2

- i CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM INTERESTED PARTIES, AND DOE RESPONSES

TABLE OF CONTENTS

2.1 INTRODUCTION

................................ ................................ ................................ .............. 2

- 1
2.1.1 Overview

................................ ................................ ................................ ................. 2

- 1
2.1.2 General Rulemaking Issues

................................ ................................ ..................... 2

- 1
2.1.2.1 Scope of Coverage

................................ ................................ ................... 2

- 1
2.1.2. 2 Off Mode and Standby Mode

................................ ................................ 2

- 10
2.1.2.3 Equipment Design Issues

................................ ................................ ....... 2

- 10
2.1.2.4 Prescriptive Standards

................................ ................................ ............ 2

- 11
2.1.2.5 Third

- Party Ratings

................................ ................................ ................ 2

- 11
2.2 MARKET AND TECHNOLOG Y ASSESSMENT

................................ ......................... 2

- 12
2.2.1 Equipment Classes

................................ ................................ ................................ 2

- 12
2.2.1.1 Blast Chillers

................................ ................................ .......................... 2

- 14
2.2.1.2 Hybrid Doors

................................ ................................ ......................... 2

- 15
2.2.1.3 Ne w Equipment Classes

................................ ................................ ........ 2

- 15
2.2.1.4 Under

- Counter Equipment

................................ ................................ ..... 2

- 16
2.2.1.5 Service Over Counter Equipment

................................ .......................... 2

- 17
2.2.1.6 Open Versus Closed Display Cases

................................ ....................... 2

- 19
2.2.2 Technology Assessment

................................ ................................ ........................ 2

- 23
2.3 SCREENING ANALYSIS

................................ ................................ ............................... 2

- 25
2.4 ENGINEERING ANALYSIS

................................ ................................ ........................... 2

- 26
2.4.1 Analysis Approach

................................ ................................ ................................ 2

- 27
2.4.1. 1 Verification with Test Data

................................ ................................ .... 2

- 27
2.4.1.2 Background Data

................................ ................................ ................... 2

- 27
2.4.1.3 Performance Simulation

................................ ................................ ......... 2

- 27
2.4.1.4 Proprietary Designs

................................ ................................ ................ 2

- 28
2. 4.1.5 Insulation Performance

................................ ................................ .......... 2

- 28
2.4.2 Normalization Metrics

................................ ................................ .......................... 2

- 29
2.4.3 Refrigerants

................................ ................................ ................................ ........... 2

- 31
2.5 MARKUPS TO DETERMINE EQUIPMENT PRICE

................................ .................... 2

- 31
2.5.1 Distribution Channels for Commercial Refrigeration Equipment

........................ 2

- 32
2.5.2 Methodology for Markups Analysis

................................ ................................ ..... 2

- 33
2.5.3 Shipping Cos ts

................................ ................................ ................................ ...... 2

- 33
2.6 ENERGY USE ANALYSIS

................................ ................................ ............................. 2

- 34
2.7 LIFE

- CYCLE COST AND PAYBA CK PERIOD ANALYSES

................................ ..... 2

- 36
2.7.1 Equipment Lifetimes

................................ ................................ ............................. 2

- 36
2.7.2 New Markets

................................ ................................ ................................ ......... 2

- 38
2.7.3 Installation, Maintenance, and Repair Costs

................................ ......................... 2

- 38
2.8 SHIPMENTS ANALYSIS

................................ ................................ ............................... 2

- 40
2.9 NATIONAL IMPACT ANAL YSIS

................................ ................................ ................. 2

- 42
2.10 PRELIMINARY MANUFACT URER IMPACT ANALYSIS

................................ ........ 2

- 43
2.10.1 Industry Cash

- Flow Analysis

................................ ................................ ................ 2

- 432

- ii 2.10.2 Manufacturer Subgroup Analysis

................................ ................................ ......... 2

- 44
2.10.3 Competitive Impacts Assessment

................................ ................................ ......... 2

- 45
2.10.4 Cumulative Regulatory Burden

................................ ................................ ............ 2

- 45
2.10.5 Preliminary Results for the Manufacturer Impact Analysis

................................ . 2

- 46
2.11 LIFE

- CYCLE COST SUBGROUP ANALYSIS

................................ ............................. 2

- 47
2.12 UTILITY IMPACT ANALY SIS

................................ ................................ ...................... 2

- 47
2.13 ENVIRONMENTAL ASSESS MENT

................................ ................................ ............. 2

- 48
2.13.1 Carbon Dioxide

................................ ................................ ................................ ..... 2

- 48
2.13.2 Sulfur Dioxide

................................ ................................ ................................ ....... 2

- 48
2.13.3 Nitrogen Oxides

................................ ................................ ................................ .... 2

- 49
2.13.4 M ercury

................................ ................................ ................................ ................. 2

- 49
2.13.5 Particulate Matter

................................ ................................ ................................ .. 2

- 49
2.14 MONETIZATION OF EMIS SIONS REDUCTION BENE FITS

................................ .... 2

- 50
2.14.1 Environmental Impact of Refrigerant Leakage

................................ ..................... 2

- 51
2.15 EMPLOYMENT IMPACT AN ALYSIS

................................ ................................ .......... 2

- 53
2.16 REGULATORY IMPACT AN ALYSIS

................................ ................................ .......... 2

- 53

LIST OF TABLES

Table 2.2.1 Commercial Refrigeration Equipment Classes Established in the 2009 Final Rule

... 2

- 13 Table 2.2.2 Proposed Classes for Commercial Refrigeration Equipment for which Standards Were Prescribed by EPCA

................................ ................................ ................................ ......... 2

- 142

- 1 CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM INTERESTED PARTIES, AND DOE RESPONSES

2.1 INTRODUCTION

2.1.1 Overview

The U.S. Department of Energy (DOE or the Department) is required to publish performance

- based standards for commercial refrigeration equipment (CRE) that achieve the maximum improvements in energy efficiency that are technologically feasible and economically justified. (42 U.S.C. 6313(c)(5) ; 6316(e)(1) ) This chapter describes the analytical framework that DOE is using to evaluate new energy conservation standards for commercial refrigeration equipment. The chapter sets forth the methodology, analytical tools, and relationships among the
variou s analyses that are part of this rulemaking. The analyses performed as part of the accompanying notice and reported in this preliminary technical support document (TSD) are
described in section ES.2 of the e xecutive s ummary.

DOE proposed this analytical fr amework in the rulemaking framework document for commercial refrigeration equipment. DOE announced the availability of the framework document in a notice of public meeting and availability of a framework document . 75 FR 24824 ( May 6, 2010 ) . DOE presented t he analytical approach to interested parties during a public meeting held on May 18, 2010. The framework document is available at http://www1.eere.energy.gov/buildings/appliance_standards/commercial/pdfs/cre_framework_04

- 30

- 10.pdf

Subsequent to the publication of the framework document and at the public meeting, DOE received numerous comments from interested parties regarding DOE’ s analytical approach. This chapter summarizes the key comments and describes DOE’s responses. In this chapter, DOE also summarizes any significant changes made to the analytical approach described in the framework document and incorporated into its prelim inary analyses. In the executive summary of the preliminary TSD, DOE also identifies a number of issues for which DOE seeks public comment. DOE explains each of those issues in the relevant analysis sections below.

2.1.2 General Rulemaking Issues

This section summarize s comments that are not specific to any of the rulemaking analyses and presents DOE’s responses to these comments.

2.1.2.1 Scope of Coverage

During the Framework public meeting and in the associated comment period, DOE
received a number of comments from interested parties regarding the scope of coverage of this rulemaking.

The scope of coverage for the commercial refrigeration equipment rulemakings is derived from the amendments to the Energy Policy and Conservation Act (EPCA) in the Energy Policy2

- 2 Act o f 2005 (EPACT 2005), Pub. L. No. 109

- 58. These amendments prescribe energy conservation standards for commercial refrigerat ors, freezers, and refrigerator

- freezers with self

contained condensing units designed for holding temperature applications, as well as for commercial refrigerators with transparent doors and self

- contained condensing units designed for pull

- down temperature applications

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

− (3)) The EPACT 2005 amendments

to EPCA also mandate that DOE set standards for the following additional categories of commercial refrigeration equipment: ice

- cream freezers; self

- contained commercial refrigerators, freezers, and refrigerator

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

- freezers. (42 U.S.C. 6313(c)(4)(A)) DOE publi shed a final rule establishing these standards on January 9, 2009. 74 FR 1091 (Jan

. 9, 2009)

. a

EPCA also direct s DOE to conduct a second rulemaking to determine whet her to amend the standards for commercial refrigeration established under 42 U.S.C. 6313(c)

, which include both those prescribed in EPCA and the January 2009 final rule . (42 U.S.C. 6313(c)(5)) If DOE determines to amend the standards, DOE must publish a fi nal rule establishing such amended standards by January 1, 2013. Id

. DOE began this process with the publication in the Federal Register of the notice of a public meeting and availability of the framework document on May 6,
2010.

The following subsectio ns present the interested parties’ comments and DOE responses regarding the scope of coverage issues.

Revision of 2009 Standards

During the Framework public meeting, the Air

- Conditioning, Heating

, and Refrigeration Institute (AHRI) stated that in the consensus agreement that served as the basis for the EPACT
2005 amendments

, the parties involved did not originally intend for DOE to revise the standards for equipment covered by the 2009 final rule a head of the effective date for those standards. (AHRI, No. 1.2.006 at pp. 23

− 24 b ) Moreover, AHRI stated that it was not the intent of Congress

to require DOE to initiate a rulemaking applying to equipment for which previous standards have not yet become ef fective. AHRI expressed its belief that the January 1, 2013 deadline was directed at equipment covered by the EPACT 2005 standard levels. (AHRI, No. 1.3.008 at p. 2) Furthermore, AHRI stated that it believes DOE has the statutory authority to decide whethe r to engage in a full rulemaking for all of the equipment discussed, and that it does not believe that DOE must perform a full analysis to determine whether to amend standards. AHRI urged DOE to focus this rulemaking solely on self

- contained units with doo rs. (AHRI, No. 1.3.008 at p. 2) Zero Zone agreed with AHRI’s concern about setting new standards so shortly after the 2009

a EPCA also authorizes DOE to issue standards for other types of commercial refrigeration equipment. 42 U.S.C. 6313(c)(4)(B). DOE has not yet established standards for commercial refrigeration equipment other than those prescribed in EPCA and the January 2 009 final rule.

b In the following discussion, comments will be presented alon g with a notation in the form “AHRI , No. 1.2.006 at

p p

. 23

− 24,” which identifies a written comment DOE received and included in the docket of this rulemaking. DOE
refers to com ments based on when the comment was submitted in the rulemaking process

. S ection 1.1.XXX refers

to Federal Register documents, section 1.2.XXX refers public meeting support documents, and 1.3.XXX refers to comments submitted by interested parties. This par ticular notation refers to a comment (1) by AHRI , (2) in document number 6 in the public meeting support materials, and (3) appearing on page s 23 and 24

.2

- 3 standards become effective, and, in its written comment, asked DOE to delay the notice of proposed rulemaking (NOPR) for as long as p ossible to lessen burden on manufacturers. (Zero Zone, No. 1.3.007 at p. 1) Hoshizaki agree d with the rulemaking schedule that DOE presented. (Hoshizaki, No. 1.3.006 at p. 1)

The EPACT 2005 amendments to EPCA require DOE to conduct a rulemaking to determine whether to amend the standards for commercial refrigeration equipment established under 42 U.S.C. 6313(c)

. These include both the standards prescribed by EPACT 2005 and the
standards set by DOE in the January 2009 final rule . (42 U.S.C. 6313(c)(5 )) If it determines to amend the standards, DOE must publish a final rule establishing such amended standards by January 1, 2013. Id

. In response to Zero Zone’s comments concerning burden imposed by standards, DOE will consider manufacturer impacts in the manufacturer impact analysis (MIA)

, as required by 42 U.S.C. 6295(o)(2)(B)(i)(I) and 6316(e)(1).

Custom Units

During the Framework public meeting, discussion arose regarding “custom” units with low production volumes. Traulsen stated that there is a la rge range of such equipment designed around specific customer needs, and that it should be captured within the scope of this rulemaking. (Traulsen, No. 1.2.006 at pp. 84

− 85) The American Council for an Energy

- Efficient Economy ( ACEEE ) responded that perhap s units with extremely low production volumes should be exempted from standards. (ACEEE, No. 1.2.006 at p. 85) However, Traulsen further cautioned that there could be instances where a unit is originally designed for a single customer,
but then could be ex panded to higher production volumes, so DOE would have to be careful were it to provide exemptions such as that suggested by ACEEE. (Traulsen, No. 1.2.006 at p. 86)
The Northwest Joint Comment c stated that the definition of a “custom unit” needs to be reso lved early in the rulemaking process. ( Northwest Joint Comment , No. 1.3.003 at p. 2)

DOE maintains that equipment that falls under the statutory definition of a commercial refrigerator, freezer, or refrigerator

- freezer could be considered for coverage i n this rulemaking

, regardless of the number of units produced of that model. EPCA provides definitions for this equipment at 42 U

. S

. C

. 6311(9)

. As stated previously, EPCA also set standards for certain product classes of this equipment, mandated that DOE s et standards for other product classes (standards that were established in the January 2009 final rule), and authorized DOE to issue standards for other types of commercial refrigeration equipment. (42 U.S.C. 6313(c)) EPCA does not provide an exemption fro m coverage due to low production volumes of “custom” equipment

. Instead, it provides specific exemptions in the case of equipment designed and marketed exclusively for medical, scientific, or research purposes. ( 42 U.S.C. 6311(9)(A) ) DOE intends to

cover the commercial refrigeration equipment within the scope of this rule without allowances
for low

- shipments or custom units.

c “Northwest Joint Comment” refers here to comment 1.3.003, submitted by Adjuvant Consulting on behalf of the Northwest Energy Efficiency Alliance and the Northwest Power and Conservation Council.2

- 4 Coverage of Remote Condensing Units

Several interested parties submitted comments in which they suggested that DOE regulate remot ely located condensers to which display cases are attached. Earthjustice urged DOE to revisit its previous interpretation that it does not have the authority to regulate remote condensers (Earthjustice, No. 1.2.006 at p. 95), while California Codes and Sta ndards stated that it would like to see separate, repeatable ratings for remote condensers sold separately. (California Codes and Standards, No. 1.2.006 at p. 17) California Codes and Standards also suggested that DOE develop an energy efficiency ratio sta ndard and controls requirement for unitary condensing units attached to remote systems that would apply to all condensing units, regardless
of the equipment they serve. (California Codes and Standards, No. 1.3.005 at p. 2) It added that
this measurement sh ould include the results of both full and part

- load tests and that DOE should conduct a parametric analysis to determine appropriate size breakpoints for classifying this equipment. (California Codes and Standards, No. 1.3.005 at p. 7)

Earthjustice and the Natural Resources Defense Council (NRDC) asserted that DOE misconstrued EPCA’s definitions in its previous decision not to cover remote condensing units. According to these interested parties, DOE made an error in not differentiating between “refrigera ted” and “refrigeration” equipment, and coverage should include all parts of the “refrigeration” equipment. (Earthjustice, No. 1.3.004 at pp. 4

− 5) The comment also stated that the definitions of this equipment apply to equipment that “operates” at a given temperature, and that, since remote condensing equipment cannot functionally operate without the remote condenser, that piece of the system must be covered as well. (Earthjustice, No. 1.3.004 at p. 5) Finally, these interested parties noted that, in the pa st, DOE had distinguished between different types of products and equipment based, in part, on whether those items can operate independent of other components . They stated that, in the water heater rule , DOE excluded coverage of “add

on” heat pump water he aters by drawing a distinction between the add

- on heat pump water heater, and the electric water heater storage tank with which is paired , the latter of which is fully functional when it leaves the factory . 75 FR 20126 (April 16, 2010).These parties also r eferenced split

- system air conditioners, which consist of two subsystems that “do not work independently until paired together in the field.” Earthjustice and NRDC asserted that remote condensing commercial refrigeration equipment also consists of two subs ystems that cannot work until paired during installation. (Earthjustice, No. 1.3.004 at p. 5)

There are several technical factors that make coverage of remote condensing units impractical as part of the current commercial refrigeration equipment rulemak ing. The first is that remote condensing units, which are used in larger applications such as grocery stores, often serve several types of equipment currently regulated by DOE or for which DOE is developing standards, including display cases and walk

- in co olers and freezers. Classification in a single rule with one of these types of equipment could lead to inconsistencies with regard to standards for other equipment. Another issue is that there are currently no standardized test procedures of
which DOE is a ware for the testing of remote condensing units and compressor racks. Because remote compressor racks can serve such a wide variety of equipment, development of such test procedures would require significant input from a number of entities, including manuf acturers of compressors, coils, and the equipment that compressor racks serve, such as commercial2

- 5 refrigeration equipment and walk

- in coolers and freezers. Due to these complexities, remote condensing units are best addressed in a separate proceeding. As a result, DOE may consider
whether to set standards for remote condensing units through a separate rulemaking.

Liquid

- Cooled Condensing Units

ACEEE stated that liquid

- cooled condensing units could become more prevalent within commercial refrigeration eq uipment in the future and asked for clarification of their coverage under this rulemaking. (ACEEE, No. 1.2.006 at pp. 44

− 45) Similarly, California Codes and Standards requested clarification from DOE regarding whether units with a self

- contained

compressor and a water

- cooled condensing unit served by a remote fluid cooler would be considered covered equipment and, if so, the category to which this equipment would belong

. (California Codes and Standards, No. 1.3.005 at p. 4)

In its definition of “commercia l refrigerator, freezer, and refrigerator

- freezer,” EPCA states that such a piece of equipment “is connected to a self

- contained condensing unit or to a remote condensing unit.” (42 U.S.C. 6311(9)(A)(vii)) EPCA defines “remote condensing unit” to
mean “a f actory

- made assembly of refrigerating components designed to compress and liquefy a specific refrigerant that is remotely located from the refrigerated equipment and consists of one or more refrigerant compressors, refrigerant condensers, condenser fans an d motors, and factory supplied accessories.” (42 U.S.C. 6311(9)(E)) EPCA defines “self

- contained condensing unit” to mean “a factory

- made assembly of refrigerating components designed to compress and liquefy a specific refrigerant that is an integral part of the refrigerated equipment and consists of one or more refrigerant compressors, refrigerant condensers, condenser fans and motors, and factory supplied accessories.” (42 U.S.C. 6311(9)(F))

Beyond these definitions, EPCA makes no further specification regarding how that
remote or self

- contained condensing unit must operate. Neither of the above definitions contains any language that would preclude condensing units cooled by a liquid from bein g covered under those definitions. DOE reviewed the current test procedures for commercial refrigeration equipment and found that these test procedures contain provisions that allow the testing of equipment connected to a liquid

- cooled condensing unit. As a result, DOE believes that such equipment falls under the scope of this current rulemaking.

New Equipment Designs

Southern Store Fixtures asked whether a new piece of equipment that did not fit in an existing equipment class would be exempted from standards, or whether manufacturers would not be allowed to produce it

. (Southern Store Fixtures, No. 1.2.006 at p. 88) The Northwest Joint Comment suggested that equipment classes will require further exploration, and that over

counter and under

- cou nter equipment, as well as hybrid units, may constitute separate classes. ( Northwest Joint Comment , No. 1.3.003 at p. 2)

DOE believes that the equipment mentioned by these commenters is likely to fit into one of, or a combination of, the existing equipm ent classes. The definition of “commercial refrigerator, freezer, and refrigerator

- freezer” is very broad and sufficient to accommodate the2

- 6 spectrum of equipment available on the market. As part of the 2009 advance notice of proposed rulemaking (ANOPR), wh en DOE initially developed the equipment class nomenclature used in that rulemaking, DOE did so based upon a suggested equipment class structure provided by the Air Conditioning and Refrigeration Institute (ARI). 72 FR 41173 (July 26, 2007) . The result was a comprehensive listing that DOE presented to interested parties during the 2009 rulemaking process before adopting it in the final rule. In the 2009 final rule, DOE published a methodology for determining energy standards for hybrid units containing elem ents or compartments from more than one equipment class. 74 FR 1122 (Jan

. 9, 2009)

. Service over counter (SOC) equipment already composes its own equipment family, while under

- counter equipment generally falls into one of the existing self

- contained equipm ent classes. As a result, while the current standards apply only to those product classes, or combinations of product classes, set forth in EPCA or the January 2009 final rule, DOE does not see the need to modify or expand its equipment class conventions a t this time. Should new equipment come onto the market that does not fall into these product classes, or combinations of product classes, DOE will consider amending the energy conservation standards to include such equipment in a future rulemaking. (42 U.S .C. 6295(m); 6316(e)(1))

Chef Bases and Preparation Tables

True Manufacturing commented on a specific type of equipment, stating that chef bases and food preparation tables are currently not covered, have not been discussed by the Department, and woul d be difficult to regulate. (True, No. 1.2.006 at p. 91) DOE believes that food preparation tables and chef bases do not meet the EPCA definition of “commercial refrigerator, freezer, and refrigerator

- freezer

. ” This definition states that such equipment “displays or stores merchandise and other perishable materials horizontally, semi vertically, or vertically.” ( 42 U.S.C. 6311(9)(A)(iv) ) Since preparation tables and chef bases are not designed for the display or storage of merchandise, but rather for shor t

- term use during food preparation, DOE believes that they do not meet this definition and hence they are not covered under this rulemaking.

Wine Coolers

California Codes and Standards asked for clarification on the distinction between “unitary” and “b uilt

- up” wine coolers with regard to which units are covered under California and Federal standards, recommending that the scope of this rulemaking be limited to wine coolers with remote condensing units. (California Codes and Standards, No. 1.3.005 at p. 13)

Wine coolers , both self

- contained and remote condensing, that are marketed by
manufacturers for commercial use will be considered for cover age under this rulemaking. In this preliminary analysis, DOE is not considering a separate equipment class for commercial wine
coolers

.

Secondary Coolant Applications

Numerous interested parties offered comments regarding secondary coolant applications

. Earthjustice encouraged DOE to revisit its conclusion regarding the exclusion of secondary2

- 7 coolant applications (Earthjustice, No. 1.2.006 at p. 46) Zero Zone stated that failure to cover secondary coolant applications within the scope of this rulemaking would allow the sale of secondary coolant sy stems that are less efficient than comparable remote condensing systems

. (Zero Zone, No. 1.2.006 at p. 202) Earthjustice and NRDC asserted that they believe DOE’s interpretation that secondary coolant systems are not covered because they are not directly

c onnected to a remote condensing unit ignores the plain language of the statute. These interested parties expressed their belief that secondary coolant systems are no less “connected” than direct

expansion systems. (Earthjustice, No. 1.3.004 at pp. 5

− 6) Cal ifornia Codes and Standards requested that DOE make a clear determination as to whether this equipment is covered and, if it is not, regarding the ability of States to regulate it without Federal preemption. (California Codes and Standards, No. 1.3.005 at p. 4) The Northwest Joint Comment stated that there may be justification for considering secondary coolant systems as a design option rather than a separate class. It urged DOE to take this approach if such systems indeed compose a nontrivial market
share. ( Northwest Joint Comment , No. 1.3.003 at p. 4)

Section 340(9)(A)(vii) of EPCA (42 U.S.C. 6311(9)(A)(vii), added by EPACT 2005, section 136(a)(3)) states that the terms “commercial refrigerator, freezer, and refrigerator

freezer” refer to equipment th at is connected to a self

- contained condensing unit or to a remote condensing unit. DOE determined in the 2009 final rule that coverage of secondary coolant systems was not warranted due to their small market share and the lack of a test procedure that

cov ered secondary coolant systems. 74 FR 1105 (Jan

. 9, 2009). Based on the comments received during the ANOPR and NOPR stages of the 2009 rulemaking, the market share of secondary coolant systems was estimated to be between 5 and 10 percent. DOE does not beli eve that there have been significant changes in the market penetration of secondary coolant systems since the 2009 rulemaking. For this rulemaking, DOE is currently not considering coverage of secondary coolant applications, but seeks further data on marke t share and any other information on these applications.

In reference to the question from California Codes and Standards regarding Federal preemption of State standards, EPCA states that:

Section 6297 of this title shall apply to commercial refrigerators, freezers, and refrigerator

- freezers for which standards are established under section 6313(c)(4) of this title to the same extent and in the same manner as the provisions apply under part A of this subchapter on the date of publication of th e final rule by the Secretary, except that any State or local standard issued before the date of publication of the final rule by the Secretary shall not be preempted until the
standards take effect.

( 42 U.S.C. 6136(e)(3)(A) )

Section 6297 states in rele vant part that no State regulation concerning the energy efficiency or energy use of a covered product shall be effective with respect to such covered product unless certain narrow exceptions apply

. (42 U.S.C. 6297(b),(c))2

- 8 DOE does not believe that tr eatment of secondary coolant applications as a design option would be appropriate. The incorporation of a technology as a design option requires that it meet the four screening criteria, and that its effects be quantifiable

. A secondary coolant system

requ ires a different system for distribution of the secondary coolant to the display cases than direct expansion systems . It would not be feasible in most cases to replace an individual display
case that use s direct expansion of a refrigerant with one that use s a secondary coolant refrigerant system. A change to a secondary coolant requires a major change to the coolant distribution system in the store. Therefore, DOE has concluded for this preliminary analysis that secondary coolant applications do not meet th e four screening criteria, because they would not be practicable to manufacture, install, and service and would have adverse impacts on equipment utility or availability.

Concerning the lack of a test procedure capable of testing secondary coolant equipment

, True mentioned that the 2009 final rule set standards for equipment types excluded by AHRI 1200, so that exclusion under the test procedure should not serve as a sole reason for not covering equipment. True also added that secondary coolant sys tems can be tested under American Society of Heating, Refrigerating and Air

- Conditioning Engineers (ASHRAE) 72

, provided that the coolant used either does not change phase or completely changes phase as part of the cycle. (True, No. 1.2.006 at pp. 40

− 41) C alifornia Codes and Standards expressed the opinion that restrictions in AHRI 1200 should not prevent the regulation of this equipment, and that it does not believe that the statute precludes DOE from regulating secondary coolant applications. (California Codes and Standards, No. 1.3.005 at pp. 3

− 4)

The absence of an industry test procedure also weighs in favor of not regulating secondary coolant equipment at this time

. According to information provided to DOE, both ASHRAE and AHRI are currently undertak ing efforts to develop test procedures specifically capable of quantifying the performance of secondary coolant refrigeration systems. However, it
is DOE’s understand ing that these test procedures are applicable to secondary coolant systems in
which either the secondary coolant does not change phase or the entire refrigerant changes phase.
T here are some secondary coolant systems, namely those using carbon dioxide (CO 2 ), that
involve only a part of the refrigerant changing phase

, which cannot be accurately tested using the revised industry test procedures. DOE believes that it is best to work with industry in formulat ing new test procedures that will allow testing of secondary coolant systems. DOE intends to follow the progress of these organizations in deve loping such test procedures.

Several of the interested parties also provided comments regarding the size of the secondary coolant market, which DOE determined to be small at the time of the 2009 rulemaking. California Codes and Standards stated that alth ough secondary coolant applications currently represent a small portion of the market, that portion will increas e due to concerns over greenhouse gas emissions in the form of refrigerant leakage. (California Codes and Standards, No. 1.3.005 at p. 4) The No rthwest Joint Comment stated that up to 10 percent of the market may be composed of these units, and that DOE should analyze these units as a basis for making a decision. ( Northwest Joint Comment , No. 1.3.003 at p. 2) NRDC provided another figure, stating that secondary coolant systems have a roughly 4 percent market share in supermarkets and grocery stores. (NRDC, No. 1.3.012 at p. 2) NRDC also stated that cost and efficiency premiums for secondary coolant systems have dropped in recent years. (NRDC, No. 1 .3.012 at p. 2) True2

- 9 commented that Significant New Alternatives Policy (SNAP) rules have recently allowed CO 2 secondary coolant applications and that such systems are currently in use in the United States. (True, No. 1.2.006 at p. 185)

In the ANOPR for the 2009 rulemaking, interested parties submitted comments estimating the size of the secondary coolant market as being roughly 5 percent of the overall commercial refrigeration equipment market. 72 FR 41171 (July 26, 2007) . At the NOPR stage of
that rule making, manufacturers commenting to DOE suggested that these systems composed roughly 10 percent of the overall CRE market. 73 FR 50106 (Aug

. 25, 2008) . At that time, there was also speculation regarding the prevalence and market penetration of these syste ms in coming years, with some interested parties suggesting that these systems would become more common and comp ri se a greater market share in the next few years after that rulemaking. However, the estimates that DOE received in the May 2010 Framework public meeting are in line with the estimates from the 2009 rulemaking. These estimates have been corroborated by input from manufacturers during the preliminary MIA interviews, in which manufacturers stated that their secondary coolant system shipments fa ll into the 5

− 10 percent range estimated in the 2009 rulemaking. Consequently, DOE does not believe that there have been significant changes in the secondary coolant equipment market that would require DOE to reexamine coverage of secondary coolant equipme nt in this rulemaking. DOE requests more data from interested parties regarding the market share of secondary coolant equipment to evaluate any change in the prevalence of this equipment that may have occurred since the publication of the 2009 final rule

.

Other interested parties expressed the opinion that secondary coolant applications should not be considered covered equipment under this rulemaking. In its written comment, Hoshizaki stated that secondary coolant applications are not relevant to energy efficiency standards. (Hoshizaki, No. 1.3.006 at p. 1) Southern Store Fixtures mentioned that secondary coolant systems utilizing glycol are less efficient than direct

- expansion systems and that discussion of a standard for these systems would in itself go against DOE’s goal of reducing energy consumption. (Southern Store Fixtures, No. 1.2.006 at p. 48) In response, California Codes and Standards stated that, while brine

- based secondary coolant systems are less efficient than direct

expansion systems, CO 2 - b ased systems are actually more efficient than direct expansion. (California Codes and Standards, No. 1.2.006 at p. 49)

At the NOPR stage of the 2009 rulemaking, DOE received information from the industry expressing that secondary coolant systems general ly consume about 5 percent more energy than analogous direct

- expansion systems. 73 FR 50106 (Aug

. 25, 2008) . However, this information did not specify a working medium or specific type of secondary coolant system. In interviews conducted as part of the pre liminary analysis for this rulemaking, several manufacturers stated that they believed that, overall, secondary coolant systems have energy consumption characteristics roughly equal to those of direct

- expansion systems. In light of the differing stances pr esented by interested parties on the performance of different types of secondary coolant systems, DOE welcomes feedback and data from interested parties regarding this subject.

In summary, available information does not indicate that major changes have occurred in secondary coolant system performance or market share. Therefore, in keeping with its decision2

- 10 in the previous commercial refrigeration equipment rulemaking, DOE does not intend to include secondary coolant applications under the scope of covera ge of this rulemaking.

2.1.2.2 Off Mode and Standby Mode

During the public meeting, the subject of off mode and standby mode energy consumption was raised as a topic for comment by interested parties. True stated that all commercial refrigeration equipment is designed to run continuously, thus making these modes of operation irrelevant to this equipment. In its written comment, AHRI agreed that neither of these modes of operation apply to commercial refrigeration equipment, and added that it believes that the Energy Independence and Security Act of 2007 (EISA 200 7, Pub. L. No. 110

- 140) applies only to consumer products and not commercial equipment, and thus that it feels off mode and standby mode energy consumption are outside the scope of this rulemaking. (AHRI, No. 1.3.008 at p. 2) Zero Zone echoed this stance, stating that these modes of operation are not applicable and that DOE should not develop test standards for these modes for commercial refrigeration equipment. (Zero Zone, No. 1.3.007 at p. 1) Hoshizaki also agreed regarding the inapplicability of standby and off modes to commercial refrigeration equipment. (Hoshizaki, No. 1.3.006 at p. 1)

DOE agrees with the interested parties who stated that the off mode and standby operating modes do not apply to commercial refrigeration equipment. Since commercial
ref rigeration equipment is, by definition, designed and built for storing or displaying refrigerated or frozen merchandise, this equipment must then operate continuously at the required temperature to preserve the product and maintain food safety. This operat ion is independent of whether the equipment is in use by consumers, as in a retail application, or employees, as in a foodservice application. As a result, DOE does not intend to consider off mode and standby modes of operation as part of the analyses for this rulemaking.

2.1.2.3 Equipment Design Issues

Several interested parties provided comments and questions regarding equipment design. Kysor/Warren stated that equipment designs and sales are driven by customer needs and urged DOE not to eliminate any equipment classes for which there is continued demand. (Kysor/Warren, No. 1.2.006 at p. 49) In response

, DOE notes that DOE may not prescribe a standard if the standard is likely to result in the unavailability in the United States of performance characteristics (i ncluding 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) ; 42 U.S.C. 6316(e)(1) ) DOE must also establish separate equipment classes with different energy conservation standards based on the type of energy consumed, or based on capacity or other performance

- related feature that justifies a different standard after
consideration of such factors as utility to the consumer. (42 U.S.C. 6295(q); 42 U.S.C. 6316(e)(1) ) Therefore, DOE will consider the impacts on the availability and utility of equipment features when developing equipment classes and performing its analyses for this rulemaking

.

Hoshizaki expressed concern that a tightening of efficiency standards may result in food safety issues if manufacturers are forced to cut corners to meet those standards. (Hoshizaki, No. 1.3.006 at p. 1) It is DOE’s understanding that equipment inten ded for use in foodservice, food2

- 11 storage, or food retailing will continue to have to meet food safety standards independent from DOE’s energy conservation standards. These could include certification by Underwriters Laboratories, Inc. (UL) and NSF, for exa mple. In the 2009 final rule, DOE addressed the issue of NSF certification, expressing its understanding that manufacturers of commercial refrigeration equipment were required to test to NSF 7 to measure product temperature for food safety requirements. 74 FR 1128 (Jan

. 9, 2009)

. In developing energy conservation standards, DOE uses screening criteria for technology options that would exclude from consideration those options that would negatively impact health and safety. DOE must also, as stated above, con sider utility to the consumer in establishing equipment classes and standards applicable to those
classes

.

2.1.2.4 Prescriptive Standards

Earthjustice suggested that, if a test procedure cannot accommodate end

- user

- dependent technologies, DOE could use prescript ive standards to require those technologies. (Earthjustice, No. 1.2.006 at p. 66) California Codes and Standards stat ed that the CRE rulemaking should evaluate whether to require motion

- activated lighting controls. (California Codes and Standards,
No. 1.3. 005 at p. 11)

EPCA defines the term “energy conservation standard” as a performance standard that prescribes a minimum level of energy efficiency or a maximum quantity of energy use for a product or a design requirement for a product. (42 U.S.C. 6311(18 )) Therefore, unless other provisions of EPCA or other applicable law specif ies otherwise , DOE must use either a performance standard or design (prescriptive) requirements. In the case of commercial refrigeration equipment, all of the equipment that is the subject of this rulemaking is currently covered either by a statutorily mandated performance standard or by a performance standard set by DOE in the 2009 final rule. DOE is currently considering amendments to these performance standards for commercial refrigeration equipment, and is therefore not considering design requirements at this time

.

2.1.2.5 Third

- Party Ratings

DOE received a comment from California Codes and Standards during the public meeting stating that the o rganization would like to see DOE utilize a third

- party rating program for commercial refrigeration equipment. (California Codes and Standards, No. 1.2.006 at p. 16) ACEEE added that, in light of growing international competition, third

- party ratings can b e useful in keeping the competitive landscape fair, and that the goal should be to make the rating process as simple as possible while meeting the need of the program. (ACEEE, No. 1.2.006 at p. 203) The Northwest Joint Comment stated that it supports third

- party testing and certification, adding that there are a number of such programs currently in existence that would fill this need. ( Northwest Joint Comment , No. 1.3.003 at p. 3) AHRI stated that it runs a third

- party certification program for this equipme nt. (AHRI, No. 1.2.006 at p. 204) Master

- Bilt agreed that
third

- party ratings are useful in uncovering unfair manufacturing processes, but suggested that a spot

- check methodology for compliance testing would be a better approach. (Master

- Bilt, No.

1.2.006 at pp. 203

− 204) True suggested a different methodology, similar to one currently used by NSF, where a product listed can be questioned by a competing manufacturer, who will then pay the initial cost of testing the equipment in question. (True, No. 1.2.006 at p. 204)2

- 12 EPCA requires DOE, in determining compliance with the standards for commercial refrigeration equipment prescribed in EPCA, to require manufacturers to certify that their equipment meets the applicable standard through use of an independent, n ationally recognized testing or certification program. DOE is also required, to the maximum extent practicable, to encourage the establishment of at least two independent testing and certification programs. ( 42 U.S.C. 6316(e)(5) ) DOE may also consider the use of such testing or certification program s for other types of commercial refrigeration equipment, such as the equipment for which standards were established in the January 2009 final rule. ( 42 U.S.C. 6316(b),(e) ) Issues pertaining to
third

- party ratings , certification programs, compliance, and other related topics are currently being addressed by an ongoing DOE rulemaking on Certification, Compliance, and Enforcement for Consumer Products and Commercial and Industrial Equipment (Docket No. EERE

- 2010

- BT

C E

- 0014, RIN 1904

- AC23). This rulemaking, for which a NOPR was published on September 16, 2010 (75 FR 56796), addresses certification, compliance, and enforcement for commercial refrigeration equipment, in addition to other types of products and equipment. DOE welcomes comments from interested parties and invites interested parties to participate in this rulemaking
effort.

2.2 MARKET AND TECHNOLOG Y ASSESSMENT

When DOE begins an energy conservation standards rulemaking, it develops information that provides an o verall picture of the market for the equipment considered, including the nature of the equipment, market characteristics, and industry structure. This activity consists of both quantitative and qualitative efforts based primarily on publicly available info rmation. The market assessment examined manufacturers, trade associations, and the quantities and types of equipment sold and offered for sale.

DOE reviewed relevant literature and interviewed manufacturers to develop an overall picture of the commercial r efrigeration equipment industry in the United States. Industry publications and trade journals, government agencies, and trade organizations provided the bulk of the information, including (1) manufacturers and their market shares; (2) shipments by product type and capacity; (3) product information; and (4) industry trends.

Subsequent sections of this chapter describe the comments DOE received in response to its review of the commercial refrigeration equipment market for the framework document. The analysis developed as part of the market and technology assessment is described in chapter 3 of the preliminary TSD.

2.2.1 Equipment Classes

When evaluating and establishing energy conservation standards, DOE divides covered equipment into equipment classes by the type of energy used and by capacity or other performance

- related features that affect efficiency. A standard must specify a different level of energy efficiency or energy use for product classes that consume a different type of energy, or for product c lasses based on capacity or other performance

- related features where the feature justifies a different standard after consideration of such factors as utility to the consumer. (42 U.S.C. 6295(q))2

- 13 In the framework document, DOE listed the following equipmen t classes that it was considering in regards to commercial refrigeration equipment

.

Table 2.2

. 1 Commercial Refrigeration Equipment Classes Established in the 2009 Final

Rule

Equipment Category Condensing
Unit Configuration Equipment Family Operating Temperature
°F Equipment
Class Designation Remote Condensing Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator

- Freezers* Remote Vertical Open ≥ 32 VOP.RC.M
< 32 VOP.RC.L
Semivertical Open ≥ 32 SVO.RC.M
< 32 SVO.RC.L Horizontal Open ≥ 32 HZO.RC.M
< 32 HZO.RC.L Vertical Closed Transparent ≥ 32 VCT.RC.M
< 32 VCT.RC.L Horizontal Closed Transparent ≥ 32 HCT.RC.M
< 32 HCT.RC.L
Vertical Closed Solid ≥ 32 VCS.RC.M
< 32 VCS.RC.L
Horizontal Closed Solid ≥ 32 HCS.RC.M
< 32 HCS.RC.L
Service Over Counter ≥ 32 SOC.RC.M
< 32 SOC.RC.L
Self

- Contained Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator

- Freezers* without
Doors Self

- Contained Vertical Open ≥ 32 VOP.SC.M
< 32 VOP.SC.L Semivertical Open ≥ 32 SVO.SC.M
< 32 SVO.SC.L Horizontal Open ≥ 32 HZO.SC.M
< 32 HZO.SC.L
Commercial Ice

- Cream Freezers Remote Vertical Open ≤

- 5 VOP.RC.I Semivertical Open SVO.RC.I Horizontal Open HZO.RC.I Vertical Closed Transparent VCT.RC.I Horizontal Closed Transparent HCT.RC.I
Vertical Closed Solid VCS.RC.I
Horizontal Closed Solid HCS.RC.I
Service Over Counter SOC.RC.I
Self

- Contained Vertical Open VOP.SC.I Semivertical Open SVO.SC.I Horizontal Open HZO.SC.I Vertical Closed Transparent VCT.SC.I Horizontal Closed Transparent HCT.SC.I
Vertical Closed Solid VCS.SC.I
Horizontal Closed Solid HCS.SC.I
Service Over Counter SOC.SC.I * While DOE did not establish separate equipment classes for refrigerator

- freezers in the 2009 final rule, DOE did provide a methodology for applying standards to commercial refrigerator

- freezers in the rule. Please see 10 CFR 431.66.2

- 14 Table 2.2

. 2 Proposed Classes for Commercial Refrigeration Equipment for which Standards Were Prescribed by EPCA

Equipment Category Condensing
Unit Configuration Equipment Family Operating Temperature
°F Equipment
Class Designation Commercial Refrigerators, Commercial Freezers, and Commercial Refrigerator

Freezers With Doors Self

- Contained Vertical Closed Transparent ≥ 32 VCT.SC.M
< 32 VCT.SC.L Horizontal Closed Transparent ≥ 32 HCT.SC.M
< 32 HCT.SC.L
Vertical Closed Solid ≥ 32 VCS.SC.M
< 32 VCS.SC.L
Horizontal Closed Solid ≥ 32 HCS.SC.M
< 32 HCS.SC.L
Service Over Counter ≥ 32 SOC.SC.M
< 32 SOC.SC.L Commercial Refrigerators with Transparent Doors for Pull

Down Temperature Applications Self

- Contained Pull

- Down ≥ 32 PD.SC.M

DOE plans to use the above classes, as listed in Table 2.2

. 1 and Table 2.2

. 2 , as the basis for equipment analysis in this rulemaking. DOE received input from interested parties on the component definitions and equipment classes that DOE included in the framework document, as
discussed below.

2.2.1.1 Blast Chillers

Traulsen suggested during the public meeting that DOE should ensure that pull

- down equipmen t is defined in a manner such that the standards for such equipment do not inadvertently apply to blast chillers designed to pull hot foods down to safe storage temperatures. (Traulsen, No. 1.2.006 at p. 80) California Codes and Standards added that Califo rnia exemptions for blast chillers are based on the British thermal unit (Btu) rating of the coil per square foot of space. (California Codes and Standards, No. 1.2.006 at p. 85)

EPCA states that “The term ‘pull

- down temperature application’ means a comm ercial refrigerator with doors that, when fully loaded with 12 ounce beverage cans at 90 degrees F, can cool those beverages to an average stable temperature of 38 degrees F in 12 hours or less.” (42 U.S.C. 6311(9)(D)) This definition constrains the scope of standards for pull

- down equipment to be applicable only to this specific application, the cooling of canned beverages to 38 °F. These types of equipment are often referred to in the industry as “beverage merchandisers.” Due to its specificity, the statu tory definition precludes coverage of blast chillers by standards set for pull

down temperature applications. While DOE has the authority to set standards for other types of commercial refrigeration equipment (42 U.S.C. 6313(c)(4)(B)), it is not currently considering standards for equipment other than that for which EPCA prescribed standards or for which DOE prescribed standards in the January 2009 rule

.2

- 15 2.2.1.2 Hybrid Doors

Zero Zone commented at the public meeting that ASHRAE is developing a test standard
for hybrid doors, where any door that is more than 50 percent glass (by surface area) will be considered transparent. (Zero Zone, No. 1.2.006 at p.50) ACEEE responded that perhaps the ASHRAE group addressing this topic could consider an area

- weighted thermal conductivity value based on the solid and transparent door areas. (ACEEE, No. 1.2.006 at p. 55)

DOE is aware that ASHRAE is currently working on a standardized definition and categorization for hybrid doors. DOE understands that the proposed ASHRAE categ orization defines a glass door as a door with greater than or equal to 50 percent glass area and would be the cutoff for whether a door is treated as transparent or solid. DOE will consider adopt ing the proposed categorization of transparent or solid door as this rulemaking proceeds and welcomes further comment from interested parties regarding this topic.

2.2.1.3 New Equipment Classes

Numerous comments were received regarding the topic of potential new equipment classes. True stated that wine coolers operate at two storage temperatures, both of which are higher than food safety temperatures. (True, No. 1.2.006 at p.82) ACEEE suggested t hat it would agree with the idea of classifying equipment such as candy and floral cases separately because it would be inappropriate to test them at food safety temperatures (ACEEE, No. 1.2.006 at pp.81

− 82) Structural Concepts commented on a unit it manuf actures, a semi

- open case with sliding glass doors, for which it believes a clear classification category does not exist. (Structural Concepts, No. 1.2.006 at pp. 83

− 84) Structural Concepts also recommended that DOE create an SOC.SC.M equipment class (Stru ctural Concepts, No. 1.2.006 at p. 90), and AHRI agreed, adding that DOE should establish an SOC.SC.L class as well. (AHRI, No. 1.3.008 at p. 3) The Northwest Joint Comment added that there will likely be new equipment classes established in
this rulemakin g and stated that DOE should not exclude from the market and technology assessment manufacturers that produce equipment that does not fit into any of the current classes. ( Northwest Joint Comment , No. 1.3.003 at pp. 3

− 4)

DOE understands that commercial refrigeration equipment spans a wide variety of equipment types, and that some equipment may not be easily categorized. However, DOE also believes that all of the equipment currently available on the market fit s within the e xisting equipment families and classes presented in the framework document, or combinations thereof. DOE needs additional information to ascertain the product class of the specific equipment brought up by Structural Concepts. During this rulemaking, DOE wi ll continue to assess the equipment classes, and, should certain equipment not fit with the existing classification methodology, DOE will examine the treatment of such equipment at that time

.

Wine, c andy

, and floral cases, while operating at higher tempe ratures than those recommended for safe food storage , are not inherently unique equipment types ; rather, in most

cases they are traditional units that operate at a higher temperature compared to units intended for food storage and retailing. In the 2009 ru lemaking ANOPR, DOE addressed the issue of higher

- temperature units such as wine coolers and determin ed that they did not warrant a2

- 16 separate equipment class or rating temperature because they comprised a small share of the
market

. 72 FR 41162 (July 26

, 200 7)

. At that time, DOE stated that manufacturers of such equipment could seek waivers from the test procedure if the equipment could not be tested at one of the designated rating temperatures. 72 FR 41169 (July 26, 2007)

.

The issue of equipment that oper ates at higher product temperatures is being addressed further in the concurrent test procedure rulemaking (Docket N o. EERE

- 2010

- BT

- TP

- 0034). The CRE test procedure NOPR, published November 24, 2010, propose d that commercial refrigerators that cannot operate at the prescribed 38 °F integrated average product temperature
would be rated at the “lowest application product temperature.” The lowest application product temperature would be defined as the lowest temperature setting that can be maintai ned for the duration of the test. In this case, the integrated average product temperature achieved during the test should be recorded. Equipment tested at the lowest application product temperature will still be required to comply with the standard for it s respective equipment class. 75 FR 71596, 71605 (Nov

. 24, 2010)

.

2.2.1.4 Under

- Counter Equipment

Several interested parties provided comments on small under

- counter units. Traulsen stated that DOE should give close scrutiny to small under

- counter units going f orward, as there may have been assumptions made as part of the EPACT 2005 standard that may need to be re

examined. (Traulsen, No. 1.2.006 at pp. 56

− 57) Zero Zone, however, stated that small under

counter equipment was originally considered in the Californ ia Energy Commission (CEC) standards and that there is little reason why this equipment should not be able to comply with the EPACT 2005 standards. (Zero Zone, No. 1.2.006 at p. 54) True countered that, during the development of the EPACT 2005 standards, t he data on small under

- counter units were sparse. (True, No. 1.2.006 at p. 58) Hoshizaki added in its written comment that DOE should review
standards for under

- counter single freezers and dual

- temperature reach

- ins that are unable to
meet the current stan dards, and that standards should be expanded to allow for realistic energy consumption levels for these units. (Hoshizaki, No. 1.3.006 at p. 1)

In response to these interested parties’ concerns, DOE notes that

, a s part of the analyses
for the 2009 final rule, DOE developed a set of “offset factors” to adjust for end effects that may have a disproportionate effect on smaller equipment. DOE plans to review the 2009 offset
factors

, as well as the factors currently included in the EPACT 2005 standard equatio ns , and to update them, if necessary, in light of the results of the ongoing analyses . However, DOE notes
that under

- counter units do not constitute a separate equipment class at this time and instead fall into the appropriate equipment classes for self

- co ntained equipment with doors. This would
include the under

- counter single freezers and dual

- temperature reach

- ins mentioned by Hoshizaki. Regarding the comments by Traulsen, True, and Hoshizaki concerning EPACT 2005 standards, these standards were set via legislative action, and DOE is prohibited from establishing a standard that allows for a decrease in energy efficiency or an increase in energy

use . (42 U.S.C. 6295(o)(1); 6316(e)(1)(A))2

- 17 2.2.1.5 Service Over Counter Equipment

Several interested parties commented on issues specific to service over counter equipment, specifically

, self

- contained service over counter equipment operating at medium temperature (SOC.SC.M equipment class). In reference to this equipment, True stated that the compliance issue previously raised by some manufacturers about these units was because many have front panels that flip up for cleaning purposes to meet NSF requirements. True also stated that some older units with fixed fronts can meet the EPACT 2005 standard. (True, No. 1.2.006 at pp. 54

− 55 ) AHRI added that it has proposed a legislative solution to the service over counter issue as part of a current energy bill and that it would be recommending a separate class for service over counter units going forward. (AHRI, No. 1.2.006 at p. 5 6)

Standards prescribed in EPCA, as amended by EPACT 2005, for self

- contained refrigerators and freezers with doors are based on the CEC Appliance Efficiency Regulations published in April 2005. (CEC

- 400

- 2005

- 012, section 1605.3) The CEC regulations set
standards for “reach

- in cabinets, pass

- through cabinets, and roll

- in or roll

- through cabinets.” However, EPCA does not outline suc h equipment subsets beyond defining the terms “commercial refrigerator, freezer, and refrigerator

- freezer” and “self

- contained condensing unit

, ” among other definitions related to this equipment. These EPCA definitions resulted in the application of these standards to all self

- contained refrigerators, freezers, and refrigerator

freezers, including SOC.SC.M.

In December 2009, DOE’s Office of Hearings and Appeals (OHA) responded to an application for exception relief from a manufacturer of service over coun ter equipment. This
manufacturer argued that it was entitled to relief because its service over counter units could not
meet the EPACT 2005 standards for self

- contained equipment with doors. OHA responded that DOE did not have jurisdiction to consider such exceptions for equipment covered by the statutorily

- mandated standards. (Case no. TEE

- 0066, Dec

. 29, 2009)

In response to the concerns manufacturers expressed in comments at the framework public meeting and in written comments, DOE compar ed the standard s set for service over
counter units in the 2009 final rule with the EPACT 2005 standards for self

- contained commercial refrigerators with transparent doors, which include self

- contained service over
counter units. While DOE did not examine SOC.SC.M units in the 2009 final rule

, it did develop a set of extension multipliers that allowed standard levels developed directly in the engineering analysis to be extended to secondary classes with similar features. (For a full discussion of the extension multiplier approach, please see chapter 5 of the 2009 final rule TSD.) These multipliers included a multiplier of 1.40 between remote condensing and self

- contained equipment with doors, which would allow the 2009 final rule standard for SOC.RC.M equipment
to be exten ded to the SOC.SC.M equipment class for purposes of comparison. To compare the various standard levels for SOC equipment, DOE plotted the EPACT 2005 standard for self

contained medium temperature equipment with doors, the 2009 SOC.RC.M final rule standard level, and a theoretical level for SOC.SC.M based upon extension of the 2009 final rule SOC.RC.M level using the remote condensing to self

- contained extension multiplier. Figure
2.2.1 shows a plot of the three data sets.2

- 18 Figure 2.2

. 1 Comparison of Standard Levels for SOC.SC.M Equipment

The 2009 DOE standards for SOC.RC.M were expressed in terms of the total display area (TDA) of the unit. Because the EPACT 2005 standard is expressed in terms of volume of the refrigerator, DOE converted the volume to TDA using the ratio of the values of T DA and refrigerated volume of the representative SOC.RC.M unit analyzed directly in the 2009 final rule. The dotted line represents the total daily energy consumption (TDEC), in terms of TDA, allowed by the EPCA standard for self

- contained commercial refri gerators with transparent
doors. The dashed line in Figure 2.2.1 shows the maximum allowed TDEC for SOC.RC.M units. Finally, the solid line represents a hypothetical SOC.SC.M level developed by applying the remote condensing to self

- contained multiplier of 1.40 to the 2009 SOC.RC.M standard level. Figure 2.2

. 1 shows that SOC.SC.M standards prescribed by EPCA allow for much less TDEC than the SOC.RC.M standards prescribed by 2009 DOE final rule. This is in contrast to the general findings of the 2009 final rule analyses that, within an equipment family ( e.g. , SO C, VOP, HZO), remote condensing equipment consumes less energy than similarly sized self

contained equipment.

DOE understands the concerns of the interested parties regarding SOC.SC.M equipment standards. However, DOE cannot , without explicit statutory authority, exempt equipment from the standards prescribed by Congress . Should any applicable legislative actions occur during the course of this rulemaking, DOE will respond to those changes accordingly. During the preliminary analysis for this rulemaking, DOE found that the EPACT 2005 standards for 0 5 10 15 20 25 30 35 40 45 50 55

20 30 40 50 60 70Total Daily Energy Consumption(kWh/Day)

TDA (ft 2 ) 2009 Final Rule SOC.RC.M Standard
EPACT 2005 Standard

2009 RC to SC Using Ext. Mult.2

- 19 SOC.SC.M cannot be achieved at even the max

- tech level in the engineering analysis. Therefore, DOE excluded SOC.SC.M equipment from further analysis as part of this rulemaking to date

.

2.2.1.6 Open Versus Closed Displa y Cases

Numerous interested parties presented opinions regarding open display cases during the Framework public meeting and comment period. California Codes and Standards mentioned that open freezers generally consume up to four times as much energy as c omparable cases with doors. (California Codes and Standards, No. 1.3.005 at p. 5) California Codes and Standards also stated that, while energy usage of medium

- temperature open cases is less than that of low

temperature open cases, there are roughly 40 tim es as many of them and that, as a result, setting a standard for open medium

- temperature cases equal to that of vertical closed transparent (VCT)
medium

- temperature cases could result in a large energy savings. The comment recommended
that DOE review the A SHRAE and SuperValu studies regarding open medium

- temperature cases and then consider eliminating all open cases, regardless of temperature. (California Codes and Standards, No. 1.3.005 at p. 6) Similarly, the Appliance Standards Awareness Project (ASAP) c ommented that open cases make up almost 50 percent of display cases, according to an ASHRAE study, and consume approximately 1.2 times as much energy as doored cases. ASAP
believes that these data point to a large energy savings potential for this class of equipment

. (ASAP, No. 1.3.010 at p. 2) Zero Zone stated that open cases use two to three times as much energy as doored cases. (Zero Zone, No. 1.2.006 at p. 36)

Regarding the treatment of open display cases under this rulemaking, California Codes
and S tandards suggested that DOE consider merging equipment classes for open and closed low temperature vertical cases, or at least setting the same energy targets for the two classes. (California Codes and Standards, No. 1.2.006 at p. 16) ASAP stated that they believe DOE is not required to maintain separate product classes for equipment with and without doors, and that eliminating this separation would create significant energy savings. ASAP urged DOE to consolidate this equipment into a single class. (ASAP, N o. 1.3.010 at p. 1) Additionally, Earthjustice and NRDC commented that the failure of Congress to codify standards for open equipment in EPACT 2005 did not imply an intent for such equipment to be subject to weaker standards. Instead, EPACT 2005 simply lis ted the equipment for which DOE must develop standards. (Earthjustice, No. 1.3.004 at pp. 3

− 4) Earthjustice and NRDC added that the EPACT 2005 standards were a codified version of a consensus agreement and thus cannot be used to infer any intent of Congres s. They also stated that EPCA does not make any statements obligating DOE to maintain statutorily created equipment classes. (Earthjustice, No. 1.3.004 at p. 4) California Codes and Standards stated that multi

- zone heating and cooling systems could

serve a s an example of a product that has been phased out due to low efficiency and questioned whether DOE should do the same with open low

- temperature vertical display cases. (California Codes and Standards, No. 1.2.006 at p. 31) ACEEE added that, in the context of this discussion, a precedent for phasing out a product class exists in the form of the expiration of the through

- the

wall class for central air

- conditioners. (ACEEE, No. 1.2.006 at p. 34) California Codes and Standards suggest ed that DOE (1) conduct an end

- user survey regarding the utility of freezers with and without class doors; (2) identify the sales volumes of vertical open low

- temperature and ice cream cases; and (3) evaluate and publish the nationwide energy impact of a regulation that
would set e qual standards for open freezers and freezers with doors. (California Codes and Standards, No. 1.3.005 at p. 8)2

- 20 Earthjustice and NRDC presented a legal argument regarding their position on open cases. Earthjustice and NRDC stated that EPCA only mandates multiple product classes when the failure to do so would eliminate truly unique product attributes from the market. Moreover, these interested parties stated that the consumers of this equipment are retailers, to whom impact would be judged based on any c hange in sales, and that, unless the presence of doors on a display case results in a drop in sales, there is no loss of features if a standard level were sufficiently stringent to be met only by equipment with doors. (Earthjustice, No. 1.3.004 at p. 2) Th ese interested parties asserted that even if open access to displayed goods is a unique feature, EPCA does not require a separate class for equipment without doors. Moreover, they argue d that if accessing the refrigerated space directly is a feature, then accessing it via opening a door is a feature that is “substantially the same,” and therefore they could be grouped together under a single standard. (Earthjustice, No. 1.3.004 at pp. 2

− 3) The interested parties asserted that the “substantially the same” cl ause in EPCA shows that Congress did not intend for the unavailability of any single feature to serve as a barrier to the imposition of standards. Instead, they argue d that EPCA only bars standards that would have a substantial impact on utility. (Earthjus tice, No. 1.3.004 at p. 3) They cited DOE’s commercial clothes washer rulemaking, in
which they assert ed that DOE declined to establish a separate class for top

- loading washers due to utility differences, as a precedent for the combination of equipment wit h similar utility and features. (Earthjustice, No. 1.3.004 at p. 3)

This subject was reviewed at the NOPR stage of the 2009 rulemaking, when Southern California Edison asked that DOE consider doors as a design option for open cases. 73 FR 50088 (Aug. 25, 2008) . This comment is substantively the same as comments referenced above , as it would effectively consolidate the two case types into a single class. In the 2009 rulemaking, while DOE did acknowledge that substantial energy savings could be realized by the implicit elimination of open cases, DOE determined that it was explicitly precluded by EPCA from taking such action. EPCA states that:

The Secretary may not prescribe an amended or new standard under this section if the Secretary finds (and publis hes such finding) that interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that 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))

DOE is also required to prescribe di fferent standards for product classes that have a capacity or other performance

- related feature that justifies the establishment of a different
standard

. In making a determination whether the feature justifies a different standard, DOE is required to consi der such factors as the utility to the consumer. ( 42 U.S.C. 6295(q) )

In the 2009 rulemaking NOPR, DOE stated that 42 U.S.C. 6294(o)(4) required DOE to retain separate classes for open and closed cases, stating that consolidation of the two would2

- 21 “resul t in the unavailability” of features uniquely offered by open cases. 73 FR 50089 (Aug

. 25, 2008) . Moreover, DOE noted that EPCA prescribes energy conservation standards for self

contained equipment with doors, and mandates that DOE develop standards for se lf

- contained equipment without doors. Id .; 42 U.S.C. 6313(c)(2)

– (4)

. As a result, DOE treated open cases and
cases with door s as separate categories of equipment in the 2009 final rule. DOE also believes that 42 U.S.C. 6295(p) and 42 U.S.C. 6316(e)(1) requ ire DOE to establish separate product classes and consider different standards for those classes because of the distinct utility offered by open cases, as discussed below. As a result, DOE is considering separate product classes for open cases and cases wi th doors in this preliminary analysis

.

Numerous parties commented regarding the utility aspect of open cases, specifically with regard to sales. Earthjustice suggested that data should be gathered from the retail market regarding the utility impacts o n end

- users of the presence of doors on cases. (Earthjustice, No. 1.2.006 at p. 35) Zero Zone responded that ASHRAE Research Project 1402 could show that there is no productivity drop between open and doored vertical cases. (Zero Zone, No. 1.2.006 at p. 36 ) ASAP also cited this study, stating that ASHRAE Research Project 1402 found qualitative improvements in customer impressions of supermarket environments due to the installation of
cases with doors . If the installation of doored cases does not hinder sale s, ASAP stated, then there would be no distinct “feature” of open cases justifying a separate equipment class. ASAP also added that the study indicates that cases with doors reduce variations in temperature, possibly reducing some food safety issues. (ASAP , No. 1.3.10 at p. 1) NEEA agreed with ASAP and Zero Zone, citing ASHRAE 1402 and a Swedish case study suggesting that cases with doors provide an equal or improved set of customer attributes. Earthjustice and NRDC also agreed, referencing ASHRAE 1402 and the Swedish study. (Earthjustice, No. 1.3.004 at p. 2) True, however, cautioned that the ASHRAE research regarding utility was incomplete and that it was not possible to definitively state the impact of doors on productivity. (True, No. 1.2.006 at p. 37)

In further discussion on open case utility, California Codes and Standards stated that the primary utility of an open case is that the customer does not have to prop a door open, and that open cases do not have reflections when viewed obliquely. However, California Codes and Standards also stated that open freezer cases have negative attributes, including the release of
low

- temperature air into the surroundings, the buildup of frost on product, and less stable operating temperatures

, which results in free ze/thaw cycles and lower product quality. (California Codes and Standards, No. 1.3.005 at pp. 5

− 6) California Codes and Standards also requested that DOE make a determination regarding the utility screening criterion . In its view, this screening criterion would preserve inefficient equipment classes , which California Codes
and Standards wants eliminated . (California Codes and Standards, No. 1.3.005 at p. 8) Earthjustice and NRDC also commented that DOE’s inclusion of strip curtains in the framework document serves as an admission that such barriers to access to goods have no adverse impact on utility because strip curtains , like doors, require action by the shopper in order to access the product.

In response to the interested par ty input regarding the utility of open cases, DOE reviewed the ASHRAE 1402 study after it was published. 1 While the study shows no difference in sales between open and closed cases , the data were collected only within the context of one specific controlled scenario . As a result, DOE does not believe that the data presented by this2

- 22 study demonstrate that open cases do not provide a distinct utility . While one equipment type may exhibit enhanced performance under a given set of conditions or in terms of a spe cific metric, such as sales volume, that fact does not address the restriction DOE faces with respect to setting standards that may result in the unavailability of distinct features or characteristics. Open cases provide unique features both to customers o f grocery stores, in the form of unobstructed
view of and access to product, and to stores themselves, in the form of simplified stocking, cleaning, and maintenance of cases. By definition, the two case types have markedly different performance characteris tics. With respect to Earthjustice and NRDC’s assertion that the impact of standards would be judged based of the effect on sales, DOE notes that it considers sales impacts as evidence of one form of customer utility

. DOE also considers the other forms of

customer utilit y referenced above

. While setting standards that, in essence, require closable doors
on all cases would increase the level of energy efficiency of this equipment

, it would decrease the utility derived from the other features.

W ith respect to the comment on the utility screening criterion, DOE eliminates technologies that have an adverse impact on equipment utility or availability from further consideration in its analyses

. DOE believes that this criterion of its screening analysis is consistent with the EPCA provisions cited above regarding the creation of separate product classes and energy conservation standards based on capacity or other performance

- related features and the prohibition on eliminat ing generally available performance characteristics. T he requirement that standards do not result in the unavailability of performance characteristic s and features does not speak to the efficiency of a type of equipment, only to the continued availability of existing “performance characteris tics, features, sizes, capacities and volumes.” Therefore, the evaluation of this criterion takes place independently of the evaluation of other effects, such as those on energy use

.

In response to the comment by Earthjustice and NRDC about strip curtai ns, DOE did list strip curtains in the framework document as a technology for discussion and evaluation. DOE has learned that strip curtains are not a manufacturer

- installed technology in this equipment but an aftermarket accessory that owners may choose t o install. Thus, since they are not applicable at the point of manufacture, DOE does not intend to further consider strip curtains in this rulemaking.

In summary, DOE understands that the issue of open versus closed display cases is of
interest to a num ber of interested parties in this rulemaking. DOE determined in the previous rulemaking that open cases present distinct, unique features to the consumer and end

- user, and that DOE is prevented from setting standards that would make those features unavaila ble. As a result, DOE plans to evaluate energy consumption of both open and closed cases. The energy consumption of individual units at the baseline and at increased levels of performance will be analyzed and modeled as part of the engineering analysis, an d the overall energy consumption and energy savings potential of this equipment will be studied as part of the energy use analysis

. DOE welcomes additional data and information on this issue and will consider such information in developing the standards le vels for the NOPR

.2

- 23 2.2.2 Technology Assessment

As part of the market and technology assessment, DOE developed a list of technologies to consider for improving the efficiency of commercial refrigeration equipment. Chapter 3 of the preliminary TSD includes the detailed list of all technology options DOE identified for further consideration in this rulemaking.

During the Framework public meeting, DOE requested comment regarding the technology options that it had listed in the framework document. California Codes and Standards supported evaluating all of these options (California Codes and Standards, No. 1.3.005 at p. 7), while the Northwest Joint Comment stated that DOE should not screen out any technologies based on the inability of the test procedure to q uantify their effects, but should instead modify the test procedure. ( Northwest Joint Comment , No. 1.3.003 at p. 4) The Northwest Joint Comment also added that the list of technology options is likely to grow once the equipment
classes have been finalized. ( Northwest Joint Comment , No. 1.3.003 at p. 4)

Throughout this rulemaking and the related test procedure rulemaking, DOE will investigate new technologies that may apply to this equipment and, should they prove to be relevant, include them within the s cope of its analysis.

As noted above, DOE is considering modifications to the test procedure to accommodate
additional technologies and has propos ed provisions to quantify the performance of those options. 75 FR 71596 ( Nov. 24, 2010)

. Specific proposed changes include provisions for measuring the energy impacts of lighting occupancy sensors and controls, and night curtains. Other technologies, such as higher efficiency expansion valves, condenser fan motor controllers,
and anti

- sweat heater controllers, are technologies that reduce energy consumption at part

- load conditions. DOE believes that explicit testing for these energy efficiency technologies that reduce energy consumption at part

- load is not justified at this time because it would significantly
in crease the testing burden. The energy savings and cost effectiveness of these technologies will also vary considerably based on climate zone and application. While the increased cost of independent testing of part

- load technologies is not justified, DOE believes that the energy saving potential of these technologies is already captured to some degree in the current test procedure. For more discussion on the tre atment of energy efficiency technologies in the test procedure, please refer to the CRE test procedure rulemaking documents , available at http:/ /www2.eere.energy.gov/buildings/appliance_standards/commercial/refrigeration_equipmen
t.html

.

Interested parties also provided comment regarding the general applicability and impacts of considering certain technology options. ACEEE believe d it was inappr opriate to screen out technologies that are commercially available globally, even if they are not in common usage in the United States. (ACEEE, No. 1.2.006 at p. 104) Structural Concepts stated that some of the technology options presented as applicable to all equipment would only show a reasonable return on investment in remote condensing equipment . It urged DOE to consider cost

- to

- benefit ratios for these technologies. (Structural Concepts, No. 1.2.006 at p. 96) Southern Store Fixtures added that testing methods should be developed and performed prior to the development of standards to quantify the actual energy savings potential of various technologies. (Southern Store Fixtures,2

- 24 No. 1.2.006 at pp. 98

− 99) Southern Store Fixtures also stated that many of th e technology options were dependent on changes in ambient conditions to be effective and that these technologies would be more applicable to remote condensing units than self

- contained units. (Southern Store Fixtures, No. 1.2.006 at p. 97) Similarly, Zero Zone expressed concern that DOE may not take into consideration the adverse impacts of low

- energy technologies, such as low

energy doors that may sweat under conditions different from the test conditions. Zero Zone
added that demand defrost also has risks and that DOE must focus on the primary and secondary functions of design features. (Zero Zone, No. 1.3.007 at pp. 1

− 2)

In response to the above interested party comments, DOE intends to consider technologies that are commercially available or available as working prototypes for use in commercial refrigeration equipment and that meet the four screening criteria. Test methods will be reviewed and potentially amended as necessary as part of the simultaneously ongoing DOE rulemaking on commercia l refrigeration equipment test procedures, and modeling of unit performance will be conducted in accordance with the provisions of the test procedure (Docket
No. EERE

- 2010

- BT

- TP

- 0034). Ambient conditions for testing and performance analysis will
also be ad dressed within the test procedure rulemaking, and DOE welcomes comment on these subjects as inputs to that process. Regarding differentiation in the performance of some technologies between remote condensing and self

- contained units, the existing equipment class structure provides for separate classes for each type at each operating temperature and within each family. During its analysis, DOE intends to model and analyze equipment by class ; thus

, any differences in the performance of a given technology betw een remote condensing and self

contained equipment will be quantified in these analyses to the extent possible. Finally, in response to the concern expressed by Zero Zone, DOE plans to gather data from manufacturers regarding the details of implementing sp ecific technologies, and will use this data to guide its analysis

.

Interested parties also commented on aspects of specific technologies. ACEEE stated that in previous rulemakings DOE had screened out modulating compressors that only show their
benefit s at part

- load, and requested that DOE consider them for this rulemaking. (ACEEE, No. 1.2.006 at pp. 95

− 96) It added that any oversized refrigeration system would benefit from modulating compressor and fan capabilities and that it would be illogical for DO E not to consider them. (ACEEE, No. 1.2.006 at p. 102) California Codes and Standards also suggested that DOE consider variable speed cycling controls for evaporator fan motors, especially in conjunction with electronically commutated motors (ECMs). (Calif ornia Codes and Standards, No. 1.2.006 at pp. 99

− 100) Additionally, California Codes and Standards commented that light

emitting diode (LED) lighting technologies and lighting controls should be implemented to substantially reduce case energy consumption. (California Codes and Standards, No. 1.2.006 at p. 15) It also added that motion controls or occupancy sensors should be included in the list of technology options. (California Codes and Standards, No. 1.2.006 at p. 99) Southern Store
Fixtures mentioned fl oating head pressure control as a possible option, stating that it has been in use for 25 to 30 years and is well understood. (Southern Store Fixtures, No. 1.2.006 at pp.

134

− 135) NRDC added that it agreed with DOE’s inclusion of anti

- fog films for doors i n its framework document, stating that reducing or eliminating the need for anti

- sweat heaters will significantly improve the efficiency of the system. (NRDC, No. 1.3.012 at p. 5)2

- 25 Modulating compressors and variable

- speed motors allow for a unit to adap t its performance to variable ambient conditions, thereby potentially reducing the annual energy consumption of commercial refrigeration equipment. Similarly, floating head pressure allows condenser performance to adapt to changes in ambient conditions. It is DOE’s understanding that, although ASHRAE Standard 72

- 2005 is a steady

- state test, some variation in refrigeration load is experienced in display cases with doors as part of the door opening requirement included in that test. When the doors are opened, the refrigeration load increases because warm ambient air has entered the case. If the equipment being tested has more efficient operation at variable refrigeration load, the case will use less energy overall. In this way, the effects of variable or part

- load features are already captured to some degree in the current test procedure for commercial refrigeration equipment with doors. Similarly, if the test procedure is altered to capture decreased energy consumption as a result of night curtain use, the eff icacy of many part

load technologies in open cases will also be captured. In response to the suggestions by California Codes and Standards, LED lighting and motion control s are being considered by DOE in its analysis for classes to which these technologies are applicable.

California Codes and Standards provided specific comment regarding the use of liquid suction heat exchangers, urging DOE to consider them as a technology option in this rulemaking. (California Codes and Standards, No. 1.2.006 at p. 15) Later, California Codes and Standards added that these devices are applicable to remote rack systems as well as self

- contained units. (California Codes and Standards, No. 1.2.006 at p. 100) The Northwest Joint Comment provided a similar statement. ( Northwe st Joint Comment , No. 1.3.004 at p. 4) In its written comment, California Codes and Standards provided more specificity, stating that liquid

- suction heat exchangers (LSHXs) are well

- suited to remote commercial refrigeration equipment, but that requirements would likely be better addressed within a building code. As a result, California Codes and Standards requested that DOE determine if an energy code requirement on LSHXs for remote equipment would be preempted by this standard. (California Codes and Standa rds, No. 1.3.005 at p. 7) DOE had included liquid suction heat exchangers in the list of technologies presented in the framework document, and will address the issue of LSHXs as a technology option in the market and technology assessment and screening anal ysis.

2.3 SCREENING ANALYSIS

The purpose of the screening analysis is to evaluate the technologies identified in the technology assessment to determine which options to consider further in the engineering analysis. As stated above, DOE considers those technologies for which energy impacts can be measured using the DOE test procedure, and DOE proposed test procedure amendments to measure the impacts of additional technologies in a separate rulemaking . DOE also remove s technologies that do not change or a ffect the energy efficiency of commercial refrigeration equipment. In the screening analysis , DOE then examines whether the remaining technologies (1) are technologically feasible; (2) are practicable to manufacture, install, and service; (3) have
an adver se impact on product utility or availability; and (4) have adverse impacts on health and safety. DOE reviewed the list of technologies according to these criteria in consultation with industry, technical experts, and other interested parties. In the engine ering analysis, DOE further considers the energy

- saving technologies that it did not eliminate in the screening analysis. Chapter 4 of the preliminary TSD, the screening analysis, contains details about DOE’s screening criteria.2

- 26 Zero Zone stated that, a s part of the screening analysis, the reliability of a given technology being considered should be another criterion that must be met. (Zero Zone, No. 1.2.006 at p. 105) During the screening analysis, the Department consider s four factors when considering technologies as part of the standards setting process. DOE must determine whether to eliminate from consideration any technology that presents unacceptable problems with respect to (1) technological feasibility; (2) practicability to manufacture, install, and service; (3) impacts on equipment utility or equipment availability; and (4) adverse impacts on health or safety. While reliability is not specifically mentioned as one of these factors, it is likely that a technology that reduces the reliability of a piece of equipment would present a problem with respect to practicability to install and service, or would result in an impact on equipment utility. As a result, DOE believes that the concern expressed by Zero Zone is already adequately captured within the four existing screening criteria. In addition, in considering standards for commercial equipment, DOE is prohibited from establishing a standard that is likely to result in the unavailability in the United States in any covered product type of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. ( 42 U.S.C. 6295(o)(4); 42 U.S.C. 6313(e)(1) )

2.4 ENGINEERING ANALYSIS

The engineering analysi s (chapter 5 of the preliminary TSD) establishes the relationship between the manufacturer production cost (MPC) and the efficiency for each piece of commercial refrigeration equipment. This relationship serves as the basis for cost

- benefit
calculations in terms of individual customers, manufacturers, and the nation. Chapter 5 discusses the equipment classes analyzed, representative baseline units, incremental efficiency levels, methodology used to develop manufacturing production costs, cost

- efficiency cur ves, impact of efficiency improvements on the equipment, and methodology used to extend the analysis to low

shipment

- volume equipment classes.

In the engineering analysis, DOE evaluates a range of equipment efficiency levels and associated manufacturing costs. The purpose of the analysis is to estimate the incremental manufacturer selling prices (MSPs) that would result from increasing efficiency levels above the baseline model in each equipment class. The engineering analysis considers technologies not

e liminated in the screening analysis. The life

- cycle cost ( LCC ) analysis uses the cost

- efficiency relationships developed in the engineering analysis.

DOE typically structures its engineering analysis around one of three methodologies: (1) the design

- opti on approach, which calculates the incremental costs of adding specific design options to a baseline model; (2) the efficiency

- level approach, which calculates the relative costs of achieving increases in energy efficiency levels without regard to design op tions used to achieve such increases; and/or (3) the reverse

- engineering or cost

- assessment approach, which
involves a “bottom

- up” manufacturing cost assessment based on a detailed bill of materials
derived from tear

- downs of the equipment being analyzed.

In the framework document, DOE stated its intention to use a design

- option approach for the engineering analysis

, as it was the methodology employed in the 2009 final rule analyses and was found to be the approach most appropriate for the equipment and te chnologies on the market2

- 27 because this equipment is designed and marketed based on the inclusion of specific features and components, rather than being sold as possessing a certain, standardized efficiency rating . In a design

- option approach, analysis is pe rformed in terms of incremental increases in efficiency due to the implementation of selected design options. For each equipment class, the engineering analysis estimates MPCs for each successive design option. Hence, in the framework document, DOE request ed industry cost data and shipment data.

2.4.1 Analysis Approach

2.4.1.1 Verification with Test Data

Structural Concepts suggested that, because this rulemaking will take place before the effective date of the existing standards, DOE should collect empirical test data on this equipment to validate calculations used in the analyses. (Structural Concepts, No. 1.2.006 at p. 205) During the analyses for this rulemaking, DOE intends to validate its analytical results by conduct ing independent testing of certain equipmen t p u r suant to the Department’s proposed test procedure for commercial refrigeration equipment. (See 75 FR 51596, Nov. 24, 2010 ). Additionally, DOE’s manufacturer impact analysis interviews will provide another means to validate DOE’s results and methodolog y, as well as an opportunity for manufacturers to provide feedback. DOE would also welcome any data from manufacturers from their own equipment testing programs and from other interested parties on this subject

.

2.4.1.2 Background Data

Southern Store Fixtures suggested that DOE contact end

- users regarding the impact of new technologies on the operation of their equipment. (Southern Store Fixtures, No. 1.2.006 at p. 76) Likewise, California Codes and Standards stated that an understanding of patterns of use of

c ommercial refrigeration equipment supported by a large sample of survey data will be essential in determining the cost effectiveness of many of the technologies available. (California Codes and Standards, No. 1.3.005 at pp. 1

− 2)

Most of the technology o ptions in this rulemaking are not expected to impact customer
choices

, other than the increased cost considerations. However, night curtains and occupancy sensors may be subject to customer preferences. DOE will survey customers and end

- users to understand their concerns and attempt to factor these concerns into the current rulemaking. DOE would welcome any information from manufacturers, end

- users, or other interested parties regarding patterns of use, impacts of specific new technologies on equipment oper ation, or other issues pertaining to the operation and use of commercial refrigeration equipment.

2.4.1.3 Performance Simulation

AHRI stated that the energy efficiency benefits of incorporating design options are not simply additive, and that assessment of combin ed benefits will require rigorous total

- system simulations. (AHRI, No. 1.3.008 at p. 4) As part of the engineering analysis for this rulemaking, DOE intends to model system performance using a full

- system heat transfer and energy consumption simulation sim ilar to that used in the 2009 rulemaking engineering analysis. The model calculates energy consumption in two major subsections (expressed as kilowatt

- hours per2

- 28 day): compressor energy consumption and component energy consumption. Component energy consumpt ion is the sum of electrical energy directly consumed by each fan motor, lamp, defrost and drain heater, anti

- sweat heater, and pan heater. Compressor energy consumption is calculated from the total heat load (expressed as Btu/h) and one of two compressor models: one version for remote condensing equipment, and one for self

- contained equipment. The total heat load is a sum of the component load and the non

- electric load. The component load is a sum of the heat emitted by evaporator fan motors, lighting, def rost heaters, drain heaters, and anti

- sweat heaters inside and adjacent to the refrigerated space (condenser fan motors and pan heaters are outside the refrigerated space and do not contribute to the component heat load). The non

electric load is the sum o f the heat contributed by radiation through glass and openings, heat conducted through walls and doors, and warm air infiltration through openings that must be removed from the case. The model will account, to the extent possible, for interactive effects
b etween system components.

2.4.1.4 Proprietary Designs

AHRI stated that proprietary designs should not be evaluated as part of this rulemaking. (AHRI, No. 1.3.008 at p. 4)

In past rulemakings, DOE has always considered proprietary designs only in cases where

t hey do not constitute the only possible path to a given level of equipment performance or efficiency. An example of this can be found in the 2009 final rule for refrigerated beverage vending machines, in which DOE did not screen out proprietary designs or technologies, but instead incorporated them into the analysis because it believed that alternate pathways existed to achieving the efficiency levels associated with those technologies. 74 FR 44925

, ( Aug

. 31,
2009 )

. Consistent with its practice in previous rulemakings, DOE intends to consider proprietary designs so long as they do not present the sole method for achieving a given level of performance.

2.4.1.5 Insulation Performance

NanoPore Insulation, LLC, a manufacturer of vacuum

- insulated panels for use in
ref rigerated cases

, stated that DOE should not assume that the energy performance of an appliance will remain constant over its entire lifetime, and that fiberglass

- based vacuum insulated panels can in fact lose much of their initial insulation capacity in a matter of a few months. (NanoPore, No. 1.3.011 at p. 1) NanoPore suggested that DOE revise the test protocol to include a lifetime performance test to evaluate the long

- term efficiency of commercial refrigeration equipment, such as by artificially aging un its at high temperatures. (NanoPore, No. 1.3.011 at p. 1)

As part of the preliminary analysis, the Department is considering vacuum insulated panels as a design option applicable to commercial refrigeration equipment. However, DOE has not made any disti nction between different types of vacuum insulated panels, nor has it moved to consider the long

- term performance of panels manufactured with different methodologies. DOE is not aware of any industry

- accepted test procedures for determining the long

- term p erformance of vacuum insulated panels, nor has it received any additional comments from manufacturers2

- 29 regarding this issue. Therefore, at this time, DOE does not intend to distinguish between types of vacuum insulated panels in its analyses

.

2.4.2 Normalization Metrics

Numerous interested parties commented and provided suggestions regarding the measures used in quantifying case size for energy consumption purposes. The Northwest Joint Comment stated that the quality of the engineering analysis will come as a r esult of two major factors: equipment classes and metrics. The comment added that efficiency standards and
normalization metrics are not well

- established, especially for open cases, where the TDA metric neglects shelf depth and provides an incentive to giv e a high ratio of TDA to volume or capacity, leading to less efficient equipment ( Northwest Joint Comment , No. 1.3.003 at pp. 2

− 5) T he
Northwest Joint Comment suggested that DOE consider an “aspect” ratio, such as TDA to volume, or the use of an offset fac tor that provides an allowance for display area and then scales with volume. Since display units, especially open cases, are the largest relative consumers of energy, the metric must discourage the impacts of the properties that make them consume the

most energy ( Northwest Joint Comment , No. 1.3.003 at p. 5) Southern Store Fixtures agreed

, stating that a TDA metric alone does not accommodate different case depths, as cases with the same TDA are held to the same standard regardless of depth. (Southern Store Fixtures, No. 1.2.006 at p. 117) True agreed that case depth needs to be addressed (True, No. 1.2.006 at p. 118), and Zero Zone stated that TDA works well, but that a combination of shelf depth and TDA would be even more descriptive. (Zero Zone, No. 1.2.00 6 at p. 119) Structural Concepts added that open cases may need a third metric, case height, in addition to TDA and depth, in order to quantify air curtain performance. (Structural Concepts, No. 1.2.006 at p. 120) True also stated
that different customers have different needs, and that the relative importance of display area versus volume and solid versus transparent doors will be application

- driven. (True, No. 1.2.006 at pp. 120

− 121) AHRI asked that DOE use a TDA metric for SOC equipment classes. (AHRI,
No . 1.3.008 at p. 4)

California Codes and Standards recommended that DOE perform an analysis to determine whether the current normalization method results in a close match to the energy consumption of equipment containing cost

- effective measures for reduced energy consumption. (California Codes and Standards, No. 1.3.005 at p. 8) It added that DOE should work with manufacturers to see if niche equipment that meets the required prescriptive measures could comply with standards in light of an improved normalization metric. (California Codes and Standards, No. 1.3.005 at p. 3) The submission suggested that DOE evaluate energy savings potential from a reformatted standards level equation that better fits the energy consumption of differently sized equipme nt with varying aspect ratios of opaque to display area . The commenter
added that if a significant energy savings results from this evaluation , the standards level equations should be changed to account for this situation . (California Codes and Standard s , No. 1.3.005 at p. 9) In its view , an improved normalization metric could make a standard level a function of solid opaque area, glass area, and open area. (California Codes and Standards, No. 1.3.005 at p. 9) A class that might face a lower standard in l ight of an improved metric would be VCT.SC.L, which currently uses a volume metric. (California Codes and Standards, No. 1.3.005 at p. 5) Finally, California Codes and Standards stated that normalization metrics should be reviewed for all equipment classes and that DOE should also review end effects for smaller2

- 30 equipment in unison with improved normalization metrics, as there may exist synergies that would be overlooked were the two examined separately. (California Codes and Standards, No. 1.3.005 at p. 9)

DOE understands that the selection of appropriate measures of case size is important to
the standards

- setting process across all covered equipment classes. For the self

- contained equipment with doors for which standards were set in the EPACT 2005 legis lation, volume was used in the statute as the normalization metric. (42 U.S.C. 6313(c)(2)) For the equipment covered by the 2009 final rule, DOE selected the metrics of volume for equipment with solid doors and total display area for display

- type equipment . During the Framework public meeting for that rulemaking, DOE asked interested parties for input as to what metrics would be most appropriate for use with the covered equipment, and numerous interested parties comment ed . The commenters expressed positions similar to those in the above comments, with various interested parties advocating TDA, refrigerated volume, case length, and combinations of these as preferred
metrics.

In the 2009 rulemaking ANOPR, DOE determined that for equipment with transparent
d oors, radiation and conduction through doors were the primary heat transfer pathways . DOE
concluded that TDA would be the metric that best quantifies this effect . Likewise, for equipment without doors, the majority of heat load occurs due to warm air infi ltration, and DOE determined that TDA would also be the most appropriate metric for capturing these effects. DOE also stated its belief that for these equipment types, where the function is to display merchandise for sale, TDA best quantifies the ability o f a piece of equipment to perform that function . On the other hand, equipment with solid doors is designed for storage, and volume was determined to be the most appropriate metric for quantifying the storage capacity of the unit. 72 FR 41177

− 78 ( July 26, 2 007 ) . DOE presented these choices of metric in the 2009 rulemaking ANOPR and

, after considering comments received and other information, retained the normalization metrics through publication of the final rule.

DOE understands the concern s expressed by Northwest Joint Comment that the TDA metric for display cases encourages manufacturers to increase the relative display area of the equipment, which allows for higher energy consumption compared to equipment with the same refrigerated volume but smaller T DA

. However, for most display cases covered by the 2009 final rule, DOE believes that there are limited opportunities for manufacturers to increase the TDA for a given ref rigerated volume. For example, VCT.RC.M and VCT.RC.L cases are typically 8 to 12
feet long and several feet deep . Since the front of these cases is almost entirely glass (transparent), the only additional opportunity for increasing the TDA is to make the side walls transparent, which is a relatively modest increase in TDA. Replacing the solid (opaque) side walls with glass incurs a penalty in the form of higher production costs. Hence, the modest gain in energy allowance due to increased TDA may in part be offset by the increase in production

cost s

.

On the other hand, self

- contained equipment with transparent doors is smaller in length (usually 2 to 4 feet)

, and the relative increase in TDA would be substantially high er if the side walls were transparent. For such display cases, the TDA metric woul d in fact present an opportunity for manufacturers to increase the allowance of total energy consumption by2

- 31 increasing the TDA. This is one reason why , for self

- contained equipment with transparent doors, refrigerated volume would be a better choice compar ed to TDA.

In the case of SOC equipment, the TDA to refrigerated volume ratio is very high compared to other display cases ; that is, the opaque area is small compared to the transparent

area. Therefore, t he re is little incentive for manufacturers to dis proportionately increas e the TDA
to obtain a higher energy consumption allowance.

In line with the reasons stated above , DOE is considering retention of the current normalization metrics for the respective equipment classes , consisting of both the metrics set forth in the 2009 final rule and those prescribed by the EPCA standards for self

- contained equipment with doors

.

2.4.3 Refrigerants

The Natural Resources Defense Council provided comment regarding potential regulatory changes pertaining to refrige rants. In its written comment, NRDC stated that DOE must investigate alternative refrigerants for medium

- temperature use, and suggested CO 2 for these applications, adding that CO 2 - based refrigeration systems have been installed in numerous applications in the United States, United Kingdom, Australia, and Europe. Moreover, NRDC added, DOE should, absent Presidential or legislative action, consider the long

- term phase

- out of hydrofluorocarbons (HFCs) to be inevitable. (NRDC, No. 1.3.012 at pp. 5

− 6)

As part of the engineering analysis, DOE will consider the current state of the industry, and will base its analysis on the use of refrigerants currently utilized by the majority of the commercial refrigeration industry. In the 2009 final rule, DOE considered the effects of HFC refrigerants by using HFC refrigerants in all of its analyses. For remote condensing equipment, the compressor efficiency values used in the analyses were based on ARI 1200, which used an
HFC

- based compressor rack with R

- 404a refrigerant. L ikewise, for self

- contained equipment, DOE’s analysis used R

- 134a and R

- 404a, both HFC

- based refrigerants. In the 2009 final rule Federal Register notice discussion of maintenance costs, DOE explicitly stated that it would not predict or account for potent ial future changes in the cost of refrigerants. 74 FR 1108 ( Jan

. 9,
2009 )

. Because such predictions are speculative , barring any final legislative or other regulatory action during this rulemaking, DOE will not make any assumptions regarding future regulat ion of specific refrigerants or the potential effects of such regulations.

2.5 MARKUPS TO DETERMINE EQUIPMENT PRICE

DOE used manufacturer

- to

- customer markups to convert the MSP estimated in the engineering analysis to customer prices, which then were used in the LCC and payback period (PBP) analysis, and national impact analysis (NIA). DOE calculates markups for baseline equipment (baseline markups) based on the markups at each step in each distribution channel to obtain the customer purchase price for the bas eline equipment sold through each channel. DOE calculates the incremental markups based on the assumption that some of the costs scale with the cost increments for higher efficiency levels and the rest remain constant. Detailed explanation for
the calculat ion of baseline and incremental markups is presented in chapter 6.2

- 32 2.5.1 Distribution Channels for Commercial Refrigeration Equipment

DOE identified three major distribution channels through which commercial refrigeration equipment is purchased by the end

- user: (1) manufacturer to end

- user (direct channel); (2)
manufacturer to wholesale distributor to end

- user (wholesaler channel); and (3) manufacturer to
distributor to mechanical contractor to end

- user (contractor channel). In 2009 rulemaking, DOE
used distribution channel share data provided by interested parties. For remote condensing equipment, 70 percent share was attributed to direct channel, 15 percent to wholesaler channel

, and 15 percent to contractor channel. In the case of self

- contained equip ment, 30 percent was attributed to direct channel, 35 percent to wholesaler channel, and 35 percent to contractor
channel.

Interested parties presented various opinions on DOE’s assumption regarding distribution channels. ACEEE agreed with the data pres ented, stating that the market channels presented by DOE fit with their experience. (ACEEE, No. 1.2.006 at p. 143) Other parties provided recommendations and data. Hoshizaki stated that it felt the makeup of distribution to be 70 percent 2

- channel, 25 perc ent 1

- channel, and 5 percent direct, and suggested that DOE check with the North American Association of Food Equipment Manufacturers (NAFEM) and AHRI for current market trends. (Hoshizaki, No. 1.3.006 at p. 1) Traulsen suggested that the Foodservice Equip ment Distributors Association (FEDA) could represent a distribution perspective, but mentioned that this association deals mostly with large chain accounts. ( Northwest Joint Comment , No. 1.3.003 at p. 6)

Interested parties also provided input regarding recent market trends. True stated that sales are skewed toward national accounts because distributors are doing less business, and fewer new restaurants are being built. (True, No. 1.2.006 at p. 141) Southern Store Fixtures stated that
a reduction of the throughput of dealers and distributors is occurring to the point that they are asked to build equipment with components supplied by the customer and are compensated only for their labor. (Southern Store Fixtures, No. 1.2.006 at p. 142) Continental stated t hat large parts
of traditional distribution channels are not seen as cost effective and are being permanently
eliminated . Continental offered to check with NAFEM for verification and data on this subject. (Continental, No. 1.2.006 at p. 145) The Northwest Joint Comment stated that manufacturers have mentioned that there are many changes occurring in their markets, many of which are lowering margins. These include consolidation in the grocery industry and a trend toward national accounts and point

- of

- sale eq uipment, where lower margins are incurred. The Northwest Joint Comment suggested that m anufacturers could provide data to quantify this for the analysis. ( Northwest Joint Comment , No. 1.3.003 at p. 6) True added that the growth in the use of point

of

- sales beverage cases has been a trend over the past 5

− 7 years. (True, No. 1.2.006 at pp.

142

− 143)

As part of the markups analysis, DOE reviewed available sources of information to allocate the appropriate percentages to each distribution channel. DOE determine d that NAFEM (in its last three reports) and FEDA do not track information on distribution channel shares.
Some information could be obtained from Foodservice Equipment & Supplies (FES) magazine with regard to the shares of the distribution channe ls. This data applies to all foodservice equipment sales and may be different for refrigeration equipment, which has an 8 percent share2

- 33 of the total foodservice equipment sales. Refrigerators and freezers used in the foodservice industry are primarily self

- contained equipment such as reach

- in refrigerators and freezers, chest freezers, milk coolers, and ice

- cream storage and dipping cabinets. The FES magazine data does not seem to support the statement that the sales are skewed toward the direct manufacture r

- to

end

- user distribution channel. On the contrary, only 17 percent of sales are attributed to the direct distribution channel, which is much lower than the 30 percent used in 2009 rulemaking. 2

Because of the lack of comprehensive data to support distribu tion channels significantly different
than those used for the 2009 rulemaking, DOE has retained th os e estimates with modifications from the FES magazine data for the self

- contained product classes. DOE requests interested parties to provide additional data concerning the share of each distribution channel in different equipment categories.

2.5.2 Methodology for Markups Analysis

Markups are different for different distribution channels, with the direct channel having the smallest markup and the contractor channe l having the largest. DOE calculated one average markup value for each level in each distribution channel.

AHRI stated in its written comment that attempting to build prices up from estimates of manufacturer costs and supply chain markups leads to compo unding of errors, and that cost

efficiency curves should be validated against actual retail prices. (AHRI, No. 1.3.008 at p. 4)

DOE estimates the MPC as part of the engineering analysis, with the manufacturer markup determined from industry

- wide financia l data. The methodology for estimating the production costs is discussed in chapter 5, the engineering analysis. The methodologies used in determining both the manufacturer markup and the MPC are similar to those used in the 2009 final rule, as well as man y other past and ongoing DOE rulemakings, with these methodologies having been vetted by numerous interested parties. Therefore, DOE believes that its markups are based on the best available data on markup values

.

DOE estimates the markups for distribut ors based on Heating, Air

- conditioning & Refrigeration Distributors International (HARDI) profit data and markups for mechanical contractors from U.S. Census Bureau data for plumbing, heating, and air

- conditioning (PHAC) industry. DOE attempted to verify t he estimated costs and markups against retail sale prices for certain individual commercial refrigeration units. This exercise yielded a large range of markup values, 0.88 to 2.88, over the MSP . Retail markups for individual units are, in general, a functi on of many factors

, including general economic environment and outlook, manufacturer brand name, newer versions of the same product introduced into the market by the manufacturers, and availability of cheaper or more technologically advanced alternatives i n the market. On the other hand, markup values estimated from the profit data of distributors provide an average markup value for all commercial refrigeration equipment. DOE intends to continue using the current sources of data for markup analysis and seek s additional data from potential new sources.

2.5.3 Shipping Costs

The Northwest Joint Comment stated that there is a growing trend in some markets, especially highly consolidated markets, toward including shipping costs in equipment price, and2

- 34 that DOE will need to be careful regarding where it places these costs in its analysis. ( Northwest
Joint Comment , No. 1.3.003 at p. 6)

DOE estimates the equipment cost in the engineering analysis by calculating the cost to build the equipment from its components. This value

, termed manufacturer production cost (MPC)

, does not include the shipping costs of the finished product. DOE includes the shipping costs in the MSP, which is obtained by applying a markup to the MPC. The LCC and PBP analyses take into account only t hose costs that vary with increasing equipment efficiency. Costs that are constant over all the efficiency levels do not impact analysis results. Shipping costs are generally determined by the size of a unit, and the design options being accounted for in t his rulemaking do not result in notable changes in equipment size. Hence, DOE assumes that the shipping costs for higher

- efficiency equipment will not be different from the shipping costs for the baseline equipment. Therefore, shipping costs do not have an effect on the LCC

- PBP analysis
and NIA

.

2.6 ENERGY USE ANALYSIS

For the 2009 rulemaking, DOE conducted an energy use analysis for display cases connected to remote condensing units in supermarkets using t he whole building simulation tool
DOE 2.2R. Simulation s were used to study the effect of different climates on the equipment energy consumption and impact of improved equipment efficiency on the building heating, ventilation, and air

- conditioning (HVAC) energy consumption

. In both cases

, the impacts were
found to be in significant. For the final rule, DOE used the daily energy consumption values calculated from the engineering analysis for the LCC

- PBP and national impact analyses, without any adjustments for HVAC impacts.

DOE received the following comments in response to a plan for the energy use characterization for commercial refrigeration equipment outlined in the framework document.

Several interested parties suggested potential sources of data to aid in the energy us e analysis. Zero Zone stated that the University of Colorado has a research project in place studying the interdependency of CRE and HVAC loads. (Zero Zone, No. 1.2.006 at p. 128) True suggested that ASHRAE 189.1 may be a good source of data. (True, No. 1. 2.006 at p. 134)
California Codes and Standards recommended that DOE review the DOE

- 2.12R refrigeration simulation tool, and consult the SCE Refrigeration and Thermal Test Center as well as the PG&E Food Service Technology Center regarding past research an d possible future coordination. (California Codes and Standards, No. 1.3.005 at p. 11) California Codes and Standards also stated that many grocery chains have studied the effects of lighting controls, and suggested that DOE supplement its own findings wit h this end

- user research. (California Codes and Standards, No. 1.3.005 at p. 11)

The Northwest Joint Comment included several points addressing the energy use analysis. First, it stated that DOE will need to significantly upgrade the energy use analysis fr om that used in the 2009 final rule because there are a number of new classes, especially self

contained equipment, that have a much larger impact on HVAC loads. Moreover, ambient relative humidity will affect the refrigeration system performance much more than with remote condensing units, and the model will need to reflect this. ( Northwest Joint Comment , No. 1.3.0032

- 35 at p. 5) Secondly, the Northwest Joint Comment commented that potential test procedure changes to accommodate new technologies will require m odeling of those technologies in this analysis, and that such modeling may need to be based upon test data. ( Northwest Joint

Comment , No. 1.3.003 at pp. 5

− 6) Finally, it stated that the division of market share among remote condensing, self

- contained, and secondary

- loop equipment will complicate this analysis, as each type will have to be appropriately modeled. ( Northwest Joint Comment , No. 1.3.003 at p. 6)

Kysor/Warren stated that commercial refrigeration equipment has a large impact on
HVAC loads and that , similarly, the temperature and relative humidity of the store has a large impact on the energy use of the refrigeration equipment. (Kysor/Warren, No. 1.2.006 at p. 126) Adding to this, ACEEE commented that commercial refrigeration equipment will have a l arger impact on HVAC loads in convenience stores, where there are predominantly self

- contained units. (ACEEE, No. 1.2.006 at p. 128)

California Codes and Standards commented on night curtains, stating that the addition of this technology would result in a significant whole

- building energy use impact. (California Codes and Standards, No. 1.3.005 at p. 12)

DOE conducted a brief evaluation of the effect of efficiency improvement in self

contained commercial refrigeration equipment on the building HVAC loads by simulating a self

contained freezer in restaurant buildings. DOE found the effect on building heating and cooling loads to be negligible. During the NOPR stage of the current rulemaking, DOE intends to conduct a similar evaluation to study the effect of n ight curtains on the building HVAC loads. DOE will take into account all potential sources of information in conducting the energy use analysis.

California Codes and Standards comment ed regarding the lighting controls. First, it stated
that , unlike fluore scent lighting, LED lighting does not degrade due to being turned off and on, making LED better suited to lighting controls. (California Codes and Standards, No. 1.3.005 at p. 11) Moreover, it commented that 24

- hour per day lighting operation should be the base case for a comparison of the savings of motion

- activated LED lighting, for which DOE should develop estimates of the amount of time during which there is motion around a case. (California Codes and Standards, No. 1.3.005 at pp. 11

− 12) Finally, Califo rnia Codes and Standards added that the greatest benefit from lighting controls may come in stores that operate 24

- hour s per day but have periods of low activity. (California Codes and Standards, No. 1.3.005 at p. 12)

LED lighting and occupancy sensors (mo tion

- activated lighting controls) have been included in the list of design options. DOE intends to use 24

- hour lighting operation as the base case to calculate energy savings from lighting controls because this is considered to be the standard mode of oper ation in cases not equipped with lighting controls or occupancy sensors

.
California Codes and Standards stated that if DOE considers putting transparent doors on open vertical display cases, the potential energy savings interaction effect would be signific ant, and that this could be validated using DOE

- 2.12R or another building energy model. (California Codes and Standards, No. 1.3.005 at p. 12)2

- 36 For the reasons given in section 2.2.1.5, DOE will not consider transparent doors as a design option for open dis play cases. Therefore , DOE did not carry out energy use analysis comparing the impact of transparent doors on open display cases as suggested by California
Codes and Standards.

2.7 LIFE

- CYCLE COST AND PAYBA CK PERIOD ANALYSES

The effects of amended standards o n individual customers usually include a reduction in operating cost and an increase in purchase cost, which together determine the economic impact of standards on individual customers. This chapter describes the following two metrics that DOE
used in the analysis to measure this impact:

• Life

- cycle cost is the total customer cost of an appliance or equipment, generally over the life of the appliance or equipment, including purchase and operating costs. The latter consist of maintenance, repair, and energy c osts. Future operating costs are discounted to the time of purchase and summed over the lifetime of the appliance or equipment.

• Payback period measures the amount of time it takes customers to recover the assumed higher purchase price of a more energy

- effi cient piece of equipment through reduced operating costs.

New or amended energy conservation standards typically affect equipment operating expenses and purchase prices. DOE evaluated the LCC to analyze the net economic effect of amended commercial refrige ration equipment standards on customers. Inputs to the LCC calculation include the installed customer cost of the equipment (customer purchase price plus installation costs and sales tax), and operating expenses (repair, maintenance and energy costs), equi pment lifetimes, and discount rates.

The LCC and PBP model was developed using Microsoft Excel spreadsheets combined with Crystal Ball, a commercially available add

- in for modeling uncertainty. The LCC and PBP analysis is carried out using Monte Carlo simu lations in which key inputs are treated as probability distributions rather than single

- point values. By this approach, DOE takes into account the uncertainty and variability of certain inputs. Another distinct advantage of this approach is that DOE can id entify the percentage of customers achieving LCC savings or attaining certain PBP values, in addition to identifying the mean and median LCC savings and PBP for each efficiency level.

DOE received a number of comments from interested parties on the LCC and PBP analysis methods and proposed sources of data.

2.7.1 Equipment Lifetimes

Equipment lifetimes are important inputs for determining the LCC savings. The savings in LCC of higher

- efficiency equipment accrue over the lifetime of the equipment in the form of energy cost savings. For the 2009 CRE rulemaking, DOE used equipment lifetime values of 10 years for large food retail stores and 15 years for small stores.2

- 37 Interested parties provided a variety of comments in response to DOE’s request for input on equi pment lifetimes in the framework document. Zero Zone stated that a 10

- year lifetime for large retailers and a 15

- year lifetime for other customers would be sound estimates. (Zero Zone, No. 1.2.006 at p. 160) AHRI agreed, stating that it believes the averag e equipment lifetime to be approximately 10 years. (AHRI, No. 1.3.008 at p. 6) True added that efforts to increase efficiency are leading to less oversizing of refrigeration systems, causing equipment to run more continuously and thus shortening equipment lifetimes. (True, No. 1.2.006 as pp. 162

− 163)

Other interested parties expressed alternative views on the issue of equipment lifetime. California Codes and Standards commented that reducing the equipment lifetime for grocery
stores and multi

- line retail ers to 10 years may underestimate the value of the equipment and savings extended across multiple owners, and suggested that DOE interview end

- users regarding the frequency of display case renovation and replacement, as well as regarding what is done with retired display cases. (California Codes and Standards, No. 1.3.005 at p. 12) The Northwest Joint Comment stated that DOE’s current equipment lifetime assumptions are too simplistic and that the impact of the used equipment market will require a differenti ation between “period of first ownership and equipment lifetime.” The comment added that, while DOE’s assumed averages may be close considering the broad distribution of actual lifetimes, data will be required to ground the analysis in reality. ( Northwest Joint Comment , No. 1.3.003 at p. 6) The Northwest Joint Comment also cautioned DOE not to make any assumptions regarding possible shortening of equipment lifetimes due to increased loads and competition. ( Northwest Joint Comment , No. 1.3.003 at p. 7)

Statements by some interested parties regarding the resale of used equipment led to discussion about the used equipment market. The Northwest Joint Comment stated that equipment is owned up to seven times before being scrapped, and suggested a distribution of lifetimes rather than assuming a single lifetime value. ( Northwest Joint Comment , No. 1.2.006 at p. 161) True observed that customers with lower budgets do not buy new equipment, that a restaurant refrigerator has an average of seven owners, and that h igher costs of new equipment extend the life of older, less efficient equipment. (True, No. 1.2.006 at p. 153) AHRI stated that DOE needs to analyze the growing market for used equipment, which has likely expanded in recent years in light of the economic d ownturn. (AHRI, No. 1.3.008 at p. 3) The Northwest Joint Comment agreed, stating that there is little data regarding the used CRE market, and that if used equipment is a large and/or growing part of the market, data will be needed for this analysis. ( North west Joint Comment , No. 1.3.003 at p. 6) For sources of this information, True suggested that DOE check with the National Restaurant Association, and stated that there also exist several dealers’ associations that deal in new and used equipment. (True, No. 1.2.006 at pp. 172

− 173) ACEEE agreed, stating that there is a subclass of brokers that deal in used equipment for restaurants and other sectors, and that such a perspective might be useful. (ACEEE, No. 1.2.006 at p. 172) Zero Zone stated that high

- efficie ncy glass doors save energy through measures that
include decreased anti

- sweat protection, which has caused issues in some store applications and geographic areas, and could potentially lead to end

- users retaining their existing equipment for a longer peri od. (Zero Zone, No. 1.2.006 at p. 167)

In the 2009 rulemaking, grocery store display cases formed the major share of equipment classes. This equipment tends to be used by grocery stores for 10 to 15 years and generally is2

- 38 replaced for cosmetic reasons du ring store renovations. DOE believes that the salvage value of such equipment is not significant. Therefore, for 2009 final rule, DOE assumed the period of first ownership as the equipment lifetime for supermarket and grocery store display cases.

The current rulemaking includes a larger proportion of self

- contained equipment that is typically used in markets other than grocery stores, such as restaurants, cafeterias, and convenience stores. Many of these operators tend to purchase used equipment. Therefor e, period of first ownership is not a good estimate of the equipment lifetime. Chapter 3, Market and Technology Assessment, provides a list of references that estimate the typical equipment lifetime
values for self

- contained equipmen t to be in the range of 7 to 12 years. 3

, 4 Therefore, irrespective of the number of times the equipment changes ownership, DOE intends to use an average lifetime value of 10 years for self

- contained equipment. DOE will consider any information concerning ways to make the analyses more realistic in terms of the impact of used markets on product life, continuity of product usage, or other relevant impacts.

The equipment lifetime values of 10 years and 15 years, mentioned above, are assumed average values. T o account for the commen ts from the interested parties, DOE used a distribution of equipment lifetimes with average values of 10 years and 15 years, as applicable. DOE encourages interested parties to comment on this approach.

2.7.2 New Markets

In its written statement, the Northwes t Joint Comment addressed the subject of new markets that may need to be recognized as part of the LCC analysis. It cautioned that this LCC analysis would be more complex than past analyses due to the wider range of markets associated with the newly covere d equipment, each with its own financial characteristics and each requiring a distinct analysis. As an example of such a market, the Northwest Joint Comment stated that it believes the government and quasi

- governmental institution sector is large enough to warrant its inclusion in the range of discount rates used in the analysis. ( Northwest Joint Comment , No. 1.3.003 at p. 6)

A major share of self

- contained equipment is generally used in smaller establishments that do not employ remote compressor racks. F or the current rulemaking, DOE has included additional markets not examined explicitly in the previous rulemaking. These are fast food and full service restaurants and other foodservice establishments ( e.g. , cafeterias, caterers, and others). Based on the 2007 U.S. Census Bureau data , food sales from “cafeterias, grill buffets
and buffets” constitute less than 2 percent of the total sales revenue of all “food services and drinking places.” 5 The refore, DOE determined that the g overnment and quasi

- governmental
institution sector forms a small portion of the foodservice sector and does not merit separate analysis. This sector was subsumed within the “ o ther foodservice establishments” category.

2.7.3 Installation, Maintenance, and Repair Costs

Installation costs are the labor and material costs to customers for installing the equipment. Maintenance costs are the labor and material costs for preventative maintenance and lighting maintenance. The repair costs are the costs to the equipment owner for replacing or repairing equipment components that have failed. During the public meeting and in subsequent2

- 39 written comments, numerous interested parties expressed a variety of views regarding installation, maintenance, and repair costs and the va riation of those costs with equipment efficiency.

Southern Store Fixtures stated that manufacturers are under pressure from customers to reduce labor costs associated with their equipment, and that this activity cost should be
considered in the rulemakin g. (Southern Store Fixtures, No. 1.2.006 at p. 206) Southern Store Fixtures also added that, as equipment gets more complex and incorporates features such as electronic controls, installation and maintenance costs increase accordingly. (Southern Store
Fixt ures, No. 1.2.006 at pp. 156

− 157) Zero Zone agreed, suggesting that installation and maintenance costs may increase 10 to 20 percent due to the incorporation of advanced technologies such as electronic controls. (Zero Zone, No. 1.2.006 at p. 156) Zero Zone further
clarified this suggestion , stating that automatic controls such as electronic expansion valves and
anti

- sweat heater controls result in increased setup, warranty, and maintenance costs, while passive devices such as ECMs do not incur these costs b eyond the inherently higher cost of the feature. (Zero Zone, No. 1.3.007 at p. 2) California Codes and Standards also expressed that electronic controls may increase maintenance costs and suggested that DOE review its findings on this topic from the refrig erated beverage vending machine rulemaking. (California Codes and Standards, No. 1.3.005 at p. 12) AHRI agreed, further stating that it would be incorrect to assume that installation, maintenance, and repair costs would not change for more efficient equipm ent. AHRI continued that DOE cannot assume that the price to service the refrigeration system will remain constant with time and efficiency, and that larger coils needed for higher efficiencies will require more refrigerant to charge. Finally, AHRI suggest ed that DOE survey parts distributors to find price differences between permanent split capacitor motors and ECMs, and between two

stage and single

- stage compressors. (AHRI, No. 1.3.008 at p. 5)

Other interested parties expressed a differing opinion on t his topic. The Northwest Joint Comment stated that, in the absence of a final list of technology options, it is unwilling to agree that installation, maintenance, and repair costs will certainly rise with increased efficiency, further stating that even the lowest efficiency equipment has become much more complex in recent years. The comment stated that any party claiming that these costs will rise with increased efficiency should provide data to substantiate such claims. ( Northwest Joint Comment , No.
1.3.00 3 at p. 6) Regarding specific technologies, California Codes and Standards commented that LSHXs would reduce the chance of liquid refrigerant entering the compressor, thus reducing compressor maintenance costs on average, and that a larger condenser or eva porator would not
be expected to impact maintenance costs significantly, especially during the reduced lifetimes DOE is applying to grocery stores. (California Codes and Standards, No. 1.3.005 at p.12)

A majority of the technology options under consideration for this rulemaking are similar to those considered in the 2009 rulemaking. In the 2009 final rule, installation costs were assumed to be constant for all remote condensing and self

- contained equipme nt, with self

contained equipment installation costs assumed to be much lower than those of remote condensing equipment. Given the current list of technology options, and based on discussions with manufacturers, DOE does not believe that there is any basis to assume that higher efficiency equipment would incur any additional installation costs than the baseline equipment. DOE2

- 40 encourages interested parties to provide specific information in order for DOE to reconsider such an approach.

DOE splits maintena nce costs into regular preventative maintenance costs and lighting maintenance costs. Typically, manufacturers prescribe routine annual or bi

- annual preventative maintenance procedures for commercial refrigeration equipment. These preventative
maintenance procedures are similar for similar types of equipment and do not vary with increased efficiency levels. Lighting maintenance costs are incurred by end

- users in order to replace failed display case lights. DOE assumes lifetime values of 2 years for fluoresc ent lights and 5.7 years for LED lights. Cost of replacement is a direct function of the original equipment manufacturer cost. This approach typically yields an increase in lighting maintenance costs for higher efficiency lighting. Therefore, the overall m aintenance cost varies only with lighting maintenance cost and is not affected by other technology options. In addition to the above comments, DOE requests information from manufacturers and other interested parties to present
maintenance cost information specific to the listed technology options in order to facilitate fair estimation of maintenance costs for each efficiency level.

DOE calculates repair costs as a direct function of the cost of the components to the original refrigeration equipment manufa cturer. DOE applied a markup value to the original equipment manufacturer cost to arrive at an approximate cost to repair or replace a particular component. Assumed failure rates of different components are presented in chapter 8. This approach typically r esults in an increased repair costs for higher efficiency equipment because the original equipment manufacturer cost for higher efficiency components is larger than the cost of the components in the baseline equipment. This approach is similar to the one u sed in 2009
final rule.

DOE encourages interested parties to comment on the methodology for estimating installation, maintenance, and repair costs. The engineering analysis presents a list of technology options under consideration for this rulemaking. DOE requests information specific to these and any other technology options. Based on the information received from interested parties, DOE
would consider revising the above proposed approach to installation, maintenance, and repair

costs.

2.8 SHIPMENTS ANALYSIS

The shipments analysis is used to estimate future equipment shipments as well as the current stock of commercial refrigeration equipment. It provides crucial input for estimating the national energy savings (NES), net present value (NPV), and the manufac turer impact analysis.

A number of interested parties provided comments that could help guide the shipments analysis. The Northwest Joint Comment stated that the shipments analysis will be difficult to conduct without a better understanding of equipment lifetimes and markets, and that DOE will need to have a good understanding of current market trends in order to use new construction data to estimate stocks and shipments. ( Northwest Joint Comment , No. 1.3.003 at pp. 7

− 8) The
Northwest Joint Comment also e xpressed a desire for DOE to obtain several years’ worth of shipments data in order to gain a better understanding of shipment patterns and stocks, and stated that NAFEM should be added to the list of data sources for shipments data. ( Northwest Joint2

- 41 Comme nt , No. 1.3.003 at p. 7) Southern Store Fixtures stated that there was a trend in equipment
sales toward more open

- type display cases, both self

- contained and remote, going into convenience stores. (Southern Store Fixtures, No. 1.2.006 at pp. 161

− 162) True added that end

users who rent their buildings tend to use self

- contained units. (True, No. 1.2.006 at p. 164)

For the 2009 final rule, AHRI provided 2005 shipments data based on input from its
members. While t hese shipments did not constitute a complete representation of the commercial refrigeration equipment market at that time, DOE believed this data was the best available and used the AHRI data as representative for the commercial refrigeration equipment industry for the
2009 final rule.

For the current rulemaking, DOE augmented the 2005 shipments data provided by AHRI
with data from reports published by NAFEM and Freedonia Group Incorporated . While NAFEM provided shipments estimates by equipment category used in foodservice industry, Freedonia

repor ts provide shipments data for both the foodservice and food retail industries. Freedonia reports also present the total commercial refrigeration market trend over the past few years. Chapter 9 of preliminary analysis TSD provides further details about ship ments analysis.

During the Framework public meeting, DOE requested interested parties to provide shipments data, but did not receive any new data. DOE encourages interested parties to comment on the proposed approach (chapter 9) and provide additional in formation to improve the shipments analysis.

NRDC stated that projecting growth within a category will not be simple because equipment owners will have different options

, ranging from replacing all equipment to procuring phased

- out refrigerants through recyclers. (NRDC, No. 1.3.012 at p. 6) NRDC further suggested that DOE evaluate the cost of replacement R

- 22 for owners wishing to maintain their current equipment, and that DOE should also review the likelihood of some installations modifying their equipment to permit the use of non

- hydrochlorofluorocarbon (HCFC) refrigerants. NRDC also suggested that DOE include estimates of new units to replace existing systems

, which will switch to HFC alternatives or secondary coolant systems, and use this data to review the total equivalent warming impact (TEWI) of the forecast sales. (NRDC, No. 1.3.012 at pp. 6

− 7)

DOE calculates current equipment stock and future shipments based on th e historical shipments data and forecasted new construction data. DOE presumes that virtually all replacement equipment for existing HCFC equipment will be HFC equipment, but that these replacements will happen over time invariably on a schedule that corre sponds with the equipment lifetime. While there may be some early replacements due to phasing out of HCFC refrigerants, DOE has no ability to weigh the two competing scenarios of replacement versus repair or retrofitting. Therefore, DOE did not factor the effect of the phasing out of HCFC refrigerants into the shipments analysis.

DOE is not covering secondary coolant equipment in this rulemaking for reasons stated in section 2.1.2.1. DOE’s response to the TEWI of refrigerant leakages is presented in sect ion
2.13.7.2

- 42 2.9 NATIONAL IMPACT ANAL YSIS

DOE quantifies national impacts of energy conservation standards using two metrics: (1) NES, and (2) NPV of future savings. The NES values, expressed in quads (quadrillion Btu), are the cumulative energy savings as a result of the new standards over the 30

- year time frame of DOE’s analysis , 2016

– 2045. The NPV of future savings is also calculated over the 30 years and
is expressed in dollars discounted to the present year, 2010$.

Inputs for NES calculations are: (1) annual unit energy consumption; (2) shipments; (3) equipment stock; and (4) site

- to

- source conversion factor. Inputs for determining NPV are: (1) total annual installed cost; (2) total annual savings in operating costs; (3) a discount factor; (4) present v alue of costs; and (5) present value of savings. For preliminary analysis, DOE calculated net savings each year as the difference between the base case (scenario in the absence of the proposed standards) and each efficiency level within each equipment clas s. DOE calculated savings over the life of each product, accounting for differences in annual energy rates. DOE calculated NPV as the difference between the present value of operating cost savings and the present value of total installed costs.

As direct ed by the Office of Management and Budget (OMB) , DOE used 3

- percent and
7

- percent real discount rates for its NPV analysis. DOE also discounted non

- monetary indicators, such as physical units of measure, for presentation in the TSD.

Chapter 10 of the pr eliminary TSD provides additional details on the national impact analysis.

The Northwest Joint Comment stated that the NIA will need special care in light of the current economic climate, and that volatility in shipments, energy prices, and energy demand

c ould result in a broad range of potential outcomes from the analysis. ( Northwest Joint
Comment , No. 1.3.003 at p. 8)

DOE will account for variations in the electricity prices in the form of regional variation in electricity prices and price forecasts, as w ell as examine differing forecasts for electricity prices based on Energy Information Administration (EIA) economic growth scenarios. The impacts of the current economic climate are factored into the analysis in two ways. First, the shipments analysis is b ased on a lowered estimate of historical 2009 total shipments (lowered
vis

- à

- vis estimates based on pre

- recession shipments). Second, DOE uses the National Energy Modeling System (NEMS) projections of growth in commercial building stocks to estimate
future CRE shipments. The NEMS building stock projections included a significant downturn in 2009 through 2011, and show new building additions not returning to pre

- recession levels until nearly 2020. 6

DOE notes that the major impact of the economic climate is on the purchase of new units for installation in new buildings. DOE recognizes that in a weak economic climate some owners may postpone replacement of existing units, which would result in longer service life of equipment and a reduction in shipments of re placement units. DOE has no data, however, with which to calibrate such a relationship or to use such a relationship in the context of future forecasts. For this reason, DOE assumes that for the purposes of the shipments analysis and NIA,2

- 43 purchases to repl ace existing units are less a function of the economic climate than of the age of the existing units. Following publication of the preliminary analysis, DOE will provide interested parties with opportunities to comment on and provide information related to this topic.

2.10 PRELIMINARY MANUFACT URER IMPACT ANALYSIS

DOE performed a preliminary MIA to estimate the financial impact of higher energy conservation standards on commercial refrigeration equipment manufacturers and to calculate the impact of such standa rds on employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects. The quantitative part of the MIA relies on the Government Regulatory Impact Model (GRIM), an industry

- cash

- flow model customized for the commercial refrige ration industr y . The GRIM inputs are information on the industry cost structure, shipments, and revenues. This includes information from many of the analyses described above, such as manufacturing costs and prices from the engineering analysis and shipment s forecasts. The key GRIM output is the industry net present value. Different sets of assumptions (scenarios) will produce different results. The qualitative part of the MIA addresses factors such as equipment characteristics, characteristics of particular firms, and market and equipment trends, and includes assessment of the impacts of standards on manufacturer subgroups. Chapter 12 of the preliminary TSD describes the complete preliminary MIA.

DOE conducts each MIA in three phases and will further tailor the analytical framework for each MIA based on comments from interested parties. In Phase I, DOE creates an industry profile to characterize the industry and identify important issues that require consideration. In Phase II, DOE prepares an industry cash

- f low model and interview questionnaire to guide subsequent discussions. In Phase III, DOE interviews manufacturers and assesses the impacts of standards quantitatively and qualitatively. DOE assesses industry and subgroup cash flow and NPV using the GRIM. D OE then assesses impacts on competition, manufacturing capacity, employment, and regulatory burden based on manufacturer interview feedback and discussions.

DOE gathered preliminary MIA information during the preliminary manufacturer
interviews conducte d for the engineering analysis. See chapter 12 of the preliminary TSD for a summary of manufacturers’ concerns regarding the impacts of new energy conservation standards for this rulemaking.

As part of the NOPR, DOE will seek comments from manufacturers about their potential loss of market share, changes in the efficiency distribution within each industry, and the total reduction in equipment shipments at each new energy conservation standard level. DOE will then estimate the impacts on the industry quant itatively and qualitatively. DOE seeks further comment from interested parties about the impact of new standards on domestic manufacturers.

The following is an overview of the information DOE will collect and the analysis it will conduct during the prel iminary MIA (chapter 12 of the preliminary TSD).

2.10.1 Industry Cash

- Flow Analysis

The industry cash

- flow analysis relies primarily on the GRIM. DOE uses the GRIM to analyze the financial impacts of more stringent energy conservation standards on the industry2

- 44 that produces the equipment covered by the standard. The GRIM analysis uses many factors to determine annual cash flows from a new standard: annual expected revenues; manufacturer costs, including cost of goods sold, depreciation, research and development, selling, general, and administrative expenses; taxes; and conversion capital expenditures. DOE compares the results against base

- case projections that involve no new standards. The financial impact of new
standards is then the difference between the two s ets of discounted annual cash flows. Other performance metrics such as return on invested capital are available from the GRIM. For more information on the industry cash

- flow analysis, refer to chapter 12 of the preliminary TSD.

2.10.2 Manufacturer Subgroup Analys is

Industry cost estimates are not adequate to assess differential impacts among subgroups of manufacturers. For example, small and niche manufacturers, or manufacturers whose cost structure differs significantly from the industry average, could be more n egatively affected by the imposition of standards. Therefore , DOE typically uses the results of the industry characterization to group manufacturers exhibiting similar characteristics.

DOE outlined the process it uses to establish manufacturer subgroups i n the framework document and sought comment from interested parties on any potential subgroups within the industry.

During the public meeting, Southern Store Fixtures stated that compressor manufacturers are a subgroup of which DOE should be aware when performing the manufacturer impact analysis. (Southern Store Fixtures, No. 1.2.006 at p. 183) In a written comment, AHRI agreed, suggesting that DOE assess impacts of a rule on different types of component suppliers, including manufacturers of compressors, motors, and valves. AHRI also suggested that DOE analyze impacts on dealers, distributors, and contractors. (AHRI, No. 1.3.008 at p. 6)

Energy conservation rulemakings can significantly impact the design options of an industry. The redesign of products between the effective date and the compliance date of a rulemaking can result in substantial fluctuation in demand for key components. DOE analyzes the potential for capacity constraints, including those from supply chain bottlenecks, in its manufacturer impact analysis. DOE seeks additional comment on the key components that are
likel y to have sharp changes in demand as a result of amended standards. DOE’s manufacturer impact analysis for commercial refrigeration equipment, however, focuses on the impact to
manufacturers and not the impact on dealers, distributors, and contractors. (42 U.S.C. 6295(o)(2)(B)(i)(I); 42 U.S.C. 6313(e)(1)(A) )

During the manufacturer interview process conducted as part of the NOPR, DOE will discuss the potential subgroups and subgroup members it has identified for the analysis. DOE will encourage manufactu rers to recommend subgroups or characteristics appropriate for the subgroup analysis. DOE will also attempt to contact component suppliers, dealers, distributors, and contractors during the manufacturer interview process conducted for the NOPR to seek
info rmation for inputs to the MIA . For more detail on the manufacturer subgroup analysis, see chapter 12 of the preliminary TSD.2

- 45 2.10.3 Competitive Impacts Assessment

DOE must consider whether a new standard is likely to reduce industry competition, and the Attorney General must determine the impacts, if any, of reduced competition. DOE will attempt to gather and report firm

- specific financial information and impacts. The competitive impacts assessment will focus on assessing the impacts on smaller manufacturers. DOE will base this assessment on manufacturing cost data and information collected from interviews with manufacturers. The interviews will focus on gathering information to help assess asymmetrical cost increases to some manufacturers, increased proportion of fixed costs potentially increasing business risks, and potential barriers to market entry ( e.g. , proprietary technologies). The NOPR will be submitted to the Attorney General for a review of the impacts of standards on competition. The Attorney General’s comments on the proposed rule will be considered in preparing the final rule.

2.10.4 Cumulative Regulatory Burden

DOE recognizes and seeks to mitigate the overlapping effects on manufacturers of new or revised DOE standards and other regulatory actions affecting the same equipment. DOE will analyze and consider the impact on manufacturers of multiple, product

- specific regulatory actions. DOE outlined the cumulative regulatory burden process in the framework document and sought comment on any additional regulations facing the commercial refrigeration industry. DOE received several comments from interested parties regarding cumulative regulatory burden at the Framework public meeting and in written comments.

ACEEE suggested that DOE account for possible variability within the regulatory landscape by performing scenario analyses addressing bundled impacts of potential regulatory changes. (ACEEE, No. 1.2.006 at pp. 184

− 185) DOE does not intend to analyze the impacts o f pending legislation or regulations that have not yet been promulgated . However, DOE incorporates the potential impacts of multiple regulations in the cumulative regulatory burden section of the MIA. DOE will work with manufacturers to understand the regulatory landscape during manufacturer impact intervi ews.

Regarding regulatory burden, AHRI stated that there is pending legislation that, if passed, will reduce the amount of HFC refrigerants available to the industry, thus creating a significant impact on refrigerant costs. AHRI further urged DOE to cons ider the impacts of various climate change bills being considered, which could lead to curtailment of HFC availability as soon as 2012 or as late as 2019. Finally, AHRI stated that higher efficiency equipment requires more refrigerant to charge, and that p roposed HFC regulation could lead to dramatic increases in refrigerant prices and a possible shortage of sufficient refrigerants to meet the requirements of a new standard. (AHRI, No. 1.3.008 at p. 5)

DOE uses HFC refrigerants as the basis for its analys es. While pending climate change legislation might result in a phase

- out or production caps for HFC refrigerants over the course of this rulemaking, any analysis of potential impacts before such legislation is enacted would be speculative. At this time, DO E requests data or information on projected HFC cost increases and the basis for such projections. DOE also seeks comment on the extent to which interested parties2

- 46 expect projected HFC costs to increase, the timing of these increases, and the certainty of the
increases.

AHRI stated that California is working on new Title 24 regulations that will most likely establish new prescriptive requirements for this equipment, and that several states have enacted their own climate change legislation to reduce greenhouse gas (GHG) emissions. (AHRI, No. 1.3.008 at p. 6)

Because of the speculative nature of pending legislation, DOE does not analyze the potential impacts of pending legislation; however, the Department seeks comment on any existing state legislati on that is likely to have significant impact on manufacturers, elaboration of the changes in business that result from state legislation, and quantitative estimates of the conversion and compliance costs. In its analysis of the cumulative regulatory burden for CRE
manufacturers , DOE includes the commercial refrigeration equipment energy conservation
standard that was adopted in 2009 and that will go into effect in January 1, 2012. (10 CFR Part
431

, Jan. 9, 2009)

2.10.5 Preliminary Results for the Manufacturer Imp act Analysis

As part of the preliminary MIA, DOE discussed potential impacts of new energy conservation standards with manufacturers responsible for a majority of commercial refrigeration equipment sales. These discussions occurred during the interviews DO E conducted for the engineering analysis. The interviews provided valuable information that DOE used to evaluate the impacts of new energy conservation standards on manufacturers’ cash flows, manufacturing capacities, and employment levels. DOE discusses i ts findings from the preliminary MIA interviews in the executive summary and in chapter 13 of the preliminary TSD. During the Framework public meeting and comment period, DOE also received comments regarding general manufacturer impacts of amended energy c onservation standards.

Several manufacturers commented regarding the burden of added testing costs. Master

Bilt expressed concern regarding the burden of having to test hundreds of equipment models in different configurations. (Master

- Bilt, No. 1.2.006 at p. 200) True also stated its concern regarding the growing cost of testing, largely due to the third

- party certification requirement for programs such as ENERGY STAR  , as well as for international sales. (True, No. 1.2.006 at p. 201) Zero Zone echoed th is sentiment, stating that equipment testing is a significant burden on the company. (Zero Zone, No. 1.2.006 at p. 202)

DOE acknowledges that the cost of testing can be a significant burden. As part of the manufacturer impact analysis, DOE will investiga te testing costs as a component of product conversion costs associated with this energy conservation standard.

Hoshizaki stated that DOE should not amend energy efficiency standards for the EPACT 2005 equipment since the current (EPACT 2005) standards we nt into effect January 1, 2010. Hoshizaki believes that this would place a significant burden on manufacturers who have just finished working to meet the EPACT 2005 standards, and suggested that the revision of these standards be delayed by 3 years. (Hoshi zaki, No. 1.3.006 at p. 2)2

- 47 DOE acknowledges the potential for successive regulation to create a cumulative burden that can negatively impact an industry. DOE encourages manufacturers to share information on
the conversion costs of current EPACT 2005 stan dards on industry. This information will be incorporated into DOE’s manufacturer impact analysis and investigation of cumulative regulatory burden.

2.11 LIFE

- CYCLE COST SUBGROUP ANALYSIS

The LCC subgroup analysis evaluates economic impacts on selected customer subgroups that might be adversely affected by a change in the national energy conservation standards for the considered equipment. DOE evaluates impacts on particular subgroups of customers in part by analyzing the LCC impacts and PBP for those particular customers.

DOE will use the LCC spreadsheet model to evaluate impacts on customer subgroups. DOE can analyze the LCC for any subgroup by applying the LCC spreadsheet model to only that subgroup. DOE is particularly sensitive to increases in the customer p rice and LCC of the considered equipment, wishing to avoid a negative economic impact on any identified customer subgroup.

The Northwest Joint Comment agreed with DOE that the increased scope of this rulemaking as compared to the 2009 final rule will require analysis of additional consumer subgroups, such as independent restaurant owners, coffee shops and delis, and schools. ( Northwest Joint Comment , No. 1.3.003 at p. 8)

DOE will review the available information with respect to the identified customer subgroups. DOE will consider investigating the impacts on independent grocery stores, small convenience stores, and independent foodservice establishments as consumer subgrou ps in its LCC subgroup analysis.

2.12 UTILITY IMPACT ANALY SIS

The utility impact analysis includes an analysis of the effect of new energy conservation standards on the electric and the gas utility industries. For this analysis, DOE adapted the National Energy Modeling System, a large multi

- sectoral, partial

- equilibrium model of the U.S. energy sector that the EIA developed throughout the past decade primarily for preparing EIA’s Annual Energy Outlook ( AEO ). In previous rulemakings, a variant of NEMS (currently termed
NEMS

- BT, BT referring to DOE’s Building Technologies program) was developed to address the specific impacts of an energy conservation standard.

Available in the public domain, NEMS produces a widely recognized baseline energy
forecast for the Unit ed States through 2030. The typical NEMS outputs include forecasts of electricity sales, prices, and electric generating capacity. The energy savings impacts from amended energy conservation standards are modeled using NEMS

- BT to generate forecasts that
de viate from the AEO reference case.2

- 48 During the Framework public meeting, the Northwest Joint Comment urged DOE to examine and analyze the dampening effect that energy conservation standards have on electricity prices. ( Northwest Joint Comment , No. 1.2.006 at pp. 179

− 181)

Inclusion of the dampening effect of standards on electricity prices is an issue that affects all equipment standards rulemakings. In the absence of an appropriate methodology for measuring such effects , DOE will not take the dampening effe ct into consideration for this rulemaking , but will continue to consider the development of an appropriate methodology.

2.13 ENVIRONMENTAL ASSESS MENT

Pursuant to the National Environmental Policy Act of 1969 and the requirements of 42 U.S.C. 6295(o)(2)(B)(i)( VI) and 6316(a), DOE intends to prepare an environmental assessment of the impacts of amended energy conservation standards for commercial refrigeration equipment. The primary environmental effects of these standards would be reduced power plant
emissions resulting from reduced consumption of electricity. DOE will assess these environmental effects by using NEMS

- BT to provide key inputs to its analysis. The portion of the environmental assessment that will be produced by NEMS

- BT considers CO 2 , nitrogen
oxid es (NO
x ), and mercury (Hg). The environmental assessment also considers impacts on sulfur dioxide ( SO 2 ) emissions and discusses particulate matter (PM) emissions. After a brief discussion of general methodology, this section will address each of the releva nt emissions. Th e following section, section 2.14 , explains how DOE plans to monetize the benefits associated with
emissions reductions.

2.13.1 Carbon Dioxide

In the absence of any Federal emissions control regulation of power plant emissions of
CO 2 , a DOE standard is likely to result in reductions of these emissions. The CO 2 emission reductions likely to result from a standard will be estimated using N EMS

- BT and national energy savings estimates drawn from the NIA spreadsheet model. The net benefit of the standard is the difference between emissions estimated by NEMS

- BT at each standard level considered and the
AEO Reference Case. NEMS

- BT tracks CO 2 emi ssions using a detailed module that provides results with broad coverage of all sectors and inclusion of interactive effects

.

2.13.2 Sulfur Dioxide

SO 2 emissions from affected EGUs are subject to nationwide and regional emissions cap and trading programs, and DOE has preliminarily determined that these programs create uncertainty about the potential standards’ impact on SO 2 emissions. Title IV of the Cle an Air Act sets an annual emissions cap on SO 2 for affected EGUs in the 48 contiguous states and the District of Columbia (D.C.). SO 2 emissions from 28 eastern states and D.C. are also limited under the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), which created an
allowance

- based trading program. Although CAIR has been remanded to the U.S. Environmental Protection Agency ( EPA ) by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), see North Carolina v. EPA , 550 F. 3d 1176 (D.C. Cir. 2008), it remains in effect temporarily, consistent with the D.C. Circuit’s earlier opinion in North Carolina v. EPA , 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2010, EPA issued the Transport Rule proposal, a2

- 49 replacement for CAIR, which w ould limit emissions from EGUs in 32 states, potentially through the interstate trading of allowances, among other options. 75 FR 45210 (Aug. 2, 2010).

The attainment of emissions caps is typically flexible among electric generating units ( EGUs ) and is e nforced through the use of emissions allowances and tradable permits. Under existing EPA regulations, and under the Transport Rule if it is finalized, any excess SO 2 emissions allowances resulting from the lower electricity demand caused by the imposition of an efficiency standard could be used to permit offsetting increases in SO 2 emissions by any regulated EGU. However, if the standard resulted in a permanent increase in the quantity of unused emissions allowances, there would be an overall reduction in S O 2 emissions from the standards. While there remains some uncertainty about the ultimate effects of efficiency
standards on SO 2 emissions covered by the existing cap and trade system, the NEMS

- BT modeling system that DOE uses to forecast emissions reductio ns currently indicates that no physical reductions in power sector emissions would occur for SO 2

.

2.13.3 Nitrogen Oxides

A cap on NO
x emissions, affecting electric generating units in the CAIR region, would mean that the standards for commercial refrigeration e quipment may have little or no physical
effect on NO
x emissions in the 28 eastern states and the D.C. covered by CAIR or any states covered by the proposed Transport Rule if the Transport Rule if finalized. The standards would, however, reduce NO
x emission s in those 22 states not affected by the CAIR. As a result, DOE plans to use NEMS

- BT to estimate the emissions reductions from possible standards in the states where emissions are not capped.

2.13.4 Mercury

Similar to emissions of SO 2 and NO
x , future emissions of Hg would have been subject to emissions caps. In May 2005, E PA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18, 2005). CAMR would have permanently capped emissions of mercury for new and existing coal

- fired power plants in all states by 20 10. However, on February 8, 2008, the D.C.
Circuit issued a decision in New Jersey v. Environmental Protection Agency , in which it vacated CAMR. 517 F.3d 574 (D.C. Cir. 2008). EPA has decided to develop emissions standards for power plants under the Clean Air Act (Section 112), consistent with the D.C. Circuit’s opinion
on CAMR. See http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf . Pending
EPA’ s forthcoming revisions to the rule, DOE is excluding CAMR from its environmental assessment. In the absence of CAMR, a DOE standard would likely reduce Hg emissions and DOE plans to use NEMS

- BT to estimate these emission reductions. However, DOE continues to
review the impact of rules that reduce energy consumption on Hg emissions, and may revise its assessment of Hg emission reductions in future rulemakings.

2.13.5 Particulate Matter

DOE acknowledges that PM exposure can impact human health. Power plant emissions
can have e ither direct or indirect impacts on PM. A portion of the pollutants emitted by a power plant , called direct, or primary PM emissions, are in the form of particulates as they leave the smoke stack. However, the great majority of PM emissions associated with power plants are in2

- 50 the form of secondary sulfates, which are produced a significant distance away from power plants by complex atmospheric chemical reactions that often involve the gaseous (non

particulate) emissions of power plants, mainly SO 2 and NO
x . The quantity of the secondary sulfates produced is determined by a very complex set of factors including the atmospheric quantities of SO 2 and NO
x , and other atmospheric constituents and conditions. Because these highly complex chemical reactions produce P M comprised of different constituents from different sources, EPA does not distinguish direct PM emissions from power plants from the secondary sulfate particulates in its ambient air quality requirements, PM monitoring of ambient air quality, or PM emissi ons inventories. For these reasons, it is not currently possible to determine how the amended standard impacts either direct or indirect PM emissions. Therefore, DOE is not planning to assess the impact of these standards on PM emissions. Further, as
descr ibed previously, it is uncertain whether efficiency standards will result in a net decrease in power plant emissions of SO 2 , which are now largely regulated by cap and trade systems.

2.14 MONETIZATION OF EMIS SIONS REDUCTION BENE FITS

DOE plans to consider the estimated monetary benefits likely to result from the reduced
emissions of CO 2 and other pollutants that are expected to result from each of the standard levels
considered.

In order to estimate the monetary value of benefits resulting from reduced emis sions of
CO 2 , DOE plans to use the most current Social Cost of Carbon (SCC) values developed and/or agreed to by an interagency process. The SCC is intended to be a monetary measure of the incremental damage resulting from GHG emissions, including, but not limited to, net agricultural productivity loss, human health effects, property damage 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, econ omics, 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.

At the time of this notice, the most recent interagency estima tes of the potential global benefits resulting from reduced CO 2 emissions in 2010, expressed in 2009$, were $4.9, $22.1, $36.3, and $67.1 per metric ton avoided. For emission reductions that occur in later years, these values grow in real terms over time. Additionally, the interagency group determined that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to calculate domestic effects, although DOE will give preference to consideration of the global benefits of reducing CO 2 emissions. To calculate a present value of the stream of monetary values, DOE will discount the values in each of the four cases using the discount rates that had been used to
obtain the SCC values in each case.

DOE recognizes that scientific and ec onomic knowledge continues to evolve rapidly as to
the contribution of CO 2 and other GHG to changes in the future global climate and the potential resulting damages to the world economy. Thus, these values are subject to change.

DOE also intends to estim ate the potential monetary benefit of reduced NO
x emissions resulting from the standard levels it considers. For NO
x emissions, available estimates suggest a2

- 51 very wide range of monetary values for NO
x emissions, ranging from $447 to $4,591 per ton in 2009$ ). 7 In accordance with OMB guidance, DOE will conduct two calculations of the monetary benefits derived using each of the economic values used for NO
x , one using a real discount rate of 3 percent and another using a real discount rate of 7 percent. d

DOE d oes not plan to monetize estimates of Hg in this rulemaking. DOE is aware of multiple agency efforts to determine the appropriate range of values used in evaluating the potential economic benefits of reduced Hg emissions. DOE has decided to await further g uidance regarding consistent valuation and reporting of Hg emissions before it once again monetizes Hg in its rulemakings.

DOE received a number of comments on the monetization of pollutants. In its written comments to DOE, AHRI made several statements re garding its position on DOE’s monetization of emissions reductions. AHRI stated that, while reduction of CO 2 emissions is an important factor to consider, DOE has no statutory responsibility to establish a monetary value for such
reduction , and that DOE sh ould not allow evaluation of environmental impacts to negate core analyses such as payback and life

- cycle cost. (AHRI, No. 1.3.008 at pp. 6

− 7) Moreover, AHRI added, since there is not currently a cap

- and

- trade program in place in the United States, nor is there consensus on a single value for CO 2 emissions, it would be an arbitrary decision for DOE to rely on existing valuations. (AHRI, No. 1.3.008 at p. 7) Finally, AHRI suggested that, if DOE is going to estimate the value of CO 2 emissions reductions, it m ust also consider the additional
CO 2 emissions produced in the manufacture of more efficient units. (AHRI, No. 1.3.008 at p. 7) NRDC support ed the use of monetization of emissions reductions . In addition, NRDC
commented that because indirect CO 2 emissions may only represent part of a system’s TEWI

, monetization calculations should be used that encourage reductions in TEWI, including those due to reductions in refrigerant leakage. (NRDC, No. 1.3.012 at p. 7)

As described above, DOE uses a procedur e provided by an interagency working group
for the monetization of CO 2 emissions and continues to modify this procedure as guidance changes. Monetization of refrigerant leaks is currently not part of the interagency guidance. Evaluation of environmental impacts is a n independent analysis and does not influence the life

cycle cost and payback period analyses. DOE’s environmental impact analysis is standard for all DOE rulemakings and may change in the future as the interagency guidance evolves.

2.14.1 Environmental Impact of Refrigerant Leakage

During the Framework public meeting, interested parties commented on refrigerant leakage, namely from supermarket refrigeration systems. California Codes and Standards stated that the California Air Resources Board (CARB) is working on standards to address leakage, that typical leakage rates are around 18 percent annually, and that the refrigerants involved typically have a global warming potential (GWP) of around 2,000, making this a significant climate change issue. (California Codes and Standards, No. 1. 2.006 at p. 42) In a later written comment, California Codes and Standards clarified that CARB is pursuing regulation of refrigerants with a GWP greater than 150, and suggested that DOE coordinate with CARB and EPA to develop a standard that supports GHG r eduction through improved efficiency and reduced leakage.

d OMB, Circular A

- 4: Regulatory Analysis ( Sept. 17, 2003).2

- 52 Moreover, it was stated that DOE should determine that this standard not preempt any state standard seeking to reduce GHG emissions. (California Codes and Standards, No. 1.3.005 at p. 10) Southern S tore Fixtures questioned the previous statement regarding leakage rates, stating that new supermarket refrigeration systems have much less leakage than the previously cited 18 percent figure (Southern Store Fixtures, No. 1.2.006 at p. 48) The Northwest Joi nt Comment stated that, regardless, it is becoming clear that manufacturers will soon have to address issues of leakage, and thus any outside regulatory changes regarding refrigerants are unlikely to have a major impact on this equipment. ( Northwest Joint Comment , No. 1.3.003 at p. 5) NRDC stated that DOE should evaluate whether or not to recommend to Congress that incentives or penalties based on TEWI be enacted into law. (NRDC, No. 1.3.012 at p. 7)

Interested parties also briefly commented on leakage fro m secondary coolant systems. Kysor/Warren asked if CO 2 from a secondary coolant system that leaks or is vented to the atmosphere is quantified as a GHG emission. (Kysor/Warren, No. 1.2.006 at p. 184) ACEEE responded that the CO 2 contribution from secondary coolant systems is insignificant (ACEEE, No. 1.2.006 at pp. 185

− 186), and the Northwest Joint Comment agreed, stating that CO 2 emissions due to secondary coolant applications are net zero. ( Northwest Joint Comment , No. 1.2.006 at p. 186)

NRDC commented t hat refrigerant leakage emissions are of comparable importance to

energy

- related emissions, and should be addressed as a matter of policy by DOE standards. NRDC further stated that secondary coolant systems have leakage rates of only 3

− 5 percent annually, as opposed to 15

− 30 percent for DX systems, and require about 89 percent less refrigerant than DX systems. (NRDC, No. 1.3.012 at pp. 2

− 3) To account for this, NRDC suggested that DOE consider the TEWI as a means of comparing the effects of refrigerant
leak age to those of the energy consumption of a unit, and that DOE should evaluate and monetize TEWI, then set slightly looser energy efficiency standards for lower

- TEWI systems if warranted by analysis. (NRDC, No. 1.3.012 at p. 4)

DOE’s approach to the envir onmental impact assessment currently includes evaluation of
CO 2 , SO 2 , NO
x , and Hg emissions. F or DOE rulemakings, the current interagency guidance
referenced above does not disc u ss the monetization of refrigerant leaks. DOE will adapt its approach to futur e changes in the interagency guidance, and encourages interested parties to provide their input on the interagency guidance and contribute to its evolution.

As stated in section 2.1.2.1, DOE does not intend to analyze secondary coolant systems as part of this rulemaking and, hence, the environmental impacts of CO 2 emissions from these systems, if any, would not be considered in the rulemaking.

DOE is required to set energy conservation standards for commercial refrigeration equipment that achieve the maxi mum improvement in energy efficiency that is technologically feasible and economically justified . These standards do not directly regulat e GHG emissions

, though the preemption of any state standards would be governed by the applicable preemption provisions of EPCA . DOE encourages interested parties, including CARB and other environmental agencies, to comment on DOE’s analysis of efficiency levels if they believe that the efficiency levels would, in conjunction with the regulations being considered by CARB,2

- 53 result in the inability of certain equipment types to continue to be sold after the compliance date of any final standards

.

2.15 EMPLOYMENT IMPACT AN ALYSIS

The imposition of standards can affect employment both directly and indirectly. Direct employment impacts are changes in the number of employees at plants that produce covered equipment and at the affiliated distribution and service companies. DOE evaluated direct employment impacts in the manufacturer impact analysis. Indirect employ ment impacts may result from customers shifting expenditures between goods (the substitution effect) and from changes in income and overall expenditure levels (the income effect). DOE will use PNNL’s Impact of Sector Energy Technologies (ImSET) model to in vestigate the combined direct and indirect employment impacts. The ImSET model, which was developed for DOE’s Office of Planning, Budget, and Analysis, estimates the employment and income effects energy

- saving technologies produce in buildings, industry, a nd transportation. Compared with simple economic multiplier approaches, ImSET allows for more complete analysis of the economic impacts of energy conservation investments.

2.16 REGULATORY IMPACT AN ALYSIS

In the NOPR, DOE will prepare a regulatory impact analys is (RIA) pursuant to Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 ( Oct

. 4, 1993 ) . The RIA is subject to review under the Executive Order by the Office of Information and Regulatory Affairs at the Office of Management and Budget. The RIA addresses the potential for non

regulatory approaches to supplant or augment energy conservation standards in order to improve the energy efficiency or reduce the energy consumption of the equipment covered under this rulemaking.

NRDC stated that DOE should review the EPA GreenChill programs for store certification and potentially enact standards to lower refrigerant leakage rates. (NRDC, No. 1.3.012 at p. 7) The EPA GreenChill Advanced Refrigeration Partnership program works with
food retailers to en courage them to reduce the refrigerant emissions and decrease their impact on the ozone layer and climate change. However, DOE is required, as stated above, to establish standards that achieve the maximum improvement in energy efficiency that is technologi cally feasible and economically justified. Therefore, the standards’ impact on refrigerant leakage is beyond the scope of this rulemaking.

At the Framework public meeting, True stated that DOE should research rebate programs for commercial refrigeration eq uipment, such as a recent Hydro

- Quebec program that provided large rebates for replacement units under the condition that old equipment be scrapped to guarantee energy savings. (True, No. 1.2.006 at pp. 187

− 189) ACEEE stated that, in
coordination with AHRI , it had introduced legislation for incentives to remove chlorofluorocarbon (CFC) chillers from the marketplace. (ACEEE, No. 1.2.006 at p. 190)
Hoshizaki commented that schools and non

- profits should be considered for rebates to help them obtain energy

- eff icient equipment. (Hoshizaki, No. 1.3.006 at p. 1)2

- 54 DOE recognizes that non

- regulatory efforts by manufacturers, utilities, and other interested parties can substantially improve energy efficiency or reduce energy consumption. For the NOPR, DOE will base it s assessment on the actual impacts of any such initiatives to date, but will also consider information presented by interested parties on the impacts that existing initiatives might have in the future.2

- 55 

### References

1

. American Society of Heating, Refrigerating and Air

- Conditioning Engineers. Comparison of
Vert ical Display Cases: Energy and Productivity Impacts of Glass Doors Versus Open Display Cases . 2009. Atlanta, GA. RP

- 1402.

< http://rp.ashrae.biz/researchproject.php?rp_id=580 >

2

. Carbonara, M. 2010 Foodservice Industry Forecast: Achieving Stability

. Foodservice Equipment and Supplies

. September 1, 2009. (Last accessed December 2010.)

< http://www.fesmag.com/ind ex.php/research/industry

- forecast >

3

. Navigant Consulting, Inc. Energy Savings Potential and R&D Opportunities for Commercial Refrigeration, Final Report . 2009. Prepared for the U.S. Department of Energy Office of Efficiency and Renewable Energy, Washi ngton, D.C.

< http://apps1.eere.energy.gov/buildings/publications/pdfs/corporate/commercial_refrig_repor t_10

- 09.pdf >

4

. Intergovernmental Panel on Climate Change, World Meteorological Organization/United Nations Environment Programme . Good Practice Guidance and Uncertainty Management in
National Greenhouse Gas Inventories . 2001. (Last accessed June 26, 2007.)

< http://www.ipcc

- nggip.iges.or.jp/public/gp/english/3_Industry.pdf >. The June 26, 2007
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- 2006

- STD

- 0126. For more
information , contact Brenda Edwards

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- 2945.

5 U.S. Census Bur eau. 2007 Economic Census, Sector 72: EC0772A1: Accommodation and
Food Services . ( Last a ccessed Dec ember 10, 2010

. )

< http://factfinder.census.gov/servlet/IBQTable?_bm=y&

- geo_id=D&

- ds_name=EC0772A1&

- _lang=en >

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. U.S. Department of Energy, Energy Information Administration. Annual Energy Outlook
2010 . Washington

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. U.S. Office of Management and Budget, Office of Information and Regulatory Affairs

. 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities . 2007. Washington, D.C.