12000 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket No. EERE–2008–BT–STD–0013] 

RIN 1904–AB83 

Energy Conservation Program for 

Certain Industrial Equipment: Energy 

Conservation Standards and Test 

Procedures for Commercial Heating, 

Air-Conditioning, and Water-Heating 

Equipment 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Notice of proposed rulemaking 

and public meeting. 

SUMMARY: The Energy Policy and 

Conservation Act of 1975 (EPCA), as 

amended, directs the U.S. Department of 

Energy (DOE) to establish energy 

conservation standards for certain 

commercial and industrial equipment, 

including commercial heating, airconditioning, and water-heating 

equipment. Of particular relevance here, 

the statute also requires that each time 

the corresponding industry standard— 

the American Society of Heating, 

Refrigerating and Air-Conditioning 

Engineers, Inc. (ASHRAE)/Illuminating 

Engineering Society of North America 

(IESNA) Standard 90.1—is amended, 

DOE must assess whether there is a 

need to update the uniform national 

energy conservation standards for the 

same equipment covered under EPCA. 

ASHRAE officially released an amended 

version of this industry standard 

(ASHRAE Standard 90.1–2007) on 

January 10, 2008, thereby triggering 

DOE’s related obligations under EPCA. 

Specifically, pursuant to EPCA, DOE 

assessed whether the revised ASHRAE 

efficiency levels are more stringent than 

the existing Federal energy conservation 

standards; and for those equipment 

classes for which ASHRAE set morestringent efficiency levels (i.e., 

commercial packaged boilers), analyzed 

the economic and energy savings 

potential of amended national energy 

conservation standards (at both the new 

ASHRAE Standard 90.1 levels and 

more-stringent efficiency levels). 

DOE has tentatively concluded that 

the statutory criteria have been met for 

commercial packaged boilers and watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h, thereby justifying 

consideration of national energy 

conservation standards set at the revised 

levels in ASHRAE Standard 90.1–2007. 

Furthermore, DOE has tentatively 

concluded that clear and convincing 

evidence does not exist, as would justify 

more-stringent standard levels than the 

efficiency levels in ASHRAE Standard 

90.1–2007 for commercial packaged 

boilers. DOE has also tentatively 

concluded that there are no watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h being currently 

manufactured, and therefore, it is not 

possible to assess the economic and 

energy savings potential for adopting 

efficiency levels at or above the 

ASHRAE Standard 90.1–2007 efficiency 

levels for such equipment. Accordingly, 

in this notice, DOE is proposing to 

amend the energy conservation 

standards for commercial packaged 

boilers and to adopt a new energy 

conservation standard for water-cooled 

and evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h at the efficiency levels 

specified by ASHRAE Standard 90.1– 

2007. DOE is also proposing related 

amendments to its test procedures for 

commercial packaged boilers. In 

addition, DOE is announcing a public 

meeting to receive comment on its 

proposal and related issues. 

DATES: DOE will hold a public meeting 

on April 7, 2009, from 9 a.m. to 4 p.m., 

in Washington, DC. DOE must receive 

requests to speak at the public meeting 

before 4 p.m., March 24, 2009. DOE 

must receive a signed original and an 

electronic copy of statements to be made 

at the public meeting before 4 p.m., 

March 31, 2009. 

DOE will accept comments, data, and 

information regarding the notice of 

proposed rulemaking (NOPR) before and 

after the public meeting, but no later 

than June 3, 2009. See section VII, 

‘‘Public Participation,’’ of this NOPR for 

details. 

ADDRESSES: The public meeting will be 

held at the U.S. Department of Energy, 

Forrestal Building, Room 8E–089, 1000 

Independence Avenue, SW., 

Washington, DC. Please note that 

foreign nationals visiting DOE 

Headquarters are subject to advance 

security screening procedures. If you are 

a foreign national and wish to 

participate in the public meeting, please 

inform DOE as soon as possible by 

contacting Ms. Brenda Edwards at (202) 

586–2945 so that the necessary 

procedures can be completed. 

Any comments submitted must 

identify the NOPR for Energy 

Conservation Standards and Test 

Procedures for ASHRAE Standard 90.1 

Products, and provide the docket 

number EERE–2008–BT–STD–0013 

and/or Regulatory Information Number 

(RIN) 1904–AB83. Comments may be 

submitted using any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

ASHRAE_90.1_rulemaking@ee.doe.gov. 

Include the docket number EERE–2008– 

BT–STD–0013 and/or RIN 1904–AB83 

in the subject line of the message. 

• Postal Mail: Ms. Brenda Edwards, 

U.S. Department of Energy, Building 

Technologies Program, Mailstop EE–2J, 

1000 Independence Avenue, SW., 

Washington, DC 20585–0121. Please 

submit one signed paper original. 

• Hand Delivery/Courier: Ms. Brenda 

Edwards, U.S. Department of Energy, 

Building Technologies Program, 950 

L’Enfant Plaza, 6th Floor, Washington, 

DC 20024. Telephone: (202) 586–2945. 

Please submit one signed paper original. 

For detailed instructions on 

submitting comments and additional 

information on the rulemaking process, 

see section VII, ‘‘Public Participation,’’ 

of this document. 

Docket: For access to the docket to 

read background documents or 

comments received, visit the U.S. 

Department of Energy, Resource Room 

of the Building Technologies Program, 

950 L’Enfant Plaza, SW., 6th Floor, 

Washington, DC 20024, (202) 586–2945, 

between 9 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

Please call Ms. Brenda Edwards at the 

above telephone number for additional 

information regarding visiting the 

Resource Room. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mohammed Khan, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, Mailstop EE–2J, 

1000 Independence Avenue, SW., 

Washington, DC 20585–0121. 

Telephone: (202) 586–7892. E-mail: 

Mohammed.Khan@ee.doe.gov. 

Mr. Eric Stas, U.S. Department of 

Energy, Office of the General Counsel, 

Mailstop GC–72, Forrestal Building, 

1000 Independence Avenue, SW., 

Washington, DC 20585–0121. 

Telephone: (202) 586–9507. E-mail: 

Eric.Stas@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Summary of Proposed Rule 

II. Introduction 

A. Authority 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12001 

1Although EPCA does not explicitly define the 

term ‘‘amended’’ in the context of ASHRAE 

Standard 90.1, DOE provided its interpretation of 

what would constitute an ‘‘amended standard’’ in 

a final rule published in the Federal Register on 

March 7, 2007 (hereafter referred to as the March 

2007 final rule). 72 FR 10038. In that rule, DOE 

stated that the statutory trigger requiring DOE to 

adopt uniform national standards based on 

ASHRAE action is for ASHRAE to change a 

standard for any of the equipment listed in EPCA 

section 342(a)(6)(A)(i) (42 U.S.C. 6313(a)(6)(A)(i)) by 

increasing the energy efficiency level for that 

equipment type. Id. at 10042. In other words, if the 

revised ASHRAE Standard 90.1 leaves the standard 

level unchanged or lowers the standard, as 

compared to the level specified by the national 

standard adopted pursuant to EPCA, DOE does not 

have the authority to conduct a rulemaking to 

consider a higher standard for that equipment 

pursuant to 42 U.S.C. 6313(a)(6)(A). 

B. Background 

1. ASHRAE Standard 90.1–2007 

2. Notice of Data Availability and Request 

for Public Comment 

III. General Discussion of Comments 

Regarding the ASHRAE Process and 

DOE’s Interpretation of EPCA’s 

Requirements With Respect to ASHRAE 

Equipment 

A. The ASHRAE Process 

B. The Definition of Amendment With 

Respect to the Efficiency Levels in an 

ASHRAE Standard 

C. Different Types of Changes in ASHRAE 

Standard 90.1–2007 

D. DOE’s Review of ASHRAE Equipment 

Independent of the ASHRAE Standards 

Process 

E. Equipment Classes With a Two-Tier 

Efficiency Level Specified in ASHRAE 

Standard 90.1–2007 

IV. General Discussion of the Changes in 

ASHRAE Standard 90.1–2007 and 

Determination of Scope for Further 

Rulemaking Analyses 

A. Commercial Warm Air Furnaces 

1. Gas-Fired Commercial Warm Air 

Furnaces 

2. Oil-Fired Commercial Warm Air 

Furnaces 

B. Commercial Package Air-Conditioning 

and Heating Equipment 

1. Three-Phase Through-the-Wall AirCooled Air Conditioners and Heat 

Pumps 

2. Three-Phase, Small-Duct, High-Velocity 

Air-Cooled Air Conditioners and Heat 

Pumps 

3. Commercial Package Air-Cooled Air 

Conditioners With a Cooling Capacity at 

or Above 760,000 Btu per Hour 

4. Water-Cooled and Evaporatively-Cooled 

Commercial Package Air Conditioners 

and Heat Pumps With a Cooling 

Capacity at or Above 135,000 Btu/h and 

Less Than 240,000 Btu/h 

5. Water-Cooled and Evaporatively-Cooled 

Commercial Package Air Conditioners 

and Heat Pumps With a Cooling 

Capacity at or Above 240,000 Btu/h and 

Below 760,000 Btu/h 

C. Commercial Packaged Boilers 

1. Efficiency Metric Description 

(Combustion Efficiency and Thermal 

Efficiency) 

2. Analysis of Energy Efficiency Levels in 

ASHRAE Standard 90.1–1999 

3. Analysis of Energy Efficiency Levels in 

ASHRAE Standard 90.1–2007 

4. Preliminary Conclusions From Market 

Analysis for Commercial Packaged 

Boilers 

a. Accuracy of Thermal Efficiency Ratings 

b. Benefits of the Thermal Efficiency Metric 

c. Overall Energy Savings 

5. Conclusions Regarding the Efficiency 

Levels in ASHRAE Standard 90.1–2007 

for Commercial Packaged Boilers 

V. Methodology and Discussion of Comments 

for Commercial Packaged Boilers 

A. Test Procedures 

B. Market Assessment 

1. Definitions of Commercial Packaged 

Boilers 

2. Equipment Classes 

3. Review of Current Market for 

Commercial Packaged Boilers 

a. Trade Association Information 

b. Manufacturer Information 

c. Shipments Information 

C. Engineering Analysis 

1. Approach 

2. Representative Input Capacities 

3. Baseline Equipment 

4. Identification of Efficiency Levels for 

Analysis 

a. Small Gas-Fired Hot Water Commercial 

Packaged Boiler Efficiency Levels 

b. Small Gas-Fired Steam All Except 

Natural Draft Commercial Packaged 

Boiler Efficiency Levels 

c. Small Gas-Fired Steam Natural Draft 

Water Commercial Packaged Boiler 

Efficiency Levels 

d. Small Oil-Fired Hot Water Commercial 

Packaged Boiler Efficiency Levels 

e. Small Oil-Fired Steam Commercial 

Packaged Boiler Efficiency Levels 

f. Large Gas-Fired Hot Water Commercial 

Packaged Boiler Efficiency Levels 

g. Large Gas-Fired Steam, All Except 

Natural Draft Commercial Packaged 

Boiler Efficiency Levels 

h. Large Gas-Fired Steam Natural Draft 

Commercial Packaged Boiler Efficiency 

Levels 

i. Large Oil-Fired Hot Water Commercial 

Packaged Boiler Efficiency Levels 

j. Large Oil-Fired Steam Commercial 

Packaged Boiler Efficiency Levels 

5. Oil-Fired Commercial Packaged Boilers 

6. Dual Output Boilers 

7. Engineering Analysis Results 

D. Markups to Determine Equipment Price 

E. Energy Use Characterization 

F. Life-Cycle Cost and Payback Period 

Analyses 

1. Approach 

2. Life-Cycle Cost Inputs 

a. Equipment Prices 

b. Installation Costs 

c. Annual Energy Use 

d. Fuel Prices 

e. Maintenance Costs 

f. Repair Costs 

g. Equipment Lifetime 

h. Discount Rate 

3. Payback Period 

G. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

1. Approach 

2. Shipments Analysis 

3. Base-Case and Standards-Case 

Forecasted Distribution of Efficiencies 

H. Other Issues 

1. Effective Date of the Proposed Amended 

Energy Conservation Standards 

VI. Analytical Results 

A. Efficiency Levels Analyzed 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Customers 

a. Life-Cycle Cost and Payback Period 

2. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

b. Net Present Value 

C. Proposed Standards for Commercial 

Packaged Boilers 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

B. Review Under the National 

Environmental Policy Act 

C. Review Under the Regulatory Flexibility 

Act 

D. Review Under the Paperwork Reduction 

Act 

E. Review Under the Unfunded Mandates 

Reform Act of 1995 

F. Review Under the Treasury and General 

Government Appropriations Act, 1999 

G. Review Under Executive Order 13132 

H. Review Under Executive Order 12988 

I. Review Under the Treasury and General 

Government Appropriations Act, 2001 

J. Review Under Executive Order 13211 

K. Review Under Executive Order 12630 

L. Review Under Section 32 of the Federal 

Energy Administration Act of 1974 

M. Review Under the Information Quality 

Bulletin for Peer Review 

VIII. Public Participation 

A. Attendance at Public Meeting 

B. Procedure for Submitting Requests to 

Speak 

C. Conduct of Public Meeting 

D. Submission of Comments 

E. Issues on Which DOE Seeks Comment 

IX. Approval of the Office of the Secretary 

I. Summary of Proposed Rule 

The Energy Policy and Conservation 

Act (EPCA) (42 U.S.C. 6291 et seq.), as 

amended, requires DOE to consider 

amending the existing Federal energy 

conservation standard for each type of 

equipment listed (generally, commercial 

water heaters, commercial packaged 

boilers, commercial air conditioning 

and heating equipment, and packaged 

terminal air conditioners and heat 

pumps), each time ASHRAE Standard 

90.1, Energy Standard for Buildings 

Except Low-Rise Residential Buildings, 

is amended with respect to such 

equipment. (42 U.S.C. 6313(a)(6)(A)) For 

each type of equipment, EPCA directs 

that if ASHRAE Standard 90.1 is 

amended,1 DOE must adopt amended 

energy conservation standards at the 

new efficiency level in ASHRAE 

Standard 90.1, unless clear and 

convincing evidence supports a 

determination that adoption of a morestringent efficiency level as a national 

12002 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

2To obtain a copy of ASHRAE Standard 90.1– 

2007, visit http://www.ashrae.org/technology/page/ 

548 or contact the ASHRAE publications 

department by e-mail at orders@ashrae.org or by 

telephone at (800) 527–4723. 

3This part was originally titled Part C; however, 

it was redesignated Part A–1 after Part C of Title 

III of EPCA was repealed by Public Law 109–58. 

standard would produce significant 

additional energy savings and be 

technologically feasible and 

economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)) If DOE decides to 

adopt as a national standard the 

efficiency levels specified in the 

amended ASHRAE Standard 90.1, DOE 

must establish such standard not later 

than 18 months after publication of the 

amended industry standard. (42 U.S.C. 

6313(a)(6)(A)(ii)(I)) If DOE determines 

that a more-stringent standard is 

appropriate, DOE must establish an 

amended standard not later than 30 

months after publication of the revised 

ASHRAE Standard 90.1. (42 U.S.C. 

6313(a)(6)(B)) 

This NOPR sets forth DOE’s 

determination of scope for consideration 

of amended energy conservation 

standards with respect to certain 

heating, ventilating, air-conditioning, 

and water-heating equipment addressed 

in ASHRAE Standard 90.1–2007. Such 

inquiry is necessary to ascertain 

whether the revised ASHRAE efficiency 

levels have become more stringent, 

thereby ensuring that any new amended 

national standard would not result in 

‘‘backsliding’’ which is prohibited 

under 42 U.S.C. 6295(o)(1) and 42 

U.S.C. 6316(a). For those equipment 

classes for which ASHRAE set morestringent efficiency levels (i.e., 

commercial packaged boilers), DOE 

analyzed the economic and energy 

savings potential of amended national 

energy conservation standards (at both 

the new ASHRAE Standard 90.1 

efficiency levels and more-stringent 

efficiency levels). DOE also found that 

ASHRAE set a more-stringent efficiency 

level for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h. However, DOE did not 

analyze the economic and energy 

savings potential of amended national 

energy conservation standards because 

there is no equipment currently being 

manufactured in this equipment class. 

In light of the above, DOE has 

tentatively concluded that for ten 

classes of commercial packaged boilers: 

(1) The revised efficiency levels in 

ASHRAE 90.1–2007 2 are more stringent 

than current national standards; and (2) 

their adoption as national standards 

would result in significant energy 

savings. DOE has also tentatively 

concluded that there is not clear and 

convincing evidence as would justify 

adoption of more-stringent efficiency 

levels for this equipment. 

Thus, in accordance with these 

criteria discussed in this notice, DOE is 

proposing to amend the energy 

conservation standards for ten 

equipment classes of commercial 

packaged boilers and to adopt a new 

energy conservation standard for watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h by adopting the 

efficiency levels specified by ASHRAE 

Standard 90.1–2007. The proposed 

standards for commercial packaged 

boilers would apply to the ten 

equipment classes of commercial 

packaged boilers manufactured on or 

after the date two years after the 

effective date specified in ASHRAE 

Standard 90.1–2007. (42 U.S.C. 

6313(a)(6)(D)(i)) The proposed standards 

for water-cooled and evaporativelycooled commercial package air 

conditioners and heat pumps with a 

cooling capacity at or above 240,000 

Btu/h and less than 760,000 Btu/h 

would apply to such equipment 

manufactured on or after the date three 

years after the effective date specified in 

ASHRAE Standard 90.1–2007. (42 

U.S.C. 6313(a)(6)(D)(ii)) 

In addition, DOE is proposing 

amendments to its test procedures for 

commercial packaged boilers, which 

manufacturers are required to use to 

certify compliance with energy 

conservation standards mandated under 

EPCA. Specifically, these amendments 

would update the citations and 

references to the most recent version of 

the industry standards already 

referenced in DOE’s test procedures. In 

addition, these amendments would 

specify a definition and methodology to 

test the thermal efficiency of these 

boilers, which is the metric DOE is 

proposing for eight of the ten equipment 

classes of commercial packaged boilers 

to conform with the new energy 

efficiency metric adopted in ASHRAE 

Standard 90.1–2007. Lastly, these 

amendments would make a small 

number of technical modifications to 

DOE’s existing test procedure for 

commercial packaged boilers. 

II. Introduction 

A. Authority 

Title III of EPCA, Public Law 94–163, 

as amended, sets forth a variety of 

provisions concerning energy efficiency. 

Part A–1 3 of Title III created the energy 

conservation program for certain 

industrial equipment. (42 U.S.C. 6311– 

6317) In general, this program addresses 

the energy efficiency of certain types of 

commercial and industrial equipment. 

Part A–1 specifically includes 

definitions (42 U.S.C. 6311), energy 

conservation standards (42 U.S.C. 6313), 

test procedures (42 U.S.C. 6314), 

labelling provisions (42 U.S.C. 6315), 

and the authority to require information 

and reports from manufacturers (42 

U.S.C. 6316). 

EPCA contains mandatory energy 

conservation standards for commercial 

heating, air-conditioning, and waterheating equipment. (42 U.S.C. 6313(a)) 

Specifically, the statute sets standards 

for small, large, and very large 

commercial package air-conditioning 

and heating equipment, packaged 

terminal air conditioners (PTACs) and 

packaged terminal heat pumps (PTHPs), 

warm air furnaces, packaged boilers, 

storage water heaters, and unfired hot 

water storage tanks. Id. In doing so, 

EPCA established Federal energy 

conservation standards that generally 

correspond to the levels in ASHRAE 

Standard 90.1, as in effect on October 

24, 1992 (i.e., ASHRAE Standard 90.1– 

1989), for each type of covered 

equipment listed in 42 U.S.C. 6313(a). 

In acknowledgement of technological 

changes that yield energy efficiency 

benefits, Congress further directed DOE 

through EPCA to consider amending the 

existing Federal energy conservation 

standard for each type of equipment 

listed, each time ASHRAE Standard 

90.1 is amended with respect to such 

equipment. (42 U.S.C. 6313(a)(6)(A)) For 

each type of equipment, EPCA directs 

that if ASHRAE Standard 90.1 is 

amended, DOE must adopt amended 

standards at the new efficiency level in 

ASHRAE Standard 90.1, unless clear 

and convincing evidence supports a 

determination that adoption of a more 

stringent level would produce 

significant additional energy savings 

and be technologically feasible and 

economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)) If DOE decides to 

adopt as a national standard the 

efficiency levels specified in the 

amended ASHRAE Standard 90.1, DOE 

must establish such standard not later 

than 18 months after publication of the 

amended industry standard. (42 U.S.C. 

6313(a)(6)(A)(ii)(I)) However, if DOE 

determines that a more-stringent 

standard is justified under 42 U.S.C. 

6313(a)(6)(A)(ii)(II), then it must 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12003 

4 DOE reviewed and adopted some of the 

efficiency levels in ASHRAE Standard 90.1–1999 in 

a Final Rule published on January 12, 2001. 66 FR 

3336. 

establish such more-stringent standard 

not later than 30 months after 

publication of the amended ASHRAE 

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

ASHRAE officially released and made 

public on January 10, 2008, ASHRAE 

Standard 90.1–2007. This action 

triggered DOE’s obligations under 42 

U.S.C. 6313(a)(6), as outlined above. 

Pertinent to any rulemaking in 

response to an ASHRAE revision of 

Standard 90.1, it is noted that EPCA 

contains what is commonly known as 

an ‘‘anti-backsliding’’ provision, which 

mandates that the Secretary shall not 

prescribe any amended standard that 

either increases the maximum allowable 

energy use or decreases the minimum 

required energy efficiency of covered 

equipment. (42 U.S.C. 6295(o)(1); 42 

U.S.C. 6316(a)) It is a fundamental 

principle in EPCA’s statutory scheme 

that DOE cannot weaken standards from 

those that have been published as a final 

rule. See Natural Resources Defense 

Council v. Abraham, 355 F.3d 179 (2d 

Cir. 2004). 

When considering the possibility of a 

more-stringent standard, DOE’s more 

typical rulemaking requirements under 

EPCA apply (i.e., a determination of 

technological feasibility, economic 

justification, and significant energy 

savings). For example, EPCA provides 

that in deciding whether such a 

standard is economically justified, DOE 

must determine, after receiving 

comments on the proposed standard, 

whether the benefits of the standard 

exceed its burdens by considering, to 

the greatest extent practicable, the 

following seven factors: 

1. The economic impact of the 

standard on manufacturers and 

consumers of the products subject to the 

standard; 

2. The savings in operating costs 

throughout the estimated average life of 

the product in the type (or class) 

compared to any increase in the price 

of, or in the initial charges for, or 

maintenance expenses of the products 

which 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. 

6295(o)(2)(B)(i)–(ii); 42 U.S.C. 6316(a)) 

Additionally, the Secretary may not 

prescribe an amended standard if 

interested persons have established by a 

preponderance of the evidence that the 

amended standard is ‘‘likely to result in 

the unavailability in the United States of 

any product type (or class)’’ with 

performance characteristics, 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); 42 U.S.C. 6316(a)) 

Federal energy conservation 

requirements for commercial equipment 

generally supersede State laws or 

regulations concerning energy 

conservation testing, labeling, and 

standards. (42 U.S.C. 6316 (a) and (b)) 

However, DOE can grant waivers of 

preemption for particular State laws or 

regulations, in accordance with the 

procedures and other provisions of 

section 327(d) of EPCA. (42 U.S.C. 

6297(d) and 6316(b)(2)(D)) 

When considering more stringent 

standards for the ASHRAE equipment 

under consideration here, EPCA states 

that there is a rebuttable presumption 

that an energy conservation standard is 

economically justified if the additional 

cost to the consumer of a product that 

meets the standard level is less than 

three times the value of the first-year 

energy (and as applicable water) savings 

resulting from the standard, as 

calculated under the applicable DOE 

test procedure. (42 U.S.C. 

6295(o)(2)(B)(iii) and 42 U.S.C. 6316(a)) 

Generally, DOE’s LCC and PBP analyses 

generate values that calculate the 

payback period for consumers of 

potential energy conservation standards, 

which includes, but is not limited to, 

the three-year payback period 

contemplated under the rebuttable 

presumption test discussed above. 

However, DOE routinely conducts a full 

economic analysis that considers the 

full range of impacts, including those to 

the consumer, manufacturer, Nation, 

and environment, as required under 42 

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

6316(a). The results of this analysis 

serve as the basis for DOE to definitively 

evaluate the economic justification for a 

potential standard level (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). 

B. Background 

1. ASHRAE Standard 90.1–2007 

On January 9, 2008, ASHRAE’s Board 

of Directors gave final approval to 

ASHRAE Standard 90.1–2007, which 

ASHRAE released on January 10, 2008. 

The ASHRAE standard addresses 

efficiency levels for many types of 

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

equipment covered by EPCA. ASHRAE 

Standard 90.1–2007 revised the 

efficiency levels for certain commercial 

equipment, but for the remaining 

equipment, ASHRAE left in place the 

preexisting efficiency levels (i.e., the 

efficiency levels specified in ASHRAE 

Standard 90.1–1999 4). 

Table II.1 below shows the existing 

Federal energy conservation standards 

and the efficiency levels specified in 

ASHRAE Standard 90.1–2007 for 

equipment where ASHRAE modified its 

requirements. DOE is addressing this 

equipment in today’s notice. In section 

IV of today’s NOPR, DOE assesses these 

equipment types to determine whether 

the amendments in ASHRAE Standard 

90.1–2007 constitute increased energy 

conservation levels, as would 

necessitate further analysis. This step 

was necessary because DOE found that 

while ASHRAE had made changes in 

ASHRAE Standard 90.1–2007, it was 

not immediately apparent whether such 

revisions to the ASHRAE Standard 90.1 

level would make the equipment more 

or less efficient, as compared to the 

existing Federal energy conservation 

standards. For example, when setting a 

standard using a different efficiency 

metric (as is the case for several types 

of commercial packaged boiler 

equipment), ASHRAE Standard 90.1– 

2007 changes the standard level from 

that specified in EPCA, but it is not 

immediately clear whether a standard 

level will make equipment more or less 

efficient. Therefore, DOE is undertaking 

this additional threshold analysis in 

order to thoroughly evaluate the 

amendments in ASHRAE Standard 

90.1–2007 in a manner consistent with 

its statutory mandate. 

12004 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

TABLE II.1—FEDERAL ENERGY CONSERVATION STANDARDS AND ENERGY EFFICIENCY LEVELS IN ASHRAE STANDARD

90.1–2007 FOR SPECIFIC TYPES OF COMMERCIAL EQUIPMENT* 

ASHRAE equipment class Federal energy conservation 

standards 

ASHRAE standard 90.1–2007 

Energy efficiency levels Effective 

date 

Commercial Warm Air Furnaces 

Gas-Fired Commercial Warm Air Furnace .......... Et = 80% .............................................. Ec = 80% Interrupted or intermittent 

ignition device, jacket losses not exceeding 0.75% of input rating, 

power vent, or flue damper**.

1/10/2008 ‡

Oil-Fired Commercial Warm Air Furnace ............ Et =81% ............................................... Et = 81% Interrupted or intermittent ignition device, jacket losses not exceeding 0.75% of input rating, 

power vent, or flue damper**.

1/10/2008‡

Commercial Package Air-Conditioning and Heating Equipment 

Through-the-Wall Air Conditioners ...................... 13.0 SEER*** ......................................

(Effective as of 06/19/08) 

12.0 SEER .......................................... 1/23/2010 

Through-the-Wall Air-Cooled Heat Pumps .......... 13.0 SEER ..........................................

(Effective as of 06/19/08) 

12.0 SEER ..........................................

7.4 HSPF†

1/23/2010 

Small Duct, High Velocity, Air-Cooled Air Conditioners.13.0 SEER ..........................................

(Effective as of 06/19/08) 

10.0 SEER .......................................... 1/10/2008 

Small Duct, High-Velocity, Air-Cooled Heat 

Pumps.

13.0 SEER ..........................................

(Effective as of 06/19/08) 

10.0 SEER ..........................................

6.8 HSPF 

1/10/2008 

Packaged Air-Cooled Air Conditioners with Cooling Capacity ≥760,000 Btu/h†† and with No 

Heating or with Electric Resistance Heating.

None .................................................... 9.7 EER††† ........................................... 1/1/2010 

Packaged Air-Cooled Air Conditioners with Cooling Capacity ≥760,000 Btu/h and with Heating 

That is Other Than Electric Resistance Heating.

None .................................................... 9.5 EER ............................................... 1/1/2010 

Water-Cooled and Evaporatively-Cooled Air 

Conditioner with Cooling Capacity ≥135,000 

and <240,000 Btu/h, and with No Heating or 

with Electric Resistance Heating.

11.0 EER ............................................. 11.0 EER ............................................. 1/10/2008‡

Water-Cooled and Evaporatively Cooled Air 

Conditioner with Cooling Capacity ≥135,000 

and <240,000 Btu/h, and with Heating That is 

Other Than Electric Resistance Heating.

11.0 EER ............................................. 10.8 EER ............................................. 1/10/2008‡

Water-Cooled and Evaporatively Cooled Air 

Conditioner with Cooling Capacity ≥240,000 

Btu/h and with No Heating or with Electric Resistance Heating.

None .................................................... 11.0 EER ............................................. 1/10/2008‡

Water-Cooled and Evaporatively Cooled Air 

Conditioner with Cooling Capacity ≥240,000 

Btu/h and with Heating That is Other Than 

Electric Resistance Heating.

None .................................................... 10.8 EER ............................................. 1/10/2008‡

Commercial Packaged Boilers 

Small Gas-Fired, Hot Water, Commercial Packaged Boilers.EC = 80% ............................................ ET = 80% ............................................. 3/2/2010 

Small Gas-Fired, Steam, All Except Natural Draft 

Commercial Packaged Boilers.

EC = 80% ............................................ ET = 79% ............................................. 3/2/2010 

Small Gas-Fired, Steam, Natural Draft, Commercial Packaged Boilers.EC = 80% ............................................ ET = 77% .............................................

ET = 79% .............................................

3/2/2010 

3/2/2020 

Small Oil-Fired, Hot Water, Commercial Packaged Boilers.EC = 83% ............................................ ET = 82% ............................................. 3/2/2010 

Small Oil-Fired, Steam, Commercial Packaged 

Boilers.

EC = 83% ............................................ ET = 81% ............................................. 3/2/2010 

Large Gas-Fired, Hot Water, Commercial Packaged Boilers.EC = 80% ............................................ EC = 82% ............................................ 3/2/2010 

Large Gas-Fired, Steam, All Except Natural 

Draft, Boilers.

EC = 80% ............................................ ET = 79% ............................................. 3/2/2010 

Large Gas-Fired, Steam, Natural Draft, Commercial Packaged Boilers.EC = 80% ............................................ ET = 77% .............................................

ET = 79% .............................................

3/2/2010 

3/2/2020 

Large Oil-Fired, Hot Water, Commercial Packaged Boilers.EC = 83% ............................................ EC = 84% ............................................ 3/2/2010 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12005 

5 ‘‘EEI, No. 2 at p. 2’’ refers to (1) a statement that 

was submitted by the Edison Electric Institute and 

is recorded in the Resource Room of the Building 

Technologies Program in the docket under ‘‘Energy 

Conservation Program for Certain Industrial 

Equipment: Energy Conservation Standards for 

Commercial Heating, Air-Conditioning, and WaterHeating Equipment,’’ Docket Number EERE–2008– 

BT–STD–0013, as comment number 2; and (2) a 

passage that appears on page 2 of that statement. 

TABLE II.1—FEDERAL ENERGY CONSERVATION STANDARDS AND ENERGY EFFICIENCY LEVELS IN ASHRAE STANDARD

90.1–2007 FOR SPECIFIC TYPES OF COMMERCIAL EQUIPMENT*—Continued 

ASHRAE equipment class Federal energy conservation 

standards 

ASHRAE standard 90.1–2007 

Energy efficiency levels Effective 

date 

Large Oil-Fired, Steam, Commercial Packaged 

Boilers.

EC = 83% ............................................ ET = 81% ............................................. 3/2/2010 

*All equipment classes included in this table are equipment where there is a perceived difference between the current Federal standard levels 

and the efficiency levels specified by ASHRAE Standard 90.1–2007. Although, in some cases, the efficiency levels in this table may appear to be 

equal or lower than the Federal energy conservation standards, DOE further reviewed the efficiency levels in ASHRAE Standard 90.1–2007 and 

presented its findings in section III. 

** A vent damper is an acceptable alternative to a flue damper for those furnaces that draw combustion air from conditioned space. 

*** Seasonal energy efficiency ratio 

† Heating seasonal performance factor 

††British thermal units per hour (Btu/h) †††Energy efficiency ratio ‡For the purposes of this NOPR, the date shown in this column is the date of publication of ASHRAE Standard 90.1–2007 (Jan. 10, 2008) for 

equipment where the ASHRAE Standard 90.1–2007 initially appears to be different from the Federal energy conservation standards and where 

no effective date was specified by ASHRAE Standard 90.1–2007. 

2. Notice of Data Availability and 

Request for Public Comment 

On July 16, 2008, DOE published a 

notice of data availability (July 2008 

NODA) and request for public comment 

in the Federal Register as a preliminary 

step pursuant to EPCA’s requirements 

for DOE to consider amended energy 

conservation standards for certain types 

of commercial equipment covered by 

ASHRAE Standard 90.1. 73 FR 40770 

(July 16, 2008). Specifically, the July 

2008 NODA presented for public 

comment DOE’s analysis of the potential 

energy savings estimates for amended 

national energy conservation standards 

for types of commercial equipment 

based on: (1) The modified efficiency 

levels contained within ASHRAE 

Standard 90.1–2007; and (2) morestringent efficiency levels. Id. at 40772. 

DOE has described these analyses and 

preliminary conclusions and sought 

input from interested parties, including 

the submission of data and other 

relevant information. Id. 

In addition, DOE presented a 

discussion in the July 2008 NODA of the 

changes found in ASHRAE Standard 

90.1–2007. Id. at 40776–86. Lastly, the 

July 2008 NODA includes an initial 

description of DOE’s evaluation of each 

ASHRAE equipment type to determine 

which energy conservation standards, if 

any, have been set pursuant to EPCA, in 

order for DOE to determine whether the 

amendments in ASHRAE Standard 

90.1–2007 have increased efficiency 

levels. For those types of equipment in 

ASHRAE Standard 90.1 for which 

ASHRAE increased efficiency levels, 

DOE subjected that equipment to the 

potential energy savings analysis 

discussed above and presented the 

results in the July 2008 NODA for 

public comment. 73 FR 40770, 40776– 

86 (July 16, 2008). 

As a result of the preliminary 

determination of scope set forth in the 

July 2008 NODA, DOE found the only 

equipment type for which ASHRAE 

increased the efficiency levels and 

equipment was available on the market 

were commercial packaged boilers, 

generally. 73 FR 40770, 40776–86 (July 

16, 2008). DOE presented its 

methodology, data, and results for the 

preliminary energy savings analysis 

developed for most of the commercial 

packaged boiler equipment classes in 

the July 2008 NODA for public 

comment. 73 FR 40770, 40786–91 (July 

16, 2008). 

III. General Discussion of Comments 

Regarding the ASHRAE Process and 

DOE’s Interpretation of EPCA’s 

Requirements With Respect to ASHRAE 

Equipment 

In response to its request for comment 

on the July 2008 NODA, DOE received 

six comments from manufacturers, trade 

associations, and energy efficiency 

advocates. The issues raised in these 

comments, along with DOE’s responses, 

are set forth below. 

A. The ASHRAE Process 

In response to the preliminary 

determination of scope and analyses set 

forth in the July 2008 NODA, DOE 

received several comments regarding 

the ASHRAE process for considering 

revised efficiency levels for certain 

commercial heating, ventilating, airconditioning, and water heater 

equipment, including commercial 

packaged boilers. 

Edison Electric Institute (EEI) stated 

its belief that DOE should make 

proposals for increased efficiency to 

ASHRAE and not perform a separate 

rulemaking on commercial packaged 

boilers. EEI asserted this would 

streamline DOE’s efforts and provide 

opportunities to increase equipment 

efficiency through the ASHRAE 

consensus process. (EEI, No. 2 at p. 2) 5

The Air-Conditioning, Heating, and 

Refrigeration Institute (AHRI) asserted 

that the efficiency levels for commercial 

packaged boilers in ASHRAE Standard 

90.1–2007 are the product of a 

consensus agreement between AHRI 

boiler manufacturer members, ACEEE, 

and several other organizations. AHRI 

stated its belief these efficiency levels 

reflect the collective experience of the 

manufacturers and the knowledge of the 

relationship between combustion 

efficiency and thermal efficiency for 

their models that comes from practical 

experience of transforming design 

concepts to models coming off the 

production line. Further, AHRI asserted 

DOE should accept the efficiency levels 

in ASHRAE Standard 90.1–2007 as 

negotiated standards that can be 

processed through an expedited 

rulemaking. (AHRI, No. 3 at p. 4) 

The American Council for an EnergyEfficient Economy (ACEEE), the 

Appliance Standards Awareness Project 

(ASAP), the Alliance to Save Energy 

(ASE), the California Energy 

Commission (CEC), the Natural 

Resources Defense Council (NRDC), the 

Northeast Energy Efficiency 

Partnerships (NEEP), and the Northwest 

Power and Conservation Council 

(NPCC) submitted a joint comment in 

response to the July 2008 NODA 

12006 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

6 DOE reviewed the previous efficiency levels for 

commercial packaged boilers, which were 

incorporated into ASHRAE Standard 90.1–1999, in 

a notice of document availability published on 

March 13, 2006. 71 FR 12634, 12639 (March 13, 

2006). At that time, DOE determined it could not 

adopt the efficiency levels in ASHRAE Standard 

90.1–1999 for small commercial packaged boilers 

due to backsliding concerns. 71 FR 12634, 12639– 

41 (March 13, 2006). In addition, DOE determined 

it did not have the authority to consider amended 

energy conservation standards for large commercial 

packaged boilers because ASHRAE did not change 

the existing energy conservation standard levels in 

ASHRAE Standard 90.1–1999. 71 FR 12634, 12641– 

42 (March 13, 2006). 

(hereafter referred to as the Advocates 

Comment). (The Advocates Comment, 

No. 4 at p. 2) The Advocates Comment 

stated its support for the adoption of the 

efficiency levels in ASHRAE Standard 

90.1–2007 for commercial boilers, 

except for any specific equipment class 

for which further DOE analysis shows 

that adoption of the ASHRAE efficiency 

levels would violate the anti-backsliding 

clause. The Advocates Comment 

pointed out that the efficiency levels in 

ASHRAE Standard 90.1–2007 for 

commercial packaged boilers are the 

result of a 2006 agreement between 

several efficiency advocacy groups and 

the trade association for commercial 

packaged boilers. (The Advocates 

Comment, No. 4 at p. 2) 

Lastly, AHRI, ACEEE, ASAP, ASE, 

and NRDC submitted a joint letter to the 

Assistant Secretary (hereafter referred to 

as the Joint Letter) urging DOE to adopt 

as Federal minimum energy 

conservation standards the efficiency 

levels contained in ASHRAE Standard 

90.1–2007 for commercial packaged 

boilers. (The Joint Letter, No. 5 at p. 1) 

The Joint Letter asserted that the 

commercial boiler efficiency levels are 

more stringent than the corresponding 

requirements in the previous version of 

the ASHRAE Standard.6 In addition, the 

Joint Letter pointed out that the 

efficiency levels in ASHRAE Standard 

90.1–2007 for commercial packaged 

boilers are the result of a consensus 

recommendation. Finally, the Joint 

Letter stated its belief that given the 

origin of these efficiency levels in the 

consensus process (both with the 

negotiated agreement and the ASHRAE 

process) and their significant potential 

energy savings, DOE should give these 

recommendations deference and move 

to adopt them as a final rule as 

expeditiously as possible. (The Joint 

Letter, No. 5 at p. 2) 

While DOE acknowledges that certain 

efficiency levels in ASHRAE Standard 

90.1–2007 are the result of consensus 

standards, including those for 

commercial packaged boilers, EPCA 

specifies DOE’s obligations to review 

the amendments when ASHRAE issues 

revised standards. Specifically, EPCA 

directs that if ASHRAE Standard 90.1 is 

amended, DOE must adopt amended 

energy conservation standards at the 

new efficiency level in ASHRAE 

Standard 90.1, unless clear and 

convincing evidence supports a 

determination that adoption of a more 

stringent level as a national standard 

would produce significant additional 

energy savings and be technologically 

feasible and economically justified. (42 

U.S.C. 6313(a)(6)(A)(ii)) In order to 

determine if more-stringent efficiency 

levels would meet EPCA’s criteria, DOE 

must review the efficiency levels in 

ASHRAE Standard 90.1–2007 and morestringent efficiency levels for their 

energy savings and economic potentials 

irrespective of whether the efficiency 

levels were once part of a consensus 

standard. Contrary to what some 

commenters seem to suggest, DOE may 

not delegate its standard-setting 

authority either directly or indirectly to 

ASHRAE or any other party. 

B. The Definition of Amendment With 

Respect to the Efficiency Levels in an 

ASHRAE Standard 

DOE stated in the July 2008 NODA 

that EPCA does not explicitly define the 

term ‘‘amended’’ in the context of 

ASHRAE Standard 90.1, but the July 

2008 NODA pointed out that DOE 

provided its interpretation of what 

would constitute an ‘‘amended 

standard’’ in a final rule published in 

the Federal Register on March 7, 2007 

(72 FR 10038). 73 FR 40770, 40771 (July 

16, 2008). In that final rule, DOE stated 

that the statutory trigger requiring DOE 

to adopt uniform national standards 

based on ASHRAE action is for 

ASHRAE to change a standard for any 

of the equipment listed in EPCA section 

342(a)(6)(A)(i) (42 U.S.C. 

6313(a)(6)(A)(i)) by increasing the 

energy efficiency level for that 

equipment type. 72 FR 10038, 10042 

(March 7, 2007). In other words, if the 

revised ASHRAE Standard 90.1 leaves 

the standard level unchanged or lowers 

the standard, as compared to the level 

specified by the national standard 

adopted pursuant to EPCA, DOE does 

not have the authority to conduct a 

rulemaking to consider a higher 

standard for that equipment pursuant to 

42 U.S.C. 6313(a)(6)(A). 73 FR 40770, 

40771 (July 16, 2008). 

In response to DOE’s interpretation of 

the definition of ‘‘amendment,’’ the 

Advocates Comment argued that DOE 

has applied an unlawfully narrow 

definition to the word ‘‘amendment.’’ 

(The Advocates Comment, No. 4 at pp. 

2–3) Instead, the Advocates Comment 

asserts that EPCA requires DOE to 

consider changes to the Federal 

minimum energy conservation 

standards for covered products ‘‘[i]f 

ASHRAE/IES Standard 90.1 is amended 

* * *’’ (The Advocates Comment, No. 4 

at pp. 2–3 (referring to 42 U.S.C. 

6313(a)(6)(A)(i)) (emphasis in original)). 

In other words, the Advocates Comment 

suggests that DOE has very broad 

authority to consider amended 

standards for any and all ASHRAE 

equipment, once ASHRAE acts to revise 

any of the levels in Standard 90.1. The 

Advocates Comment asserts that 

Congress’s use of the neutral terms 

‘‘amended’’ and ‘‘amendment’’ imposes 

no threshold requirement that before 

DOE can analyze the energy saving 

potential of revised Federal energy 

conservation standards it must first 

determine that the amended ASHRAE 

standard is more stringent than the prior 

Federal energy conservation standard. 

The Advocates Comment stated its 

belief that DOE’s very limited definition 

of ‘‘amendment’’ is inconsistent with 

the plain language of EPCA. (The 

Advocates Comment, No. 4 at p. 3) 

DOE does not agree with the 

Advocates Comment’s assertions. DOE 

maintains its position that the statutory 

trigger requiring DOE to adopt uniform 

national standards based on ASHRAE 

action is for ASHRAE to change a 

standard for any of the equipment listed 

in EPCA section 342(a)(6)(A)(i) (42 

U.S.C. 6313(a)(6)(A)(i)) by increasing the 

energy efficiency level for that 

equipment type. As described in the 

March 2007 final rule, the intent of 

section 342, generally, is for DOE to 

maintain uniform national standards 

consistent with those set in ASHRAE 

Standard 90.1. 72 FR 10038, 10042 

(March 7, 2007). Given this intent, if 

ASHRAE has not amended a standard 

for a product subject to section 342, 

there is no change, which would require 

action by DOE to consider amending the 

uniform national standard to maintain 

consistency with ASHRAE Standard 

90.1. Id. If ASHRAE considered 

amending the standards for a given 

equipment type but ultimately chose not 

to do so, the statutory trigger for DOE to 

adopt ASHRAE’s amended standards 

did not occur with respect to this 

equipment. Id. The statutory language 

specifically links ASHRAE’s action in 

amending standards for specific 

equipment to DOE’s action for those 

same equipment. Id. 

C. Different Types of Changes in 

ASHRAE Standard 90.1–2007 

The Advocates Comment asserted that 

ASHRAE Standard 90.1–2007 includes 

at least three different types of 

amendments, which must trigger DOE 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12007 

review of the existing Federal energy 

conservation standards, including: (1) A 

change in the efficiency performance 

metric; (2) an addition of a new 

prescriptive or performance 

requirement; and (3) a possible decrease 

to the efficiency standard. (The 

Advocates Comment, No. 4 at p. 4–5) 

The Advocates Comment further 

asserted that DOE cannot reject the 

consideration of amendments which 

change the performance metric or which 

add new prescriptive or performance 

requirements on top of existing Federal 

requirements. The Advocates Comment 

further stated that even DOE’s definition 

of ‘‘amendment’’ compels consideration 

of amendments which add energysaving requirements since these 

requirements ‘‘increase’’ the level of 

energy efficiency for a given equipment 

type. If DOE decides it cannot adopt 

multiple efficiency requirements (an 

interpretation the Advocates Comment 

believes is contrary to EPCA), the 

Advocates Comment argued that these 

requirements still trigger DOE review. 

(The Advocates Comment, No. 4 at 

p. 4–5) 

When reviewing the changes in 

ASHRAE Standard 90.1–2007, DOE 

stated in the July 2008 NODA that for 

each class of commercial equipment for 

which ASHRAE modified the existing 

standard, DOE would assess whether 

the change made would increase energy 

efficiency and, therefore, require further 

DOE analysis and consideration. 73 FR 

40770, 40775 (July 16, 2008). DOE 

initially completed a comprehensive 

analysis of the products covered under 

both EPCA and ASHRAE Standard 

90.1–2007 to determine which product 

types require further analysis. The July 

2008 NODA contains a description of 

DOE’s initial evaluation of each 

ASHRAE equipment type for which 

energy conservation standards have 

been set pursuant to EPCA, in order for 

DOE to determine whether the 

amendments in ASHRAE Standard 

90.1–2007 have resulted in increased 

efficiency levels. 73 FR 40770, 40773– 

40786 (July 16, 2008). 

DOE does not agree with the 

Advocates Comment’s assertion that 

DOE is required to review changes in 

ASHRAE Standard 90.1–2007, which do 

not increase the efficiency level when 

compared to the current Federal energy 

conservation standards for a given piece 

of equipment. Further as DOE has 

previously explained, since EPCA does 

not explicitly define the term 

‘‘amended’’ in the context of ASHRAE 

Standard 90.1, DOE provided its 

interpretation of what would constitute 

an ‘‘amended standard’’ in a final rule 

published in the Federal Register on 

March 7, 2007. 72 FR 10038. In that 

rule, DOE stated that the statutory 

trigger requiring DOE to adopt uniform 

national standards based on ASHRAE 

action is for ASHRAE to change a 

standard for any of the equipment listed 

in EPCA section 342(a)(6)(A)(i) (42 

U.S.C. 6313(a)(6)(A)(i)) by increasing the 

energy efficiency level for that 

equipment type. Id. at 10042. Even 

though DOE realizes that these 

prescriptive requirements could save 

additional energy in addition to the 

energy-efficiency level, DOE does not 

believe adding a prescriptive 

requirement alone without increasing 

the efficiency level triggers DOE review. 

In addition, if ASHRAE adds a 

prescriptive requirement for equipment 

where an efficiency level is already 

specified, DOE does not believe it has 

the authority to address a dual 

descriptor for a single equipment type 

(see section IV.A.1 below for additional 

explanation). In light of the above, DOE 

maintains its position set out in the July 

2008 NODA. If the revised ASHRAE 

Standard 90.1 leaves the standard level 

unchanged (even if ASHRAE adds 

prescriptive requirements) or lowers the 

standard, as compared to the level 

specified by the national standard 

adopted pursuant to EPCA, DOE does 

not have the authority to conduct a 

rulemaking to consider a higher 

standard for that equipment pursuant to 

42 U.S.C. 6313(a)(6)(A). 73 FR 40770, 

40771 (July 16, 2008). 

D. DOE’s Review of ASHRAE Equipment 

Independent of the ASHRAE Standards 

Process 

The Advocates Comment pointed to 

language in EPCA (at 42 U.S.C. 

6313(a)(6)(C)) that it believes triggers 

DOE review to determine the need to 

amend the energy conservation standard 

for a given piece of equipment, 

including a six-year timeframe elapsing 

since the last final rule ‘‘establishing or 

amending a standard’’ for that product. 

(The Advocates Comment, No. 4 at p. 5) 

The Advocates Comment also stated 

that the same provision of EPCA further 

provides that if DOE determines that the 

statutory criteria have not been met for 

amending the energy conservation 

standard for a product, DOE must 

conduct the same review process within 

the next three years. (The Advocates 

Comment, No. 4 at p. 5) The Advocates 

Comment stated its belief that the 

timeline (three or six years) has elapsed 

for several equipment categories, 

including: (1) Central water-source and 

evaporatively-cooled AC products; (2) 

warm-air furnaces; (3) gas and oil 

storage water heaters; (4) gas and oil 

instantaneous water heaters; (4) tankless 

oil-fired instantaneous water heaters 

and unfired hot water storage tanks; (5) 

electric water heaters; (6) tankless gasfired instantaneous water heaters; and 

(7) commercial packaged boilers. (The 

Advocates Comment, No. 4 at p. 5–6) 

In response, DOE acknowledges that 

section 305(b) of the Energy 

Independence and Security Act of 2007 

(EISA 2007), Pub. L. 110–140, amended 

Section 342(a)(6) of EPCA to create an 

additional requirement that directs DOE 

to assess whether there is a need to 

update the Federal energy conservation 

standards for certain commercial 

equipment (i.e., ASHRAE equipment) 

after a certain amount of time has 

elapsed. Specifically, EPCA, as 

amended, states that ‘‘the Secretary 

must publish either a notice of 

determination that standards for a 

product do not need to be amended, or 

a notice of proposed rulemaking 

including new proposed standards 

within 6 years after the issuance of any 

final rule establishing or amending a 

standard.’’ (42 U.S.C. 6313(a)(6)(C)(i)) In 

addition, if the Secretary chooses to 

publish a notice of determination that 

the standards for a product do not need 

to be amended, a new determination 

must be issued within 3 years of the 

previous determination. (42 U.S.C. 

6313(a)(6)(C)(iii)(II)) These requirements 

are applicable to small commercial 

package air conditioning and heating 

equipment, large commercial package 

air conditioning and heating equipment, 

very large commercial package air 

conditioning and heating equipment, 

packaged terminal air conditioners, 

packaged terminal heat pumps, warmair furnaces, packaged boilers, storage 

water heaters, instantaneous water 

heaters, and unfired hot water storage 

tanks. (42 U.S.C. 6313(a)(6)(A)(i)) 

DOE believes that the commenters 

have misconstrued the amendments in 

section 305(b) of EISA 2007 by 

suggesting that the relevant provisions 

should be applied retroactively, rather 

than prospectively. DOE does not 

believe it was Congress’s intention to 

apply these requirements retroactively, 

so that DOE would immediately be in 

violation of its legal obligations upon 

passage of the statute, thereby failing 

from its inception. DOE does not believe 

that the interpretation in the Advocates 

Comment is reasonable, nor does DOE 

agree with the assertion that DOE is late 

and should initiate an immediate review 

of certain commercial equipment cited 

by the commenters above. 

12008 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

E. Equipment Classes With a Two-Tier 

Efficiency Level Specified in ASHRAE 

Standard 90.1–2007 

For commercial packaged boilers, 

ASHRAE Standard 90.1–2007 further 

divides the existing equipment classes 

(i.e., gas-fired and oil-fired) into 10 

different divisions. For two of the ten 

equipment classes specified in ASHRAE 

Standard 90.1–2007, ASHRAE specifies 

a two-tier efficiency level, with one 

efficiency level effective in 2010 and 

another more-stringent efficiency level 

effective in 2020. The two equipment 

classes where ASHRAE Standard 90.1– 

2007 specifies a two-tier efficiency 

levels are small gas-fired steam natural 

draft and large gas-fired steam natural 

draft commercial packaged boilers. In 

determining whether the efficiency 

levels in ASHRAE Standard 90.1–2007 

violated EPCA’s anti-backsliding clause, 

DOE examined only the efficiency levels 

with a 2010 effective date. However, 

DOE considers the two-tier efficiency 

levels to be a ‘‘package’’ set of potential 

amended energy conservation 

standards. DOE does not intend to adopt 

one efficiency level without adopting 

the latter efficiency level. Accordingly, 

in its economic and energy savings 

analysis DOE analyzes these two 

equipment classes as if both the 2010 

and 2020 levels will be adopted on their 

respective effective dates. 

IV. General Discussion of the Changes 

in ASHRAE Standard 90.1–2007 and 

Determination of Scope for Further 

Rulemaking Analyses 

As discussed above, before beginning 

an analysis of economic impacts and 

energy savings that would result from 

adopting the efficiency levels specified 

by ASHRAE Standard 90.1–2007 or 

more-stringent efficiency levels, DOE 

first sought to determine whether or not 

the ASHRAE Standard 90.1–2007 

efficiency levels actually represented an 

increase in efficiency above the current 

Federal standard levels. This section 

discusses each equipment class where 

the ASHRAE Standard 90.1–2007 

efficiency level differs from the current 

Federal standard level, along with 

DOE’s preliminary conclusion as to the 

action DOE would take with respect to 

that equipment. 

A. Commercial Warm Air Furnaces 

Under EPCA, a ‘‘warm air furnace’’ is 

defined as ‘‘a self-contained oil-or gasfired furnace designed to supply heated 

air through ducts to spaces that require 

it and includes combination warm-air 

furnace/electric air-conditioning units 

but does not include unit heaters and 

duct furnaces.’’ (42 U.S.C. 6311(11)(A)) 

In its regulations, DOE defines a 

‘‘commercial warm air furnace’’ as a 

‘‘warm-air furnace that is industrial 

equipment, and that has a capacity 

(rated maximum input) of 225,000 Btu 

[British thermal units] per hour or 

more.’’ 10 CFR 431.72. The amendments 

in ASHRAE Standard 90.1–2007 

changed the efficiency metric for gasfired commercial warm air furnaces and 

added design requirements for both gasfired and oil-fired commercial warm air 

furnaces, thereby triggering DOE to 

further review ASHRAE’s changes as 

presented below. 

1. Gas-Fired Commercial Warm Air 

Furnaces 

Gas-fired commercial warm air 

furnaces are fueled by either natural gas 

or propane. The Federal energy 

conservation standard for commercial 

gas-fired warm air furnaces corresponds 

to the efficiency level in ASHRAE 

Standard 90.1–1999, which specifies 

that for equipment with a capacity of 

225,000 Btu per hour (h) or more, the 

thermal efficiency at the maximum 

rated capacity (rated maximum input) 

must be no less than 80 percent. 10 CFR 

431.77(a). The Federal energy 

conservation standard for gas-fired 

commercial warm air furnaces applies 

to equipment manufactured on or after 

January 1, 1994. 10 CFR 431.77. 

ASHRAE changed the efficiency 

levels for gas-fired commercial warm air 

furnaces by changing the metric from a 

thermal efficiency descriptor to a 

combustion efficiency descriptor and 

adding three design requirements. 

Specifically, the efficiency levels in 

ASHRAE Standard 90.1–2007 specify a 

minimum combustion efficiency of 80 

percent. ASHRAE Standard 90.1–2007 

also specifies the following design 

requirements for commercial gas-fired 

warm air furnaces: The gas-fired 

commercial warm air furnace must use 

an interrupted or intermittent ignition 

device, have jacket losses no greater 

than 0.75 percent of the input rating, 

and use a power vent or flue damper. 

To evaluate the change in efficiency 

level (if any) specified by the amended 

ASHRAE standard, DOE reviewed the 

change of metric for gas-fired 

commercial warm air furnaces. In 

general, the energy efficiency of a 

product is a function of the relationship 

between the product’s output of services 

and its energy input. A furnace’s output 

is largely the energy content of its 

output (i.e., warm air delivered to the 

building). A furnace’s energy losses 

consist of energy that escapes through 

its flue (commonly referred to as ‘‘flue 

losses’’), and of energy that escapes into 

the area surrounding the furnace 

(commonly referred to as ‘‘jacket 

losses’’). 

In a final rule published in the 

Federal Register on October 21, 2004 

(the October 2004 final rule), DOE 

incorporated definitions for commercial 

warm air furnaces and its efficiency 

descriptor, energy efficiency test 

procedures, and energy conservation 

standards. 69 FR 61916 (Oct. 21, 2004). 

In the October 2004 final rule, DOE 

pointed out that EPCA specifies the 

energy conservation standard levels for 

commercial warm air furnaces in terms 

of thermal efficiency (42 U.S.C. 

6313(a)(4)(A)–(B); 10 CFR 431.77), but 

provides no definition for this term. Id. 

DOE proposed to interpret this term in 

the context of commercial warm air 

furnaces to mean combustion efficiency 

(i.e., 100 percent minus percent flue 

loss). Id. Given the use of the thermal 

efficiency term in EPCA and its 

continued use as the efficiency 

descriptor for furnaces in ANSI 

Standard Z21.47, ‘‘Gas-Fired Central 

Furnaces’’ (DOE’s test procedure for this 

equipment), DOE stated that it would be 

confusing to use the term ‘‘combustion 

efficiency’’ in the final rule. 

Accordingly, DOE defined the term 

‘‘thermal efficiency’’ to mean 100 

percent minus the percent flue loss in 

the October 2004 final rule for gas-fired 

commercial warm air furnaces. Id. 

DOE presented an initial review of the 

ASHRAE efficiency levels for warm-air 

furnaces in the July 2008 NODA. DOE 

stated that upon reviewing the 

efficiency levels and methodology 

specified in ASHRAE Standard 90.1– 

2007, DOE believed that despite 

changing the name of the energy 

efficiency descriptor from ‘‘thermal 

efficiency’’ to ‘‘combustion efficiency,’’ 

ASHRAE did not intend to change the 

efficiency metric for gas-fired 

commercial warm air furnaces. 73 FR 

40770, 40776 (July 16, 2008). When 

ASHRAE specified a newer version of 

the test procedure for manufacturers’ 

use with gas-fired commercial air 

furnaces (i.e., ANSI Standard Z21.47– 

2001), the calculation of thermal 

efficiency did not change from the 

previous version. Therefore, despite that 

change in the name of the energy 

efficiency descriptor, the terms are 

synonymous in the present context 

because the calculation of that value has 

not changed (i.e., 100 percent minus the 

percent flue loss). DOE sees no plausible 

reason why ASHRAE would have 

chosen to incorporate a different metric 

than that used in the ANSI Standard 

Z21.47–2001 test procedure. 

Consequently, because the amendments 

for this type of equipment set out in 

ASHRAE Standard 90.1–2007 do not 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12009 

appear to have substantively changed 

the efficiency level, DOE tentatively 

decided to leave the existing Federal 

energy conservation standards in place 

for gas-fired commercial warm air 

furnaces; these standards specify a 

thermal efficiency of 80 percent using 

the definition of ‘‘thermal efficiency’’ 

established by DOE in the October 2004 

final rule and presented in subpart D to 

10 CFR part 431. 73 FR 40770, 40776 

(July 16, 2008). 

In response to the preliminary review 

set forth in the July 2008 NODA, the 

Advocates Comment noted that 

ASHRAE added additional energy 

saving requirements, including a 

standard limiting jacket losses, a 

prescriptive requirement for 

intermittent or interrupted ignition 

devices, and a requirement for power 

venting or flue dampers in ASHRAE 

Standard 90.1–2007 for commercial gasfired warm air furnaces. (The Advocates 

Comment, No. 4 at p. 6) The Advocates 

Comment further stated that the 

addition of these requirements triggers 

DOE review, which must lead to either 

adoption of the new ASHRAE standards 

or more-stringent standards. (The 

Advocates Comment, No. 4 at p. 6) The 

Advocates Comment also asserted that 

ASHRAE recognized that combustion 

efficiency is an inadequate efficiency 

descriptor and added these additional 

efficiency requirements to capture off 

cycle losses, which can waste 

significant amounts of energy. (The 

Advocates Comment, No. 4 at p. 6) Even 

though the comments concluded DOE 

has asserted in other rulemakings that it 

lacks the authority to apply more than 

one efficiency metric to a given product, 

the commenters believe DOE’s 

viewpoint is contrary to the language 

and purposes of EPCA. (The Advocates 

Comment, No. 4 at p. 7) Further, the 

Advocates Comment stated that because 

ASHRAE has adopted a performance 

standard and multiple design 

requirements, DOE must read the statute 

as permitting DOE sufficient authority 

to harmonize Federal and ASHRAE 

requirements. Lastly, the comments 

point out that some of the multi-part 

standards (e.g., those for commercial 

storage instantaneous water heaters and 

commercial heat pumps) are based on 

equivalent multi-part requirements in 

ASHRAE 90.1. (The Advocates 

Comment, No. 4 at p. 6–7) 

DOE has determined that the design 

requirements in ASHRAE Standard 

90.1–2007 for gas-fired commercial 

warm air furnaces are beyond the scope 

of its legal authority. EPCA authorizes 

the Secretary to amend the energy 

conservation standards for specified 

equipment. (42 U.S.C. 6313(a)(6)) 

Section 340(18) of EPCA defines the 

term ‘‘energy conservation standard’’ as: 

‘‘(A) a performance standard that 

prescribes a minimum level of energy 

efficiency or a maximum quantity of 

energy use for a product; or 

(B) a design requirement for a 

product.’’ 

(42 U.S.C. 6311(18)) 

The language of EPCA authorizes DOE 

to establish a performance standard or a 

single design standard. As such, a 

standard that establishes both a 

performance standard and a design 

requirement is beyond the scope of 

DOE’s legal authority, as would be a 

standard that included more than one 

design requirement. In this case, 

ASHRAE Standard 90.1–2007 

recommends three design requirements, 

which goes beyond EPCA’s limit of one 

design requirement for the specified 

covered equipment. 

Therefore, DOE has not changed its 

preliminary review set forth in the July 

2008 NODA. Because the amendments 

for this type of equipment set out in 

ASHRAE Standard 90.1–2007 do not 

appear to have changed the efficiency 

level, DOE is leaving the existing 

Federal energy conservation standards 

in place for gas-fired commercial warm 

air furnaces; these standards specify a 

thermal efficiency of 80 percent using 

the definition of ‘‘thermal efficiency’’ 

established by DOE in the October 2004 

final rule and presented in subpart D to 

10 CFR part 431. 73 FR 40770, 40776 

(July 16, 2008). DOE is not conducting 

any further analysis on gas-fired 

commercial warm air furnaces. 

2. Oil-Fired Commercial Warm Air 

Furnaces 

The Federal energy conservation 

standard for commercial oil-fired warm 

air furnaces corresponds to the 

efficiency level in ASHRAE Standard 

90.1–1999, which specifies that for 

equipment with a capacity of 225,000 

[British thermal units per hour] (Btu/h) 

or more, the thermal efficiency at the 

maximum rated capacity (rated 

maximum input) must be no less than 

81 percent. 10 CFR 431.77(b). The 

Federal energy conservation standard 

for oil-fired commercial warm air 

furnaces applies to equipment 

manufactured on or after January 1, 

1994. 10 CFR 431.77. 

The efficiency level in ASHRAE 

Standard 90.1–2007 specifies a 

minimum thermal efficiency of 81 

percent. ASHRAE did not change the 

efficiency levels for oil-fired commercial 

warm air furnaces, but ASHRAE added 

three design requirements. ASHRAE 

Standard 90.1–2007 now specifies that 

commercial, oil-fired, warm air furnaces 

must use an interrupted or intermittent 

ignition device, have jacket losses no 

greater than 0.75 percent of the input 

rating, and use a power vent or flue 

damper. 

DOE published a final rule in the 

Federal Register on March 7, 2007, 

which states that the statutory trigger 

that requires DOE to adopt uniform 

national standards based on ASHRAE 

action is for ASHRAE to change a 

standard by increasing the energy 

efficiency of the equipment listed in 

EPCA section 342(a)(6)(A)(i) (42 U.S.C. 

6313(a)(6)(A)(i)). 72 FR 10038, 10042. 

In practice, 42 U.S.C. 6313 generally 

allows ASHRAE Standard 90.1 to set 

energy efficiency levels for equipment 

as a model building code and directs 

DOE to use these efficiency levels as the 

basis for maintaining consistent, 

uniform national energy conservation 

standards for the same equipment, 

provided all other applicable statutory 

requirements are met. DOE stated in the 

July 2008 NODA that if ASHRAE has 

not changed an efficiency level for a 

class of equipment subject to 42 U.S.C. 

6313, DOE does not have authority to 

consider amending the uniform national 

standard at the time of publication of 

the amended ASHRAE Standard 90.1. 

73 FR 40770, 40777 (July 16, 2008). DOE 

also pointed out that although ASHRAE 

added design requirements in ASHRAE 

Standard 90.1–2007, it did not change 

the efficiency levels for oil-fired 

commercial warm air furnaces. Id. 

Therefore, DOE tentatively concluded 

that it does not have authority to amend 

the uniform national standard for this 

equipment. Id. 

In response to the preliminary review 

of oil-fired commercial warm air 

furnaces set forth in the July 2008 

NODA, the Advocates Comment made 

the same assertion regarding the three 

design requirements added by ASHRAE 

as it did for gas-fired commercial warm 

air furnaces above. (The Advocates 

Comment, No. 4 at p. 7) 

DOE does not have any reason to treat 

oil-fired commercial warm air furnaces 

any differently than gas-fired 

commercial warm air furnaces. The 

language of EPCA authorizes DOE to 

establish a performance standard or a 

single design standard. As such, DOE is 

concluding a standard for oil-fired 

commercial warm air furnaces that 

establishes both a performance standard 

and a design requirement is beyond the 

scope of DOE’s legal authority, as it did 

with gas-fired commercial warm air 

furnaces. 

Therefore, DOE has not changed its 

preliminary review set forth in the July 

2008 NODA. Because the amendments 

for this equipment type set out in 

12010 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

7ASHRAE provides the same requirement for 

single-phase and three-phase through-the-wall aircooled air conditioners and heat pumps used in 

covered commercial buildings, but points out that 

single-phase products are regulated as residential 

products under 10 CFR 430.32(c)(2). 

8Section 314(b)(4)(C) of EISA 2007 specifies for 

‘‘equipment manufactured on or after the later of 

January 1, 2008, or the date that is 180 days after 

the date of enactment of the Energy Independence 

and Security Act of 2007— 

(i) the minimum seasonal energy efficiency ratio 

of air-cooled 3-phase electric central air 

ASHRAE Standard 90.1–2007 did not 

change the efficiency level for oil-fired 

commercial warm air furnaces, DOE is 

leaving the existing Federal energy 

conservation standards in place for this 

equipment; these standards specify a 

thermal efficiency of 81 percent. 

Accordingly, DOE is not conducting any 

further analysis on oil-fired commercial 

warm air furnaces. 

B. Commercial Package AirConditioning and Heating Equipment 

EPCA, as amended, defines 

‘‘commercial package air-conditioning 

and heating equipment’’ as ‘‘air-cooled, 

water-cooled, evaporatively cooled, or 

water source (not including ground 

water source) electrically operated, 

unitary central air conditioners and 

central air-conditioning heat pumps for 

commercial application.’’ (42 U.S.C. 

6311(8)(A); 10 CFR 431.92) EPCA also 

defines ‘‘small,’’ ‘‘large,’’ and ‘‘very 

large commercial package airconditioning and heating equipment’’ 

based on the equipment’s rated cooling 

capacity. (42 U.S.C. 6311(8)(B)–(D); 10 

CFR 431.92) Specifically, the term 

‘‘small commercial package airconditioning and heating equipment’’ 

means ‘‘commercial package airconditioning and heating equipment 

that is rated below 135,000 Btu per hour 

(cooling capacity).’’ (42 U.S.C. 

6311(8)(B); 10 CFR 431.92) The term 

‘‘large commercial package airconditioning and heating equipment’’ 

means ‘‘commercial package airconditioning and heating equipment 

that is rated: (i) At or above 135,000 Btu 

per hour and (ii) below 240,000 Btu per 

hour (cooling capacity).’’ (42 U.S.C. 

6311(8)(C); 10 CFR 431.92) The term 

‘‘very large commercial package airconditioning and heating equipment’’ 

means ‘‘commercial package airconditioning and heating equipment 

that is rated: (i) at or above 240,000 Btu 

per hour; and (ii) below 760,000 Btu per 

hour (cooling capacity).’’ (42 U.S.C. 

6311(8)(D); 10 CFR 431.92) 

The amendments in ASHRAE 

Standard 90.1–2007 include: (1) 

Identifying separate efficiency levels for 

three-phase through-the-wall air-cooled 

air conditioners and heat pumps and 

three-phase, small-duct, high-velocity 

air-cooled air conditioners and heat 

pumps; (2) adding equipment classes 

corresponding efficiency levels for 

commercial package air-cooled air 

conditioners with a cooling capacity at 

or above 760,000 Btu/h and watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h; and (3) 

changing the efficiency levels for watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 135,000 Btu/h and less than 

240,000 Btu/h, thereby triggering DOE 

to further review ASHRAE’s changes as 

presented below. 

1. Three-Phase Through-the-Wall AirCooled Air Conditioners and Heat 

Pumps 

ASHRAE Standard 90.1–2007 

identifies efficiency levels for threephase through-the-wall air-cooled air 

conditioners and heat pumps, singlepackage and split systems, with a 

cooling capacity of no greater than 

30,000 Btu/h. The efficiency levels 

specified by ASHRAE Standard 90.1– 

2007 include a seasonal energy 

efficiency ratio of 12.0 for cooling mode 

and a heating seasonal performance 

factor of 7.4 for equipment 

manufactured on or after January 23, 

2010.7 ASHRAE aligned these efficiency 

levels and its corresponding effective 

dates with the efficiency levels 

established in EPCA for single-phase 

residential versions of the same 

products. 

Neither EPCA nor DOE has 

established a specific definition for 

commercial ‘‘through-the-wall aircooled air conditioners and heat 

pumps.’’ Residential through-the-wall 

air-cooled air conditioners and heat 

pumps are consumer products covered 

as ‘‘central air conditioners’’ under 

EPCA, as amended, which are defined at 

42 U.S.C. 6291(21) and 10 CFR 430.2. 

Residential through-the-wall air-cooled 

air conditioners and heat pumps are by 

definition single-phase products (Id.), 

whereas the commercial through-thewall air-cooled air conditioners and heat 

pumps mentioned in ASHRAE Standard 

90.1–2007 are three-phase products. In 

DOE’s regulations, a residential 

‘‘[t]hrough-the-wall air conditioner and 

heat pump’’ means ‘‘a central air 

conditioner or heat pump that is 

designed to be installed totally or 

partially within a fixed-size opening in 

an exterior wall * * *’’ 10 CFR 430.2. 

Furthermore to be covered, this 

equipment (1) must be manufactured 

before January 23, 2010; (2) must not be 

weatherized; (3) must be clearly and 

permanently marked for installation 

only through an exterior wall; (4) have 

a rated cooling capacity no greater than 

30,000 Btu/h; (5) exchange all of its 

outdoor air across a single surface of the 

equipment cabinet; and (6) have a 

combined outdoor air exchange area of 

less than 800 square inches (split 

systems) or less than 1,210 square 

inches (single packaged systems) as 

measured on the surface described in 

paragraph (5) of this definition. Id. 

In terms of equipment construction, 

commercial and residential through-thewall air-cooled air conditioners and heat 

pumps use the same components in the 

same configurations to provide space 

cooling and heating. Commercial 

versions of through-the-wall air-cooled 

air conditioners and heat pumps are 

essentially the same as residential 

versions, except that they are powered 

using three-phase electric power. 

EPCA does not separate three-phase 

through-the-wall air-cooled air 

conditioners and heat pumps from other 

types of small commercial package airconditioning and heating equipment in 

its definitions. Therefore, EPCA’s 

definition of ‘‘small commercial package 

air-conditioning and heating 

equipment’’ would include three-phase 

through-the-wall air-cooled air 

conditioners and heat pumps. Although 

EPCA does not use the term ‘‘threephase through-the-wall air-cooled air 

conditioners and heat pumps,’’ the 

three-phase versions of this equipment, 

regardless of cooling capacity, fall 

within the definition of ‘‘small 

commercial package air-conditioning 

and heating equipment.’’ (42 U.S.C. 

6311(8)(A)–(B)) There is no language in 

EPCA to indicate that three-phase 

through-the-wall air-cooled air 

conditioners and heat pumps are a 

separate class of covered equipment. 

The Federal energy conservation 

standards for three-phase commercial 

package air conditioners and heat 

pumps less than 65,000 Btu/h were 

established by EISA 2007 for such 

products manufactured on or after June 

19, 2008. Specifically, section 

314(b)(4)(C) of EISA 2007 amended 

section 342(a)(7) of EPCA (42 U.S.C. 

6313(a)(7)) by adding new provisions for 

three-phase commercial package air 

conditioners with a cooling capacity of 

less than 65,000 Btu/h. (42 U.S.C. 

6313(a)(7)(D)) These provisions in EISA 

2007 mandate SEERs for cooling mode 

and HSPFs for heating mode of aircooled three-phase electric central air 

conditioners and central airconditioning heat pumps with a cooling 

capacity of less than 65,000 Btu/h.8

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12011 

conditioners and central air-conditioning heat 

pumps less than 65,000 Btu per hour (cooling 

capacity), split systems, shall be 13.0; 

(ii) the minimum seasonal energy efficiency ratio 

of air-cooled 3-phase electric central air 

conditioners and central air-conditioning heat 

pumps less than 65,000 Btu per hour (cooling 

capacity), single package, shall be 13.0; 

(iii) the minimum heating seasonal performance 

factor of air-cooled 3-phase electric central airconditioning heat pumps less than 65,000 Btu per 

hour (cooling capacity), split systems, shall be 7.7; 

and 

(iv) the minimum heating seasonal performance 

factor of air-cooled 3-phase electric central airconditioning heat pumps less than 65,000 Btu per 

hour (cooling capacity), single package, shall be 

7.7.’’ (42 U.S.C. 6313(a)(7)(D)). 

9 DOE published a final rule amending the energy 

conservation standards for residential central air 

conditioners and heat pumps on January 22, 2001. 

66 FR 7170 (Jan. 22, 2001). 

10ASHRAE Standard 90.1–2007 includes 

efficiency levels for three-phase and single-phase 

SDHV air-cooled air conditioners and heat pumps 

used in commercial buildings. ASHRAE Standard 

90.1–2007 also includes a footnote to these 

provisions, which indicates that the single-phase 

versions of this equipment are regulated as 

residential products under 10 CFR 430.32(c)(2). 

Three-phase through-the-wall air-cooled 

air conditioners and heat pumps are a 

smaller subset of three-phase 

commercial package air conditioners 

with a cooling capacity of less than 

65,000 Btu/h, and were not explicitly 

excluded from the standards in section 

314(b)(4)(C) of EISA 2007. DOE noted in 

the July 2008 NODA that since EISA 

2007 set these standards, DOE must 

follow them, and they are more 

stringent than the levels contained in 

ASHRAE Standard 90.1–2007 for threephase through-the-wall air-cooled air 

conditioners and heat pumps. 73 FR 

40770, 40778 (July 16, 2008). 

Accordingly, DOE affirmed that the 

EISA 2007 efficiency levels for small 

commercial package air-conditioning 

and heating equipment less than 65,000 

Btu/h, as set forth at 42 U.S.C. 

6313(a)(7)(D), apply to three-phase 

through-the-wall air-cooled air 

conditioners and heat pumps with a 

cooling capacity no greater than 30,000 

Btu/h. Id. 

In response to the preliminary 

conclusions set forth in the July 2008 

NODA, AHRI stated that the minimum 

energy efficiency standards for small 

commercial package air conditioning 

and heating equipment less than 65,000 

Btu/h specified in ASHRAE Standard 

90.1–2007 were initially amended by 

addendum f to ASHRAE/IES 90.1–2004 

in 2005, well before Congress enacted 

EISA 2007. (AHRI, No. 3 at pp. 1–2) 

AHRI further commented ‘‘[t]he intent 

behind addendum f was to harmonize 

the minimum energy efficiency 

standards, product classes and effective 

dates for the three-phase products 

covered by ASHRAE Standard 90.1 with 

the respective efficiency standards, 

product classes and effective dates 

established under EPCA for single-phase 

residential products.’’ Id. AHRI further 

noted that it believes the intent of 

Congress was very clear in EISA 2007 

(i.e., to harmonize the standard for 

three-phase commercial products with 

cooling capacities less than 65,000 Btu/ 

h with that of the single-phase 

residential products of the same 

capacity). Further, AHRI commented 

that Congress never intended to require 

a minimum 13 SEER/7.7 HSPF 

standards for three-phase, through-thewall, air-cooled air conditioners and 

heat pumps; DOE itself found it 

impossible to meet that efficiency level 

during the last rulemaking on central air 

conditioners and heat pumps. (AHRI, 

No. 3 at pp. 1–2) 

AHRI also stated its belief that DOE 

has the authority to establish a separate 

product class for three-phase, throughthe-wall, air-cooled air conditioners and 

heat pumps. (AHRI, No. 2 at p. 2) AHRI 

pointed out that prior to the last 

rulemaking on residential central air 

conditioners (i.e., single-phase, aircooled air conditioners and heat 

pumps), EPCA did not specifically 

address through-the-wall products. 

AHRI asserted it was DOE that 

established the product class when it 

determined that through-the-wall 

products had unique space-constraint 

challenges that warranted a lower 

minimum efficiency standard than 

conventional systems. (AHRI, No. 3 at p. 

2) AHRI commented that DOE can and 

should do the same for commercial 

three-phase versions of these products. 

AHRI also stated that DOE can adopt the 

proposed ASHRAE 90.1–2007 efficiency 

levels for three-phase through-the-wall 

air-cooled air conditioners and heat 

pumps because the efficiency levels 

were developed and justified by DOE 

through a lengthy rulemaking process 

(i.e., the 2001 rulemaking on central air 

conditioners and heat pumps 9). Lastly, 

AHRI pointed out that due to spaceconstraint issues, three-phase throughthe-wall air-cooled air conditioners and 

heat pumps cannot meet the 13 SEER/ 

7.7 standard established by EISA 2007. 

AHRI stated that manufacturers of threephase commercial through-the-wall 

products would have no choice but to 

file for a waiver if the ASHRAE 

Standard 90.1–2007 efficiency levels 

were not adopted by DOE for this 

equipment class. (AHRI, No. 3 at p. 2) 

DOE does not agree with AHRI’s 

assertions regarding three-phase 

through-the-wall air-cooled air 

conditioners and heat pumps. 

Specifically, while ASHRAE may have 

been trying to harmonize the 

definitions, equipment classes, and 

energy conservation standards for 

equipment classes of similar types with 

their residential counterparts, the 

energy conservation standards specified 

by EISA 2007 supersede the efficiency 

levels in ASHRAE Standard 90.1–2007. 

EISA 2007 did not explicitly exclude 

three-phase through-the-wall air-cooled 

air conditioners and heat pumps from 

its regulations for the larger class of 

small commercial package air 

conditioning and heating equipment. 

As to AHRI’s assertion regarding 

establishing a separate equipment class 

for these subsets of equipment, DOE 

agrees with AHRI that DOE has the 

authority to adopt a separate equipment 

class for this equipment when initially 

established by ASHRAE Standard 90.1– 

2007. However, DOE does not have the 

authority to adopt a less stringent 

efficiency level for a separate equipment 

class, including three-phase throughthe-wall air-cooled air conditioners and 

heat pumps in contravention of the 

prescriptive standard levels set by EISA 

2007. Effectively, the efficiency levels in 

ASHRAE Standard 90.1–2007 are less 

stringent than the energy conservation 

standards specified by EISA 2007 for 

three-phase, through-the-wall, aircooled air conditioners and heat pumps. 

As DOE stated in the July 2008 NODA, 

DOE is affirming in today’s notice that 

the EISA 2007 efficiency levels set forth 

in 42 U.S.C. 6313(a)(7)(D) for small 

commercial package air-conditioning 

and heating equipment less than 65,000 

Btu/h apply to three-phase through-thewall air-cooled air conditioners and heat 

pumps with a cooling capacity no 

greater than 30,000 Btu/h. 73 FR 40770, 

40778 (July 16, 2008). DOE does not 

have authority to grant exception relief 

from the prescriptive standard levels set 

by EISA 2007 for three-phase 

commercial through-the-wall air 

conditioners and heat pumps, nor can it 

provide a waiver from the test 

procedure as a means of avoiding this 

statutory requirement. 

2. Three-Phase, Small-Duct, HighVelocity Air-Cooled Air Conditioners 

and Heat Pumps 

ASHRAE Standard 90.1–2007 

identifies efficiency levels for threephase small-duct, high-velocity (SDHV) 

air-cooled air conditioners and heat 

pumps, both single-package and split 

systems, with a cooling capacity less 

than 65,000 Btu/h.10 The efficiency 

levels specified by ASHRAE Standard 

90.1–2007 include a SEER of 10.0 for 

cooling mode and a HSPF of 6.8 for 

12012 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

11 DOE notes that the residential versions of 

SDHV are subject to an exception issued by DOE’s 

Office of Hearing and Appeals (OHA). On October 

14, 2004, OHA granted an exception to SpacePak 

and Unico, Inc., authorizing them to manufacture 

SDHV systems (as defined in 10 CFR 430.2) with 

a SEER of no less than 11.0 and a heating seasonal 

performance factor (HSPF) of 6.8. The exception 

relief will remain in effect until DOE modifies the 

general energy efficiency standard for central air 

conditioners and establishes a different standard for 

SDHV systems that complies with EPCA. However, 

this exception only applies to the residential singlephase SDHV systems and would, therefore, exclude 

three-phase SDHV equipment. (DOE’s Office of 

Hearing and Appeals, Decision and Order: 

Applications for Exception (Oct. 14, 2004) 

(Available at: http://www.oha.doe.gov/cases/ee/ 

tee0010.pdf.)) 

equipment. ASHRAE aligned these 

efficiency levels and the corresponding 

effective dates with the efficiency levels 

established in EPCA for single-phase 

residential versions of the same 

products.11

Just as with three-phase through-thewall air-cooled air conditioners and heat 

pumps, neither EPCA nor DOE has 

established a specific definition for 

commercial ‘‘three-phase SDHV air 

conditioners and heat pumps.’’ In its 

regulations, DOE defines a residential 

‘‘SDHV air-cooled air conditioner or 

heat pump’’ as ‘‘a heating and cooling 

product that contains a blower and 

indoor coil combination that: (1) Is 

designed for and produces at least 1.2 

inches of external static pressure when 

operated at the certified air volume rate 

of 220–350 CFM [cubic feet per minute] 

per rated ton of cooling; and (2) When 

applied in the field, uses high-velocity 

room outlets generally greater than 

1,000 fpm [feet per minute] which have 

less than 6.0 square inches of free area.’’ 

10 CFR 430.2. 

In terms of equipment construction, 

commercial and residential SDHV air 

conditioners and heat pumps utilize the 

same components in the same 

configurations to provide space cooling 

and heating. Commercial versions of 

SDHV systems are essentially the same 

as residential versions powered with 

single-phase electric power, except that 

they are powered using three-phase 

electric power. 

EPCA does not separate three-phase 

SDHV air conditioners and heat pumps 

from other types of small commercial 

package air-conditioning and heating 

equipment in its definitions. Therefore, 

EPCA’s definition of ‘‘small commercial 

package air-conditioning and heating 

equipment’’ would include three-phase 

SDHV air conditioners and heat pumps. 

Although EPCA does not use the term 

‘‘three-phase SDHV air conditioners and 

heat pumps,’’ the three-phase versions 

of this equipment, regardless of cooling 

capacity, fall within the definition of 

‘‘small commercial package airconditioning and heating equipment.’’ 

(42 U.S.C. 6311(8)(A)–(B)) There is no 

language in EPCA to indicate that threephase SDHV air conditioners and heat 

pumps are a separate type of covered 

equipment. 

The Federal energy conservation 

standards for three-phase, commercial 

package air conditioners and heat 

pumps less than 65,000 Btu/h were 

established by EISA 2007 for products 

manufactured on or after June 19, 2008. 

Specifically, section 314(b)(4)(C) of 

EISA 2007 amended section 342(a) of 

EPCA (42 U.S.C. 6313(a)) by adding new 

provisions for three-phase commercial 

package air conditioners with a cooling 

capacity of less than 65,000 Btu/h. (42 

U.S.C. 6313(a)(7)(D)) As mentioned 

previously, this provision in EISA 2007 

mandates seasonal energy efficiency 

ratios for cooling mode and heating 

seasonal performance factors for heating 

mode of air-cooled three-phase electric 

central air conditioners and central airconditioning heat pumps with a cooling 

capacity of less than 65,000 Btu/h. (42 

U.S.C. 6313(a)(7)(D)) Three-phase SDHV 

air conditioners and heat pumps are a 

smaller subset of three-phase 

commercial package air conditioners 

with a cooling capacity of less than 

65,000 Btu/h and were not explicitly 

excluded from the standards in section 

314(b)(4)(C) of EISA 2007. Because EISA 

2007 set such standards, and because 

they are more stringent than the levels 

contained in ASHRAE Standard 90.1– 

2007 for those products, DOE must 

continue to implement the EISA 2007 

standards and will not consider 

amended standard levels based on 

ASHRAE’s action. 

Thus, manufacturers of three-phase 

SDHV equipment must follow the 

energy conservation standards in EISA 

2007. DOE affirms that the EISA 2007 

efficiency levels for three-phase small 

commercial package air-conditioning 

and heating equipment less than 65,000 

Btu/h apply to three-phase SDHV aircooled air conditioners and heat pumps 

with a cooling capacity less than 65,000 

Btu/h. Accordingly, DOE is not 

conducting any further analysis on 

three-phase SDHV equipment. DOE 

notes that it does not have authority to 

grant exception relief from the 

prescriptive standard levels set by EISA 

2007 for three-phase SDHV air-cooled 

air conditioners and heat pumps, nor 

can it provide a waiver from the test 

procedure as a means of avoiding this 

statutory requirement. 

3. Commercial Package Air-Cooled Air 

Conditioners With a Cooling Capacity at 

or Above 760,000 Btu per Hour 

EPCA specifies energy conservation 

standards for small (cooling capacities 

at or above 65,000 and less than 135,000 

Btu/h), large (cooling capacities at or 

above 135,000 and less than 240,000 

Btu/h), and very large (cooling 

capacities at or above 240,000 and less 

than 760,000 Btu/h) commercial 

package air-cooled air conditioners. (42 

U.S.C. 6313(a)(1)–(2), (7)–(9); 10 CFR 

431.97) However, there are no Federal 

energy conservation standards for 

commercial package air-cooled air 

conditioners with a cooling capacity at 

or above 760,000 Btu/h. In contrast, 

ASHRAE Standard 90.1–2007 sets the 

energy efficiency levels for commercial 

package air-cooled air conditioners with 

a cooling capacity at or above 760,000 

Btu/h at 9.7 EER for equipment with 

electric resistance heating, and 9.5 EER 

for equipment with any other type of 

heating or without heating. The 

efficiency level in ASHRAE Standard 

90.1–2007 applies to equipment 

manufactured on or after January 1, 

2010. 

Units with capacities at or above 

760,000 Btu/h fall outside the 

definitions of the small, large, and very 

large commercial package air-cooled air 

conditioner equipment classes 

established in EPCA. (42 U.S.C. 

6311(8)(A)–(D); 10 CFR 431.92) 

Therefore, DOE has concluded that it 

does not have the authority to review 

the efficiency level for that equipment. 

Accordingly, DOE is not conducting any 

further analysis on commercial package 

air-cooled air conditioners with a 

cooling capacity at or above 760,000 

Btu/h. 

4. Water-Cooled and EvaporativelyCooled Commercial Package Air 

Conditioners and Heat Pumps With a 

Cooling Capacity at or Above 135,000 

Btu/h and Less Than 240,000 Btu/h 

The Federal energy conservation 

standard for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 135,000 Btu/h and less than 

240,000 Btu/h requires an EER no less 

than 11.0 for equipment manufactured 

on or after October 29, 2004. 10 CFR 

431.97, Table 1. 

ASHRAE Standard 90.1–2007 

includes the same efficiency level for 

water-cooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 135,000 Btu/h and less than 

240,000 Btu/h that use electric 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12013 

resistance heating (i.e., an EER no less 

than 11.0). However, ASHRAE Standard 

90.1–2007 specifies a different 

efficiency level for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 135,000 Btu/h and less than 

240,000 Btu/h that use any type of 

heating other than electric resistance 

(i.e., an EER no less than 10.8). 

DOE reviewed a final rule published 

on January 12, 2001 (hereafter referred 

to as the January 2001 final rule) which 

considered ASHRAE Standard 90.1– 

1999 to determine the efficiency levels 

applicable to water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 135,000 Btu/h and less than 

240,000 Btu/h. 66 FR 3336, 3340 (Jan. 

12, 2001). DOE adopted the efficiency 

levels specified by ASHRAE Standard 

90.1–1999 for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 135,000 Btu/h and less than 

240,000 Btu/h in the January 2001 final 

rule. Id. at 33340. The January 2001 

final rule did not establish different 

efficiency levels for different types of 

supplemental heating systems 

associated with this equipment. Id. All 

large water-cooled and evaporativelycooled commercial package air 

conditioners and heat pumps were 

subject to the same efficiency level of 

11.0 EER regardless of heating type. 

ASHRAE Standard 90.1–1999 did 

establish different efficiency levels 

applicable to water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 135,000 Btu/h and less than 

240,000 Btu/h for different types of 

supplemental heating systems. 

DOE has concluded that the ASHRAE 

Standard 90.1–2007 efficiency levels for 

water-cooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 135,000 Btu/h and less than 

240,000 Btu/h that utilize electric 

resistance heating or no heating would 

maintain the efficiency level in the 

current Federal energy conservation 

standard. ASHRAE Standard 90.1–2007 

would effectively lower the efficiency 

levels (i.e., EER) required by EPCA and 

allow increased energy consumption for 

equipment that utilize any type of 

heating other than electric resistance. 

Not only has ASHRAE Standard 90.1– 

2007 not increased the efficiency levels 

for water-cooled and evaporativelycooled commercial package air 

conditioners and heat pumps with a 

cooling capacity at or above 135,000 

Btu/h and less than 240,000 Btu/h, but 

it could result in backsliding for those 

products that utilize any type of heating 

other than electric resistance. 

Accordingly, DOE is not conducting any 

further analysis on water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a capacity at or above 

135,000 Btu/h and less than 240,000 

Btu/h. 

5. Water-Cooled and EvaporativelyCooled Commercial Package Air 

Conditioners and Heat Pumps With a 

Cooling Capacity at or Above 240,000 

Btu/h and Below 760,000 Btu/h 

Under EPCA, ‘‘commercial package 

air-conditioning and heating 

equipment’’ means ‘‘air-cooled, watercooled, evaporatively cooled, or water 

source (not including ground water 

source) electrically operated, unitary 

central air conditioners and central airconditioning heat pumps for 

commercial application.’’ (42 U.S.C. 

6311(8)(A); 10 CFR 431.92) EPCA goes 

on to define ‘‘very large commercial 

package air-conditioning and heating 

equipment’’ as commercial package airconditioning and heating equipment 

that is rated at or above 240,000 Btu per 

hour and below 760,000 Btu per hour 

(cooling capacity). (42 U.S.C. 

6311(8)(D); 10 CFR 431.92) Although 

water-cooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h fall within the definition 

of very large commercial package airconditioning and heating equipment, 

EPCA does not specify Federal energy 

conservation standards for this 

equipment class. (EPCA set standards 

for air-cooled systems only, under 42 

U.S.C. 6313(a)(7)–(9).) ASHRAE added 

this new equipment class to ASHRAE 

Standard 90.1–2007, setting efficiency 

levels at 11.0 EER for equipment with 

electric resistance heating or without 

heating, and at 10.8 EER for equipment 

with all other types of heating. Under 

EPCA, DOE must either adopt the 

efficiency level specified in ASHRAE 

Standard 90.1–2007 for this new class of 

equipment, or consider a more stringent 

level that would result in significant 

additional energy savings and is 

technologically feasible and 

economically justified. (42 U.S.C. 

6313(a)(6)) 

For the July 2008 NODA, DOE 

reviewed the market for water-cooled 

and evaporatively-cooled commercial 

package air conditioners and heat 

pumps and found that manufacturers 

offer few models. 73 FR 40770, 40779– 

80 (July 16, 2008). For this study, DOE 

surveyed the AHRI Directory of 

Certified Product Performance, but did 

not identify any equipment on the 

market with a cooling capacity at or 

above 240,000 Btu/h. Id. DOE stated in 

the July 2008 NODA that there are no 

energy savings associated with this class 

because there is no equipment being 

manufactured in this class, and 

therefore, it is not possible to assess the 

potential for additional energy savings 

beyond the levels anticipated in 

ASHRAE Standard 90.1–2007. Id. Thus, 

DOE did not perform a potential energysavings analysis on this equipment type. 

DOE specifically sought comment from 

interested parties on the market and 

energy savings potential for this 

equipment type in the July 2008 NODA. 

73 FR 40770, 40780 and 40791 (July 16, 

2008). 

In response to the March 2008 NODA, 

DOE did not receive any comments on 

the market for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h. In absence of a 

market for water-cooled and 

evaporatively-cooled equipment in the 

given capacity range, DOE cannot 

perform an economic and energy 

savings analysis. 

However, DOE is proposing to adopt 

the ASHRAE Standard 90.1–2007 

efficiency levels for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h as required by EPCA. (42 

U.S.C. 6313(a)(6)(A)(ii)) Even though 

ASHRAE specified efficiency levels for 

water-cooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h, DOE is 

specifying an upper bound to the 

cooling capacity since DOE’s authority 

under the very large commercial 

package air-conditioning and heating 

equipment definition only covers 

equipment with cooling capacities less 

than 760,000 Btu/h. (42 U.S.C. 

6311(8)(D)(ii)) DOE is proposing to add 

subsection (d) to 10 CFR Part 431.97, 

which will specify the proposed 

standards and effective dates for this 

equipment. These standards would be 

applicable to any water-cooled and 

evaporatively-cooled commercial 

package air conditioner or heat pump 

with a cooling capacity at or above 

240,000 Btu/h and less than 760,000 

Btu/h manufactured on or after the 

effective date, which is three years after 

the effective date specified in ASHRAE 

12014 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

Standard 90.1–2007. (42 U.S.C. 

6313(a)(6)(D)(ii)) Since ASHRAE 

Standard 90.1–2007 does not explicitly 

set an effective date for this equipment, 

DOE is interpreting the effective date of 

amended standards to be three years 

from the publication of ASHRAE 

Standard 90.1–2007 (i.e., January 10, 

2011). 

C. Commercial Packaged Boilers 

EPCA defines a ‘‘packaged boiler’’ as 

‘‘a boiler that is shipped complete with 

heating equipment, mechanical draft 

equipment, and automatic controls; 

usually shipped in one or more 

sections.’’ (42 U.S.C. 6311(11)(B)) In its 

regulations, DOE further refined the 

‘‘packaged boiler’’ definition to exclude 

a boiler that is custom designed and 

field constructed. 10 CFR 431.102. 

Additionally, if the boiler is shipped in 

more than one section, the sections may 

be produced by more than one 

manufacturer, and may be originated or 

shipped at different times and from 

more than one location. Id. In the 

marketplace, there are various different 

types of commercial packaged boilers, 

which can be distinguished based on 

the input capacity size (i.e., small or 

large), fuel type (i.e., oil or gas), output 

(i.e., hot water or steam), and draft type 

(i.e., natural draft or other). 

However, the current Federal energy 

conservation standards separate 

commercial packaged boilers only by 

the type of fuel used by the boiler, 

creating two equipment classes: (1) Gasfired, and (2) oil-fired. (42 U.S.C. 

6313(a)(4)(C)–(D); 10 CFR 431.87) As set 

forth below, EPCA specified minimum 

Federal standards for commercial 

packaged boilers manufactured on or 

after January 1, 1994. Id. The minimum 

combustion efficiency at the maximum 

rated capacity of a gas-fired packaged 

boiler with capacity of 300,000 Btu/h 

(300 kBtu/h) or more must be 80 

percent. (42 U.S.C. 6313(a)(4)(C); 10 

CFR 431.87(a)) The minimum 

combustion efficiency at the maximum 

rated capacity of an oil-fired packaged 

boiler with capacity of 300,000 Btu/h or 

more must be 83 percent. (42 U.S.C. 

6313 (a)(4)(D); 10 CFR 431.87(b)) 

In contrast, ASHRAE has adopted a 

different approach when considering 

commercial packaged boilers, as 

described below. ASHRAE Standard 

90.1–2007 further divided these two 

equipment classes into the following ten 

classes: 

• Small gas-fired hot water boilers; 

• Small gas-fired steam, all except 

natural draft boilers; 

• Small gas-fired steam, natural draft 

boilers; 

• Small oil-fired hot water boilers; 

• Small oil-fired steam boilers; 

• Large gas-fired hot water boilers; 

• Large gas-fired steam, all except 

natural draft boilers; 

• Large gas-fired steam, natural draft 

boilers; 

• Large oil-fired hot water boilers; 

and 

• Large oil-fired steam boilers. 

Table IV.1 shows the ten equipment 

classes and efficiency levels established 

by ASHRAE. 

TABLE IV.1—ASHRAE STANDARD 90.1–2007 ENERGY EFFICIENCY LEVELS FOR COMMERCIAL PACKAGED BOILERS

Equipment type Size category 

(Input kBtu/h) 

ASHRAE standard 

90.1–2007 

(effective 3/2/ 

2010)* 

ASHRAE standard 

90.1–2007 

(effective 3/2/ 

2020)* 

Small Gas-fired Hot Water ........................................................................................ 300–2,500 ET = 80% ET = 80% 

Small Gas-fired Steam All Except Natural Draft ....................................................... 300–2,500 ET = 79% ET = 79% 

Small Gas-fired Steam Natural Draft ......................................................................... 300–2,500 ET = 77% ET = 79% 

Small Oil-fired Hot Water ........................................................................................... 300–2,500 ET = 82% ET = 82% 

Small Oil-fired Steam ................................................................................................. 300–2,500 ET = 81% ET = 81% 

Large Gas-fired Hot Water ........................................................................................ >2,500 EC = 82% EC = 82% 

Large Gas-fired Steam All Except Natural Draft ....................................................... >2,500 ET = 79% ET = 79% 

Large Gas-fired Steam Natural Draft ........................................................................ >2,500 ET = 77% ET = 79% 

Large Oil-fired Hot Water .......................................................................................... >2,500 EC = 84% EC = 84% 

Large Oil-fired Steam ................................................................................................ >2,500 ET = 81% ET = 81% 

*EC = combustion efficiency; ET = thermal efficiency. 

Of particular relevance here, ASHRAE 

changed the metric for determining 

energy efficiency for five equipment 

classes of small commercial packaged 

boilers and three equipment classes of 

large commercial packaged boilers in 

ASHRAE Standard 90.1–2007. Whereas 

the Federal energy conservation 

standards for these eight equipment 

classes are expressed in terms of 

combustion efficiency (42 U.S.C. 

6313(a)(4)), the efficiency levels in 

ASHRAE Standard 90.1–2007 are 

expressed in terms of thermal efficiency. 

ASHRAE initially attempted to 

transition small commercial boilers 

from an energy conservation standard 

using the combustion efficiency metric 

to a standard using the thermal 

efficiency metric the last time the 

efficiency levels for commercial 

packaged boilers in ASHRAE Standard 

90.1 were revised, in 1999 (i.e., 

ASHRAE Standard 90.1–1999). 

However, DOE was unable to accept 

those efficiency levels due to EPCA’s 

anti-backsliding clause, which resulted 

in DOE leaving the existing standard 

levels in place in terms of combustion 

efficiency, as explained below. 72 FR 

10038, 10043 (March 7, 2007). The 

sections below detail the following: (1) 

The differences between the thermal 

and combustion efficiency metrics; (2) 

the analysis done for DOE’s review of 

small commercial packaged boiler 

efficiency levels in ASHRAE Standard 

90.1–1999; (3) the market analysis 

developed for DOE’s current review of 

the efficiency levels in ASHRAE 

Standard 90.1–2007; (4) the preliminary 

conclusions regarding the market 

analysis; and (5) DOE’s conclusions 

regarding the efficiency levels contained 

in ASHRAE Standard 90.1–2007 for 

commercial packaged boilers. 

1. Efficiency Metric Description 

(Combustion Efficiency and Thermal 

Efficiency) 

In general, the energy efficiency of a 

product is a function of the relationship 

between the product’s output of services 

and its energy input. A boiler’s output 

of services is measured largely by the 

energy content of its output (steam or 

hot water). Consequently, its efficiency 

is understood to be the ratio between its 

energy output and its energy input, with 

the energy output being calculated as 

the energy input minus the energy lost 

in producing the output. A boiler’s 

energy losses consist of energy that 

escapes through its flue (commonly 

referred to as ‘‘flue losses’’), and of 

energy that escapes into the area 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12015 

12At the time, a different anti-backsliding clause 

was in effect for commercial boilers, although it 

contained language identical to that quoted here in 

the text (previously, 42 U.S.C. 6313(a)(6)(B)(ii) prior 

to the enactment of EISA 2007). 

surrounding the boiler (commonly 

referred to as jacket losses). However, 

the combustion efficiency descriptor 

used for commercial packaged boilers in 

EPCA only accounts for flue losses, and 

is defined as ‘‘100 percent minus 

percent flue loss.’’ (42 U.S.C. 

6313(a)(4)(C)–(D); 10 CFR 431.82) The 

thermal efficiency descriptor used in 

ASHRAE Standard 90.1–2007 accounts 

for jacket losses as well as flue losses, 

and can be considered combustion 

efficiency minus jacket loss. Because all 

boilers will have at least some jacket 

losses (even if small) and because 

thermal efficiency takes these losses 

into account, the thermal efficiency for 

a particular boiler, as measured under 

the same set of conditions, must 

necessarily be lower than its 

combustion efficiency. 

While the above-described 

relationship exists between combustion 

and thermal efficiencies, there is no 

direct mathematical correlation between 

these two measures of efficiency. The 

factors that contribute to jacket loss 

(e.g., the boiler’s design and materials) 

have little or no direct bearing on 

combustion efficiency. The lack of 

correlation between combustion 

efficiency and thermal efficiency causes 

difficulties in comparing an energy 

conservation standard that is based on 

thermal efficiency to an energy 

conservation standard based on 

combustion efficiency. However, when 

DOE last evaluated the change in 

efficiency metric for commercial 

packaged boilers in response to 

ASHRAE Standard 90.1–1999, it 

developed a methodology to determine 

quantitatively whether backsliding 

could occur, as explained in section 

IV.C.2 below. DOE uses the 

methodology developed for determining 

backsliding in DOE’s review of ASHRAE 

Standard 90.1–1999, along with the 

consideration of several other factors 

(described in detail in the sections 

below) to evaluate the appropriateness 

of the efficiency levels for commercial 

packaged boilers specified by ASHRAE 

Standard 90.1–2007. 

2. Analysis of Energy Efficiency Levels 

in ASHRAE Standard 90.1–1999 

Prior to publishing ASHRAE Standard 

90.1–2007, the last time ASHRAE 

revised the efficiency levels for 

commercial packaged boilers in 

ASHRAE Standard 90.1 occurred in 

1999 (ASHRAE Standard 90.1–1999). 

DOE reviewed the efficiency levels in 

ASHRAE Standard 90.1–1999 for small 

commercial packaged boilers and issued 

a Notice of Data Availability (NODA) in 

March 2006 (here after referred to the 

March 2006 NODA) to present its 

findings. 71 FR 12634 (March 13, 2006). 

In the March 2006 NODA, DOE 

examined whether the thermal 

efficiencies for small gas-fired and small 

oil-fired commercial packaged boilers 

specified in ASHRAE Standard 90.1– 

1999 would result in a decrease in the 

required efficiency for particular piece 

of equipment compared to the Federal 

energy conservation standard 

established by EPCA. Id. 

For the 2006 analysis, DOE examined 

the average thermal efficiency of small 

commercial packaged boiler models that 

were minimally compliant with the 

Federal standard. Id. DOE defined 

‘‘minimally compliant’’ as being within 

one percent of the minimum 

combustion efficiency set by EPCA. 71 

FR 12634, 12684 (March 13, 2006). DOE 

specifically examined the minimally 

complying boilers because the antibacksliding clause in EPCA mandates 

that DOE not prescribe a standard that 

‘‘decreases the minimum required 

energy efficiency.’’ (42 U.S.C. 6316(a); 

42 U.S.C. 6295(o)(1)) 12 DOE determined 

that it would be appropriate to examine 

the boilers currently at the minimum 

required combustion efficiency 

established in EPCA to determine 

whether the potential adoption of the 

thermal efficiency levels in ASHRAE 

Standard 90.1, as Federal minimums, 

would allow for a decrease in the 

efficiency of those models. 

DOE calculated the average thermal 

efficiency of the boilers classified as 

minimally compliant and compared it to 

the thermal efficiency specified in 

ASHRAE Standard 90.1–1999. DOE 

found that the thermal efficiency levels 

for small commercial packaged boilers 

specified in ASHRAE Standard 90.1– 

1999 were significantly lower (i.e., 1.8 

percent lower for small gas-fired boilers 

and 3.1 percent lower for small oil-fired 

boilers) than the average thermal 

efficiency of the minimally complying 

models on the market. 71 FR 12634, 

12640 (March 13, 2006). DOE stated in 

the March 2006 NODA that this analysis 

did not establish directly that the small 

boiler efficiency levels in Standard 

90.1–1999 were lower than those in 

EPCA because EPCA’s combustion 

efficiency standards for this equipment 

set maximum amounts of flue losses, 

but do not regulate jacket losses. Id. 

Thermal efficiency is a function of both 

flue losses (i.e., combustion efficiency) 

and jacket losses. 71 FR 12634, 12640 

(March 13, 2006). Since these two losses 

can be independent of one another, in 

theory, a small boiler could meet or 

exceed EPCA’s applicable combustion 

efficiency standard, but have 

sufficiently large jacket losses that cause 

it to have a thermal efficiency lower 

than the efficiency levels specified in 

ASHRAE Standard 90.1–1999. Id. Thus, 

DOE stated that adoption of ASHRAE 

Standard 90.1–1999 thermal efficiency 

levels would not have directly 

decreased the minimum combustion 

efficiencies required in EPCA for small 

boilers. Id. However, the adoption of the 

ASHRAE Standard 90.1–1999 thermal 

efficiency levels for small boilers would 

have had the effect of lowering 

minimum combustion efficiency levels 

required by EPCA. Id. 

DOE outlined its basis for rejecting 

the efficiency levels for small 

commercial boilers specified by 

ASHRAE Standard 90.1–1999 in the 

March 2006 NODA. The basis for DOE’s 

decision was as follows: 

The thermal efficiency of a small 

commercial boiler is a function of (1) the 

manufacturer’s compliance with the 

applicable EPCA combustion efficiency 

standard and (2) decisions it makes 

independent of EPCA concerning the boiler’s 

design, materials, and other features that 

affect jacket losses. Although EPCA does not 

regulate jacket losses, for both small gas-fired 

and oil-fired commercial packaged boilers 

with relatively low combustion efficiencies, 

manufacturers restricted jacket losses to 

levels that kept thermal efficiencies, within 

an average of 2.6 percentage points below 

their combustion efficiencies. [DOE] does not 

believe its adoption of Standard 90.1–1999’s 

thermal efficiency levels for small 

commercial boilers would result in 

manufacturers’ increasing the amount of 

jacket losses for this equipment. No reason is 

readily apparent as to why manufacturers 

would alter their current practices to make 

equipment that has greater jacket losses, even 

if mandatory thermal efficiency levels were 

set below the levels that equipment was 

currently achieving. However, setting 

thermal efficiency standards at levels lower 

than the thermal efficiencies of existing 

equipment could potentially result in 

equipment with lower combustion 

efficiencies. This allows for the possibility of 

equipment having lower efficiencies than 

permitted by EPCA, meaning that the current 

Federal minimum (required) efficiency 

would be decreased. 

For these reasons, it appears to [DOE] that 

EPCA precludes it from prescribing as 

amended Federal energy conservation 

standards the ASHRAE Standard 90.1–1999 

thermal efficiency levels (one for gas-fired 

and the other for oil-fired equipment) for 

small commercial packaged boilers because 

each would decrease the minimum required 

efficiency of the equipment. (42 U.S.C. 

6313(a)(6)(B)(ii)) 

71 FR 12634; 12641 (March 13, 2006). 

12016 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

13The Hydronics Institute division of the Air 

Conditioning, Heating, and Refrigerating Institute, 

I=B=R Ratings for Boilers, Baseboard Radiation, 

Finned Tube (Commercial) Radiation, and IndirectFired Water Heaters (Jan. 2008). Available at: 

http://www.gamanet.org/gama/inforesources.nsf/

vAttachmentLaunch/

E9E5FC7199EBB1BE85256FA100838435/$FILE/01- 

08_CBR.pdf. 

14These anomalous ratings are likely due to 

Hydronics Institute’s (HI) de-rating procedures, 

manufacturers’ interpolation of results, varying test 

chambers and instrument calibration among 

manufacturers, or submittal of erroneous ratings. 

15Available at: http://www1.eere.energy.gov/

buildings/appliance_standards/commercial/

ashrae_products_docs_meeting.html. 

3. Analysis of Energy Efficiency Levels 

in ASHRAE Standard 90.1–2007 

For its current analysis of the 

efficiency levels for commercial 

packaged boilers in ASHRAE Standard 

90.1–2007, DOE based the preliminary 

market assessment and potential energy 

savings analysis performed for the July 

2008 NODA solely on the information 

provided by the January 2008 edition of 

the I=B=R Ratings for Boilers, Baseboard 

Radiation, Finned Tube (Commercial) 

Radiation and Indirect-Fired Water 

Heaters13 (referred to hereafter as the 

January 2008 I=B=R Directory). 

Regarding the preliminary analysis 

performed in the July 2008 NODA, 

AHRI stated its belief that the January 

2008 I=B=R Directory is incomplete 

because participation in the certification 

program and listing in the directory is 

voluntary and some manufacturers do 

not participate. (AHRI, No. 3 at p.3) 

Burnham Hydronics made a similar 

assertion, pointing out that Bryan 

Steam’s (another Burnham Holdings 

subsidiary) boilers are not listed in the 

January 2008 I=B=R Directory (Burnham 

Hydronics, No. FDMS DRAFT 0003 at 

pp. 1–2). 

In response to these comments and in 

an effort to enhance its analysis, DOE 

made further efforts to identify 

commercial boiler manufacturers along 

with commercial boiler equipment 

produced by these manufacturers that 

are not included in the January 2008 

I=B=R Directory. DOE examined the 

Canadian Standards AssociationInternational (CSA-International) 

certified product listings and the South 

Coast Air Quality Management District 

(SCAQMD) list of certified boiler 

equipment. For the CSA-International 

product listings, DOE only identified 

those manufacturers that certified their 

equipment to U.S. standards. From 

these two product listings, DOE went to 

each manufacturer’s Web site and 

verified that they produced equipment 

that meets the definition of commercial 

packaged boilers. From this review, 

DOE identified 16 additional 

commercial boiler manufacturers, as 

listed in section V.B.3.b. DOE also 

identified manufacturers with other 

model offerings not included in the 

January 2008 I=B=R Directory. When 

DOE found equipment that fit the 

definition of ‘‘commercial packaged 

boiler’’ and found efficiency ratings 

reported for that equipment in 

manufacturer literature, DOE included 

the equipment in its database of 

commercial boiler equipment used for 

this analysis (hereafter referred to as 

DOE’s commercial boiler database). 

However, for today’s analysis of 

commercial packaged boilers, DOE did 

not use all of the models in the January 

2008 I=B=R Directory or in its own 

database. DOE filtered out any boiler 

models that did not contain all of the 

information needed for DOE’s analysis 

or that appeared to have erroneous 

efficiency ratings before analyzing 

commercial packaged boiler data for its 

market analysis. DOE divided the 

boilers into the equipment classes in 

which they would be classified to apply 

ASHRAE Standard 90.1–2007. Then, for 

the eight equipment classes where 

ASHRAE Standard 90.1–2007 specifies 

an efficiency level in thermal efficiency, 

DOE filtered out boilers that did not 

contain a thermal efficiency rating. DOE 

did not filter out models without a 

thermal efficiency rating for the two 

equipment classes where ASHRAE 

Standard 90.1–2007 specifies an 

efficiency level in combustion 

efficiency. Next, for all equipment 

classes, DOE eliminated any boilers 

where both thermal and combustion 

efficiency were provided, but the 

thermal efficiency was higher than the 

combustion efficiency. DOE eliminated 

those boilers because it is physically 

impossible for a boiler to have a thermal 

efficiency that is higher than its 

combustion efficiency, which led DOE 

to conclude that the efficiency ratings 

for those boilers may be inaccurate.14

See chapter 2 of the NOPR Technical 

Support Document (TSD)15 for other 

market data regarding DOE’s 

commercial packaged boiler database of 

equipment. 

To review the commercial packaged 

boiler efficiency levels specified in 

ASHRAE Standard 90.1–2007, DOE first 

developed a quantitative analysis 

similar to that conducted for the March 

2006 NODA for the commercial boiler 

equipment classes specified in ASHRAE 

Standard 90.1–2007. DOE analyzed the 

available market data to estimate the 

percentage of the market held by each 

equipment class. DOE also examined 

the percentage of models available on 

the market below the efficiency levels in 

ASHRAE Standard 90.1–2007, the 

average efficiency of models currently 

available on the market, and the range 

of efficiencies currently on the market 

for each equipment class. In addition, 

for each equipment class with an 

efficiency metric change, DOE separated 

out the models that minimally comply 

with the existing EPCA standard levels 

(i.e., models with 80 ≤ EC < 81 for gasfired boilers and 83 ≤ EC < 84 for oilfired boilers), and then calculated the 

average thermal efficiency of those 

models for each equipment class based 

on the thermal efficiencies in DOE’s 

database of market data. Table IV.2 

shows the results of DOE’s quantitative 

market analysis for the eight equipment 

classes where ASHRAE Standard 90.1– 

2007 specifies a thermal efficiency level, 

as well as for the two equipment classes 

where ASHRAE Standard 90.1–2007 

specifies a combustion efficiency level. 

TABLE IV.2—RESULTS OF DOE’S COMMERCIAL PACKAGED BOILER QUANTITATIVE MARKET ANALYSIS * 

Equipment class Market share** 

Current federal 

energy 

conservation 

standard 

ASHRAE 

standard 90.1– 

2007 efficiency 

level 

Average 

thermal 

efficiency of 

minimally 

complying 

boilers 

Range of 

thermal 

efficiencies of 

minimally 

complying 

boilers 

Percentage of 

market below 

ASHRAE 

standard 90.1– 

2007 efficiency 

level 

Average 

efficiency of 

equipment 

class 

Small Gas-fired Hot 

Water ........................ 24.2% 80% EC 80% ET 78.3% ET 77.0%–80.0% 8.9% 84.9% ET

Small Gas-fired Steam 

All Except Natural 

Draft .......................... 8.2% 80% EC 79% ET 79.6% ET 79.3%–79.9% 9.0% 80.5% ET

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12017 

TABLE IV.2—RESULTS OF DOE’S COMMERCIAL PACKAGED BOILER QUANTITATIVE MARKET ANALYSIS *—Continued 

Equipment class Market share** 

Current federal 

energy 

conservation 

standard 

ASHRAE 

standard 90.1– 

2007 efficiency 

level 

Average 

thermal 

efficiency of 

minimally 

complying 

boilers 

Range of 

thermal 

efficiencies of 

minimally 

complying 

boilers 

Percentage of 

market below 

ASHRAE 

standard 90.1– 

2007 efficiency 

level 

Average 

efficiency of 

equipment 

class 

Small Gas-fired Steam 

Natural Draft ............. 12.6% 80% EC 77% ET (2010) 

79% ET (2020) 

76.7% ET 75.4%–78.6% 26.5% (2010) 

77.6% (2020) 

77.4% ET

Small Oil-fired Hot 

Water ........................ 6.8% 83% EC 82% ET 80.7% ET 79.2%–81.8% 29.3% 83.8% ET

Small Oil-fired Steam ... 11.4% 83% EC 81% ET 81.6% ET 79.7%–83.6% 17.5% 82.2% ET

Large Gas-fired Hot 

Water ........................ 3.9% 80% EC 82% EC ........................ ........................ 17.0% 83.6% EC

Large Gas-fired Steam 

All Except Natural 

Draft .......................... 7.1% 80% EC 79% ET 79.4% ET 78.8%–79.9% 17.7% 80.6% ET

Large Gas-fired Steam 

Natural Draft ............. 9.1% 80% EC 77% ET (2010) 

79% ET (2020) 

78.1% ET 75.4%–79.4% 3.3% (2010) 

57.7% (2020) 

78.9% ET

Large Oil-fired Hot 

Water ........................ 1.9% 83% EC 84% EC ........................ ........................ 0% 86.5% EC

Large Oil-fired Steam ... 15.0% 83% EC 81% ET 81.9% ET 81.1%–83.5% 0% 82.8% ET

* EC is combustion efficiency and ET is thermal efficiency. 

** DOE calculated the percentage of boilers in each equipment class based on the number of models it analyzed for that equipment class divided by the total number of models it analyzed in all equipment classes. These totals were taken after all filters and modifications to DOE’s 

commercial packaged boiler database, described in section 3, were applied. 

4. Preliminary Conclusions From 

Market Analysis for Commercial 

Packaged Boilers 

Based solely on the quantitative 

analysis, DOE found that the average 

thermal efficiency of the minimally 

compliant equipment was higher than 

the efficiency level specified by 

ASHRAE Standard 90.1–2007 for five of 

the commercial packaged boiler 

equipment classes, as shown in Table 

IV.2. This indicates that it would be 

theoretically possible for backsliding to 

occur for those equipment classes. As 

explained below, several interested 

parties commented on DOE’s method for 

determining backsliding in response to 

the preliminary analysis presented in 

the July 2008 NODA. However, when 

DOE also evaluated a number of other 

considerations (including accuracy of 

the thermal efficiency ratings), it 

tentatively concluded that backsliding is 

unlikely to occur for any of the classes 

in question. This topic is discussed in 

further detail below. 

Burnham Hydronics stated that DOE 

could not use the least efficient boiler 

on the market as the de facto standard 

for determining whether a standard is 

backsliding. (Burnham Hydronics, No. 

FDMS DRAFT 0003 at p. 2) Burnham 

Hydronics asserted that ‘‘DOE’s legal 

framework defines backsliding in terms 

of ‘maximum allowable energy use,’ not 

‘maximum energy actually used by an 

individual product on the market at a 

particular moment in time.’ ’’ (Burnham 

Hydronics, No. FDMS DRAFT 0003 at p. 

2) To determine that an efficiency level 

is backsliding, Burnham Hydronics 

stated that DOE must ‘‘prove that a less 

efficient boiler could not be built under 

the current [F]ederal standards [than 

could be built if the efficiency levels in 

ASHRAE Standard 90.1–2007 were 

adopted as Federal energy conservation 

standards].’’ (Burnham Hydronics, No. 

FDMS DRAFT 0003 at pp. 2) 

In response, DOE does not agree with 

Burnham’s assertion that to determine 

backsliding DOE must prove that a less 

efficient boiler could not be built under 

the Federal standards than could be 

built if the efficiency levels in ASHRAE 

Standard 90.1–2007 were adopted as 

Federal energy conservation standards. 

EPCA’s anti-backsliding clause states, 

‘‘[t]he Secretary may not prescribe any 

amended standard which increases the 

maximum allowable energy use * * * 

or decreases the minimum required 

energy efficiency of a covered product.’’ 

(42 U.S.C. 6295(o)(1); 42 U.S.C. 6316(a)) 

Because the Federal standard levels for 

commercial packaged boilers are 

specified in terms of an energy 

efficiency requirement rather than an 

allowable energy use requirement, DOE 

believes that the applicable part of 

EPCA’s anti-backsliding clause here is 

the requirement that the Secretary may 

not prescribe any amended standard 

that ‘‘decreases the minimum required 

efficiency’’ of this equipment. DOE 

believes that to determine backsliding it 

must prove that the efficiency levels in 

ASHRAE Standard 90.1–2007 would 

allow for the construction of equipment 

with lower combustion efficiencies than 

the current Federal standards require, 

thereby decreasing the minimum 

required energy efficiency. Therefore, to 

determine backsliding, DOE examined 

whether the thermal efficiency levels in 

ASHRAE Standard 90.1–2007 would 

effectively result in a decrease in the 

required combustion efficiencies 

currently specified in EPCA (i.e., 80 

percent combustion efficiency for gasfired equipment and 83 percent 

combustion efficiency for oil-fired 

equipment). 

Further, Federal standards currently 

do not regulate the thermal efficiency or 

the jacket losses of commercial 

packaged boilers. Consequently, 

although it is not practical, a boiler 

could theoretically be constructed with 

100 percent jacket losses under the 

Federal standards, resulting in an 

infinite amount of energy use. If DOE 

were to examine ‘‘the maximum 

allowable energy use,’’ as Burnham 

suggests, then any thermal efficiency 

level would not constitute backsliding 

because there are no existing Federal 

energy conservation standards 

regulating the jacket losses. Therefore, 

DOE has investigated the potential for 

backsliding with respect to the energy 

efficiency of the equipment rather than 

the allowable energy use (as noted 

above). 

DOE does note, however, that models 

currently being manufactured with the 

highest jacket losses (i.e., the models 

12018 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

16These boiler models list a thermal efficiency 

rating greater than its combustion efficiency rating, 

which is physically impossible. These anomalous 

ratings are likely due to Hydronics Institute’s (HI’s) 

de-rating procedures, manufacturers’ interpolation 

of results, variances in test chambers and 

instrument calibration among manufacturers, or 

submittal of erroneous ratings. 

with the lowest thermal efficiencies) 

represent the practical limit to the 

amount of jacket losses that occur in 

commercial boilers. DOE also notes that 

there is equipment manufactured with 

thermal efficiencies lower than the 

thermal efficiency levels specified by 

ASHRAE Standard 90.1–2007, which 

would create the need for manufacturers 

to discontinue or redesign certain 

models to meet the efficiency levels in 

ASHRAE Standard 90.1–2007 if those 

levels are adopted as Federal 

minimums. Because certain models 

manufactured under the current Federal 

standards would be discontinued or 

replaced with higher-efficiency models 

if the ASHRAE Standard 90.1–2007 

levels were adopted as Federal 

minimums, DOE recognizes that the 

ASHRAE Standard 90.1–2007 efficiency 

levels represent an increase in efficiency 

and a decrease in energy use when 

compared to the EPCA levels. 

AHRI stated that the criterion to 

determine backsliding (where a specific 

minimum thermal efficiency 

requirement is considered less stringent 

if it might theoretically allow a model 

to have a combustion efficiency lower 

than the current minimum combustion 

efficiency requirement) is overly 

stringent because there is no direct 

mathematical correlation between 

combustion and thermal efficiency. 

(AHRI, No. 3 at p. 2) 

DOE considered both Burnham 

Hydronics’ and AHRI’s comments when 

determining whether the efficiency 

levels for commercial packaged boilers 

are in violation of EPCA’s antibacksliding clause. DOE considered the 

difference between the average thermal 

efficiency of minimally-complying 

models and the efficiency levels 

specified in ASHRAE Standard 90.1– 

2007. DOE used the average thermal 

efficiency because DOE found there was 

a range of thermal efficiencies that 

correspond to the minimally-complying 

models. DOE found that the difference 

is very small (between 0.4 and 0.9 

percent) for those equipment classes 

where it is believed that backsliding 

could potentially occur. Therefore, there 

are several other important issues to 

consider in determining whether the 

efficiency levels specified in ASHRAE 

Standard 90.1–2007 are, in fact, 

backsliding. DOE also considered the 

uncertainty of the reported thermal 

efficiency ratings, the benefit of 

switching to an energy conservation 

standard using a thermal efficiency 

metric, and the overall energy savings 

that could result from adopting the 

ASHRAE Standard 90.1–2007 efficiency 

levels for commercial packaged boilers. 

Each of these considerations is 

discussed below. 

a. Accuracy of Thermal Efficiency 

Ratings 

The Federal energy conservation 

standards for commercial packaged 

boilers are expressed only using the 

combustion efficiency metric. 10 CFR 

431.86. Although the industry standard 

incorporated by reference in the 

applicable DOE test procedure also 

contains a test for thermal efficiency, 

DOE’s test procedures only specify that 

manufacturers need to conduct the 

combustion efficiency test for 

determining the energy efficiency of 

commercial packaged boilers. Id. 

Consequently, all manufacturers test for 

combustion efficiency, but only some of 

the manufacturers test for thermal 

efficiency. Of the manufacturers that 

report results for thermal efficiency, 

only some actually test for thermal 

efficiency, while the others estimate it. 

The method of estimation can vary from 

one manufacturer to another and is not 

described in manufacturer literature. 

The fact that a requirement to test and 

rate the thermal efficiency of 

commercial packaged boilers in 

accordance with an approved DOE test 

procedure does not exist brings into 

question the validity of the reported 

values for thermal efficiency. The 

reported thermal efficiency ratings are 

the basis for the vast majority of DOE’s 

quantitative analysis for this equipment. 

Since DOE has no way of determining 

which thermal efficiency ratings are the 

result of actual testing and which are 

simply manufacturer estimates, DOE 

cannot be absolutely certain of the 

accuracy and validity of the thermal 

efficiency ratings used in its analyses. In 

fact, when performing an analysis of its 

data, DOE had to exclude nearly onefifth of the ratings because they 

appeared to be erroneous.16 However, 

with the exclusion of the models with 

erroneous ratings and the uncertainties 

in accuracy of the considered ratings, 

DOE believes that it has adequately 

controlled for the potential sources of 

error and that the 2008 I=B=R Directory 

and manufacturer catalogs represent the 

best available sources of information 

that could be used for the analyses that 

DOE must conduct in this rulemaking. 

As mentioned previously, AHRI 

stated that DOE’s analysis relied too 

heavily on the information presented in 

the 2008 I=B=R Directory. AHRI stated 

that the directory is incomplete because 

participation in the certification 

program and listing in the directory is 

voluntary and some manufacturers do 

not participate. Because the program 

does not require a manufacturer to list 

all the models that come within the 

scope of the program, AHRI asserted 

that the commercial boiler listings are 

incomplete, and stated that it can be 

assumed manufacturers do not list their 

least-efficient offerings. Further, AHRI 

stated that due to anomalous 

combustion and thermal listings caused 

by a variety of testing issues, the values 

from the tests cannot be used 

definitively to evaluate the true 

relationship between combustion and 

thermal efficiency for a specific listing. 

(AHRI, No. 3 at pp. 3–4) 

Burnham Hydronics also stated that 

the I=B=R Directory is unsuitable for 

use as the basis for DOE’s analysis. 

Burnham Hydronics stated that the 

I=B=R Directory does not consistently 

represent the relationship between 

thermal and combustion efficiency. 

(Burnham Hydronics, No. FDMS 

DRAFT 0003 at pp. 1–2) 

DOE agrees with the comments made 

by AHRI and Burnham Hydronics, and 

recognizes the inconsistent relationship 

between combustion and thermal 

efficiencies listed in the January 2008 

I=B=R Directory. However, because no 

other widely-recognized source for 

commercial packaged boiler ratings 

exists, DOE relied on the January 2008 

I=B=R Directory and manufacturers’ 

catalogs as its primary sources for its 

analysis. Whenever possible, DOE 

checked the efficiency ratings in the 

January 2008 I=B=R Directory against 

manufacturers’ literature for 

consistency. Also, although 

manufacturers are not required to test 

for thermal efficiency and report it to 

the I=B=R Directory, DOE believes the 

majority of the ratings in the I=B=R 

Directory are valid. DOE believes the 

I=B=R Directory, with the addition of 

boiler models from manufacturers that 

are not included from the directory, 

provides a good proxy of what the 

thermal efficiency ratings would be if all 

commercial boiler models were tested 

and rated according to the Hydronics 

Institute (HI) BTS–2000 test procedure 

for thermal efficiency (i.e., the industry 

standard incorporated by reference in 

the DOE test procedure for these 

products). 

Once DOE has determined the 

efficiency levels in ASHRAE Standard 

90.1–2007 for commercial packaged 

boilers represent, on average, an 

increase in energy efficiency when 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12019 

17For commercial equipment, ‘‘[t]he term ‘energy 

efficiency’ means the ratio of the useful output of 

services from an article of industrial equipment to 

the energy use by such article, determined in 

accordance with test procedures under section 6314 

of [title 42 of the United States Code].’’ (42 U.S.C. 

6311(3)) 

18 It is noted here that in the selection of 

‘‘minimally compliant’’ boilers, DOE included 

boilers whose combustion efficiency was up to 0.9 

percentage point above the EPCA minimum level. 

compared to the Federal energy 

conservation standards for this 

equipment, DOE will further consider 

amended energy conservation standards 

at the ASHRAE Standard 90.1–2007 

efficiency levels as presented in section 

V. The limited confidence in the 

thermal efficiency data being reported 

for commercial packaged boilers and the 

lack of a mathematical conversion 

between thermal and combustion 

efficiency (explained in section IV.A.1) 

become an issue when deciding whether 

efficiency levels in ASHRAE Standard 

90.1–2007 are comparable to Federal 

energy conservation standards, which 

would be based solely on the average 

thermal efficiency of minimallycomplying equipment. In addition, even 

if all commercial packaged boilers were 

tested for thermal efficiency, there 

would be some margin of error inherent 

to the testing and measurement of 

thermal efficiency. For these reasons, 

DOE believes the difference between the 

listed thermal efficiencies of the 

minimally-complying models and the 

efficiency levels in ASHRAE Standard 

90.1–2007 is within the margin of error 

of this analysis. (See chapter 2 of the 

NOPR TSD for more details about 

thermal efficiency of minimallycomplying models.) 

This identified problem would be 

mitigated if DOE migrates to a thermal 

efficiency metric, because DOE would 

amend its test procedure to require 

manufacturers to verify their 

equipment’s thermal efficiency ratings 

through testing in accordance with a 

DOE-mandated test procedure. A 

Federal energy conservation standard 

based on thermal efficiency, rather than 

combustion efficiency, would also 

require manufacturers to rate the 

thermal efficiency of their equipment, 

thereby resolving the issue of 

uncertainty in the reporting of the 

thermal efficiency metric. 

b. Benefits of the Thermal Efficiency 

Metric 

In the March 2006 NODA, DOE stated 

that the thermal efficiency metric 

provides a preferred method for 

measuring the efficiency of commercial 

boilers because it is more inclusive and 

better reflects the total energy losses of 

the equipment, as compared to the 

combustion efficiency metric prescribed 

by EPCA. 71 FR 12634, 12641 (March 

13, 2006). In addition, the thermal 

efficiency metric is more consistent 

with EPCA’s definition of ‘‘energy 

efficiency’’ 17 for commercial 

equipment. Id. Interested parties agree 

that thermal efficiency is superior to 

combustion efficiency as a metric for 

rating boilers because it is a more 

complete measure of efficiency. (AHRI, 

No. 3 at p. 3) Although DOE preferred 

the thermal efficiency approach 

expressed in ASHRAE Standard 90.1– 

1999, DOE was prevented from adopting 

those standard levels due to the 

backsliding concerns discussed above. 

ASHRAE Standard 90.1–2007, for the 

reasons discussed below, has largely 

resolved such concerns. Not adopting 

the efficiency levels in ASHRAE 

Standard 90.1–2007 for several of the 

equipment classes would prevent the 

efficiency metric change (from 

combustion efficiency to thermal 

efficiency) that DOE has recognized in 

the past and continues to recognize as 

beneficial in the regulation of 

commercial packaged boilers. 

In a written comment to DOE, AHRI 

stated that there are several key aspects 

that support rating commercial boilers 

using the thermal efficiency metric. 

These key factors include: (1) Thermal 

efficiency provides more useful 

information since it indicates the energy 

being put into the water; (2) in many 

cases the specified minimum thermal 

efficiency will require models to have a 

combustion efficiency higher than the 

current minimum combustion 

efficiency, and the current combustion 

efficiency requirements allow models to 

have significantly lower thermal 

efficiency values; and (3) even if the 

thermal efficiency is two or three points 

less than the corresponding combustion 

efficiency, it is still more stringent than 

a combustion efficiency standard 

because it focuses on energy transferred 

rather than energy not lost through the 

flue. (AHRI, No. 3 at p. 2) 

DOE agrees with AHRI that the 

thermal efficiency metric does provide 

key benefits over the current 

combustion efficiency metric for 

commercial packaged boilers used in 

EPCA. As stated in the March 2006 

NODA, the thermal efficiency metric 

provides a preferred method for 

measuring the efficiency of commercial 

boilers because it is more inclusive and 

better reflects the total energy losses in 

the equipment than the combustion 

efficiency metric prescribed by EPCA. 

71 FR 12634, 12641 (March 13, 2006). 

In addition, because ASHRAE Standard 

90.1 has switched to a thermal 

efficiency metric for certain commercial 

packaged boiler equipment classes, a 

one-time conversion in the DOE 

efficiency metric will be required at 

some point. Once the issue of differing 

efficiency metrics is resolved, DOE will 

again be able to make direct 

comparisons with future versions of 

ASHRAE Standard 90.1. 

c. Overall Energy Savings 

As a further consideration, the 

efficiency levels specified in ASHRAE 

Standard 90.1–2007, taken together, 

when compared to the Federal energy 

conservation standards, would result in 

increased energy savings to the Nation. 

Conversely, a decision by DOE not to 

adopt the efficiency levels in ASHRAE 

Standard 90.1–2007 for the equipment 

classes where it believes backsliding 

could possibly occur would result in a 

loss of potential energy savings by not 

adopting the thermal efficiency levels 

provided in ASHRAE Standard 90.1– 

2007 for those five equipment classes 

(See chapter 7 of the NOPR TSD for 

details on the potential energy savings). 

Although not controlling on the issue of 

determining backsliding, it does carry 

some weight in terms of how DOE acts 

in resolving the uncertainties associated 

with conversions and calculations 

between the two different metrics. 

5. Conclusions Regarding the Efficiency 

Levels in ASHRAE Standard 90.1–2007 

for Commercial Packaged Boilers 

When considering if adopting 

ASHRAE Standard 90.1–2007’s 

efficiency levels would violate EPCA’s 

anti-backsliding provision, DOE 

considered the uncertainty in the 

reporting of the thermal efficiency 

metric, the benefits of rating the 

efficiency of commercial packaged 

boilers with a thermal efficiency metric, 

and the overall energy savings that 

would result from the adoption of 

ASHRAE Standard 90.1–2007. When 

viewed comprehensively, DOE has 

tentatively concluded that these 

considerations justify analyzing and 

proposing adoption of the efficiency 

levels in ASHRAE Standard 90.1–2007 

as Federal energy conservation 

standards (see section V for a discussion 

of the commercial packaged boiler 

analysis methodology and section VI for 

the analytical results of the commercial 

packaged boiler analysis). Although the 

average thermal efficiency of minimallycompliant 18 models on the market is 

slightly higher than the levels specified 

in ASHRAE Standard 90.1–2007 for 5 of 

the 10 equipment classes, the difference 

12020 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

19 DOE believes the small differences between the 

two efficiency metrics attributing to the margin of 

error could arise from a number of factors including 

manufacturing tolerances, testing tolerances, and 

equipment design differences. 

20The Air-Conditioning and Refrigeration 

Institute (ARI) and the Gas Appliance 

Manufacturers Association (GAMA) announced on 

December 17, 2007, that their members voted to 

approve the merger of the two trade associations to 

represent the interests of cooling, heating, and 

commercial refrigeration equipment manufacturers. 

The merged association became AHRI on January 1, 

2008. 

between the two values are small, which 

is within the margin of error of the 

analysis.19 The current situation is 

unlike the boiler analysis conducted for 

the March 2006 NODA, which reviewed 

the commercial packaged boiler 

efficiency levels in ASHRAE Standard 

90.1–1999 and found the differences 

between the ASHRAE Standard 90.1– 

1999 efficiency levels and the average 

thermal efficiency of minimallycompliant models to be relatively large 

(i.e., significantly greater than a 

percentage point). 

Therefore, based upon this analysis of 

the efficiency levels in ASHRAE 

Standard 90.1–2007, DOE has 

tentatively concluded that the 

qualitative considerations outweigh the 

slight differences revealed by the 

quantitative analysis of the ASHRAE 

Standard 90.1–2007 efficiency levels for 

the five equipment classes at issue. In 

light of the foregoing, DOE has 

determined that the efficiency levels for 

all ten equipment classes identified in 

ASHRAE Standard 90.1–2007 represent 

an increase in efficiency for commercial 

packaged boilers as compared to the 

current Federal energy conservation 

standards. Consequently, DOE 

performed a market analysis, economic 

analysis, and energy savings analysis for 

all of the identified commercial 

packaged boiler equipment classes to 

consider energy conservation standards 

at the ASHRAE Standard 90.1–2007 

efficiency levels, as well as levels more 

stringent than those found in ASHRAE 

Standard 90.1–2007, in accordance with 

EPCA. (42 U.S.C. 6313 (a)(6)(A)(ii)(II)) 

V. Methodology and Discussion of 

Comments for Commercial Packaged 

Boilers 

This section addresses the analyses 

DOE has performed for this rulemaking 

with respect to commercial packaged 

boilers. A separate subsection addresses 

each analysis. DOE used a spreadsheet 

to calculate the life-cycle cost (LCC) and 

payback periods (PBPs) of potential 

amended energy conservation 

standards. DOE used another 

spreadsheet to provide shipments 

forecasts and then calculate national 

energy savings and net present value 

impacts of potential amended energy 

conservation standards. 

This section also proposes 

amendments to the DOE test procedure 

for commercial packaged boilers to 

require testing in terms of thermal 

efficiency, consistent with the amended 

efficiency levels in ASHRAE Standard 

90.1–2007. In addition, DOE is 

proposing to remove certain outdated 

provisions from the test procedure (e.g., 

references to an alternate test procedure 

that has been phased out). 

A. Test Procedures 

Section 343(a) of EPCA requires the 

Secretary to amend the test procedures 

for packaged boilers to the latest version 

generally accepted by industry or the 

rating procedures developed or 

recognized by the Air-Conditioning and 

Refrigeration Institute (ARI) 20 or by 

ASHRAE, as referenced by ASHRAE/IES 

Standard 90.1, unless the Secretary 

determines by clear and convincing 

evidence that the latest version of the 

industry test procedure does not meet 

the requirements for test procedures 

described in paragraphs (2) and (3) of 

section 343(a). (42 U.S.C. 6314(a)(4)(B)) 

DOE published a final rule on October 

21, 2004 that amended its test procedure 

for commercial packaged boilers to 

incorporate by reference the industry 

test procedure for commercial packaged 

boilers, the Hydronics Institute (HI) 

division of the Gas Appliance 

Manufacturer’s Association (GAMA) 

Boiler Testing Standard BTS–2000, 

‘‘Method to Determine the Efficiency of 

Commercial Space Heating Boilers’’ (HI 

BTS–2000). 69 FR 61949. This 

rulemaking responded to ASHRAE’s 

action in ASHRAE Standard 90.1–1999 

to revise the test procedures for certain 

commercial equipment, including 

commercial packaged boilers. 

In 2007, AHRI made several changes 

to BTS–2000 and reaffirmed BTS–2000 

(Rev06.07) as the testing standard for 

commercial boilers. The changes 

include updating the numbering of the 

subsections and a change to the 

tolerance of the inlet temperature for 

condensing boilers (from ±5 °F to ±10 

°F). DOE compared the two versions and 

found that the only changes were to the 

inlet temperature tolerances and there 

were no other changes to the testing 

method. Furthermore, DOE believes the 

changes to the test tolerances do not 

significantly affect the measure of 

energy efficiency. Therefore, DOE is 

proposing to update the uniform test 

procedure for commercial packaged 

boilers to incorporate by reference the 

version of HI BTS–2000 (Rev06.07) that 

AHRI reaffirmed in 2007. 

In the October 2004 test procedure 

final rule for commercial packaged 

boilers, DOE also incorporated by 

reference the American Society of 

Mechanical Engineers (ASME) Power 

Test Codes for Steam Generating Units, 

ASME PTC 4.1–1964, reaffirmed 1991 

(including 1968 and 1969 addenda) 

(ASME PTC 4.1) as an alternate test 

method for rating the efficiency of steel 

commercial packaged boilers only. 69 

FR 61956 (Oct. 21, 2004). DOE provided 

ASME PTC 4.1, with modifications, as 

an alternate test procedure for steel 

commercial packaged boilers because 

many manufacturers of steel boilers 

were unfamiliar with HI BTS–2000 and 

its predecessor, HI–1989, and typically 

tested their boilers using the ASME PTC 

4.1 test procedure. Id at 61951. DOE 

designated a transition period for 

manufacturers to convert from using the 

ASME PTC 4.1 test procedure to the HI 

BTS–2000 test procedure. Id. This 

would allow manufacturers of steel 

boilers an opportunity to become 

familiar with HI BTS–2000 and ensure 

that their equipment would be able to 

comply with EPCA standards using that 

procedure. Id. at 61956. DOE stated that 

it would allow the use of ASME PTC 4.1 

as an alternate test procedure for two 

years after the publication of the 

October 2004 final rule. Id. The 

transition period ended on October 23, 

2006, and now all commercial boilers 

are required to be tested using the HI 

BTS–2000 test procedure. 10 CFR 

431.86 

Because DOE no longer accepts the 

ASME PTC 4.1 as a method for testing 

steel commercial packaged boilers, DOE 

is proposing to remove item (b)(2) of 10 

CFR 431.85, which listed ASME PTC 4.1 

as a material incorporated by reference. 

Further, DOE proposes to delete item (d) 

of 10 CFR 431.86, which describes use 

of ASME PTC 4.1 as an alternative test 

method for commercial packaged 

boilers. Finally, in item (c) of 10 CFR 

431.86, DOE proposes to remove the 

sentence instructing manufacturers to 

follow either the provisions in (c) or (d) 

of that part for steel commercial 

packaged boilers because part (d) will be 

removed. Manufacturers are required to 

use the provisions in part (c) for all 

commercial packaged boilers. 

Eliminating the references to ASME PTC 

4.1 in the CFR does not introduce any 

changes to the test procedure for this 

equipment; it simply removes obsolete 

references. Manufacturers are still 

required to test all steel boilers using the 

method that references the HI BTS–2000 

test procedure, as they have been since 

October 23, 2006. 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12021 

Currently, the uniform test method for 

the measurement of energy efficiency of 

commercial packaged boilers requires 

that only the combustion efficiency be 

tested and calculated in accordance 

with the HI BTS–2000. 10 CFR 

431.86(c)(1)(ii). In this notice, DOE is 

proposing to adopt as Federal energy 

conservation standards several thermal 

efficiency levels described in ASHRAE 

Standard 90.1–2007. For this reason, 

DOE intends to amend the definitions in 

10 CFR 431.82 to incorporate the 

definition of ‘‘thermal efficiency’’ as 

written in section 3.0 of the HI BTS– 

2000 (Rev06.07) test procedure. Thus, 

DOE is proposing to add the definition 

of ‘‘thermal efficiency’’ to 10 CFR 

431.82 as follows: ‘‘Thermal efficiency 

for a commercial packaged boiler is 

determined using test procedures 

prescribed under § 431.86 and is the 

ratio of the heat absorbed by the water 

or the water and steam to the higher 

heating value in the fuel burned.’’ 

In addition to adding the definition of 

‘‘thermal efficiency’’ to its regulations, 

DOE is proposing to amend the 

definition of ‘‘combustion efficiency’’ to 

remove the statement describing it as 

‘‘the efficiency descriptor for packaged 

boilers.’’ DOE is proposing this change 

because after the effective date of the 

final rule amending the energy 

conservation standards for commercial 

packaged boilers to include efficiency 

levels based on those specified in 

ASHRAE Standard 90.1–2007 (i.e., 

March 2, 2012), combustion efficiency 

would no longer be the efficiency 

descriptor for all commercial packaged 

boiler equipment classes. Thus, DOE 

proposes to amend the definition of 

‘‘combustion efficiency’’ in 10 CFR 

431.82 to read: ‘‘Combustion efficiency 

for a commercial packaged boiler is 

determined using the test procedures 

prescribed under § 431.86 and equals to 

100 percent minus percent flue loss 

(percent flue loss is based on input fuel 

energy).’’ DOE is seeking input from 

interested parties about its proposed 

definitions for ‘‘thermal efficiency’’ and 

‘‘combustion efficiency.’’ This is 

identified as Issue 1 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

VIII.E of today’s NOPR. 

In addition, DOE is proposing to 

modify 10 CFR 431.86 (Uniform test 

method for measurement of energy 

efficiency of commercial packaged 

boilers) to include requirements for the 

measurement of thermal efficiency for 

those commercial packaged boiler 

classes where the thermal efficiency 

metric is being proposed in today’s 

notice. In 10 CFR 431.86(a), Scope, DOE 

is proposing to modify the scope to state 

that in addition to procedures for 

measuring combustion efficiency of 

commercial packaged boilers, that 

section also contains procedures for 

measuring the thermal efficiency of 

commercial packaged boilers. Under 10 

CFR 431.86(c), ‘‘Test Method for 

Commercial Packaged Boilers— 

General,’’ DOE is proposing to update 

several items. DOE proposes to amend 

subparagraph (c)(1)(ii), the test setup 

requirements, to require manufacturers 

to perform the thermal efficiency test in 

section 5.1 (thermal efficiency test) of 

the HI BTS–2000 (Rev06.07) for the 

following eight commercial packaged 

boiler equipment classes, if the 

ASHRAE Standard 90.1–2007 efficiency 

levels go into effect as Federal energy 

conservation standards, as proposed: 

• Small gas-fired hot water; 

• Small gas-fired steam all except 

natural draft; 

• Small gas-fired steam natural draft; 

• Small oil-fired hot water; 

• Small oil-fired steam; 

• Large gas-fired steam all except 

natural draft; 

• Large gas-fired steam, natural draft; 

• Large oil-fired steam. 

DOE proposes to direct manufacturers 

rating their commercial packaged 

boilers before March 2, 2012 (the 

effective date of a final rule for amended 

energy conservation standards) to use 

the test setup requirements in section 

5.2 (Combustion Efficiency Test) of the 

HI BTS–2000 (Rev06.07) for all 

commercial packaged boiler equipment 

classes in accordance with the Federal 

energy conservation standards in 10 

CFR 431.86. 69 FR 61961 (Oct. 21, 

2004). DOE is proposing that 

manufacturers use the revised version of 

the test procedure (i.e., HI BTS–2000 

(Rev06.07) effective thirty days from the 

publication of the final rule in the 

Federal Register to represent their 

model’s energy efficiency and 

compliance with the current Federal 

energy conservation standards. DOE is 

also proposing to revise the requirement 

to conduct the combustion efficiency 

test to specify that beginning on March 

2, 2012 (the effective date if DOE were 

to adopt the ASHRAE Standard 90.1– 

2007 efficiency levels as Federal energy 

conservation standards) the combustion 

efficiency test will only be required for 

large gas-fired hot water and large oilfired hot water boilers. 

In 10 CFR 431.86(c)(1)(iv), ‘‘Test 

Conditions,’’ DOE proposes to add a 

requirement to use the test conditions 

from section 8.0 of HI BTS–2000 

(Rev06.07) for testing the thermal 

efficiency, in addition to the 

combustion efficiency (which is already 

provided, along with certain 

exclusions). DOE proposes to update the 

exclusions for the combustion efficiency 

test conditions to exclude only section 

8.6.2 to reflect the changes made to HI 

BTS–2000 (Rev06.07) when it was 

reaffirmed in 2007. In addition, DOE 

proposes to delete 10 CFR 

431.86(c)(1)(iv)(A). DOE is proposing to 

eliminate 10 CFR 431.86(c)(1)(iv)(A) 

from the test procedure, because in the 

HI BTS–2000 (Rev06.07) (reaffirmed 

2007), the test procedures for 

condensing boilers were amended to be 

identical to those listed in 10 CFR 

431.86(c)(1)(iv)(A). Therefore, paragraph 

(c)(1)(iv)(A) and any provisions referring 

to it are no longer necessary. 

Eliminating this paragraph and 

replacing it with a reference to the 

applicable HI BTS–2000 (Rev06.07) 

section (section 8.5.2 for test conditions 

and section 9.1.2.1.4 for test procedures) 

would not introduce any changes to the 

test procedure because the requirements 

in HI BTS–2000 (Rev06.07) are now the 

same as the requirements that had been 

set forth in 10 CFR 431.86(c)(1)(iv)(A). 

In 10 CFR 431.86(c)(2), ‘‘Test 

Measurements,’’ DOE is proposing to 

include an additional provision to 

measure thermal efficiency according to 

sections 9.1 and 10.1 of the HI BTS– 

2000 (Rev06.07) for the commercial 

packaged boiler equipment classes in 

cases where the Federal standard would 

be specified in thermal efficiency. DOE 

is proposing that manufacturers should 

continue to measure the combustion 

efficiency of equipment in those eight 

equipment classes until proposed 

amended energy conservation standards 

based on the ASHRAE Standard 90.1– 

2007 efficiency levels would become 

effective on March 2, 2012. At such 

time, manufacturers would be expected 

to begin measuring the thermal 

efficiency for the applicable equipment 

classes. Also, DOE proposes to update 

the instructions for measuring 

combustion efficiency in the Test 

Measurements section to specify that 

combustion efficiency only needs to be 

measured for the two equipment classes 

where the Federal standard will be 

specified in combustion efficiency (i.e., 

large gas-fired hot water and large oilfired hot water commercial packaged 

boilers) after the effective date of a final 

rule for amended national standards. 

DOE also proposes to update the 

instructions for measuring combustion 

efficiency in 10 CFR 431.86(c)(2). DOE 

proposes to remove the provision in 10 

CFR 431.86(c)(2) that excludes section 

9.1.2.1.4 of HI–BTS 2000 and replaces it 

with the requirements in 10 CFR 

431.86(c)(1)(iv)(A) for condensing boiler 

tests. DOE is proposing to allow for the 

use of section 9.1.2.1.4 because in HI 

BTS–2000 (Rev06.07), the requirements 

12022 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

in that section were modified to be the 

same as those in 10 CFR 

431.86(c)(1)(iv)(A). Such modification 

would not introduce any substantive 

changes to the test procedure because 

the requirements in HI BTS–2000 are 

now the same as the requirements in 10 

CFR 431.86(c)(1)(iv)(A). 

Under 10 CFR 431.86(c)(2)(iii), ‘‘Test 

Measurements for a Boiler Capable of 

Supplying Either Steam or Water,’’ DOE 

is proposing to update the provision 

that allows manufacturers to measure 

and rate the combustion efficiency of 

these boilers only as steam boilers. DOE 

proposes to change that provision to 

require the testing and measurement of 

thermal efficiency in addition to 

combustion efficiency for any boiler 

capable of producing steam and hot 

water that is being tested only as a 

steam boiler for equipment 

manufactured on and after March 2, 

2012. Prior to that date, DOE proposes 

to instruct manufacturers to continue 

testing only for combustion efficiency of 

those boilers being tested in steam mode 

only. DOE must require manufacturers 

to test for both the combustion and 

thermal efficiencies in steam mode for 

units capable of producing both steam 

and hot water because, due to the new 

efficiency levels specified in ASHRAE 

Standard 90.1–2007, the boilers would 

be required to meet an efficiency level 

using both metrics under any amended 

energy conservation standard based 

upon ASHRAE Standard 90.1–2007. In 

other words, DOE is proposing to allow 

manufacturers to test dual output 

boilers (i.e., those capable of producing 

both steam and hot water) in only steam 

mode. However, DOE is modifying its 

existing provisions to require 

manufacturers to conduct both the 

combustion efficiency and the thermal 

efficiency test for these dual output 

boilers. This will ensure that a dual 

output boiler is meeting the thermal 

efficiency requirement when operated 

in steam mode and the combustion 

efficiency requirement when operated 

in hot water mode, because achieving 

compliance in steam mode is generally 

more challenging. Thus, a boiler that 

complies with the standard in steam 

mode would be presumed to meet the 

standard in hot water mode. In essence, 

manufacturers will be required to rate 

dual output boilers using both the 

thermal and combustion efficiency 

metrics. DOE points out that the only 

other alternative for testing dual output 

boilers would be for manufacturers to 

separately run the combustion 

efficiency test in hot water mode and 

the thermal efficiency test in steam 

mode on or after March 2, 2012. Because 

DOE believes running two independent 

tests on the same boiler could be 

burdensome and that testing only in 

steam mode would suffice for 

compliance purposes, DOE is proposing 

to allow manufacturers to only test in 

steam mode for both metrics to mitigate 

this additional testing burden to 

manufacturers. 

In addition to allowing boilers 

capable of producing both steam and 

hot water to be tested only in steam 

mode, the test procedure at 10 CFR 

431.86(c)(2)(iii) also allows boilers 

capable of producing steam and hot 

water to be tested and rated in both 

steam mode and hot water mode 

separately. DOE proposes to amend 10 

CFR 431.86(c)(2)(iii) of the test 

procedure to specify that when testing 

a large gas-fired or oil-fired boiler in hot 

water mode on or after March 2, 2012, 

combustion efficiency must be tested for 

and rated; however, for large gas- or oilfired boilers in steam mode or for any 

other boiler equipment class, the 

thermal efficiency must be tested and 

rated. 

Finally, DOE proposes to amend 10 

CFR 431.86(c), ‘‘Test Method for 

Commercial Packaged Boilers— 

General,’’ by adding a provision to 

calculate the thermal efficiency using 

the calculation procedure described in 

section 11.1 of HI BTS–2000. DOE 

proposes to note in this provision that 

thermal efficiency should be calculated 

only for the eight equipment classes of 

commercial packaged boilers for which 

DOE is proposing to adopt a Federal 

energy conservation standard using a 

thermal efficiency metric. In addition, 

DOE proposes to specify this should 

only be done on or after March 2, 2012, 

the anticipated effective date of the 

corresponding amended energy 

conservation standards for this 

equipment. 

In addition, DOE proposes to modify 

the ‘‘Calculation of Combustion 

Efficiency’’ under 10 CFR 431.86(c)(3) to 

specify that on or after March 2, 2012, 

combustion efficiency only needs to be 

calculated when rating commercial 

packaged boiler equipment classes with 

a Federal energy conservation standard 

specified in combustion efficiency (i.e., 

large gas-fired hot water and large oilfired hot water commercial packaged 

boilers). 

See the regulatory text at the end of 

today’s notice for all the changes made 

to the definitions, reference materials, 

effective dates, and the uniform test 

procedure for commercial packaged 

boilers in 10 CFR 431.86. 

B. Market Assessment 

When beginning a review of the 

ASHRAE Standard 90.1–2007 efficiency 

levels, DOE developed information that 

provides an overall picture of the 

market for the equipment concerned, 

including the purpose of the equipment, 

the industry structure, and market 

characteristics. This activity includes 

both quantitative and qualitative 

assessments based primarily on 

publicly-available information. The 

subjects addressed in the market 

assessment for this rulemaking include 

equipment classes, manufacturers, 

quantities, and types of equipment sold 

and offered for sale. The key findings of 

DOE’s market assessment are 

summarized below. For additional 

detail, see chapter 2 of the NOPR TSD. 

1. Definitions of Commercial Packaged 

Boilers 

EPCA defines a ‘‘packaged boiler’’ as 

‘‘a boiler that is shipped complete with 

heating equipment, mechanical draft 

equipment, and automatic controls; 

usually shipped in one or more 

sections.’’ (42 U.S.C. 6311(11)(B)) In its 

regulations at 10 CFR 431.102, DOE 

further refined the ‘‘packaged boiler’’ 

definition to exclude a boiler that is 

custom designed and field constructed. 

Additionally, 10 CFR 431.102 provides 

that if the boiler is shipped in more than 

one section, the sections may be 

produced by more than one 

manufacturer, and may be originated or 

shipped at different times and from 

more than one location. In its 

regulations in 10 CFR 431.82, DOE also 

defines a ‘‘commercial packaged boiler’’ 

as a type of packaged low pressure 

boiler that is industrial equipment with 

a capacity, (rated maximum input) of 

300,000 BTU per hour (Btu/h) or more 

which, to any significant extent, is 

distributed in commerce: (1) For heating 

or space conditioning applications in 

buildings; or (2) For service water 

heating in buildings but does not meet 

the definition of ’hot water supply 

boiler’ in [part 431]. 10 CFR 431.82. 

2. Equipment Classes 

Federal energy conservation standards 

currently separate commercial packaged 

boilers only by the type of fuel used by 

the boiler, creating two equipment 

classes: (1) Gas-fired, and (2) oil-fired. 

(42 U.S.C. 6313(a)(4)(C)–(D); 10 CFR 

431.87) However, commercial packaged 

boilers can be distinguished by several 

factors, which include the input 

capacity size (i.e., small or large), fuel 

type (i.e., oil or gas), output (i.e., hot 

water or steam), and draft type (i.e., 

natural draft or other). ASHRAE 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12023 

21 DOE has incorporated by reference HI BTS– 

2000 as the DOE test procedure at 10 CFR 431.85. 

22For more information on ABMA’s commercial 

systems group, visit http://www.abma.com/ 

commercialSystems.html. 

Standard 90.1–2007 further divided the 

two equipment classes designated in 

EPCA into the following ten classes: 

• Small gas-fired hot water boilers; 

• Small gas-fired steam, all except 

natural draft; 

• Small gas-fired steam, natural draft 

boilers; 

• Small oil-fired hot water boilers; 

• Small oil-fired steam boilers; 

• Large gas-fired hot water boilers; 

• Large gas-fired steam all except 

natural draft boilers; 

• Large gas-fired steam natural draft 

boilers; 

• Large oil-fired hot water boilers; 

and 

• Large oil-fired steam boilers. 

In general, DOE divides equipment 

classes by the type of energy used or by 

capacity or other performance-related 

features that affect efficiency. Different 

energy conservation standards may 

apply to different equipment classes. (42 

U.S.C. 6295(q)) In the context of the 

present rulemaking, DOE believes input 

capacity size (i.e., small or large), fuel 

type (i.e., oil or gas), output (i.e., hot 

water or steam), and draft type (i.e., 

natural draft or other) are all 

performance-related features that affect 

commercial packaged boiler efficiency. 

By examining the market data, DOE 

found commercial packaged boilers in a 

wide range of efficiencies depending on 

their design and features. Consequently, 

DOE is proposing the ten equipment 

classes in ASHRAE Standard 90.1–2007 

to differentiate between types of 

commercial packaged boilers. 

3. Review of Current Market for 

Commercial Packaged Boilers 

In order to obtain the information 

needed for the market assessment for 

this rulemaking, DOE consulted a 

variety of sources, including trade 

associations, manufacturers, and 

shipments data (i.e., the quantities and 

types of equipment sold and offered for 

sale). The information DOE gathered 

serves as resource material throughout 

the rulemaking. Chapter 2 of the NOPR 

TSD provides additional detail on the 

market assessment. 

a. Trade Association Information 

AHRI, formerly GAMA (and 

sometimes referred to as such in this 

notice), is the trade association 

representing commercial packaged 

boiler manufacturers. AHRI develops 

and publishes technical standards for 

residential and commercial equipment 

using rating criteria and procedures for 

measuring and certifying equipment 

performance. The DOE test procedure is 

an AHRI standard. The HI division of 

AHRI has developed the Boiler Testing 

Standard (BTS) 2000 ‘‘Method to 

Determine the Efficiency of Commercial 

Space Heating Boilers,’’ as discussed in 

section IV.A above. The DOE test 

procedure incorporates by reference this 

AHRI standard.21

The Institute of Boiler and Radiator 

Manufacturers (I=B=R), a division of the 

HI, developed a certification program 

that the majority of the manufacturers in 

the commercial packaged boiler 

industry use to certify their equipment. 

Through the certification program, 

AHRI determines if the equipment 

conforms to HI BTS–2000. Once AHRI 

has determined that the equipment has 

met all the requirements under the HI 

BTS–2000 standards and certification 

program, it is added to the I=B=R 

Directory. DOE used I=B=R’s 

certification data, as summarized by the 

January 2008 I=B=R Directory, in the 

engineering analysis. 

Another trade association 

representing the interests of commercial 

boiler manufacturers is the American 

Boiler Manufacturers Association 

(ABMA). ABMA represents 

manufacturers serving a number of 

markets. One of these markets is boilers 

intended for use in commercial systems. 

ABMA’s Web site 22 describes ‘‘light 

commercial’’ systems as having Btu 

input capacities of 400,000 to 12.5 

MMBH and applications that include 

‘‘hydronic hot water heating boilers, 

low-pressure steam boilers * * * for 

heating * * * applications.’’ Because 

such boilers meet the definition of 

commercial packaged boilers covered by 

this rulemaking, ABMA is a trade 

association that could represent 

commercial packaged boiler 

manufacturers covered by this 

rulemaking. 

b. Manufacturer Information 

DOE initially identified 

manufacturers of commercial packaged 

boilers by reviewing AHRI’s January 

2008 I=B=R Directory of commercial 

packaged boilers and equipment 

literature. Table V.1 shows the 26 

separate commercial packaged boiler 

manufacturers identified in the January 

2008 I=B=R Directory. Several of these 

manufacturers share the same parent 

company, which is shown in 

parentheses next to the individual brand 

name. 

TABLE V.1—COMMERCIAL PACKAGED BOILER MANUFACTURERS REPRESENTED IN AHRI’S JANUARY 2008 I=B=R RATINGS

DIRECTORY

A.O. Smith Water Products Co. New Yorker Boiler Co., Inc. (Burnham Holdings, Inc.) 

AERCO International, Inc P B Heat, LLC. 

BIASI, S.p.A. c/o QHT, Inc Pennco (ECR International, Inc.). 

Bosch Thermotechnology Corp Raypak, Inc. 

Burnham Commercial (Burnham Holdings, Inc.) RBI Water Heaters (Mestek, Inc.). 

Burnham Hydronics (Burnham Holdings, Inc.) Slant/Fin Corporation. 

Columbia Boiler Company of Pottstown Smith Cast Iron Boilers. 

Crown Boiler Co. (Burnham Holdings, Inc.) Thermal Solutions Products, LLC (Burnham Holdings, Inc.). 

De Dietrich Thermo-Dynamics Boiler Co. 

Dunkirk Boilers (ECR International, Inc.) Triangle Tube. 

Heat Transfer Products Inc Utica Boilers (ECR International, Inc.). 

LAARS Heating Systems Company Viessmann Manufacturing Company, Inc. 

Lochinvar Corporation Weil-McLain. 

While several of the manufacturers 

listed in Table V.1 specialize in 

residential boiler equipment, all offer at 

least some equipment with capacities 

that classify them as commercial boilers. 

DOE also identified 20 additional 

manufacturers of commercial packaged 

boiler equipment from ABMA’s member 

listings, and from searching the 

12024 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

SCAQMD certification directory and the 

CSA-International product listings. The 

additional manufacturers DOE 

identified through these methods were: 

AESYS Technologies, Inc.; Ajax Boiler, 

Inc.; Bryan Steam, LLC; Cleaver-Brooks, 

Inc.; Easco Boiler Corporation; Johnston 

Boiler Company; Miura; Sellers 

Engineering; Superior Boiler Works, 

Inc.; Vapor Power International; Fulton 

Boiler; Parker Boiler; Patterson-Kelley 

Company (division of Harsco); Triad 

Boiler Systems; CAMUS Hydronics, 

Ltd.; Gasmaster Industries; General 

Boiler Co., Inc.; Hurst Boiler and 

Welding Co., Inc.; Lattner Boiler 

Company; and Unilux Advanced 

Manufacturing, LLC. Each commercial 

boiler manufacturer generally 

specializes in a specific type of 

commercial boiler construction. For 

example, manufacturers such as WeilMcLain, Smith Cast Iron, and Burnham 

Commercial specialize in cast iron 

boilers; manufacturers such as Raypak 

and Lochinvar tend to manufacture a 

higher number of copper-tube boilers. 

c. Shipments Information 

DOE obtained data on estimated 

annual shipments for commercial 

packaged boilers from AHRI, which 

totaled approximately 36,000 units in 

2007. DOE notes that these estimated 

total shipments likely underestimates 

the actual total shipments of the 

commercial packaged boiler market 

because the data only include 

information provided through AHRI. 

Some manufacturers have not have 

provided information to AHRI regarding 

their shipments. However, DOE believes 

the fraction of shipments not included 

in this total would be small. Further 

details regarding the shipments 

estimates and forecasts can be found in 

section V.G., National Impact Analysis, 

below. 

C. Engineering Analysis 

The engineering analysis establishes 

the relationship between the cost and 

efficiency of a piece of equipment DOE 

is evaluating for potential amended 

energy conservation standards. This 

relationship serves as the basis for costbenefit calculations for individual 

consumers and the Nation. The 

engineering analysis identifies 

representative baseline equipment, 

which is the starting point for analyzing 

the possibility for energy efficiency 

improvements. A baseline piece of 

equipment here refers to a model having 

features and technologies typically 

found in equipment currently offered 

for sale. The baseline model in each 

equipment class represents the typical 

characteristics of equipment in that 

class and, for equipment already subject 

to energy conservation standards, 

usually is a model that just meets the 

current Federal standard. After 

identifying the baseline models, DOE 

estimates the costs to the customer 

through an analysis of contractor costs 

and markups. ‘‘Markups’’ are the 

multipliers DOE uses to determine the 

costs to the customer based on 

contractor cost. 

DOE typically structures its 

engineering analysis around one of three 

methodologies: (1) The design-option 

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 the particular design 

options 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 product being analyzed. 

1. Approach 

For this analysis, DOE used an 

efficiency-level approach to evaluate the 

cost of commercial packaged boilers at 

the baseline efficiency level, as well as 

efficiency levels above the baseline. 

DOE used the efficiency level approach 

because of the wide variety of designs 

available of the market and because the 

efficiency level approach does not 

examine a specific design in order to 

reach each of the efficiency levels. The 

efficiency levels that DOE considered in 

the engineering analysis were 

representative of commercial packaged 

boilers currently being produced by 

manufacturers at the time the 

engineering analysis was developed. 

DOE relied primarily on data collected 

through discussions with mechanical 

contractors or equipment distributors of 

commercial boiler equipment to develop 

its cost-efficiency relationship for 

commercial packaged boilers. (See 

chapter 3 of the NOPR TSD for further 

detail.) 

2. Representative Input Capacities 

For commercial packaged boilers, 

each energy efficiency level is expressed 

as either a thermal efficiency or 

combustion efficiency, which covers the 

full output capacity range. For each 

‘‘small’’ equipment class analyzed, DOE 

collected contractor cost data for three 

representative rated output capacities of 

small commercial packaged boilers: 400, 

800, and 1,500 kBtu/h. DOE then 

normalized the contractor costs by 

capacity for each small commercial 

packaged boiler equipment class. DOE 

used all the normalized contractor costs 

on a per kBtu/h basis to create a single 

cost-efficiency curve with 800 kBtu/h as 

the representative capacity. DOE chose 

800 kBtu/h because it is the median of 

the three representative capacities and 

because a large number of shipments 

correspond to this capacity. 

For each ‘‘large’’ equipment class 

analyzed, DOE used a similar approach, 

in which it collected cost data and 

created a cost-efficiency curve for one 

representative output capacity, 3,000 

kBtu/h. (See chapter 3 of the NOPR TSD 

for additional details.) 

3. Baseline Equipment 

DOE selected baseline efficiency 

levels as reference points for each 

equipment class, against which it 

measured changes resulting from 

potential amended energy conservation 

standards. DOE defined the baseline 

efficiency levels in the engineering 

analysis and the LCC and PBP analyses 

as reference points to compare the 

technology, energy savings, and cost of 

equipment with higher energy efficiency 

levels. Typically, units at the baseline 

efficiency level just meet Federal energy 

conservation standards and provide 

basic consumer utility. However, DOE is 

not able to consider efficiency levels 

lower than those specified in ASHRAE 

Standard 90.1–2007 for commercial 

packaged boilers. Therefore, the 

baseline efficiency levels DOE identified 

for this analysis were the efficiency 

levels specified for each commercial 

packaged boiler equipment class in 

ASHRAE Standard 90.1–2007. Table V.2 

lists the ASHRAE Standard 90.1–2007 

efficiency levels for each commercial 

packaged boiler equipment class. 

TABLE V.2—BASELINE EFFICIENCY

LEVELS FOR COMMERCIAL PACKAGED BOILERS

Equipment class 

ASHRAE 

standard 

90.1–2007 

efficiency 

level 

(percent) 

Small Gas-Fired Hot Water ...... 80 ET

Small Gas-Fired Steam All Except Natural Draft .................. 79 ET

Small Gas-Fired Steam Natural 

Draft ...................................... 77 ET

Small Oil-Fired Hot Water ........ 82 ET

Small Oil-Fired Steam .............. 81 ET

Large Gas-Fired Hot Water ...... 82 EC

Large Gas-Fired Steam, All Except Natural Draft .................. 79 ET

Large Gas-Fired Steam Natural 

Draft ...................................... 77 ET

Large Oil-Fired Hot Water ........ 84 EC

Large Oil-Fired Steam .............. 81 ET

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12025 

4. Identification of Efficiency Levels for 

Analysis 

In the engineering analysis, DOE 

established energy efficiency levels for 

each equipment class that reflect the 

current commercial packaged boiler 

market. DOE reviewed the commercial 

packaged boiler market to determine 

what types of equipment are available to 

consumers. DOE examined all of the 

manufacturers’ product offerings to 

identify the energy efficiencies that 

correspond to efficiency levels with 

models already widely available on the 

market. DOE used these energy 

efficiencies to develop the efficiency 

levels of the engineering analysis. For 

this NOPR, DOE used an efficiency level 

approach, which allows DOE to estimate 

the costs and benefits associated with a 

particular efficiency level rather than a 

particular design. Table V.3 through 

Table V.12 show the efficiency levels 

analyzed for each equipment class. 

a. Small Gas-Fired Hot Water 

Commercial Packaged Boiler Efficiency 

Levels 

For small gas-fired hot water 

commercial packaged boilers, DOE 

selected four efficiency levels to analyze 

above the baseline efficiency level. 

Table V.3 shows the efficiency levels 

DOE selected. DOE examined these 

efficiency levels for the representative 

output capacity (i.e., 800 kBtu/h) for 

analysis purposes. However, DOE notes 

these efficiency levels can be found at 

numerous other capacities within the 

range of covered capacities. 

TABLE V.3—SMALL GAS-FIRED HOT

WATER COMMERCIAL PACKAGED

BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal efficiency (ET) 

levels for 

analysis 

(percent) 

Baseline Efficiency ................... 80 

Efficiency Level 1 ..................... 82 

Efficiency Level 2 ..................... 84 

Efficiency Level 3 ..................... 86 

Efficiency Level 4 (Condensing) 92 

b. Small Gas-Fired Steam All Except 

Natural Draft Commercial Packaged 

Boiler Efficiency Levels 

For small gas-fired steam all except 

natural draft commercial packaged 

boilers, DOE selected four efficiency 

levels to analyze above the baseline 

efficiency level. Table V.4 shows the 

efficiency levels DOE selected. DOE 

examined these efficiency levels for the 

800 kBtu/h representative output 

capacity for analysis purposes. 

However, DOE notes these efficiency 

levels can be found at numerous other 

capacities within the range of covered 

capacities. 

TABLE V.4—SMALL GAS-FIRED STEAM, 

ALL EXCEPT NATURAL DRAFT COMMERCIAL PACKAGED BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 79 

Efficiency Level 1 ..................... 80 

Efficiency Level 2 ..................... 81 

Efficiency Level 3 ..................... 82 

Efficiency Level 4 ..................... 83 

c. Small Gas-Fired Steam Natural Draft 

Water Commercial Packaged Boiler 

Efficiency Levels 

For small gas-fired steam natural draft 

commercial packaged boilers, DOE 

selected three efficiency levels to 

analyze above the baseline efficiency 

level. Table V.5 shows the efficiency 

levels DOE selected. DOE examined 

these efficiency levels for the 800 

kBtu/h representative output capacity 

for analysis purposes. However, DOE 

notes these efficiency levels can be 

found at numerous other capacities 

within the range of covered capacities. 

TABLE V.5—SMALL GAS-FIRED STEAM

NATURAL DRAFT COMMERCIAL

PACKAGED BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 77 

Efficiency Level 1 ..................... 78 

Efficiency Level 2 ..................... 79 

Efficiency Level 3 ..................... 80 

d. Small Oil-Fired Hot Water 

Commercial Packaged Boiler Efficiency 

Levels 

For small oil-fired hot water 

commercial packaged boilers, DOE 

selected three efficiency levels to 

analyze above the baseline efficiency 

level. Table V.6 shows the efficiency 

levels DOE selected. DOE examined 

these efficiency levels for the 800 

kBtu/h representative output capacity 

for analysis purposes. However, DOE 

notes these efficiency levels can be 

found at numerous other capacities 

within the range of covered capacities. 

TABLE V.6—SMALL OIL-FIRED HOT

WATER COMMERCIAL PACKAGED

BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 82 

Efficiency Level 1 ..................... 84 

Efficiency Level 2 ..................... 86 

Efficiency Level 3 ..................... 88 

e. Small Oil-Fired Steam Commercial 

Packaged Boiler Efficiency Levels 

For small oil-fired steam commercial 

packaged boilers DOE selected three 

efficiency levels to analyze above the 

baseline efficiency level. Table V.7 

shows the efficiency levels DOE 

selected. DOE examined these efficiency 

levels for the 800 kBtu/h representative 

output capacity for analysis purposes. 

However, DOE notes these efficiency 

levels can be found at numerous other 

capacities within the range of covered 

capacities. 

TABLE V.7—SMALL OIL-FIRED STEAM

COMMERCIAL PACKAGED BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 81 

Efficiency Level 1 ..................... 82 

Efficiency Level 2 ..................... 83 

Efficiency Level 3 ..................... 85 

f. Large Gas-Fired Hot Water 

Commercial Packaged Boiler Efficiency 

Levels 

For large gas-fired hot water 

commercial packaged boilers, DOE 

selected four efficiency levels to analyze 

above the baseline efficiency level. 

Table V.8 shows the efficiency levels 

DOE selected. DOE examined these 

efficiency levels for the 3,000 kBtu/h 

representative output capacity for 

analysis purposes. However, DOE notes 

these efficiency levels can be found at 

numerous other capacities within the 

range of covered capacities. 

12026 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

TABLE V.8—LARGE GAS-FIRED HOT

WATER COMMERCIAL PACKAGED

BOILER EFFICIENCY LEVELS

Efficiency level 

Combustion 

efficiency 

(EC) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 82 

Efficiency Level 1 ..................... 83 

Efficiency Level 2 ..................... 84 

Efficiency Level 3 ..................... 85 

Efficiency Level 4 (Condensing) 95 

g. Large Gas-Fired Steam, All Except 

Natural Draft Commercial Packaged 

Boiler Efficiency Levels 

For large gas-fired steam, all except 

natural draft commercial packaged 

boilers, DOE selected four efficiency 

levels to analyze above the baseline 

efficiency level. Table V.9 shows the 

efficiency levels selected by DOE. DOE 

examined these efficiency levels for the 

3,000 kBtu/h representative output 

capacity for analysis purposes. 

However, DOE notes these efficiency 

levels can be found at numerous other 

capacities within the range of covered 

capacities. 

TABLE V.9—LARGE GAS-FIRED

STEAM, ALL EXCEPT NATURAL

DRAFT COMMERCIAL PACKAGED

BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 79 

Efficiency Level 1 ..................... 80 

Efficiency Level 2 ..................... 81 

Efficiency Level 3 ..................... 82 

Efficiency Level 4 ..................... 83 

h. Large Gas-Fired Steam Natural Draft 

Commercial Packaged Boiler Efficiency 

Levels 

For large gas-fired steam natural draft 

commercial packaged boilers, DOE 

selected four efficiency levels to analyze 

above the baseline efficiency level. 

Table V.10 shows the efficiency levels 

DOE selected. DOE examined these 

efficiency levels for the 3,000 kBtu/h 

representative output capacity for 

analysis purposes. However, DOE notes 

these efficiency levels can be found at 

numerous other capacities within the 

range of covered capacities. 

TABLE V.10—LARGE GAS-FIRED

STEAM NATURAL DRAFT COMMERCIAL PACKAGED BOILER EFFICIENCY

LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 77 

Efficiency Level 1 ..................... 78 

Efficiency Level 2 ..................... 79 

Efficiency Level 3 ..................... 80 

Efficiency Level 4 ..................... 81 

i. Large Oil-Fired Hot Water Commercial 

Packaged Boiler Efficiency Levels 

For large oil-fired hot water 

commercial packaged boilers, DOE 

selected three efficiency levels to 

analyze above the baseline efficiency 

level. Table V.11 shows the efficiency 

levels DOE selected. DOE examined 

these efficiency levels for the 3,000 

kBtu/h representative output capacity 

for analysis purposes. However, DOE 

notes these efficiency levels can be 

found at numerous other capacities 

within the range of covered capacities. 

TABLE V.11—LARGE OIL-FIRED HOT

WATER COMMERCIAL PACKAGED

BOILER EFFICIENCY LEVELS

Efficiency level 

Combustion 

efficiency 

(EC) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 84 

Efficiency Level 1 ..................... 86 

Efficiency Level 2 ..................... 87 

Efficiency Level 3 ..................... 88 

j. Large Oil-Fired Steam Commercial 

Packaged Boiler Efficiency Levels 

For large oil-fired steam commercial 

packaged boilers, DOE selected four 

efficiency levels to analyze above the 

baseline efficiency level. Table V.12 

shows the efficiency levels DOE 

selected. DOE examined these efficiency 

levels for the 3,000 kBtu/h 

representative output capacity for 

analysis purposes. However, DOE notes 

these efficiency levels can be found at 

numerous other capacities within the 

range of covered capacities. 

TABLE V.12—LARGE OIL-FIRED STEAM

COMMERCIAL PACKAGED BOILER EFFICIENCY LEVELS

Efficiency level 

Thermal 

efficiency 

(ET) levels 

for analysis 

(percent) 

Baseline Efficiency ................... 81 

Efficiency Level 1 ..................... 82 

Efficiency Level 2 ..................... 83 

Efficiency Level 3 ..................... 84 

Efficiency Level 4 ..................... 86 

5. Oil-Fired Commercial Packaged 

Boilers 

DOE estimated that oil-fired 

commercial packaged boilers are, on 

average, 3 percent more efficient than 

gas-fired boilers of identical 

construction. Because the construction 

of oil-fired and gas-fired boilers is 

basically the same, with the exception 

of some differences in controls, DOE 

assumed the incremental cost for 

increasing the efficiency of both types of 

boilers would be the same. The 

difference in the cost of controls would 

make no difference in the incremental 

cost of equipment because the same 

additional cost for controls would be 

applied across the range of oil-fired 

commercial boiler efficiencies. Once the 

cost-efficiency curves were normalized, 

the cost of the controls was subtracted. 

For these reasons, DOE estimated the 

incremental cost-efficiency curves for 

oil-fired equipment by shifting the costefficiency curves for each gas-fired 

equipment class by 3 percent (e.g., DOE 

shifted the small gas-fired hot water 

curve 3 percent higher in efficiency to 

obtain the small oil-fired hot water 

curve). 

For the steam curves, where gas-fired 

equipment is divided into natural draft 

and all except natural draft curves, DOE 

used the all except natural draft curves 

to develop the cost-efficiency curves for 

oil-fired steam boilers. This is because 

the majority of oil-fired steam boilers in 

DOE’s database are categorized as all 

except natural draft. 

6. Dual Output Boilers 

Dual output boilers are boilers 

capable of producing either hot water or 

steam as the boiler’s output of services. 

DOE analyzed dual output boilers by 

classifying them as steam only boilers. 

DOE did this because the current test 

procedure for commercial packaged 

boilers instructs manufacturers to test 

boilers capable of producing both steam 

and hot water either only in steam mode 

or in both steam mode and hot water 

mode. 10 CFR 431.86(c)(2)(iii)(A). 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12027 

Further, the test procedure states that if 

a manufacturer chooses to test a boiler 

in both steam mode and hot water 

mode, the boiler must be rated for 

efficiency in each mode as two separate 

listings in the I=B=R Directory. 10 CFR 

431.86(c)(2)(iii)(B). Therefore, DOE 

assumed the efficiency ratings for dual 

output boilers were representative of the 

efficiency of the boiler tested in steam 

mode only. DOE seeks comment from 

interested parties regarding the 

efficiency of dual output boilers in both 

steam mode and hot water mode. 

Specifically, DOE is interested in 

receiving data or comments, which 

would allow DOE to convert the steam 

ratings in the I=B=R Directory and 

manufacturers’ catalogs to hot water 

ratings. This is identified as Issue 2 

under ‘‘Issues on Which DOE Seeks 

Comment’’ in section VIII.E of today’s 

NOPR. 

7. Engineering Analysis Results 

The result of the engineering analysis 

is a set of cost-efficiency curves. 

Creating the cost-efficiency curves 

involved three steps: (1) Plotting the 

contractor cost versus efficiency; (2) 

aggregating the cost data by 

manufacturer; and (3) using an 

exponential regression analysis to fit a 

curve that best defines the aggregated 

data. DOE refers to the contractor cost— 

provided directly from mechanical 

contractors or equipment distributors— 

as the ‘‘absolute cost.’’ DOE correlated 

the absolute cost as a function of each 

commercial packaged boiler’s rated 

efficiency. Most manufacturers publish 

the rated thermal and/or combustion 

efficiencies of their commercial 

packaged boilers according to AHRI 

specifications. DOE only presents the 

incremental costs of increasing the 

efficiency of a commercial packaged 

boiler in the NOPR TSD to avoid the 

possibility of revealing sensitive 

information about individual 

manufacturers’ equipment. Different 

manufacturers might have substantially 

different absolute costs for their 

equipment at the same efficiency level 

due to design modifications and 

manufacturing practices. 

To determine the relationship of 

incremental cost versus efficiency for 

each of the representative capacities in 

each equipment class, DOE aggregated 

the absolute cost data. After aggregating 

the data, DOE fit an exponential curve 

to the data at each representative 

capacity for each equipment class and 

normalized the data. That is, DOE 

adjusted the costs of every 

manufacturer’s equipment so that the 

cost of its equipment was zero at the 

baseline ASHRAE Standard 90.1–2007 

efficiency levels (Table V.2). The 

normalized exponential cost curves 

from the aggregated data establish costefficiency curves for each equipment 

class that represent the average 

incremental cost of increasing efficiency 

above the ASHRAE Standard 90.1–2007 

levels. 

The curves do not represent any 

single manufacturer, and they do not 

describe any variance among 

manufacturers. The curves simply 

represent, on average, the industry’s 

cost to increase equipment efficiency. It 

should be noted that in this analysis, 

several types of boiler construction are 

aggregated into single equipment 

classes, and the cost-efficiency curves 

represent only an average boiler and not 

any individual boiler with any specific 

design characteristics. For example, 

small gas hot water boilers are 

commonly manufactured as copper tube 

boilers or as cast iron sectional boilers. 

The difference in the two materials and 

the construction of these boilers results 

in a wide range of prices and 

efficiencies for this boiler equipment 

class. DOE attempted in its analysis to 

determine what the average costefficiency relationship would look like 

across the range of boiler types included 

in each equipment class. The results 

show that the cost-efficiency 

relationships for each of the ten 

equipment classes are nonlinear. As 

efficiency increases, manufacturing 

becomes more difficult and more costly 

for manufacturers. Chapter 3 of the 

NOPR TSD provides additional 

information about the engineering 

analysis, as well as the complete set of 

cost-efficiency results. 

D. Markups To Determine Equipment 

Price 

DOE understands that the price of 

commercial boilers depends on the 

distribution channel the customer uses 

to purchase the equipment. Typical 

distribution channels for commercial 

HVAC equipment include 

manufacturers’ national accounts, 

wholesalers, mechanical contractors, 

and/or general contractors. DOE 

developed costs for mechanical 

contractors directly in the engineering 

analysis and estimated cost to customers 

using a markup chain beginning with 

the mechanical contractor cost. DOE did 

not develop an estimate for 

manufacturer selling prices in the 

engineering analysis and consequently, 

did not develop an estimate of markups 

for national account distribution 

channels with sales directly from 

manufacturers to customers. Because of 

the complexity of installation and based 

on few shipments to mercantile/retail 

building types, DOE estimated most 

sales of commercial packaged boilers 

involved mechanical contractors. 

Consequently, DOE did not develop 

separate markups for costs through a 

national account distribution chain or 

directly from wholesalers. 

DOE developed supply chain 

markups in the form of multipliers that 

represent increases above the 

mechanical contractor cost. DOE 

applied these markups (or multipliers) 

to the mechanical contractor costs it 

developed from the engineering 

analysis. DOE then added sales taxes 

and installation costs to arrive at the 

final installed equipment prices for 

baseline and higher-efficiency 

equipment. See chapter 5 of the NOPR 

TSD for additional details on markups. 

DOE identified two separate distribution 

channels for commercial boilers to 

describe how the equipment passes 

from the mechanical contractor to the 

customer (Table V.13). 

*COM022*TABLE V.13—DISTRIBUTION

CHANNELS FOR COMMERCIAL PACKAGED BOILER EQUIPMENT

Channel 1 

(replacements) 

Channel 2 

(new construction) 

Mechanical Contractor.Mechanical Contractor. 

General Contractor. 

Customer ................... Customer. 

DOE assumed that general contractors 

would be involved in new construction 

involving installation of commercial 

boilers. DOE assumed that replacement 

of existing boilers would not involve 

general contractors. 

DOE estimated percentages for both 

the new construction and replacement 

markets based on data developed for the 

shipment’s model and based on growth 

in new construction and replacement of 

existing stock as shown in Table V.14. 

Based on these results, DOE assumes 

that approximately 33 percent of 

commercial boilers purchased will be 

installed in new construction, and the 

remaining 67 percent will replace 

existing commercial boilers. 

12028 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

23Air Conditioning Contractors of America. 

Financial Analysis for the HVACR Contracting 

Industry, 2005. Available at: http://www.acca.org. 

24The 2002 U.S. Census Bureau financial data for 

the plumbing, heating, and air conditioning 

industry is the latest version data set and was 

issued in December 2004. Available at: http:// 

www.census.gov/prod/ec02/ec0223i236220.pdf. 

25U.S. Department of Energy, Office of Energy 

Efficiency and Renewable Energy, ‘‘Energy 

Conservation Program for Consumer Products: 

Screening Analysis for EPACT-Covered Commercial 

HVAC and Water-Heating Equipment Screening 

Analysis’’ (April 2000). 

26Energy Information Administration (2003). 

Available at: http://www.eia.doe.gov/emeu/cbecs/ 

contents/html (2003). 

TABLE V.14—PERCENTAGE OF COMMERCIAL PACKAGED BOILER MARKET SHARES PASSING THROUGH EACH

DISTRIBUTION CHANNEL

Channel 1 (%) Channel 2 (%) 

Replacement Market ............................................................................................................................................ 100 0 

New Construction Market .................................................................................................................................... 0 100 

For each step in the distribution 

channels presented above, DOE 

estimated a baseline markup and an 

incremental markup. DOE defined a 

baseline markup as a multiplier that 

converts the mechanical contractor cost 

of equipment with baseline efficiency to 

the customer purchase price for the 

equipment at the same baseline 

efficiency level. An incremental markup 

is defined as the multiplier to convert 

the incremental increase in mechanical 

contractor cost of higher-efficiency 

equipment to the customer purchase 

price for the same equipment. Both 

baseline and incremental markups only 

depend on the particular distribution 

channel and are independent of the 

boiler efficiency levels. 

DOE developed the markups for each 

distribution channel based on available 

financial data. DOE based the 

mechanical contractor markups on data 

from the Air Conditioning Contractors 

of America (ACCA) 23 and on the 2002 

U.S. Census Bureau financial data 24 for 

the plumbing, heating, and air 

conditioning industry. DOE derived the 

general contractor markups from U.S. 

Census Bureau financial data for the 

commercial and institutional building 

construction sector. 

The overall markup is the product of 

all the markups (baseline or 

incremental) for the different steps 

within a distribution channel plus sales 

tax. DOE calculated sales taxes based on 

2008 State-by-State sales tax data 

reported by the Sales Tax 

Clearinghouse. Because both contractor 

costs and sales tax vary by State, DOE 

developed distributions of markups 

within each distribution channel by 

State. Because the State-by-State 

distribution of boiler unit sales varies by 

building type, the National distribution 

of the markups varies among business 

types. Chapter 5 of the NOPR TSD 

provides additional detail on markups. 

E. Energy Use Characterization 

DOE used the building energy use 

characterization analysis to assess the 

energy savings potential of commercial 

boilers at different efficiency levels. 

This analysis estimates the energy use of 

commercial boilers at specified 

efficiency levels by using previously 

calculated Full Load Equivalent 

Operating Hour (FLEOH) metrics by 

building type and by climate across the 

United States. FLEOHs are effectively 

the number of hours that a system 

would have to run at full capacity to 

serve a total load equal to the annual 

load on the equipment. Boiler FLEOHs 

are calculated as the annual heating 

load divided by the equipment capacity. 

The FLEOH values used for the boiler 

analysis were based on simulations 

documented for the ‘‘Screening Analysis 

for EPACT-Covered Commercial 

[Heating, Ventilating and AirConditioning] HVAC and Water-Heating 

Equipment’’ 25 (hereafter, 2000 

Screening Analysis) (66 FR 3336 (Jan. 

12, 2001)) and used 7 different building 

types and 11 different U.S. climates. 

For each equipment class, DOE 

estimated the energy use of a given 

piece of equipment by multiplying the 

characteristic equipment output 

capacity by the FLEOH appropriate to 

each combination of representative 

building type and climate location. The 

product is effectively the total annual 

heat output from the boiler. The input 

energy is then determined by dividing 

the annual heat output by the thermal 

efficiency of the equipment at each 

efficiency level. The thermal efficiency 

is used here for all equipment classes 

since it defines the relationship between 

energy input and useful output of a 

commercial packaged boiler. For the 

two classes where a thermal efficiency 

metric was not specified by ASHRAE 

Standard 90.1–2007, an estimate of the 

thermal efficiency of equipment just 

meeting the combustion efficiency 

requirements specified by ASHRAE 

Standard 90.1–2007 was developed 

based on DOE’s market analysis. DOE 

adjusted the unit energy use for each 

nominal equipment efficiency level 

DOE considered. 

In addition for condensing hot water 

boilers, it is recognized that the thermal 

efficiency of a commercial packaged 

boiler in actual use depends on the 

return water conditions. In turn, the 

return water conditions are dependent 

upon the hydronic system design and 

control. For DOE’s analysis, the rated 

thermal efficiencies for fully condensing 

equipment were further adjusted to 

reflect return water conditioners based 

on installation in existing buildings 

with conventional hydronic heating 

coils. DOE’s estimates allow for the 

supply water temperature to reset 

sufficiently to meet the estimated 

heating coil loads during the year. See 

chapter 4 of the TSD for further details. 

DOE estimated the national energy 

impacts of higher efficiency equipment 

by: (1) Mapping climate locations onto 

regions; and (2) estimating the fraction 

of each year’s national equipment 

shipments (by product category) within 

market segments, as defined by a 

representative building type within a 

particular region of the United States. 

Seven representative building types 

were used, including: Assembly, 

Education, Food Service, Lodging, 

Office, Retail, and Warehouse buildings, 

as were used in the 2000 Screening 

Analysis. Because detailed statistical 

information related to where and in 

what types of buildings the equipment 

is currently being installed is generally 

unavailable, DOE developed an 

allocation process. The estimated 

allocation of national shipments to 

market segments was based on 

information from the 2003 Commercial 

Buildings Energy Consumption Survey 

(CBECS) 26 related to floor space and 

relative fraction of floor space reporting 

use of boilers for each market segment. 

DOE developed the energy use 

estimates for the seven key commercial 

building types in 11 geographic regions. 

Seven of these regions correspond 

directly to U.S. Census divisions. The 

Pacific and Mountain Census divisions 

were subdivided individually into 

northern and southern regions to 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12029 

27 Damodaran Online. Leonard N. Stern School of 

Business, New York University (Jan. 2006). 

Available at: http://www.stern.nyu.edu/adamodar/ 

New_Home_Page/data.html. 

account for north-south climate 

variation within those Census divisions, 

as discussed in the 2000 Screening 

Analysis. The LCC and national energy 

savings (NES) analyses use the annual 

energy consumption of commercial 

boilers in each equipment class 

analyzed. As expected, annual energy 

use of commercial boilers decreased as 

the efficiency level increased from the 

baseline efficiency level to the highest 

efficiency level analyzed. Chapter 4 of 

the NOPR TSD provides additional 

details on the energy use 

characterization analysis. 

F. Life-Cycle Cost and Payback Period 

Analyses 

DOE conducted the LCC and PBP 

analyses to estimate the economic 

impacts of potential standards on 

individual customers of commercial 

packaged boilers. DOE first analyzed 

these impacts for commercial packaged 

boilers by calculating the change in 

customers’ LCCs likely to result from 

higher efficiency levels compared with 

the baseline efficiency levels. The LCC 

calculation considers total installed cost 

(contractor cost, sales taxes, distribution 

chain markups, and installation cost), 

operating expenses (energy, repair, and 

maintenance costs), equipment lifetime, 

and discount rate. DOE calculated the 

LCC for all customers as if each would 

purchase a new commercial boiler unit 

in the year the standard takes effect. 

Since DOE is considering both the 

efficiency levels in ASHRAE Standard 

90.1–2007 and more-stringent efficiency 

levels, an amended energy conservation 

standard becomes effective on different 

dates depending upon the efficiency 

level and equipment class. The statutory 

lead times for DOE adopting of the 

ASHRAE Standard 90.1–2007 efficiency 

levels and more-stringent efficiency 

levels are different. (See section V.H.1 

below for additional explanation of the 

effective dates.) However, from the 

customer’s viewpoint, there is only a 

single boiler purchase date in 

determining the LCC benefits to the 

customer from purchase of a boiler at 

more-stringent efficiency levels. To 

account for this, DOE presumes that the 

purchase year for the LCC calculation is 

2014, the earliest year in which DOE 

can establish an amended energy 

conservation level at an efficiency level 

more stringent than the ASHRAE 

efficiency level. To compute LCCs, DOE 

discounted future operating costs to the 

time of purchase and summed them 

over the lifetime of the equipment. 

Second, DOE analyzed the effect of 

changes in installed costs and operating 

expenses by calculating the PBP of 

potential standards relative to baseline 

efficiency levels. The PBP estimates the 

amount of time it would take the 

customer to recover the incremental 

increase in the purchase price of moreefficient equipment through lower 

operating costs. The PBP is the change 

in purchase price divided by the change 

in annual operating cost that results 

from the standard. DOE expresses this 

period in years. Similar to the LCC, the 

PBP is based on the total installed cost 

and the operating expenses. However, 

unlike the LCC, DOE only considers the 

first year’s operating expenses in the 

PBP calculation. Because the PBP does 

not account for changes in operating 

expense over time or the time value of 

money, it is also referred to as a simple 

PBP. 

DOE conducted the LCC and PBP 

analyses using a commercially-available 

spreadsheet model. This spreadsheet 

accounts for variability in energy use, 

installation costs and maintenance 

costs, and energy costs, and uses 

weighting factors to account for 

distributions of shipments to different 

building types and States to generate 

national LCC savings by efficiency level. 

The results of DOE’s LCC and PBP 

analyses are summarized in section VI 

below and described in detail in chapter 

5 of the NOPR TSD. 

1. Approach 

Recognizing that each business that 

uses commercial packaged boiler 

equipment is unique, DOE analyzed 

variability and uncertainty by 

performing the LCC and PBP 

calculations assuming a one-to-one 

correspondence between business types 

and market segments (characterized as 

building types) for customers located in 

seven types of commercial buildings. 

DOE developed financial data 

appropriate for the customers in each 

building type. Each type of building has 

typical customers who have different 

costs of financing because of the nature 

of the business. DOE derived the 

financing costs based on data from the 

Damodaran Online site.27

The LCC analysis used the estimated 

annual energy use for each commercial 

packaged boiler unit described in 

section V.E. Because energy use of 

commercial packaged boilers is 

sensitive to climate, it varies by State. 

Aside from energy use, other important 

factors influencing the LCC and PBP 

analyses are energy prices, installation 

costs, equipment distribution markups, 

and sales tax. At the national level, the 

LCC spreadsheets explicitly modeled 

both the uncertainty and the variability 

in the model’s inputs, using probability 

distributions based on the shipment of 

commercial packaged boiler equipment 

to different States. 

As mentioned above, DOE generated 

LCC and PBP results by building type 

and State and used developed weighting 

factors to generate national average LCC 

savings and PBP for each efficiency 

level. As there is a unique LCC and PBP 

for each calculated value at the building 

type and State level, the outcomes of the 

analysis can also be expressed as 

probability distributions with a range of 

LCC and PBP results. A distinct 

advantage of this type of approach is 

that DOE can identify the percentage of 

customers achieving LCC savings or 

attaining certain PBP values due to an 

increased efficiency level, in addition to 

the average LCC savings or average PBP 

for that efficiency level. 

2. Life-Cycle Cost Inputs 

For each efficiency level DOE 

analyzed, the LCC analysis required 

input data for the total installed cost of 

the equipment, its operating cost, and 

the discount rate. Table V.15 

summarizes the inputs and key 

assumptions DOE used to calculate the 

customer economic impacts of all 

energy efficiency levels analyzed in this 

rulemaking. A more detailed discussion 

of the inputs follows. 

TABLE V.15—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LCC AND PBP ANALYSES

Inputs Description 

Affecting Installed Costs 

Equipment Price ..................... Equipment price was derived by multiplying contractor cost (from the engineering analysis) by mechanical and 

general contractor markups as needed plus sales tax from the markups analysis. 

12030 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

28RS Means CostWorks 2007, R.S. Means 

Company, Inc. 2007. Kingston, Massachusetts 

(2007). Available at: http:// 

www.meanscostworks.com/. 

29Natural Gas Price and Expenditure Estimates by 

Sector, EIA, 2006. Available at: http:// 

www.eia.doe.gov/emeu/states/sep_fuel/html/ 

fuel_pr_ng.html. 2006 Distillate Fuel Price and 

Expenditure Estimates by Sector, EIA, 2006. 

Available at: http://www.eia.doe.gov/emeu/states/ 

hf.jsp?incfile=sep_fuel/html/fuel_pr_df.html 

30MARS 8 Facility Cost Forecast System 

Database, Whitestone Research, 2008. Washington, 

DC. Available at: http:// 

www.whitestoneresearch.com/mars/index.htm. 

31RS Means CostWorks 2007, R.S. Means 

Company, Inc. 2007. Kingston, Massachusetts 

(2007). Available at: http:// 

www.meanscostworks.com/. 

TABLE V.15—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LCC AND PBP ANALYSES—Continued 

Inputs Description 

Installation Cost ..................... Installation cost includes installation labor, installer overhead, and any miscellaneous materials and parts, derived from RS Means CostWorks 2007.28 DOE added additional costs to reflect the installation of near condensing and condensing boilers at efficiency levels more stringent than ASHRAE Standard 90.1–2007 efficiency levels. These costs include control modifications, stainless steel flues, and condensate pumps and piping to remove condensate. 

Affecting Operating Costs 

Annual Energy Use ................ DOE derived annual energy use using FLEOH data for commercial boilers combined with thermal efficiency estimates for each boiler efficiency level analyzed. DOE did not incorporate differences in annual electricity use 

by efficiency level. DOE used State-by-State weighting factors to estimate the national energy consumption by 

efficiency level. 

Fuel Prices ............................. DOE developed average commercial natural gas and fuel oil prices for each State using EIA’s State Energy 

Database Data for 2006 for natural gas and oil price data.29 DOE used AEO2008 energy price forecasts to 

project oil and natural gas prices into the future. 

Maintenance Cost .................. DOE estimated annual maintenance costs for commercial boilers based on MARS 8 Facility Cost Forecast System Database 30 for commercial boilers. Annual maintenance cost did not vary as a function of efficiency. 

Repair Cost ............................ DOE estimated the annualized repair cost for baseline efficiency commercial boilers based on cost data from 

MARS 8 Facility Cost Forecast System Database for commercial boilers. DOE assumed that repair costs 

would vary in direct proportion with the MSP at higher efficiency levels because it generally costs more to replace components that are more efficient. 

Affecting Present Value of Annual Operating Cost Savings 

Equipment Lifetime ................ DOE estimated equipment lifetime assuming a 30-year lifespan for all commercial boilers based on data published by ASHRAE. 

Discount Rate ........................ Mean real discount rates for all buildings range from 2.3 percent for education buildings to 5.9 percent for retail 

building owners. 

Analysis Start Year ................ Start year for LCC is 2014, which is four years after the publication of the final rule for amended energy conservation standards higher than ASHRAE. 

Analyzed Efficiency Levels 

Analyzed Efficiency Levels .... DOE analyzed the baseline efficiency levels (ASHRAE Standard 90.1–2007) and up to four higher efficiency levels for all ten equipment classes. See the engineering analysis for additional details. 

a. Equipment Prices 

The price of a commercial boiler 

reflects the application of distribution 

channel markups (mechanical and 

general contractor markups) and sales 

tax to the mechanical contractor cost 

established in the engineering analysis. 

As described in section V.C, DOE 

determined mechanical contractor costs 

for ten commercial boilers defined by a 

single representative equipment 

capacity (output capacity) for each of 

ten equipment classes. For each 

equipment class, the engineering 

analysis provided contractor costs for 

the baseline equipment and up to four 

higher equipment efficiencies. 

The markup is the percentage increase 

in price as the commercial packaged 

boiler equipment passes through the 

distribution channel. As explained in 

section V.D, distribution chain markups 

are based on two truncated distribution 

channels, starting with a mechanical 

contractor cost for each efficiency level, 

based on whether the equipment is 

being purchased for the new 

construction market or to replace 

existing equipment. 

b. Installation Costs 

DOE derived national average 

installation costs for commercial boilers 

from data provided in RS Means 

CostWorks 2007 (RS Means) for 

commercial boiler equipment with 

efficiencies at or below the ASHRAE 

Standard 90.1–2007 efficiency levels.31

RS Means provides estimates for 

installation costs for hot water and 

steam boilers by equipment capacity 

and fuel type, as well as cost indices 

that reflect the variation in installation 

costs for 295 cities in the United States. 

The RS Means data identifies several 

cities in all 50 States and the District of 

Columbia. DOE incorporated locationbased cost indices into the analysis to 

capture variation in installation cost, 

depending on the location of the 

customer. 

For more-stringent efficiency levels, 

DOE estimated the cost for stainless 

steel venting at more-stringent 

efficiency levels based on an assumed 

35-foot flue length and applied the 

entire materials cost to commercial 

packaged boilers going into the 

replacement market. In addition, DOE 

assumed additional costs for control 

modifications for higher-efficiency 

boilers and for condensate removal for 

near condensing and condensing 

boilers. DOE recognized, however, that 

installation costs could potentially be 

higher with higher efficiency 

commercial packaged boilers due 

primarily to venting concerns with 

existing flues and chimney cases in the 

replacement market. DOE did not have 

data to calibrate the extent to which 

additional cost should apply. This is 

identified as Issue 3 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

VIII.E of today’s NOPR. 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12031 

32EIA’s Commercial Buildings Energy 

Consumption Survey, Energy Information Agency. 

Public use microdata available at: http:// 

www.eia.doe.gov/emeu/cbecs/cbecs2003/ 

public_use_2003/cbecs_pudata2003.html. 

33EIA’s 2003 CBECS is the most recent version 

of the data set. 

34ASHRAE Handbook: 1995 Heating, Ventilating, 

and Air-Conditioning Applications, ASHRAE, 1995. 

Available for purchase at: http://www.ashrae.org/ 

publications/page/1287. 

c. Annual Energy Use 

DOE estimated the annual natural gas 

or fuel oil energy consumed by each 

class of commercial boiler, by efficiency 

level, based on the energy use 

characterization described in section 

V.E. DOE aggregated the average annual 

energy use per unit at the State level by 

applying a regional building-type 

weighting factor to establish the relative 

building type shipments for each of 11 

geographic regions composed of select 

States, and then a population-weighting 

factor for each State within the 

geographic regions. 

DOE adjusted the condensing 

efficiency levels identified in the 

engineering analysis for small and large 

gas-fired hot water commercial 

packaged boilers to more accurately 

reflect actual field efficiencies. In both 

cases, DOE degraded the thermal 

efficiencies to 88 percent. DOE assumed 

that commercial packaged boilers serve 

a standard fan coil or air handler 

delivery system and that the load of the 

system varies linearly with the outdoor 

temperature from a balance point of 50 

degrees Fahrenheit. Chapter 4 of the 

NOPR TSD describes the annual energy 

use calculations. 

In determining the reduction in 

energy consumption of commercial 

packaged boiler equipment due to 

increased efficiency, DOE did not take 

into account a rebound effect. The 

rebound effect occurs when a piece of 

equipment, after it is made more 

efficient, is used more intensively, and 

therefore the expected energy savings 

from the efficiency improvement do not 

fully materialize. For the commercial 

boilers that are the subject of this 

rulemaking, DOE has no basis for 

concluding that a rebound effect would 

occur and has not taken the rebound 

effect into account in the energy use 

characterization. 

d. Fuel Prices 

Fuel prices are needed to convert the 

gas or oil energy savings from higherefficiency equipment into energy cost 

savings. Because of the variation in 

annual fuel consumption savings and 

equipment costs across the country, it is 

important to consider regional 

differences in electricity prices. DOE 

used average effective commercial 

natural gas and commercial fuel oil 

prices at the State level from Energy 

Information Administration (EIA) data 

for 2006 and 2007. Where 2006 data 

were used, EIA fuel escalation factors 

from the 2008 Annual Energy Outlook 

(AEO2008) were used to escalate prices 

to 2007 average fuel price estimates. 

This approach captured a wide range of 

commercial fuel prices across the 

United States. Furthermore, different 

kinds of businesses typically use 

electricity in different amounts at 

different times of the day, week, and 

year, and therefore face different 

effective prices. To make this 

adjustment, DOE used EIA’s 2003 

CBECS 32 data set to identify the average 

prices the seven building types paid and 

compared them with the average prices 

all commercial customers paid.33 DOE 

used the ratios of prices paid by the 

seven types of businesses to the national 

average commercial prices seen in the 

2003 CBECS as multipliers to adjust the 

average commercial 2007 State price 

data. 

DOE weighted the prices each 

building type paid in each State by the 

estimated sales of commercial boilers to 

each building type to obtain a weightedaverage national electricity and national 

average fuel oil price for 2007. The 

State/building type weights reflect the 

probabilities that a given boiler unit 

shipped will operate with a given fuel 

price. The effective prices (2007$) range 

from approximately $4.75 per million 

Btu to approximately $27.98 per million 

Btu for natural gas, and from 

approximately $14.83 per million Btu to 

approximately $17.56 cents per million 

Btu for commercial fuel oil. (See chapter 

5 of the NOPR TSD.) 

The natural gas and fuel price trends 

provide the relative change in fuel costs 

for future years to 2042. DOE applied 

the AEO2008 reference case as the 

default scenario and extrapolated the 

trend in values from 2020 to 2030 of the 

forecast to establish prices in 2030 to 

2042. This method of extrapolation is in 

line with methods the EIA uses to 

forecast fuel prices for the Federal 

Energy Management Program. DOE 

provides a sensitivity analysis of the 

LCC savings and PBP results to different 

fuel price scenarios using both the 

AEO2008 high-price and low-price 

forecasts in chapter 5 of the NOPR TSD. 

e. Maintenance Costs 

Maintenance costs are the costs to the 

customer of maintaining equipment 

operation. Maintenance costs include 

services such as cleaning heatexchanger coils and changing air filters. 

DOE estimated annual routine 

maintenance costs for commercial boiler 

equipment as $1.445/kbtu-hr output 

capacity per year for boilers with output 

capacities of nominally 800 kBtu/h, and 

as $0.945/kbtu-hr output capacity per 

year for boilers with output capacities of 

3000 kBtu/h, reported in the MARS 8 

Facility Cost Forecast System database. 

Because data were not available to 

indicate how maintenance costs vary 

with equipment efficiency, DOE 

decided to use preventive maintenance 

costs that remain constant as equipment 

efficiency increases. 

f. Repair Costs 

The repair cost is the cost to the 

customer of replacing or repairing 

components that have failed in the 

commercial boiler. DOE estimated the 

annualized repair cost for baseline 

efficiency commercial boilers as $443/yr 

for boilers with output capacities of 

nominally 800 kBtu/h, and as $820/yr 

for boilers with output capacities of 

3000 kBtu/h, based on costs for 

component repair documented in MARS 

8 Facility Cost Forecast System 

database. DOE determined that repair 

costs would increase in direct 

proportion with increases in equipment 

prices. Because the price of boilers 

increases with efficiency, the cost for 

component repair will also increase as 

the efficiency of equipment increases. 

g. Equipment Lifetime 

DOE defines equipment lifetime as 

the age when a commercial boiler is 

retired from service. DOE reviewed 

available literature and consulted with 

manufacturers to establish typical 

equipment lifetimes. The literature and 

experts consulted offered a wide range 

of typical equipment lifetimes. DOE 

used a 30-year lifetime for commercial 

boilers in the 2000 Screening Analysis 

based on data from ASHRAE’s 1995 

Handbook of HVAC Applications.34

DOE continued to use this estimate for 

the LCC analysis. Chapter 5 of the NOPR 

TSD contains a discussion of equipment 

lifetime. 

h. Discount Rate 

The discount rate is the rate at which 

future expenditures are discounted to 

establish their present value. DOE 

estimated the discount rate by 

estimating the cost of capital for 

purchasers of commercial boilers. Most 

purchasers use both debt and equity 

capital to fund investments. Therefore, 

for most purchasers, the discount rate is 

the weighted-average cost of debt and 

equity financing, or the weightedaverage cost of capital (WACC), less the 

expected inflation. 

12032 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

35 Damodaran financial data used for determining 

cost of capital available at: http:// 

pages.stern.nyu.edu/∼adamodar/ for commercial 

businesses. Data for determining financing for 

public buildings available at: http:// 

finance.yahoo.com/bonds/composite_bond_rates. 

36 DOE used the NEMS version consistent with 

AEO2008. An overview of the NEMS model and 

documentation is found at http://www.eia.doe.gov/ 

oiaf/aeo/overview/index.html. 

37EIA, Assumptions to the Annual Energy 

Outlook 2007 (2007). Available at: http:// 

www.eia.doe.gov/oiaf/aeo/assumption/index.html. 

To estimate the WACC of commercial 

boiler purchasers, DOE used a sample of 

over 2000 companies grouped to be 

representative of operators of each of 

five of seven commercial building types 

(food service, lodging, office, retail, and 

warehouse) and drawn from a database 

of 7,369 U.S. companies presented on 

the Damodaran Online website.35 This 

database includes most of the publiclytraded companies in the United States. 

For public assembly and education 

buildings, DOE estimated the cost of 

capital based on composite tax exempt 

bond rates. When one or more of the 

variables needed to estimate the 

discount rate was missing or could not 

be obtained, DOE discarded the firm 

from the analysis. The WACC approach 

for determining discount rates accounts 

for the current tax status of individual 

firms on an overall corporate basis. DOE 

did not evaluate the marginal effects of 

increased costs, and thus depreciation 

due to more expensive equipment, on 

the overall tax status. 

DOE used the final sample of 

companies to represent purchasers of 

commercial boilers. For each company 

in the sample, DOE derived the cost of 

debt, percent debt financing, and 

systematic company risk from 

information on the Damodaran Online 

Web site. Damodaran estimated the cost 

of debt financing from the long-term 

government bond rate (4.39 percent) and 

the standard deviation of the stock 

price. DOE then determined the 

weighted average values for the cost of 

debt, range of values, and standard 

deviation of WACC for each category of 

the sample companies. Deducting 

expected inflation from the cost of 

capital provided estimates of real 

discount rate by ownership category. 

Based on this database, DOE calculated 

the weighted average after-tax discount 

rate for commercial boiler purchases, 

adjusted for inflation, in each of the 

seven building types used in the 

analysis. Chapter 5 of the NOPR TSD 

contains the detailed calculations on the 

discount rate. 

3. Payback Period 

DOE also determined the economic 

impact of potential amended energy 

conservation standards on customers by 

calculating the PBP of more-stringent 

efficiency levels relative to a baseline 

efficiency level. The PBP measures the 

amount of time it takes the commercial 

customer to recover the assumed higher 

purchase expense of more-efficient 

equipment through lower operating 

costs. Similar to the LCC, the PBP is 

based on the total installed cost and the 

operating expenses for each building 

type and State, weighted on the 

probability of shipment to each market. 

Because the PBP does not take into 

account changes in operating expense 

over time or the time value of money, 

DOE considered only the first year’s 

operating expenses to calculate the PBP, 

unlike the LCC. Chapter 5 of the NOPR 

TSD provides additional details about 

the PBP. 

G. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

The national impacts analysis 

evaluates the impact of a proposed 

energy conservation standard from a 

national perspective rather than from 

the customer perspective represented by 

the LCC. This analysis assesses the net 

present value (NPV) (future amounts 

discounted to the present) and the NES 

of total commercial customer costs and 

savings, which are expected to result 

from amended standards at specific 

efficiency levels. For each efficiency 

level analyzed, DOE calculated the NPV 

and NES for adopting more-stringent 

standards than the efficiency levels 

specified in ASHRAE Standard 90.1– 

2007. The NES refers to cumulative 

energy savings from 2012 through 2042. 

DOE calculated new energy savings in 

each year relative to a base case, defined 

as DOE adoption of the efficiency levels 

specified by ASHRAE Standard 90.1– 

2007. The NPV refers to cumulative 

monetary savings. DOE calculated net 

monetary savings in each year relative 

to the base case as the difference 

between total operating cost savings and 

increases in total installed cost. 

Cumulative savings are the sum of the 

annual NPV over the specified period. 

DOE accounted for operating cost 

savings until 2085, when 95 percent of 

all the equipment installed in 2042 

should be retired. 

1. Approach 

Over time, equipment that is more 

efficient in the standards case gradually 

replaces less-efficient equipment. This 

affects the calculation of both the NES 

and NPV, which are a function of the 

total number of units in use and their 

efficiencies. Both the NES and NPV 

depend on annual shipments and 

equipment lifetime, including changes 

in shipments and retirement rates in 

response to changes in equipment costs 

due to amended energy conservation 

standards. Both calculations start by 

using the shipments estimate and the 

quantity of units in service derived from 

the shipments model. 

With regard to estimating the NES, 

because more-efficient boilers gradually 

replace less-efficient ones, the energy 

per unit of capacity used by the boilers 

in service gradually decreases in the 

standards case relative to the base case. 

DOE calculated the NES by subtracting 

energy use under a standards-case 

scenario from energy use in a base case 

scenario. 

Unit energy savings for each 

equipment class are the weightedaverage values calculated in the LCC 

spreadsheet. To estimate the total 

energy savings for each efficiency level, 

DOE first calculated the national site 

energy consumption (i.e., the energy 

directly consumed by the units of 

equipment in operation) for each class 

of commercial packaged boilers for each 

year of the analysis period. The NES 

and NPV analysis periods began with 

the earliest expected effective date of 

amended Federal energy conservation 

standards (i.e., 2012) based on DOE 

adoption of the baseline ASHRAE 90.1– 

2007 efficiency levels. For the analysis 

of DOE adoption of more-stringent 

efficiency levels, the earliest effective 

date is 2014, four years after DOE would 

likely issue a final rule requiring such 

standards. Second, DOE determined the 

annual site energy savings, consisting of 

the difference in site energy 

consumption between the base case and 

the standards case for each class of 

boiler. Third, DOE converted the annual 

site energy savings into the annual 

amount of energy saved at the source of 

gas generation (the source energy), using 

a site-to-source conversion factor. 

Finally, DOE summed the annual source 

energy savings from 2012 to 2042 to 

calculate the total NES for that period. 

DOE performed these calculations for 

each efficiency level considered for 

commercial packaged boilers in this 

rulemaking. 

DOE considered whether a rebound 

effect is applicable in its NES analysis. 

A rebound effect occurs when an 

increase in equipment efficiency leads 

to an increased demand for its service. 

EIA in its national energy modeling 

system (NEMS) model assumes a certain 

elasticity factor to account for an 

increased demand for service due to the 

increase in cooling (or heating) 

efficiency.36 EIA refers to this as an 

efficiency rebound.37 For the 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12033 

commercial heating equipment market, 

there are two ways that a rebound effect 

could occur: (1) Increased use of the 

heating equipment within the 

commercial buildings they are installed 

in; and (2) additional instances of 

heating a commercial building where it 

was not being heated before. 

The first instance does not occur often 

because commercial buildings are 

generally heated to the thermal comfort 

temperatures desired in these buildings 

during the occupied periods. DOE also 

does not believe that increases in the 

efficiency of commercial boilers would 

result in significant increases in 

operating hours during which heating 

might be utilized in buildings. 

With regard to the second instance, 

commercial boilers are unlikely to be 

installed in previously unheated 

building spaces, because commercial 

packaged boilers are not primarily 

found in warehouse buildings. 

Furthermore, relatively little unheated 

commercial building space exists 

outside of warehouse buildings. For 

warehouse buildings generally, other 

heating equipment types tend to be 

utilized today and will likely continued 

to be used in the future, because of 

lower first costs with direct heating 

equipment such as furnaces and unit 

heaters as well as the use of high 

temperature radiant heaters for human 

comfort in some warehouses. Therefore, 

DOE did not assume a rebound effect in 

the present NOPR analysis. DOE seeks 

input from interested parties on whether 

there will be a rebound effect for 

improvements in the efficiency of 

commercial packaged boilers. If 

interested parties believe a rebound 

effect will occur, DOE is interested in 

receiving data quantifying the effects as 

well as input regarding how should 

DOE quantify this in its analysis. This 

is identified as Issue 4 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

VIII.E of today’s NOPR. 

To estimate NPV, DOE calculated the 

net impact as the difference between 

total operating cost savings (including 

electricity, repair, and maintenance cost 

savings) and increases in total installed 

costs (including customer prices and 

installation cost). DOE calculated the 

NPV of each standard level over the life 

of the equipment using the following 

three steps. First, DOE determined the 

difference between the equipment costs 

under the standard-level case and the 

base case in order to obtain the net 

equipment cost increase resulting from 

the higher standard level. Second, DOE 

determined the difference between the 

base-case operating costs and the 

standard-level operating costs in order 

to obtain the net operating cost savings 

from each higher efficiency level. Third, 

DOE determined the difference between 

the net operating cost savings and the 

net equipment cost increase in order to 

obtain the net savings (or expense) for 

each year. DOE then discounted the 

annual net savings (or expenses) to 2008 

for boilers bought on or after 2012 and 

summed the discounted values to 

provide the NPV of an efficiency level. 

An NPV greater than zero shows net 

savings (i.e., the efficiency level would 

reduce customer expenditures relative 

to the base case in present value terms). 

An NPV that is less than zero indicates 

that the efficiency level would result in 

a net increase in customer expenditures 

in present value terms. 

To make the analysis more 

transparent to all interested parties, 

DOE used a commercially-available 

spreadsheet model to calculate the 

energy savings and the national 

economic costs and savings from 

amended standards. Chapter 7 of the 

NOPR TSD helps explain the models 

and how to use them. Interested parties 

can review DOE’s analyses by changing 

various input quantities within the 

spreadsheet. 

Unlike the LCC analysis, the NES 

spreadsheet does not use distributions 

for inputs or outputs, but relies on 

national average first costs and energy 

costs developed from the LCC 

spreadsheet. DOE examined sensitivities 

by applying different scenarios. DOE 

used the NES spreadsheet to perform 

calculations of energy savings and NPV 

using the annual energy consumption 

and total installed cost data from the 

LCC analysis. DOE forecasted the energy 

savings, energy cost savings, equipment 

costs, and NPV of benefits for 

equipment sold in each boiler 

equipment class from 2012 through 

2042. The forecasts provided annual 

and cumulative values for all four 

output parameters described above. 

2. Shipments Analysis 

Equipment shipments are an 

important element in the estimate of the 

future impact of a standard. DOE 

developed shipments projections under 

a base case and each of the standards 

cases using a shipments model. DOE 

used the standards-case shipments 

projection and, in turn, the standardscase equipment stock to determine the 

NES. The shipments portion of the 

spreadsheet model forecasts boiler 

shipments from 2012 to 2042. Chapter 6 

of the NOPR TSD provides details of the 

shipment projections. 

DOE developed shipments forecasts 

by accounting for (1) the growth in the 

stock of commercial buildings which 

use boilers; (2) equipment retirements; 

and (3) equipment lifetimes. 

The shipments model assumes that in 

each year, each existing boiler either 

ages by one year or breaks down, and 

that equipment that breaks down is 

replaced. In addition, new equipment 

can be shipped into new commercial 

building floor space, and old equipment 

can be removed through demolitions. 

DOE’s shipments model is based on 

current shipments for commercial 

packaged boilers based on data provided 

by AHRI, as described above, as well as 

on an existing boiler survival function 

consistent with a 30-year equipment 

life. Shipments are separated into two 

groups: (1) Shipments to new 

construction; and (2) shipments for 

replacements. Total commercial boiler 

shipment data for 2007 from AHRI was 

first disaggregated into these two groups 

using the relative floor space between 

new construction and existing stock (as 

determined in the NEMS model for 

2007) and assuming the same saturation 

rate for boiler usage between new and 

existing buildings. DOE then 

disaggregated total boiler shipments into 

shipments by equipment class, based on 

the relative fraction of models for each 

equipment class reflected in DOE’s 

market database. This data allowed DOE 

to allocate sales of equipment to the 

different equipment classes. Annual 

shipments to new construction grew in 

proportion to the annual construction 

put in place as forecast by the NEMS 

model. Shipments for replacements in 

each year are based on a replacement 

model, which tracks the quantity and 

types of boilers that must be replaced in 

the building stock based on the boiler 

survival function. Chapter 2 of the 

NOPR TSD summarizes the total 

shipments data and the market database. 

Table V.16 shows the forecasted 

shipments for the different equipment 

classes of commercial boilers for 

selected years from 2012 to 2042 for the 

base case. As equipment purchase price 

increases with efficiency, DOE 

recognizes that higher first costs can 

result in a drop in shipments. However, 

DOE had no basis for estimating the 

elasticity of shipments for commercial 

packaged boilers as a function of either 

first costs or operating costs. Therefore, 

DOE presumed that total shipments do 

not change with higher standard levels. 

Table V.16 also shows the cumulative 

shipments for boilers from 2012 to 2042. 

Chapter 6 of the NOPR TSD provides 

additional details on the shipments 

forecasts, including the standards case 

forecast. 

12034 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

38The NES spreadsheet can be found on the 

DOE’s ASHRAE Products Web site at: http:// 

www1.eere.energy.gov/buildings/ 

appliance_standards/commercial/ 

ashrae_products_docs_meeting.html. 

39The Weibull distribution is a continuous 

probability distribution used to understand the 

failure and durability of equipment. It is popular 

because it is extremely flexible and can accurately 

model various types of failure processes. A twoparameter version of the Weibull was used and is 

described in chapter 7 of the TSD. 

TABLE V.16—BASE-CASE SHIPMENTS FORECAST FOR COMMERCIAL BOILERS

Equipment 

Thousands of units shipped by year and equipment class 

2012 2015 2020 2025 2030 2035 2040 2042 

Cumulative 

shipments 

(2012–2042) 

Small gas-fired hot water ....... 6,853 7,112 7,494 7,922 8,848 10,343 12,239 12,984 73,795 

Small gas-fired steam all except natural draft ................ 2,322 2,410 2,539 2,684 2,998 3,505 4,147 4,399 25,005 

Small gas-fired steam natural 

draft .................................... 3,568 3,703 3,902 4,125 4,607 5,385 6,372 6,760 38,422 

Small oil-fired hot water ......... 1,926 1,999 2,106 2,226 2,486 2,906 3,439 3,648 20,736 

Small oil-fired steam .............. 3,228 3,350 3,530 3,732 4,168 4,872 5,765 6,116 34,763 

Large gas-fired hot water ....... 1,104 1,146 1,208 1,277 1,426 1,667 1,972 2092 11,893 

Large gas-fired steam all except natural draft ................ 2,011 2,087 2,199 2,324 2,596 3,034 3,591 3,809 21,651 

Large gas-fired steam natural 

draft .................................... 2,577 2,674 2,818 2,979 3,327 3,889 4,602 4,882 27,750 

Large oil-fired hot water ......... 538 558 588 622 695 812 961 1,019 5,794 

Large oil-fired steam .............. 4,248 4,408 4,645 4,910 5,485 6,411 7,586 8,048 45,741 

Total ................................ 28,376 29,449 31,030 32,801 36,637 42,824 50,675 53,758 305,550 

3. Base-Case and Standards-Case 

Forecasted Distribution of Efficiencies 

The annual energy consumption of a 

commercial boiler unit is inversely 

related to the thermal efficiency of the 

unit. Thus, DOE forecasted shipmentweighted average equipment thermal 

efficiencies that, in turn, enabled a 

determination of the shipment-weighted 

annual energy consumption values for 

the base case and each efficiency level 

analyzed. DOE determined shipmentweighted average efficiency trends for 

commercial boilers equipment by first 

converting the 2008 equipment 

shipments by equipment class into 

market shares by equipment class. DOE 

then reviewed DOE’s market database to 

determine the distribution of efficiency 

levels for commercially-available 

models within each equipment class. 

DOE bundled the efficiency levels into 

‘‘efficiency ranges’’ and determined the 

percentage of models within each range. 

DOE applied the percentages of models 

within each efficiency range to the total 

unit shipments for a given equipment 

class to estimate the distribution of 

shipments within the base case. To 

determine the percentage of models in 

each efficiency range, DOE considered 

models greater than or equal to the 

lower bound of the efficiency range and 

models with efficiencies less than the 

upper bound of the efficiency range. For 

example, for the thermal efficiency 

range of 79–80 percent, DOE considered 

models with thermal efficiency levels 

from 79.0 to 79.9 to be within this range. 

Then, from those market shares and 

projections of shipments by equipment 

class, DOE extrapolated future 

equipment efficiency trends both for a 

base-case scenario and standards-case 

scenarios. The difference in equipment 

efficiency between the base case and 

standards cases was the basis for 

determining the reduction in per-unit 

annual energy consumption that could 

result from amended standards. 

For the base case, DOE assumed that, 

absent amended standards, forecasted 

market shares would remain frozen at 

the 2012 efficiency levels until the end 

of the forecast period (30 years after the 

effective date, or 2042). This prediction 

could cause DOE to overestimate the 

savings associated with the higher 

efficiency levels discussed in this notice 

because historical data indicated boiler 

efficiencies or relative efficiency class 

preferences may change voluntarily over 

time. Therefore, DOE seeks comment on 

this assumption and the potential 

significance of any overestimation of 

savings. In particular, DOE requests data 

that would allow it to better characterize 

the likely increases in packaged boiler 

efficiencies that would occur over the 

30-year analysis period absent adoption 

of either the ASHRAE 90.1–2007 

efficiency levels or higher efficiency 

levels considered in this rule. This is 

identified as Issue 5 under ‘‘Issues on 

Which DOE Seeks Comment’’ in section 

VIII.E of today’s NOPR. 

For each efficiency level analyzed, 

DOE used a ‘‘roll-up’’ scenario to 

establish the market shares by efficiency 

level for the year that standards become 

effective (i.e., 2014 if DOE adopts morestringent efficiency levels than those in 

ASHRAE Standard 90.1–2007). DOE 

collected information that suggests the 

efficiencies of equipment in the base 

case that did not meet the standard level 

under consideration would roll up to 

meet the standard level. This 

information also suggests that 

equipment efficiencies in the base case 

that were above the standard level 

under consideration would not be 

affected. 

DOE seeks input on its basis for the 

NES-forecasted base-case distribution of 

efficiencies and its prediction of how 

amended energy conservation standards 

affect the distribution of efficiencies in 

the standards case. This is identified as 

Issue 6 under ‘‘Issues on Which DOE 

Seeks Comment’’ in section VIII.E of 

today’s NOPR. 

4. National Energy Savings and Net 

Present Value 

The commercial boiler equipment 

stock is the total number of commercial 

boilers in each equipment class 

purchased or shipped from previous 

years that have survived until the point 

at which stock is taken. The NES 

spreadsheet,38 through use of the 

shipments model, keeps track of the 

total number of commercial boilers 

shipped each year. For purposes of the 

NES and NPV analyses, DOE assumes 

that retirements follow a Weibull 39

distribution with a 30-year mean 

lifetime. Retired units are replaced until 

2042. For units shipped in 2042, any 

units still remaining at the end of 2085 

are retired. 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12035 

40OMB Circular No. A–94, ‘‘Guidelines and 

Discount Rates for Benefit-Cost Analysis of Federal 

Programs’’ (Oct. 29, 1992) section 8.c.1. 

The national annual energy 

consumption is the product of the 

annual unit energy consumption and 

the number of boiler units of each 

vintage in the stock. This approach 

accounts for differences in unit energy 

consumption from year to year. In 

determining national annual energy 

consumption, DOE first calculated the 

annual energy consumption at the site 

(i.e., million Btus of fuel consumed by 

commercial boilers) and multiplied that 

by a conversion factor to account for 

distribution losses. 

To discount future impacts, DOE 

follows Office of Management and 

Budget (OMB) guidance in using 

discount rates of 7 percent and 3 

percent in evaluating the impacts of 

regulations. In selecting the discount 

rate corresponding to a public 

investment, OMB directs agencies to use 

‘‘the real Treasury borrowing rate on 

marketable securities of comparable 

maturity to the period of analysis.’’ 40

The 7-percent rate is an estimate of the 

average before-tax rate of return on 

private capital in the United States 

economy, and reflects the returns to real 

estate and small business capital as well 

as corporate capital. DOE used this 

discount rate to approximate the 

opportunity cost of capital in the private 

sector, because recent OMB analysis has 

found the average rate of return on 

capital to be near this rate. DOE also 

used the 3-percent discount rate to 

capture the potential effects of standards 

on private customers’ consumption (e.g., 

reduced purchasing of equipment due to 

higher prices and purchase of reduced 

amounts of energy). This rate represents 

the rate at which society discounts 

future consumption flows to their 

present value. This rate can be 

approximated by the real rate of return 

on long-term government debt (e.g., 

yield on Treasury notes minus annual 

rate of change in the Consumer Price 

Index), which has averaged about 3 

percent on a pre-tax basis for the last 30 

years. Table V.17 summarizes the inputs 

to the NES spreadsheet model along 

with a brief description of the data 

sources. The results of DOE’s NES and 

NPV analysis are summarized in section 

VI.B.2 below and described in detail in 

chapter 7 of the NOPR TSD. 

TABLE V.17—SUMMARY OF NES AND NPV MODEL INPUTS

Inputs Description 

Shipments ........................................................... Annual shipments from shipments model (see chapter 6 of the NOPR TSD). 

Effective Date of Standard ................................. 2014 for adoption of a more-stringent efficiency level than those specified by ASHRAE Standard 90.1–2007. 2012 for adoption of the efficiency levels specified by ASHRAE Standard 

90.1–2007. 

Base Case Efficiencies ....................................... Distribution of base-case shipments by efficiency level. 

Standard Case Efficiencies ................................ Distribution of shipments by efficiency level for each standards case. Standards-case annual 

shipment-weighted market shares remain the same as in the base case and each standard 

level for all efficiencies above the efficiency level being analyzed. All other shipments are at 

the efficiency level. 

Annual Energy Use per Unit ............................... Annual national weighted-average values are a function of efficiency level. (See chapter 4 of 

the NOPR TSD.) 

Total Installed Cost per Unit ............................... Annual weighted-average values are a function of efficiency level. (See chapter 5 of the NOPR 

TSD.) 

Repair Cost per Unit ........................................... Annual weighted-average values increase with manufacturer’s cost level. (See chapter 5 of the 

NOPR TSD.) 

Maintenance Cost per Unit ................................. See chapter 5 of the NOPR TSD. 

Escalation of Fuel Prices .................................... AEO2008 forecasts (to 2030) and extrapolation for beyond 2030. (See chapter 5 of the NOPR 

TSD.) 

Site-Source Conversion ...................................... Based on average annual site-to-source conversion factor for natural gas from AEO2008. 

Discount Rate ..................................................... 3 percent and 7 percent real. 

Present Year ....................................................... Future costs are discounted to 2008. 

H. Other Issues 

1. Effective Date of the Proposed 

Amended Energy Conservation 

Standards 

Generally, covered equipment to 

which a new or amended energy 

conservation standard applies must 

comply with the standard if such 

equipment is manufactured or imported 

on or after a specified date. In today’s 

NOPR, DOE is evaluating whether morestringent efficiency levels than those in 

ASHRAE Standard 90.1–2007 would be 

economically justified and result in a 

significant amount of energy savings. If 

DOE were to propose a rule prescribing 

energy conservation standards at the 

efficiency levels contained in ASHRAE 

Standard 90.1–2007, EPCA states that 

any such standards shall become 

effective ‘‘on or after a date which is two 

years after the effective date of the 

applicable minimum energy efficiency 

requirement in the amended ASHRAE/ 

IES standard * * *’’. (42 U.S.C. 

6313(a)(6)(D)) DOE has applied this twoyear implementation period to 

determine the effective date of any 

energy conservation standard equal to 

the efficiency levels specified by 

ASHRAE Standard 90.1–2007 proposed 

by this rulemaking. Thus, if DOE 

decides to adopt one of the efficiency 

levels in ASHRAE Standard 90.1–2007 

for the equipment classes where a twotier standard is set-forth, the effective 

date of the rulemaking would be 

dependent upon the effective date 

specified in ASHRAE Standard 90.1– 

2007. For example, in certain cases, the 

effective date in ASHRAE Standard 

90.1–2007 is March 2, 2010 for the 

initial efficiency level (which would 

require an effective date of 2012), but 

the effective date is March 2, 2020 for 

the second tier efficiency level (which 

would require an effective date of 2022). 

If DOE were to propose a rule 

prescribing energy conservation 

standards higher than the efficiency 

levels contained in ASHRAE Standard 

90.1–2007, EPCA states that any such 

standards ‘‘shall become effective for 

products manufactured on or after a 

date which is four years after the date 

such rule is published in the Federal 

12036 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

41Since ASHRAE published ASHRAE Standard 

90.1–2007 on January 10, 2008, EPCA requires that 

DOE publish a final rule adopting more-stringent 

standards than those in ASHRAE Standard 90.1– 

2007 within 30 months of ASHRAE action (i.e., by 

July 2010). Thus, four years from July 2010 would 

be July 2014, which would be the anticipated 

effective date for DOE adoption of more-stringent 

standards. 

Register.’’ (42 U.S.C. 6313(a)(6)(D)) DOE 

has applied this 4-year implementation 

period to determine the effective date of 

any energy conservation standard higher 

than the efficiency levels specified by 

ASHRAE Standard 90.1–2007 that might 

be prescribed in a future rulemaking. 

Thus, for products for which DOE might 

adopt a level more stringent than the 

ASHRAE efficiency levels, the rule 

would apply to products manufactured 

on or after July 2014, which is four years 

from the date of publication of the final 

rule.41

Table V.18 presents the anticipated 

effective dates of an amended energy 

conservation standard for each 

equipment class for which DOE 

developed a potential energy savings 

analysis. 

TABLE V.18—ANTICIPATED EFFECTIVE DATE OF AN AMENDED ENERGY CONSERVATION STANDARD FOR EACH EQUIPMENT

CLASS OF COMMERCIAL PACKAGED BOILERS

Equipment class 

Anticipated effective date for 

adopting the efficiency levels in 

ASHRAE standard 90.1–2007 

Anticipated effective date for 

adopting morestringent efficiency levels 

than those in 

ASHRAE standard 90.1–2007 

Small Gas-Fired Hot Water Commercial Packaged Boilers ........................................................................... 2012 2014 

Small Gas-Fired Steam, All Except Natural Draft Commercial Packaged Boilers ......................................... 2012 2014 

Small Gas-Fired Steam Natural Draft Commercial Packaged Boilers ............................................................ 2012 or 2022 2014 

Small Oil-Fired Hot Water Commercial Packaged Boilers .............................................................................. 2012 2014 

Small Oil-Fired Steam Commercial Packaged Boilers .................................................................................... 2012 2014 

Large Gas-Fired Hot Water Commercial Packaged Boilers ........................................................................... 2012 2014 

Large Gas-Fired Steam, All Except Natural Draft Commercial Packaged Boilers ......................................... 2012 or 2022 2014 

Large Gas-Fired Steam Natural Draft Commercial Packaged Boilers ........................................................... 2012 2014 

Large Oil-Fired Hot Water Commercial Packaged Boilers ............................................................................. 2012 2014 

VI. Analytical Results 

A. Efficiency Levels Analyzed 

Table VI.1 presents the baseline 

efficiency level and the efficiency levels 

analyzed for each equipment class of 

commercial packaged boilers subject to 

today’s proposed rule. The baseline 

efficiency levels correspond to the 

efficiency levels specified by ASHRAE 

Standard 90.1–2007. The efficiency 

levels above the baseline represent 

efficiency levels above those specified 

in ASHRAE Standard 90.1–2007 where 

equipment is currently available on the 

market. 

TABLE VI.1—EFFICIENCY LEVELS ANALYZED

Equipment class 

Representative 

capacity 

kBtu/h 

Efficiency levels 

analyzed 

(percent) 

Small gas-fired hot water ......................................................................................................... 800 Baseline—80 ET

82 ET

84 ET

86 ET

Condensing—92 ET

Small gas-fired steam all except natural draft ......................................................................... 800 Baseline—79 ET

80 ET

81 ET

82 ET

83 ET

Small gas-fired steam natural draft ......................................................................................... 800 Baseline—77 ET

78 ET

79 ET

80 ET

Small oil-fired hot water ........................................................................................................... 800 Baseline—82 ET

84 ET

86 ET

88 ET

Small oil-fired steam ................................................................................................................ 800 Baseline—81 ET

82 ET

83 ET

85 ET

Large gas-fired hot water ........................................................................................................ 3,000 Baseline—82 EC

83 EC

84 EC

85 EC

Condensing—95 EC

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12037 

TABLE VI.1—EFFICIENCY LEVELS ANALYZED—Continued 

Equipment class 

Representative 

capacity 

kBtu/h 

Efficiency levels 

analyzed 

(percent) 

Large gas-fired steam all except natural draft ........................................................................ 3,000 Baseline—79 ET

80 ET

81 ET

82 ET

83 ET

Large gas-fired steam natural draft ......................................................................................... 3,000 Baseline—77 ET

78 ET

79 ET

80 ET

81 ET

Large oil-fired hot water ........................................................................................................... 3,000 Baseline—84 EC

86 EC

87 EC

88 EC

Large oil-fired steam ................................................................................................................ 3,000 Baseline—81 ET

82 ET

83 ET

84 ET

86 ET

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Customers 

a. Life-Cycle Cost and Payback Period 

To evaluate the economic impact of 

the efficiency levels on commercial 

customers, DOE conducted an LCC 

analysis for each efficiency level. More 

efficient commercial packaged boilers 

would affect these customers in two 

ways: (1) Annual operating expense 

would decrease; and (2) purchase price 

would increase. Inputs used for 

calculating the LCC include total 

installed costs (i.e., equipment price 

plus installation costs), operating 

expenses (i.e., annual energy savings, 

energy prices, energy price trends, 

repair costs, and maintenance costs), 

equipment lifetime, and discount rates. 

The output of the LCC model is a 

mean LCC savings for each equipment 

class, relative to the baseline 

commercial packaged boiler efficiency 

level. The LCC analysis also provides 

information on the percentage of 

customers that are negatively affected by 

an increase in the minimum efficiency 

standard. 

DOE performed a PBP analysis as part 

of the LCC analysis. The PBP is the 

number of years it would take for the 

customer to recover the increased costs 

of higher-efficiency equipment as a 

result of energy savings based on the 

operating cost savings. The PBP is an 

economic benefit-cost measure that uses 

benefits and costs without discounting. 

Chapter 5 of the NOPR TSD provides 

detailed information on the LCC and 

PBP analyses. 

DOE’s LCC and PBP analyses 

provided five key outputs for each 

efficiency level above the baseline (i.e., 

efficiency levels more stringent than 

those in ASHRAE Standard 90.1–2007), 

reported in Table VI.2 through Table 

VI.11. The first three outputs are the 

proportion of commercial boiler 

purchases where the purchase of a 

commercial packaged boiler that is 

compliant with the amended energy 

conservation standard creates a net LCC 

increase, no impact, or a net LCC 

savings for the customer. The fourth 

output is the average net LCC savings 

from standard-compliant equipment. 

The fifth output is the average PBP for 

the customer investment in standardcompliant equipment. 

TABLE VI.2—SUMMARY LCC AND PBP RESULTS FOR SMALL GAS-FIRED HOT WATER BOILERS, 800 KBTU/h OUTPUT

CAPACITY

Small gas-fired hot water 

Efficiency level 

1 2 3 4 

Thermal Efficiency (ET) ............................................................................................................ 82% 84% 86% 92% 

Equipment with Net LCC Increase (%) ................................................................................... 11 26 47 66 

Equipment with No Change in LCC (%) .................................................................................. 77 48 25 18 

Equipment with Net LCC Savings (%) .................................................................................... 12 27 28 17 

Mean LCC Savings ($) ............................................................................................................ $860 $2,007 ($319) ($6,649) 

Mean PBP (years) ................................................................................................................... 26.8 30.7 42.5 56.5 

Increase in Total Installed Cost ($) ......................................................................................... $3,754 $5,936 $9,486 $14,642 

Note: Numbers in parentheses indicate negative LCC savings. 

12038 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

TABLE VI.3—SUMMARY LCC AND PBP RESULTS FOR SMALL GAS-FIRED STEAM ALL EXCEPT NATURAL DRAFT, 800 

KBTU/h OUTPUT CAPACITY

Small gas-fired steam all except natural draft 

Efficiency level 

1 2 3 4 

Thermal Efficiency (ET) ............................................................................................................ 80% 81% 82% 83% 

Equipment with Net LCC Increase (%) ................................................................................... 30 60 73 75 

Equipment with No Change in LCC (%) .................................................................................. 64 19 10 7

Equipment with Net LCC Savings (%) .................................................................................... 6 21 17 18 

Mean LCC Savings ($) ............................................................................................................ ($1,530) ($1,545) ($3,521) ($4,163) 

Mean Payback Period (years) ................................................................................................. 44.1 42.8 51.2 50.7 

Increase in Total Installed Cost ($) ......................................................................................... $3,592 $5,350 $8,103 $10,109 

Note: Numbers in parentheses indicate negative savings. 

TABLE VI.4—SUMMARY LCC AND PBP RESULTS FOR SMALL GAS-FIRED STEAM NATURAL DRAFT BOILERS, 800 KBTU/h 

OUTPUT CAPACITY

Small gas-fired steam natural draft 

Efficiency level 

1 2 3 

Thermal Efficiency (ET) ........................................................................................................................................ 78% 79% 80% 

Equipment with Net LCC Increase (%) ............................................................................................................... 49 39 51 

Equipment with No Change in LCC (%) ............................................................................................................. 32 22 3 

Equipment with Net LCC Savings (%) ................................................................................................................ 19 38 46 

Mean LCC Savings ($) ........................................................................................................................................ ($712) $789 $1,103 

Mean PBP (years) ............................................................................................................................................... 33.5 26.6 28.9 

Increase in Total Installed Cost ($) ..................................................................................................................... $3,261 $4,321 $5,972 

Note: Numbers in parentheses indicate negative savings. 

TABLE VI.5—SUMMARY LCC AND PBP RESULTS FOR SMALL OIL-FIRED HOT WATER BOILERS, 800 KBTU/h OUTPUT

CAPACITY

Small oil-fired hot water 

Efficiency level 

1 2 3 

Thermal Efficiency (ET) ........................................................................................................................................ 84% 86% 88% 

Equipment with Net LCC Increase (%) ............................................................................................................... 20 25 37 

Equipment with No Change in LCC (%) ............................................................................................................. 39 27 7 

Equipment with Net LCC Savings (%) ................................................................................................................ 41 48 56 

Mean LCC Savings ($) ........................................................................................................................................ $2,441 $5,376 $5,212 

Mean PBP (years) ............................................................................................................................................... 19.2 19.6 26.6 

Increase in Total Installed Cost ($) ..................................................................................................................... $3,897 $6,325 $10,185 

TABLE VI.6—SUMMARY LCC AND PBP RESULTS FOR SMALL OIL-FIRED STEAM BOILERS, 800 KBTU/h OUTPUT CAPACITY

Small oil-fired hot water 

Efficiency level 

1 2 3 

Thermal Efficiency (ET) ........................................................................................................................................ 82% 83% 85% 

Equipment with Net LCC Increase (%) ............................................................................................................... 29 46 54 

Equipment with No Change in LCC (%) ............................................................................................................. 58 24 6 

Equipment with Net LCC Savings (%) ................................................................................................................ 13 30 40 

Mean LCC Savings ($) ........................................................................................................................................ ($732) $88 $864 

Mean PBP (years) ............................................................................................................................................... 35.1 33.7 35.0 

Increase in Total Installed Cost ($) ..................................................................................................................... $3,524 $5,142 $8,670 

Note: Numbers in parentheses indicate negative savings. 

TABLE VI.7—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED HOT WATER BOILERS, 3,000 KBTU/h OUTPUT

CAPACITY

Large gas-fired hot water 

Efficiency level 

1 2 3 4 

Combustion Efficiency (EC) ..................................................................................................... 83% 84% 85% 95% 

Equipment with Net LCC Increase (%) ................................................................................... 9 20 34 49 

Equipment with No Change in LCC (%) .................................................................................. 51 23 17 6

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12039 

TABLE VI.7—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED HOT WATER BOILERS, 3,000 KBTU/h OUTPUT

CAPACITY—Continued 

Large gas-fired hot water 

Efficiency level 

1 2 3 4 

Equipment with Net LCC Savings (%) .................................................................................... 40 58 49 46 

Mean LCC Savings ($) ............................................................................................................ $5,254 $9,421 $8,678 $7,637 

Mean PBP (years) ................................................................................................................... 16.0 19.3 27.8 37.1 

Increase in Total Installed Cost ($) ......................................................................................... $4,489 $8,172 $14,043 $37,821 

TABLE VI.8—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED STEAM, ALL EXCEPT NATURAL DRAFT BOILERS, 

3,000 KBTU/h OUTPUT CAPACITY

Large gas-fired steam all except natural draft 

Efficiency level 

1 2 3 4 

Thermal Efficiency (ET) ............................................................................................................ 80% 81% 82% 83% 

Equipment with Net LCC Increase (%) ................................................................................... 6 5 4 4 

Equipment with No Change in LCC (%) .................................................................................. 61 26 23 20 

Equipment with Net LCC Savings (%) .................................................................................... 33 69 73 77 

Mean LCC Savings ($) ............................................................................................................ $6,711 $16,291 $25,415 $34,087 

Mean Payback Period (years) ................................................................................................. 12.5 9.1 8.1 7.7 

Increase in Total Installed Cost ($) ......................................................................................... $4,364 $6,048 $7,824 $9,697 

TABLE VI.9—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED STEAM NATURAL DRAFT BOILERS, 3,000 KBTU/h 

OUTPUT CAPACITY

Large gas-fired steam natural draft 

Efficiency level 

1 2 3 4 

Thermal Efficiency (ET) ............................................................................................................ 78% 79% 80% 81% 

Equipment with Net LCC Increase (%) ................................................................................... 1 3 6 10 

Equipment with No Change in LCC (%) .................................................................................. 88 42 24 7

Equipment with Net LCC Savings (%) .................................................................................... 11 55 71 82 

Mean LCC Savings ($) ............................................................................................................ $8,339 $17,917 $25,371 $30,669 

Mean Payback Period (years) ................................................................................................. 9.8 8.2 9.1 10.8 

Increase in Total Installed Cost ($) ......................................................................................... $3,800 $5,893 $9,073 $13,367 

TABLE VI.10—SUMMARY LCC AND PBP RESULTS FOR LARGE OIL-FIRED HOT WATER BOILERS, 3,000 KBTU/h OUTPUT

CAPACITY

Large oil-fired hot water 

Efficiency level 

1 2 3 

Combustion Efficiency (EC) ........................................................................................................................... 86% 87% 88% 

Equipment with Net LCC Increase (%) ......................................................................................................... 5 11 15 

Equipment with No Change in LCC (%) ....................................................................................................... 52 24 24 

Equipment with Net LCC Savings (%) .......................................................................................................... 43 65 61 

Mean LCC Savings ($) .................................................................................................................................. $18,874 $23,498 $27,342 

Mean PBP (years) ......................................................................................................................................... 9.3 12.9 15.4 

Increase in Total Installed Cost ($) ............................................................................................................... $7,063 $12,536 $18,256 

TABLE VI.11—SUMMARY LCC AND PBP RESULTS FOR LARGE OIL-FIRED STEAM BOILERS, 3,000 KBTU/h OUTPUT

CAPACITY

Large oil-fired steam 

Efficiency level 

1 2 3 4 

Thermal Efficiency (ET) ............................................................................................................ 82% 83% 84% 86% 

Equipment with Net LCC Increase (%) ................................................................................... 4 7 11 12

Equipment with No Change in LCC (%) .................................................................................. 66 41 16 11 

Equipment with Net LCC Savings (%) .................................................................................... 30 53 73 77 

Mean LCC Savings ($) ............................................................................................................ $9,613 $19,472 $26,117 $40,322 

Mean Payback Period (years) ................................................................................................. 9.7 9.3 11.2 12.3 

Increase in Total Installed Cost ($) ......................................................................................... $4,280 $7,392 $12,189 $20,635 

12040 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

2. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

To estimate the energy savings 

through 2042 due to amended energy 

conservation standards, DOE compared 

the energy consumption of commercial 

boilers under the base case (i.e., the 

ASHRAE 90.1–2007 efficiency levels) to 

energy consumption of boilers under 

higher efficiency standards. DOE 

examined up to four efficiency levels 

higher than those of ASHRAE Standard 

90.1–2007. The amount of energy 

savings depends not only on the 

potential increase in energy efficiency 

due to a standard, but also on the rate 

at which the stock of existing, lessefficient commercial boilers will be 

replaced over time after implementation 

of the amended energy conservation 

standard. Table VI.12 shows the 

forecasted national energy savings at 

each of the standard levels. DOE reports 

both undiscounted and discounted 

estimates of energy savings. Table VI.13 

and Table VI.14 show the magnitude of 

the energy savings if they are 

discounted at rates of 7 percent and 3 

percent, respectively. Each standard 

level considered in this rulemaking 

would result in significant energy 

savings, and the amount of savings 

increases with higher energy 

conservation standards. (See chapter 7 

of the NOPR TSD.) 

TABLE VI.12—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS (ENERGY SAVINGS FOR

UNITS SOLD FROM 2012 TO 2042, UNDISCOUNTED) 

Equipment class 

National energy savings (quads) * 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ............................................................................................... 0.022 0.072 0.140 0.212 

Small gas-fired steam, all except natural draft .............................................................. (0.000 ) 0.014 0.030 0.045 

Small gas-fired steam natural draft ............................................................................... (0.006 ) 0.016 0.042 ....................

Small oil-fired hot water ................................................................................................. 0.015 0.034 0.057 ....................

Small oil-fired steam ...................................................................................................... 0.009 0.027 0.068 ....................

Large gas-fired hot water .............................................................................................. 0.014 0.037 0.061 0.176 

Large gas-fired steam, all except natural draft ............................................................. 0.022 0.063 0.105 0.148 

Large gas-fired, steam natural draft .............................................................................. (0.022 ) 0.002 0.032 0.067 

Large oil-fired hot water ................................................................................................. 0.014 0.024 0.034 ....................

Large oil-fired steam ...................................................................................................... 0.039 0.106 0.198 0.410 

* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-stringent efficiency levels 

compared to the efficiency levels specified in ASHRAE Standard 90.1–2007. 

TABLE VI.13—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS (ENERGY SAVINGS FOR

UNITS SOLD FROM 2012 TO 2042, DISCOUNTED AT SEVEN PERCENT) 

Equipment class 

National energy savings (quads) * 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ............................................................................................... 0.004 0.015 0.029 0.043 

Small gas-fired steam, all except natural draft .............................................................. (0.000 ) 0.003 0.006 0.009 

Small gas-fired steam natural draft ............................................................................... (0.000 ) 0.004 0.009 ....................

Small oil-fired hot water ................................................................................................. 0.003 0.007 0.012 ....................

Small oil-fired steam ...................................................................................................... 0.002 0.005 0.014 ....................

Large gas-fired hot water .............................................................................................. 0.003 0.008 0.012 0.036 

Large gas-fired steam, all except natural draft ............................................................. 0.004 0.013 0.021 0.030 

Large gas-fired, steam natural draft .............................................................................. (0.003 ) 0.002 0.008 0.015 

Large oil-fired hot water ................................................................................................. 0.003 0.005 0.007 ....................

Large oil-fired steam ...................................................................................................... 0.008 0.022 0.041 0.084 

* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-stringent efficiency levels 

compared to the efficiency levels specified in ASHRAE Standard 90.1–2007. 

TABLE VI.14—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS (ENERGY SAVINGS FOR

UNITS SOLD FROM 2012 TO 2042, DISCOUNTED AT THREE PERCENT) 

Equipment class 

National energy savings (quads) * 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ............................................................................................... 0.010 0.035 0.068 0.103 

Small gas-fired steam, all except natural draft .............................................................. (0.000 ) 0.007 0.014 0.022 

Small gas-fired, steam natural draft .............................................................................. (0.002 ) 0.008 0.021 ....................

Small oil-fired hot water ................................................................................................. 0.007 0.016 0.027 ....................

Small oil-fired steam ...................................................................................................... 0.004 0.013 0.033 ....................

Large gas-fired hot water .............................................................................................. 0.007 0.018 0.030 0.085 

Large gas-fired steam, all except natural draft ............................................................. 0.010 0.031 0.051 0.072 

Large gas-fired steam, natural draft .............................................................................. (0.009 ) 0.002 0.017 0.034 

Large oil-fired hot water ................................................................................................. 0.007 0.012 0.016 ....................

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12041 

TABLE VI.14—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS (ENERGY SAVINGS FOR

UNITS SOLD FROM 2012 TO 2042, DISCOUNTED AT THREE PERCENT)—Continued 

Equipment class 

National energy savings (quads) * 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Large oil-fired steam ...................................................................................................... 0.019 0.051 0.096 0.199 

* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-stringent efficiency levels 

compared to the efficiency levels specified in ASHRAE Standard 90.1–2007. 

b. Net Present Value 

The NPV analysis is a measure of the 

cumulative benefit or cost of standards 

to the Nation. In accordance with 

OMB’s guidelines on regulatory analysis 

(OMB Circular A–4, section E (Sept. 17, 

2003)), DOE calculated NPV using both 

a 7-percent and a 3-percent real 

discount rate. The 7-percent rate is an 

estimate of the average before-tax rate of 

return on private capital in the U.S. 

economy, and reflects the returns to real 

estate and small business capital as well 

as corporate capital. DOE used this 

discount rate to approximate the 

opportunity cost of capital in the private 

sector, because recent OMB analysis has 

found the average rate of return on 

capital to be near this rate. DOE also 

used the 3-percent rate to capture the 

potential effects of standards on private 

customers’ consumption (e.g., reduced 

purchasing of equipment due to higher 

prices for equipment and purchase of 

reduced amounts of energy). This rate 

represents the rate at which society 

discounts future consumption flows to 

their present value. This rate can be 

approximated by the real rate of return 

on long-term government debt (e.g., 

yield on Treasury notes minus annual 

rate of change in the Consumer Price 

Index), which has averaged about 3 

percent on a pre-tax basis for the last 30 

years. Table VI.15 and Table VI.16 

provide an overview of the NPV results. 

(See chapter 7 of the NOPR TSD.) 

TABLE VI.15—SUMMARY OF CUMULATIVE NET PRESENT VALUE FOR BOILERS

[Discounted at seven percent] 

Equipment class 

Net present value (billion 2008) 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... ($0.014 ) ($0.010 ) ($0.166 ) ($0.543 ) 

Small gas-fired steam, all except natural draft ........................................................ ($0.038 ) ($0.041 ) ($0.081 ) ($0.114 ) 

Small gas-fired, steam natural draft ........................................................................ ($0.037 ) ($0.016 ) ($0.028 ) ......................

Small oil-fired hot water ........................................................................................... ($0.008 ) ($0.000 ) ($0.041 ) ......................

Small oil-fired steam ................................................................................................ ($0.031 ) ($0.040 ) ($0.085 ) ......................

Large gas-fired hot water ........................................................................................ $0.011 $0.028 $0.003 ($0.093 ) 

Large gas-fired steam, all except natural draft ....................................................... $0.027 $0.127 $0.226 $0.322 

Large gas-fired steam, natural draft ........................................................................ ($0.054 ) ($0.021 ) ($0.013 ) ($0.045 ) 

Large oil-fired hot water ........................................................................................... $0.042 $0.071 $0.063 ......................

Large oil-fired steam ................................................................................................ $0.062 $0.184 $0.248 $0.504 

* Numbers in parentheses indicate negative NPV. 

TABLE VI.16—SUMMARY OF CUMULATIVE NET PRESENT VALUE FOR BOILERS

[Discounted at three percent] 

Equipment class 

Net present value (billion 2008$) 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... $0.077 $0.274 $0.146 ($0.510 ) 

Small gas-fired steam, all except natural draft ........................................................ (0.076 ) (0.014 ) (0.034 ) (0.050 ) 

Small gas-fired steam, natural draft ........................................................................ (0.100 ) 0.041 0.125 ......................

Small oil-fired hot water ........................................................................................... 0.053 0.137 0.121 ......................

Small oil-fired steam ................................................................................................ (0.023 ) 0.014 0.049 ......................

Large gas-fired hot water ........................................................................................ 0.093 0.222 0.259 0.483 

Large gas-fired steam, all except natural draft ....................................................... 0.166 0.576 0.984 1.391 

Large gas-fired steam, natural draft ........................................................................ (0.257 ) (0.081 ) 0.077 0.174 

Large oil-fired hot water ........................................................................................... 0.146 0.243 0.262 ......................

Large oil-fired steam ................................................................................................ 0.302 0.830 1.328 2.702 

* Numbers in parentheses indicate negative NPV. 

12042 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

C. Proposed Standards for Commercial 

Packaged Boilers 

EPCA specifies that, for any 

commercial and industrial equipment 

addressed in section 342(a)(6)(A)(i) of 

EPCA, DOE may prescribe an energy 

conservation standard more stringent 

than the level for such equipment in 

ASHRAE/IESNA Standard 90.1, as 

amended, only if ‘‘clear and convincing 

evidence’’ shows 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)(ii)(II)) 

In evaluating more-stringent 

efficiency levels for commercial 

packaged boilers than those specified by 

ASHRAE Standard 90.1–2007, DOE 

reviewed the results in terms of their 

technological feasibility, economic 

justification, and significance of energy 

savings. 

DOE first examined the potential 

energy savings that would result from 

the efficiency levels specified in 

ASHRAE Standard 90.1–2007 and 

compared that to the potential energy 

savings that would result from 

proposing efficiency levels more 

stringent than those in ASHRAE 

Standard 90.1–2007 as Federal energy 

conservation standards. All of the 

efficiency levels examined by DOE 

resulted in cumulative energy savings, 

including the efficiency levels in 

ASHRAE Standard 90.1–2007. DOE 

estimates that a total of 0.10 quads of 

energy will be saved if DOE adopts the 

efficiency levels for each commercial 

boiler equipment class specified in 

ASHRAE Standard 90.1–2007. If DOE 

were to propose efficiency levels more 

stringent than those specified by 

ASHRAE Standard 90.1–2007 as Federal 

minimum standards, the potential 

additional energy savings ranges from 

0.14 quads to 1.26 quads. Associated 

with proposing more-stringent 

efficiency levels is a two-year delay in 

implementation compared to the 

adoption of energy conservation 

standards at the level specified in 

ASHRAE Standard 90.1–2007 (see 

section V.H.1). This two-year delay in 

implementation of amended energy 

conservation standards would result in 

a small amount of energy savings being 

lost in the first two years (2012 and 

2013) compared to the savings from 

adopting the levels in ASHRAE 

Standard 90.1–2007; however, this 

energy savings may be compensated for 

by increased savings from higher 

standards in later years. 

In addition to energy savings, DOE 

also examined the economic 

justification of proposing efficiency 

levels more stringent than those 

specified in ASHRAE Standard 90.1– 

2007. As shown in section VI.B.1.a, 

higher efficiency levels result in a 

positive mean LCC savings for some 

commercial packaged boiler equipment 

classes. For example, in the largest 

commercial packaged boiler equipment 

class (i.e., small, gas-fired hot water 

boilers), the mean LCC savings ranges 

from $860 to a mean LCC cost of $6,649 

for efficiency level 1 through efficiency 

level 4. The total installed cost increases 

from $3,754 to $14,642 for efficiency 

level 1 through efficiency level 4 when 

compared to the baseline. Overall, there 

would be a wide range of commercial 

customer LCC impacts based on climate, 

hydronic system operating temperature, 

and installation costs, which might 

place a significant burden on some 

commercial customers. 

In general, there is a large range in the 

total installed cost of different types of 

commercial boiler equipment, leading to 

a high variance and uncertainty in the 

economic analyses. Many factors affect 

the cost of a commercial boiler, 

including the type of commercial 

packaged boilers, the material of the 

heat exchanger being used, and the 

overall design. In addition, the 

installation costs of boilers vary greatly 

depending on the efficiency, the 

location of the boiler, and the venting 

system. In more-efficient boilers, the 

flue must be made out of corrosion 

resistant materials to prevent the 

possibility of corrosion caused due to 

condensing flue gases. Because the 

mean LCC savings can be considered 

small in comparison to the total 

installed cost of the equipment, a 

relatively minor change in the 

differential installed cost estimate could 

negate the mean LCC savings realized by 

proposing more-stringent efficiency 

levels as Federal minimum standards 

for commercial packaged boilers. 

After examining the potential energy 

savings and the economic justification 

of proposing efficiency levels more 

stringent than those specified in 

ASHRAE Standard 90.1–2007, DOE 

believes there are several other factors it 

should consider before proposing 

amended energy conservation standards 

for commercial packaged boilers. 

First, DOE reexamined the certainty 

in its analysis of commercial packaged 

boilers. As noted in section IV.C.4.a, 

due to current test procedure 

requirements, not all manufacturers test 

for the thermal efficiency of their 

commercial boiler models, nor do they 

all report it to the I=B=R Directory or in 

manufacturers’ catalogs. Some 

manufacturers simply do not report 

thermal efficiency, and of those 

manufacturers that do report thermal 

efficiency, some may estimate the 

thermal efficiency ratings of their 

equipment, rather than actually test for 

the thermal efficiency of their 

equipment. DOE has no way to 

determine which thermal efficiency 

ratings are the result of estimation and 

which are the result of actual testing. 

Further, in the case of manufacturers 

that do test for thermal efficiency, 

variances in testing facilities and 

equipment can lead to inconsistent 

results in the thermal efficiency testing 

among the manufacturers. The 

combination of these factors leads to 

concerns about the viability of using the 

data from the I=B=R Directory and 

manufacturers’ catalogs as the source for 

thermal efficiency ratings for the basis 

of this analysis. Such concerns are 

heightened the further one moves away 

from the consensus efficiency levels in 

ASHRAE Standard 90.1–2007 in the 

context of this standard-setting 

rulemaking. 

Because ASHRAE Standard 90.1–2007 

has switched to a thermal efficiency 

metric for certain commercial packaged 

boiler equipment classes, a one-time 

conversion in the DOE efficiency metric 

will be required at some point. The 

transition to a thermal efficiency metric 

will require manufacturers to test for 

and report thermal efficiency for 8 out 

of 10 commercial boiler equipment 

classes. This would mitigate the 

problem of uncertainty in the thermal 

efficiency ratings for those equipment 

classes, allowing DOE to be able to make 

more definitive comparisons with future 

versions of ASHRAE Standard 90.1. 

DOE believes that an earlier transition to 

a rated thermal efficiency across the 

industry will provide additional, nearterm benefits covering the entire 

industry that are not captured in the 

DOE analysis presented. These benefits 

may include more rapid exposure of 

purchasers to the rated thermal 

efficiency of competing products, which 

lays the groundwork for assessing the 

benefits of one boiler against another in 

the marketplace and will create greater 

competition among manufacturers to 

provide customers with additional 

purchasing choices. DOE has no 

information with which to calculate this 

benefit. 

Second, DOE notes the efficiency 

levels in ASHRAE Standard 90.1–2007 

are part of a consensus agreement 

between the trade association 

representing the manufacturers and 

several energy-efficiency advocacy 

groups. DOE strongly encourages 

stakeholders to work together to propose 

agreements to DOE. When DOE receives 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12043 

a consensus agreement, DOE takes 

careful consideration to review the 

agreement resulting from groups that 

commonly have conflicting goals. DOE 

also points out that the Joint Letter 

submitted by AHRI, ACEEE, ASAP, 

ASE, and NRDC strongly urged DOE to 

adopt as Federal minimum energy 

conservation standards the efficiency 

levels in ASHRAE Standard 90.1–2007 

for commercial packaged boilers. (The 

Joint Letter, No. 5 at p. 1) DOE believes 

this negotiated agreement was made in 

good faith, and DOE is hesitant to 

second guess the outcome based on a 

limited analysis with many 

uncertainties. In light of those 

considerations, DOE is presenting the 

results for all the efficiency levels 

analyzed for commercial packaged 

boilers for stakeholder feedback. 

Third, DOE has not assessed any 

likely change in the efficiencies of 

models currently on the boiler market in 

the absence of setting more-stringent 

standards. DOE recognizes that 

manufacturers would continue to make 

future improvements in the boiler 

efficiencies even in the absence of 

mandated energy conservation 

standards. Such ongoing technological 

developments could have a 

disproportionately larger impact on the 

analytical results for the more-stringent 

efficiency levels analyzed in terms of 

reduced energy benefits as compared to 

the ASHRAE Standard 90.1–2007 

efficiency level scenario. When 

manufacturers introduce a new product 

line, they typically introduce higherefficiency models, while maintaining 

their baseline product offering (i.e., 

equipment at the ASHRAE Standard 

90.1–2007 efficiency levels). Any 

introduction of higher-efficiency 

equipment and subsequent purchase by 

commercial customers, which usually 

buy higher-efficiency equipment, could 

reduce the energy savings benefits of 

more-stringent efficiency levels. 

Fourth, DOE believes there could be 

a possible difference in life expectancy 

between the commercial packaged 

boilers at the ASHRAE Standard 90.1– 

2007 efficiency levels and those at 

more-stringent efficiency levels, 

including condensing boilers. DOE did 

not have any information to quantify 

these differences and is seeking 

comments from interested parties 

regarding these potential differences in 

expected lifetime. 

Finally, DOE also recognizes that 

commercial packaged boilers are one 

component in a hydronic system. 

Unlike most of the other residential 

appliances and commercial equipment 

for which DOE mandates energy 

conservation standards, the design and 

operation of that hydronic system (i.e., 

the hot-water distribution system) can 

result in significant variances in the 

annual field efficiencies of the 

commercial packaged boilers compared 

to the rated efficiency levels of these 

units. DOE recognizes that as a result, a 

critical piece of information needed to 

ensure that the benefits of high nominal 

efficiency commercial packaged boilers 

are actually achieved in the field is not 

captured in the DOE analysis. 

After weighing the benefits and 

burdens of proposing the ASHRAE 

Standard 90.1–2007 efficiency levels as 

Federal standards for commercial 

packaged boilers as compared to those 

for proposing more-stringent efficiency 

levels, DOE has tentatively concluded to 

propose the efficiency levels in 

ASHRAE 90.1–2007 as amended energy 

conservation standards for all ten 

commercial packaged boilers equipment 

classes. DOE must have ‘‘clear and 

convincing’’ evidence in order to 

propose efficiency levels more stringent 

than those specified in ASHRAE 90.1– 

2007, and for the reasons explained in 

this notice, the totality of information 

does not meet the level necessary to 

support these more-stringent efficiency 

levels. Given the relatively small mean 

LCC savings (in comparison to the total 

installed cost), even a slight alteration in 

DOE’s installation estimates could result 

in the potential for negative mean LCC 

savings. In addition, the uncertainty of 

the thermal efficiency values reported 

may have resulted in the overstatement 

or understatement of the efficiency of 

some equipment, leading to even greater 

uncertainty in the economic benefits of 

more-stringent standards. 

DOE recognizes that the thermal 

efficiency metric is superior to the 

combustion efficiency metric because 

thermal efficiency is a more complete 

measure of boiler efficiency than the 

combustion efficiency metric (thermal 

efficiency accounts for jacket losses and 

combustion efficiency does not). DOE 

believes that once commercial packaged 

boilers are transitioned from the 

combustion efficiency metric to the 

thermal efficiency metric, the thermal 

efficiency ratings of certified equipment 

will be more accurate and consistent. 

The efficiency levels in ASHRAE 

Standard 90.1–2007 are an acceptable 

foundation that will allow the 

commercial boiler industry to begin the 

transition from using combustion 

efficiency to a thermal efficiency metric. 

DOE also takes into account the 

consensus nature of the efficiency levels 

in ASHRAE Standard 90.1–2007 for 

commercial packaged boilers. 

Therefore, based on the discussion 

above, DOE has tentatively concluded 

that the efficiency levels beyond those 

in ASHRAE Standard 90.1–2007 for 

commercial packaged boilers are not 

economically justified and is proposing 

as Federal minimum standards the 

efficiency levels in ASHRAE Standard 

90.1–2007 for all ten equipment classes 

of commercial packaged boilers. DOE 

seeks comments from interested parties 

on its proposed amended energy 

conservation standards for commercial 

packaged boilers as well as the other 

efficiency levels considered. Although 

DOE currently believes that it would be 

appropriate to adopt the efficiency 

levels in ASHRAE Standard 90.1–2007 

for commercial packaged boilers, DOE 

would consider the possibility of setting 

standards at more-stringent efficiency 

levels if public comments and 

additional data supply clear and 

convincing evidence in support of such 

an approach. Table VI.17 shows the 

proposed energy conservation standards 

for commercial packaged boilers. 

TABLE VI.17—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL PACKAGED BOILERS

Equipment type Subcategory Size category (input) 

Efficiency level * 

Effective 

date: March 

2, 2012 

Effective 

date: March 

2, 2022 

Hot Water Commercial Packaged 

Boilers.

Gas-fired ........................................... ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

80% ET 80% ET

Hot Water Commercial Packaged 

Boilers.

Gas-fired ........................................... > 2,500,000 Btu/h ............................. 82% EC 82% EC

Hot Water Commercial Packaged 

Boilers.

Oil-fired ............................................. ≥300,000 Btu/h and ≤ 2,500,000 

Btu/h.

82% ET 82% ET

12044 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

TABLE VI.17—PROPOSED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL PACKAGED BOILERS—Continued 

Equipment type Subcategory Size category (input) 

Efficiency level * 

Effective 

date: March 

2, 2012 

Effective 

date: March 

2, 2022 

Hot Water Commercial Packaged 

Boilers.

Oil-fired ............................................. > 2,500,000 Btu/h ............................. 84% EC 84% EC

Steam Commercial Packaged Boilers.Gas-fired—all, except natural draft .. ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

79% ET 79% ET

Steam Commercial Packaged Boilers.Gas-fired—all, except natural draft .. > 2,500,000 Btu/h ............................. 79% ET 79% ET

Steam Commercial Packaged Boilers.Gas-fired—natural draft .................... ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

77% ET 79% ET

Steam Commercial Packaged Boilers.Gas-fired—natural draft .................... > 2,500,000 Btu/h ............................. 77% ET 79% ET

Steam Commercial Packaged Boilers.Oil-fired ............................................. ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

81% ET 81% ET

Steam Commercial Packaged Boilers.Oil-fired ............................................. > 2,500,000 Btu/h ............................. 81% ET 81% ET

* ET is the thermal efficiency and EC is the combustion efficiency. 

VII. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Order 12866 

Today’s proposed rule has been 

determined not to be a ‘‘significant 

regulatory action’’ under section 3(f)(1) 

of Executive Order 12866, ‘‘Regulatory 

Planning and Review.’’ 58 FR 51735 

(Oct. 4, 1993). Accordingly, this action 

was not subject to review under that 

Executive Order by the Office of 

Information and Regulatory Affairs 

(OIRA) of the Office of Management and 

Budget. 

B. Review Under the National 

Environmental Policy Act 

DOE plans to prepare an 

environmental assessment (EA) of the 

impacts of the proposed rule pursuant 

to the National Environmental Policy 

Act of 1969 (42 U.S.C. 4321 et seq.), the 

regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and DOE’s regulations for 

compliance with the National 

Environmental Policy Act (10 CFR part 

1021). This assessment would include a 

concise examination of the impacts of 

emission reductions likely to result from 

the rule. Most of these impacts are likely 

to be positive. The EA will be 

incorporated into the final rule TSD. 

DOE requests that interested members of 

the public, Tribes, and States submit 

any relevant data or other information 

for DOE to consider when preparing the 

EA. 

C. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires preparation 

of an initial regulatory flexibility 

analysis for any rule that by law must 

be proposed for public comment, unless 

the agency certifies that the rule, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities. As required by 

Executive Order 13272, ‘‘Proper 

Consideration of Small Entities in 

Agency Rulemaking,’’ 67 FR 53461 

(August 16, 2002), DOE published 

procedures and policies on February 19, 

2003, to ensure that the potential 

impacts of its rules on small entities are 

properly considered during the DOE 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s Web site: http:// 

www.gc.doe.gov. 

DOE has reviewed today’s proposed 

rule under the provisions of the 

Regulatory Flexibility Act and the 

policies and procedures published on 

February 19, 2003. 68 FR 7990. As part 

of this rulemaking, DOE examined the 

existing compliance costs manufacturers 

already bear and compared them to the 

revised compliance costs, based on the 

proposed revisions to the test 

procedure. Since DOE is proposing to 

adopt the efficiency levels in ASHRAE 

Standard 90.1–2007, which are part of 

the prevailing industry standard and 

were a result of a consensus agreement, 

DOE believes that commercial packaged 

boiler manufacturers are already 

producing equipment at these efficiency 

levels. For water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h, DOE believes the 

efficiency levels being proposed in 

today’s NOPR are also part of the 

prevailing industry standard and that 

manufacturers would experience no 

impacts, because no such equipment is 

currently manufactured. Furthermore, 

DOE believes the industry standard was 

developed through a process which 

would attempt to mitigate the impacts 

on manufacturers, including any small 

commercial packaged boiler 

manufacturers, while increasing the 

efficiency of this equipment. In 

addition, DOE does not find that the 

costs imposed by the revisions proposed 

to the test procedure for commercial 

packaged boilers in this document 

would result in any significant increase 

in testing or compliance costs. DOE 

requests public comment on the impact 

of this proposed rule on small entities. 

For the reasons stated above, DOE 

certifies that the proposed rule, if 

promulgated, would not have a 

significant economic impact on a 

substantial number of small entities. 

Therefore, DOE did not prepare an 

initial regulatory flexibility analysis for 

the proposed rule. DOE transmitted its 

certification and a supporting statement 

of factual basis to the Chief Counsel for 

Advocacy of the SBA for review 

pursuant to 5 U.S.C. 605(b). 

D. Review Under the Paperwork 

Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (44 U.S.C. 3501 et seq.) (PRA), 

a person is not required to respond to 

a collection of information by a Federal 

agency, including a requirement to 

maintain records, unless the collection 

displays a valid OMB control number. 

(44 U.S.C. 3506(c)(1)(B)(iii)(V)) This 

NOPR would not impose any new 

information or recordkeeping 

requirements. Accordingly, OMB 

clearance is not required under the PRA. 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12045 

E. Review Under the Unfunded 

Mandates Reform Act of 1995 

DOE reviewed this regulatory action 

under Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA) (Pub. L. 

104–4), which requires each Federal 

agency to assess the effects of Federal 

regulatory actions on State, local, and 

Tribal governments and the private 

sector. For proposed regulatory actions 

likely to result in a rule that may cause 

expenditures by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector of $100 million or more 

in any one year (adjusted annually for 

inflation), section 202 of UMRA requires 

a Federal agency to publish a written 

statement assessing the resulting costs, 

benefits, and other effects of the rule on 

the national economy (2 U.S.C. 1532(a) 

and (b)). Section 204 of UMRA requires 

a Federal agency to develop an effective 

process to permit timely input by 

elected officers of State, local, and 

Tribal governments on a proposed 

‘‘significant intergovernmental 

mandate.’’ (2 U.S.C. 1534) Section 203 

of UMRA requires an agency plan for 

giving notice and opportunity for timely 

input to potentially affected small 

governments that may be affected before 

establishing any requirements that 

might significantly or uniquely affect 

small governments. (2 U.S.C. 1533) On 

March 18, 1997, DOE published a 

statement of policy on its process for 

intergovernmental consultation under 

UMRA (62 FR 12820) (also available at: 

http://www.gc.doe.gov). 

Today’s proposed rule contains 

neither an intergovernmental mandate 

nor a mandate that may result in the 

expenditure by State, local, and Tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any year. Accordingly, no assessment 

or analysis is required under UMRA. 

F. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any 

proposed rule that may affect family 

well-being. This rule would not have 

any impact on the autonomy or integrity 

of the family as an institution. 

Accordingly, DOE has concluded that it 

is unnecessary to prepare a Family 

Policymaking Assessment. 

G. Review Under Executive Order 13132 

Executive Order 13132, ‘‘Federalism,’’ 

64 FR 43255 (August 4, 1999) imposes 

certain requirements on agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have Federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the 

States and to carefully assess the 

necessity for such actions. The 

Executive Order also requires agencies 

to have an accountable process to 

ensure meaningful and timely input by 

State and local officials in the 

development of regulatory policies that 

have Federalism implications. On 

March 14, 2000, DOE published a 

statement of policy describing the 

intergovernmental consultation process 

it will follow in the development of 

such regulations. 65 FR 13735. DOE has 

examined this proposed rule and has 

determined that it would not have a 

substantial direct effect on the States, on 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. EPCA governs and 

prescribes Federal preemption of State 

regulations as to energy conservation for 

the equipment that are the subject of 

today’s proposed rule. States can 

petition DOE for exemption from such 

preemption to the extent, and based on 

criteria, as set forth in EPCA. (42 U.S.C. 

6297(d) and 6316(b)(2)(D)) No further 

action is required by Executive Order 

13132. 

H. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform’’ (61 FR 4729 (Feb. 7, 1996)) 

imposes on Federal agencies the general 

duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; (3) 

provide a clear legal standard for 

affected conduct rather than a general 

standard and promote simplification 

and burden reduction. With regard to 

the review required by section 3(a), 

section 3(b) of Executive Order 12988 

specifically requires that Executive 

agencies make every reasonable effort to 

ensure that the regulation (1) clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing Federal law or regulation; (3) 

provides a clear legal standard for 

affected conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive effect, if any; (5) 

adequately defines key terms; and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of Executive Order 12988 requires 

Executive agencies to review regulations 

in light of applicable standards in 

sections 3(a) and 3(b) to determine 

whether they are met or it is 

unreasonable to meet one or more of 

them. DOE has completed the required 

review and determined that, to the 

extent permitted by law, the proposed 

rule meets the relevant standards of 

Executive Order 12988. 

I. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

Section 515 of the Treasury and 

General Government Appropriations 

Act, 2001 (44 U.S.C. 3516 note) provides 

for agencies to review most 

disseminations of information to the 

public under guidelines established by 

each agency pursuant to general 

guidelines issued by OMB. OMB’s 

guidelines were published at 67 FR 

8452 (Feb. 22, 2002), and DOE’s 

guidelines were published at 67 FR 

62446 (Oct. 7, 2002). DOE has reviewed 

this notice under the OMB and DOE 

guidelines and has concluded that it is 

consistent with applicable policies in 

those guidelines. 

J. Review Under Executive Order 13211 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ 66 FR 28355 (May 

22, 2001) requires Federal agencies to 

prepare and submit to OMB, a 

Statement of Energy Effects for any 

proposed significant energy action. A 

‘‘significant energy action’’ is defined as 

any action by an agency that 

promulgated or is expected to lead to 

promulgation of a final rule, and that: 

(1) Is a significant regulatory action 

under Executive Order 12866, or any 

successor order; and (2) is likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy; or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed significant energy action, 

the agency must give a detailed 

statement of any adverse effects on 

energy supply, distribution, or use 

should the proposal be implemented, 

and of reasonable alternatives to the 

action and their expected benefits on 

energy supply, distribution, and use. 

Today’s regulatory action would not 

have a significant adverse effect on the 

supply, distribution, or use of energy, 

and, therefore, is not a significant 

energy action. Furthermore, this 

regulatory action has not been 

designated as a significant energy action 

12046 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

by the Administrator of OIRA. 

Accordingly, DOE has not prepared a 

Statement of Energy Effects. 

K. Review Under Executive Order 12630 

Pursuant to Executive Order 12630, 

‘‘Governmental Actions and Interference 

With Constitutionally Protected 

Property Rights,’’ 53 FR 8859 (March 15, 

1988), DOE has determined that this 

rule would not result in any takings that 

might require compensation under the 

Fifth Amendment to the United States 

Constitution. 

L. Review Under Section 32 of the 

Federal Energy Administration Act of 

1974 

Under section 301 of the Department 

of Energy Organization Act (Pub. L. 95– 

91), DOE must comply with all laws 

applicable to the former Federal Energy 

Administration, including section 32 of 

the Federal Energy Administration Act 

of 1974 (Pub. L. 93–275), as amended by 

the Federal Energy Administration 

Authorization Act of 1977 (Pub. L. 95– 

70). 15 U.S.C. 788. Section 32 provides 

that where a proposed rule authorizes or 

requires use of commercial standards, 

the notice of proposed rulemaking must 

inform the public of the use and 

background of such standards. In 

addition, section 32(c) requires DOE to 

consult with the Department of Justice 

(DOJ) and the FTC concerning the 

impact of the commercial or industry 

standards on competition. 

The amendments and revisions to the 

test procedure for commercial packaged 

boilers proposed in this notice 

incorporate updates to commercial 

standards already codified in the CFR. 

DOE has evaluated these revised 

standards and is unable to conclude 

whether they fully comply with the 

requirements of section 32(b) of the 

Federal Energy Administration Act, (i.e., 

that they were developed in a manner 

that fully provides for public 

participation, comment, and review). 

DOE will consult with the Attorney 

General and the Chairman of the FTC 

concerning the impact of these test 

procedures on competition before 

prescribing a final rule. 

M. Review Under the Information 

Quality Bulletin for Peer Review 

On December 16, 2004, OMB in 

consultation with the Office of Science 

and Technology Policy (OSTP), issued 

its ‘‘Final Information Quality Bulletin 

for Peer Review’’ (Bulletin). 70 FR 2664 

(Jan. 14, 2005). The Bulletin establishes 

that certain scientific information shall 

be peer reviewed by qualified specialists 

before it is disseminated by the Federal 

government, including influential 

scientific information related to agency 

regulatory actions. The purpose of the 

bulletin is to enhance the quality and 

credibility of the Government’s 

scientific information. Under the 

Bulletin, the energy conservation 

standards rulemakings analyses are 

‘‘influential scientific information.’’ The 

Bulletin defines ‘‘influential scientific 

information’’ as ‘‘scientific information 

the agency reasonably can determine 

will have or does have a clear and 

substantial impact on important public 

policies or private sector decisions.’’ 70 

FR 2664, 2667 (Jan. 14, 2005). 

In response to OMB’s Bulletin, DOE 

conducted formal peer reviews of the 

energy conservation standards 

development process and analyses, and 

then prepared a Peer Review Report 

pertaining to the energy conservation 

standards rulemaking analyses. 

Generation of this report involved a 

rigorous, formal, and documented 

evaluation process using objective 

criteria and qualified and independent 

reviewers to make a judgment as to the 

technical/scientific/business merit, the 

actual or anticipated results, and the 

productivity and management 

effectiveness of programs and/or 

projects. The ‘‘Energy Conservation 

Standards Rulemaking Peer Review 

Report,’’ dated February 2007, has been 

disseminated and is available at http:// 

www.eere.energy.gov/buildings/ 

appliance_standards/peer_review.html. 

VIII. Public Participation 

A. Attendance at Public Meeting 

DOE will hold a public meeting on 

April 7, 2009, from 9 a.m. to 4 p.m. in 

Washington, DC. The meeting will be 

held at the U.S. Department of Energy, 

Forrestal Building, Room 8E–089, 1000 

Independence Avenue, SW., 

Washington, DC. To attend the public 

meeting, please notify Ms. Brenda 

Edwards at (202) 586–2945. As 

explained in the ADDRESSES section, 

foreign nationals visiting DOE 

Headquarters are subject to advance 

security screening procedures. Any 

foreign national wishing to participate 

in the meeting should advise DOE of 

this fact as soon as possible by 

contacting Ms. Brenda Edwards to 

initiate the necessary procedures. 

B. Procedure for Submitting Requests to 

Speak 

Any person who has an interest in 

today’s notice, or who is a 

representative of a group or class of 

persons that has an interest in these 

issues, may request an opportunity to 

make an oral presentation. Such persons 

may hand-deliver requests to speak to 

the address shown in the ADDRESSES

section at the beginning of this notice of 

proposed rulemaking between the hours 

of 9 a.m. and 4 p.m., Monday through 

Friday, except Federal holidays. 

Requests may also be sent e-mail to: 

Brenda.Edwards@ee.doe.gov. 

Persons requesting to speak should 

briefly describe the nature of their 

interest in this rulemaking and provide 

a telephone number for contact. DOE 

requests persons scheduled to make a 

presentation submit an advance copy of 

their statements at least two weeks 

before the public meeting. At its 

discretion, DOE may permit any person 

who cannot supply an advance copy of 

their statement to participate, if that 

person has made advance alternative 

arrangements with the Building 

Technologies Program. The request to 

give an oral presentation should ask for 

such alternative arrangements. 

C. Conduct of Public Meeting 

DOE will designate a DOE official to 

preside at the public meeting and may 

use a professional facilitator to aid 

discussion. The meeting will not be a 

judicial or evidentiary-type public 

hearing, but DOE will conduct it in 

accordance with 5 U.S.C. 553 and 

section 336 of EPCA (42 U.S.C. 6306). A 

court reporter will be present to record 

the proceedings and prepare a 

transcript. DOE reserves the right to 

schedule the order of presentations and 

to establish the procedures governing 

the conduct of the public meeting. After 

the public meeting, interested parties 

may submit further comments on the 

proceedings as well as on any aspect of 

the rulemaking until the end of the 

comment period. 

The public meeting will be conducted 

in an informal, conference style. DOE 

will present summaries of comments 

received before the public meeting, 

allow time for presentations by 

participants, and encourage all 

interested parties to share their views on 

issues affecting this rulemaking. Each 

participant will be allowed to make a 

prepared general statement (within time 

limits determined by DOE), before the 

discussion of specific topics. DOE will 

permit other participants to comment 

briefly on any general statements. 

At the end of all prepared statements 

on a topic, DOE will permit participants 

to clarify their statements briefly and 

comment on statements made by others. 

Participants should be prepared to 

answer questions by DOE and by other 

participants concerning these issues. 

DOE representatives may also ask 

questions of participants concerning 

other matters relevant to this 

rulemaking. The official conducting the 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12047 

public meeting will accept additional 

comments or questions from those 

attending, as time permits. The 

presiding official will announce any 

further procedural rules or modification 

of the above procedures that may be 

needed for the proper conduct of the 

public meeting. 

DOE will make the entire record of 

this proposed rulemaking, including the 

transcript from the public meeting, 

available for inspection at the U.S. 

Department of Energy, Forrestal 

Building, Resource Room of the 

Building Technologies Program, 950 

L’Enfant Plaza, SW., 6th Floor, 

Washington, DC 20024, (202) 586–9127, 

between 9 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

Any person may buy a copy of the 

transcript from the transcribing reporter. 

D. Submission of Comments 

DOE will accept comments, data, and 

information regarding the proposed rule 

before or after the public meeting, but 

no later than the date provided at the 

beginning of this notice of proposed 

rulemaking. Information submitted 

should be identified by docket number 

EERE–2008–BT–STD–0013 and/or RIN 

1904–AB83. Please submit comments, 

data, and information electronically, to 

the following e-mail address: 

ASHRAE_90.1_rulemaking@ee.doe.gov. 

Stakeholders should submit electronic 

comments in WordPerfect, Microsoft 

Word, PDF, or text (ASCII) file format 

and avoid the use of special characters 

or any form of encryption, and 

whenever possible carry the electronic 

signature of the author. Comments, data, 

and information submitted to DOE via 

mail or hand delivery/courier should 

include one signed paper original. No 

telefacsimiles (faxes) will be accepted. 

Pursuant to 10 CFR 1004.11, DOE 

requires any person submitting 

information that he or she believes to be 

confidential and exempt by law from 

public disclosure to submit two copies: 

one copy of the document including all 

the information believed to be 

confidential, and one copy of the 

document with the information believed 

to be confidential deleted. DOE will 

make its own determination about the 

confidential status of the information 

and treat it according to its 

determination. 

Factors of interest to DOE when 

evaluating requests to treat submitted 

information as confidential include: (1) 

A description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by or available from 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

E. Issues on Which DOE Seeks Comment 

DOE is particularly interested in 

receiving comments and views of 

interested parties concerning the 

following issues: 

1. DOE’s proposed definitions for 

‘‘thermal efficiency’’ and ‘‘combustion 

efficiency’’ for commercial packaged 

boilers. 

2. The efficiency of dual output 

boilers in both steam mode and water 

mode. Specifically, DOE is interested in 

receiving data or comments, which 

would allow DOE to convert the steam 

ratings in the I=B=R Directory and 

manufacturers’ catalogs to hot water 

ratings. 

3. DOE’s assumption of fixed 

installation cost for each equipment 

class independent of equipment 

efficiency. DOE seeks data or comment 

on how installation costs could 

potentially increase with higherefficiency commercial boilers due 

primarily to venting concerns. 

4. The potential for a rebound effect 

to occur in the commercial packaged 

boiler industry. 

5. DOE’s assumption and the potential 

significance of any overestimation of 

savings. In particular, DOE requests data 

that would allow it to better characterize 

the likely increases in packaged boiler 

efficiencies that would occur over the 

30-year analysis period absent amended 

energy conservation standards. 

6. The NES-forecasted base-case 

distribution of efficiencies and DOE’s 

prediction of how amended energy 

conservation standards affect the 

distribution of efficiencies in the 

standards case. 

IX. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of today’s Notice of 

Proposed Rulemaking. 

List of Subjects in 10 CFR Part 431 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, and 

Reporting and recordkeeping 

requirements. 

Issued in Washington, DC, on March 10, 

2009. 

Steven G. Chalk, 

Principal Deputy Assistant Secretary, Energy 

Efficiency and Renewable Energy. 

For the reasons set forth in the 

preamble, DOE proposes to amend 

Chapter II of Title 10, Code of Federal 

Regulations, Part 431 to read as set forth 

below: 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

1. The authority citation for part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

2. In § 431.82, revise the definition 

‘‘combustion efficiency’’ and add the 

definition ‘‘thermal efficiency,’’ in 

alphabetical order to read as follows: 

§ 431.82 Definitions concerning 

commercial packaged boilers. 

* * * * * 

Combustion Efficiency for a 

commercial packaged boiler is 

determined using test procedures 

prescribed under § 431.86 and equals to 

100 percent minus percent flue loss 

(percent flue loss is based on input fuel 

energy). 

* * * * * 

Thermal Efficiency for a commercial 

packaged boiler is determined using test 

procedures prescribed under § 431.86 

and is the ratio of the heat absorbed by 

the water or the water and steam to the 

higher heating value in the fuel burned. 

3. Revise § 431.85 to read as follows: 

§ 431.85 Materials incorporated by 

reference. 

(a) General. We incorporate by 

reference the following standards into 

Subpart E of Part 431. The material 

listed has been approved for 

incorporation by reference by the 

Director of the Federal Register in 

accordance with 5 U.S.C. 552(a) and 1 

CFR 51. Any subsequent amendment to 

a standard by the standard-setting 

organization will not affect the DOE 

regulations unless and until amended 

by DOE. Material is incorporated as it 

exists on the date of the approval and 

a notice of any change in the material 

will be published in the Federal 

Register. All approved material is 

available for inspection at the National 

Archives and Records Administration 

(NARA). For information on the 

availability of this material at NARA, 

call 202–741–6030 or go to http:// 

www.archives.gov/federal_register/ 

code_of_federal_regulations/ 

ibr_locations.html. Also, this material is 

12048 Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 

available for inspection at the U.S. 

Department of Energy, Office of Energy 

Efficiency and Renewable Energy, 

Building Technologies Program, 6th 

Floor, 950 L’Enfant Plaza, SW., 

Washington, DC 20024, 202–586–2945, 

or go to: http://www1.eere.energy.gov/ 

buildings/appliance_standards/. 

Standards can be obtained from the 

sources listed below. (b) HI. Hydronics 

Institute Division of GAMA, P.O. Box 

218, Berkeley Heights, NJ 07922, or 

http://www.gamanet.org/publist/ 

hydroordr.htm. 

(1) HI BTS–2000 (Rev06.07), Method 

to Determine Efficiency of Commercial 

Space Heating Boilers, June 2007, IBR 

approved for § 431.86. 

(2) [Reserved] 

4. Revise § 431.86 to read as follows: 

§ 431.86 Uniform test method for the 

measurement of energy efficiency of 

commercial packaged boilers. 

(a) Scope. This section provides test 

procedures that must be followed for 

measuring, pursuant to EPCA, the 

steady state combustion efficiency and 

thermal efficiency of a gas-fired or oilfired commercial packaged boiler. These 

test procedures apply to packaged low 

pressure boilers that have rated input 

capacities of 300,000 Btu/hr or more 

and are ‘‘commercial packaged boilers,’’ 

but do not apply under EPCA to 

‘‘packaged high pressure boilers.’’ 

(b) Definitions. For purposes of this 

section, the Department incorporates by 

reference the definitions specified in 

Section 3.0 of the HI BTS–2000 

(Rev06.07) (incorporated by reference, 

see § 431.85), with the exception of the 

definition for the terms ‘‘packaged 

boiler,’’ ‘‘condensing boilers,’’ and 

‘‘packaged low pressure steam’’ and 

‘‘hot water boiler.’’ 

(c) Test Method for Commercial 

Packaged Boilers—General. Follow the 

provisions in this paragraph (c) for all 

testing of packaged low pressure boilers 

that are commercial packaged boilers. 

(1) Test Setup—(i) Classifications. If 

employing boiler classification, you 

must classify boilers as given in Section 

4.0 of the HI BTS–2000 (Rev06.07) 

(incorporated by reference, see 

§ 431.85). 

(ii) Requirements. (A) Before March 2, 

2012, conduct the combustion efficiency 

test as given in Section 5.2 (Combustion 

Efficiency Test) of the HI BTS–2000 

(Rev06.07) (incorporated by reference, 

see § 431.85) for all commercial 

packaged boiler equipment classes. 

(B) On or after March 2, 2012, conduct 

the thermal efficiency test as given in 

Section 5.1 (Thermal Efficiency Test) of 

the HI BTS–2000 (Rev06.07) for the 

following commercial packaged boiler 

equipment classes: small, gas, hot water; 

small, gas, steam, all except natural 

draft; small, gas, steam, natural draft; 

small, oil, hot water; small, oil, steam; 

large, gas, steam, all except natural 

draft; large, gas, steam, natural draft; 

and large, oil, steam. On or after March 

2, 2012, conduct the combustion 

efficiency test as given in Section 5.2 

(Combustion Efficiency Test) of the HI 

BTS–2000 (Rev06.07) (incorporated by 

reference, see § 431.85) for the following 

commercial packaged boiler equipment 

classes: large, gas-fired, hot water and 

large, oil-fired, hot water. 

(iii) Instruments and Apparatus. (A) 

Follow the requirements for instruments 

and apparatus in sections 6 

(Instruments) and 7 (Apparatus), of the 

HI BTS–2000 (Rev06.07) (incorporated 

by reference, see § 431.85), with the 

exception of section 7.2.5 (flue 

connection for outdoor boilers) which is 

replaced with paragraph (c)(1)(iii)(B) of 

this section. 

(B) Flue Connection for Outdoor 

Boilers. For oil-fired and power gas 

outdoor boilers, the integral venting 

means may have to be revised to permit 

connecting the test flue apparatus 

described in section 7.2.1 of HI BTS– 

2000 (Rev06.07). A gas-fired boiler for 

outdoor installation with a venting 

system provided as part of the boiler 

must be tested with the venting system 

in place. 

(iv) Test Conditions. Use test 

conditions from Section 8.0 (excluding 

8.6.2) of HI BTS–2000 (Rev06.07) 

(incorporated by reference, see § 431.85) 

for combustion efficiency testing. Use 

all of the test conditions from Section 

8.0 of HI BTS–2000 (Rev06.07) for 

thermal efficiency testing. 

(2) Test Measurements—(i) NonCondensing Boilers. (A) Combustion 

Efficiency. Measure for combustion 

efficiency according to sections 9.1 

(excluding sections 9.1.1.2.3 and 

9.1.2.2.3), 9.2 and 10.2 of the HI BTS– 

2000 (Rev06.07) (incorporated by 

reference, see § 431.85). 

(B) Thermal Efficiency. Measure for 

thermal efficiency according to sections 

9.1 and 10.1 of the HI BTS–2000 

(Rev06.07) (incorporated by reference, 

see § 431.85). 

(ii) Procedure for the Measurement of 

Condensate for a Condensing Boiler. For 

the combustion efficiency test, collect 

flue condensate as specified in Section 

9.2.2 of HI BTS–2000 (Rev06.07) 

(incorporated by reference, see 

§ 431.85). Measure the condensate from 

the flue gas under steady state operation 

for the 30 minute collection period 

during the 30 minute steady state 

combustion efficiency test. Flue 

condensate mass shall be measured 

immediately at the end of the 30 minute 

collection period to prevent evaporation 

loss from the sample. The humidity of 

the room shall at no time exceed 80 

percent. Determine the mass of flue 

condensate for the steady state period 

by subtracting the tare container weight 

from the total container and flue 

condensate weight measured at the end 

of the test period. For the thermal 

efficiency test, collect and measure the 

condensate from the flue gas as 

specified in Section 9.1.1 and 9.1.2 of HI 

BTS–2000 (Rev06.07). 

(iii) A Boiler That is Capable of 

Supplying Either Steam or Hot Water— 

(A) Testing. For purposes of EPCA, 

before March 2, 2012, measure the 

combustion efficiency of any size 

commercial packaged boiler capable of 

supplying either steam or hot water 

either by testing the boiler in the steam 

mode or by testing it in both the steam 

and hot water modes. On or after March 

2, 2012, measure the combustion 

efficiency and thermal efficiency of a 

large (fuel input greater than 2500 kBtu/ 

h) commercial packaged boiler capable 

of supplying either steam or hot water 

either by testing the boiler for both 

efficiencies in steam mode, or by testing 

the boiler in both steam and hot water 

modes measuring the thermal efficiency 

of the boiler in steam mode and the 

combustion efficiency of the boiler in 

hot water mode. Measure only the 

thermal efficiency of a small (fuel input 

of greater than or equal to 300 kBtu/h 

and less than or equal to 2500 kBtu/h) 

commercial packaged boiler capable of 

supplying either steam or hot water 

either by testing the boiler for thermal 

efficiency only in steam mode or by 

testing the boiler for thermal efficiency 

in both steam and hot water modes. 

(B) Rating. If testing a large boiler only 

in the steam mode, use the efficiencies 

determined from such testing to rate the 

thermal efficiency for the steam mode 

and the combustion efficiency for the 

hot water mode. If testing a large boiler 

in both modes, rate the boiler’s 

efficiency for each mode based on the 

testing in that mode. If testing a small 

boiler only in the steam mode, use the 

efficiencies determined from such 

testing to rate the thermal efficiency for 

the steam mode and the hot water mode. 

If testing a small boiler in both modes, 

rate the boiler’s efficiency for each mode 

based on the testing in that mode. 

(3) Calculation of Efficiency. (i) 

Combustion Efficiency. Use the 

calculation procedure for the 

combustion efficiency test specified in 

Section 11.2 (including the specified 

subsections of 11.1) of the HI BTS–2000 

(Rev06.07) (incorporated by reference, 

see § 431.85). 

Federal Register / Vol. 74, No. 53 / Friday, March 20, 2009 / Proposed Rules 12049 

(ii) Thermal Efficiency. Use the 

calculation procedure for the thermal 

efficiency test specified in Section 11.1 

of the HI BTS–2000 (Rev06.07) 

(incorporated by reference, see 

§ 431.85). 

5. Revise § 431.87 to read as follows: 

§ 431.87 Energy conservation standards 

and their effective dates. 

(a) Each commercial packaged boiler 

manufactured on or after January 1, 

1994, and before March 2, 2012, must 

meet the following energy efficiency 

standard levels. 

(1) For a gas-fired packaged boiler 

with a capacity (rated maximum input) 

of 300,000 Btu/hr or more, the 

combustion efficiency at the maximum 

rated capacity must be not less than 80 

percent. 

(2) For an oil-fired packaged boiler 

with a capacity (rated maximum input) 

of 300,000 Btu/hr or more, the 

combustion efficiency at the maximum 

rated capacity must be not less than 83 

percent. 

(b) Each commercial packaged boiler 

manufactured on or after the effective 

date listed in Table 1 to § 431.87, must 

meet the applicable energy conservation 

standard in Table 1. 

TABLE 1 TO § 431.87—COMMERCIAL PACKAGED BOILER ENERGY EFFICIENCY LEVELS

Equipment type Subcategory Size category 

(input) 

Efficiency level 

Effective 

date: March 

2, 2012* 

Effective 

date: March 

2, 2022* 

Hot Water Commercial Packaged 

Boilers.

Gas-fired ........................................... ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

80.0% ET 80.0% ET

Hot Water Commercial Packaged 

Boilers.

Gas-fired ........................................... > 2,500,000 Btu/h ............................. 82.0% EC 82.0% EC

Hot Water Commercial Packaged 

Boilers.

Oil-fired ............................................. ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

82.0% ET 82.0% ET

Hot Water Commercial Packaged 

Boilers.

Oil-fired ............................................. > 2,500,000 Btu/h ............................. 84.0% EC 84.0% EC

Steam Commercial Packaged Boilers.Gas-fired—all, except natural draft .. ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

79.0% ET 79.0% ET

Steam Commercial Packaged Boilers.Gas-fired—all, except natural draft .. > 2,500,000 Btu/h ............................. 79.0% ET 79.0% ET

Steam Commercial Packaged Boilers.Gas-fired—natural draft .................... ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

77.0% ET 79.0% ET

Steam Commercial Packaged Boilers.Gas-fired—natural draft .................... > 2,500,000 Btu/h ............................. 77.0% ET 79.0% ET

Steam Commercial Packaged Boilers.Oil-fired ............................................. ≥ 300,000 Btu/h and ≤ 2,500,000 

Btu/h.

81.0% ET 81.0% ET

Steam Commercial Packaged Boilers.Oil-fired ............................................. > 2,500,000 Btu/h ............................. 81.0% ET 81.0% ET

* Where EC is combustion efficiency and ET is thermal efficiency as defined in § 431.82. 

6. In § 431.97, add paragraph (d) to 

read as follows: 

§ 431.97 Energy conservation standards 

and their effective dates. 

* * * * * 

(d) Each water-cooled and 

evaporatively-cooled commercial 

package air conditioning and heating 

equipment with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h manufactured on or after 

January 10, 2011, shall meet the 

following standard levels: 

(1) For equipment that utilizes electric 

resistance heat or without heating, the 

energy efficiency ratio must be not less 

than 11.0. 

(2) For equipment that utilizes all 

other types of heating, the energy 

efficiency ratio must be not less than 

10.8. 

[FR Doc. E9–5818 Filed 3–19–09; 8:45 am] 

BILLING CODE 6450–01–P