Energy Conservation Standards 

Commercial Refrigeration Equipm

(CRE) 

Notice of Proposed Rulemaking 

Public Meeting 

Building Technologies Program 

Office of Energy Efficiency and Renewable E

U.S. Department of Energy

September 23, 2008

http://www.eere.energy.gov/buildings/appliance_standards/commercial/r

 EE-2006-STD-0126 COMMENT 24.3
 Purposes

• To invite comment on the proposed energy conservation standa

commercial refrigeration equipment and to request recommenda

• To present methodologies and characterize results for this rulem• To discuss specific issues related to each analysis;• To seek input from interested parties on methodologies, assump

results from the analyses; and

• To describe the next steps.

 Comments from Participants

• Participants are invited to provide summary comments or statem• Participants are invited to raise additional issues for discussion t• NOPR comment period closes October 24, 2008.

Purpose of the Public Meeting a

Comments From Participants

 EE-2006-STD-0126 COMMENT 24.3
Statutory Authority – Energy Polic

Conservation Act as amende

 Addresses requirements of 42 USC 6313(c)(4)(A):

• (A) Not later than January 1, 2009, the Secretary shall is

levels for ice-cream freezers, self-contained commercial 

and refrigerator-freezers without doors, and remote condrefrigerators, freezers, and refrigerator-freezers, with the effective for equipment manufactured on or after Januar

• This rulemaking is one of the scheduled actions describe

congress, which was prepared in response to section 14Policy Act of 2005 (EPACT 2005).

 EE-2006-STD-0126 COMMENT 24.3
DOE Actions on CRE

 Test Procedures

• Final Rule published on December 8, 2006, based on A

Standards Institute (ANSI)/Air-Conditioning and RefrigeStandard 1200-2006 (Performance Rating of CommerciMerchandisers and Storage Cabinets). 71 FR 71340.

 Energy Conservation Standards

• Framework Document published April 25, 2006. 71 FR 2• Advance Notice of Public Rulemaking (ANOPR) publish

41161.

• Technical Support Document (TSD) posted on DOE we• Notice of Proposed Rulemaking (NOPR) published in th

August 25, 2008. 73 FR 50072.

– Issued by DOE on August 12, 2008.– Available to stakeholders for review more than a month pri

• Final Rule scheduled for December 2008.

 EE-2006-STD-0126 COMMENT 24.3
The Energy Policy and Conservation Act (

DOE to consider seven factors when set

conservation standards

Factor Ana

1. Economic impact on consumers 

and manufacturers

Life-cycle cost analysManufacturer impact 

2. Lifetime operating cost savings Life-cycle cost analys3. Total projected energy savings National impact analy4. Impact on utility or performance Screening analysis

Engineering analysis

5. Impact of any lessening of 

competition

Manufacturer impact 

6. Need for national energy 

conservation

National impact analy

7. Other factors the Secretary 

considers relevant

Environmental assesUtility impact analysiEmployment impact a

 EE-2006-STD-0126 COMMENT 24.3
Selection of Proposed Standa

 DOE considered five trial standard levels (TSLs), beginn

efficient level (TSL 5) and worked down to a level where potential standards outweighed the burdens.

• DOE tentatively concludes that TSL 5 is not economically justifie

estimated benefits (energy savings, commercial consumer averaemission reductions) would not outweigh the costs (national NPmanufacturer INPV).

• DOE proposes that TSL 4 represents the maximum improvemen

is technologically feasible and economically justified and that the 

the Nation outweigh the costs. Therefore, DOE is proposing TSL 

conservation standards for commercial refrigeration equipment 

 DOE requests comments on whether it should adopt TS

mix of efficiency levels of the equipment classes.

 EE-2006-STD-0126 COMMENT 24.3
Proposed Amended Energy Conservation Sta

Equipment 

Category

Condensing 

Unit 

Configuration

Equipment Family Rating Temp. (°F) Operating Temp. (°F) Equ

C

Desi

Remote Condensing Commercial Refrigerators and Commercial Freezers

Remote 

(RC)

Vertical Open 

(VOP)

38 (M)

≥ 32 VO

0 (L) > -5 and < 32 VO

Semivertical Open 

(SVO)

38 (M)

≥ 32 SVO

0 (L) > -5 and < 32 SVO

Horizontal Open 

(HZO)

38 (M)

≥ 32 HZO

0 (L) > -5 and < 32 HZ

Vertical Closed 

Transparent (VCT)

38 (M)

≥ 32 VCT

0 (L) > -5 and < 32 VC

Horizontal Closed 

Transparent (HCT)

38 (M)

≥ 32 HCT

0 (L) > -5 and < 32 HC

Vertical Closed Solid 

(VCS)

38 (M)

≥ 32 VC

0 (L) > -5 and < 32 VC

Horizontal Closed Solid 

(HCS)

38 (M)

≥ 32 HC

0 (L) > -5 and < 32 HC

Service Over Counter 

(SOC)

38 (M)

≥ 32 SOC

0 (L) > -5 and < 32 SO

 EE-2006-STD-0126 COMMENT 24.3
Equipment Category

Condensing 

Unit 

Configuration

Equipment Family

Rating 

Temp. 

(°F)

Operating 

Temp. (°F)

Equipm

Clas

Designa

Self-Contained Commercial Refrigerators and Commercial Freezers without Doors

Self-Contained 

(SC)

Vertical Open 

(VOP)

38 (M) ≥ 32 VOP.SC

0 (L) > -5 and < 32 VOP.S

Semivertical Open 

(SVO)

38 (M) ≥ 32 SVO.S

0 (L) > -5 and < 32 SVO.S

Horizontal Open

38 (M) ≥ 32 HZO.S

0 (L) > -5 and < 32 HZO.S

Proposed Amended Energy Conservation Standa

 EE-2006-STD-0126 COMMENT 24.3
Equipment 

Category

Condensing Unit 

Configuration Equipment Family Rating Temp. (°F) Operatin

Temp. (°

Commercial Ice-Cream Freezers

Remote

(RC)

Vertical Open (VOP)

-15 (I) ≤ -5

Semivertical Open (SVO) 

Horizontal Open (HZO) 

Vertical Closed Transparent (VCT) 

Horizontal Closed Transparent (HCT) 

Vertical Closed Solid (VCS) 

Horizontal Closed Solid (HCS) 

Service Over Counter (SVO) 

Self-Contained

(SC)

Vertical Open (VOP) 

Semivertical Open (SVO) 

Horizontal Open (HZO) 

Vertical Closed Transparent (VCT) 

Horizontal Closed Transparent (HCT) 

Vertical Closed Solid (VCS) 

Horizontal Closed Solid (HCS) 

Service Over Counter (SVO) 

Proposed Amended Energy Conservation Standa

 EE-2006-STD-0126 COMMENT 24.3
 Opening Remarks

• At this time, DOE welcomes opening remarks from inter

NOPR for commercial refrigeration equipment.

 In addition, DOE specifically invites comment on t

energy conservation standard levels, TSL 4, for corefrigeration equipment, and requests suggestion

Opening Remarks and Comments from 

Parties on the Proposed Energy Conservat

Opening 

 EE-2006-STD-0126 COMMENT 24.3
Summary of Issues on which DOE seeks comment 

Issues 

1. Data or information on projected LED cost reductions and bases fo

consideration of projected LED prices. 

2. Base Case Efficiency Trends3. Determining operating temperature ranges for equipment classes.4. Use of offset factors and the methodology used to calculate them.

5. Extending the results of the engineering analysis to the 23 second6. Determining appropriate standard levels for hybrid cases and wedg

7. Consideration of TSL 5 and whether the benefits would outweigh t

 EE-2006-STD-0126 COMMENT 24.3
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

Trial Standard Levels

Revise ANOPR Analyses

Employment 

Impact 

Analysis

Engineering Analysis

Life-Cycle Cost & Payback Period Analyses

National 

Impact 

Analysis

 EE-2006-STD-0126 COMMENT 24.3
 Purpose

• To characterize manufacturer cost-efficiency relationships for hi

equipment.

• To evaluate design options that improve efficiency relative to the • Sensitivity analysis to look at current material prices.

 Equipment classes analyzed

• DOE prioritized the analysis by focusing on the classes with the 

volumes

• Equipment classes with at least 100 shipments per year were an

 Design-option approach

• DOE analytically derived cost-efficiency curves for 15 equivalen

shipments per year.

• Industry supplied cost-efficiency curves for the 4 highest shipme

classes were used to supplement and validate the design-option 

Engineering Analysis

 EE-2006-STD-0126 COMMENT 24.3
Equipment Class Operating Temperatu

(Issue #3)

DOE invites comments on the selected temperature r

organize equipment classes.

• Medium temperature: 

≥ 32

°

F

• Low temperature: < 32 and > -5

°

F

• Ice-cream temperature: 

≤ -5

°

F

 EE-2006-STD-0126 COMMENT 24.3
Offset Factors 

(Issue #4)

 Certain components of refrigeration loads (such as the cond

do not scale proportionately with size.

 Offset factors are intended to approximate these constant lo

end point, corresponding to a zero total display area (TDA) oan equation that describes the relationship between energy corresponding TDA or volume metric.

DOE invites comments on the use of offset factors anused to calculate them.

 EE-2006-STD-0126 COMMENT 24.3
Extension of Proposed Energy Conservat

(Issue #5)

 This approach is intended to streamline the analysis by focusi

shipment volume equipment classes and avoiding direct analyequipment classes.

DOE invites comments on the extension of the energy standard from the 15 equipment classes directly analyequipment classes covered in this rulemaking.

 Open, RC 

Æ Open, SC (x 2.51)

 With Door, Low Temp. 

Æ With Door, Ice-Cream Temp. (x 1.17)

 Open, Low Temp. 

Æ Open, Ice-Cream Temp. (x 1.27)

 With Door, RC, Ice-Cream Temp. 

Æ With Door, SC, Ice-Cream Temp. (x 1. 40)

 Trans. Door, RC, Med. Temp. 

Æ Trans. Door, RC, Low Temp. (x 2.10)

 EE-2006-STD-0126 COMMENT 24.3
Extension of Proposed Energy Conservat

(Issue #6)

Open, RC 

Æ Open, SC (x 2.51)

With Door, Low Temp. 

Æ With Door, Ice-Cream Temp. (x 1.17)

Open, Low Temp. 

Æ Open, Ice-Cream Temp. (x 1.27)

With Door, RC, Ice-Cream Temp. 

Æ With Door, SC, Ice-Cream Tem

Trans. Door, RC, Med. Temp. 

Æ Trans. Door, RC, Low Temp. (x 2.

 VOP.RC.L to VOP.SC.L

 SVO.RC.I to SVO.SC.I

 SVO.RC.L to SVO.SC.L

 HZO.RC.I to HZO.SC.I

 VOP.RC.I to VOP.SC.I

 SOC.RC.L to SOC.RC.I

 HCT.RC.L to HCT.RC.I

 VOP.RC.L to VOP.RC.I

 SVO.SC.L to SVO.SC.I

 SVO.RC.L to SVO.RC.I

 HZO.SC.L to HZO.SC.I

 VOP.SC.L to VOP.SC.I SOC.RC.I to SOC.SC.I

 VCS.RC.I to VCS.SC.I

 HCT.RC.I to HCT.SC.I

 HCS.RC.I to HCS.SC.I

 VCT.RC.M to VCT.RC.L

 HCT.RC.M to HCT.RC.L

 EE-2006-STD-0126 COMMENT 24.3
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

Trial Standard Levels

Revise ANOPR Analyses

Employment 

Impact 

Analysis

Engineering Analysis

Life-Cycle Cost & Payback Period Analyses

National 

Impact 

Analysis

 EE-2006-STD-0126 COMMENT 24.3
 Energy Use Characterization

• To develop electrical energy consumption savings estim

equipment efficiency levels. 

• To validate the energy savings estimates from the engi

refrigerant system and whole building modeling for a di

 Markups for Equipment Price Determination

• To characterize the channels for how equipment is dist

manufacturer to the customer.

• To determine prices paid by customers based on manu

for baseline and higher efficiency equipment.

 Life-Cycle Cost and Payback Period Analyses

• To develop the customer life-cycle cost savings and pa

efficiency equipment.

Purpose

 EE-2006-STD-0126 COMMENT 24.3
Approach

 DOE used the engineering estimates of energy consum

ARI 1200 Test Procedure

 ARI 1200 Test Procedure accounts for 

• direct energy consumption (evaporator fan motors, ligh

heaters, defrost and drain heaters, and condensate pan equipment and compressor energy consumption) in selIndirect energy consumption (compressor energy consucondensing equipment.

 DOE validated the engineering estimates using whole-b

energy simulation incorporating interactive refrigeratio(DOE 2.2R) for seven classes of remote condensing equ

Ene

 EE-2006-STD-0126 COMMENT 24.3
Distribution Channels 

Markups to De

 Estimated Fraction of Equipment Shipments by Distribu

(Modified from ANOPR based on public comment)

Replacement 

& 

New Construction

70% 15% 15

Manufacturer

National Account

Consumer

Wholesaler or Wholesale 

Mechanical 

(New Construction 

Consumer Consu

30% 35% 35

 EE-2006-STD-0126 COMMENT 24.3
 Inputs

• Firm balance sheets:

– Wholesalers: HARDI’s 2005 Profit Planning Report.

– Mechanical Contractors: U.S. Census Bureau Financia

Heating, and Air-Conditioning Contractors, 2002 and A

Contractors of America (ACCA) financial analysis data

– General Contractors: U.S. Census Bureau Financial D

and Institutional Building Construction Contractors

• 20% - 80% split of equipment between new construction a

market, respectively.

 Outputs

• Weighted average baseline markups of 1.49 for remote co

self contained (new construction and replacement market) equipment (including sales tax). 

• Weighted average incremental markups of 1.18 for remote 

for self contained (new construction and replacement markefficiency equipment (including sales tax).

Markups to Determine Equipmen

Inputs and Outputs

Markups to De

 EE-2006-STD-0126 COMMENT 24.3
 Life-Cycle Cost (LCC) equals customer price plus the su

operating costs discounted to a particular base year (20

 Economic evaluation from the customer perspective. Analysis implemented in an Excel® spreadsheet with ad

estimate impacts in individual states

 Results are expressed as LCC savings (baseline minus  Simple payback period (in years) is also calculated and 

analysis.

Life-Cycle Cost and P

Life-Cycle Cost Analysis

Combine Changes 

in Costs 

Installed Cost

(Customer Price + Installation Cost)

Operating Expenses

Convert 

to Present 

Value

 EE-2006-STD-0126 COMMENT 24.3
 LCC analysis was based on State-by-State average electricity p

business types that use CRE equipment (Large Grocery Stores

Grocery without Gasoline Pumps, Convenience Grocery with GLine Stores). 

 Electricity prices by business type were developed using the rat

2003 CBECS by business type to commercial average price.

 These ratios are then applied to the State-by-State average com

electricity prices calculated from EIA data for 2006 (updated froState-by-State electricity prices by business type. 

 These State-by-State prices by business type were projected fo

using EIA AEO 2007 national commercial electricity price trends

 The final rule analysis will use the latest EIA data and the AEO 

Electricity Prices

Life-Cycle Cost and P

 EE-2006-STD-0126 COMMENT 24.3
 Installation costs (updated and held constant with higher effi

industry comments). 

 Discount rates (weighted average cost of capital—data upda

Damodaran Online website).

 Equipment lifetime (distribution of lifetimes with a 10-year av

and Multi-line Retailers, and 15 years for Convenience Store

comments).

 Repair costs (baseline repair cost plus increase due to highe

calculated for higher efficiency level). Increase with higher c

industry comments

 Maintenance costs (based on RS Means Costworks, held co

level). Lighting replacement costs separately calculated dep

Other Inputs

Life-Cycle Cost and P

 EE-2006-STD-0126 COMMENT 24.3
Life-cyc

Installed Cost-LCC Tradeoff

$25,000$25,500$26,000$26,500$27,000$27,500$28,000$28,500

$8,518 $8,558 $8,656 $8,757 $9,052 $9,115 $

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 

Installed Cost

Life Cycle Cost

Installed Cost-LCC T

 Equipment= Vertical Open (VOP), Operating Mode=Remote Condenser (RC), Tempera

Price

=AEO 2007 - Reference Case, Start Year

= 2012

 EE-2006-STD-0126 COMMENT 24.3
Life-cyc

Installed Cost-LCC Tradeoff

$31,000$32,000$33,000$34,000$35,000$36,000$37,000$38,000

$13,192 $13,226 $13,307 $14,825 $14,888 $15,856 $

Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 L

Installed Cost

Life Cycle Cost

Installed Cost-LCC Tr

 Equipment= Vertical Closed Transparent (VCT), Operating Mode=Remote Condenser (RC

Fuel Price=AEO 2007 - Reference Case, Start Year= 2012

 EE-2006-STD-0126 COMMENT 24.3
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

Trial Standard Levels

Revise ANOPR Analyses

Employment 

Impact 

Analysis

Engineering Analysis

Life-Cycle Cost & Payback Period Analyses

National 

Impact 

Analysis

 EE-2006-STD-0126 COMMENT 24.3
Purpose

 Shipments Analysis

• To estimate CRE shipments over time.

 National Impact Analysis

• To estimate the National Energy Savings (NES) from C

efficiency levels.

• To estimate the national economic impact on the nation 

Value (NPV)) from equipment energy conservation stanefficiency levels.

 EE-2006-STD-0126 COMMENT 24.3
Approach

 Shipment forecasts (2012-2042) derived from:

• Historical shipments;• Replacements based on equipment lifetimes;• New installations based on the projected floor space construction 

Energy Outlook 2007 forecasts; and

• Estimates of the equipment mix of baseline and higher-efficiency 

and shipments.

 Shipments and stocks of equipment tracked by vintage, m

replacement), and equipment class.

 Added estimate of shipments for VOP.RC.L at 5% of VOP

based on industry input.

 EE-2006-STD-0126 COMMENT 24.3
Outcomes of Shipments Forecasts

Total Shipments of CREs

0

500

1,0001,5002,0002,500

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

Years

Thousands of Linear Feet

Replacements, Large, for Year 2000 Stock Replacements, Small, Yr 20Replacements, Large, for New Sales Replacements, Small, for NeNew Sales, Large New Sales, Small

 EE-2006-STD-0126 COMMENT 24.3
 National energy savings calculated from 2012-2042 and Na

calculated from 2012-2062. 

 Base case incorporates the penetration of higher efficienc

Example: No Amended Standard, VOP-RC-M

Approach

 Standards “roll up” inefficient equipment, but do not affect 

Example: Standard at Efficiency =Level 4

 Once a standard is in place, old equipment goes out of the 

the base case efficiency mix. New equipment is sold to repaccording to the new efficiency mix.

 Use national average customer prices, annual energy use, 

repair and maintenance expenditures from LCC analysis. Sand total costs calculated over analysis time periods and cpresent. 

Below 1 Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 L

0% 0.0% 0.0% 0.0% 70.0% 14.2% 13.5% 

Below 1 Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Leve

0% 17.3% 18.0% 18.1% 16.6% 14.2% 13.5% 

 EE-2006-STD-0126 COMMENT 24.3
Issues for which DOE seeks comm

(Issue #2)

N

DOE seeks comment on whether shipments of LED-eqwould change if LED costs drop and if so, the extent ashipment changes. 

DOE recognizes that baseline efficiency trends caequipment costs are different than those projectedLED prices drop more than assumed in the engineconsumer demand for LED-equipped equipment c

 EE-2006-STD-0126 COMMENT 24.3
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

Trial Standard Levels

Revise ANOPR Analyses

Employment 

Impact 

Analysis

Engineering Analysis

Life-Cycle Cost & Payback Period Analyses

National 

Impact 

Analysis

 EE-2006-STD-0126 COMMENT 24.3
 Purpose

• To develop a list of standard levels from which impacts are weigh

level is selected.

– Each trial standard level consists of a set of potential minimu

all equipment classes, and may vary between equipment cla

– NOPR analyses assess impacts for trial standard levels (not 

 Method 

• Trial standard levels are assembled from the equipment classes i

– Analyzed standard levels cover a range of efficiencies and c

 Most energy efficient level (max tech); Efficiency level with the lowest life-cycle cost; Efficiency level with a payback period of three years or 

 Efficiency levels with noteworthy technologies; and Efficiency levels that fill in large gaps between candida

– Each trial standard level consists of the analyzed standard le

class that meets one of the above criteria.

• “Mixed” TSLs were constructed based on NPV results for equipm

Selection of Trial Standard Lev

 EE-2006-STD-0126 COMMENT 24.3
Trial Standard Levels for the NOP

Equipment 

Class Test Metric

Trial Standard Levels for Primary Equipment Cla

Baseline TSL 1 TSL 2 TSL 3 

VOP.RC.M CDEC kWh/day 1.01 x TDA + 4.07 0.9 x TDA + 4.07 0.87 x TDA + 4.07 0.82 x TDA + 4.

VOP.RC.L CDEC kWh/day 2.84 x TDA + 6.85 2.5 x TDA + 6.85 2.38 x TDA + 6.85 2.35 x TDA + 6.

VOP.SC.M TDEC kWh/day 2.34 x TDA + 4.71 2.09 x TDA + 4.71 1.92 x TDA + 4.71 1.74 x TDA + 4.

VCT.RC.M CDEC kWh/day 0.48 x TDA + 1.95 0.46 x TDA + 1.95 0.43 x TDA + 1.95 0.31 x TDA + 1.

VCT.RC.L CDEC kWh/day 1.03 x TDA + 2.61 0.97 x TDA + 2.61 0.68 x TDA + 2.61 0.67 x TDA + 2.

VCT.SC.I TDEC kWh/day 1.63 x TDA + 3.29 1.2 x TDA + 3.29 0.85 x TDA + 3.29 0.75 x TDA + 3.

VCS.SC.I TDEC kWh/day 0.55 x V + 0.88 0.49 x V + 0.88 0.43 x V + 0.88 0.38 x V + 0.88 

SVO.RC.M CDEC kWh/day 1.01 x TDA + 3.18 0.91 x TDA + 3.18 0.89 x TDA + 3.18 0.83 x TDA + 3.

SVO.SC.M TDEC kWh/day 2.23 x TDA + 4.59 2.04 x TDA + 4.59 1.9 x TDA + 4.59 1.73 x TDA + 4.

SOC.RC.M CDEC kWh/day 0.62 x TDA + 0.11 0.59 x TDA + 0.11 0.55 x TDA + 0.11 0.51 x TDA + 0.

HZO.RC.M CDEC kWh/day 0.51 x TDA + 2.88 0.45 x TDA + 2.88 0.39 x TDA + 2.88 0.36 x TDA + 2.

HZO.RC.L CDEC kWh/day 0.68 x TDA + 6.88 0.62 x TDA + 6.88 0.58 x TDA + 6.88 0.57 x TDA + 6.

HZO.SC.M TDEC kWh/day 1.14 x TDA + 5.55 1.02 x TDA + 5.55 0.91 x TDA + 5.55 0.78 x TDA + 5.

HZO.SC.L TDEC kWh/day 2.63 x TDA + 7.08 2.41 x TDA + 7.08 2.2 x TDA + 7.08 1.94 x TDA + 7.

HCT.SC.I TDEC kWh/day 1.33 x TDA + 0.43 1.16 x TDA + 0.43 0.64 x TDA + 0.43 0.61 x TDA + 0.

 EE-2006-STD-0126 COMMENT 24.3
NPV Results by TSL

 TSL 3 provides the maximum NPV of $1.20 Billion at 7 p

all equipment classes show positive NPV

 TSL 4 provides NPV of $1.10 Billion at 7 percent discoun

classes with positive NPV

 TSL 5 provides NPV of -$0.20 Billion at 7 percent discou

equipment classes (VOP.RC.M, VOP.SC.M, SVO.RC.M, SSOC.RC.M) have negative NPV. 

N

 EE-2006-STD-0126 COMMENT 24.3
Issues for which DOE seeks comm

(Issue #7)

N

Under a scenario of 50 percent cost reduction for LED by 2012, consistent with current DOE projections, all classes show maximum NPV at TSL 5. DOE invites coconsideration of TSL 5 and whether the benefits woulburdens.

If, based on comment, DOE were to revise the costs to reflect projected costs as of 2012 as dpreviously the economic impacts of TSL 5 wou

 EE-2006-STD-0126 COMMENT 24.3
 DOE requests data or information on projected LED cos

seeks comment on its consideration of projected LED p

 DOE also seeks comment on the extent to which stakeh

projected LED cost reductions would occur, the timing 

cost reductions, and the certainty of the projected LED 

 DOE seeks comment on the extent to which manufactu

LED technology into the design of commercial refrigeraabsence of standards. 

NPV Results by TSL assuming different sc

reduction in LED Lighting by 20

 At a 6 percent LED lighting cost reduction by 2012, TSL 5 pr

overall, but five classes continue to show negative NPV undrate. 

 At a 50 percent LED lighting cost reduction–consistent with D

projections for the LED industry–TSL 5 provides a positive Nclasses. 

N

Issues for which DOE seeks comm

(Issue #1)

 EE-2006-STD-0126 COMMENT 24.3
NOPR Analyses Flow Diagram

Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

Trial Standard Levels

Revise ANOPR Analyses

Employment 

Impact 

Analysis

Engineering Analysis

Life-Cycle Cost & Payback Period Analyses

National 

Impact 

Analysis

 EE-2006-STD-0126 COMMENT 24.3
LCC Subgroup Analysis

Life-Cycle 

 Purpose

• To evaluate the economic impacts of standards on consumer subg

disproportionately impacted compared with the general user popu

 Method

• DOE identified small businesses, exemplified by independent groc

as a customer subgroup that could be disproportionately affected, 

proposed standards on this group.

• DOE used the LCC spreadsheet model to determine the impact o

subgroup.

 Output

• LCC savings and simply payback period (in years) for the identifie• Determined small business subgroup were not disproportionately 

 EE-2006-STD-0126 COMMENT 24.3
Manufacturer Impact Analysi

Manu

 Purpose

• To assess the impacts of standards on CRE manufacturers;• To identify and estimate impacts on manufacturer sub-groups tha

impacted than the industry as a whole; and

• To examine the impact of cumulative regulatory burdens on the in

 Method 

• Analyze industry cash flow and net present value through use of 

Regulatory Impact Model (GRIM); and

• Interview manufacturers to refine inputs to the GRIM, develop sub

address qualitative issues.

 EE-2006-STD-0126 COMMENT 24.3
Manufacturer Impact Analysis Pro

Manu

 The MIA consists of three phases:

Industry profile

Develop straw-man GRIM*

Develop interview guide

Interviews 

& industrywide / 

subgroup 

analyses

Assesemplocompecumulburden

Phase 2

* Government Regulatory Impact Model (GRIM)

Phase 1 Pha

 EE-2006-STD-0126 COMMENT 24.3
 Purpose

• To investigate the effects on utilities from reduced energy sales an

potential standards.

 Method 

• Use National Energy Savings Results; and• Use the EIA’s National Energy Modeling System (NEMS-BT) tailor

Technologies Program.

 Output

• Change in electricity sales and price by region;• Change in the mix of electricity generation; and• Change in installed capacity and generation.

Utility Impact Analysis

 EE-2006-STD-0126 COMMENT 24.3
 Purpose

• To report net jobs created or eliminated nationally as a consequenc

energy conservation standards. Employment impacts include direct 

 Method 

• Uses the Impact of Sector Energy Technologies (ImSET) model to 

employment impacts;

• Estimate changes in employment, industry output, and wage incom

States economy resulting from changes in expenditures in the varioeconomy;

• Estimate changes in costs and benefits using the NES analysis; an• Direct employment impacts are addressed in the Manufacturer Imp

 Output

• Change in employment in national economy, other than in the man

regulated, as a consequence of the amended energy conservation 

Emp

Employment Impact Analysis

 EE-2006-STD-0126 COMMENT 24.3
 Purpose

• To report environmental impacts as a consequence of the amende

standards, including changes in power plant emissions.

 Output

• Calculated the reduction in power plant emissions of carbon dioxid

(NOX ) and mercury (Hg), using the NEMS-BT computer model.

• Sulfur dioxide (SO2 ) emission was not included due to the emission 

Act Amendments of 1990. Impact on SO2 emissions changes was 

affect value of emissions allowances under the cap.

• Monetized value of reductions in CO2 , NOX , and Hg.

Env

Environmental Assessment

 EE-2006-STD-0126 COMMENT 24.3
 Purpose

• To investigate the national impacts due to non-regulatory alterna

mandatory energy conservation standards.

• The non-regulatory alternatives that DOE analyzed include: 

– No New Regulatory Action;– Commercial Customer Rebates;– Commercial Customer Tax Credits; and

– Voluntary Energy-Efficiency Targets—ENERGY STAR.

 Method

• Modify NES spreadsheet model to consider the four scenarios a

by efficiency level.

 Output

• National Energy Savings and Net Present Value of the non-regu• Impact of non-regulatory alternatives on usage of energy-efficie

Reg

Regulatory Impact Analysis

 EE-2006-STD-0126 COMMENT 24.3
Summary of Issues on which DOE seeks comment 

Issues 

1. Data or information on projected LED cost reductions and bases fo

consideration of projected LED prices. 

2. Base Case Efficiency Trends3. Determining operating temperature ranges for equipment classes.4. Use of offset factors and the methodology used to calculate them.

5. Extending the results of the engineering analysis to the 23 second6. Determining appropriate standard levels for hybrid cases and wedg

7. Consideration of TSL 5 and whether the benefits would outweigh t

 EE-2006-STD-0126 COMMENT 24.3
How to Submit Comments...

 Public Meeting – Oral comments will be captured in the tran

part of the public record.

 Written comments – NOPR comment period open until Octo

Reference docket #: EE–2006–STD–0126 and/or RIN #: 19

Email: commercialrefrigeration.rulemaking@ee.doe.goMail: Ms. Brenda Edwards

U.S. Department of EnergyBuilding Technologies Program, Mailstop EE–21000 Independence Avenue, SW.Washington, DC 20585–0121.Telephone: (202) 586–2945.

Courier: Ms. Brenda Edwards

U.S. Department of EnergyBuilding Technologies Program950 L’Enfant Plaza, SW., 6th Floor,Washington, DC 20024.

 EE-2006-STD-0126 COMMENT 24.3
Backup Slides

 EE-2006-STD-0126 COMMENT 24.3
Summary of Results Based Upon the AEO2007 Reference Case En

TSL 1 TSL 2 TSL 3 

Primary Energy Saved (quads) 0.141 0.545 0.715 

7% Discount Rate 0.034 0.132 0.173 

3% Discount Rate 0.073 0.284 0.372 

Generation Capacity Reduction (GW)** 

0.109 0.421 0.552 

NPV (2007$billion): 7% Discount Rate 3% Discount Rate

0.33 0.98 1.20 0.82 2.59 3.25 

Industry Impacts Industry NPV (2007$ million) Industry NPV (% Change) 

0 – (63)0 – (12)

6 – (88)1 – (17)

(17) – (129)

(3) – (25)

Cumulative Emissions Impacts†:

CO2 (Mt) 7.37 28.47 37.37 

NOx (kt) 2.74 10.58 13.88 Hg (t) 0.09 0.36 0.47 

Life-Cycle Cost

Net Savings (%) 17 - 48 34 - 68 61 - 89 

Net Increase (%)

0

0

0 

No Change (%) 52 - 83 32 - 66 11 – 39 

Mean LCC Savings (2007$) 192 - 3132 551 - 4005 710 - 4089 

Mean PBP (yrs) 0.4 - 1.2 0.6 - 2.6 1.3 - 4.6 

* Parentheses indicate negative (-) values. For LCCs, a negative value means an increase in LCC by the amount indicated.

** Change in installed generation capacity by the year 2042 based on AEO2007 Reference Case. 

† CO2 emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power 

credits where NOx emissions are subject to emissions caps. 

 EE-2006-STD-0126 COMMENT 24.3
Market Characteristics

Market and 

 Four manufacturers account for approximately 85% o

market share of all types of covered equipment.

 Approximately 170,000 units covered by this rulemak

year 2005 (2006 ARI and Appliance Magazine data).

 Remote condensing equipment accounts for about 80

market, while self-contained equipment accounts for t

Hussmann

48%

Tyler Refrigeration

16%

Hill Phoenix

15%

Kysor/Warren

6%

Other

15%

Source: Appliance Magazine, 28th Annual Portrait of the U.S. Appliance Industry, S

 EE-2006-STD-0126 COMMENT 24.3
Equipment Classes

Market and 

Equipment

Category

Condensing

Unit

Configuration

Equipment Family Rating Temperature (°F) O

Te

Remote

CondensingCommercial

Refrigerators,

Commercial

Freezers, and

Commercial

Refrigerator

Freezers

Remote

Vertical Open 38 

0 < 

Semivertical Open 38 

0 < 

Horizontal Open 38 

0 < 

Vertical Closed

Transparent

38 

0 < 

Horizontal Closed

Transparent

38 

0 < 

Vertical Closed

Solid

38 

0 < 

Horizontal Closed

Solid

38 

0 < 

Service Over

Counter

38 

0 < 

 EE-2006-STD-0126 COMMENT 24.3
Equipment Classes

Market and 

Equipment

Category

Condensing

Unit

Configuration

Equipment

Family

Rating

Temperature

(°F)

Self-Contained

Commercial Refrigerators,

Commercial Freezers, and

Commercial RefrigeratorFreezers

Without Doors

Self-Contained

Vertical Open 38 

0 

Semivertical

Open

38 

0 

Horizontal

Open

38 

0 

 EE-2006-STD-0126 COMMENT 24.3
Equipment Classes

Market and 

Equipment 

Category

Condensing 

Unit 

Configuration

Equipment Family

Rating

Temperature

(°F)

Commercial 

Ice-Cream 

Freezers

Remote

Vertical Open

-15 

Semivertical Open 

Horizontal Open 

Vertical Closed Transparent 

Horizontal Closed 

Transparent 

Vertical Closed Solid 

Horizontal Closed Solid 

Service Over Counter 

Self-Contained

Vertical Open 

Semivertical Open 

Horizontal Open 

Vertical Closed Transparent 

Horizontal Closed 

Transparent 

Vertical Closed Solid 

Horizontal Closed Solid 

Service Over Counter 

 EE-2006-STD-0126 COMMENT 24.3
Screening Analysis Method

 Design options screened using the following crite

• Technological feasibility;• Practicability to manufacture, install and service;• Adverse impacts on product utility or product availabilit• Adverse impacts on health or safety.

 EE-2006-STD-0126 COMMENT 24.3
Technologies Selected for Further Con

Technologies that can improve calculated daily energy co

• higher-efficiency lighting• higher-efficiency lighting ballasts• remote lighting ballast location• higher-efficiency evaporator fan motors• evaporator fan motor controllers• higher-efficiency evaporator fan blades

• increased evaporator surface area• low-pressure differential evaporators• improved or thicker insulation• defrost mechanism• defrost cycle control• higher-efficiency compressors (self-contained equipment only)

• increased condenser surface area (self-contained equipment only)• higher-efficiency condenser fan motors (self-contained equipment only• higher-efficiency condenser fan blades (self-contained equipment only

 EE-2006-STD-0126 COMMENT 24.3
Downstre

• Life-Cycle 

Payback 

• National • Manufact

Analysis

Cost – Efficiency 

Relationship

Incremental 

Manufacturing Cost

EER

 Characterize the relationship between manufacturer cost an

COP)

Purpose of the Engineering Ana

 EE-2006-STD-0126 COMMENT 24.3
Baseline and Incremental Mark

 Markups relate customer price to cost of goods sold (CO Baseline markups relate price to cost prior to a change i

• Baseline markups indicate a customer price that covers all of a w

expenses plus profit.

• Direct labor costs (salaries, payroll, rental and occupancy) are inc

 Incremental markups relate the incremental change in cu

incremental change in COGS beyond baseline

• Some distribution costs remain constant with COGS increases.• Incremental markups cover only expenses that vary with an incre

– For example, direct labor costs (salaries, payroll), rental, and 

efficiency-induced changes in COGS.

• DOE assumes other operating costs and profit will scale proportio

Markups to De

 EE-2006-STD-0126 COMMENT 24.3
LCC Calculation Flowchar

Life-Cycle Cost and P

Baseline

Manufacturer

Price

Std-Level

Manufacturer

Price

Total Installed

Cost

From 

Engineering 

Analysis

(Price is a 

Function of 

Efficiency)

From Markups 

for Equipment 

Price 

Determination 

Analysis

Electricity

Prices

Annual Energy

Expense

Repair Cost

Maintenance

Cost

Annual

Operating

Expense

Lifetime

Discount Rate

Electricity

Price Trend

From Energy 

Use 

Characterization 

Analysis 

(Energy Use as a 

Function of 

Efficiency)

Payba

Perio

Energy

Consumption

Distributor

Markup

Sales Tax

ContractorMarkup

Customer

Price

Installation

Cost

 EE-2006-STD-0126 COMMENT 24.3
National Impact Analysis Proc

Shipments Model

National Energy Savings

National EconomicImpacts

LCC Analysis Results and Other Inputs

 National energy savings calculated for period from 2012-20 NPV calculated for period from 2012-2062

 EE-2006-STD-0126 COMMENT 24.3
Shipments Model

NEMS Food Services 

Bldg

Construction Forecast ARI Estimate of Shipments (2005)

Initial Replacement

Shipments 

Initial Shipments to New

Construction

Initial CRE Stock

Estimated Lifetime 

of CRE Stock

Shipments to New

Construction 

R

S

P

% Shipm

Cl

 EE-2006-STD-0126 COMMENT 24.3
Shipments by Equipment Class

2012 2015 2020 2025 2030 2035 

VOP.RC.M 451 436 451 464 497 531 

VOP.RC.L 23 22 23 23 25 27 

VOP.SC.M 30 29 30 31 33 36 

VCT.RC.M 32 31 32 33 35 38 

VCT.RC.L 448 433 448 461 494 527 

VCT.SC.I 11 11 11 11 12 13 

VCS.SC.I 3 3 3 3 3 3 SVO.RC.M 344 332 344 354 379 405 

SVO.SC.M 45 44 45 47 50 53 

SOC.RC.M 87 84 87 89 96 102 HZO.RC.M 53 51 53 54 58 62 

HZO.RC.L 166 161 166 171 183 196 

HZO.SC.M 4 4 4 4 4 5 HZO.SC.L 8 8 8 8 9 10 HCT.SC.I 36 35 36 37 39 42 

Total 1,742 1,682 1,739 1,791 1,918 2,049 

Equipment

Thousands of Linear Feet Shipped by Year and Eq

 EE-2006-STD-0126 COMMENT 24.3
Outcomes of Shipments Forecasts

Stock of CRE Units,

Including Replacements

-

5

10152025

2000

2003

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

2042

2045

2048

2051

Years

Linear Feet (Million)

Cumulative New Units (All Replaced through 2042) (Linear FFrom Stock Existing in 2000 (Most Replaced) (Linear Feet)

 EE-2006-STD-0126 COMMENT 24.3
NES and NPV Flow Cha

Stock of Linear Feet by Year

Linear Feet Shipped by Year

Linear Feet Shipped by Equipment Class, Efficiency Level by Year

Installed Costsper Linear Foot, Energy Use per Linear Foot, Energy Prices, Other Operating Costs per Linear Foot

Shipments Analysis

Market Shares by Equipment Class

Annualized Costs Calculations by Risk Group

Market Shares by Equipment Class 

Stock of Linear Feet by Equipment Class and Efficiency, by Year 

Installed Costs, by Equipment Class, Efficiency Level

Total Installed Costs by Year, Equipment Class, Efficiency Level

Total Energy Used,Energy Costs, and Other Operating Costs by Equipment Class, Efficiency Level, and Year

LCC Model

Electricity Used, Electricity Cost per Unit, Other Operating Costs per Linear Foot

DRL

Results: Cumulative Energy Use, PV and Annualized Installed Cost and Operating Costs, Net Present Value and Annualized Costs

 EE-2006-STD-0126 COMMENT 24.3
NPV Results by TSL 

(Seven-Percent Discount Rat

N

Equipment Class

Trial Standard Level (Billion 2007

TSL 1 TSL 2 TSL 3 TSL 

VOP.RC.M $0.11 $0.10 $0.19 $0.1

VOP.RC.L $0.01 $0.02 $0.02 $0.0VOP.SC.M $0.01 $0.02 $0.04 $0.0VCT.RC.M $0.00 $0.00 $0.01 $0.0

VCT.RC.L $0.07 $0.60 $0.62 $0.5VCT.SC.I $0.02 $0.04 $0.04 $0.0VCS.SC.I $0.00 $0.00 $0.00 $0.0SVO.RC.M $0.06 $0.06 $0.12 $0.1SVO.SC.M $0.01 $0.02 $0.04 $0.0

SOC.RC.M $0.00 $0.01 $0.02 $0.0HZO.RC.M $0.00 $0.01 $0.01 $0.0HZO.RC.L $0.02 $0.05 $0.05 $0.0HZO.SC.M $0.00 $0.00 $0.00 $0.0HZO.SC.L $0.00 $0.01 $0.01 $0.0

HCT.SC.I $0.00 $0.03 $0.03 $0.0

 EE-2006-STD-0126 COMMENT 24.3
NPV Results for 50 Percent LED Cost Redu

(Seven-Percent Discount Rate

N

Equipment Class

Trial Standard Level (Billion 200

TSL 1 TSL 2 TSL 3 TSL 

VOP.RC.M $0.11 $0.10 $0.18 $0.

VOP.RC.L $0.01 $0.02 $0.02 $0.VOP.SC.M $0.01 $0.02 $0.03 $0.VCT.RC.M $0.00 $0.00 $0.01 $0.VCT.RC.L $0.06 $0.57 $0.58 $0.VCT.SC.I $0.02 $0.04 $0.05 $0.VCS.SC.I $0.00 $0.00 $0.00 $0.SVO.RC.M $0.06 $0.05 $0.11 $0.SVO.SC.M $0.01 $0.02 $0.04 $0.SOC.RC.M $0.00 $0.01 $0.01 $0.HZO.RC.M $0.00 $0.01 $0.01 $0.HZO.RC.L $0.02 $0.05 $0.05 $0.HZO.SC.M $0.00 $0.00 $0.00 $0.HZO.SC.L $0.00 $0.01 $0.01 $0.HCT.SC.I $0.00 $0.03 $0.03 $0.

 EE-2006-STD-0126 COMMENT 24.3