CHAPTER 1. INTRODUCTION

TABLE OF CONTENTS

1.1 PURPOSE OF THE DOCUMENT ................................................................................. 1­1

1.2 OVERVIEW OF COMMERCIAL EQUIPMENT STANDARDS................................. 1­1

1.3 OVERVIEW OF PACKAGED TERMINAL AIR CONDITIONER AND

PACKAGED TERMINAL HEAT PUMP STANDARDS.............................................. 1­2

1.4 STRUCTURE OF THE DOCUMENT............................................................................ 1­4

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CHAPTER 1. INTRODUCTION

1.1 PURPOSE OF THE DOCUMENT

This technical support document (TSD) is a stand­alone report that documents the

technical analyses and results in support of the information presented in the Notice of Proposed

Rulemaking (NOPR) for establishing energy conservation standards for packaged terminal air

conditioners (PTACs) and packaged terminal heat pumps (PTHPs).

1.2 OVERVIEW OF COMMERCIAL EQUIPMENT STANDARDS

Part B of Title III of the Energy Policy and Conservation Act (EPCA) of 1975, Public

Law 94­163, as amended by the National Energy Conservation Policy Act of 1978 (NECPA),

Public Law 95­619; the National Appliance Energy Conservation Act of 1987 (NAECA), Public

Law 100­12; the National Appliance Energy Conservation Amendments of 1988 (NAECA

1988), Public Law 100­357; and the Energy Policy Act of 1992 (EPACT 1992), Public Law 102­

486 (the Act or EPCA), established the Energy Conservation Program for Consumer Products

other than Automobiles. (42 U.S.C. 6291­6309) Part 3 of Title IV of NECPA amended EPCA

to add Part C of Title III, which includes PTACs and PTHPs. (42 U.S.C. 6311(1)(D)) EPACT

1992 also amended EPCA with respect to air­conditioning equipment, providing definitions in

section 122(a), test procedures in section 122(b), labeling provisions in section 122(c), energyefficiency standards in section 122(d), and enforcement requirements in section 122(e). (42

U.S.C. 6311, 6313­15) These amendments expanded the Department of Energy (DOE)’s energy

conservation program to include PTACs and PTHPs, the focus of this document.

EPCA, as amended by EPACT 1992, established Federal energy conservation standards

that correspond to the levels in American Society of Heating, Refrigerating and Air­Conditioning

Engineers, Inc. (ASHRAE)/Illuminating Engineering Society of North America (IESNA)

Standard 90.1 in effect on October 24, 1992. The statute further provides that if the efficiency

levels in ASHRAE/IESNA Standard 90.1“Energy Standard for Buildings Except Low­Rise

Residential Buildings” (ASHRAE/IESNA Standard 90.1­1992) are amended after that date for

any of the covered products, including PTACs and PTHPs, the Secretary of Energy (Secretary)

must establish an amended uniform national standard for such equipment at the new minimum

level for each effective date specified in ASHRAE/IESNA Standard 90.1, unless the Secretary

determines, through a rulemaking supported by clear and convincing evidence, that a more

stringent standard would result in significant additional conservation of energy and is

technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A))

Under EPCA, when DOE studies new or amended standards, it must consider to the

greatest extent practicable, the following seven factors:

(1) the economic impact of the standard on the manufacturers and consumers of the

products subject to the standard;

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(2) the savings in operating costs throughout the estimated average life of the products in

the type (or class) compared to any increases in the price, initial charges, or maintenance

expense for the products that are likely to result from the imposition of the standard;

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

imposition of the standard;

(4) any lessening of the utility or the performance of the products likely to result from the

imposition of the standard;

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

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

(6) the need for national energy conservation; and

(7) other factors the Secretary considers relevant (42 U.S.C. 6313(a)(6)(B)(i))

Other statutory requirements are set forth in 42 U.S.C. 6313(a)(6)(B)(ii) and (C).

DOE considers stakeholder participation to be a very important part of the process for

setting energy conservation standards. DOE actively encourages the participation and interaction

of all stakeholders during the comment period in each stage of the rulemaking. During comment

periods, interactions among stakeholders provide a balanced discussion of the information that is

required for the standards rulemaking.

In conducting test procedure and energy conservation standards rulemakings, DOE

involves stakeholders through formal public notifications (i.e., Federal Register notices). For

this PTAC and PTHP energy conservation standards rulemaking, DOE will employ the

procedures set forth in DOE’s Process Rule (Procedures for Consideration of New or Revised

Energy Conservation Standards for Consumer Products, 61 FR 36974, July 15, 1996, 10 CFR

Part 430, Subpart C, Appendix A) to the extent they are appropriate for developing energy

conservation standards for the PTAC and PTHP equipment covered under this rulemaking.

Before DOE determines whether to adopt a proposed energy conservation standard, it

must first solicit comments on the proposed standard. (42 U.S.C. 6313(a)(6)(B)(i)) Any new or

amended standard must be designed to achieve significant additional conservation of energy and

be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)) To determine

whether economic justification exists, DOE must review comments on the proposal and

determine that the benefits of the proposed standard exceed its burdens to the greatest extent

practicable, weighing the seven factors listed above.

1.3 OVERVIEW OF PACKAGED TERMINAL AIR CONDITIONER AND

PACKAGED TERMINAL HEAT PUMP STANDARDS

On October 29, 1999, ASHRAE’s board of directors approved ASHRAE/IESNA

Standard 90.1­1999 “Energy Standard for Buildings Except Low­Rise Residential Buildings”

(ASHRAE/IESNA Standard 90.1­1999), which addressed efficiency levels for 34 categories of

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commercial heating, ventilating, and air­conditioning (HVAC) and water heating equipment

covered by EPCA. The new ASHRAE/IESNA Standard 90.1­1999 revised the efficiency levels

in the existing ASHRAE/IESNA Standard 90.1­1989 for certain commercial equipment

including PTACs and PTHPs. For the remaining equipment, ASHRAE left the preexisting levels

in place, after considering revision of the levels for some equipment and deferring consideration

of others.

Following the publication of ASHRAE/IESNA Standard 90.1­1999, DOE performed a

screening analysis that covered 24 of the categories of equipment to help decide what action it

would take with respect to the new efficiency levels. For each equipment type of equipment, the

screening analysis examined a range of efficiency levels that included the levels specified in

EPCA and ASHRAE/IESNA Standard 90.1­1999, as well as levels associated with the lowest

life­cycle cost. Screening Analysis for EPACT­Covered Commercial HVAC and Water­Heating

Equipment (screening analysis) summarizes the analysis and estimates the annual national

energy consumption and the potential for energy savings that would result if EPACT­covered

products were to meet these efficiency levels.a The analysis also estimates additional energysavings potential for the EPACT­covered products if they were to exceed the efficiency levels

prescribed in ASHRAE/IESNA Standard 90.1­1999. The baselines for the comparison were the

corresponding levels specified in ASHRAE/IESNA Standard 90.1­1999 and EPCA. On January

12, 2001, DOE published a final rule concluding that the screening analysis indicated at least a

reasonable possibility of finding “clear and convincing evidence” that more stringent standards

“would be technologically feasible and economically justified and would result in significant

additional conservation of energy” for PTACs and PTHPs. 66 FR 3349. According to EPCA,

these are the criteria for the adoption of standards more stringent than those in ASHRAE/IESNA

Standard 90.1. (42 U.S.C. 6313(a)(6)(A))

Lastly on March 13, 2006, DOE issued a Notice of Availability (NOA) announcing the

availability of a technical support document (TSD) DOE used in assessing whether to adopt, as

uniform national standards, energy conservation standards contained in amendments to the

ASHRAE/IESNA Standard 90.1­1999 for certain types of commercial equipment including

PTACs and PTHPs. 71 FR 12634. DOE revised its energy savings analysis used in the

screening analysis and summarized the assumptions and results in this TSD. DOE also stated

that even though the potential energy savings in the revised analysis has been reduced for

seeking a more stringent standard compared to the efficiency levels specified in

ASHRAE/IESNA 90.1­1999, DOE believes there is a possibility of clear and convincing

evidence, which would warrant further evaluation of more stringent standard levels for PTACs

and PTHPs. Therefore, DOE stated in this notice that it was inclined to seek a more stringent

standard level than the efficiency levels in ASHRAE/IESNA Standard 90.1­1999 for PTACs and

PTHPs through a separate rulemaking process. 71 FR 12639.

DOE conducted several analyses in preparation for publishing this notice of proposed

rulemaking (NOPR) and TSD for the current PTAC and PTHP rulemaking. A list of the

a On April 2000, the DOE published the Screening Analysis for EPACT­Covered Commercial HVAC and WaterHeating Equipment which covered PTAC and PTHP products.

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analyses and the corresponding Chapter number is presented in the next section. A summary of

each analysis conducted can be found in Chapter 2 of this TSD.

1.4 STRUCTURE OF THE DOCUMENT

This NOPR TSD outlines the analytical approaches used in this rulemaking. The TSD

consists of 15 chapters, a report for regulatory impact analysis, and appendices.

Chapter 1 Introduction: provides an overview of the appliance standards program

and how it applies to the PTAC and PTHP rulemaking, and outlines the

structure of the document.

Chapter 2 Analytical Plan: describes the rulemaking process step by step.

Chapter 3 Market and Technology Assessment: characterizes the PTAC and PTHP

market and the technologies available for increasing equipment efficiency.

Chapter 4 Screening Analysis: determines which technology options are viable for

consideration in the engineering analysis.

Chapter 5 Engineering Analysis: discusses the methods used for developing the

relationship between increased manufacturer price and increased

efficiency.

Chapter 6 Markups for Equipment Price Determination: discusses the methods used

for establishing markups for converting manufacturer prices to customer

equipment prices.

Chapter 7 Energy Use Characterization: discusses the process used for generating

energy use estimates of PTACs and PTHPs for a variety of equipment

classes, climate locations, and standard levels.

Chapter 8 Life­Cycle Cost and Payback Period Analyses: discusses the economic

effects of standards on individual customers and users of the equipment

and compares the LCC and PBP of equipment with and without higher

efficiency standards.

Chapter 9 Trial Standard Levels: discusses the trial standard levels and the methods

used to derive the energy­efficiency equations corresponding to the

proposed energy conservation standards.

Chapter 10 Shipments Analysis: discusses the methods used for forecasting

shipments with and without higher efficiency standards, including how

equipment purchase decisions are economically influenced and modeled

with econometric equations.

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Chapter 11 National Impact Analysis: discusses the methods used for forecasting

national energy consumption and national economic impacts based on

annual equipment shipments and estimates of future equipment efficiency

distributions in the absence and presence of higher efficiency standards.

Chapter 12 Life­Cycle Cost Sub­Group Analysis: discusses the effects of standards

on a subgroup of PTAC and PTHP equipment customers and compares the

LCC and PBP of equipment with and without higher efficiency standards

for these customers.

Chapter 13 Manufacturer Impact Analysis: discusses the effects of amended energy

conservation standards on the finances and profitability of equipment

manufacturers.

Chapter 14 Utility Impact Analysis: discusses the effects of amended energy

conservation standards on the installed generation capacity of electric

utilities.

Chapter 15 Employment Impact Analysis: discusses the effects of amended energy

conservation standards on National employment.

Chapter 16 Environmental Assessment: discusses the effects of amended energy

conservation standards on certain environmental indicators.

Regulatory Impact Analysis for Packaged Terminal Air Conditioners and Packaged

Terminal Heat Pumps: discusses the present regulatory actions as well as

the impact of non­regulatory alternatives to setting new energy

conservation standards.

Appendix A Detailed Data for Equipment Price Markups: accompanies Chapter 6,

Markups for Equipment Price Determination

Appendix B Internal Loads Schedules and Part­Load Performance Curves for PTACs

and PTHPs: accompanies Chapter 7, Energy Use Characterization

Appendix C Typical Meteorological Year (TMY2) Assignments: accompanies

Chapter 7, Energy Use Characterization

Appendix D User Instructions for Life­Cycle Cost Spreadsheet: accompanies Chapter

8, Life­Cycle Cost and Payback Period Analysis

Appendix E Detailed Life­Cycle Cost Output: accompanies Chapter 8, Life­Cycle

Cost and Payback Period Analysis

Appendix F User Instructions for National Energy Savings and Net Present Value

Spreadsheet: accompanies Chapter 10, National Impact Analysis

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Appendix G Detailed National Energy Savings and National Net Present Value Output:

accompanies Chapter 10, National Impact Analysis

Appendix H Estimation of Marginal Heat Rates and Site­to­Source Conversion Factors;

accompanies Chapter 10, National Impact Analysis

Appendix I Government Regulatory Impact Model (GRIM)

Appendix J Estimation of Utility and Environmental Results from NEMS­BT Output:

accompanies Chapter 13, Utility Impact Analysis

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