion, this represents a simplified estimate that includes both 2007$ and 2008$. 

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EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

Table I.4 Annualized Benefits and Costs for Class B Equipment 

Category 

Primary 

Estimate 

(AEO 

Reference 

Case) 

Low 

Estimate 

(Low 

Growth 

Case) 

High 

Estimate 

(High 

Growth 

Case) 

Units 

Year 

Dollars Disc 

Period 

Covered 

Benefits 

Annualized 

Monetized 

(millions$/year) 

4.1 3.6 4.4 2008 7% 31 

4.9 4.3 5.2 2008 3% 31 

Annualized 

Quantified 

0.03 CO2 

(Mt) 

0.03 CO2 

(Mt) 

0.03 CO2 

(Mt) NA 7% 31 

0.01 NOx (kt) 

0.01 NOx 

(kt) 

0.01 NOx 

(kt) NA 7% 31 

0.001 Hg (t) 

0.001 Hg 

(t) 0.001 Hg (t) NA 7% 31 

0.04 CO2 

(Mt) 

0.04 CO2 

(Mt) 

0.04 CO2 

(Mt) NA 3% 31 

0.012 NOx 

(kt) 

0.012 

NOx (kt) 

0.012 NOx 

(kt) NA 3% 31 

0.001 Hg (t) 

0.001 Hg 

(t) 0.001 Hg (t) NA 3% 31 

CO2 Monetized 

Value ( at 

$19/Metric Ton, 

millions$/year) 

1.1 1.1 1.1 2007 7% 31 

1.3 1.3 1.3 2007 3% 31 

Total Monetary 

Benefits 

(millions$/year)* 

5.2 4.7 5.6 

2008&20 

07 7% 31 

6.1 5.5 6.5 

2008&20 

07 3% 31 

Qualitative 

Costs 

Annualized 

Monetized 

(millions$/year) 

4.4 4.4 4.4 2008 7% 31 

4.3 4.3 4.3 2008 3% 31 

Qualitative 

Net Benefits/Costs 

Annualized 

Monetized, including 

Carbon Benefits 

(million$/year)* 

0.8 0.3 1.1 2008&2007 7% 31 

1.9 1.3 2.2 2008&2007 3% 31 

Qualitative 

*Per the above discussion, this represents a simplified estimate that includes both 2007$ and 2008$. 

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EERE-2006-BT-STD-0125 COMMENT 71
II. Introduction 

A. 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. The 

amendments to EPCA contained in the Energy Policy Act of 2005 (EPACT 2005), Pub. 

L. 109-58, include new or amended energy conservation standards and test procedures for 

some of these products, and direct DOE to undertake rulemakings to promulgate such 

requirements. In particular, section 135(c)(4) of EPACT 2005 amends EPCA to direct 

DOE to prescribe energy conservation standards for beverage vending machines. 

(42 U.S.C. 6295(v)) 

Because of its placement in Part A of Title III of EPCA, the rulemaking for 

beverage vending machine energy conservation standards is bound by the requirements 

of 42 U.S.C. 6295. However, since beverage vending machines are commercial 

equipment, DOE intends to place the new requirements for beverage vending machines in 

Title 10 of the Code of Federal Regulations (CFR), Part 431 (“Energy Efficiency 

Program for Certain Commercial and Industrial Equipment”), which is consistent with 

DOE’s previous action to address the EPACT 2005 requirements for commercial 

equipment. The location of the provisions within the CFR does not affect either their 

substance or applicable procedure, so DOE is placing them in the appropriate CFR part 

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EERE-2006-BT-STD-0125 COMMENT 71
based on their nature or type. DOE will refer to beverage vending machines as 

“equipment” throughout the notice because of their placement in 10 CFR part 431. DOE 

publishes today’s final rule pursuant to Title III, Part A of EPCA, which provides for test 

procedures, labeling, and energy conservation standards for beverage vending machines 

and certain other equipment. The test procedures for beverage vending machines appear 

at sections 431.293 and 431.294. 

EPCA provides criteria for prescribing new or amended standards for beverage 

vending machines. As indicated above, any new or amended standard for this 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)) Additionally, 

EPCA provides specific prohibitions on prescribing such standards. DOE may not 

prescribe an amended or new standard for any equipment for which DOE has not 

established a test procedure. (42 U.S.C. 6295(o)(3)) Further, DOE may not prescribe an 

amended or new standard if DOE determines by rule that such standard would not result 

in “significant conservation of energy” or “is not technologically feasible or 

economically justified.” (42 U.S.C. 6295(o)(3)(A) and (B)) 

EPCA also provides that in deciding whether such a standard is economically 

justified for equipment such as beverage vending machines, DOE must, after receiving 

comments on the proposed standard, determine whether the benefits of the standard 

exceed its burdens by considering, to the greatest extent practicable, the following seven 

factors: 

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EERE-2006-BT-STD-0125 COMMENT 71
1. The economic impact of the standard on manufacturers and consumers of the 

products subject to the standard; 

2. The savings in operating costs throughout the estimated average life of the 

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

or in the initial charges for, or maintenance expenses of, the equipment likely 

to result from the imposition of the standard; 

3. The total projected amount of energy savings likely to result directly from the 

imposition of the standard; 

4. Any lessening of the utility or the performance of the products likely to result 

from the imposition of the standard; 

5. The impact of any lessening of competition, as determined in writing by the 

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

6. The need for national energy conservation; and 

7. Other factors the Secretary of Energy (Secretary) considers relevant. 

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

In addition, EPCA, as amended (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a)), 

establishes a rebuttable presumption that any standard for covered products is 

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

purchasing a product complying with an energy conservation standard level will be less 

than three times the value of the energy (and as applicable, water) savings during the first 

year that the consumer will receive as a result of the standard, as calculated under the test 

procedure...” in place for that standard. 

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EPCA further provides 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 in any covered 

product type (or class) of performance characteristics (including reliability), features, 

sizes, capacities, and volumes that are substantially the same as those generally available 

in the United States at the time of the Secretary’s finding.” (42 U.S.C. 6295(o)(4) and 

6316(e)(1)) 

Section 325(q)(1) of EPCA is applicable to promulgating standards for most types 

or classes of equipment, including beverage vending machines that have two or more 

subcategories. (42 U.S.C. 6295(q)(1) and 42 U.S.C. 6316(e)(1)) Under this provision, 

DOE must specify a different standard level than that which applies generally to such 

type or class of equipment for any group of products “which have the same function or 

intended use, if . . . products within such group—(A) consume a different kind of energy 

from that consumed by other covered products within such type (or class); or (B) have a 

capacity or other performance-related feature which other products within such type (or 

class) do not have and such feature justifies a higher or lower standard” than applies or 

will apply to the other products. (42 U.S.C. 6295(q)(1)(A) and (B)) In determining 

whether a performance-related feature justifies such a different standard for a group of 

products, DOE must consider “such factors as the utility to the consumer of such a 

feature” and other factors DOE deems appropriate. (42 U.S.C. 6295(q)(1)) Any rule 

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prescribing such a standard must include an explanation of the basis on which DOE 

established such a higher or lower level. (See 42 U.S.C. 6295(q)(2)) 

Federal energy conservation standards for commercial equipment generally 

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

standards. (42 U.S.C. 6297(a)–(c); 42 U.S.C. 6316(e)(2)-(3)) DOE can, however, grant 

waivers of preemption for particular State laws or regulations, in accordance with the 

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

U.S.C. 6316(e)(2)-(3)) 

B. Background 

1. History of Standards Rulemaking for Beverage Vending Machine Equipment 

As discussed in the notice of proposed rulemaking (NOPR), 74 FR 26022 (May 

29, 2009) (the May 2009 NOPR), the EPACT 2005 amendments to EPCA require that 

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

which would apply to equipment manufactured 3 years after publication of the final rule 

establishing the energy conservation standards. (42 U.S.C. 6295(v)(1), (2) and (3)) The 

energy use of this equipment has not previously been regulated by Federal law. 

Section 135(a)(3) of EPACT 2005 also amended section 321 of EPCA, in part, by 

adding definitions for terms relevant to this equipment. (42 U.S.C. 6291 (40)) EPCA 

defines “refrigerated bottled or canned beverage vending machine” as “a commercial 

refrigerator that cools bottled or canned beverages and dispenses the bottled or canned 

beverages on payment.” (42 U.S.C. 6291 (40)) Section 136(a)(3) of EPACT 2005 

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amended section 340 of EPCA, in part, by adding a definition for “commercial 

refrigerator, freezer, and refrigerator-freezer.” 

During the course of this rulemaking, Congress passed the Energy Independence 

Security Act of 2007 (EISA 2007), which the President signed on December 19, 2007 

(Pub. L. 110-140). Section 310(3) of EISA 2007 amended section 325 of EPCA in part 

by adding subsection 325(gg) (42 U.S.C. 6295(gg)). This subsection requires any new or 

amended energy conservation standards adopted after July 1, 2010, to incorporate 

“standby mode and off mode energy use.” (42 U.S.C. 6295(gg)(3)(A)) In the NOPR, 

DOE stated that because any standards associated with this rulemaking are required by 

August 2009, the energy use calculations will not include “standby mode and off mode 

energy use.” To include standby mode and off mode energy use requirements for this 

rulemaking would take considerable analytical effort and would likely require changes to 

the test procedure. Given the statutory deadline, DOE has decided to address these 

additional requirements when the energy conservation standards for beverage vending 

machines are reviewed in August 2015. At that time, DOE will consider the need for 

possible amendment in accordance with 42 U.S.C. 6295(m). (74 FR 26023) 

DOE commenced this rulemaking on June 28, 2006, by publishing a notice of a 

public meeting and of the availability of its framework document for the rulemaking. 

71 FR 36715. The framework document described the approaches DOE anticipated using 

and issues to be resolved in the rulemaking. DOE held a public meeting in Washington, 

D.C. on July 11, 2006, to present the contents of the framework document, describe the 

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EERE-2006-BT-STD-0125 COMMENT 71
analyses DOE planned to conduct during the rulemaking, obtain public comment on these 

subjects, and facilitate the public’s involvement in the rulemaking. After the public 

meeting, DOE also allowed the submission of written statements in response to the 

framework document. 

On June 16, 2008, DOE published an advance notice of proposed rulemaking 

(ANOPR) in this proceeding. 73 FR 34094 (the June 2008 ANOPR). In the June 2008 

ANOPR, DOE sought comment on its proposed equipment classes for the rulemaking, 

and on the analytical framework, models, and tools that DOE used to analyze the impacts 

of energy conservation standards for beverage vending machines. In conjunction with the 

June 2008 ANOPR, DOE published on its website the complete ANOPR technical 

support document (TSD), which included the results of DOE’s various preliminary 

analyses in this rulemaking. In the June 2008 ANOPR, DOE requested oral and written 

comments on these results and on a range of other issues. DOE held a public meeting in 

Washington, DC, on June 26, 2008, to present the methodology and results of the 

ANOPR analyses and to receive oral comments from those who attended. The oral and 

written comments DOE received focused on DOE’s assumptions, approach, and 

equipment class breakdown, and were addressed in detail in the May 2009 NOPR. 

In the May 2009 NOPR, DOE proposed new energy conservation standards for 

beverage vending machines. 74 FR 26020. In conjunction with the May 2009 NOPR, 

DOE also published on its website the complete TSD for the proposed rule, which 

incorporated the final analyses that DOE conducted, and contained technical 

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EERE-2006-BT-STD-0125 COMMENT 71
 

documentation for each step of the analysis. The TSD included the engineering analysis 

spreadsheets, the LCC spreadsheet, and the national impact analysis spreadsheet. The 

standards DOE proposed for beverage vending machines are shown in Table II.1. 

Table II.1 May 2009 Proposed Standard Levels for Beverage Vending Machines 

Equipment Class* 

Proposed Standard Level** 

Maximum Daily Energy Consumption (MDEC) 

kWh/day*** 

A MDEC = 0.055 x V + 2.56† 

B MDEC = 0.073 x V + 3.16†† 

*

 See section IV.A.2 of the NOPR (74 FR 26027) for a discussion of equipment classes. ** “V” is the refrigerated volume (ft3

) of the refrigerated bottled or canned beverage vending machine, as 

measured by ANSI/AHAM HRF-1-2004, “Energy, Performance and Capacity of Household Refrigerators, 

Refrigerator-Freezers and Freezers.” 

*** Kilowatt hours per day. †

 TSL 6. 

†† TSL 3. 

In the May 2009 NOPR, DOE identified issues on which it was particularly 

interested in receiving comments and views of interested parties. These included the 

magnitude of the estimated decline in INPV and what impact this level could have on 

industry parties including small businesses; whether the proposed linear equation used to 

describe the maximum daily energy consumption standards should be based on a twopoint, three-point, or some other weighting strategy; whether the proposed standard risks 

industry consolidation; how small business manufacturers will be affected due to new 

energy conservation standards; the potential compliance costs and other impacts to small 

manufacturers that do not supply the high-volume customers of beverage vending 

machines; the impacts on small manufacturers for possible alternatives to the proposed 

rule; and whether the energy savings and related benefits outweigh the costs, including 

potential manufacturer impacts. After the publication of the May 2009 NOPR, DOE 

received written comments on these and other issues. DOE also held a public meeting in 

19 

EERE-2006-BT-STD-0125 COMMENT 71
Washington, DC, on June 17, 2009, to hear oral comments on and solicit information 

relevant to the proposed rule. The May 2009 NOPR included additional background 

information on the history of this rulemaking. 74 FR 26023. 

2. Miscellaneous Rulemaking Issues 

a. Type of Standard 

For the ANOPR, DOE received comments from interested parties regarding the 

type of standards it would be developing as part of this rulemaking. Some interested 

parties recommended that DOE set prescriptive standards, while others suggested that the 

choice of technologies used to achieve standards should be left to the discretion of the 

manufacturer. (73 FR 34100) 

In response, DOE noted in the ANOPR that EPCA provides that an “energy 

conservation standard” must be either (A) “a ... level of energy efficiency” or “a ... 

quantity of energy use,” or (B), for certain specified equipment, “a design requirement.” 

(42 U.S.C. 6291(6)) Thus, an “energy conservation standard” cannot consist of both a 

design requirement and a level of efficiency or energy use. In addition, beverage vending 

machines are not one of the specified types of equipment for which EPCA allows a 

standard be set with a design requirement. (42 U.S.C. 6291(6)(B), 6292(a)) Item (A) 

above also indicates that, under EPCA, a single energy conservation standard cannot have 

measures of both energy efficiency and energy use. Furthermore, EPCA specifically 

requires DOE to base its test procedure for this equipment on ANSI/American Society of 

Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 32.1-2004, 

20 

EERE-2006-BT-STD-0125 COMMENT 71
Methods of Testing for Rating Vending Machines for Bottled, Canned or Other Sealed 

Beverages. (42 U.S.C. 6293(b)(15)) The test methods in ANSI/ASHRAE Standard 32.1­

2004 consist of means to measure energy consumption, not energy efficiency. (73 FR 

34100) 

During the NOPR public meeting, the Appliance Standards Awareness Project 

(ASAP), stated that DOE’s previous decisions to not allow multi-part standards needs to 

be revisited, but not as part of this rulemaking. Multi-part standards would allow 

performance standards and design requirements to be established. (ASAP, Public 

Meeting Transcript, No. 56 at p. 35) A notation in the form “ASAP, No. 56 at p. 35” 

identifies an oral comment that DOE received during the June 17, 2008, NOPR Public 

Meeting. This comment was recorded in the public meeting transcript in the docket for 

this rulemaking (Docket No. EERE–2006–BT–STD–0125). This particular notation 

refers to a comment (1) made during the public meeting by the Appliance Standards 

Awareness Project; (2) recorded in document number 35, which is the public meeting 

transcript filed in the docket of this rulemaking; and (3) appearing on page 35 of 

document number 56. In a written comment co-signed by Pacific Gas and Electric 

Company (PG&E), Southern California Edison, Southern California Gas Company 

(SCGC), San Diego Gas and Electric (SDGE), ASAP, and the National Resource 

Defense Council (NRDC), hereafter the Joint Comment, signatories urged DOE to 

include a design requirement for factory set controls in today’s final rule. (Joint 

Comment, No. 67 at p. 2) For the reasons given above, DOE maintains that it does not 

have authority to develop standards that consist of both a design requirement and a level 

21 

EERE-2006-BT-STD-0125 COMMENT 71
of efficiency or energy use. Instead, DOE has developed standards that would require that 

each beverage vending machine be subject to a maximum level of energy consumption, 

and manufacturers could meet these standards with their own choice of design methods. 

In response to the NOPR, the University of Southern Maine (USM) recommended 

that DOE establish energy consumption standards that are based on beverage vending 

machines that have no lights, with the exception of lighting the coin slots. Or as an 

alternative, USM suggested that the standards be based on a machine that has lights 

controlled by proximity sensors that turn lights on only when prospective purchasers are 

nearby. (USM, No. 52 at p. 1) USM also supported setting a design standard that 

encourages the use of refrigerant gases that offer the lowest total life-cycle impacts. 

(USM, No. 52 at p. 1) As stated above, beverage vending machines are not one of the 

specified equipment for which EPCA allows a standard to consist of a design 

requirement. (42 U.S.C. 6291(6)(B), 6292(a)) 

b. Combination Vending Machines 

Combination vending machines have a refrigerated volume for the purpose of 

cooling and vending “beverages in a sealed container,” and are therefore covered by this 

rule. However, beverage vending is not their sole function. Combination vending 

machines also have non-refrigerated volumes for the purpose of vending other, non­

“sealed beverage” merchandise. In the ANOPR, DOE addressed several comments from 

interested parties regarding combination vending machines. Specifically, these parties 

were concerned that regulating vending machines that contain both refrigerated and non22 

EERE-2006-BT-STD-0125 COMMENT 71
refrigerated products could result in confusion about what this rulemaking covers, or 

could result in manufacturers taking advantage of loopholes to produce equipment that 

does not meet the standards. In response, DOE stated that the language used in EPCA to 

define beverage vending machines is broad enough to include any vending machine, 

including a combination vending machine, as long as some portion of that machine cools 

bottled or canned beverages and dispenses them upon payment. (42 U.S.C. 6291 (40)) 

DOE interprets this language to cover any vending machine that can dispense at least one 

type of refrigerated bottled or canned beverage, regardless of the other types of vended 

products (some of which may not be refrigerated). 73 FR 34105-06. 

At the NOPR public meeting, Dixie-Narco stated that combination vending 

machines were not specifically included in the analysis, which focused on glass front and 

stack-style beverage vending machines, and should be studied further. (Dixie-Narco, 

Public Meeting Transcript, No. 56 at p. 204) Dixie-Narco asserted that the existing 

formulas for Class A and Class B machines create an energy threshold that cannot be met 

by combination machines. Dixie-Narco explained that with combination machines, the 

entire cabinet is illuminated, but they typically have smaller refrigerated volumes 

compared to other vending machines with similar exterior dimensions. Dixie-Narco 

suggested creating a Class C equipment class for zone-cooled glass front vending 

machines. It proposed the following equation: MDEC = 0.073 x V + 3.5. Dixie-Narco 

also stated that it is open to other possible solutions suggested by DOE or other 

concerned parties. (Dixie-Narco, No. 64 at p. 3) Coca-Cola stated that combination 

vending machines may not scale down in efficiency because refrigeration components 

23 

EERE-2006-BT-STD-0125 COMMENT 71
may not be available in small sizes. (Coca-Cola, Public Meeting Transcript, No. 56 at p. 

210) Dixie-Narco noted that combination vending machines are not typically purchased 

by Coca-Cola and PepsiCo, and are manufactured by a group of manufacturers different 

from the beverage vending machine manufacturers. Dixie-Narco also stated that 

shipments for combination vending machines are very small. (Dixie-Narco, Public 

Meeting Transcript, No. 56 at pp. 204, 212) 

In the analysis for the proposed rule, DOE did not consider combination vending 

machines as a separate equipment class. Rather, they were considered with all other Class 

A and Class B beverage vending machines. However, based on comments received, DOE 

recognizes that the design and manufacture of combination vending machines may be 

challenged by less component availability compared to other beverage vending machines. 

DOE concludes that combination vending machines have a distinct utility that limits the 

energy efficiency improvement potential possible for such beverage vending machines. 

While more efficient combination vending machines are technologically feasible, DOE 

does not have the data needed to estimate either the energy efficiency improvement 

potential or the cost of more efficient designs of combination vending machines. 

Furthermore, none of the interested parties’ comments provided an economic analysis 

demonstrating that efficiency standards for such beverage vending machines would be 

cost-justified. Without engineering cost and efficiency data, DOE was not able to perform 

an analysis of the impacts of standards on combination vending machines. Thus, DOE is 

not able to determine whether energy conservation standards for combination vending 

machines are economically justified and would result in significant energy savings. Based 

24 

EERE-2006-BT-STD-0125 COMMENT 71
on the above, DOE concludes that combination vending machines are a class of beverage 

vending machines, and, since DOE cannot determine whether standards would meet 

EPCA’s statutory criteria, DOE is not setting standards for combination vending 

machines at this time. Instead, DOE is reserving standards for combination vending 

machines. EPCA does require that, not later than 6 years after issuance of any final rule 

establishing or amending a standard, the Secretary shall publish either a notice of 

determination that standards for the product do not need to be amended or a notice of 

proposed rulemaking including new proposed standards. 42 U.S.C. 6295(m). 

So that interested parties understand what constitutes a combination vending 

machine, DOE is incorporating into today’s final rule a definition for combination 

vending machine, and is modifying the definitions of Class A and Class B beverage 

vending machines (see section IV.A.2). DOE adopts the following definition for 

combination vending machine: 

“Combination vending machine means a refrigerated bottled or canned 

beverage vending machine that also has non-refrigerated volumes for the 

purpose of vending other, non-“sealed beverage” merchandise.” 

DOE notes that this definition for combination vending machine could be refined 

if DOE initiates a rulemaking proceeding that evaluates energy conservation standards 

for combination vending machines. 

25 

EERE-2006-BT-STD-0125 COMMENT 71
c. Installed Base 

USA Technologies stated that it does not believe that significant energy savings 

will be achieved by the standard unless the installed base is included. (USA 

Technologies, Public Meeting Transcript, No. 56 at p. 16) 

DOE acknowledges that additional energy savings can be obtained by regulating 

the installed base of beverage vending machines. This would require existing, used 

machines to be rebuilt or refurbished to comply with the standards. However, in the 

ANOPR, DOE carefully considered its authority to establish energy conservation 

standards for rebuilt and refurbished beverage vending machines and concluded that its 

authority does not extend to rebuilt and refurbished equipment. (73 FR 34106–07) 

As stated in the ANOPR, throughout the history of the energy conservation 

standards program, DOE has not regulated used consumer products or commercial 

equipment that has been refurbished, rebuilt, or undergone major repairs, since EPCA 

only covers new covered equipment distributed in commerce. Therefore, for this final 

rule, DOE maintains that rebuilt or refurbished beverage vending machines are not new 

covered equipment under EPCA and, therefore, are not subject to DOE’s energy 

conservation standards or test procedures. 

d. Rating Conditions 

In the ANOPR, DOE stated that it planned to use a 75 °F/45 RH rating condition 

for all beverage vending machines covered by this rulemaking. (73 FR 34102) In a 

26 

EERE-2006-BT-STD-0125 COMMENT 71
written comment on the NOPR, the National Automatic Merchandising Association 

(NAMA) stated that these rating conditions were appropriate. (NAMA, No. 65 at p. 3) 

Dixie-Narco also commented that it supports the 75 °F/45 percent relative humidity (RH) 

rating condition because it is a more realistic temperature for measuring energy efficiency 

compared to the 90 °F/65 percent RH condition. Therefore, for this final rule, DOE 

continues to use the 75 °F/45 RH rating condition for all beverage vending machines 

covered by this rulemaking. 

e. Certification and Enforcement 

Regal Beloit asked how certification and enforcement will be conducted for the 

energy conservation standards that DOE establishes for beverage vending machines. 

(Regal Beloit, No. 59 at p. 1) 

To enforce energy conservation standards, DOE establishes both generally 

applicable regulations that apply to various types of products or equipment covered by 

standards, as well as a limited number of product-specific requirements. DOE has not 

adopted requirements that apply to beverage vending machines (an EPACT 2005 addition 

to the program). DOE is developing enforcement regulations for the EPACT 2005 

equipment, which it expects will be based on the existing enforcement regulations that 

require manufacturers to certify compliance with the standards by filing two separate 

documents: 1) a compliance statement in which the manufacturer certifies its equipment 

meets the requirements; and 2) a certification report in which the manufacturer provides 

equipment-specific information, such as the model number, energy consumption and 

27 

EERE-2006-BT-STD-0125 COMMENT 71
other model specific information that would enable DOE to determine which equipment 

class and standard the equipment is subject to and whether the equipment meets the 

standard. 

In instances where there are questions whether equipment meets the standards, 

existing regulations require DOE to consult with the manufacturer. If DOE remains 

unsatisfied with the manufacturer's explanation for the alleged noncompliance, DOE may 

test units of the allegedly non-complying product or equipment, to determine whether it 

meets the applicable standard. After DOE has completed testing, the manufacturer has the 

option to conduct additional tests for DOE to consider. DOE has never had to conduct 

enforcement testing, as it has been able to resolve all issues with manufacturers prior to 

taking that step. 

The beverage vending machine standards will go into effect 3 years after the 

publication of the final rule. DOE anticipates that it will have enforcement regulations in 

place, applicable to beverage vending machines, by that time. But if such regulations are 

not in place when the standards go into effect, manufacturers will not be required to 

report to DOE. Moreover, if there is a question regarding compliance with the standards, 

DOE will confer with the manufacturer before pursuing enforcement action. A violation 

of these standards could subject a manufacturer to injunctive action or other relief. See 42 

U.S.C. 6302-6305. 

28 

EERE-2006-BT-STD-0125 COMMENT 71
III. General Discussion 

A. Test Procedures 

On December 8, 2006, DOE published a final rule (the December 2006 final rule) 

in the Federal Register that incorporated by reference ANSI/ASHRAE Standard 32.1– 

2004, with two modifications, as the DOE test procedure for this equipment. 71 FR 

71340, 71375; 10 CFR 431.294. In section 6.2 of ANSI/ASHRAE Standard 32.1–2004, 

Voltage and Frequency, the first modification specifies that equipment with dual 

nameplate voltages must be tested at the lower of the two voltages only. 71 FR 71340, 

71355 The second modification specifies that (1) any measurement of “vendible 

capacity” of refrigerated bottled or canned beverage vending machines must be in 

accordance with the second paragraph of section 5 of ANSI/ASHRAE Standard 32.1– 

2004, Vending Machine Capacity; and (2) any measurement of “refrigerated volume” of 

refrigerated bottled or canned beverage vending machines must be in accordance with the 

methodology specified in section 5.2, Total Refrigerated Volume (excluding subsections 

5.2.2.2 through 5.2.2.4) of ANSI/AHAM HRF–1–2004, “Energy, Performance and 

Capacity of Household Refrigerators, Refrigerator-Freezers and Freezers.” 

The current version of ANSI/ASHRAE Standard 32.1-2004 defines standard 

bottled, canned, or other sealed beverage storage capacity; establishes uniform methods 

of testing for determining laboratory performance of vending machines for bottled, 

canned, or other sealed beverages; and defines three tests/test conditions, as seen in 

Table III.1. 

29 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

Table III.1 ANSI/ASHRAE Standard 32.1-2004–Standard Test Conditions 

Test and Pretest 

Conditions Energy Consumption Tests Vend Test Recovery Test 

Ambient Temperature Perform twice: At 90±2°F 

(32.2±1°C) and at 75°F±2°F 

(23.9±1°C) 

90±2°F (32.2±1°C) 90±2°F (32.2±1°C) 

Relative Humidity 65±5% for 90±2°F test 

and 

45±5% for 75±2°F test 

65±5% 65±5% 

Reloaded Product 

Temperature 

__ 90±1°F (32.2±0.5°C) 90±1°F (32.2±0.5°C) 

Average Beverage 

Temperature (for test) 

36±1°F (2.2±0.5°C) 

Throughout Test 

40°F or less 

(4.4°C or less) 

Final Temperature 

33-40°F 

(0.6-4.4°C) 

Final Temperature 

Average Beverage 

Temperature (for 

pretest conditions) 

Not Applicable 36±1°F (2.2±0.6°C) 

Pretest Conditions 

36±1°F (2.2±0.6°C) 

Pretest Conditions 

During the NOPR public meeting, ASAP stated that DOE’s test procedures for 

beverage vending machines should be revised to capture technologies such as variable 

speed technologies and advanced controls. ASAP stated that there are energy savings that 

are not being achieved because the test procedure does not account for these types of 

technologies. (ASAP, Public Meeting Transcript, No. 56 at p. 36) In addition, Coca-Cola 

stated that the DOE test procedure does not accurately reflect actual operating conditions, 

because it does not regulate or dictate the control of the operating methods for all the 

powered elements in the equipment. (Coca-Cola, Public Meeting Transcript, No. 56 at p. 

147) Coca-Cola also stated that lighting controls would not save as much energy in real 

world applications as the test procedure indicates, resulting in “artificially low” test 

results. (Coca-Cola, No. 63 at p. 1) Coca-Cola commented that very few of its vending 

machines go into applications where they are inactive for long periods of time. (CocaCola, Public Meeting Transcript, No. 56 at p. 193) For these reasons, Coca-Cola and 

NAMA conclude that TSL 6 for Class A machines is not “practically feasible.” (CocaCola, No. 63 at p. 1 and NAMA, No. 65 at p. 3) The Joint Comment recommends that the 

next revision to the current test procedure address; (1) the limitations of steady-state 

30 

EERE-2006-BT-STD-0125 COMMENT 71
testing conditions, (2) the current test procedure’s insufficient representation of real 

world conditions, and (3) the capture of increased energy use as a result of future, energy 

intensive beverage vending machine features, such as interactive displays. (Joint 

Comment, No. 67 at p. 4) Elstat stated that prohibiting the use of standby and off mode 

power does not support the goal of reduced energy consumption in beverage vending 

machines, and recommends that DOE revisit the use of energy management controls in 

2010, or within one year of the rule statutory deadline (Elstat, No. 62 at p. 1) DOE notes, 

however, that it is not prohibiting the use of standby and off mode power consumption, 

but rather is not including standby mode and off mode power consumption in its 

calculation of energy use. As stated in the May 2009 NOPR, DOE has decided to address 

these additional requirements when the energy conservation standards for beverage 

vending machines are reviewed in August 2015 (see section II.B.1) and, as described 

below, must review the test procedures by 2013. 

As stated above, DOE’s test procedure for refrigerated beverage vending 

machines is based on ANSI/ASHRAE Standard 32.1-2004. Section 302(a) of EISA 2007 

amended section 323 of EPCA, in part, by adding new subsection 323(b)(1). (42 U.S.C. 

6293(b)(1)) This subsection provides that the Secretary shall review test procedures at 

least once every 7 years. Therefore, the test procedure for refrigerated beverage vending 

machines must be reviewed by December 8, 2013, to determine whether an amendment is 

necessary. In addition, DOE is aware that ASHRAE, via its Standards Project Committee 

32.1, is working on an update to ANSI/ASHRAE Standard 32.1-2004. While specific 

changes to ASHRAE Standard 32.1-2004 are unknown at this time, DOE understands 

31 

EERE-2006-BT-STD-0125 COMMENT 71
that the beverage vending machine industry is working closely with ASHRAE to develop 

an update to this test procedure. As part of the 7-year review of the test procedures for 

refrigerated beverage vending machines, DOE will consider any updates to ASHRAE 

Standard 32.1 standard, as well as any technologies to reduce energy consumption and/or 

increase energy efficiency and determine whether the test procedure and/or measure of 

energy efficiency warrant revisions. 

B. Technological Feasibility 

1. General 

As stated above, any standards that DOE establishes for beverage vending 

machines must be technologically feasible. (42 U.S.C. 6295(o)(2)(A) and (o)(3)(B); 42 

U.S.C. 6316(e)(1)) DOE considers a design option to be technologically feasible if it is in 

use by the respective industry 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). 

This final rule considers the same design options as those evaluated in the May 

2009 NOPR. (See chapter 4 of the TSD.) All the evaluated technologies have been used 

(or are being used) in commercially available products or working prototypes. Therefore, 

DOE has determined that all of the efficiency levels evaluated in this notice are 

technologically feasible. 

2. Maximum Technologically Feasible Levels 

32 

EERE-2006-BT-STD-0125 COMMENT 71
As required by EPCA, (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6316(e)(1)) in 

developing the May 2009 NOPR, DOE identified the energy use levels that would 

achieve the maximum reductions in energy use that are technologically feasible (“maxtech” levels) for beverage vending machines. 74 FR 26025. For today’s final rule, the 

max-tech levels for all classes are the levels provided in Table III.2. DOE identified these 

maximum technologically feasible levels for the equipment classes analyzed as part of 

the engineering analysis (chapter 5 of the TSD). For both equipment classes, DOE 

applied the most efficient design options available for energy-consuming components. 

Table III.2 Max-Tech Energy Use Levels 

Equipment Class Max-Tech Level 

kWh/day* 

A MDEC = 0.045 x V + 2.42 

B MDEC = 0.068 x V + 2.63 

“V” is the refrigerated volume of the refrigerated bottled or canned beverage vending machine, as 

measured by ANSI/AHAM HRF-1-2004. 

*Kilowatt hours per day. 

C. Energy Savings 

DOE forecasted energy savings in its national energy savings (NES) analysis 

through the use of a spreadsheet tool discussed in the May 2009 NOPR. 74 FR 26020, 

26039-43, 26057. 

One criterion that governs DOE’s adoption of standards for refrigerated beverage 

vending machines is the standard must result in “significant conservation of energy.” 

(42 U.S.C. 6295(o)(3)(B) and 42 U.S.C. 6316(e)(1)) While EPCA does not define the 

term “significant,” 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 

33 

EERE-2006-BT-STD-0125 COMMENT 71
trivial.” DOE’s estimates of the energy savings for energy conservation standards at each 

of the TSLs in today’s final rule indicate that the energy savings each would achieve are 

nontrivial. Therefore, DOE considers these savings “significant” within the meaning of 

section 325 of EPCA. 

D. Economic Justification 

1. Specific Criteria 

As noted earlier, EPCA provides seven factors to evaluate in determining whether 

an energy conservation standard for refrigerated beverage vending machines is 

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

following sections discuss how DOE has addressed each of those seven factors in this 

rulemaking. 

a. Economic Impact on Commercial Customers and Manufacturers 

DOE considered the economic impact of the new refrigerated beverage vending 

machines standards on commercial customers and manufacturers. For customers, DOE 

measured the economic impact as the change in installed cost and life-cycle operating 

costs, i.e., the LCC. (See sections IV.F and VI.C.1.a and chapter 8 of the TSD.) DOE 

investigated the impacts on manufacturers through the manufacturer impact analysis 

(MIA). (See sections IV.J and VI.C.2, and chapter 13 of the TSD.) The economic impact 

on commercial customers and manufacturers is discussed in detail in the May 2009 

NOPR. 74 FR 26033-38, 26039-26044, 26044-47, 26050-53, 26053-56, 26063-67. 

b. Life-Cycle Costs 

34 

EERE-2006-BT-STD-0125 COMMENT 71
DOE considered life-cycle costs of beverage vending machines, as discussed in 

the May 2009 NOPR. 74 FR at 26033-38, 26050-53 

DOE calculated the sum of the purchase price and the operating expense 

(discounted over the lifetime of the equipment) to estimate the range in LCC benefits that 

commercial customers would expect to achieve due to the standards. 

c. Energy Savings 

Although significant conservation of energy is a separate statutory requirement 

for imposing an energy conservation standard, EPCA also requires DOE, in determining 

the economic justification of a standard, to consider the total projected energy savings 

that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and 

42 U.S.C. 6316(e)(1)) As in the May 2009 NOPR (74 FR 26056-57), for today’s final 

rule, DOE used the NES spreadsheet results in its consideration of total projected savings 

that are directly attributable to the standard levels DOE considered. 

d. Lessening of Utility or Performance of Equipment 

In selecting today’s standard levels, DOE sought to avoid new standards for 

beverage vending machines that would lessen the utility or performance of that 

equipment. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 42 U.S.C. 6316(e)(1)); 74 FR 26059. 

Today’s standards do not involve changes in design or unusual installation requirements 

that would reduce the utility or performance of the equipment. 

e. Impact of Any Lessening of Competition 

35 

EERE-2006-BT-STD-0125 COMMENT 71
DOE considers any lessening of competition likely to result from standards. 

Accordingly, as discussed in the May 2009 NOPR (74 FR 26059, 26064-65, 26070-71), 

DOE requested that the Attorney General transmit to the Secretary a written 

determination of the impact (if any) of lessening of competition likely to result from 

today’s standard, together with an analysis of the nature and extent of such impact. (42 

U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii) and 42 U.S.C. 6316(e)(1)) 

To assist the Attorney General in making such a determination, DOE provided the 

Department of Justice (DOJ) with copies of May 2009 proposed rule and the NOPR TSD 

for review. (DOJ, No. 61 at pp. 1–2) The Attorney General’s response is discussed in 

section VI.C.5 and is reprinted at the end of this rule. For Class A machines, DOJ 

concluded that the proposed TSL 6 could potentially lessen competition. DOJ requested 

that DOE ensure that the standard it adopts for Class A beverage vending machines will 

not require access to intellectual property owned by an industry participant, which would 

place other industry participants at a comparative disadvantage. For Class B machines, 

DOJ does not believe the proposed standard would likely lead to a lessening of 

competition. Compliance with a lesser standard does not appear to raise similar concerns. 

f. Need of the Nation to Conserve Energy 

In considering standards for refrigerated beverage vending machines, the 

Secretary must consider the need of the Nation to conserve energy. (42 U.S.C. 

6295(o)(2)(B)(i)(VI) and 42 U.S.C. 6316(e)(1)) The Secretary recognizes that energy 

conservation benefits the Nation in several important ways. The non-monetary benefits of 

36 

EERE-2006-BT-STD-0125 COMMENT 71
the standards are likely to be reflected in improvements to the security and reliability of 

the Nation’s energy system. Today’s standards will also result in environmental benefits. 

DOE has considered these factors in adopting today’s standards. 

g. Other Factors 

In determining whether a standard is economically justified, EPCA directs the 

Secretary to consider any other factors deemed relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII) 

and 42 U.S.C. 6316(e)(1)) In adopting today’s standard, DOE considered LCC impacts 

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

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

DOE examined the LCC on businesses with high financing costs and low energy prices 

that may not be able to afford a significant increase in the purchase price (“first cost”) of 

beverage vending machines. Some of these customers may retain equipment past its 

useful life. Large increases in first cost could also preclude the purchase and use of 

equipment entirely. DOE identified no factors for analysis other than those already 

considered above. 

2. Rebuttable Presumption 

Section 325(o)(2)(B)(iii) of EPCA states that there is a rebuttable presumption 

that an energy conservation standard is economically justified if the additional cost to the 

consumer that meets the standard level is less than three times the value of the first-year 

energy (and as applicable, water) savings resulting from the standard, as calculated under 

the applicable DOE test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 

6316(e)(1)) DOE’s LCC and payback period (PBP) analyses generate values that 

calculate the PBP for customers of potential energy conservation standards, which 

37 

EERE-2006-BT-STD-0125 COMMENT 71
includes, but is not limited to, the 3-year PBP contemplated under the rebuttable 

presumption test discussed above. However, DOE routinely conducts a full economic 

analysis that considers the full range of impacts, including those to the customer, 

manufacturer, Nation, and environment, as required under 42 U.S.C. 6295(o)(2)(B)(i) and 

42 U.S.C. 6316(e)(1). The results of this analysis serve as the basis for DOE to evaluate 

definitively the economic justification for a potential standard level (thereby supporting 

or rebutting the results of any preliminary determination of economic justification). 

IV. Methodology and Discussion of Comments on Methodology 

DOE used several previously developed analytical tools in setting today’s 

standard. Each was adapted for this rule. One of these analytical tools is a spreadsheet 

that calculates LCC and PBP. Another calculates national energy savings and national 

NPV. A third tool is the Government Regulatory Impact Model (GRIM), the results of 

which are the basis for the MIA, among other methods. In addition, DOE developed an 

approach using the National Energy Modeling System (NEMS) to estimate impacts of 

energy efficiency standards for beverage vending machines on electric utilities and the 

environment. The TSD appendices discuss each of these analytical tools in detail. 74 FR 

26026-49. 

As a basis for this final rule, DOE has continued to use the spreadsheets and 

approaches explained in the May 2009 NOPR. DOE used the same general methodology 

but has revised some of the assumptions and inputs for this final rule in response to 

comments from interested parties. The following paragraphs discuss these revisions. 

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EERE-2006-BT-STD-0125 COMMENT 71
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. DOE presented its market and technology assessment for 

this rulemaking in the May 2009 NOPR and chapter 3 of the NOPR TSD. The assessment 

included equipment definitions, equipment classes, manufacturers, quantities and types of 

equipment offered for sale, retail market trends, and regulatory and non-regulatory 

programs. 

1. Definitions Related to Refrigerated Beverage Vending Machines 

a. Definition of Bottled or Canned Beverage 

EPCA defines the term “refrigerated bottled or canned beverage vending 

machine” as “a commercial refrigerator that cools bottled or canned beverages and 

dispenses the bottled or canned beverages on payment.” (42 U.S.C. 6291(40)) Thus, 

coverage of equipment under EPCA as a beverage vending machine, in part, depends on 

whether it cools and dispenses “bottled beverages” and/or “canned beverages.” DOE 

tentatively decided to consider a broader definition for the terms “bottled” and “canned” 

as they apply to beverage vending machines based on comments on the framework 

document. A bottle or can in this broader definition refers to “a sealed container for 

beverages,” so a bottled or canned beverage is “a beverage in a sealed container.” Such a 

definition would avoid unnecessary complications regarding the material composition of 

the container and eliminate the need to determine whether a particular container is a 

39 

EERE-2006-BT-STD-0125 COMMENT 71
bottle or a can. In the ANOPR, DOE sought comment on this broader definition and on 

whether it is consistent with the intent of EPCA. (73 FR 34103) DOE did not receive any 

comments on this and thus proposed in the NOPR that a bottled or canned beverage mean 

“a beverage in a sealed container.” (74 FR 26027) Because DOE did not receive any 

comments in response to the proposed definition in the May 2009 NOPR, DOE is 

adopting the definition of bottled or canned beverage as proposed, without modification. 

2. Equipment Classes 

When evaluating and establishing energy conservation standards, DOE generally 

divides covered equipment into equipment classes by the type of energy used, capacity, 

or other performance-related features that affect efficiency and factors such as the utility 

of such feature(s). (42 U.S.C. 6295(q)) DOE routinely establishes different energy 

conservation standards for different equipment classes based on these criteria. 

Certain characteristics of beverage vending machines have the potential to affect 

their energy use and efficiency. Accordingly, these characteristics could be the basis for 

separate equipment classes for these machines. DOE determined that the most significant 

criterion affecting beverage vending machine energy use is the method used to cool 

beverages. In the NOPR, DOE divided covered equipment into two equipment classes 

according to method of refrigeration: Class A and Class B. (74 FR 26027) 

The Class A beverage vending machine equipment class comprises machines that 

cool product throughout the entire refrigerated volume of the machine. Class A machines 

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EERE-2006-BT-STD-0125 COMMENT 71
generally use “shelf-style” vending mechanisms and a transparent (glass or polymer) 

front. Because the next-to-be-vended product is visible to the customer and any product 

can be selected by the customer off the shelf, all bottled or canned beverage containers 

are necessarily enclosed within the refrigerated volume. 

In Class B beverage vending machines, refrigerated air is directed at a fraction (or 

zone) of the refrigerated volume of the machine. This cooling method is used to assure 

that the next-to-be-vended product will be the coolest product in the machine. These 

machines typically have an opaque front and use a “stack-style” vending mechanism. 

Therefore, DOE defines Class A and Class B as follows: 

• Class A means a refrigerated bottled or canned beverage vending machine that is 

fully cooled, and is not a combination vending machine. 

• Class B means any refrigerated bottled or canned beverage vending machine not 

considered to be Class A, and is not a combination vending machine. 

Because DOE did not receive any comments in response to the presentation of 

equipment classes in the May 2009 NOPR, DOE is adopting the equipment classes as 

proposed, with a modification to address combination vending machines as described in 

section II.B.2.b. 

B. Screening Analysis 

The purpose of the screening analysis is to evaluate the technology options 

identified as having the potential to improve the efficiency of equipment, to determine 

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EERE-2006-BT-STD-0125 COMMENT 71
which technologies to consider further and which to screen out. DOE consulted with 

industry, technical experts, and other interested parties to develop a list of technologies 

for consideration. DOE then applied the following four screening criteria to determine 

which technologies are unsuitable for further consideration in the rulemaking: 

1. Technological Feasibility. Technologies incorporated in commercial 

equipment or in working prototypes will be considered technologically 

feasible. 

2. Practicability to Manufacture, Install, and Service. If mass production and 

reliable installation and servicing of a technology in commercial equipment 

could be achieved on the scale necessary to serve the relevant market at the 

time of the effective date of the standard, then that technology will be 

considered practicable to manufacture, install, and service. 

3. Adverse Impacts on Equipment Utility or Equipment Availability. If a 

technology is determined to have significant adverse impact on the utility of 

the equipment to significant subgroups of customers, or result in the 

unavailability of any covered equipment type with performance characteristics 

(including reliability), features, sizes, capacities, and volumes that are 

substantially the same as equipment generally available in the United States at 

the time, it will not be considered further. 

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EERE-2006-BT-STD-0125 COMMENT 71
4. Adverse Impacts on Health or Safety. If it is determined that a technology will 

have significant adverse impacts on health or safety, it will not be considered 

further. 

10 CFR Part 430, Subpart C, Appendix A at 4(a)(4) and 5(b). 

In the ANOPR market and technology assessment, DOE developed an initial list 

of technologies expected to have the potential to reduce the energy consumption of 

beverage vending machines. In the screening analysis, DOE screened out technologies 

based on the four criteria discussed above. The list of remaining technologies became one 

of the key inputs to the engineering analysis. (73 FR 34108–09) For the engineering 

analysis each technology is referred to as a design option. 

After the ANOPR screening analysis, DOE did not receive any comments 

suggesting a change to its list of design options. As a result, no changes were made for 

the NOPR. During the NOPR public meeting, multiple manufacturers expressed the 

ability to meet today’s standard with the use of lighting controls. (Dixie-Narco, Public 

Meeting Transcript, No. 56 at p. 188 and Royal Vendors, Public Meeting Transcript, No. 

56 at p. 189) As a result, the signatories of the Joint Comment suggest that DOE consider 

lighting controls as a design option for the final rule because, if not considered, “costeffective energy-savings may be forgone.” (Joint Comment, No. 67 at p. 3) 

DOE disagrees with the Joint Commenters’ assessment of lighting controls. The 

Joint Comment infers that a lighting control design option meets the screening analysis 

43 

EERE-2006-BT-STD-0125 COMMENT 71
criteria. According to the screening criteria, however, a technology cannot be considered 

as a design option if it has adverse impacts on equipment utility. 10 CFR Part 430, 

Subpart C, Appendix A at 4(a)(4) and 5(b) DOEs analysis ensures preservation of 

equipment utility by choosing design options that, when implemented, do not lessen 

utility relative to the engineering baseline unit. The energy-savings potential of lighting 

controls is realized when the control system automatically deactivates all or a portion of a 

machine’s lighting system. While the lighting system is deactivated, the light output of 

the machine is reduced, leaving the machine’s contents or signage less visible. If lighting 

controls were a design option in the engineering analysis, this reduction would represent 

a loss in utility relative to the baseline unit. Therefore, lighting controls do not meet the 

screening criteria, and DOE will not consider them as a design option in its analysis for 

the final rule. 

In the ANOPR screening analysis, variable-speed compressors were eliminated 

from consideration. For the NOPR analysis, DOE did not receive any comments 

recommending that variable-speed compressors be reconsidered. For the final rule 

analysis, the Joint Comment recommended that DOE reconsider this technology, stating 

that it believes variable-speed compressors can provide some energy-use reduction, 

despite the current steady-state conditions that are prescribed in ANSI/ASHRAE 

Standard 32.1-2004 test procedure. The Joint Comment asserted that when DOE screened 

out variable-speed compressors, DOE did not consider that beverage vending machine 

manufacturers oversize their compressors to meet purchasers’ pull down requirements. 

(Joint Comment, No. 67 at p. 2) 

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EERE-2006-BT-STD-0125 COMMENT 71
DOE screened out variable-speed compressors in the ANOPR analysis because 

the resulting energy efficiency ratio of a variable-speed compressor operating at steady 

state, according to the test procedure, would not be greater than the energy efficiency 

ratio of a properly sized single-speed compressor. DOE acknowledges that a variablespeed compressor operating at steady state may have energy savings compared to an 

oversized single-speed compressor operating at the same conditions. However, DOE is 

unaware of any data that quantifies and compares these energy savings specifically for 

beverage vending machines under these conditions. DOE was also unable to determine 

whether variable-speed compressors are a cost-effective design option. Due to a lack of 

any comparative data on the performance of variable speed compressors for these 

applications and evidence of the cost effectiveness of variable-speed compressors, DOE 

did not consider variable-speed compressors in its analysis. 

In the framework document, DOE stated that, to the greatest extent possible, it 

would base its analysis on commercially available technologies that have not been 

screened out, including proprietary designs. DOE stated that it would consider a 

proprietary design in the subsequent analyses only if it is not a unique path to a given 

efficiency level. If the proprietary design is the only approach available to achieve a 

given efficiency level, then DOE will exclude that efficiency level from further analysis. 

During the NOPR public meeting, PepsiCo stated that the use of LED lighting in 

glass front vendors is a proprietary design patented by Coca-Cola, which PepsiCo is 

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EERE-2006-BT-STD-0125 COMMENT 71
precluded from using. (PepsiCo, Public Meeting Transcript, No. 56 at p. 52) In a written 

comment, NAMA stated similar concerns. (NAMA, No. 65 at p. 3) Coca-Cola stated that 

there are control strategies used in beverage vending machines (e.g., certain lighting 

controls and certain motor controls) that are patented and are not widely available for use 

by all manufacturers. (Coca-Cola, No. 56 at p. 149 and Coca-Cola, No. 63 at p. 1) CocaCola added that TSL 6 for Class A machines cannot be achieved without these 

“firmware” control strategies. (Coca-Cola, No. 63 at p. 1) According to USA 

Technologies, there are patented, after-market lighting control products widely used in 

the industry. (USA Technologies, Public Meeting Transcript, No. 56 at p. 200) In 

addition, Dixie-Narco stated that it is not aware of any intellectual property issues that 

would prevent other manufactures from adopting lighting strategies similar to those that it 

has been using in its equipment. (Dixie-Narco, No. 64 at p. 3) ASAP stated that certain 

patented technologies may provide a cost-effective way to achieve a certain efficiency 

level, but they do not preclude a manufacturer from achieving the same efficiency level 

in a different manner. ASAP submits that there are historically multiple paths to achieve 

any given efficiency level. (ASAP, Public Meeting Transcript, No. 56 at p. 202) 

DOE recognizes that there are existing patents that involve specific screened-in 

beverage vending machine technologies. For example, there is a U.S. patent on a 

“Dispensing Apparatus with Directional LED Lighting” (Patent No. U.S. 6,550,269 B2, 

April 22, 2003). DOE is not screening out proprietary technologies such as LED lighting 

or certain control strategies, solely because they are proprietary. In contrast, DOE is 

incorporating these technologies into its analysis because DOE believes that there are 

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EERE-2006-BT-STD-0125 COMMENT 71
alternate pathways to achieve the efficiency levels associated with these technologies. 

Providing LED lighting in a vending machine in a manner other than directionally, 

employing an alternative lighting type, and/or providing various other control strategies 

that are not patented, have the potential to result in a vending machine that meets 

equivalent efficiency levels. 

DOE notes that most patents do not convey market power to their owners because 

close substitutes for these inventions exist. Licensors will pay no more for patented 

technologies than the cost advantage they provide over the next best alternative pathway 

to compliance with the efficiency standard. Ultimately, the availability of cost-effective 

alternate technology pathways is what limits the ability of the owner of a proprietary 

technology to extract high fees for its use. It is DOE’s opinion that a standard level which 

can only be met with a single proprietary technology which comes without assurances of 

open and free technology access should be rejected because it carries great risk of 

resulting in an anti-competitive market. This principle has been consistently applied in 

past DOE rulemakings. If standard levels were set based on proprietary technologies 

representing a unique path to compliance and not available to all equipment 

manufacturers, the standards-setting process itself would convey great market power 

because there would be no alternative means to satisfy the standard. In consideration of 

these factors, DOE maintains that it can consider proprietary designs as long as it is not a 

unique path to a given efficiency level. For the reasons discussed, DOE believes that 

neither directional LED lighting nor lighting controls represent a unique path to 

compliance with TSL 6 for Class A equipment. 

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EERE-2006-BT-STD-0125 COMMENT 71
C. Engineering Analysis 

The engineering analysis develops cost-efficiency relationships to show the 

manufacturing costs of achieving increased energy efficiency. As discussed in the May 

2009 NOPR, DOE used the design-option approach, involving consultation with outside 

experts, review of publicly available cost and performance information, and modeling of 

equipment cost and energy consumption. 74 FR 26027-26030. Chapter 5 of the NOPR 

TSD contains a detailed discussion of the engineering analysis methodology. 

1. Approach 

In this rulemaking, DOE is adopting a design-option approach, which calculates 

the incremental costs of increased efficiency. Efficiency increases are modeled by 

implementing specific energy saving technologies, referred to as design options, to a 

baseline model. Using the design-option approach, cost-efficiency relationship estimates 

are based on manufacturer or component supplier data or derived from engineering 

computer simulation models. Chapter 5 of the TSD contains a detailed description of the 

equipment classes analyzed and analytical models used to conduct the design-option 

approach based beverage vending machine engineering analysis. 

2. Analytical Models 

a. Cost Model 

DOE used a cost model to estimate the core case cost of beverage vending 

machines. The core case cost is the cost of all non-energy-consuming components, such 

as the structure, walls, doors, shelving, and fascia. This model was adapted from a cost 

model developed for DOE’s rulemaking on commercial refrigeration equipment (refer to 

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

48 

EERE-2006-BT-STD-0125 COMMENT 71
uipment.html for further detail on and validation of the commercial refrigeration 

equipment cost model). The approach for commercial refrigeration equipment involved 

disassembling a self-contained refrigerator, analyzing the materials and manufacturing 

processes for each component, and developing a parametric spreadsheet to model the cost 

to fabricate (or purchase) each component and the cost of assembly. Because of the 

similarities in manufacturing processes between self-contained commercial refrigeration 

equipment and beverage vending machines, DOE was able to adapt the commercial 

refrigeration equipment cost model for use in this rule. This adaptation involved 

maintaining many of the assumptions about materials and manufacturing processes but 

modifying the dimensions and types of components specific to beverage vending 

machines. To confirm the accuracy of the cost model, DOE obtained input from 

interested parties on beverage vending machine production cost estimates and on other 

assumptions DOE used in the model. Chapter 5 of the TSD provides details of the cost 

model. 

b. Energy Consumption Model 

The energy consumption model estimates the daily energy consumption (DEC) of 

beverage vending machines at various performance levels using the previously discussed 

design-option approach. The model is specific to the categories of equipment covered 

under this rulemaking, but is sufficiently generalized to model the energy consumption of 

both covered equipment classes. For a given equipment class, the model estimates the 

DEC for the baseline design and the energy consumption of several levels of performance 

above the baseline design. DOE uses the model to calculate each performance level 

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EERE-2006-BT-STD-0125 COMMENT 71
separately. For the NOPR, DOE made updates to the energy consumption model by 

altering Class A can capacities (or vendible capacities) and verifying Class B can 

capacities. For both classes, DOE modified exterior case dimensions, which resulted in 

changes in infiltration loads, refrigerated volumes, and exterior wall areas. These 

alterations and their effects are detailed in chapter 5 of the TSD. DOE did not receive any 

comments in response to these changes. Therefore, DOE maintained these revised 

calculation methodologies for the final rule. DOE did, however, receive a comment 

regarding the energy consumption model DEC results. Royal Vendors and NAMA 

commented that, without lighting, a Class B machine will always consume less energy 

than a similarly equipped Class A machine due to differences in their thermodynamic 

properties. Royal Vendors cites the divergence from this expected outcome at TSL 4 as 

the origin of their skepticism for DOE’s Class A analysis. (Royal Vendors, No. 60 at pp. 

1 and 2; NAMA, No. 65 at pp. 3 and 4) 

DOE’s analysis results and selected TSLs adequately reflect the thermodynamic 

differences between Class A and Class B machines. DOE agrees that a Class B machine 

stripped of electricity consuming components that are not essential to the refrigeration 

system (i.e., lighting) will consume less energy than a similarly equipped Class A 

machine. As described in chapter 5 of the final rule TSD, the engineering analysis’ DEC 

results are modeled as the sum of the component electricity consumption and compressor 

electricity consumption. The physical and thermodynamic equipment differences 

described by Royal affect the total refrigeration load, which is factored into the 

compressor electricity consumption in DOE’s energy consumption model. When 

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EERE-2006-BT-STD-0125 COMMENT 71
comparing compressor electricity consumption results between a Class A and Class B 

machine with the same volume, the Class B machine compressor consumes less 

electricity at all engineering efficiency levels. The divergence in DEC described by Royal 

Vendors at higher TSLs occurs because the modeled Class A and Class B machines being 

compared are no longer “similarly equipped.” Different design options are implemented 

for each machine class at each TSL, and each design option has unique energy savings 

potential. For instance, at TSL 4 for Class A machines, LED lighting is implemented 

which has an incremental component energy savings of 0.89 kWh/day. At TSL 4 for 

Class B machines, an electronically commutated motor (ECM) condenser fan motor is 

implemented which has an incremental component energy savings of 0.05 kWh/day. 

These incremental component energy savings manifest themselves as reductions in the 

component electricity consumption addend of the DEC. The greater energy savings 

potential of some Class A design options results in component electricity consumption 

reductions significant enough to drive the overall DEC of Class A machines below that of 

Class B machines. See chapter 5 of the TSD for a detailed explanation of the engineering 

analysis energy consumption model. 

Based on public comments, DOE proposed to use refrigerated volume instead of 

vendible capacity as the normalization metric for setting standards for beverage vending 

machines in the NOPR. (74 FR 26029) Following the NOPR, NAMA commented that 

volume was an appropriate normalization metric, rather than the number of cans. 

(NAMA, No. 65 at p. 3) Therefore, DOE will continue to use refrigerated volume as the 

normalization metric in the standard. 

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D. Markups to Determine Equipment Price 

In the May 2009 NOPR, DOE explained how it developed the distribution 

channel markups used. 74 FR 26036. DOE did not receive comments on these markups; 

however, it updated the distribution channel markups by including 2009 sales tax data as 

well as the markups for refrigerated beverage vending machines wholesalers using 2009 

financial data. DOE used these markups, along with sales taxes, installation costs, and 

manufacturer selling prices (MSPs) developed in the engineering analysis, to arrive at the 

final installed equipment prices for baseline and higher efficiency refrigerated beverage 

vending machines. As explained in the May 2009 NOPR (74 FR 26036), DOE defined 

three distribution channels for refrigerated beverage vending machines to describe how 

the equipment passes from the manufacturer to the customer. DOE retained the same 

distribution channel market shares described in the May 2009 NOPR. 

The new overall baseline and incremental markups for sales within each 

distribution channel are shown in Table IV.1 and Table IV.2. Chapter 6 of the TSD 

provides additional details on markups. 

Table IV.1 Overall Average Baseline Markups by Distribution Channel Including 

Sales Tax 

Markup Category Manufacturer Direct Wholesaler/Distributor Overall Weighted 

Average 

Markup 1.000 1.460 1.069 

Sales tax 1.071 1.071 1.071 

Overall markup 1.071 1.564 1.145 

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Table IV.2 Overall Average Incremental Markups by Distribution Channel 

Including Sales Tax 

Markup Category Manufacturer Direct Wholesaler/Distributor Overall Weighted 

Average 

Markup 1.000 1.200 1.030 

Sales tax 1.071 1.071 1.071 

Overall markup 1.071 1.285 1.103 

E. Energy Use Characterization 

The energy use characterization estimates the annual energy consumption of 

beverage vending machines. 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 use for machines in the two equipment classes examined (74 FR 26027) in the 

engineering analysis (chapter 5 of the TSD) based on the DOE test procedure. DOE 

incorporated ANSI/ASHRAE Standard 32.1-2004 by reference with two modifications as 

the DOE test procedure for the beverage vending machines. 71 FR 71340, 71375 (Dec. 8, 

2006); 10 CFR 431.294. DOE assumed all Class A machines to be installed indoors and 

subject to a constant air temperature of 75 °F and relative humidity of 45 percent, 

matching test conditions in the DOE test procedure. 73 FR 34114-15. Based on market 

data and discussions with several beverage vending machine distributors, DOE assumed 

that 25 percent of Class B machines are placed outdoors, with the remaining 75 percent 

placed indoors. DOE sought but did not receive comments on this distribution; thus, DOE 

maintained the same distribution of Class B machines for this final rule. 

F. 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 

beverage vending machine standards on individual customers. DOE used the same

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EERE-2006-BT-STD-0125 COMMENT 71
spreadsheet models to evaluate the LCC and PBP as it used for the NOPR analysis; 

however, DOE updated certain specific inputs to the models. 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 beverage vending machine 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. DOE measures the changes in LCC and in PBP associated 

with a given energy use standard level relative to a base case 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. 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, electricity price, and repair and maintenance costs. The 

PBP calculation uses the same inputs as the LCC analysis, but because it is a simple 

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payback, the operating cost is for the year the standard takes effect, assumed to be 2012. 

DOE believes LCC is a better indicator of economic impacts on customers. For each 

efficiency level analyzed, the LCC analysis required input data for the total installed cost 

of the equipment, operating cost, and discount rate. 

Table IV.3 summarizes the inputs and key assumptions DOE used to calculate the 

economic impacts of various energy consumption levels on customers. 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 today’s standard. Table IV.3 also shows how DOE 

modified these inputs and key assumptions for the final rule relative to the May 2009 

NOPR. Chapter 8 of the TSD provides the changes to the input data and discusses the 

overall approach to the LCC analysis. 

55 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

Table IV.3 Summary of Inputs and Key Assumptions Used in the LCC and PBP 

Analyses 

Input NOPR Description Changes for Final Rule 

Baseline 

Manufacturer 

Selling Price 

Price charged by manufacturer to either a wholesaler or 

large customer for baseline equipment. Developed by 

using industry-supplied efficiency level data and a 

design option analysis. 

Data reflect 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. Developed by using a combination of energy 

consumption level and design option analyses. 

Data reflect updated 

engineering analysis. 

Markups and 

Sales Tax 

Associated with converting the manufacturer selling 

price to a customer price (chapter 6 of TSD). Developed 

based on product distribution channels and sales taxes. 

Markups updated based 

on revised data on sales 

tax and wholesaler 

financial data. 

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 cost data provided by industry comment. 

Data reflect updated 

installation costs. 

Equipment Energy 

Consumption 

Site energy use associated with the use of beverage 

vending machines, which includes only the use of 

electricity by the equipment itself. Taken from 

engineering analysis and validated in energy use 

characterization. (chapter 7 of the TSD) 

Data reflect updated 

engineering analysis for 

each efficiency level. 

Electricity Prices Established average commercial electricity price 

($/kWh) from EIA data for 2008 in 2007$. DOE then 

established scaling factors for beverage vending 

machine customers based on the 2003 Commercial 

Building Energy Consumption Survey. 

No change. 

Electricity Price 

Trends 

Used the AEO2009 Reference Case to forecast future 

electricity prices and extrapolated prices to 2042. 

All price cases revised to 

reflect April 2009 update 

to AEO2009 values. 

Maintenance 

Costs 

Labor and material costs associated with maintaining the 

beverage vending machines (e.g., cleaning heat 

exchanger coils, checking refrigerant charge levels, lamp 

replacement). Based on industry comment on the NOPR, 

included an updated annualized cost of one 

refurbishment/remanufacturing cycle. 

No change in 

methodology; however, 

reinterpreted year’s 

values. 

Repair Costs Labor and material costs associated with repairing or 

replacing components that have failed. Estimated based 

on replacement frequencies and costs for key 

components. 

No change. 

Equipment 

Lifetime 

Age at which the beverage vending machine is retired 

from service. Based on industry comment on the 

ANOPR, reduced average service life to 10 years, with 

15 years as a maximum. 

No change. 

Discount Rate Computed by estimating the cost of capital for 

companies that purchase refrigeration equipment using 

business financial data from the Damodaran Online 

database from 2008. 

Updated based on data 

available in the 2009 

version of the 

Damodaran website. 

Rebound Effect A rebound effect was not taken into account in the LCC 

analysis. 

No change. 

Analysis Period The time span over which DOE calculated the LCC (i.e., 

2012–2042) 

No change 

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The changes in the input data and the discussion of the overall approach to the 

LCC analysis are provided in chapter 8 of the TSD. 

G. Shipments Analysis 

The shipments analysis develops future shipments for each class of beverage 

vending machines based on current shipments and equipment life assumptions, and takes 

into account the existing stock and expected trends in markets that use beverage vending 

machines. DOE received several comments on the shipments analysis and the resulting 

shipments during the NOPR. Although DOE used the same shipments model for the final 

rule analysis as the NOPR, many of the underlying assumptions concerning future market 

behavior were changed as a result of the interested party comments. 

1. Split Incentives 

Coca-Cola (Coca-Cola, Public Meeting Transcript, No. 56 at p. 196 and CocaCola, No. 63 at p. 2) and PepsiCo (PepsiCo, Public Meeting Transcript, No. 56 at p. 94) 

stated that if costlier components and expensive control schemes are necessary to produce 

higher efficiency equipment, it would purchase less equipment. While DOE recognizes 

the principle that higher costs of equipment might possibly affect sales, neither major 

purchaser provided any data that would allow a quantitative assessment of the effect of 

higher prices on overall purchases (price elasticity) to be calculated. However, DOE 

notes that for Class A equipment, the increase in installed cost at TSL 6 is in the range of 

5 to 10 percent; for Class B machines, the increase in installed cost is in the range of 2 to 

4 percent. Even if shipments fell by the same percentage that installed cost increased by 

(i.e., price elasticity equaled 1.0, a relatively large number), neither the net present value 

57 

EERE-2006-BT-STD-0125 COMMENT 71
 

of TSL 6 for Class A equipment nor the net present value of TSL 3 for Class B 

equipment would be noticeably affected, nor would the choice of standard levels. 

2. Sustainability of Sales Less than 100 Thousand Units 

USA Technologies (USA Tech, Public Meeting Transcript, No. 56 at pp. 78, 79, 

and 85) expressed a concern that the industry’s current number of manufacturers could 

not stay in business if total production were under 100,000 machines per year. DOE 

acknowledges the concern about industry sustainability. However, for the final rule, DOE 

assumes a level of shipments of 190,000 units per year, as explained in section IV.G.4. 

This assumption mitigates the concern about sales declining below 100,000 units. One 

major manufacturer (Dixie-Narco, Public Meeting Transcript, No. 56 at p. 86) stated that 

it can survive even at today’s low sales levels (less than 100,000 units) by operating on 

one shift; additionally, neither manufacturer with a large market share believed that a 

costly investment was necessary to meet the proposed standard. (Dixie-Narco, Public 

Meeting Transcript, No. 56 at p. 186; Royal Vendors, Public Meeting Transcript, No. 56 

at p. 188) 

3. Distribution of Equipment Classes and Sizes 

In the analysis conducted for the NOPR, DOE assumed based on interested party 

comments that Class A equipment would constitute 55 percent of new sales and Class B 

equipment would constitute 45 percent of new sales. PepsiCo (PepsiCo, Public Meeting 

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EERE-2006-BT-STD-0125 COMMENT 71
Transcript, No. 56 at p. 89) commented that Class A sales would be between 50 and 60 

percent and Coca-Cola (Coca-Cola, Public Meeting Transcript, No. 56 at p. 90) 

commented that, although they expected Class A equipment would be the majority of 

sales, currently Class B machines are more than 50 percent of sales. DOE has decided to 

shift to a ratio of 60 percent Class A machines to 40 percent Class B sales for the final 

rule. DOE also assumed in the analysis for the NOPR that small-size units would 

constitute approximately zero percent of future sales, medium-size units at 75 percent, 

and large-size units at 25 percent of sales. Coca-Cola (Coca-Cola, Public Meeting 

Transcript, No. 56 at p. 107) confirmed the distribution used for the NOPR. Dixie-Narco 

(Dixie-Narco, Public Meeting Transcript, No. 56 at p. 107) commented that the smallsize unit sales were zero, but that the large equipment share might be higher─by as much 

as 40 percent. Dixie-Narco also recommended that the NAMA could act as an 

intermediary to compile the data on sales and provide it to DOE. DOE asked NAMA, and 

NAMA was able to provide an estimate of the distribution between Class A and Class B 

units for a subset of the manufacturers, approximately 60 percent Class B machines and 

40 percent Class A machines (NAMA, No. 65 at p. 2). To take account of all of the 

comments received, DOE has decided to shift to a ratio of 50 percent Class A machines 

to 50 percent Class B sales for the final rule. NAMA was not able to provide data on the 

size distribution within classes. In the absence of that data and to account for all 

comments received, DOE has modified its distribution of sales to account for as follows 

for both Class A and Class B units: small-size units, zero percent; medium-size units, 67 

percent; and large-size units, 33 percent. 

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4. Future Sales Decline 

For the analysis at the NOPR stage, DOE assumed based on comments from 

interested parties on the ANOPR that future sales would all be replacement sales and 

would be flat at the then-current level of sales of about 90,000 units per year for the entire 

period of analysis. This level of replacements would result in a reduction in stock from 

today’s level of about 2.3 million units to about 1 million units by 2020. The commenters 

agreed that the current economic situation would result in additional decline in the 

number of deployed units (Royal Vendors, Public Meeting Transcript, No. 56 at p. 74; 

Dixie-Narco, Public Meeting Transcript, No. 56 at p. 76); Coca-Cola, Public Meeting 

Transcript, No. 56 at pp. 77 and 91), but with a possibility of a near-term recovery based 

on the need to replace older equipment as it reaches the end of its lifetime and to continue 

to serve the current customer base. (Dixie-Narco, Public Meeting Transcript, No. 56 p. 

79-80; Pepsi, Public Meeting Transcript, No. 56 at p. 88; Coca-Cola, Public Meeting 

Transcript, No. 56 at p. 91) Several commenters (Dixie-Narco, Public Meeting 

Transcript, No. 56 at p. 76; Coca-Cola, Public Meeting Transcript, No. 56 at pp. 77 and 

83; ASAP, Public Meeting Transcript, No. 56 at p. 87) stated that 1 million units was too 

small to sustain the current customer base and that the shipments would therefore have to 

be higher than the current level. During the public meeting, participants estimated the 

ultimate stock ranged from about 1.6 million (Dixie-Narco, Public Meeting Transcript, 

No. 56 at p. 84) to above 2 million units. (Coca-Cola, Public Meeting Transcript, No. 56 

at p. 83) In view of these comments that there would be some additional shrinkage of 

stock but that the eventual level of stock in 2020 will need to be approximately 2 million 

units, DOE assumed that future shipments would quickly recover to 190,000 units per 

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year by 2011 and continue at that level for the foreseeable future. This allows for some 

continued stock shrinkage to about 1.6 million units in the short run as the 1998-2000 

vintage equipment retires faster than it is replaced, but with stock recovering to 1.9 

million units by 2020 and to approximately 2 million units by 2022. As ASAP observed 

(ASAP, Public Meeting Transcript, No. 56 at p. 87), this change in assumptions for the 

final rule significantly increases the overall economic benefit of the rule, but its effect is 

proportional to sales and does not significantly affect the choice between potential levels 

of the standards. 

H. National Impact Analysis 

The national impact analysis (NIA) assesses future NES and the national 

economic impacts of different efficiency levels. The analysis measures economic impacts 

using the NPV (future amounts discounted to the present) of total commercial customer 

costs and savings expected to result from new standards at specific efficiency levels. For 

the final rule analysis, DOE used the same spreadsheet model used in the NOPR to 

calculate the energy savings and the national economic costs and savings from new 

standards, but did so with updates to specific input data. 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 NIA spreadsheet to perform 

calculations of NES and NPV using; (1) the annual energy consumption and total 

installed cost data from the LCC analysis, and (2) estimates of national shipments and 

stock for each beverage vending machine class from the shipments analysis. DOE 

forecasted the energy savings from each TSL from 2012 to 2042. DOE forecasted the 

energy cost savings, equipment costs, and NPV of benefits for all refrigerated beverage 

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vending machines classes from 2012 to 2057. 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 refrigerated beverage vending machines in the base case efficiency distribution 

is replaced by a more efficient piece of equipment as a result of the standard. Energy 

savings for each equipment class are the same national average values as calculated in the 

LCC and PBP spreadsheet. Table IV.4 summarizes key inputs to the NIA analysis and the 

changes DOE made in the analysis for the final rule. Chapter 11 of the TSD provides 

additional information about the NIA spreadsheet. 

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EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

Table IV.4 Summary of National Energy Savings and Net Present Value Inputs 

Input Data Description of NOPR Analysis Changes for Final Rule 

Shipments No growth in shipments; based on industry 

comments on the NOPR, all shipments are 

replacements. 

Shipments grow to 190,000 per 

year. 

Effective Date of 

Standard 

2012 No change 

Base Case 

Efficiencies 

Distribution of base case shipments by 

efficiency level. 

No change 

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 

Annual Energy 

Consumption per 

Unit 

Annual weighted-average values are a function 

of energy consumption level per unit, which are 

established in chapter 7 of the TSD, 

No change 

Total Installed Cost 

per Unit 

Annual weighted-average values are a function 

of energy consumption level (chapter 8 of the 

TSD). 

No change in methodology. 

Installed costs reflect the updated 

final rule LCC. 

Repair Cost per 

Unit 

Annual weighted-average values are constant in 

real dollar terms for each energy consumption 

level (chapter 8 of the TSD). 

No change in methodology. 

Repair costs reflect the updated 

final rule LCC values. 

Maintenance Cost 

per Unit 

Annual weighted-average value (chapter 8 of the 

TSD), plus lighting maintenance cost. 

No change in methodology. 

Escalation of 

Electricity Prices 

Energy Information Administration (EIA) 

Annual Energy Outlook 2009 (AEO2009) 

forecasts (to 2030) and extrapolates beyond 

2030 (chapter 8 of the TSD). 

All cases updated to April 2009 

update to AEO2009 forecasts 

(chapter 8 of the TSD). 

Electricity Site-toSource Conversion Conversion factor varies yearly and is generated 

by EIA’s NEMS model. Includes the impact of 

electric generation, transmission, and 

distribution losses based on AEO2008. 

Site-to-source ratio follows April 

2009 update to AEO2009. 

Discount Rate 3 and 7 percent real. No change 

Present Year Future costs are discounted to 2009. No change 

Rebound Effect A rebound effect (due to changes in shipments 

resulting from standards) was not considered in 

the NIA. 

No change 

The modifications DOE made to the NES and NIA analyses for the final rule 

primarily reflect the latest available updates to the same data sources used in the NOPR, 

but not changes in methodology. In addition, the underlying input data on equipment 

costs and energy savings by TSL are based on the LCC analysis results as revised in the 

final rule. 

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Maintenance Costs Savings for LED Lighting in Machines 

At the NOPR stage, the Joint Comment (No. 67 at p. 3) indicated that there are 

maintenance costs savings and therefore potential life-cycle cost savings when LED 

lighting is used in place of the baseline T8 fluorescent lighting for beverage vending 

machines. The Joint Comment referenced an article in the September 3, 2008, edition of 

“Automatic Merchandiser,” Energize Displays with LED Lighting, accessed on 

Vendingmarketwatch.com for information on LED lighting maintenance costs versus 

maintenance costs for a beverage vending machine with a fluorescent lighting system 

(last accessed July 25, 2009). DOE also reviewed a more recent industry publication on 

maintenance cost savings for LED display lights in beverage vending machines in the 

April 15, 2009, edition of “Automatic Merchandiser,” Tools to Enhance Energy Savings, 

which was accessed on Vendingmarketwatch.com (last accessed July 25, 2009). 

In response to this comment, DOE conducted a sensitivity analysis for today’s 

final rule to estimate the net economic effect of reduced maintenance costs for using LED 

lighting in place of baseline T8 fluorescent lighting in beverage vending machine 

equipment. The sensitivity analysis estimated the annualized life cycle cost savings for 

LED lighting. For machines with T8 lighting, the analysis assumes two maintenance 

visits to a machine to change out three T8 lamps and a change out of the T8 lamps and 

the ballast at refurbishment (at 5 years) DOE assumed there was no additional labor for 

this change out, since this is undertaken at refurbishment. DOE estimated the total cost 

for maintenance (labor and materials) for machines with T8 lighting over the machine 

lifetime (10 years) to be $194. 

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For machines with LED lighting, no lighting maintenance visits would be 

required over the lifetime of the machine. The cost of replacing three LED strips at $50 

each would take place during refurbishment and would be $150. DOE assumed there 

would be no additional labor charge for this change out since this was being undertaken 

at refurbishment. 

The analysis estimated that the annualized net maintenance cost savings is $4.68 

for a LED lighting system used to light a machine compared to the baseline T8 lighting 

system for a machine. This net annualized maintenance cost savings is very small and 

does not significantly affect the life cycle cost analysis and thus does not impact the 

standards levels for today’s final rule. Chapter 8 of the TSD provides additional details of 

this sensitivity analysis. 

1. Choice of Discount Rate 

ASAP commented that the balance of DOE’s discussion of the choice of proposed 

standard overemphasized the 7 percent discount rate when both 7 percent and 3 percent 

are mandated by the Office of Management and Budget (OMB). (ASAP, Public Meeting 

Transcript, No. 56 at p. 144) ASAP argued that the actual cost of capital the Department 

chose for the purchase of the machine was lower than 7 percent so that the 3 percent rate 

should be considered in the Department's analysis, and is required to be considered by 

OMB. In response, DOE notes that it follows the guidelines on discount factors set forth 

in guidance that OMB provides to Federal agencies on the development of regulatory 

analysis (OMB Circular A-4 (September 17, 2003), particularly section E, “Identifying 

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EERE-2006-BT-STD-0125 COMMENT 71
 

and Measuring Benefits and Costs”). Accordingly, DOE is continuing to use 3 percent 

and 7 percent real discount rates for the relevant calculations for this final rule. 

2. Discounting of Physical Values 

ASAP commented that DOE should not be applying financial discount rates to 

physical values such as energy savings. (ASAP, Public Meeting Transcript, No. 56 at p. 

37) It said that doing so is an inappropriate application of financial evaluation tools and 

should be discontinued. 

DOE continues to report both undiscounted and discounted values of energy 

savings and carbon emission reductions. DOE believes this allows for consideration of a 

range of policy perspectives, one of which is the view that a reduction in emissions today 

is more valuable than one in 30 years. 

I. Life-Cycle Cost Subgroup Analysis 

In analyzing the potential impact of new or amended standards on commercial 

customers, DOE evaluates the impact on identifiable groups (i.e., subgroups) of 

customers, such as different types of businesses that may be disproportionately affected 

by a National standard level. For this rulemaking, DOE identified manufacturing and 

industrial facilities that purchase their own beverage vending machines as a relevant subgroup. This customer subgroup is likely to include owners of high-cost beverage vending 

machines because it has the highest capital costs. This group also faces the lowest 

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electricity prices of any customer subgroup. These two conditions make it likely that this 

subgroup will have the lowest life-cycle cost savings of any major customer sub-group. 

DOE determined the impact on this refrigerated beverage vending machines 

customer subgroup using the LCC spreadsheet model. DOE conducted the LCC and PBP 

analyses for customers represented by the subgroup. DOE did not receive comments on 

its identification of this class of customers as the key sub-group or on the assumptions 

applied to those subgroups. DOE relied on the same methodology outlined in the NOPR 

for the final rule analysis. The results of DOE’s LCC subgroup analysis are summarized 

in section VI.C.1.b and described in detail in chapter 12 of the TSD. 

J. Manufacturer Impact Analysis 

DOE performed an MIA to estimate the financial impact of energy conservation 

standards on manufacturers of beverage vending machine equipment, and to assess the 

impact of such standards on employment and manufacturing capacity. DOE conducted 

the MIA for beverage vending machine 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 beverage vending machine equipment energy conservation standards. In 

Phase 3, Subgroup Impact Analysis, DOE conducted interviews with manufacturers 

representing the majority of domestic beverage vending machine equipment sales. This 

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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. 

The GRIM inputs consist of the beverage vending machine industry’s cost 

structure, shipments, and revenues. This includes information from many of the analyses 

described above, such as manufacturing costs and selling prices from the engineering 

analysis and shipments forecasts from the NES. 

The GRIM uses the manufacturer selling prices in the engineering analysis to 

calculate the manufacturer production costs for each equipment class at each TSL. By 

multiplying the production costs by different sets of markups, DOE derives the MSPs 

used to calculate industry revenues. 

The GRIM estimates manufacturer revenues based on total-unit-shipment 

forecasts and the distribution of these shipments by efficiency. Changes in the efficiency 

mix at each standard level are a key driver of manufacturer finances. For the final rule 

analysis, DOE used the total shipments and efficiency distribution found in the final rule 

NES. 

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DOE estimates the equipment conversion costs and capital conversion costs that 

the industry would incur at each TSL. Equipment conversion costs include engineering, 

prototyping, testing, and marketing expenses incurred by a manufacturer as it prepares to 

comply with a standard. Capital conversion costs are the one-time outlays for tooling and 

plant changes required for the industry to comply. 

During the NOPR public meeting, DOE asked manufacturers to discuss their 

ability to meet the proposed TSLs and describe the impacts of those standards. Both 

Royal Vendors and Dixie-Narco discussed their ability to meet the proposed standards in 

terms of the conversion costs each would incur to develop higher efficiency equipment. 

Royal Vendors stated that, in the past, considerable costs were incurred to get from preENERGY STAR efficiency levels to ENERGY STAR Tier I efficiency levels. These 

costs included implementation of ECM fan motors, magnetic ballasts, and higher 

efficiency compressors. (Royal Vendors, Public Meeting Transcript, No. 56 at p. 185) 

Dixie-Narco agreed with Royal Vendors and stated that it faced a costly transition from 

ENERGY STAR Tier I to ENERGY STAR Tier II efficiency levels. (Dixie-Narco, 

Public Meeting Transcript, No. 56 at p. 186) In a written comment, NAMA also noted the 

considerable funds already spent by its members to comply with ENERGY STAR 

standards. (NAMA, No. 65 at p. 2) For Class B machines, Royal Vendors expects 

meeting TSL 3 will not require a tremendous effort. (Royal Vendors, Public Meeting 

Transcript, No. 56 at p. 220) Dixie-Narco also stated that it will be able to achieve the 

proposed standard for Class B machines without investing significant costs that would 

need to be passed on to its customers. (Dixie-Narco, No. 64 at p. 4) Dixie-Narco noted 

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that it achieved the TSL 6 energy consumption level with one of its Class A vending 

machines this year, using a lighting management system. (Dixie-Narco, Public Meeting 

Transcript, No. 56 at p. 188) Royal Vendors stated that it could meet TSL 6 for Class A 

machines at relatively minor cost if it were not precluded by proprietary design 

restrictions from adopting a lighting management system similar to Dixie-Narco’s. 

(Royal Vendors, Public Meeting Transcript, No. 56 at p. 189) Royal Vendors stated that 

implementing an energy management system is not an expensive addition to the machine 

and that it can be passed on at essentially no additional cost. (Royal Vendors, Public 

Meeting Transcript, No. 56 at p. 188) 

Based on public comments, DOE believes that it accurately estimated the 

conversion costs for Class B vending machines and did not make any changes for the 

final rule. However, for Class A vending machines, DOE believes that the use of energy 

management systems (e.g., lighting) could provide a method of achieving energy savings 

at minimal cost to manufacturers. To account for this possibility, DOE modified the 

assumed conversion costs required for manufacturers to meet the Class A energy 

consumption levels. In the NOPR, DOE assumed that since almost all of the market was 

already reaching TSL 1 (i.e., ENERGY STAR Tier II) for Class A machines, the 

conversion costs at TSL 1 were zero. The conversion costs progressively increased from 

TSL 2 through TSL 7 (i.e., max-tech). For the final rule, DOE accounted for the potential 

use of an energy management system by assuming there would be negligible conversion 

costs through TSL 2 for all Class A machines, shifting the conversion costs for TSLs 2 

through 5 from the NOPR to TSLs 3 through 6 for the final rule. For TSL 7, DOE 

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maintained the conversion costs from the NOPR since they represent the maximum 

possible conversion costs for the max-tech level. For more information about DOE’s 

manufacturer impact assumptions, see chapter 13 of the TSD. 

In a comment submitted on the NOPR, NAMA stated that one of its 

manufacturers would have difficulty achieving the reduction in energy consumption 

required by the proposed standard levels. The manufacturer could only meet the 

standards by changing the cabinet insulation thickness, which would require retooling its 

production lines at an estimated cost of over $1 million. (NAMA, No. 65 at p. 3) 

DOE estimated the conversion costs to manufacturers of the standard levels for 

both equipment classes and reports the values in chapter 13 of the TSD. DOE’s total 

estimated costs exceed the 1 million dollars reported by the manufacturer. Because DOE 

has accounted for conversion costs of this magnitude for the industry, DOE maintained 

the conversion costs reported in chapter 13 of the TSD. 

For the final rule, DOE analyzed manufacturer impacts under two distinct markup 

scenarios: (1) the preservation-of-gross-margin-percentage markup scenario, and (2) the 

preservation-of-operating-profit markup scenario. 

Under the first scenario, DOE applied a single uniform “gross margin percentage” 

markup that represents the current markup for manufacturers in the beverage vending 

machine industry. This markup scenario implies that as production costs increase with 

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efficiency, the absolute dollar markup will also increase. DOE calculated that the nonproduction cost markup—which consists of selling, general, and administrative (SG&A) 

expenses; research and development (R&D) expenses; interest; and profit—is 1.26. 

Under the second scenario, the implicit assumption behind the “preservation-ofoperating-profit” scenario is that the industry can only maintain its operating profit 

(earnings before interest and taxes) from the baseline after implementation of the 

standard in 2012. The industry impacts occur in this scenario when manufacturers expand 

their capital base and production costs to make more expensive equipment, but the 

operating profit does not change from current conditions. DOE implemented this markup 

scenario in the GRIM by setting the manufacturer markups at each TSL to yield 

approximately the same operating profit in both the base case and the standard case in the 

standards effective year of 2012. Together, these two markup scenarios characterize the 

range of possible conditions that the beverage vending machine market will experience as 

a result of new energy conservation standards. 

In the NOPR, DOE sought comments on whether and to what extent parties 

estimate they will be able to transfer costs of implementing TSL 6 to consumers. 74 FR 

26022. During the NOPR public meeting, Coca-Cola stated that, 10 years ago, it only had 

to sell 20 cases for a vending machine to make a profit. Now, it has to sell 100 cases for a 

vending machine to make a profit. It continued that there are many factors driving the 

profitability model of a vending machine, and to assume that model will not change is 

erroneous. (Coca-Cola, Public Meeting transcript, No. 56 at p. 91) Coca-Cola stated that, 

historically, cost increases in equipment could not be passed through to the customer. It 

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does not believe the increased cost of manufacturing higher efficiency equipment can be 

passed on to the consumer. As a result, the profit margin for each machine diminishes, 

resulting in an overall reduction in purchases. (Coca-Cola, Public Meeting Transcript, 

No. 56 at p. 183, Coca-Cola, No. 63 at p. 2, and NAMA, No. 65 at p. 5) As a result, 

Coca-Cola concluded that any increase in cost resulting from installing more energyefficient technologies into a vending machine cannot be transferred over to consumers. 

(Coca-Cola, Public Meeting Transcript, No. 56 at p. 182 and NAMA, No. 65 at p. 2) 

Coca-Cola estimates that today’s standard will result in an overall weighted average price 

markup of 14 1/2. (Coca-Cola, No. 63 at p. 2) 

The inability to pass on costs starts at the consumer level and ultimately travels 

throughout the entire distribution chain. As stated in comments from the NOPR public 

meeting, consumers are typically unwilling to incur additional costs for more energyefficient equipment. In addition, end-users (e.g., bottlers) are typically unwilling to incur 

additional costs for energy-efficient equipment, primarily due to the split-incentive issue. 

The split incentive issue is described in detail in the ANOPR. 73 FR 34101. Therefore, it 

is very difficult for manufacturers to transfer any cost increases for more energy-efficient 

equipment to their customers. The preservation-of-operating-profit scenario models the 

more negative potential impacts on the refrigerated beverage vending machine industry, 

and accounts for manufacturers’ inability to transfer additional costs to end-users. For 

additional detail on the manufacturer impact analysis, refer to chapter 13 of the TSD. In 

addition, as stated earlier in section IV.J, multiple major manufacturers stated that their 

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equipment could meet today’s standard at little or no added cost. (Dixie-Narco, No. 64 at 

p. 2 and Royal Vendors, Public Meeting Transcript, No. 56 at p. 189) 

K. Utility Impact Analysis 

The utility impact analysis estimates the effects of reduced energy consumption 

due to improved equipment efficiency on the utility industry. This analysis compares 

forecast results for a case comparable to the April 2009 updated AEO2009 Reference 

Case and forecast results for policy cases incorporating each of the beverage vending 

machines proposed TSLs. 

DOE analyzed the effects of proposed standards on electric utility industry 

generation capacity and fuel consumption using a variant of EIA’s NEMS model. 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, run similar to the April 2009 

update to the NEMS, except that refrigerated beverage vending machines 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. In response to the 

May 2009 NOPR, DOE did not receive comments directly on the methodology used for 

the utility impact analysis. DOE revised the final rule inputs to use the NEMS–BT 

consistent with the April 2009 update to AEO2009 and to use the NES impacts developed 

in the beverage vending machines final rule analysis. 

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In the utility impact 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. 

L. Employment Impact Analysis 

DOE considers direct and indirect employment impacts when developing a 

standard. In this case, direct employment impacts are any changes in the number of 

employees for beverage vending machines manufacturers, their suppliers, and related 

service firms. Indirect impacts are those changes in 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 beverage vending machines. In this rulemaking, the MIA 

addresses direct impacts (chapter 13 of the TSD), and the employment impact analysis 

addresses indirect impacts (chapter 15 of the TSD). 

Indirect employment impacts from beverage vending machines 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 refrigerated beverage vending machines; 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. 

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DOE used a different methodology to estimate 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. 

74 FR 26047, 26058. The new method uses the most recent version of the U.S. inputoutput table and updated sector employment intensities. The ImSET model estimates 

changes in employment, industry output, and wage income in the overall U.S. economy 

resulting from changes in expenditures in various economic sectors. DOE estimated 

changes in expenditures using the NES spreadsheet. ImSET then estimated the net 

national indirect employment impacts of potential refrigerated beverage vending 

machines efficiency standards on employment by sector. In response to the May 2009 

NOPR, DOE did not receive comments directly on the methodology used for the utility 

impact analysis. DOE updated its indirect employment impact analysis using Version 3 

of the ImSET model in the final rule. 

M. Environmental Assessment 

Pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 

4321 et seq.) and 42 U.S.C. 6295(o)2)(B)(i)(VI), DOE prepared an environmental 

assessment (EA) of the potential impacts of the proposed standards it considered for 

today’s final rule, which it has included as chapter 16 of the TSD for the final rule. DOE 

found that the environmental effects associated with the standards for beverage vending 

machines were not significant. Therefore, DOE is issuing a Finding of No Significant 

Impact (FONSI), pursuant to NEPA, the regulations of the Council on Environmental 

Quality (40 CFR parts 1500-1508), and DOE’s regulations for compliance with NEPA 

(10 CFR part 1021). The FONSI is available in the docket for this rulemaking. 

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In the EA, DOE estimated the reduction in total emissions of CO2 and NOx using 

the NEMS–BT computer model. DOE calculated a range of estimates for reduction in Hg 

emissions using current power sector emission rates. The EA does not include the 

estimated reduction in power sector impacts of sulfur dioxide (SO2), because DOE is 

uncertain that an energy conservation standard would not affect the overall level of SO2 

emissions in the United States due to the presence of national caps on SO2 emissions. 

These topics are addressed further below; see chapter 16 of the TSD for additional detail. 

The NEMS–BT is run similarly to the April 2009 update of NEMS, except that 

the refrigeration energy use is reduced by the amount of energy saved due to the trial 

standard levels. The inputs of national energy savings come from the NIA analysis. For 

the EA, the output is the forecasted physical emissions. The net benefit of the standard is 

the difference between emissions estimated by NEMS–BT and the April 2009 updated 

AEO2009 Reference Case. The NEMS–BT tracks CO2 emissions using a detailed module 

that provides results with a broad coverage of all sectors and inclusion of interactive 

effects. 

Title IV of the Clean Air Act sets an annual emissions cap on SO2 for all affected 

Electric Generating Units. The attainment of the emissions cap is flexible among 

generators and is enforced through the use of emissions allowances and tradable permits. 

Thus, DOE is not certain that there will be reduced overall SO2 emissions from the 

standards. However, there may be an economic benefit from reduced demand for SO2 

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emission allowances. Electricity savings decrease the generation of SO2 emissions from 

power production, which can lessen the need to purchase SO2 emissions allowance 

credits, and thereby decrease the costs of complying with regulatory caps on emissions. 

NOX emissions from 28 eastern States and the District of Columbia (D.C.) are 

limited under the Clean Air Interstate Rule (CAIR), published in the Federal Register on 

May 12, 2005. 70 FR 25162 (May 12, 2005). Although CAIR has been remanded to EPA 

by the D.C. Circuit, it will remain in effect until it is replaced by a rule consistent with 

the Court’s July 11, 2008 opinion in North Carolina v. EPA. 531 F.3d 896 (D.C. Cir. 

2008); see also North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008). These court 

positions were taken into account in the May 2009 NOPR. Thus, the same methodology 

was followed in estimating future NOX in the May 2009 NOPR as in the final rule. 

Because all States covered by CAIR opted to reduce NOX emissions through participation 

in cap-and-trade programs for electric generating units, emissions from these sources are 

capped across the CAIR region. 

For the 28 eastern States and D.C. where CAIR is in effect, no NOX emissions 

reductions will occur due to the permanent cap. Under caps, physical emissions 

reductions in those States would not result from the energy conservation standards under 

consideration by DOE, but standards might have produced an environmentally related 

economic impact in the form of lower prices for emissions allowance credits, if they were 

large enough. However, DOE determined that in the present case, such standards would 

not produce an environmentally related economic impact in the form of lower prices for 

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emissions allowance credits, because the estimated reduction in NOX emissions or the 

corresponding allowance credits in States covered by the CAIR cap would be too small to 

affect allowance prices for NOX under the CAIR. In contrast, new or amended energy 

conservation standards would reduce NOX emissions in those 22 States not affected by 

the CAIR. As a result, DOE used the NEMS–BT to forecast emission reductions from the 

beverage vending machine standards that are considered in today’s final rule. 

Similar to SO2 and NOX, future emissions of Hg would have been subject to 

emissions caps under the Clean Air Mercury Rule (CAMR) [70 FR 28606 (May 18, 

2005)], which would have permanently capped emissions of mercury for new and 

existing coal-fired power plants in all States beginning in 2010, but the CAMR was 

vacated by the D.C. Circuit in its decision in New Jersey v. Environmental Protection 

Agency prior to publication of the May 2009 NOPR. 517 F 3d 574 (D.C. Cir. 2008). 

After CAMR was vacated, DOE was unable to use the NEMS-BT model to 

estimate any changes in the quantity of mercury emissions (anywhere in the country) that 

would result from standard levels it considered for the proposed rule. Instead, DOE used 

a range of Hg emissions rates (in tons of Hg per unit energy produced) based on the 

AEO2008 for the May 2009 NOPR. Because virtually all mercury emitted from 

electricity generation is from coal-fired power plants, DOE based the high-end emissions 

rate on the tons of mercury emitted per terawatt hour (TWh) of coal-generated electricity. 

To estimate the reduction in mercury emissions, DOE multiplied the emissions rate by 

the reduction in coal-generated electricity associated with the standards considered. 

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DOE’s low estimate assumed that future standards would displace electrical generation 

only from natural gas-fired power plants, thereby resulting in an effective emission rate 

of zero. The low end of the range of Hg emissions rates is zero because natural gas-fired 

powered power plants have virtually no Hg emissions associated with their operations. 

Because the CAMR remains vacated, DOE continued to use the approach it used for the 

May 2009 NOPR to estimate the Hg emission reductions due to standards for today’s 

final rule. To estimate the reduction in Hg emissions, DOE multiplied the emissions rates 

by the reduction in electricity generation associated with the standards proposed in 

today’s final rule. 

Earthjustice commented that DOE’s approach to estimating mercury emissions 

arbitrarily ignores the results of the Department’s own utility impact analysis, which models 

cumulative avoided electricity from all sources and a breakout disclosing cumulative 

generation from several sources (coal, petroleum, natural gas, and renewables). (Earthjustice, 

No. 66 at pp. 1-2) Given that DOE’s own utility impact analysis models the energy savings 

from each source of electricity generation, DOE may not refuse to apply that information to 

estimate the cumulative mercury emissions reductions without a rational explanation. 

EarthJustice added that DOE need only refer to the AEO Reference Case average emissions 

rates to obtain updated projections for future Hg emissions factors. 

DOE estimates its emission factors based on marginal emissions rates for energy 

savings for the primary energy saved by the standard. Diagnosis of NEMS-BT model runs 

leaves significant uncertainty concerning which generating fuels would be affected at the 

margin at the scale of energy savings expected as a result of the standard. The differences in 

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emission rates are particularly important for Hg because some fuels generate almost no Hg. 

Therefore, DOE has elected to keep a range of emissions values in this rule. DOE also notes 

that the average Hg emissions values suggested by Earthjustice fell between the two values 

used by DOE. 

DOE notes that neither EPCA nor NEPA requires that the economic value of 

emissions reductions be incorporated in the LCC or NPV analysis of energy savings. 

DOE has chosen to report these benefits separately from the net benefits of energy 

savings. A summary of the monetary results is shown in section VI.C.6 of this final rule. 

DOE considered both values when weighing the benefits and burdens of standards. 

N. Monetizing Carbon Dioxide and Other Emissions Impacts 

DOE also calculated the possible monetary benefit of CO2, NOX, and Hg 

reductions. Cumulative monetary benefits discounted from the year of the emission 

reduction to the present using discount rates of 3 and 7 percent. DOE monetized 

reductions in CO2 emissions due to the standards proposed in this final rule based on a 

range of monetary values drawn from studies that attempt to estimate the present value of 

the marginal economic benefits (based on the avoided marginal social costs of carbon) 

likely to result from lowering future atmospheric concentrations of greenhouse gases. The 

marginal social cost of carbon is an estimate of the monetary value to society of the 

environmental damages of CO2 emissions. One comment was provided on the economic 

valuation of CO2 at the NOPR public meeting. 

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ASAP stated that it is important for DOE to reevaluate its approach to carbon 

valuation. (ASAP, Public Meeting Transcript, No. 56 at p. 37) ASAP believes that DOE's 

estimate for the value of carbon is low, but did not provide data for analysis. As discussed 

in section VI.C.6, DOE has updated the approach described in the May 2009 NOPR for 

its monetization of environmental emissions reductions for today’s final rule. DOE 

continues to work with other Federal agencies on a common approach and values to be 

used in monetizing carbon and other emissions. 

Although this rulemaking may not affect SO2 emissions nationwide and does not 

affect NOX emissions in the 28 eastern States and D.C. where CAIR is in effect, there are 

markets for SO2 and NOX emissions allowances. The market clearing price of SO2 and 

NOX emissions allowances is roughly the marginal cost of meeting the regulatory cap, 

not the marginal value of the cap itself. Further, because national SO2 and NOX emissions 

are regulated by a cap-and-trade system, the cost of meeting these caps is included in the 

price of energy. Thus, the value of energy savings already includes the value of SO2 and 

NOX control for those customers experiencing energy savings. The economic cost 

savings associated with SO2 and NOX emissions caps is approximately equal to the 

change in the price of traded allowances resulting from energy savings multiplied by the 

number of allowances that would be issued each year. That calculation is uncertain 

because the energy savings from new standards for beverage vending machines would be 

so small relative to the entire electricity generation market that the resulting emissions 

savings would have almost no impact on price formation in the allowances market. These 

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savings would most likely be outweighed by uncertainties in the marginal costs of 

compliance with SO2 and NOX emissions caps. 

The current NEMS-BT model used in projecting the environmental impacts 

includes the CAIR rule, as described above, which is projected to reduce SO2 and NOX 

emissions. NEMS-BT also takes into account the current set of State level renewable 

portfolio standards, the effect of the Northeastern states Regional Greenhouse Gas 

Initiative (RGGI), and utility investor reactions to the possibility of future CO2 cap and 

trade programs, all of which affect electricity prices and reduce the projected carbon 

intensity of generation. The most recent Reference Case, AEO2009, is available at 

http://www.eia.doe.gov/oiaf/servicerpt/stimulus/index.html, and documentation of the 

AEO2009 assumptions is available at 

http://www.eia.doe.gov/oiaf/aeo/assumption/index.html . 

V. Discussion of Other Comments 

Since DOE opened the docket for this rulemaking, it has received more than 100 

written comments from a diverse set of parties, including manufacturers and their 

representatives, wholesalers and distributors, energy conservation advocates, State 

officials and agencies, and electric utilities. Section IV of this preamble discusses 

comments DOE received on the analytic methodologies it used. Additional comments 

DOE received in response to the May 2009 NOPR addressed the information DOE used 

in its analyses, results of and inferences drawn from the analyses, impacts of standards, 

the merits of the different TSLs and standards options DOE considered, and other issues 

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affecting adoption of standards for beverage vending machines. DOE addresses these 

comments in this section. 

A. Information and Assumptions Used in Analyses 

1. Engineering Analysis 

During the NOPR public meeting, Royal Vendors commented that the data used 

for Class A fluorescent lighting systems in the engineering analysis is not consistent with 

the specifications of the fluorescent lighting systems it uses in its glass-front machines. 

Specifically, it stated that DOEs estimated energy consumption of 32 watts (W) per 

fixture is too high. Royal Vendors claims its fluorescent fixtures only consume 22 W 

(Royal Vendors, Public Meeting Transcript, No. 56 at p. 68). 

DOE uses aggregate values for its engineering analysis inputs. These values are 

derived using publicly available data or information provided by multiple manufacturers 

and/or component suppliers. Analysis inputs are generalized so as to better represent the 

industry as a whole. DOE’s estimate of 32 W of energy consumed for T8 fluorescent 

fixtures in Class A machines is adequate for the beverage vending machine industry and 

it has not made any adjustments for the final rule. 

B. Benefits and Burdens 

Royal Vendors stated that the proposed standards appeared to be reversed for 

Class A machines and Class B machines. It stated that Class A machines typically use 

more energy than Class B machines. (Royal Vendors, Public Meeting Transcript, No. 56 

at p. 27) Dixie-Narco disagreed with Royal Vendors, stating that the proposed standards 

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are correct and appropriate. (Dixie-Narco, Public Meeting Transcript, No. 56 at p. 29) 

ASAP stated that it generally supports DOE’s proposed standard levels. It stated that for 

Class A machines, DOE's proposal, TSL 6, is the maximum level that is cost effective. 

However, for Class B machines, ASAP suggested that DOE consider selecting TSL 4 

rather than TSL 3 because the economic results for these two levels are very similar. 

(ASAP, Public Meeting Transcript, No. 56 at p. 31) Dixie-Narco stated that when you 

consider that the standards equations are based on refrigerated volume and not can 

capacity (or vendible capacity), the equations for the standards are appropriate for both 

equipment classes. (Dixie-Narco, Public Meeting Transcript, No. 56 at p. 152) DixieNarco further stated that it is currently achieving the proposed efficiency level for Class 

A machines but not for Class B machines, and therefore would have to make 

modifications to meet the proposed level for Class B machines. (Dixie-Narco, Public 

Meeting Transcript, No. 56 at p. 163, 219) Royal Vendors stated that for Class A 

machines, they do not currently meet those levels, but given no proprietary design 

problems, they could meet them fairly easily. For Class B machines, Royal Vendors 

stated that they do not meet the proposed standards currently, but could without 

tremendous effort. (Royal Vendors, Public Meeting Transcript, No. 56 at p. 220) CocaCola commented that an appropriate standard for Class A equipment would be one that is 

“on par” with the ENERGY STAR Tier II level. (Coca-Cola, No. 63 at p. 2) 

In a written comment, NAMA stated that it received a mixed response from its 

members regarding the technological feasibility and economic benefits of the standard 

levels proposed by DOE. One manufacturer stated that it would have difficulty achieving 

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additional reductions for Class A and Class B machines, while another stated that it could 

achieve the standard for both Class A and Class B machines without significant costs to 

them or their customers. However, most responses to NAMA’s request for information 

indicated that the proposed standard for Class B machines was appropriate and 

achievable. One manufacturer specifically stated that TSL 3 for Class B could be reached 

without significant costs. The proposed standard for Class A, on the other hand, raised 

questions among many manufacturers, although one manufacturer stated that it already 

exceeds the Class A standard without adding significant costs. (NAMA, No. 65 at pp. 3, 

4) DOE considers these comments on its selection of the final energy conservation 

standard level for beverage vending machines. See section VI.D 

VI. Analytical Results and Conclusions 

A. Trial Standard Levels 

DOE analyzed seven energy consumption levels for Class A equipment and six 

energy consumption levels for Class B equipment in the LCC and NIA analyses. For the 

May 2009 NOPR, DOE determined that each of these levels should be presented as a 

possible TSL and correspondingly identified seven TSLs for Class A and six TSLs for 

Class B equipment. For each equipment class, the range of TSLs selected includes the 

energy consumption level providing the maximum NES level for the class, the level 

providing the maximum NES while providing a positive NPV, the level providing the 

maximum NPV, and the level approximately equivalent to ENERGY STAR Tier II. 

Many of the higher levels selected correspond to equipment designs that incorporate 

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specific noteworthy technologies that can provide energy savings benefits. For Class A 

machines, DOE also included two intermediate efficiency levels to fill in significant 

energy consumption gaps between the levels identified above the ENERGY STAR Tier II 

equivalent level. For Class A equipment, the ENERGY STAR Tier II level is equivalent 

to TSL 1, which allows for the highest energy consumption. For Class B equipment, 

DOE included one TSL with energy consumption higher than that provided by ENERGY 

STAR Tier II level. 

For the May 2009 NOPR, four of the TSLs for each equipment class were based 

on the levels that provided maximum energy savings, maximum efficiency level with 

positive LCC savings, maximum LCC savings, and the highest efficiency level with a 

payback of less than 3 years. 

DOE preserved energy consumption levels from the NOPR that met the same 

economic criteria in the final rule but also included the ENERGY STAR Tier II 

equivalency level and several additional TSLs. These additional levels either provide 

additional intermediate efficiency levels or include specific noteworthy technologies 

examined in the engineering analysis. Table VI.1 and Table VI.2 show the TSL levels 

DOE selected for the equipment classes and sizes analyzed. For Class A equipment, TSL 

7 is the max-tech level for each equipment class. TSL 6 is the maximum efficiency level 

with a positive NPV at the 7 percent discount rate, achieved by incorporating an ECM 

condenser fan. TSL 5 is the efficiency level with the maximum NPV and maximum LCC 

savings, achieved by using an advanced refrigerant condenser design. TSL 4 is the level 

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that first incorporated light-emitting diode (LED) lighting as a design feature in the 

engineering analysis. TSL 3 and TSL 2 were intermediate efficiency levels chosen to 

bridge the gap between TSL 4, and the ENERGY STAR Tier II equivalent level, which is 

TSL 1. 

Table VI.1 Trial Standard Levels for Class A Equipment Expressed in Terms of 

Daily Energy Consumption (kWh/day) 

Size 

TSL 

Trial Standard Level in Order of Efficiency 

Baseline TSL 

1 

TSL 

2 

TSL 

3 

TSL 

4 

TSL 

5 

TSL 

6 

TSL 

7 

LCC 

Efficiency Level 

1 2 3 4 5 6 7 8 

Small 

Engineering 

Level 1 5 NA*

 NA* 6 7 9 11 

kWh/day 6.10 5.27 4.75 4.25 3.95 3.73 3.58 3.25 

Medium 

Engineering 

Level 1 5 NA*

 NA* 6 7 9 11 

kWh/day 6.53 5.51 5.25 4.75 4.19 3.95 3.79 3.43 

Large 

Engineering 

Level 1 4 NA*

 NA* 5 6 8 10 

kWh/day 6.75 6.21 5.75 5.25 4.89 4.60 4.41 3.94 

* Not applicable. These levels established as intermediate points along the engineering cost curves. 

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Table VI.2 Trial Standard Levels for Class B Equipment Expressed in Terms of 

Daily Energy Consumption (kWh/day) 

Size 

TSL 

Trial Standard Level in Order of Efficiency 

Baseline TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6 

LCC 

Efficiency Level 

1 2 3 4 5 6 7 

Small 

Engineering 

Level 1 2 4 4 5 6 7 

kWh/day 4.96 4.62 4.31 4.31 4.28 3.78 3.69 

Medium 

Engineering 

Level 1 2 4 5 6 7 8 

kWh/day 5.56 5.20 4.99 4.76 4.72 4.22 4.12 

Large 

Engineering 

Level 1 2 3 4 5 6 7 

kWh/day 5.85 5.48 5.33 5.07 5.03 4.52 4.41 

* Not applicable. These levels established as intermediate points along the engineering cost curves. 

For Class B equipment, TSL 6 is the max-tech level for each equipment size. TSL 

5 is the level that first incorporated LED lighting as a design option in the engineering 

analysis. TSL 4 is the next highest efficiency level incorporating an ECM condenser fan 

motor. TSL 3 was achieved by using an advanced refrigerant condenser design. This TSL 

provided an NPV value of essentially 0, with total capital expenditures for new 

equipment balanced by total operating cost savings over the NIA analysis period, based 

on a 7 percent discount rate. TSL 2 is the ENERGY STAR Tier II level for Class B 

machines. This TSL provided the maximum LCC savings and maximum NPV savings at 

a 7 percent discount rate. TSL 1, which provided an energy consumption level 

approximately 4 percent higher than TSL 2, was also included in the analysis. TSL 1 

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represented the first level incorporating an evaporator fan driven by an ECM in the 

engineering analysis. 

As stated in the May 2009 NOPR, DOE chose to characterize the proposed TSL 

levels in terms of equations that establish a maximum daily energy consumption (MDEC) 

limit through a linear equation of the following form: 

MDEC = A × V + B 

Where: 

A is expressed in terms of kWh/day/ft3

 of measured volume, 

V is the measured refrigerated volume (ft3) calculated for the equipment, and 

B is an offset factor expressed in kWh/day. 

Coefficients A and B are uniquely derived for each equipment class based on a 

linear equation passing between the daily energy consumption values for equipment of 

different refrigerated volumes. For the A and B coefficients, DOE used the energy 

consumption values shown in Table VI.1 and Table VI.2 for the medium and large 

equipment sizes within each class of beverage vending machine. DOE did not use the 

small sizes in either equipment class because information from the May 2009 NOPR 

indicated that there are no significant shipments of this equipment size. Results are 

described in more detail in chapter 9 of the TSD. 

Chapter 9 of the TSD also explains the methodology DOE used for selecting 

TSLs and developing the equations shown in Table VI.3. 

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Table VI.3 Trial Standard Levels Expressed in Terms of Equations and Coefficients 

for Class A and Class B Equipment 

Trial Standard Level Test Metric Class A Class B 

Baseline kWh/day MDEC = 0.019 x V + 6.09 MDEC = 0.068 x V + 4.07 

1 kWh/day MDEC = 0.062 x V + 4.12 MDEC = 0.066 x V + 3.76 

2 kWh/day MDEC = 0.044 x V + 4.26 MDEC = 0.080 x V + 3.24 

3 kWh/day MDEC = 0.044 x V + 3.76 MDEC = 0.073 x V + 3.16 

4 kWh/day MDEC = 0.062 x V + 2.80 MDEC = 0.073 x V + 3.12 

5 kWh/day MDEC = 0.058 x V + 2.66 MDEC = 0.070 x V + 2.68 

6 kWh/day MDEC = 0.055 x V + 2.56 MDEC = 0.068 x V + 2.63 

7 kWh/day MDEC = 0.045 x V + 2.42 NA* 

* Not applicable. There is no TSL 7 for Class B equipment. 

B. Significance of Energy Savings 

To estimate the energy savings through 2042 due to new standards, DOE 

compared the energy consumption of beverage vending machines under the base case (no 

standards) to energy consumption of this equipment under each TSL that DOE 

considered. Table VI.4 and Table VI.5 show DOE’s NES estimates, which it based on the 

April 2009 update of the AEO2009 Reference Case, for each TSL. Chapter 11 of the 

TSD describes these estimates in more detail. DOE reports both undiscounted and 

discounted values of energy savings. Discounted energy savings represent a policy 

perspective where energy savings farther in the future are less significant than energy 

savings closer to the present. Table VI.4 shows the forecasted aggregate national energy 

savings, both discounted and undiscounted, of Class A equipment at each TSL. The table 

also shows the magnitude of the estimated energy savings if the savings are discounted at 

the 7 percent and 3 percent real discount rates. Each TSL considered in this rulemaking 

would result in significant energy savings, and the amount of savings increases with 

higher energy conservation standards (ranging from an estimated 0.007 quads to 0.170 

quads, undiscounted, for TSLs 1 through 7) (see chapter 11 of the TSD). 

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Table VI.4 Summary of Cumulative National Energy Savings for Class A 

Equipment (Energy Savings for Units Sold from 2012 to 2042) 

Primary National Energy Savings (quads) 

Trial Standard Level Undiscounted 3% Discounted 7% Discounted 

1 0.007 0.004 0.002 

2 0.031 0.018 0.010 

3 0.069 0.040 0.021 

4 0.107 0.061 0.032 

5 0.127 0.073 0.038 

6 0.139 0.080 0.042 

7 0.170 0.097 0.051 

In Table VI.5, DOE reports both undiscounted and discounted values of energy 

savings for Class B equipment. As with Class A equipment, each TSL considered would 

result in significant energy savings, and the amount of energy savings increases with 

higher energy conservation standards (ranging from an estimated 0.003 quads to 0.068 

quads, undiscounted, for TSLs 1 through 6. 

Table VI.5 Summary of Cumulative National Energy Savings for Class B 

Equipment (Energy Savings for Units Sold from 2012 to 2042) 

Primary National Energy Savings (quads) 

Trial Standard Level Undiscounted 3% Discounted 7% Discounted 

1 0.003 0.002 0.001 

2 0.004 0.002 0.001 

3 0.020 0.012 0.006 

4 0.023 0.013 0.007 

5 0.061 0.035 0.018 

6 0.068 0.039 0.020 

C. Economic Justification 

1. Economic Impact on Commercial Customers 

a. Life-Cycle Costs and Payback Period 

To evaluate the economic impact of the TSLs on customers, DOE conducted an 

LCC analysis for each TSL. More efficient beverage vending machines are expected to 

affect customers in two ways: annual operating expense is expected to decrease and 

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purchase price is expected to 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 VI.6 through Table VI.8 for Class A equipment. The first three outputs 

are the percentages of standard-compliant machine purchases that would result in (1) a 

net LCC increase, (2) no impact, or (3) 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 PBP is the number of years it would 

take for the customer through energy savings to recover the increased costs of higher 

efficiency equipment compared to baseline efficiency equipment. 

Table VI.6 Summary LCC and PBP Results for Class A Equipment -- Large 

Results Trial Standard Level 

1 2 3 4 5 6 7 

Equipment with Net LCC Increase (%) 0 1 3 3 3 5 100 

Equipment with No Change in LCC (%) 90 0 0 0 0 0 0 

Equipment with Net LCC Savings (%) 10 99 97 97 97 95 0 

Mean LCC Savings ($) 84 132 184 222 244 240 (1,481) 

Mean Payback Period (years) 2.3 3.1 3.4 3.6 3.8 4.3 83.8 

Note: Numbers in parentheses indicate negative values. 

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Table VI.7 Summary LCC and PBP Results for Class A Equipment -- Medium 

Results Trial Standard Level 

1 2 3 4 5 6 7 

Equipment with Net LCC Increase (%) 0 0 1 1 3 5 100 

Equipment with No Change in LCC (%) 90 0 0 0 0 0 0 

Equipment with Net LCC Savings (%) 10 100 99 99 97 95 0 

Mean LCC Savings ($) 162 207 235 296 305 295 (1,183) 

Mean Payback Period (years) 2.1 2.0 3.1 3.3 3.6 4.0 71.0 

Note: Numbers in parentheses indicate negative values. 

Table VI.8 Summary LCC and PBP Results for Class A Equipment -- Small 

Results Trial Standard Level 

1 2 3 4 5 6 7 

Equipment with Net LCC Increase ( %) 0 1 3 3 3 5 100 

Equipment with No Change in LCC (%) 90 0 0 0 0 0 0 

Equipment with Net LCC Savings (%) 10 99 97 97 97 95 0 

Mean LCC Savings ($) 130 179 227 255 265 255 (1,153) 

Mean Payback Period (years) 2.1 2.9 3.3 3.5 3.8 4.2 80.9 

Note: Numbers in parentheses indicate negative values. 

For the Class A equipment, there are positive net LCC savings on average for 

TSL 1 through 6. Only 10 percent of all equipment purchased is expected to achieve a net 

LCC savings at TSL 1, since about 90 percent of the equipment on the market in 2012 is 

expected to meet that standard. LCC savings consistently peak at TSL 5, but about 95 

percent of purchasers of Class A equipment are projected to achieve LCC savings even at 

TSL 6. Simple average PBPs are projected to be less than 3 years for all Class A 

equipment for TSL 1, and PBPs are less than 4 years from TSL 1 through 5. 

DOE’s LCC and PBP analyses provided the same five outputs for each TSL for 

Class B equipment. These outputs are reported in Table VI.9 through Table VI.11. 

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Table VI.9 Summary LCC and PBP Results for Class B Equipment – Large 

Results Trial Standard Level 

1 2 3 4 5 6 

Equipment with Net LCC Increase (%) 0 9 27 35 100 100 

Equipment with No Change in LCC (%) 90 0 0 0 0 0 

Equipment with Net LCC Savings (%) 10 91 73 65 0 0 

Mean LCC Savings ($) 43 46 40 30 (545) (2,414) 

Mean Payback Period (years) 3.3 4.5 6.5 7.5 83.8 100.0 

Note: Numbers in parentheses indicate negative values. 

Table VI.10 Summary LCC and PBP Results for Class B Equipment -- Medium 

Results Trial Standard Level 

1 2 3 4 5 6 

Equipment with Net LCC Increase (%) 0 9 29 39 100 100 

Equipment with No Change in LCC (%) 90 0 0 0 0 0 

Equipment with Net LCC Savings (%) 10 91 71 61 0 0 

Mean LCC Savings ($) 41 49 36 26 (558) (2,230) 

Mean Payback Period (years) 3.4 4.6 6.9 7.9 85.4 99.9 

Note: Numbers in parentheses indicate negative values. 

Table VI.11 Summary LCC and PBP Results for Class B Equipment – Small 

Results Trial Standard Level 

1 2 3 4 5 6 

Equipment with Net LCC Increase (%) 1 41 41 55 100 100 

Equipment with No Change in LCC (%) 90 0 0 0 0 0 

Equipment with Net LCC Savings (%) 10 59 59 45 0 0 

Mean LCC Savings ($) 35 16 16 2 (612) (2,129) 

Mean Payback Period (years) 3.9 8.7 8.7 10.9 94.7 100.0 

Note: Numbers in parentheses indicate negative values. 

For Class B equipment, there are positive net LCC savings on average for TSLs 1 

through 4. Only 10 percent of all equipment purchased is expected to achieve a net LCC 

savings at TSL 1, since about 90 percent of the equipment on the market in 2012 is 

expected to meet that standard. LCC savings consistently peak at TSL 2, but for 26 to 65 

percent of purchasers, Class B equipment is projected to achieve LCC savings at TSL 4. 

Simple average PBPs are projected to be 3.3 to 3.4 years for large and medium size Class 

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EERE-2006-BT-STD-0125 COMMENT 71
B equipment at TSL 1. PBPs are about 4.5 to 4.6 years for large and medium size Class B 

equipment for TSLs 1 and 2 and under 7 years for TSLs 1 through 3. 

b. Life-Cycle Cost Subgroup Analysis 

Using the LCC spreadsheet model, DOE estimated the impact of the TSLs on the 

following customer subgroup: manufacturing facilities that have purchased their own 

beverage vending machines. This is the largest component of the 5 percent of site owners, 

who also own their own beverage vending machines, and comprises about 2 percent of all 

beverage vending machines. About 95 percent of beverage vending machines are owned 

by bottlers and vendors. The manufacturing facilities subgroup was analyzed because, in 

addition to being the largest independent block of owners, it had among the highest 

financing costs (based on weighted average cost of capital) and faced the lowest energy 

costs of any customer subgroup. The group was therefore expected to have the least LCC 

savings and longest PBP of any identifiable customer subgroup. 

DOE estimated the LCC and PBP for the manufacturing facilities subgroup. 

Table VI.12 shows the mean LCC savings for equipment that meets the energy 

conservation standards in today’s final rule for the manufacturing facilities subgroup, and 

Table VI.13 shows the mean PBP (in years) for this subgroup. Chapter 12 of the TSD 

provides more detailed discussion on the LCC subgroup analysis and results. 

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EERE-2006-BT-STD-0125 COMMENT 71
Table VI.12 Mean Life-Cycle Cost Savings for Refrigerated Beverage Vending 

Machine Equipment Purchased by the Manufacturing Facilities LCC Subgroup 

(2008$) 

Equipment 

Class Size Trial Standard Level 

1 2 3 4 5 6 7 

A 

S 92 118 143 158 159 142 (1,258) 

M 115 148 154 190 188 171 (1,302) 

L 62 86 116 137 146 134 (1,585) 

B 

S 28 24 8 (3) (590) (2,433) 

M 26 26 4 (8) (603) (2,251) NA

L 28 24 8 (3) (590) (2,433) 

Note: Numbers in parentheses indicate negative values. NA=not applicable. 

Table VI.13 Mean Payback Period for Refrigerated Beverage Vending Machine 

Equipment Purchased by the Manufacturing Facilities LCC Subgroup (Years) 

Equipment 

Class Size Trial Standard Level 

1 2 3 4 5 6 7 

A 

S 2.6 3.6 4.1 4.3 4.7 5.2 90.6 

M 2.6 2.4 3.7 4.0 4.4 5.0 82.7 

L 2.7 3.8 4.2 4.4 4.7 5.3 92.2 

B 

S 4.9 11.9 11.9 15.5 99.5 100.0 

M 4.2 5.8 9.0 10.5 94.1 100.0 NA

L 4.1 5.7 8.4 9.9 93.0 100.0 

Note: NA=not applicable. 

For beverage vending machines, the positive LCC and PBP impacts for 

manufacturing facilities that own their own beverage vending machines are less than 

those of all customers. Because they face lower energy costs, the lower value of energy 

savings lengthens the period over which the original investment is paid back and also 

reduces operating cost savings over the lifetime of more efficient beverage vending 

machines. In addition, because they face higher financing costs, these customers sites 

have a relatively high opportunity cost for investment, so the value of future electricity 

savings from higher efficiency equipment is further reduced. Even so, for this subgroup 

of customers, LCC savings are still positive for all but TSL 7 for Class A and is positive 

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EERE-2006-BT-STD-0125 COMMENT 71
at TSL 3 and below for Class B. PBP is lengthened by about a year for Class A and 2 

years for Class B but is still less about 5 years at TSL 6 for Class A and less than 9 years 

for medium-size Class B equipment (which is less than the equipment lifetime) at TSL 3. 

2. Economic Impact on Manufacturers 

DOE determined the economic impacts of today’s standard on manufacturers, as 

described in the proposed rule. 74 FR 26053-56. As updated for today’s final rule, DOE 

analyzed manufacturer impacts under two distinct markup scenarios: (1) the preservationof-gross-margin-percentage markup scenario, and (2) the preservation-of-operating-profit 

(absolute dollars) markup scenario. 

Together, these two markup scenarios characterize the range of possible 

conditions the beverage vending machine market will experience as a result of new 

energy conservation standards. See chapter 13 of the TSD for additional details of the 

markup scenarios and analysis. 

a. Industry Cash-Flow Analysis Results 

Using two different markup scenarios, DOE estimated the impact of new 

standards for beverage vending machines on the INPV of the beverage vending machine 

industry. The impact consists of the difference between INPV in the base case and INPV 

in the standards case. INPV is the primary metric used in the MIA, and represents one 

measure of the fair value of the industry in today’s dollars. DOE calculated the INPV by 

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EERE-2006-BT-STD-0125 COMMENT 71
summing all of the net cash flows, discounted at the beverage vending machine industry’s 

cost of capital or discount rate. 

Table VI.14 through Table VI.17 show the changes in INPV that DOE estimates 

would result from the TSLs DOE considered for this final rule using the preservation-ofgross-margin-percentage and preservation-of-operating-profit scenarios described above. 

The tables also present the equipment conversion costs and capital conversion costs that 

the industry would incur at each TSL. Equipment conversion costs include engineering, 

prototyping, testing, and marketing expenses incurred by a manufacturer as it prepares to 

comply with a standard. Capital conversion costs are the one-time outlays for tooling and 

plant changes required for the industry to comply. 

Table VI.14 Manufacturer Impact Analysis for Class A Refrigerated Beverage 

Vending Machine Equipment Under the Preservation-of-Gross-Margin-Percentage 

Markup Scenario 

Preservation of Gross Margin Percentage Markup Scenario 

Metric Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 6 7 

INPV 2008$ 

millions 44.1 44.2 44.3 44.5 42.9 42.8 36.2 41.0 

Change in 

INPV 

2008$ 

millions - 0.0 0.2 0.3 (1.3) (1.3) (7.9) (3.2) 

% - 0.1 0.5 0.7 (2.9) (3.0) (18.0) (7.2) 

Equipment 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 0.6 0.6 1.2 2.9 3.5 

Capital 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 0.0 2.2 2.2 9.1 14.1 

Total 

Investment 

Required 

2008$ 

millions - 0.0 0.0 0.6 2.8 3.4 11.9 17.6 

Numbers in parentheses indicate negative values. 

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Table VI.15 Manufacturer Impact Analysis for Class A Refrigerated Beverage 

Vending Machine Equipment Under the Preservation-of-Operating-Profit Markup 

Scenario 

Preservation of Operating Profit Markup Scenario 

Metric Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 6 7 

INPV 2008$ 

millions 44.1 44.1 43.9 43.0 40.6 40.1 33.1 15.8 

Change in 

INPV 

2008$ 

millions - (0.0) (0.3) (1.1) (3.5) (4.1) (11.1) (28.3) 

% - (0.1) (0.6) (2.5) (7.9) (9.3) (25.1) (64.2) 

Equipment 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 0.6 0.6 1.2 2.9 3.5 

Capital 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 0.0 2.2 2.2 9.1 14.1 

Total 

Investment 

Required 

2008$ 

millions - 0.0 0.0 0.6 2.8 3.4 11.9 17.6 

Numbers in parentheses indicate negative values. 

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Table VI.16 Manufacturer Impact Analysis for Class B Refrigerated Beverage 

Vending Machine Equipment Under the Preservation-of-Gross-Margin-Percentage 

Markup Scenario 

Preservation of Gross Margin Percentage Markup Scenario 

Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 6 

INPV 2008$ 

millions 33.7 33.7 33.7 33.1 32.7 26.3 30.5 

Change in 

INPV 

2008$ 

millions - 0.0 0.0 (0.6) (1.0) (7.4) (3.2) 

% - 0.1 0.1 (1.9) (3.0) (21.9) (9.5) 

Equipment 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 1.7 2.6 3.5 6.9 

Capital 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 0.0 0.0 11.0 14.7 

Total 

Investment 

Required 

2008$ 

millions - 0.0 0.0 1.7 2.6 14.5 21.6 

Numbers in parentheses indicate negative values. 

Table VI.17 Manufacturer Impact Analysis for Class B Refrigerated Beverage 

Vending Machine Equipment Under the Preservation-of-Operating-Profit Markup 

Scenario 

Preservation of Operating Profit Markup Scenario 

Units Base 

Case 

Trial Standard Level 

1 2 3 4 5 6 

INPV 2008$ 

millions 33.7 33.7 33.7 32.5 32.0 17.2 0.2 

Change in 

INPV 

2008$ 

millions - (0.0) (0.0) (1.2) (1.7) (16.5) (33.5) 

% - (0.1) (0.2) (3.5) (5.0) (48.9) (99.4) 

Equipment 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 1.7 2.6 3.5 6.9 

Capital 

Conversion 

Costs 

2008$ 

millions - 0.0 0.0 0.0 0.0 11.0 14.7 

Total 

Investment 

Required 

2008$ 

millions - 0.0 0.0 1.7 2.6 14.5 21.6 

Numbers in parentheses indicate negative values. 

The May 2009 NOPR discusses the estimated impact of new beverage vending 

machine standards on INPV for each equipment class. 74 FR 26053–55. See chapter 13 

of the TSD for details. 

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b. Cumulative Regulatory Burden 

While any one regulation may not impose a significant burden on manufacturers, 

the combined effects of several 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. 

DOE recognizes that each regulation can significantly affect manufacturers’ 

financial operations. Multiple regulations affecting the same manufacturer can reduce 

manufacturers’ profits and possibly cause manufacturers to exit from the market. During 

the public meeting, PepsiCo stated that pending regulation would mandate that the 

beverage vending machine industry add nutrition labels to the exterior of all machines 

that specify the nutritional information for its contents. (PepsiCo, Public Meeting 

Transcript, No. 56 at p. 178) 

On May 14, 2009, the Menu Education and Labeling (MEAL) Act, a bill to 

amend the Federal Food, Drug, and Cosmetic Act to extend the food labeling 

requirements of the Nutrition Labeling and Education Act of 1990, was introduced into 

Congress. The bill includes a provision to require the vending machine industry to post 

labels on their machines containing certain nutrition information about their contents. 

While this legislation may potentially result in an additional labeling requirement for 

beverage vending machine manufacturers, DOE cannot consider in its cumulative 

regulatory burden analysis any legislation that has not yet been enacted. Furthermore, 

DOE has not found or received any quantitative or qualitative information regarding the 

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magnitude of the financial burden that may accompany the pending nutritional 

information regulation. 

DOE did not identify any other DOE regulations that would affect the 

manufacturers of beverage vending machines or their parent companies. DOE requested 

information about the cumulative regulatory burden during manufacturer interviews. In 

general, manufacturers were not greatly concerned about other Federal, State, or 

international regulations. The requirements of their major customers have a greater 

impact on their business than any of these other regulations. For further information 

about the cumulative regulatory burden, see chapter 13 of the TSD. 

c. Impacts on Employment 

DOE used the GRIM to assess the impacts of energy conservation standards on 

beverage vending machine industry employment. DOE used statistical data from the U.S. 

Census Bureau’s 2006 Annual Survey of Manufacturers, the results of the engineering 

analysis, and interviews with manufacturers to estimate the inputs necessary to calculate 

industry-wide labor expenditures and employment levels. Results of the U.S. Census 

Bureau’s 2007 Annual Survey of Manufacturers are not yet available. 

The vast majority of beverage vending machines are manufactured in the United 

States. Based on results of the GRIM, DOE expects that there would be slightly positive 

direct employment impacts among domestic beverage vending machine manufacturers 

for TSLs 1 through 6 for Class A equipment and TSLs 1 through 5 for Class B 

equipment. The GRIM estimates that employment would increase by fewer than 36 

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EERE-2006-BT-STD-0125 COMMENT 71
employees for Class A equipment at TSLs 1 through 6 and fewer than 97 employees for 

Class B equipment at TSLs 1 though 5. The employment impacts are more positive at the 

max-tech levels (TSL 7 for Class A equipment and TSL 6 for Class B equipment) 

because more labor is required and the production costs of the most efficient equipment 

greatly increase. The employment impacts calculated in the GRIM are shown in Table 

VI.35 and Table VI.36 in section VI.D 

The results calculated in the GRIM do not account for 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 new standards require. 

Manufacturers stated that although there are no current plans to relocate production 

facilities, higher TSLs would increase pressure to cut costs, which could result in 

relocation. The labor impacts would be different if manufacturers chose to relocate to 

lower cost countries or if manufacturers consolidated. In addition, standards could 

increase pressure to consolidate within the industry due to the low profitability and 

existing excess production capacity. Chapter 13 of the TSD further discusses how the 

employment impacts are calculated and shows the projected 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. Those impacts are documented in chapter 15 of the TSD. 

d. Impacts on Manufacturing Capacity 

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According to the majority of beverage vending machine manufacturers, new 

energy conservation standards will not affect manufacturers’ production capacity. Within 

the last decade, annual shipments of beverage vending machines have decreased almost 

three-fold. Due to the decline in shipments, it is likely that any of the major 

manufacturers has the capacity to meet most of the recent market demand. Consequently, 

the industry has the capacity to make many times more units than are currently sold each 

year. 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 Subgroups of Manufacturers 

As discussed in the May 2009 NOPR, 74 FR 26044-45, 26056, 26069-72, DOE 

evaluated the impacts of new energy conservation standards on small manufacturers as 

defined by the U.S. Small Business Administration (SBA). DOE identified six small 

manufacturers and requested information that would determine if there are differential 

impacts that may result from new energy conservation standards. In the NOPR, DOE 

specifically requested comments on how small business manufacturers will be affected 

by new energy conversation standards. 74 FR 26071. However, DOE did not receive any 

comments in response to this request. For a discussion of the impacts on small business 

manufacturers, see chapter 13 of the TSD and section VII.B of this preamble (“Review 

Under the Regulatory Flexibility Act”). 

3. National Impact Analysis 

a. Amount and Significance of Energy Savings 

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Because the pattern and strategies for improving the energy performance of 

beverage vending machines is somewhat different between Class A and B equipment, 

energy savings are reported separately for each class of equipment by TSL. The national 

energy savings are between 0.003 and 0.170 quads, beyond that achieved in ENERGY 

STAR Tier 1 equipment, depending on the TSL and equipment class, an amount of 

energy savings that DOE considers significant. As stated previously, energy savings 

increase as TSLs grow progressively more stringent than the baseline efficiency level. 

To estimate the energy savings through 2042 due to new energy conservation 

standards, DOE compared the energy consumption of beverage vending machines under 

the base case to energy consumption 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 VI.B 

DOE tentatively determined the amount of energy savings at each of the seven 

TSLs being considered for Class A equipment and six TSLs for Class B equipment, then 

analyzed and aggregated the results across the three sizes for each equipment class. 

Table VI.18 shows the forecasted aggregate national energy savings, both 

discounted and undiscounted, of Class A equipment at each TSL. The table also shows 

the magnitude of the estimated energy savings if the savings are discounted at the 7 

percent and 3 percent real discount rates. Each TSL considered in this rulemaking would 

result in significant energy savings, and the amount of savings increases with higher 

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EERE-2006-BT-STD-0125 COMMENT 71
energy conservation standards (ranging from an estimated 0.007 to 0.170 quads, 

undiscounted, for Class A equipment for TSLs 1 through 7). See chapter 11 of the TSD 

for details of the NIA. 

Table VI.18 Summary of Cumulative National Energy Savings for Class A 

Equipment (Energy Savings for Units Sold from 2012 to 2042) 

Trial Standard Level 

Primary National Energy Savings 

quads 

Undiscounted 3% Discounted 7% Discounted 

1 0.007 0.004 0.002 

2 0.031 0.018 0.010 

3 0.069 0.040 0.021 

4 0.107 0.061 0.032 

5 0.127 0.073 0.038 

6 0.139 0.080 0.042 

7 0.170 0.097 0.051 

In Table VI.19, DOE reports both undiscounted and discounted values of energy 

savings for Class B equipment. Each TSL considered would result in significant energy 

savings, and the amount of savings increases with higher energy conservation standards 

(ranging from an estimated 0.003 to 0.068 quads, undiscounted, for Class B equipment 

for TSLs 1 through 6). 

Table VI.19 Summary of Cumulative National Energy Savings for Class B 

Equipment (Energy Savings for Units Sold from 2012 to 2042) 

Trial Standard Level 

Primary National Energy Savings 

quads 

Undiscounted 3% Discounted 7% Discounted 

1 0.003 0.002 0.001 

2 0.004 0.002 0.001 

3 0.020 0.012 0.006 

4 0.023 0.013 0.007 

5 0.061 0.035 0.018 

6 0.068 0.039 0.020 

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b. Net Present Value 

The NPV analysis is a measure of the cumulative benefit or cost of standards to 

the Nation. In accordance with OMB guidelines on regulatory analysis (OMB Circular A4, section E, September 17, 2003), DOE calculated an estimated NPV using both a 7 

percent and 3 percent real discount rate. The 7 percent rate is an estimate of the average 

before-tax rate of return to private capital in the U.S. economy. This rate 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. DOE also used the 3 percent discount 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 Consumer Price Index), which has averaged about 3 

percent on a pre-tax basis for the last 30 years. 

Table VI.20 shows the estimated cumulative NPV calculated for all Class A 

equipment. Table VI.20 assumes the AEO2009 Reference Case forecast for electricity 

prices. At a 7 percent discount rate, TSLs 1 through 6 show positive cumulative NPVs. 

The highest NPV is provided by TSL 5 at $0.192 billion. TSL 6 showed an NPV at 

$0.185 billion. TSL 7 showed an NPV at -$1.449 billion, the result of negative NPV 

observed in all sizes of this equipment class. 

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EERE-2006-BT-STD-0125 COMMENT 71
Table VI.20 Summary of Cumulative Net Present Value for Class A Equipment 

(AEO2009 Reference Case) 

Trial 

Standard 

Level 

NPV* 

billion 2008$ 

7% Discount Rate 3% Discount Rate 

1 0.015 0.034 

2 0.068 0.153 

3 0.112 0.268 

4 0.175 0.415 

5 0.192 0.464 

6 0.185 0.465 

7 (1.449) (2.466) 

Note: Numbers in parentheses indicate negative NPV (i.e., net cost). 

At a 3 percent discount rate, all but TSL 7 showed a positive NPV, with the 

highest NPV provided at TSL 6 ($0.465 billion). TSL 5 showed a near equivalent NPV at 

$0.464 billion. TSL 7 showed an NPV of -$2.466 billion. DOE observed that all Class A 

equipment at TSL 7 has a negative NPV at a 3 percent discount rate. 

Table VI.21 shows the estimated cumulative NPV for beverage vending machines 

resulting from the sum of the NPV calculated for Class B equipment. This table assumes 

the AEO2009 Reference Case forecast for electricity prices. At a 7 percent discount rate, 

TSLs 1 and 2 show positive cumulative NPVs. The highest NPV is provided by TSL 2 at 

$0.006 billion. TSL 3 showed -$0.003 billion NPV. TSLs 4 through 6 also show a 

negative NPV. TSL 6 has a -$2.452 billion NPV, the result of negative NPV observed in 

all sizes of Class B equipment. 

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Table VI.21 Summary of Cumulative Net Present Value for Class B Equipment 

(AEO2009 Reference Case) 

Trial 

Standard 

Level 

NPV 

billion 2008$ 

7% Discount Rate 3% Discount Rate 

1 0.005 0.011 

2 0.006 0.014 

3 (0.003) 0.011 

4 (0.014) (0.006) 

5 (0.621) (1.083) 

6 (2.452) (4.427) 

Note: Numbers in parentheses indicate negative NPV (i.e., net cost). 

At a 3 percent discount rate, TSLs 1 through 3 showed a positive NPV, with the 

highest NPV of $0.014 billion provided at TSL 2. TSL 1 and 3 provided a near equivalent 

NPV at $0.009 billion. TSL 4 showed an NPV of -$0.006 billion. DOE observed that all 

Class B equipment sizes at TSL 5 have a negative NPV at a 3 percent discount rate. 

In addition to the Reference Case, DOE examined the NPV under the AEO2009 

high-growth and low-growth electricity price forecasts. Chapter 11 of the TSD presents 

the results of this examination. 

c. Impacts on Employment 

Besides the direct impacts on manufacturing employment discussed in section 

VI.C.2.c, DOE develops general estimates of the indirect employment impacts of 

proposed standards on the economy. As discussed above, DOE expects energy 

conservation standards for beverage vending machines 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 

by beverage vending machine operators and site owners could affect the demand for 

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EERE-2006-BT-STD-0125 COMMENT 71
labor. The impact comes in a variety of businesses not directly involved in the decision to 

make, operate, or pay the utility bills for beverage vending machines. Thus, the economic 

impact is “indirect.” To estimate these indirect economic effects, DOE used an 

input/output model of the U.S. economy using U.S. Department of Commerce, Bureau of 

Economic Analysis (BEA) and Bureau of Labor Statistics (BLS) data (as described in 

section IV.L. See chapter 15 of the TSD for details of the net national employment 

impact. 

In this input/output model, the spending of the money saved on utility bills when 

more efficient vending machines are deployed is centered in economic sectors that create 

more jobs than are lost in electric utilities when spending is shifted from electricity to 

other products and services. Thus, today’s refrigerated beverage vending machine energy 

conservation standards are likely to slightly increase the net demand for labor in the 

economy. However, 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. Neither the BLS data nor the input/output model used by DOE includes the 

quality of jobs. As shown in Table VI.22 and Table VI.23, DOE estimates that net 

indirect employment impacts from a proposed beverage vending machine standard are 

likely to be very small. 

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Table VI.22 Net National Change in Indirect Employment from Class A 

Equipment: Number of Jobs from 2012 to 2042 

Trial Standard 

Level 

Net National Change in Employment 

2012 2022 2032 2042 

1 0 13 13 13 

2 4 67 69 82 

3 17 142 159 172 

4 30 221 238 265 

5 42 256 285 313 

6 44 286 316 344 

7 157 402 444 475 

Note: Numbers in parentheses indicate negative values. 

Table VI.23 Net National Change in Indirect Employment from Class B Equipment: 

Number of Jobs from 2012 to 2042 

Trial Standard 

Level 

Net National Change in Employment 

2012 2022 2032 2042 

1 1 6 6 6 

2 1 9 9 10 

3 8 41 45 49 

4 9 47 52 55 

5 58 138 150 162 

6 166 193 204 216 

Note: Numbers in parentheses indicate negative values. 

4. Impact on Utility or Performance of Equipment 

As indicated in section V.B.4 of the May 2009 NOPR, the new standards DOE is 

adopting today will not lessen the utility or performance of any beverage vending 

machine. 74 FR 26059. 

5. Impact of Any Lessening of Competition 

As discussed in the May 2009 NOPR, 74 FR 26059, and in section III.D.1.e of 

this preamble, DOE considers any lessening of competition likely to result from 

standards. The Attorney General determines the impact, if any, of any lessening of 

competition. 

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The DOJ believes that the Class B standards contained in the proposed rule would 

not likely lead to a lessening of competition. (DOJ, No. 61 at p. 1) 

For Class A machines, DOJ concluded that the proposed TSL 6 could potentially 

lessen competition. DOJ commented that beverage vending machine manufacture is a 

highly concentrated industry in the United States, and compliance with the proposed 

Class A standard could require a disproportionate investment by some manufacturers, 

potentially placing them at a disadvantage with respect to others and leading to greater 

concentration. DOJ requested that DOE take this possible competitive impact into 

account and to ensure that the standard it adopts for Class A beverage vending machines 

will not require access to intellectual property owned by an industry participant, which 

would place other industry participants at a comparative disadvantage. (DOJ, No. 61 at 

pp. 1–2) 

DOE agrees with DOJ that the market is highly concentrated, with three major 

manufacturers supplying the vast majority of the U.S. market. In the May 2009 NOPR, 

DOE stated that it did not believe there would be differential impacts among 

manufacturers at TSL 6 for Class A equipment. At this level the manufacturers would 

have to redesign all their existing equipment and make capital investments in their 

production lines to comply with the standard, but the investments would be similar for 

each manufacturer at this level. (74 FR 26054) 

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For today’s final rule, DOE modified the assumed conversion costs required for 

manufacturers to meet the Class A energy consumption levels by accounting for the 

potential use of an energy management system (see section IV.J). This change mitigates 

the overall impacts at TSL 6, but does not impose disproportionate investments on some 

manufacturers. 

In addition, DOE received a written comment on the NOPR from NAMA 

suggesting that there could be a differential impact among manufacturers for part of the 

standards proposed in the NOPR. NAMA stated that it received a mixed response from 

its members regarding the technological feasibility and economic benefits of the standard 

levels proposed by DOE. One manufacturer stated that it would have difficulty achieving 

additional reductions for Class A and Class B machines, while another stated that it could 

achieve the standards for both Class A and Class B machines without significant costs to 

them or their customers. However, most responses to NAMA’s request for information 

indicated that the proposed standard for Class B machines was appropriate and 

achievable, but the proposed standard for Class A raised questions among some 

manufacturers. (NAMA, No. 65 at p. 3) Dixie-Narco indicated for the NOPR that they 

could achieve the proposed TSL 6 for Class A machines without the use of intellectual 

property owned by an industry participant. Dixie-Narco stated that it is currently 

achieving the proposed efficiency level for Class A machines. (Dixie-Narco, Public 

Meeting Transcript, No. 56 at pp. 163 and 219) Royal Vendors stated that for Class A 

machines, they do not currently meet those levels, but given no proprietary design issues, 

they could meet them fairly easily. (Royal Vendors, Public Meeting Transcript, No. 56 at 

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p. 220; Royal Vendors, No. 60 at p. 1) Dixie-Narco addressed the proprietary design 

issue by stating that it is not aware of any intellectual property issues that would prevent 

its competitors from achieving the levels in the proposed standards (Dixie-Narco, No. 64 

at p. 2) The Joint Comment also stated that the proposed standards could be met without 

using LED lighting, which addresses concerns raised by interested parties concerning 

patent limitations on LED lighting use in vending machines. (Joint Comment, No. 67 at 

p. 1) 

For today’s final rule, DOE did not receive comments that indicated that the 

energy conservation standards would result in the unavailability of standards-compliant 

products. DOE recognizes that there was a mixed response from manufacturers regarding 

their ability to meet the standards for Class A machines. However, DOE notes that the 

technology options that could be used to meet the standard are available to all 

manufacturers, and DOE does not believe manufacturers will have to obtain proprietary 

technologies to meet the energy conservation standards set forth by today’s rule. As 

stated in section IV.B, all major manufacturers have access to alternative technology 

pathways to meet the efficiency levels in the analysis, including TSL 6, without the use 

of proprietary technology. DOE did not receive any information or comments that would 

indicate that the identified alternative technologies that could be used to meet energy 

conservation standards set forth by today’s final rule will lead to any lessening of 

competition. Section IV.B of today’s final rule further discusses alternative technology 

pathways and proprietary technologies. 

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In the NOPR, DOE requested comment on whether the proposed standard could 

result in industry consolidation. NAMA submitted a comment stating that the industry 

has experienced a trend of industry consolidation that would continue, if not accelerate, if 

equipment costs escalate due to the proposed standard. (NAMA, No. 65 at p. 6) 

DOE believes that an increase in equipment costs due to standards would have a 

comparable impact on all manufacturers. Therefore, industry participants would not be 

placed at a comparative disadvantage. 

The Attorney General’s response is reprinted at the end of today’s rulemaking. 

6. Need of the Nation to Conserve Energy 

Improving the energy efficiency of beverage vending machines, where 

economically justified, would likely improve the security of the Nation’s energy system 

by reducing overall demand for energy, thus reducing the Nation’s reliance on foreign 

sources of energy. Reduced demand would also likely improve the reliability of the 

electricity system, particularly during peak-load periods. As a measure of this reduced 

demand, DOE expects the energy savings from the adopted standards to eliminate the 

need for approximately 0.103 Gigawatts (GW) of generating capacity for Class A 

equipment and 0.015 GW for Class B equipment by 2042. 

Enhanced energy savings also produces environmental benefits in the form of

reduced emissions of air pollutants and greenhouse gases associated with energy 

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production. Table VI.24 provides DOE’s estimate of cumulative CO2, NOX, and Hg 

emissions reductions that would result from the TSLs considered in this rulemaking for 

both Class A and Class B equipment. The expected energy savings from these standards 

for beverage vending machines may also reduce the cost of maintaining nationwide 

emissions standards and constraints. In the EA (chapter 16 of the TSD), DOE reports 

estimated annual changes in CO2, NOX, and Hg emissions attributable to each TSL. 

Table VI.24 Cumulative CO2 NOX and Hg Emissions Reductions for Classes A and 

B Equipment (Cumulative Reductions for Equipment Sold from 2012 to 2042) 

Results Trial Standard Levels for Class A Equipment 

1 2 3 4 5 6 7 

Emissions Reductions 

CO2 

(Mt) 

0.40 1.89 4.18 6.45 7.63 8.40 10.22 

NOX 

(kt) 

0.13 0.65 1.43 2.20 2.60 2.87 3.49 

Hg (tons) 

Low 0 0 0 0 0 0 0 

High 0.008 0.037 0.082 0.127 0.150 0.165 0.201 

Results Trial Standard Levels for Class B Equipment 

1 2 3 4 5 6 

Emissions Reductions 

CO2 

(Mt) 

0.16 0.24 1.19 1.36 3.66 4.08 

NOX(kt) 0.05 0.08 0.41 0.46 1.25 1.39 

Hg (tons) 

Low 0 0 0 0 0 0 

High 0.003 0.005 0.023 0.027 0.072 0.080 

Mt = million metric tons 

kt = thousand tons 

Note: Detail may not sum to total due to rounding. 

As noted in section IV.M of this final rule, DOE does not report SO2 emissions 

reductions from power plants because DOE is uncertain that an energy conservation 

standard would affect the overall level of U.S. SO2 emissions due to emissions caps. 

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NOX emissions from 28 eastern States and the District of Columbia (D.C.) are 

limited under the CAIR, published in the Federal Register on May 12, 2005. 70 FR 

25162 (May 12, 2005). Although CAIR has been remanded to EPA by the D.C. Circuit, it 

will remain in effect until it is replaced by a rule consistent with the Court’s December 

23, 2008, opinion in North Carolina v. EPA. North Carolina v. EPA, 550 F.3d 1176 (D.C. 

Cir. 2008). These court positions were taken into account in the May 2009 NOPR. Thus, 

the same methodology was followed in estimating future NOX emission reductions in the 

May 2009 NOPR as in the final rule. Because all States covered by CAIR opted to reduce 

NOx emissions through participation in cap-and-trade programs for electric generating 

units, emissions from these sources are capped across the CAIR region. 

For the 28 eastern States and D.C. where CAIR is in effect, no NOx emissions 

reductions will occur due to the permanent cap. Under caps, physical emissions 

reductions in those States would not result from the energy conservation standards under 

consideration by DOE, but standards might have produced an environmentally related 

economic impact in the form of lower prices for emissions allowance credits, if they were 

large enough. However, DOE determined that in the present case, such standards would 

not produce an environmentally related economic impact in the form of lower prices for 

emissions allowance credits, because the estimated reduction in NOX emissions or the 

corresponding allowance credits in States covered by the CAIR cap would be too small to 

affect allowance prices for NOx under the CAIR. In contrast, new or amended energy 

conservation standards would reduce NOx emissions in those 22 States that are not 

affected by the CAIR, and these emissions could be estimated from NEMS–BT. As a 

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result, DOE used the NEMS–BT to forecast emission reductions from the beverage 

machine standards in today’s final rule. 

As noted in section IV.M, DOE was able to estimate the changes in Hg emissions 

associated with an energy conservation standard as follows. DOE notes that the NEMSBT model used for the NOPR, and used as an integral part of today’s rulemaking, does 

not estimate Hg emission reductions due to new energy conservation standards, as it 

assumed that Hg emissions would be subject to EPA’s CAMR. 70 FR 28606 (May 18, 

2005). CAMR would have permanently capped emissions of mercury for new and 

existing coal-fired plants in all States by 2010. DOE assumed that under such a system, 

energy conservation standards would have resulted in no physical effect on these NOx 

emissions, but might have resulted in an environmentally related economic benefit in the 

form of a lower price for emissions allowance credits if those credits were large enough. 

DOE estimated that the change in the Hg emissions from energy conservation 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 to vacate CAMR. 517 F.3d 574 (D.C. Cir. 2008). In 

light of this development and because the NEMS-BT model could not be used to directly 

calculate Hg emission reductions, DOE used the Hg emission rates discussed below to 

calculate emissions reductions in the NOPR. This same methodology is used for the final 

rule as well due to the continued fluid environment “...with many States planning to 

enact new laws or make existing laws more stringent.” EIA AEO2009 (March 2009), p. 

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18. The NEMS-BT has only rough estimates of mercury emissions, and it was felt that 

the range of emissions used in the NOPR remain appropriate given these circumstances. 

Therefore, rather than using the NEMS-BT model, DOE established a range of Hg 

emission rates to estimate the Hg emissions that could be reduced through energy 

conservation standards. The estimate should provide the full range of possible outcomes 

and DOE has therefore selected the low and high values to bracket the uncertainties 

associated with estimating mercury emission reductions. DOE’s low estimate assumed 

that future standards would displace electrical generation only from natural gas-fired 

power plants, thereby resulting in an effective emission rate of zero. (Under this scenario, 

coal-fired power plant generation would remain unaffected.) The low-end emission rate is 

zero because natural gas-fired power plants have virtually zero Hg emissions associated 

with their operation. 

DOE’s high estimate, which assumed that standards would displace only coalfired power plants, was based on a nationwide Hg emission rate from AEO2008. (Under 

this scenario, gas-fired power plant generation would remain unaffected.) Because power 

plant emission rates are a function of local regulation, scrubbers, and the mercury content 

of coal, it is extremely difficult to identify a precise high-end emission rate. Therefore, 

the most reasonable estimate is based on the assumption that all displaced coal generation 

would have been emitting at the average emission rate for coal generation as specified in 

the April update to AEO2009. As noted previously, because virtually all Hg emitted from 

electricity generation is from coal-fired power plants, DOE based the emission rate on the 

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tons of Hg emitted per TWh of coal-generated electricity. Based on the emission rate for 

2006, DOE derived a high-end emission rate of 0.0255 tons per TWh. To estimate the 

reduction in Hg emissions, DOE multiplied the emission rate by the reduction in coalgenerated electricity due to the standards considered in the utility impact analysis. These 

changes in Hg emissions are extremely small, ranging from 0 to 0.04 percent of the 

national base-case emissions forecast by NEMS–BT, depending on the TSL. 

In the May 2009 NOPR, DOE indicated that it intended to consider the likely 

monetary benefits of CO2 emission reductions associated with standards. 74 FR 102, 

26020 (May 29, 2009). To put the potential monetary benefits from reduced CO2 

emissions into a form that would likely be most useful to decision makers and interested 

parties, DOE used methods that were similar to those it used to calculate the net present 

value of consumer cost savings. DOE converted the estimated yearly reductions in CO2 

emissions into monetary values that represented the present value, in that year, of future 

benefits resulting from that reduction in emissions, which were then discounted from that 

year to the present using both 3 percent and 7 percent discount rates. 

In the May 2009 NOPR, DOE proposed to use the range $0 to $20 per ton for 

2007 in 2007$. These estimates were originally derived to represent the lower and upper 

bounds of the costs and benefits likely to be experienced in the United States. The lower 

bound was based on an assumption of no benefit and the upper bound was based on an 

estimate of the mean value of worldwide impacts due to climate change that was reported 

by the Intergovernmental Panel on Climate Change (IPCC) in its “Fourth Assessment 

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Report.” For today’s final rule, DOE is relying on a new set of values recently developed 

by an interagency process that conducted a more thorough review of existing estimates of 

the social cost of carbon (SCC). 

The SCC is intended to be a monetary measure of the incremental damage 

resulting from greenhouse gas (GHG) emissions, including, but not limited to, net 

agricultural productivity loss, human health effects, property damages from sea level rise, 

and changes in ecosystem services. Any effort to quantify and to monetize the harms 

associated with climate change will raise serious questions of science, economics, and 

ethics. But with full regard for the limits of both quantification and monetization, the 

SCC can be used to provide estimates of the social benefits of reductions in GHG 

emissions. 

For at least three reasons, any single estimate of the SCC will be contestable. 

First, scientific and economic knowledge about the impacts of climate change continues 

to grow. With new and better information about relevant questions, including the cost, 

burdens, and possibility of adaptation, current estimates will inevitably change over time. 

Second, some of the likely and potential damages from climate change—for example, the 

value society places on adverse impacts on endangered species—are not included in all of 

the existing economic analyses. These omissions may turn out to be significant, in the 

sense that they may mean that the best current estimates are too low. Third, controversial 

ethical judgments, including those involving the treatment of future generations, play a 

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role in judgments about the SCC (see in particular the discussion of the discount rate, 

below). 

To date, regulations have used a range of values for the SCC. For example, a 

regulation proposed by the U.S. Department of Transportation (DOT) in 2008 assumed a 

value of $7 per ton CO2 (2006$) for 2011 emission reductions (with a range of $0-14 for 

sensitivity analysis). Regulation finalized by DOE used a range of $0-$20 (2007$). Both 

of these ranges were designed to reflect the value of damages to the United States 

resulting from carbon emissions, or the “domestic” SCC. In the final Model Year 2011 

Corporate Average Fuel Economy rule, DOT used both a domestic SCC value of 

$2/tCO2 and a global SCC value of $33/tCO2 (with sensitivity analysis at $80/tCO2), 

increasing at 2.4 percent per year thereafter. 

In recent months, a variety of agencies have worked to develop an objective 

methodology for selecting a range of interim SCC estimates to use in regulatory analyses 

until improved SCC estimates are developed. The following summary reflects the initial 

results of these efforts and proposes ranges and values for interim social costs of carbon 

used in this rule. It should be emphasized that the analysis described below is 

preliminary. These complex issues are of course undergoing a process of continuing 

review. Relevant agencies will be evaluating and seeking comment on all of the 

scientific, economic, and ethical issues before establishing final estimates for use in 

future rulemakings. 

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The interim judgments resulting from the recent interagency review process can 

be summarized as follows: (a) DOE and other Federal agencies should consider the 

global benefits associated with the reductions of CO2 emissions resulting from efficiency 

standards and other similar rulemakings, rather continuing the previous focus on 

domestic benefits; (b) these global benefits should be based on SCC estimates (in 2007$) 

of $55, $33, $19, $10, and $5 per ton of CO2 equivalent emitted (or avoided) in 2007; (c) 

the SCC value of emissions that occur (or are avoided) in future years should be escalated 

using an annual growth rate of 3 percent from the current values); and (d) domestic 

benefits are estimated to be approximately 6 percent of the global values. These interim 

judgments are based on the following: 

1. Global and domestic estimates of SCC. Because of the distinctive nature of the 

climate change problem, estimates of both global and domestic SCC values 

should be considered, but the global measure should be “primary.” This approach 

represents a departure from past practices, which relied, for the most part, on 

measures of only domestic impacts. As a matter of law, both global and domestic 

values are permissible; the relevant statutory provisions are ambiguous and allow 

the agency to choose either measure. (It is true that Federal statutes are presumed 

not to have extraterritorial effect, in part to ensure that the laws of the United 

States respect the interests of foreign sovereigns. But use of a global measure for 

the SCC does not give extraterritorial effect to Federal law and hence does not 

intrude on such interests.) 

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It is true that under OMB guidance, analysis from the domestic perspective is 

required, while analysis from the international perspective is optional. The 

domestic decisions of one nation are not typically based on a judgment about the 

effects of those decisions on other nations. But the climate change problem is 

highly unusual in the sense that it involves (a) a global public good in which (b) 

the emissions of one nation may inflict significant damages on other nations and 

(c) the United States is actively engaged in promoting an international agreement 

to reduce worldwide emissions. 

In these circumstances, the global measure is preferred. Use of a global measure 

reflects the reality of the problem and is expected to contribute to the continuing 

efforts of the United States to ensure that emission reductions occur in many 

nations. 

Domestic SCC values are also presented. The development of a domestic SCC is 

greatly complicated by the relatively few region- or country-specific estimates of 

the SCC in the literature. One potential estimate comes from the DICE (Dynamic 

Integrated Climate Economy, William Nordhaus) model. In an unpublished paper, 

Nordhaus (2007) produced disaggregated SCC estimates using a regional version 

of the DICE model. He reported a U.S. estimate of $1/tCO2 (2007 value, 2007$), 

which is roughly 11 percent of the global value. 

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An alternative source of estimates comes from a recent EPA modeling effort 

using the FUND (Climate Framework for Uncertainty, Negotiation and 

Distribution, Center for Integrated Study of the Human Dimensions of Global 

Change) model. The resulting estimates suggest that the ratio of domestic to 

global benefits varies with key parameter assumptions. With a 3 percent discount 

rate, for example, the US benefit is about 6 percent of the global benefit for the 

“central” (mean) FUND results, while, for the corresponding “high” estimates 

associated with a higher climate sensitivity and lower global economic growth, 

the US benefit is less than 4 percent of the global benefit. With a 2 percent 

discount rate, the U.S. share is about 2 to5 percent of the global estimate. 

Based on this available evidence, a domestic SCC value equal to 6 percent of the 

global damages is used in this rulemaking. This figure is in the middle of the 

range of available estimates from the literature. It is recognized that the 6 percent 

figure is approximate and highly speculative and alternative approaches will be 

explored before establishing final values for future rulemakings. 

2. Filtering existing analyses. There are numerous SCC estimates in the existing 

literature, and it is legitimate to make use of those estimates to produce a figure 

for current use. A reasonable starting point is provided by the meta-analysis in 

Richard Tol, “The Social Cost of Carbon: Trends, Outliers, and Catastrophes, 

Economics: The Open-Access, Open-Assessment E-Journal,” Vol. 2, 2008-25. 

http://www.economics-ejournal.org/economics/journalarticles/2008-25 (2008). 

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With that starting point, it is proposed to “filter” existing SCC estimates by using 

those that (1) are derived from peer-reviewed studies; (2) do not weight the 

monetized damages to one country more than those in other countries; (3) use a 

“business as usual” climate scenario; and (4) are based on the most recent 

published version of each of the three major integrated assessment models 

(IAMs): FUND, DICE and PAGE (Policy Analysis of the Greenhouse Effect) 

Policy. 

Proposal (1) is based on the view that those studies that have been subject to peer 

review are more likely to be reliable than those that have not been. Proposal (2) is 

based on a principle of neutrality and simplicity; it does not treat the citizens of 

one nation differently on the basis of speculative or controversial considerations. 

Proposal (3) stems from the judgment that as a general rule, the proper way to 

assess a policy decision is by comparing the implementation of the policy against 

a counterfactual state where the policy is not implemented. A departure from this 

approach would be to consider a more dynamic setting in which other countries 

might implement policies to reduce GHG emissions at an unknown future date, 

and the United States could choose to implement such a policy now or in the 

future. 

Proposal (4) is based on three complementary judgments. First, the FUND, 

PAGE, and DICE models now stand as the most comprehensive and reliable 

efforts to measure the damages from climate change. Second, the latest versions 

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of the three IAMs are likely to reflect the most recent evidence and learning, and 

hence they are presumed to be superior to those that preceded them. It is 

acknowledged that earlier versions may contain information that is missing from 

the latest versions. Third, any effort to choose among them, or to reject one in 

favor of the others, would be difficult to defend at this time. In the absence of a 

clear reason to choose among them, it is reasonable to base the SCC on all of 

them. 

The agency is keenly aware that the current IAMs fail to include all relevant 

information about the likely impacts from greenhouse gas emissions. For 

example, ecosystem impacts, including species loss, do not appear to be included 

in at least two of the models. Some human health impacts, including increases in 

food-borne illnesses and in the quantity and toxicity of airborne allergens, also 

appear to be excluded. In addition, there has been considerable recent discussion 

of the risk of catastrophe and of how best to account for worst-case scenarios. It is 

not clear whether the three IAMs take adequate account of these potential effects. 

3. Use a model-weighted average of the estimates at each discount rate. At this 

time, there appears to be no scientifically valid reason to prefer any of the three 

major IAMs (FUND, PAGE, and DICE). Consequently, the estimates are based 

on an equal weighting of estimates from each of the models. Among estimates 

that remain after applying the filter, the average of all estimates within a model is 

derived. The estimated SCC is then calculated as the average of the three model128 

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specific averages. This approach ensures that the interim estimate is not biased 

towards specific models or more prolific authors. 

4. Apply a 3 percent annual growth rate to the chosen SCC values. SCC is assumed 

to increase over time, because future emissions are expected to produce larger 

incremental damages as physical and economic systems become more stressed as 

the magnitude of climate change increases. Indeed, an implied growth rate in the 

SCC is produced by most studies that estimate economic damages caused by 

increased GHG emissions in future years. But neither the rate itself nor the 

information necessary to derive its implied value is commonly reported. In light 

of the limited amount of debate thus far about the appropriate growth rate of the 

SCC, applying a rate of 3 percent per year seems appropriate at this stage. This 

value is consistent with the range recommended by IPCC (2007) and close to the 

latest published estimate (Hope, 2008). 

For climate change, one of the most complex issues involves the appropriate 

discount rate. OMB’s current guidance offers a detailed discussion of the relevant issues 

and calls for discount rates of 3 percent and 7 percent. It also permits a sensitivity 

analysis with low rates for intergenerational problems. (“If your rule will have important 

intergenerational benefits or costs you might consider a further sensitivity analysis using 

a lower but positive discount rate in addition to calculating net benefits using discount 

rates of 3 and 7 percent.”) The SCC is being developed within the general context of the 

current guidance. 

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The choice of a discount rate, especially over long periods of time, raises highly 

contested and exceedingly difficult questions of science, economics, philosophy, and law. 

See, e.g., William Nordhaus, “The Challenge of Global Warming (2008); Nicholas Stern, 

The Economics of Climate Change” (2007); “Discounting and Intergenerational Equity” 

(Paul Portney and John Weyant, eds., 1999). Under imaginable assumptions, decisions 

based on cost-benefit analysis with high discount rates might harm future generations—at 

least if investments are not made for the benefit of those generations. See Robert Lind, 

“Analysis for Intergenerational Discounting,” id. at 173, 176-177. At the same time, use 

of low discount rates for particular projects might itself harm future generations, by 

ensuring that resources are not used in a way that would greatly benefit them. In the 

context of climate change, questions of intergenerational equity are especially important. 

Reasonable arguments support the use of a 3 percent discount rate. First, that rate 

is among the two figures suggested by OMB guidance, and hence it fits with existing 

National policy. Second, it is standard to base the discount rate on the compensation that 

people receive for delaying consumption, and the 3 percent rate is close to the risk-free 

rate of return, proxied by the return on long term inflation-adjusted US Treasury Bonds. 

(In the context of climate change, it is possible to object to this standard method for 

deriving the discount rate.) Although these rates are currently closer to 2.5 percent, the 

use of 3 percent provides an adjustment for the liquidity premium that is reflected in 

these bonds’ returns. 

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At the same time, other arguments support use of a 5 percent discount rate. First, 

that rate can also be justified by reference to the level of compensation for delaying 

consumption, because it fits with market behavior with respect to individuals’ willingness 

to trade off consumption across periods as measured by the estimated post-tax average 

real returns to private investment (e.g., the S&P 500). In the climate setting, the 5 percent 

discount rate may be preferable to the riskless rate because it is based on risky 

investments and the return to projects to mitigate climate change is also risky. In contrast, 

the 3 percent riskless rate may be a more appropriate discount rate for projects where the 

return is known with a high degree of confidence (e.g., highway guardrails). 

Second, 5 percent, and not 3 percent, is roughly consistent with estimates implied 

by reasonable inputs to the theoretically derived Ramsey equation, which specifies the 

optimal time path for consumption. That equation specifies the optimal discount rate as 

the sum of two components. The first reflects the fact that consumption in the future is 

likely to be higher than consumption today (even accounting for climate impacts), so 

diminishing marginal utility implies that the same monetary damage will cause a smaller 

reduction of utility in the future. Standard estimates of this term from the economics 

literature are in the range of 3 to 5 percent. The second component reflects the possibility 

that a lower weight should be placed on utility in the future, to account for social 

impatience or extinction risk, which is specified by a pure rate of time preference 

(PRTP). A conventional estimate of the PRTP is 2 percent. (Some observers believe that 

a principle of intergenerational equity suggests that the PRTP should be close to zero.) It 

follows that discount rate of 5 percent is within the range of values which are able to be 

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derived from the Ramsey equation, albeit at the low end of the range of estimates usually 

associated with Ramsey discounting. 

It is recognized that the arguments above—for use of market behavior and the 

Ramsey equation—face objections in the context of climate change, and of course there 

are alternative approaches. In light of climate change, it is possible that consumption in 

the future will not be higher than consumption today, and if so, the Ramsey equation will 

suggest a lower figure. Some people have suggested that a very low discount rate, below 

3 percent, is justified in light of the ethical considerations calling for a principle of 

intergenerational neutrality. See Nicholas Stern, “The Economics of Climate Change” 

(2007); for contrary views, see William Nordhaus, The A Question of Balance (2008); 

Martin Weitzman, “Review of the Stern Review on the Economics of Climate Change." 

Journal of Economic Literature, 45(3): 703–724 (2007). Additionally, some analyses 

attempt to deal with uncertainty with respect to interest rates over time; a possible 

approach enabling the consideration of such uncertainties is discussed below. Richard 

Newell and William Pizer, “Discounting the Distant Future: How Much do Uncertain 

Rates Increase Valuations?” J. Environ. Econ. Manage. 46 (2003) 52-71. 

The application of the methodology outlined above yields estimates of the SCC 

that are reported in Table VI.25. These estimates are reported separately using 3 percent 

and 5 percent discount rates. The cells are empty in rows 10 and 11, because these studies 

did not report estimates of the SCC at a 3 percent discount rate. The model-weighted 

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means are reported in the final or summary row; they are $33 per tCO2 at a 3% discount 

rate and $5 per tCO2 with a 5% discount rate. 

Table VI.25 Global Social Cost of Carbon (SCC) Estimates ($/tCO2 in 2007 

(2006$)), Based on 3% and 5% Discount Rates* 

Model Study Climate Scenario 3% 5% 

1 FUND Anthoff et al. 2009 FUND default 6 -1 

2 FUND Anthoff et al. 2009 SRES A1b 1 -1 

3 FUND Anthoff et al. 2009 SRES A2 9 -1 

4 FUND Link and Tol 2004 No THC 12 3 

5 FUND Link and Tol 2004 THC continues 12 2 

6 FUND Guo et al. 2006 Constant PRTP 5 -1 

7 FUND Guo et al. 2006 Gollier discount 1 14 0 

8 FUND Guo et al. 2006 Gollier discount 2 7 -1 

FUND Mean 8.25 0 

9 PAGE Wahba & Hope 2006 A2-scen 57 7 

10 PAGE Hope 2006 7 

11 DICE Nordhaus 2008 8 

Summary Model-weighted Mean 33 5 

*The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus 

(2008), Hope (2008), and Anthoff et al. (2009), that are based on the most recent published version of 

FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best 

available information from the underlying studies about the base year and year dollars, rather than the Tol 

(2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were 

updated to 2007 using a 3 percent annual growth rate in the SCC, and adjusted for inflation using GDP 

deflator. 

Analyses have been conducted at $33 and $5 as these represent the estimates 

associated with the 3 percent and 5 percent discount rates, respectively. The 3 percent and 

5 percent estimates have independent appeal and at this time a clear preference for one 

over the other is not warranted. Thus, DOE has also included—and centered its current 

attention on—the average of the estimates associated with these discount rates, which is 

$19. (Based on the $19 global value, the domestic value would be $1.14 per ton of CO2 

equivalent.) 

It is true that there is uncertainty about interest rates over long time horizons. 

Recognizing that point, Newell and Pizer have made a careful effort to adjust for that 

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uncertainty. See Newell and Pizer, supra. This is a relatively recent contribution to the 

literature. 

There are several concerns with using this approach in this context. First, it would 

be a departure from current OMB guidance. Second, an approach that would average 

what emerges from discount rates of 3 percent and 5 percent reflects uncertainty about 

the discount rate, but based on a different model of uncertainty. The Newell-Pizer 

approach models discount rate uncertainty as something that evolves over time; in 

contrast, one alternative approach would assume that there is a single discount rate with 

equal probability of 3 percent and 5 percent. 

Table VI.26 reports on the application of the Newell-Pizer adjustments. The 

precise numbers depend on the assumptions about the data generating process that 

governs interest rates. Columns (1a) and (1b) assume that “random walk” model best 

describes the data and uses 3 percent and 5 percent discount rates, respectively. Columns 

(2a) and (2b) repeat this, except that it assumes a “mean-reverting” process. As Newell 

and Pizer report, there is stronger empirical support for the random walk model. 

134 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

Table VI.26 Global Social Cost of Carbon (SCC) Estimates ($/tCO2 in 2007 

(2006$)),* Using Newell & Pizer (2003) Adjustment for Future Discount Rate 

Uncertainty** 

Model Study Climate Scenario 

Random- walk 

model 

Mean-reverting 

model 

3% 5% 3% 5% 

(1a) (1b) (2a) (2b) 

1 FUND Anthoff et al. 2009 FUND default 10 0 7 -1 

2 FUND Anthoff et al. 2009 SRES A1b 2 0 1 -1 

3 FUND Anthoff et al. 2009 SRES A2 15 0 10 -1 

4 FUND Link and Tol 2004 No THC 20 6 13 4 

5 FUND Link and Tol 2004 THC continues 20 4 13 2 

6 FUND Guo et al. 2006 Constant PRTP 9 0 6 -1 

7 FUND Guo et al. 2006 Gollier discount 1 14 0 14 0 

8 FUND Guo et al. 2006 Gollier discount 2 7 -1 7 -1 

FUND Mean 12 1 9 0 

9 PAGE Wahba & Hope 2006 A2-scen 97 13 63 8 

10 PAGE Hope 2006 13 8 

11 DICE Nordhaus 2008 15 9 

Summary Model-weighted Mean 55 10 36 6 

*The sample includes all peer reviewed, non-equity-weighted estimates included in Tol (2008), Nordhaus 

(2008), Hope (2008), and Anthoff et al. (2009), that are based on the most recent published version of 

FUND, PAGE, or DICE and use business-as-usual climate scenarios. All values are based on the best 

available information from the underlying studies about the base year and year dollars, rather than the Tol 

(2008) assumption that all estimates included in his review are 1995 values in 1995$. All values were 

updated to 2007 using a 3 percent annual growth rate in the SCC, and adjusted for inflation using GDP 

deflator. 

**Assumes a starting discount rate of 3 percent. Newell and Pizer (2003) based adjustment factors are not 

applied to estimates from Guo et al. (2006) that use a different approach to account for discount rate 

uncertainty (rows 7-8). 

The resulting estimates of the social cost of carbon are necessarily greater. When 

the adjustments from the random walk model are applied, the estimates of the social cost 

of carbon are $10 and $55, with the 3 percent and 5 percent discount rates, respectively. 

The application of the mean-reverting adjustment yields estimates of $6 and $36. 

Since the random walk model has greater support from the data, analyses are also 

conducted with the value of the SCC set at $10 and $55. 

135 

EERE-2006-BT-STD-0125 COMMENT 71
Based on this analysis, DOE has concluded that it is appropriate to consider the 

global benefits of reducing CO2 emissions, while also presenting the domestic benefits. 

Consequently, DOE considered in its decision process for this final rule the potential 

global benefits resulting from reduced CO2 emissions valued at $5, $10, $19, $30 and 

$55 per metric ton, and has also presented the domestic benefits derived using a value of 

$1.14 per metric ton. All of these values represent emissions that are valued in 2007$. As 

indicated in the analysis summarized above, the value of future emissions is determined 

using a 3 percent escalation rate. The resulting range is based on current peer-reviewed 

estimates of the value of SCC and, DOE believes, fairly represents the uncertainty 

surrounding the global benefits resulting from reduced CO2 emissions and, at the $1.14 

level, also encompasses the likely domestic benefits, DOE also concluded, based on the 

most recent Tol analysis, that it was appropriate to escalate these values at 3 percent per 

year to represent the expected increases, over time, of the benefits associated with 

reducing CO2 and other greenhouse gas emissions. Estimates of SCC are assumed to 

increase over time since future emissions are expected to produce larger incremental 

damages as physical and economic systems become more stressed as the magnitude of 

climate change increases. Although most studies that estimate economic damages caused 

by increased GHG emissions in future years produce an implied growth rate in the SCC, 

neither the rate itself nor the information necessary to derive its implied value is 

commonly reported. Given the limited amount of debate thus far about the appropriate 

growth rate of the SCC, applying a rate of 3 percent per year seems appropriate at this 

stage. This value is consistent with the range recommended by IPCC (2007). 

136 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

Table VI.27 and Table VI.28 present the resulting estimates of the potential range 

of NPV benefits associated with reducing CO2 emissions for both Class A and Class B 

equipment based on the range of values used by DOE for this final rule. 

Table VI.27 Estimates of Savings from CO2 Emissions Reductions at All TSLs and 

CO2 Prices at a 7 Percent Discount Rate for Class A Equipment 

Value of Estimated CO2 Emission Reductions (million 2007$)** 

TSL 

Estimated 

Cumulative 

CO2 (MMt) 

Emission 

Reductions 

CO2 Value 

of 

$1.14/metric 

ton CO2* 

$ 

CO2 

Value of 

$5/metric 

ton CO2 

S 

CO2 

Value of 

$10/metric 

ton CO2 

$ 

CO2 

Value of 

$19/metric 

ton CO2 

$ 

CO2 

Value of 

$33/metric 

ton CO2 

$ 

CO2 

Value of 

$55/metric 

ton CO2 

$ 

1 0.40 0.23 1.00 1.99 3.79 6.58 10.97 

2 1.89 1.09 4.77 9.54 18.13 31.49 52.48 

3 4.18 2.41 10.56 21.12 40.12 69.69 116.14 

4 6.45 3.71 16.28 32.55 61.85 107.43 179.04 

5 7.63 4.39 19.25 38.49 73.13 127.02 211.70 

6 8.40 4.84 21.21 42.42 80.61 140.00 233.34 

7 10.22 5.88 25.80 51.60 98.04 170.28 283.80 

* This value per ton represents the domestic negative externalities of CO2 only 

137 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

Table VI.28 Estimates of Savings from CO2 Emissions Reductions at All TSLs and 

CO2 Prices at a 3 Percent Discount Rate for Class A Equipment 

Value of Estimated CO2 Emission Reductions (million 2007$)** 

TSL 

Estimated 

Cumulative 

CO2 (MMt) 

Emission 

Reductions 

CO2 Value 

of 

$1.14/metric 

ton CO2* 

$ 

CO2 

Value of 

$5/metric 

ton CO2 

$ 

CO2 

Value of 

$10/metric 

ton CO2 

$ 

CO2 

Value of 

$19/metric 

ton CO2 

$ 

CO2 

Value of 

$33/metric 

ton CO2 

$ 

CO2 

Value of 

$55/metric 

ton CO2 

$ 

1 0.40 0.46 2.04 4.07 7.73 13.43 22.39 

2 1.89 2.22 9.74 19.47 36.99 64.25 107.09 

3 4.18 4.91 21.55 43.09 81.87 142.20 237.00 

4 6.45 7.57 33.21 66.43 126.21 219.21 365.35 

5 7.63 8.95 39.27 78.54 149.23 259.20 432.00 

6 8.40 9.87 43.29 86.57 164.48 285.68 476.14 

7 10.22 12.00 52.65 105.29 200.06 347.46 579.11 

* This value per ton represents the domestic negative externalities of CO2 only 

Table VI.29 Estimates of Savings from CO2 Emissions Reductions at All TSLs and 

CO2 Prices at a 7 Percent Discount Rate for Class B Equipment 

Value of Estimated CO2 Emission Reductions (million 2007$)** 

TSL 

Estimated 

Cumulative 

CO2 (MMt) 

Emission 

Reductions 

CO2 Value of 

$1.14/metric 

ton CO2* 

$ 

CO2 Value 

of 

$5/metric 

ton CO2 

$ 

CO2 Value 

of 

$10/metric 

ton CO2 

$ 

CO2 Value 

of 

$19/metric 

ton CO2 

$ 

CO2 Value 

of 

$33/metric 

ton CO2 

$ 

CO2 Value 

of 

$55/metric 

ton CO2 

$ 

1 0.16 0.09 0.40 0.81 1.53 2.66 4.43 

2 0.24 0.14 0.60 1.20 2.27 3.95 6.58 

3 1.19 0.68 3.00 6.00 11.40 19.81 33.01 

4 1.36 0.78 3.43 6.86 13.04 22.65 37.75 

5 3.66 2.11 9.24 18.48 35.11 60.98 101.64 

6 4.08 2.35 10.29 20.58 39.10 67.91 113.18 

* This value per ton represents the domestic negative externalities of CO2 only 

138 

EERE-2006-BT-STD-0125 COMMENT 71
Table VI.30 Estimates of Savings from CO2 Emissions Reductions at All TSLs and 

CO2 Prices at a 3 Percent Discount Rate for Class B Equipment 

Value of Estimated CO2 Emission Reductions (million 2007$)** 

TSL 

Estimated 

Cumulative 

CO2 (MMt) 

Emission 

Reductions 

CO2 Value of 

$1.14/metric 

ton CO2* 

$ 

CO2 Value 

of 

$5/metric 

ton CO2 

$ 

CO2 Value 

of 

$10/metric 

ton CO2 

$ 

CO2 Value 

of 

$19/metric 

ton CO2 

$ 

CO2 Value 

of 

$33/metric 

ton CO2 

$ 

CO2 Value 

of 

$55/metric 

ton CO2 

$ 

1 0.16 0.19 0.82 1.64 3.12 5.42 9.04 

2 0.24 0.28 1.22 2.44 4.64 8.05 13.42 

3 1.19 1.40 6.12 12.25 23.27 40.42 67.36 

4 1.36 1.60 7.00 14.01 26.61 46.22 77.04 

5 3.66 4.30 18.85 37.71 71.65 124.44 207.40 

6 4.08 4.79 21.00 41.99 79.78 138.57 230.95 

* This value per ton represents the domestic negative externalities of CO2 only 

DOE recognizes that scientific and economic knowledge about the contribution of 

CO2 and other GHG to changes in the future global climate and the potential resulting 

damages to the world economy continues to evolve rapidly. Thus, any value placed in 

this rulemaking on reducing CO2 emissions is subject to change. 

DOE, together with other Federal agencies, will continue to review various 

methodologies for estimating the monetary value of reductions in CO2 and other 

greenhouse gas emissions. This ongoing review will consider the comments on this 

subject that are part of the public record for this and other rulemakings, as well as other 

methodological assumptions and issues. However, consistent with DOE’s legal 

obligations, and taking into account the uncertainty involved with this particular issue, 

DOE has included in this final rule the most recent values and analyses resulting from the 

ongoing interagency review process. 

139 

EERE-2006-BT-STD-0125 COMMENT 71
DOE also investigated the potential monetary benefit of reduced SO2, NOx, and 

Hg emissions from the TSLs it considered. As previously stated, DOE’s initial analysis 

assumed the presence of nationwide emission caps on SO2 and Hg, and caps on NOx 

emissions in the 28 States covered by the CAIR. In the presence of these caps, DOE 

concluded that no physical reductions in power sector emissions would occur, but that the 

standards could put downward pressure on the prices of emissions allowances in cap-andtrade markets. Estimating this effect is very difficult because such factors as credit 

banking can change the trajectory of prices. DOE has concluded that the effect from 

energy conservation standards on SO2 allowance prices is likely to be negligible based on 

runs of the NEMS–BT model. See chapter 16 of the TSD for further details. 

Because the courts have decided to allow the CAIR rule to remain in effect, 

projected annual NOx allowances from NEMS–BT are relevant. The update to the 

AEO2009-based version of NEMS-BT includes the representation of CAIR. As noted 

above, standards would not produce an economic impact in the form of lower prices for 

emissions allowance credits in the 28 eastern States and D.C. covered by the CAIR cap. 

New or amended energy conservation standards would reduce NOx emissions in those 22 

States that are not affected by the CAIR. For the area of the United States not covered by 

the CAIR, DOE estimated the monetized value of NOx emissions reductions resulting 

from each of the TSLs considered for today’s final rule based on environmental damage 

estimates from the literature. 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$ (equivalent to a range of $432 to $4,441 per ton in 

140 

EERE-2006-BT-STD-0125 COMMENT 71
2007$). Refer to the OMB, Office of Information and Regulatory Affairs, “2006 Report 

to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on 

State, Local, and Tribal Entities,” Washington, DC, for additional information. 

For Hg emissions reductions, DOE estimated the national monetized values 

resulting from the TSLs considered for today’s rule based on environmental damage 

estimates from the literature. DOE conducted research for today’s final rule and 

determined that the impact of mercury emissions from power plants on humans is 

considered highly uncertain. However, DOE identified two estimates of the 

environmental damage of mercury based on two estimates of the adverse impact of 

childhood exposure to methyl mercury on intelligence quotient (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 in American children that results from exposure to mercury of U.S. power 

plant origin ($1.3 billion per year in year 2000$), which works out to $32.6 million per 

ton emitted per year (2007$). Refer to L. Trasande et al., “Applying Cost Analyses to 

Drive Policy that Protects Children,” 1076 Ann. N.Y. Acad. Sci. 911 (2006) for 

additional information. The low-end estimate is $0.66 million per ton emitted (in 2004$) 

or $0.729 million per ton in 2007$. DOE derived this estimate 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. See 

Ted Gayer and Robert Hahn, “Designing Environmental Policy: Lessons from the 

Regulation of Mercury Emissions,” Regulatory Analysis 05–01, AEI-Brookings Joint 

141 

EERE-2006-BT-STD-0125 COMMENT 71
Center for Regulatory Studies, Washington, DC (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. Table VI.31 through Table VI.34 present the resulting estimates of 

the potential range of present value benefits associated with reducing national NOx and 

Hg emissions for Class A and B equipment. 

Table VI.31 Estimates of Savings from Reducing NOx and Hg Emissions at All Trial 

Standard Levels at a 7 percent Discount Rate for Class A Equipment 

TSL 

Estimated 

Cumulative NOx 

Emission 

Reductions 

kt 

Value of Estimated 

NOx Emission 

Reductions 

thousand 2007$ 

Estimated 

Cumulative 

Hg Emission 

Reductions 

tons 

Value of Estimated Hg 

Emission Reductions 

thousand 2007$ 

1 0.13 15 – 150 0.008 0 – 61 

2 0.65 70 – 716 0.037 0 – 293 

3 1.43 154 – 1,584 0.082 0 – 649 

4 2.20 238 – 2,442 0.127 0 – 1,001 

5 2.60 281 – 2,888 0.150 0 – 1,183 

6 2.87 310 – 3,183 0.165 0 – 1,304 

7 3.49 377 – 3,871 0.201 0 – 1,586 

Table VI.32 Estimates of Savings from Reducing NOx and Hg Emissions at All Trial 

Standard Levels at a 7 percent Discount Rate for Class B Equipment 

TSL 

Estimated 

Cumulative NOx 

Emission 

Reductions 

kt 

Value of Estimated 

NOx Emission 

Reductions 

thousand 2007$ 

Estimated 

Cumulative 

Hg Emission 

Reductions 

tons 

Value of Estimated Hg 

Emission Reductions 

thousand 2007$ 

1 0.05 6 – 60 0.003 0 – 25 

2 0.08 9 – 90 0.005 0 – 37 

3 0.41 44 – 450 0.023 0 – 185 

4 0.46 50 – 515 0.027 0 – 211 

5 1.25 135 – 1,386 0.072 0 – 568 

6 1.39 150 – 1,544 0.080 0 – 633 

142 

EERE-2006-BT-STD-0125 COMMENT 71
Table VI.33 Estimates of Savings from Reducing NOx and Hg Emissions at All Trial 

Standard Levels at a 3 percent Discount Rate for Class A Equipment 

TSL 

Estimated 

Cumulative NOx 

Emission 

Reductions 

kt 

Value of Estimated 

NOx Emission 

Reductions 

thousand 2007$ 

Estimated 

Cumulative 

Hg Emission 

Reductions 

tons 

Value of Estimated Hg 

Emission Reductions 

thousand 2007$ 

1 0.13 31 – 317 0.008 0 – 132 

2 0.65 148 – 1,516 0.037 0 – 633 

3 1.43 326 – 3,356 0.082 0 – 1,401 

4 2.20 503 – 5,174 0.127 0 – 2,160 

5 2.60 595 – 6,117 0.150 0 – 2,554 

6 2.87 656 – 6,742 0.165 0 – 2,815 

7 3.49 798 – 8,200 0.201 0 – 3,424 

Table VI.34 Estimates of Savings from Reducing NOx and Hg Emissions at All Trial 

Standard Levels at a 3 percent Discount Rate for Class B Equipment 

TSL 

Estimated 

Cumulative NOx 

Emission 

Reductions 

kt 

Value of Estimated 

NOx Emission 

Reductions 

thousand 2007$ 

Estimated 

Cumulative 

Hg Emission 

Reductions 

tons 

Value of Estimated Hg 

Emission Reductions 

thousand 2007$ 

1 0.05 12 – 128 0.003 0 – 53 

2 0.08 18 – 190 0.005 0 – 79 

3 0.41 93 – 954 0.023 0 – 398 

4 0.46 106 – 1,091 0.027 0 – 455 

5 1.25 286 – 2,937 0.072 0 – 1,226 

6 1.39 318 – 3,270 0.080 0 – 1,365 

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) and (v)) 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 

143 

EERE-2006-BT-STD-0125 COMMENT 71
from the imposition of any national energy conservation standard level. DOE identified 

no factors other than those already considered above for analysis. 

D. Conclusion 

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 established a separate set of TSLs for Class A and B beverage vending 

machines. DOE considered seven TSLs for Class A and six TSLs for Class B beverage 

vending machines. The following discussion briefly explains the development of the 

TSLs, consideration of the TSLs (starting with the most stringent) under the statutory 

factors, and DOE’s conclusions. 

Table VI.35 and Table VI.36 present summaries of quantitative analysis results 

for each TSL for Class A and B equipment, respectively, based on the assumptions and 

methodology discussed above. These tables present the results or, in some cases, ranges 

of results, for each TSL. The ranges reported for industry impacts represent the results of 

the different markup scenarios DOE used to estimate impacts. 

144 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

 

 

 

 

Table VI.35 Summary of Results for Class A Equipment Based Upon the AEO2009 

Reference Case Energy Price Forecast* 

Results Trial Standard Level 

1 2 3 4 5 6 7 

Primary Energy Saved 

(quads) 

0.007 0.031 0.069 0.107 0.127 0.139 0.170 

7% Discount Rate 0.002 0.010 0.021 0.032 0.038 0.042 0.051 

3% Discount Rate 0.004 0.018 0.040 0.061 0.073 0.080 0.097 

Generation Capacity 

Reduction (GW)** 

0.005 0.023 0.051 0.079 0.094 0.103 0.126 

NPV 2008$billion: 

7% Discount Rate 

3% Discount Rate 

0.015 

0.034 

0.068 

0.153 

0.112 

0.268 

0.175 

0.415 

0.192 

0.464 

0.185 

0.465 

(1.449) 

(2.466) 

Industry Impacts 

Industry NPV (2008$ 0.0­ 0.2– 0.3– (1.3)– (1.3)– (7.9)– (3.2)– 

million) (0.0) (0.3) (1.1) (3.5) (4.1) (11.1) (28.3) 

Industry NPV (% change) 0.1­

(0.1) 

 0.5– 

(0.6) 

0.7– 

(2.5) 

(2.9)– 

(7.9) 

(3.0)– 

(9.3) 

(18.0)– 

(25.1) 

(7.2)– 

(64.2) 

Cumulative Emissions 

Impacts† 

CO2 Reductions (Mt) 0.4 1.9 4.2 6.4 7.6 8.4 10.2 

Value of CO2 Reductions at 0.2 to 1.1 to 2.4 to 3.7 to 4.4 to 4.8 to 5.9 to 

7% Discount Rate (million 

2007$) 

11 52.5 116.1 179 211.7 233.3 283.8 

Value of CO2 Reductions at 0.5 to 2.2 to 4.9 to 7.6 to 9 to 432 9.9 to 12 to 

3% Discount Rate (million 

2007$) 

22.4 107.1 237 365.4 476.1 579.1 

NOx Reductions (kt) 0.1 0.6 1.4 2.2 2.6 2.9 3.5 

Value of NOx Reductions at 15 – 70 – 154 – 238 – 281 – 310 – 377 – 

7% Discount Rate 

(thousand 2007$) 

150 716 1,584 2,442 2,888 3,183 3,871 

Value of NOx Reductions at 31 – 148 – 326 – 503 – 595 – 656 – 798 – 

3% Discount Rate 

(thousand 2007$) 

317 1,516 3,356 5,174 6,117 6,742 8,200 

Hg Reductions (tons) 0.008 0.037 0.082 0.127 0.150 0.165 0.201 

Value of Hg Reductions at 0 – 61 0 – 293 0 – 649– 0 – 0 – 0 – 1,304 0 – 1,586 

7% Discount Rate 

(thousand 2007$) 

1,001 1,183 

Value of Hg reductions at 0 – 132 0 – 633 0 – 0 – 0 – 0 – 2,815 0 – 3,424 

3% Discount Rate 

(thousand 2007$) 

1,401– 2,160 2,554 

Life-Cycle Cost 

Net Savings (%) 10 100 98 98 97 95 0 

Net Increase (%) 0 0 2 2 3 5 100 

No Change (%) 90 0 0 0 0 0 0 

Mean LCC Savings (2008$) 136 182 218 272 285 277 (1,281) 

Mean PBP (years) 2.2 2.4 3.2 3.4 3.7 4.1 75.2 

Direct Domestic 1 5 15 23 30 36 259 

145 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

 

 

 

 

Employment Impacts 

(2012) (jobs) 

Indirect Domestic 

Employment Impacts 

(2042) (jobs) 

13 82 172 265 313 344 475 

* Parentheses indicate negative values. For LCCs, a negative value means an increase in LCC. 

** Change in installed generation capacity by 2042 based on April 2009 update to the 

AEO2009 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. 

Table VI.36 Summary of Results for Class B Equipment Based on the AEO2009 

Reference Case Energy Price Forecast* 

Results Trial Standard Level 

1 2 3 4 5 6 

Primary Energy Saved (quads) 

7% Discount Rate 

3% Discount Rate 

0.003 

0.001 

0.002 

0.004 

0.001 

0.002 

0.020 

0.006 

0.012 

0.023 

0.007 

0.013 

0.061 

0.018 

0.035 

0.068 

0.020 

0.039 

Generation Capacity Reduction (GW)** 0.002 0.003 0.015 0.017 0.045 0.050 

NPV (2008$ billion): 

7% Discount Rate 

3% Discount Rate 

0.005 

0.011 

0.006 

0.014 

(0.003) 

0.011 

(0.014) 

(0.006) 

(0.621) 

(1.083 

(2.452) 

(4.427) 

Industry Impacts 

Industry NPV (2008$ million) 

Industry NPV (% Change) 

0 

0.1– 

(0.1) 

0 

0.1– 

(0.2) 

(0.6)– 

(1.2) 

(1.8)– 

(3.5) 

(1.0)– 

(1.7) 

(3.0)– 

(5.0) 

(7.4) – 

(16.5) 

(21.9)– 

(48.9) 

(3.2)– 

(33.5) 

(9.5)– 

(99.4) 

Cumulative Emissions Impacts† 

CO2 Reductions (Mt) 0.2 0.2 1.2 1.4 3.7 4.1 

Value of CO2 reductions at 7% 0.1 to 0.1 to 0.7 to 33 0.8 to 37.8 2.1 to 2.3 to 

discount rate (million 2007$) 4.4 6.6 101.6 113.2 

Value of CO2 reductions at 3% 0.2 to 0.3 to 1.4 to 1.6 to 77 4.3 to 4.8 to 

discount rate (million 2007$) 9 13.4 67.4 207.4 230.9 

NOx Reductions (kt) 0.1 0.1 0.4 0.5 1.3 1.4 

Value of NOx reductions at 7% 

discount rate (thousand 2007$) 

6 – 60 9 – 90 44 – 450 50 – 515 135 – 

1,386 

150 – 

1,544 

Value of NOx reductions at 3% 12 – 18 – 93 – 954 106 – 286 – 318 – 

discount rate (thousand 2007$) 128 190 1,091 2,937 3,270 

Hg Reductions (t) 0.003 0.005 0.023 0.027 0.072 0.080 

Value of Hg reductions at 7% 0 – 25 0 – 37 0 – 185 0 – 211 0 – 568 0 – 633 

discount rate (thousand 2007$) 

Value of Hg reductions at 3% 0 – 53 0 – 79 0 – 398 0 – 455 0 – 1,226 0 – 

discount rate (thousand 2007$) 1,365 

Life-Cycle Cost 

146 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

Net Savings (%) 

Net Increase (%) 

No Change (%) 

Mean LCC Savings (2008$) 

Mean PBP (years) 

10 

0 

90 

42 

3.4 

91 

9 

0 

48 

4.5 

72 

28 

0 

37 

6.8 

62 

38 

0 

27 

7.8 

0 

100 

0 

(554) 

84.9 

0 

100 

0 

(2,291) 

99.9 

Direct Domestic Employment Impacts 

(2012) (jobs) 0 1 8 11 97 316 

Indirect Employment Impacts (2042) 

(jobs) 6 10 49 55 162 216 

* Parentheses indicate negative values. For LCCs, a negative value means an increase in LCC.

** Change in installed generation capacity by 2042 based on the April 2009 update to the AEO2009

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.

1. Class A Equipment 

First, DOE considered TSL 7, the most efficient level for Class A beverage 

vending machines that was determined to be technologically feasible. TSL 7 would save 

a cumulative 0.170 quads of energy through 2042, an amount DOE considers significant. 

For the Nation as a whole, DOE projects that TSL 7 would result in a net decrease of 

$1.449 billion in NPV using a discount rate of 7 percent and $2.47 billion discounted at 3 

percent. The emissions reductions at TSL 7 are 10.22 Mt of CO2, up to 3.49 kt of NOx, 

and up to 0.201 ton of Hg. These reductions have a value in 2007$ of up to $283.8 

million for CO2, up to $3.9 million for NOx, and up to $1.6 million for Hg at a discount 

rate of 7 percent. These reductions have a value in 2007$ of up to $579.1 million for CO2, 

up to $8.2 million for NOx, and up to $3.4 million for Hg at a discount rate of 3 percent. 

DOE also estimates that at TSL 7, total electric generating capacity in 2042 will decrease 

compared to the base case by 0.126 GW. 

At TSL 7, DOE projects that the average Class A beverage vending machine 

customer will experience an increase in LCC of $1,281 compared to the baseline. At TSL 

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EERE-2006-BT-STD-0125 COMMENT 71
7, DOE estimates the fraction of customers experiencing LCC increases will be 100 

percent. The mean PBP for the average Class A beverage vending machine customer at 

TSL 7 compared to the baseline level is projected to be 75.2 years. 

At higher TSLs, manufacturers have a more difficult time maintaining current 

operating profit levels, as higher standards increase recurring operating costs such as 

capital expenditures, purchased materials, and carrying inventory. Therefore, TSL 7 is 

more likely to cause impacts in the higher end of the ranges (i.e., a drop of 64.2 percent in 

INPV). Manufacturers expressed great concern about high capital and equipment 

conversion costs necessary to convert production to standards-compliant equipment. At 

TSL 7, all manufacturers would have to completely redesign their production lines, and 

the risk of very large negative impacts on the industry from reduction in manufacturers’ 

operating profits levels is high. 

After carefully considering the analysis and weighing the benefits and burdens of 

TSL 7, DOE finds that the benefits to the Nation of TSL 7 (i.e., energy savings and 

emissions reductions, including environmental and monetary benefits) do not outweigh 

the burdens (i.e., a decrease of $1,738 million in NPV and a decrease of 64.2 percent in 

INPV). Because the burdens of TSL 7 outweigh the benefits, TSL 7 is not economically 

justified. Therefore, DOE rejects TSL 7 for Class A equipment. 

DOE then considered TSL 6, which provides for Class A equipment the 

maximum efficiency level that the analysis showed to have positive NPV to the Nation. 

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EERE-2006-BT-STD-0125 COMMENT 71
TSL 6 would likely save a cumulative 0.139 quads of energy through 2042, an amount 

DOE considers significant. For the Nation as a whole, DOE projects that TSL 6 would 

result in a net increase of $185 million in NPV using a discount rate of 7 percent and 

$465 million using a discount rate of 3 percent. The estimated emissions reductions at 

TSL 6 are up to 8.4 Mt of CO2, up to 2.87 kt of NOx, and up to 0.165 tons of Hg. These 

reductions have a value in 2007$ of up to $233.3 million for CO2, up to $3.2 million for 

NOx, and up to $1.3 million for Hg, at a discount rate of 7 percent, and a value in 2007$ 

of up to $476.1 million for CO2, up to $6.7 million for NOx, and up to $2.8 million for 

Hg, at a discount rate of 3 percent. Total electric generating capacity in 2042 is estimated 

to decrease compared to the base case by 0.103 GW under TSL 6. 

At TSL 6, DOE projects that the average beverage vending machine customer 

will experience a reduction in LCC of $277 compared to the baseline. The mean PBP for 

the average beverage vending machine customer at TSL 6 is projected to be 4.1 years 

compared to the purchase of baseline equipment. 

At TSL 6, DOE believes the majority of manufacturers would need to completely 

redesign all Class A equipment offered for sale. Therefore, DOE expects beverage 

vending machine manufacturers would have some difficulty maintaining current 

operating profit levels with higher production costs. Similar to TSL 7, it is more likely 

that the higher end of the range of impacts would be reached at TSL 6 (i.e., a decrease of 

25.1 percent in INPV). However, the higher end of the range of impacts at TSL 6 is lower 

than the higher end of the range of impacts for TSL 7. In addition, Class A equipment 

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EERE-2006-BT-STD-0125 COMMENT 71
showed significant positive LCC savings on a national average basis and customers did 

not experience an increase in LCC with a standard at TSL 6 compared to the baseline. 

The PBP calculated for Class A equipment was less than the life of the equipment. 

After carefully considering the analysis and weighing the benefits and burdens of 

TSL 6, DOE finds that for Class A equipment, TSL 6 represents the maximum 

improvement in energy efficiency that is technologically feasible and economically 

justified. TSL 6 is technologically feasible because the technologies required to achieve 

these levels are already in existence. TSL 6 is economically justified because the benefits 

to the Nation [i.e., increased energy savings of 0.139 quads, emissions reductions 

including environmental and monetary benefits of, for example, up to 8.4 Mt of carbon 

dioxide emissions reduction with an associated value in 2007$ of up to $233.3 million at 

a discount rate of 7 percent ($476.1 million at 3 percent), and an increase in NPV of $185 

million at 7 percent discount rate to $465 million at 3 percent discount rate] outweigh the 

costs (i.e., a decrease of 25.1 percent in INPV). In addition, the carbon dioxide reductions 

at the central value of $19 would further increase NPV by $80.6 million (2007$) at 7% 

discount rate and by $164 million at a 3 percent discount rate. The combined NPV, 

including the value of CO2 emissions reductions, would be $265.6 million at 7 percent 

discount rate and $629.0 million at a 3 percent discount rate. There is also the added 

benefit of a reduction in total electrical generating capacity in 2042 compared to the base 

case of 0.103 GW under the TSL 6 scenario. Therefore, DOE establishes TSL 6 as the 

energy conservation standard for Class A beverage vending machines in this final rule. 

2. Class B Equipment 

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EERE-2006-BT-STD-0125 COMMENT 71
First, DOE considered TSL 6, the most efficient level for Class B beverage 

vending machines. TSL 6 would likely save a cumulative 0.068 quads of energy through 

2042, an amount DOE considers significant. For the Nation as a whole, DOE projects 

that TSL 6 would result in a net decrease of $2.452 billion in NPV using a discount rate 

of 7 percent, and $4.427 billion in NPV using a discount rate of 3 percent. The emissions 

reductions at TSL 6 are up to 4.08 Mt of CO2, up to 1.39 kt of NOx, and up to 0.080 ton 

of Hg. These reductions have a value in 2007$ of up to $113.2 million for CO2, up to 

$1.5 million for NOx, and up to $633,000 for Hg at a discount rate of 7 percent and a 

value of up to $230.9 million for CO2, up to $3.3 million for NOx, and up to $1.4 million 

for Hg at a discount rate of 3 percent. DOE also estimates that at TSL 6, total electric 

generating capacity in 2042 will decrease compared to the base case by 0.050 GW. 

At TSL 6, DOE projects that for the average customer, the LCC of Class B 

beverage vending machines will increase by $2,291 compared to the baseline. At TSL 6, 

DOE estimates the fraction of customers experiencing LCC increases will be 100 percent. 

The mean PBP for the average Class B beverage vending machine customer at TSL 6 

compared to the baseline is projected to be almost 100 years. 

At higher TSLs, manufacturers have large increases in production costs, resulting 

in difficulty maintaining operating profit. Therefore, it is more likely that the higher end 

of the range of impacts would be reached at TSL 6 (i.e., a decrease of 99.4 percent in 

INPV). At TSL 6, all manufacturers would have to completely redesign their production 

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EERE-2006-BT-STD-0125 COMMENT 71
lines, and there is the risk of very large negative impacts on the industry if manufacturers’ 

operating profit levels are reduced. 

After carefully considering the analysis and weighing the benefits and burdens of 

TSL 6, DOE finds that the benefits to the Nation of TSL 6 (i.e., energy savings and 

emissions reductions including environmental and monetary benefits) do not outweigh 

the burdens (i.e., a decrease of $2.45 to $4.43 billion in NPV, a decrease of 99.4 percent 

in INPV, and an economic burden on customers). DOE finds that the burdens of TSL 6 

outweigh the benefits and TSL 6 is not economically justified. Therefore, DOE rejects 

TSL 6 for Class B equipment. 

TSL 5, the next most efficient level, would likely save a cumulative 0.061 quads 

of energy through 2042, an amount DOE considers significant. For the Nation as a whole, 

DOE projects that TSL 5 would result in a net decrease of $621 million in NPV, using a 

discount rate of 7 percent and $1.083 billion in NPV, using a discount rate of 3 percent. 

The estimated emissions reductions at TSL 5 are up to 3.66 Mt of CO2, up to 1.25 kt of 

NOx, and up to 0.072 ton of Hg. These reductions have a value in 2007$ of up to $101.6 

million for CO2, up to $1.4 million for NOx, and up to $568,000 for Hg at a discount rate 

of 7 percent, and a value in 2007$ of up to $207.4 million for CO2, up to $2.9 million for 

NOx, and up to $1.2 million for Hg at a discount rate of 3 percent. Total electric 

generating capacity in 2042 is estimated to decrease compared to the base case by 0.045 

GW at TSL 5. 

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EERE-2006-BT-STD-0125 COMMENT 71
At TSL 5, DOE projects that the average Class B beverage vending machine 

customer will experience an increase in LCC of $554 compared to the baseline. The 

mean PBP for the average Class B beverage vending machine customer at TSL 5 is 

projected to be 84.9 years compared to the purchase of baseline equipment. 

At TSL 5, DOE believes the majority of manufacturers would need to completely 

redesign all Class B equipment offered for sale at TSL 5. Therefore, DOE expects that 

manufacturers will have difficulty maintaining operating profit with larger cost increases. 

Though the higher end of the range of expected impacts is lower for TSL 5 than for TSL 

6, TSL 5 would likely cause impacts at the higher end of the range (i.e., a decrease of 

48.9 percent in INPV). 

After carefully considering the analysis and evaluating the benefits and burdens of 

TSL 5, DOE finds that the benefits to the Nation of TSL 5 (i.e., energy savings and 

emissions reductions, including environmental and monetary benefits) do not outweigh 

the burdens (i.e., a decrease of $621 to 1.08 billion in NPV and a decrease of 48.9 percent 

in INPV as well as the economic burden on customers). DOE finds that the burdens of 

TSL 5 outweigh the benefits and TSL 5 is not economically justified. Therefore, DOE 

rejects TSL 5 for Class B equipment. 

TSL 4 would save a cumulative 0.023 quads of energy through 2042, an amount 

DOE considers significant. For the Nation as a whole, DOE projects that TSL 4 would 

result in a net decrease of $14 million in NPV using a discount rate of 7 percent and a net 

153 

EERE-2006-BT-STD-0125 COMMENT 71
decrease of $6 million in NPV using a discount rate of 3 percent. The estimated 

emissions reductions at TSL 4 are up to 1.36 Mt of CO2, up to 0.46 kt of NOx, and up to 

0.027 ton of Hg. Based on previously developed estimates, these reductions could have a 

value in 2007$ of up to $37.8 million for CO2, up to $515,000 for NOx, and up to 

$211,000 for Hg at a discount rate of 7 percent and a value in 2007$ of up to $77.0 

million for CO2, up to $1.1 million for NOx, and up to $455,000 for Hg at a discount rate 

of 3 percent. Total electric generating capacity in 2042 is estimated to decrease compared 

to the base case by 0.017 GW at TSL 4. 

At TSL 4, DOE projects that the average Class B beverage vending machine 

customer will experience a reduction in LCC of $27 compared to the baseline. The mean 

PBP for the average Class B beverage vending machine customer at TSL 4 is projected to 

be 7.8 years compared to the purchase of baseline equipment. 

At TSL 4, DOE believes that while a complete redesign would not be required, 

manufacturers would need to redesign most existing Class B equipment offered for sale. 

Therefore, while perhaps to a somewhat lesser extent than for TSL 5 and TSL 6, DOE 

expects that manufacturers will have difficulty maintaining operating profit with high 

increases in production costs. In addition, while the higher end of the range of impacts 

expected from TSL 4 is less than those for TSL 5 and TSL 6, it is still likely that the 

higher end of the range of impacts would be reached at TSL 4 (i.e., a decrease of 5.0 

percent in INPV). However, compared to the baseline, Class B equipment showed 

positive LCC savings on a national average and most customers did not experience an 

154 

EERE-2006-BT-STD-0125 COMMENT 71
increase in LCC at TSL 4. The PBP calculated for Class B equipment was less than the 

lifetime of the equipment. 

After carefully considering the analysis and evaluating the benefits and burdens of 

TSL 4, DOE finds that the benefits to the Nation of TSL 4 (i.e., energy savings and 

emissions reductions, including estimates of the monetary value of the environmental 

benefits) do not outweigh the burdens (i.e., a decrease of $6 million to $14 million in 

NPV and a decrease of up to 5.0 percent in INPV, primarily from equipment redesigns). 

DOE finds that the burdens, especially the likelihood of net economic losses indicated by 

negative NPV values at both discount rates, of TSL 4 outweigh the benefits and TSL 4 is 

not economically justified. Therefore, DOE rejects TSL 4 for Class B equipment. 

TSL 3 would save a cumulative 0.020 quads of energy through 2042, an amount 

DOE considers significant. For the Nation as a whole, DOE projects that TSL 3 would 

result in a decrease in NPV of $3 million, using a discount rate of 7 percent. However, 

using a 3 percent discount rate, DOE projects that TSL 3 would result in a net increase of 

$11 million in NPV. The estimated emissions reductions at TSL 3 are up to 1.2 Mt of 

CO2, up to 0.41 kt of NOx, and up to 0.023 ton of Hg. Based on previously developed 

estimates, these reductions could have a value in 2007$ of up to $33.0 million for CO2, 

up to $450,000 for NOx, and up to $185,000 for Hg at a discount rate of 7 percent. At a 3 

percent discount rate, these reductions could have a value in 2007$ of up to $67.4 million 

for CO2, up to $954,000 for NOx, and up to $398,000 for Hg. Total electric generating 

155 

EERE-2006-BT-STD-0125 COMMENT 71
capacity in 2042 is estimated to decrease compared to the base case by 0.015 GW at TSL 

3. 

At TSL 3, DOE projects that the average Class B beverage vending machine 

customer will experience a reduction in LCC of $37 compared to the baseline. The mean 

PBP for the average Class B beverage vending machine customer at TSL 3 is projected to 

be 6.8 years compared to the purchase of baseline equipment. 

At TSL 3, DOE believes manufacturers would have to make some component 

switches to comply with the standard, but most manufacturers will not have to 

significantly alter their production process. These minor design changes would not raise 

the production costs beyond the cost of most equipment sold today, resulting in minimal 

impacts on industry value. Compared to the baseline, Class B equipment showed 

significant positive LCC savings on a national average and customers did not experience 

an increase in LCC at TSL 3. The PBP calculated for Class B equipment was less than 

the lifetime of the equipment. 

After carefully considering the analysis and weighing the benefits and burdens of 

TSL 3, DOE finds that for Class B equipment, TSL 3 represents the maximum 

improvement in energy efficiency that is technologically feasible and economically 

justified. TSL 3 is technologically feasible because the technologies required to achieve 

these levels are already in existence. TSL 3 is economically justified because DOE finds 

that the benefits to the Nation [i.e., an increase of $11 million in NPV using a 3 percent 

156 

EERE-2006-BT-STD-0125 COMMENT 71
discount rate, energy savings, and emissions reductions, including environmental and 

monetary benefits of, for example, up to 1.2 Mt of carbon dioxide emissions reduction 

with an associated value in 2007$ of up to $33 million at a discount rate of 7 percent and 

$67.4 million at a discount rate of 3 percent, and an increase in NPV of $11 million at 3 

percent discount rate] outweigh the costs (i.e., a $3 million loss in NPV at a 7 percent 

discount rate and a decrease of 3.5 percent in INPV, primarily from upgraded 

components). In addition, the carbon dioxide reductions at the central value of $19 would 

further increase NPV by $11.4 million (2007$) at 7% discount rate and by $23.3 million 

at a 3 percent discount rate. The combined NPV, including the value of CO2 emissions 

reductions, would be $8.4 million at a 7 percent discount rate and $34.3 million at a 3 

percent discount rate. DOE finds that, while there is a greater likelihood of net economic 

losses at TSL 4 (indicated by negative NPV values at 3 percent and 7 percent discount 

rates), TSL 3 is more favorable since it shows a greater possibility of a net economic 

benefit (indicated by a positive NPV value at a 3 percent discount rate). There is also the 

added benefit of a reduction in total electrical generating capacity in 2042 compared to 

the base case of 0.015 GW under the TSL 3 scenario. Therefore, DOE establishes TSL 3 

as the energy conservation standard for Class B beverage vending machines in this final 

rule. 

DOE also calculated the annualized values for certain benefits and costs at the 

various TSLs. Table VI.37 shows the annualized values for Class A equipment and Table 

VI.38 shows the annualized values for Class B equipment. 

157 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

Table VI.37 Annualized Benefits and Costs for Class A Machines 

TSL Category Unit 

Primary Estimate 

(AEO Reference 

Case) 

Low Estimate 

(Low Growth 

Case) 

High Estimate 

(High Growth 

Case) 

7% 3% 7% 3% 7% 3% 

1 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 1.96 2.29 1.79 2.09 2.07 2.41 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.01 0.01 0.01 0.01 0.01 0.01 

NOx 

(kT) 0.003 0.004 0.003 0.004 0.003 0.004 

Hg (T) 0.000 0.000 0.000 0.000 0.000 0.000 

Costs 

Annualized Consumer Costs 

($millions/year) 2008$ 0.45 0.43 0.45 0.43 0.45 0.43 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 1.50 1.86 1.34 1.65 1.62 1.98 

2 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 9.23 10.81 8.46 9.83 9.76 11.38 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.06 0.06 0.06 0.06 0.06 0.06 

NOx 

(kT) 0.016 0.019 0.016 0.019 0.016 0.019 

Hg (T) 0.001 0.001 0.001 0.001 0.001 0.001 

Costs 

Annualized Consumer Costs 

($millions/year) 2008$ 2.56 2.46 2.56 2.46 2.56 2.46 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 6.67 8.34 5.90 7.37 7.20 8.92 

3 Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 19.32 22.66 17.61 20.51 20.50 23.93 

158 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.12 0.13 0.12 0.13 0.12 0.13 

NOx 

(kT) 0.035 0.041 0.035 0.041 0.035 0.041 

Hg 

(T) 0.002 0.002 0.002 0.002 0.002 0.002 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 8.33 8.02 8.33 8.02 8.33 8.02 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 10.99 14.64 9.29 12.50 12.17 15.92 

4 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 29.80 34.96 27.18 31.65 31.62 36.92 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.19 0.20 0.19 0.20 0.19 0.20 

NOx 

(kT) 0.054 0.064 0.054 0.064 0.054 0.064 

Hg 

(T) 0.003 0.004 0.003 0.004 0.003 0.004 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 12.74 12.26 12.74 12.26 12.74 12.26 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 17.06 22.70 14.44 19.39 18.89 24.66 

5 Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 34.83 40.87 31.72 36.95 36.98 43.19 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.22 0.24 0.22 0.24 0.22 0.24 

NOX 

(kT) 0.064 0.036 0.064 0.036 0.064 0.036 

Hg 

(T) 0.004 0.004 0.004 0.004 0.004 0.004 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 16.10 15.50 16.10 15.50 16.10 15.50 

159 

EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 18.73 25.37 15.63 21.46 20.88 27.69 

6 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 37.67 44.22 34.24 39.91 40.04 46.78 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.25 0.26 0.25 0.26 0.25 0.26 

NOx 

(kT) 0.070 0.039 0.070 0.039 0.070 0.039 

Hg 

(T) 0.004 0.005 0.004 0.005 0.004 0.005 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 19.56 18.83 19.56 18.83 19.56 18.83 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 18.11 25.40 14.68 21.08 20.48 27.95 

7 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ (0.59) 1.02 (4.76) (4.22) 2.30 4.13 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.30 0.32 0.30 0.32 0.30 0.32 

NOx 

(kT) 0.085 0.048 0.085 0.048 0.085 0.048 

Hg 

(T) 0.005 0.006 0.005 0.006 0.005 0.006 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 141.02 135.74 141.02 135.74 141.02 135.74 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ (141.61) (134.72) (145.77) (139.97) (138.72) (131.61) 

Table VI.38 Annualized Benefits and Costs for Class B Machines 

TSL Category Unit Primary Estimate 

(AEO Reference 

Case) 

Low Estimate 

(Low Growth 

Case) 

High Estimate 

(High Growth 

Case) 

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EERE-2006-BT-STD-0125 COMMENT 71
 

 

 

 

 

 

 

 

 

 

7% 3% 7% 3% 7% 3% 

1 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 0.73 0.86 0.66 0.77 0.77 0.90 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.00 0.00 0.00 0.00 0.00 0.00 

NOx 

(kT) 0.001 0.002 0.001 0.002 0.001 0.002 

Hg (T) 0.000 0.000 0.000 0.000 0.000 0.000 

Costs 

Annualized Consumer Costs 

($millions/year) 2008$ 0.26 0.25 0.26 0.25 0.26 0.25 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 0.47 0.61 0.41 0.53 0.52 0.66 

2 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 1.03 1.21 0.94 1.09 1.10 1.28 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.01 0.01 0.01 0.01 0.01 0.01 

NOx 

(kT) 0.002 0.002 0.002 0.002 0.002 0.002 

Hg 

(T) 0.000 0.000 0.000 0.000 0.000 0.000 

Costs 

Annualized Consumer Costs 

($millions/year) 2008$ 0.48 0.46 0.48 0.46 0.48 0.46 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ 0.56 0.76 0.46 0.63 0.62 0.83 

3 Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 4.11 4.87 3.62 4.26 4.44 5.23 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.03 0.04 0.03 0.04 0.03 0.04 

NOx 

(kT) 0.010 0.012 0.010 0.012 0.010 0.012 

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Hg 

(T) 0.001 0.001 0.001 0.001 0.001 0.001 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 4.44 4.28 4.44 4.28 4.44 4.28 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ (0.34) 0.59 (0.82) (0.02) (0.00) 0.95 

4 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ 4.36 5.19 3.81 4.49 4.75 5.60 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.04 0.04 0.04 0.04 0.04 0.04 

NOx 

(kT) 0.011 0.013 0.011 0.013 0.011 0.013 

Hg 

(T) 0.001 0.001 0.001 0.001 0.001 0.001 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 5.72 5.51 5.72 5.51 5.72 5.51 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ (1.36) (0.32) (1.91) (1.02) (0.97) 0.09 

5 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ (7.83) (8.30) (9.32) (10.18) (6.80) (7.18) 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.11 0.11 0.11 0.11 0.11 0.11 

NOx 

(kT) 0.031 0.036 0.031 0.036 0.031 0.036 

Hg 

(T) 0.002 0.002 0.002 0.002 0.002 0.002 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 52.84 50.86 52.84 50.86 52.84 50.86 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ (60.67) (59.16) (62.16) (61.04) (59.63) (58.05) 

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6 

Benefits 

Annualized Consumer 

Benefits ($millions/year) 2008$ (67.78) (76.40) (69.44) (78.49) (66.63) (75.16) 

Annualized Emission 

Reductions 

CO2 

(Mt) 0.12 0.13 0.12 0.13 0.12 0.13 

NOx 

(kT) 0.034 0.040 0.034 0.040 0.034 0.040 

Hg 

(T) 0.002 0.002 0.002 0.002 0.002 0.002 

Costs 

Annualized Consumer 

Costs ($millions/year) 2008$ 171.92 165.49 171.92 165.49 171.92 165.49 

Net Consumer Benefits/Costs 

Net Consumer Benefits 

(excluding emission 

benefits) ($millions/year) 

2008$ (239.70) (241.89) (241.36) (243.98) (238.55) (240.65) 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

Executive Order 12866 requires that each agency identify in writing the problem 

the agency intends to address that warrants new agency action (including, where 

applicable, the failures of private markets or public institutions), as well as assess the 

significance of that problem to determine whether any new regulation is necessary. 

Executive Order 12866, section 1(b)(1). 

Because today’s regulatory action is a significant regulatory action under section 

3(f)(1) of Executive Order 12866, section 6(a)(3) of the Executive Order requires DOE to 

prepare and submit for review to the Office of Information and Regulatory Affairs 

(OIRA) in OMB an assessment of the costs and benefits of today’s rule. Accordingly, 

163 

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DOE presented to OIRA for review the draft final rule and other documents prepared for 

this rulemaking, including a regulatory impact analysis (RIA). These documents are 

included in the rulemaking record and 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) 586-2945, between 9:00 a.m. and 4:00 p.m. Monday 

through Friday, except Federal holidays. 

The May 2009 NOPR contained a summary of the RIA, which evaluated the 

extent to which major alternatives to standards for beverage vending machines could 

achieve significant energy savings at reasonable cost, as compared to the effectiveness of 

the proposed rule. 74 FR 26067–69. The complete RIA (Regulatory Impact Analysis for 

Proposed Energy Conservation Standards for Beverage Vending Machines) is contained 

in the TSD prepared for today’s rule. 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 

today’s standards. 

The major alternatives DOE analyzed were: (1) no new regulatory action; (2) 

financial incentives, including tax credits and rebates; (3) revisions to voluntary energy 

efficiency targets; (4) early replacement; (5) bulk government purchases; and (6) 

prescriptive standards that would mandate design requirements. As explained in detail in 

Section VI. of the May 2009 NOPR, none of the alternatives DOE examined would save 

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as much energy or have an NPV as high as the proposed standards. The same conclusion 

applies to the standards in today’s rule. Also, several of the alternatives would require 

new enabling legislation, because DOE does not have authority to implement those 

alternatives. Additional detail on the regulatory alternatives is found in the RIA chapter in 

the TSD. 

B. Review Under the Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an 

initial regulatory flexibility analysis (IRFA) for any rule that by law must be proposed for 

public comment, and a final regulatory flexibility analysis (FRFA) for any such rule that 

an agency adopts as a final rule, unless the agency certifies that the rule, if promulgated, 

will not have a significant economic impact on a substantial number of small entities. A 

regulatory flexibility analysis examines the impact of the rule on small entities and 

considers alternative ways of reducing negative impacts. Also, 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: www.gc.doe.gov. 

For the beverage vending machine manufacturing industry, the SBA defines small 

businesses as manufacturing enterprises with 500 or fewer employees. See 

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf. 

DOE used this small business definition to determine whether any small entities would be 

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required to comply with the rule. (65 FR 30836, 30848 (May 15, 2000), as amended at 65 

FR 53533, 53544 (September 5, 2000) and codified at 13 CFR Part 121.) The size 

standards are listed by North American Industry Classification System (NAICS) code and 

industry description. Beverage vending machine manufacturing is classified under 

NAICS 333311, “Automatic Vending Machine Manufacturing.” 

As explained in the May 2009 NOPR, the beverage vending machine industry is 

characterized by both large and small manufacturers that service a wide range of 

customers, including large bottlers and direct end-users. Almost all beverage vending 

machines sold in the United States are manufactured domestically. Three major 

companies supply roughly 90 percent of all equipment sold. Most of the sales for these 

companies are made to a few major bottlers. One of the major manufacturers with 

significant market share is considered a small business. The remaining 10 percent of 

industry shipments is believed to be supplied by five manufacturers. All of these 

companies not supplying the major bottlers are considered small businesses. 

Before issuing this notice of proposed rulemaking, DOE contacted all identified 

small business manufacturers and provided a questionnaire seeking information to better 

understand the impacts of the proposed standards on small businesses and how these 

impacts differ between large and small manufacturers. The small business interview 

questionnaire is a condensed version of the manufacturer interview guide described in the 

manufacturer impact analysis, chapter 13 of the TSD. 

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In accordance with the Regulatory Flexibility Act, during the NOPR stage of this 

rulemaking, DOE prepared an IRFA which describes potential impacts on small 

businesses associated with beverage vending machine design and manufacture, and 

incorporates information received in response to the questionnaire. The IRFA addresses 

the following: (1) the reasons the regulatory action is being considered, (2) the objectives 

of and legal basis for the proposed rule, (3) a description and estimate of the number of 

small entities that would be affected by the rule, (4) an estimate of the reporting, 

recordkeeping, and other compliance costs for the proposed rule, (5) an analysis of 

significant alternatives to the proposed rule that could lessen any disproportionate 

burdens on small entities, and (6) a discussion of any duplicative, overlapping, and 

conflicting rules. (“A Guide for Government Agencies: How to Comply with the 

Regulatory Flexibility Act, Chapter 2, Office of Advocacy, U.S. Small Business 

Administration, 2003,” available at www.sba.gov/advo/laws/rfaguide.pdf) DOE divided 

the estimate of the compliance costs for small businesses into two categories representing 

potential impacts to small business manufacturers with major market shares, and potential 

impacts to small business manufacturers with small market shares. DOE also analyzed 

alternatives that could reduce the disproportionate impact of the proposed standards on 

small vending machine manufacturers. DOE provided the complete IRFA in the May 

2009 NOPR, 74 FR 26069–72, for review by the Chief Counsel for Advocacy of the SBA 

and the public. Chapter 13 of the TSD contains more information about the impact of this 

rulemaking on manufacturers. 

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For today’s final rule, DOE has prepared a FRFA, which is presented in the 

following discussion. DOE developed this FRFA for review by the Chief Counsel for 

Advocacy of the SBA and the public. The FRFA below is written in accordance with the 

requirements of the Regulatory Flexibility Act. 

1. Need for and Objectives of the Final Rule 

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

Conservation Program for Consumer Products Other Than Automobiles (this part was 

originally titled Part B, but was redesignated Part A after Part B of Title III was repealed 

by Pub. L. 109-58; similarly, Part C, Certain Industrial Equipment, was redesignated Part 

A-1). The amendments to EPCA contained in the EPACT 2005, Pub. L. 109-58, include 

new or amended energy conservation standards and test procedures for some of these 

products, and direct DOE to undertake rulemakings to promulgate such requirements. In 

particular, section 135(c)(4) of EPACT 2005 amends EPCA to direct DOE to prescribe 

energy conservation standards for beverage vending machines. (42 U.S.C. 6295(v)) 

Hence, DOE is publishing today’s final rule on energy conservation standards for 

refrigerated bottle or canned beverage vending machines pursuant to Part A of EPCA. 

Because of its placement in Part A of Title III of EPCA, the rulemaking for beverage 

vending machine energy conservation standards is bound by the requirements of 42 

U.S.C. 6295. However, since beverage vending machines are commercial equipment, 

DOE intends to place the new requirements for beverage vending machines in Title 10 of 

the CFR, Part 431 (Energy Efficiency Program for Certain Commercial and Industrial 

Equipment), which is consistent with DOE’s previous action to incorporate the EPACT 

2005 requirements for commercial equipment. The location of the provisions within the 

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CFR does not affect either their substance or applicable procedure, so DOE is placing 

them in the appropriate CFR part based on their nature or type. 

EPCA provides that any new or amended standard for beverage vending machines 

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 (v)) 

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

conservation of energy. (42 U.S.C. 6295(o)(3)(B) and (v)) 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 will not result in significant conservation of 

energy. (42 U.S.C. 6295(o)(3)(A)(B) and (v)) 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 (v). (See section II.A of this preamble.) 

EPCA also states that the Secretary may not prescribe an amended or new 

standard if interested parties 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 (v)) 

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As set forth above, DOE has determined that the standards adopted in today’s rule 

are designed to achieve the maximum improvement in energy efficiency that is 

technologically feasible and economically justified. DOE has also determined that the 

standards will result in a significant conservation of energy and will not result in the 

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

characteristics that are substantially the same as those generally available in the United 

States. Chapter 1 of the TSD provides further background information on this 

rulemaking. 

2. Significant Issues Raised by Public Comments 

DOE summarized comments from interested parties, including beverage vending 

machine manufacturers, in sections IV and V of this preamble. DOE did not receive any 

comments regarding impacts specific to small business manufacturers for the adoption of 

TSL 6 for Class A machines and TSL 3 for Class B machines in today’s final rule or the 

alternatives identified in section 6 of the IRFA, “Significant Alternatives to the Rule.” 

No changes were made to the IRFA as a result of public comment. 

3. Description and Estimated Number of Small Entities Regulated 

To establish a list of small beverage vending machine manufacturers, DOE 

examined publicly available data and contacted manufacturers to determine if they meet 

the SBA’s definition of a small manufacturing facility and if their manufacturing 

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facilities are located within the United States. Based on this analysis, DOE confirmed that 

there are six small manufacturers of beverage vending machines. 

One of these six small manufacturers is one of the top three major manufacturers, 

who supply roughly 90 percent of all equipment sales. The full line of products offered 

by this small manufacturer and the remaining two major manufacturers, which are 

considered large businesses, are covered under this rulemaking (i.e., equipment that 

dispenses refrigerated bottled or canned beverages). The remaining five small 

manufacturers comprise approximately 10 percent of industry shipments for covered 

equipment. See chapter 3 of the TSD for further details on the beverage vending machine 

market. In its examination of the beverage vending machine industry, DOE has 

determined that these small business manufactures with small market shares differ 

significantly from the major manufacturers. The primary difference between these small 

business manufacturers and the major manufacturers is that these five small business 

manufacturers produce a wide variety of specialty and niche equipment that are not 

covered under this rulemaking, such as machines that dispense a wide range of items 

including snacks, heated drinks, electronic goods, DVDs, bowling supplies, and medical 

products. Furthermore, unlike the major manufacturers, these small business 

manufacturers do not sell equipment to the major bottlers because they do not produce 

covered equipment in the necessary volumes. Instead, these manufacturers rely on 

providing customized equipment in much smaller volumes. 

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Before issuing the NOPR, requests for interviews were delivered electronically to 

the six manufacturers that met the small business criteria. DOE received responses from 

fewer than half and conducted an on-site interview with the single manufacturer who 

agreed to be interviewed. In the questionnaire and during the interview, DOE requested 

information that would determine if there are differential impacts on small manufacturers 

that may result from new energy conservation standards. See chapter 13 of the TSD for 

further discussion about the methodology DOE used in its analysis of manufacturer 

impacts, including small manufacturers. 

4. Description and Estimate of Reporting, Recordkeeping, and Other Compliance 

Requirements 

Potential impacts on manufacturers include impacts associated with beverage 

vending machine design and manufacturing. The level of research and development 

needed to meet energy conservation standards increases with more stringent standards. 

As mentioned previously, DOE examined the level of impacts that small manufacturers 

would incur by identifying small business manufacturers and sending them a short 

questionnaire seeking information to better understand the impacts of the proposed 

standard that are unique to small manufacturers. Because not all of the small business 

manufacturers responded to the questionnaire, it is difficult to specifically quantify how 

the impacts of the proposed standards differ between large and small manufacturers. 

However, as explained below, DOE found that the impacts of the proposed standard on 

the small business manufacturer with a major market share would not differ greatly from 

those of its larger competitors; the impacts would not be significant for the remaining 

small business manufacturers, 

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a. Small Business Manufacturer with a Major Market Share 

The small business manufacturer that has a major market share in covered 

equipment will not be disproportionately disadvantaged by the proposed standard. It has a 

large shipment volume as a major supplier to the large bottlers and its access to capital is 

nearly identical to its larger competitors. Its large shipment volume allows it to distribute 

the added cost of compliance across its products, similar to the large manufacturers. 

Correspondingly, it echoed the large manufacturers’ concerns about new energy 

conservation standards, including conversion costs needed to meet standards, meeting 

customer needs, and current market conditions. DOE found no significant differences in 

the R&D emphasis or marketing strategies between this small business manufacturer with 

a major market share and large manufacturers. As a result, DOE does not believe the 

impacts of the proposed standard will be significantly different for the small business 

manufacturer with a large market share when compared to those expected for the large 

business manufacturers. 

b. Small Business Manufacturers with Small Market Shares 

DOE does not expect the small businesses with small market shares to be 

compromised by the energy conservation standard finalized in today’s rule. DOE 

estimates that only approximately 40 percent of their offered vending equipment is 

covered by the standard. The majority of equipment offered is specialty or niche 

equipment. As a result, the primary source of revenue for these small manufacturers 

comes from supplying a market underserved by the major manufacturers of covered 

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equipment. These small manufacturers may balance the cost disadvantage experienced in 

making their covered equipment compliant with today’s standard by charging premium 

prices for their non-covered niche equipment. As a result, DOE believes the standard will 

not affect the competitive position of the small business manufacturers with small market 

shares in covered equipment. 

DOE was able to estimate a portion of the differential impacts of the standard on 

the small manufacturers with small market shares by evaluating costs associated with 

equipment testing and certification. Manufacturers must test the energy performance of 

each basic model it manufacturers to determine compliance with energy conservation 

standards and testing requirements. Therefore, DOE examined the number of basic 

models available from each manufacturer to determine an estimate for the differential in 

overall compliance costs. The number of basic models attributed to each manufacturer is 

based on an examination of the different models advertised by each. DOE estimates the 

cost of testing a piece of covered equipment to be approximately $2,000. A typical major 

manufacturer has approximately 23 basic models, approximately 85 percent of which are 

covered and would require separate standards compliance certifications. Therefore, DOE 

estimates that a typical major manufacturer will incur approximately $44,013 in annual 

costs for standards compliance certifications. DOE estimates that a typical small 

manufacturer with small market share has approximately 27 basic models, 44 percent of 

which are covered and would require separate standards compliance certifications. DOE 

estimates that a typical small manufacturer will incur approximately $14,380 in annual 

costs for standards compliance certifications. According to this comparison, the cost of 

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certification for a small manufacturer with small market share is significantly lower than 

that of a major manufacturer. 

As stated above, DOE estimated that there would be some differential impacts 

associated with beverage vending machine design and manufacturing on small 

manufacturers. DOE requested comments on how small business manufacturers would be 

affected due to new energy conversation standards. Specifically, DOE requested 

comments on the compliance costs and other impacts to small manufacturers that do not 

supply the high-volume customers of beverage vending machines. However, DOE did 

not receive any comments regarding impacts specific to small business manufacturers. 

5. Steps DOE Has Taken to Minimize the Economic Impact on Small Manufacturers 

In consideration of the benefits and burdens of standards, including the burdens 

posed on small manufacturers, DOE concluded that TSL 6 for Class A machines and TSL 

3 for Class B machines are the highest levels that can be justified for beverage vending 

machines. Therefore, while the lower TSLs analyzed may lessen the impacts on small 

entities, DOE is precluded from adopting them based on the requirements of EPCA. 

Section VI.C.2 discusses how business impacts, including small business impacts, 

entered into DOE’s selection of today’s standards for beverage vending machines. DOE 

made its decision regarding standards by beginning with the highest level considered 

(TSL 7 for Class A machines and TSL 6 for Class B machines) and successively 

eliminating TSLs until it found a TSL that is both technically feasible and economically 

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justified, taking into account other EPCA criteria. DOE expects today’s standard to have 

little or no differential impact on small manufacturers of beverage vending machines. 

As explained in part 6 of the IRFA, Significant Alternatives to the Rule, DOE 

expects that the differential impact on small beverage vending machine manufacturers 

would be less severe in moving from TSL 5 to TSL 6 for Class A than it would be in 

moving from TSL 6 to TSL 7. For Class B machines, DOE expects that the differential 

impact on small beverage vending machine manufacturers would be less significant in 

moving from TSL 2 to TSL 3 than it would be in moving from TSL 4 to TSL 5. Higher 

TSLs would place excessive burdens on manufacturers, including small manufacturers of 

beverage vending machines. Such burdens would include research and development costs 

and also a potential reduction of profit margins by limiting the flexibility of customers to 

choose design options. However, the differential impact on small businesses is expected 

to be lower at TSL 6 for Class A machines and TSL 3 for Class B machines because 

research and development efforts are less at lower TSLs. Chapter 13 of the TSD contains 

additional information about the impact of this rulemaking on manufacturers. 

The TSD includes a regulatory impact analysis (RIA) (chapter 17), which 

discusses the following policy alternatives to the standards announced today that may 

lessen impacts on small entities: (1) no new regulatory action, (2) financial incentives 

including rebates or tax credits, (3) revisions to voluntary energy efficiency targets such 

as ENERGY STAR program criteria, (4) bulk government purchases, (5) early 

replacement incentive programs, and (6) prescriptive standards that would mandate 

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design requirements (e.g., lighting and refrigeration controls). DOE did not consider 

these alternatives further because they are either not feasible to implement, or not 

expected to result in energy savings as large as those that would be achieved by the 

standard levels under consideration. 

DOE considered the following alternatives in its IRFA in accordance with Section 

603(c) of the RFA: (1) establishment of different compliance or reporting requirements 

for small entities or timetables that take into account the resources available to small 

entities, (2) clarification, consolidation, or simplification of compliance and reporting 

requirements for small entities, (3) use of performance rather than design standards, and 

(4) exemption for certain small entities from coverage of the rule, in whole or in part. For 

reasons described in the May 2009 NOPR, DOE did not choose any of these alternatives 

to the proposed rule. 73 FR 26071-26072. 

C. Review Under the Paperwork Reduction Act 

DOE stated in the May 2009 NOPR that this rulemaking would impose no new 

information and recordkeeping requirements, and that OMB clearance is not required 

under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). 74 FR 26072. DOE 

received no comments on this in response to the May 2009 NOPR, and, as with the 

proposed rule, today’s final rule imposes no information and recordkeeping requirements. 

Therefore, DOE has taken no further action in this rulemaking with respect to the 

Paperwork Reduction Act. 

D. Review Under the National Environmental Policy Act 

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DOE prepared an environmental assessment of the impacts of today’s standards 

which it published as chapter 16 within the TSD for the final rule. DOE found the 

environmental effects associated with today’s various standard levels for beverage 

vending machines to be insignificant. Therefore, DOE is issuing a FONSI pursuant to 

NEPA (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 NEPA (10 CFR 

part 1021). The FONSI is available in the docket for this rulemaking. 

E. Review Under Executive Order 13132 

DOE reviewed this rule pursuant to Executive Order 13132, “Federalism,” 64 FR 

43255 (August 4, 1999), which imposes certain requirements on agencies formulating 

and implementing policies or regulations that preempt State law or that have federalism 

implications. In accordance with DOE’s statement of policy describing the 

intergovernmental consultation process it will follow in the development of regulations 

that have federalism implications, 65 FR 13735 (March 14, 2000), DOE examined the 

May 2009 proposed rule and determined that the rule 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. 74 FR 26072. DOE received no comments on this issue in response to the 

May 2009 NOPR, and its conclusions on this issue are the same for the final rule as they 

were for the proposed rule. Therefore, DOE has taken no further action in today’s final 

rule with respect to Executive Order 13132. 

F. Review Under Executive Order 12988 

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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 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, the final regulations meet the relevant standards of 

Executive Order 12988. 

G. Review Under the Unfunded Mandates Reform Act of 1995 

As indicated in the May 2009 NOPR, DOE reviewed the proposed rule under 

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4) (UMRA), which 

imposes requirements on Federal agencies when their regulatory actions will have certain 

types of impacts on State, local, and Tribal governments and the private sector. 74 FR 

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26073. DOE concluded that this rule would not contain an intergovernmental mandate, 

nor result in expenditures of $100 million or more in one year by the private sector. Id. In 

the May 2009 NOPR, DOE addressed the UMRA requirements to prepare a statement as 

to the basis, costs, benefits, and economic impacts of the proposed rule, and that it 

identify and consider regulatory alternatives to the proposed rule. Id. DOE received no 

comments concerning the UMRA in response to the May 2009 NOPR, and its 

conclusions on this issue are the same for the final rule as they were for the proposed 

rule. Therefore, DOE has taken no further action in today’s final rule with respect to the 

UMRA. 

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

DOE determined that, for this rulemaking, it need not prepare a Family 

Policymaking Assessment under Section 654 of the Treasury and General Government 

Appropriations Act, 1999 (Pub. L. 105–277). Id. DOE received no comments concerning 

Section 654 in response to the May 2009 NOPR, and, therefore, has taken no further 

action in today’s final rule with respect to this provision. 

I. Review Under Executive Order 12630 

DOE determined under Executive Order 12630, “Governmental Actions and 

Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 

1988), that today’s rule would not result in any takings that might require compensation 

under the Fifth Amendment to the U.S. Constitution. 74 FR 26073. DOE received no 

comments concerning Executive Order 12630 in response to the May 2009 NOPR, and, 

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therefore, has taken no further action in today’s final rule with respect to this Executive 

Order. 

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

Section 515 of the Treasury and General Government Appropriations Act, 2001 

(44 U.S.C. 3516 note) provides for agencies to review most disseminations of 

information to the public under guidelines established by each agency pursuant to general 

guidelines issued by OMB. 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 final rule 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 OIRA a Statement of Energy Effects for any 

significant energy action. DOE determined that today’s rule, which sets energy 

conservation standards for beverage vending machines, is not a “significant energy 

action” within the meaning of Executive Order 13211. 74 FR 26073. Accordingly, DOE 

did not prepare a Statement of Energy Effects on the proposed rule. DOE received no 

comments on this issue in response to the May 2009 NOPR. As with the proposed rule, 

DOE has concluded that today’s final rule is not a significant energy action within the 

meaning of Executive Order 13211, and has not prepared a Statement of Energy Effects 

on the final rule. 

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L. Review Under the Information Quality Bulletin for Peer Review 

On December 16, 2004, OMB, in consultation with the Office of Science and 

Technology, issued its “Final Information Quality Bulletin for Peer Review” (the 

Bulletin). 70 FR 2664 (January 14, 2005). The purpose of the Bulletin is to enhance the 

quality and credibility of the Government’s scientific information. The Bulletin 

establishes that certain scientific information shall be peer reviewed by qualified 

specialists before it is disseminated by the Federal Government. As indicated in the May 

2009 NOPR, this includes influential scientific information related to agency regulatory 

actions, such as the analyses in this rulemaking. 74 FR 26073-74. 

As set forth in the May 2009 NOPR, DOE held formal in-progress peer reviews 

of the types of analyses and processes that DOE has used to develop the energy 

efficiency standards in today’s rule, and issued a report on these peer reviews. The report 

is available at www.eere.energy.gov/buildings/appliance_standards/peer_review.html. 

Id. 

M. Congressional Notification 

As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the 

issuance of today’s final rule prior to the effective date set forth at the outset of this 

notice. The report will state that it has been determined that the rule is a “major rule” as 

defined by 5 U.S.C. 804(2). DOE also will submit the supporting analyses to the 

Comptroller General in the U.S. Government Accountability Office (GAO) and make 

them available to each House of Congress. 

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EERE-2006-BT-STD-0125 COMMENT 71
For the reasons set forth in the preamble, chapter II of title 10, Code of Federal 

Regulations, part 431 is 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. In § 431.292 add, in alphabetical order, new definitions for “bottled or canned 

beverage,” “Class A,” “Class B,” “combination vending machine,” and “V” to read as 

follows: 

§ 431.292 Definitions concerning refrigerated bottled or canned beverage 

vending machines. 

* * * * * 

Bottled or canned beverage means a beverage in a sealed container. 

 Class A means a refrigerated bottled or canned beverage vending machine that is 

fully cooled, and is not a combination vending machine. 

 Class B means any refrigerated bottled or canned beverage vending machine not 

considered to be Class A, and is not a combination vending machine. 

Combination vending machine means a refrigerated bottled or canned beverage 

vending machine that also has non-refrigerated volumes for the purpose of vending other, 

non-“sealed beverage” merchandise. 

* * * * * 

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V means the refrigerated volume (ft3

) of the refrigerated bottled or canned 

beverage vending machine, as measured by ANSI/AHAM HRF-1-2004 (incorporated by 

reference, see § 431.293). 

3. Section 431.293 is revised to read as follows: 

§ 431.293 Materials incorporated by reference. 

(a) General. DOE incorporates by reference the following standards into Subpart 

Q of Part 431. The material listed has been approved for incorporation by reference by 

the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 

51. Any subsequent amendment to a standard by the standard-setting organization will 

not affect the DOE regulations unless and until amended by DOE. Material is 

incorporated as it exists on the date of the approval and a notice of any change in the 

material will be published in the Federal Register. All approved material is available for 

inspection at the National Archives and Records Administration (NARA). For 

information on the availability of this material at NARA, call (202) 741-6030 or visit 

www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. This 

material is also available for inspection at U.S. Department of Energy, Office of Energy 

Efficiency and Renewable Energy, Building Technologies Program, 6th Floor, 950 

L’Enfant Plaza, SW., Washington, DC 20024, 202-586-2945, or visit 

www1.eere.energy.gov/buildings/appliance_standards. Standards can be obtained from 

the sources listed below. 

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(b) ANSI. American National Standards Institute, 25 W. 43rd Street, 4th Floor, 

New York, NY 10036, 212-642-4900, or visit www.ansi.org. 

(1) ANSI/AHAM HRF-1-2004, Energy, Performance and Capacity of 

Household Refrigerators, Refrigerator-Freezers and Freezers, approved July 7, 2004, IBR 

approved for §§ 431.292 and 431.294. 

(2) ANSI/ASHRAE Standard 32.1-2004, Methods of Testing for Rating 

Vending Machines for Bottled, Canned, and Other Sealed Beverages, approved 

December 2, 2004, IBR approved for §431.294. 

4. In Subpart Q, add an undesignated center heading and § 431.296 to read as follows: 

Energy Conservation Standards 

§431.296 Energy conservation standards and their effective dates. 

Each refrigerated bottled or canned beverage vending machine manufactured on 

or after 3 years from the date of publication of the final rule shall have a maximum daily 

energy consumption (in kilowatt hours per day), when measured at the 75 °F±2 °F and 45 

±5% RH condition, that does not exceed the following: 

Equipment Class Maximum daily energy consumption 

kilowatt hours per day 

Class A MDEC = 0.055 x V + 2.56 

Class B MDEC = 0.073 x V + 3.16 

Combination Vending Machines [RESERVED] 

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APPENDIX 

[The following letter from the Department of Justice will not appear in the Code of 

Federal Regulations.] 

DEPARTMENT OF JUSTICE 

Antitrust Division 

CHRISTINE A. VARNEY 

Assistant Attorney General 

Main Justice Building 

950 Pennsylvania Avenue, N.W. 

Washington, D.C. 20530-0001 

(202) 514-2401 / (202) 616-2645 (f) 

E-mail: antitrust@justice.usdoj.gov 

Web site: http://www.usdoj.gov 

July 23, 2009 

Eric J. Fygi, Deputy General Counsel 

Department of Energy 

Washington, D.C. 20585 

Dear Deputy General Counsel Fygi: 

I am responding to your May 22, 2009 letter seeking the views of the Attorney 

General about the potential impact on competition of proposed energy conservation 

standards for Class A and Class B refrigerated beverage vending machines (“BVMs”). 

Your request was submitted pursuant to Section 325(o)(2)(B)(i)(V), which requires the 

Attorney General to make a determination of the impact of any lessening of competition 

that is likely to result from the imposition of proposed energy conservation standards. 

The Attorney General’s responsibility for responding to requests from other departments 

about the effect of a program on competition has been delegated to the Assistant Attorney 

General for the Antitrust Division in 28 CFR § 0.40(g). 

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In conducting its analysis the Antitrust Division examines whether a proposed 

standard may lessen competition, for example, by substantially limiting consumer choice, 

leaving consumers with fewer competitive alternatives, placing certain manufacturers of 

a product at an unjustified competitive disadvantage compared to other manufacturers, or 

by inducing avoidable inefficiencies in production or distribution of particular products. 

We have reviewed the proposed standard contained in the Notice of Proposed 

Rulemaking (“NOPR”) (74 Fed. Reg. 26020) and attended the June 17, 2009 public 

hearing on the proposed standard. In addition, we have conducted interviews with 

members of the industry. 

Based on our review of the record and information we have gathered, we do not 

believe the proposed standard for Class B BVMs would likely lead to a lessening of 

competition. We are concerned, however, that the proposed Trial Standard Level 6 for 

Class A BVMs could potentially lessen competition. BVM manufacture is a highly 

concentrated industry in the United States, and compliance with the proposed Class A 

standard could require a disproportionate investment by some manufacturers, potentially 

placing them at a disadvantage vis-à-vis others and leading to greater concentration. 

Compliance with a lesser standard does not appear to raise similar concerns. 

We ask the Department of Energy to take this possible competitive impact into 

account. We further ask the Department of Energy to ensure that the standard it adopts 

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for Class A BVMs will not require access to intellectual property owned by an industry 

participant, which would place other industry participants at a comparative disadvantage. 

Sincerely, 

Christine A. Varney 

Assistant Attorney General 

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