Energy Conservation Standards 

Rulemaking Framework Document for 

Commercial Packaged Boilers

RIN: 1904-AD01

U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy 

Building Technologies Office

August 28, 2013
TABLE OF CONTENTS

1. INTRODUCTION ...................................................................................................................... 1

1.1 Statutory Authority ...................................................................................................... 2

1.2 History of Commercial Packaged Boiler Standards ..................................................... 3

1.3 Overview of the Rulemaking Process .......................................................................... 5

1.3.1 Preliminary Analysis ......................................................................................... 7

1.3.2 Notice of Proposed Rulemaking ........................................................................ 8

1.3.3 Final Rule ........................................................................................................ 10

2. SCOPE OF COVERAGE ........................................................................................................ 10

2.1 Current Scope of Coverage ........................................................................................ 10

2.2 Proposed Scope of Coverage ..................................................................................... 11

3. TEST PROCEDURES ............................................................................................................. 12

3.1 Discussion of Alternative Test Procedure Approaches .............................................. 13

4. OVERVIEW OF ANALYSIS FOR ENERGY CONSERVATION STANDARDS

RULEMAKING.......................................................................................................... 15

5. MARKET AND TECHNOLOGY ASSESSMENT ................................................................ 17

5.1 Market Assessment .................................................................................................... 17

5.2 Trade Associations and Manufacturers ...................................................................... 18

5.2.1 Air-Conditioning, Heating, and Refrigeration Institute ................................... 18

5.2.2 American Boiler Manufacturers Association .................................................. 19

5.3 Equipment Classes ..................................................................................................... 19

5.4 Technology Assessment ............................................................................................. 20

5.4.1 Boiler Equipment ............................................................................................. 20

5.4.2 Technology Options to Improve Combustion and/or Thermal Boiler

Efficiency ......................................................................................................... 24

5.4.3 Technology Options to Reduce Standby Mode and Off Mode Energy

Consumption .................................................................................................... 27

5.4.4 Technology Options to Reduce Seasonal Boiler Energy Consumption .......... 28

6. SCREENING ANALYSIS ...................................................................................................... 30

7. ENGINEERING ANALYSIS .................................................................................................. 31

7.1 Engineering Analysis Overview ................................................................................ 31

7.2 Engineering Analysis Approach ................................................................................ 32

7.2.1 Baseline Models .............................................................................................. 32

7.2.2 Efficiency Levels ............................................................................................. 33

7.2.3 Methodology for Developing the Cost-Efficiency Relationship ..................... 34

7.2.4 Proprietary Designs ......................................................................................... 35

8. MARKUPS ANALYSIS .......................................................................................................... 35

9. ENERGY USE ANALYSIS .................................................................................................... 38

9.1 Estimating Annual Energy Consumption of Boilers .................................................. 39

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10. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS ............................................ 42

10.1 Overview .................................................................................................................... 42

10.2 Approach .................................................................................................................... 42

10.3 Energy Prices ............................................................................................................. 44

10.4 Maintenance and Repair Costs ................................................................................... 44

10.5 Installation Costs ........................................................................................................ 45

10.6 Equipment Lifetime ................................................................................................... 46

10.7 Discount Rates ........................................................................................................... 46

10.8 Energy Efficiency in the Base Case ........................................................................... 46

11. SHIPMENTS ANALYSIS ..................................................................................................... 47

11.1 Impact of Amended Standards on Equipment Shipments .......................................... 48

12. NATIONAL IMPACT ANALYSIS ...................................................................................... 49

12.1 Projected Efficiency Trends ....................................................................................... 49

12.2 National Energy Savings ............................................................................................ 50

12.3 Net Present Value of Consumer Savings ................................................................... 50

13. CONSUMER SUBGROUP ANALYSIS .............................................................................. 51

14. MANUFACTURER IMPACT ANALYSIS .......................................................................... 52

14.1 Sources of Information for the Manufacturer Impact Analysis ................................. 52

14.2 Industry Cash-Flow Analysis ..................................................................................... 53

14.3 Manufacturer Subgroup Analysis .............................................................................. 53

14.4 Competitive Impacts Assessment .............................................................................. 54

14.5 Cumulative Regulatory Burden .................................................................................. 54

15. EMISSIONS ANALYSIS ...................................................................................................... 54

16. MONETIZING CO2 AND OTHER EMISSIONS REDUCTIONS ...................................... 57

17. UTILITY IMPACT ANALYSIS ........................................................................................... 58

18. EMPLOYMENT IMPACT ANALYSIS ............................................................................... 58

19. REGULATORY IMPACT ANALYSIS ................................................................................ 59

APPENDIX A – LIST OF ITEMS FOR COMMENT ................................................................ 61

LIST OF TABLES

Table 1.1 Energy Conservation Standards for Commercial Packaged Boilers Manufactured on or

after March 2, 2012 ....................................................................................................... 4

Table 1.2 Energy Conservation Standards for Commercial Packaged Boilers Manufactured on or

after March 2, 2022 ....................................................................................................... 4

Table 5.1 Considered Commercial Packaged Boiler Equipment Classes .................................... 20
LIST OF FIGURES

Figure 4.1 Flow Diagram of Analyses Conducted for an Energy Conservation Standards

Rulemaking ................................................................................................................ 16

Figure 8.1 Replacement Distribution Channel ............................................................................ 36

Figure 8.2 New Construction Distribution Channel .................................................................... 36

Figure 8.3 National Account Distribution Channel .................................................................... 36

Figure 8.4 Wholesaler Distribution Channel ............................................................................... 36

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LIST OF ACRONYMS

ABMA American Boiler Manufacturers Association 

ACCA Air-conditioning Contractors of America 

AEMTCA American Energy Manufacturing Technical Corrections Act 

AEO Annual Energy Outlook 

AHRI Air-conditioning, Heating, and Refrigeration Institute 

ANSI American National Standards Institute 

ASHRAE American Society of Heating, Refrigerating and Air-Conditioning Engineers 

ASME American Society of Mechanical Engineers 

BLS Bureau of Labor Statistics 

BMG basic model group 

BOH burner operating hours 

BOM bill of materials 

BPM brushless permanent magnet 

BT Building Technologies Office 

Btu British thermal unit 

CAIR Clean Air Interstate Rule 

CBECS Commercial Building Energy Consumption Survey 

CBLR Certification Program for Commercial Boilers 

CBLR OM Certification Program for Commercial Boilers Operations Manual 

CFR Code of Federal Regulations 

CO2 carbon dioxide 

CPVC chlorinated polyvinyl chloride 

CSAPR Cross-State Air Pollution Rule 

CSL candidate standard level 

D.C. District of Columbia 

DOE U.S. Department of Energy 

DOJ U.S. Department of Justice 

DSI direct spark ignition 

EC combustion efficiency 

ET thermal efficiency 

EERE Office of Energy Efficiency and Renewable Energy 

EGU electric generating unit 

EIA Energy Information Administration 

EISA 2007 Energy Independence and Security Act of 2007 

EPA U.S. Environmental Protection Agency 

EPACT 1992 Energy Policy Act of 1992 

EPCA Energy Policy and Conservation Act 

EPRI Electric Power Research Institute 

FFC full fuel-cycle 

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FR Federal Register

GAMA Gas Appliance Manufacturers Association 

GDP gross domestic product 

GHG greenhouse gas 

GREET Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation 

GRIM Government Regulatory Impact Model 

GTI Gas Technology Institute 

HAP hazardous air pollutant 

HARDI Heating, Air-conditioning & Refrigeration Distributors International 

HDD heating degree-day 

Hg mercury 

HI Hydronics Institute 

hr hour 

HVAC heating, ventilation, and air-conditioning 

HVACR heating, ventilation, air-conditioning, and refrigeration 

ImSET Impact of Sector Energy Technologies 

I-O U.S. Benchmark National Input-Output 

LBNL Lawrence Berkeley National Laboratory 

LCC life-cycle cost 

LPG liquefied petroleum gas 

MATS Mercury and Air Toxics Standards 

MIA manufacturer impact analysis 

MPC manufacturer production cost 

MSP manufacturer selling price 

NCI Navigant Consulting, Inc. 

NEMS National Energy Modeling System 

NES national energy savings

NIA national impact analysis 

NOPD notice of proposed determination 

NOPR notice of proposed rulemaking 

NOX oxides of nitrogen 

NPV net present value 

NREL National Renewable Energy Laboratory 

OMB U.S. Office of Management and Budget 

PBP payback period 

PM particulate matter 

PNNL Pacific Northwest National Laboratory 

PSC permanent split capacitor 

psig pounds per square inch gauge

R&D research and development 

RIMS Regional Input-Output Modeling System 

RECS Residential Energy Consumption Survey 

SCC social cost of carbon 

SEC Securities and Exchange Commission 

SG&A selling, general, and administrative costs 

SMPS switching mode power supply 

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SO2 sulfur dioxide 

TFI trail-for-ignition period 

TSD technical support document 

TSL trial standard level 

U.S. United States 

U.S.C. United States Code 

WH water heating 

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RULEMAKING FRAMEWORK DOCUMENT FOR COMMERCIAL 

PACKAGED BOILERS

1. INTRODUCTION

The U.S. Department of Energy (DOE) Appliances and Equipment Standards Program, 

within the Office of Energy Efficiency and Renewable Energy’s (EERE’s) Building 

Technologies Office (BT), develops and promulgates energy conservation standards for certain 

consumer appliances and commercial and industrial equipment. The process for developing 

standards involves analysis, public notice and comment, and consultation with interested parties. 

Interested parties include manufacturers, trade associations, consumers/users, energy 

conservation and environmental advocates, State and Federal agencies, and any other groups or 

individuals with an interest in these standards. The DOE Appliance Standards Program Report to 

Congress,

1 initially submitted on January 31, 2006, and updated twice a year since first publication, 

identifies the numerous rulemakings for a variety of products that DOE has scheduled for completion 

and explains many of the techniques DOE will apply during the rulemaking process to meet this 

schedule. 

The purpose of this Framework Document is to describe the procedural and analytical 

approaches DOE anticipates using to evaluate potential amended energy conservation standards 

for commercial packaged boilers (see section 1.1 for a discussion of the statutory authority for 

this rulemaking). This Framework Document also introduces the upcoming commercial 

packaged boilers test procedure rulemaking, and serves to solicit feedback from stakeholders on 

the current test procedure (see section 3 for a discussion of the test procedure). Commercial 

packaged boilers include electric, gas-fired and oil-fired, hot water and steam boilers with input 

ratings of 300,000 British thermal units/hour (Btu/hr) or more. 

This document is intended to inform interested parties about the process DOE will follow 

and to encourage and facilitate the input of interested parties during the rulemaking. This 

document serves as the starting point to develop potential amended energy conservation 

standards, and a potentially amended test procedure, and is not a definitive statement on any 

issue to be determined in the rulemaking.

This Framework Document is comprised of 19 sections related to the rulemaking. Section 

1 of this document provides an overview of DOE’s rulemaking process and of the history and 

authority for regulation of commercial packaged boilers. Sections 2 and 3 discuss scope of 

coverage and test procedures, respectively. Sections 5 through 19 discuss analyses DOE intends 

to conduct to fulfill the statutory requirements for this energy conservation standards rulemaking. 

DOE will analyze potential amended energy conservation standards for commercial packaged 

boilers to determine whether such standards are technologically feasible and economically 

justified and would result in significant energy savings. DOE will maintain information about 

1 U.S. Department of Energy. Energy Conservation Standards Activities; Submitted pursuant to Section 141 of the 

Energy Policy Act of 2005 (EPACT 2005), Pub. L. 109-58, and in response to section 305 of the Energy 

Independence and Security Act of 2007 (EISA 2007), Pub. L. 110-140; U.S. Department of Energy (Available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/reports_and_publications.html).

1 
this rulemaking on its website at: 

http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/74

While DOE invites comment on all aspects of the material presented in this document, 

several specific issues on which DOE seeks comment are set out in comment boxes like this 

one. DOE uses these comment boxes to highlight issues and to ask specific questions on the 

approaches DOE plans to follow to conduct the analyses required for this energy 

conservation standards rulemaking. Such requests for feedback are numbered sequentially 

throughout the document and are compiled in Appendix A.

1.1 Statutory Authority

Title III, Part C2 of the Energy Policy and Conservation Act of 1975 (EPCA), Pub. L. 94- 

163 (42 U.S.C. 6311-6317, as codified), added by Pub. L. 95-619, Title IV, §441(a), sets forth a 

variety of provisions designed to improve energy efficiency, and it established the "Energy 

Conservation Program for Certain Industrial Equipment," a program covering certain 

commercial and industrial equipment (hereafter referred to as "covered equipment"), which 

includes the commercial packaged boilers that are the subject of this rulemaking.3 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), labeling provisions (42 U.S.C. 6315), and the authority 

to require compliance information and certification reports from manufacturers of covered 

equipment (42 U.S.C. 6316). This program authorizes DOE to establish technologically feasible, 

economically justified energy conservation regulations for certain products and equipment that 

would be likely to result in substantial national energy savings. (42 U.S.C. 6295(o)(2)(B)(i)(I)- 

(VII)) 

EPCA established mandatory Federal energy conservation standards for commercial 

heating, air-conditioning, and water-heating equipment that generally correspond to the levels set 

in the American Society of Heating, Refrigeration, and Air-Conditioning Engineers (ASHRAE) 

Standard 90.1, “Energy Standard for Buildings Except Low-Rise Residential Buildings,” which 

were subsequently codified under subpart E of Title 10 of the Code of Federal Regulations 

(CFR), Part 431 (10 CFR Part 431).4 (42 U.S.C. 6313(a)) In particular, the statute sets standards 

for small, large, and very large commercial package air-conditioning and heating equipment, 

packaged terminal air conditioners, packaged terminal heat pumps, warm air furnaces, packaged 

boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks 

(collectively “ASHRAE equipment”). (42 U.S.C. 6313(a)) 

EPCA directs DOE to consider amending the existing Federal energy conservation 

standard for each type of covered ASHRAE equipment whenever ASHRAE amends the 

efficiency levels in Standard 90.1. (42 U.S.C. 6313(a)(6)(A)) For each type of listed equipment, 

EPCA directs that if ASHRAE amends Standard 90.1, DOE must adopt amended standards at the 

2 For editorial reasons, upon codification in the United States Code (U.S.C.), Part C was redesignated Part A-1. 

3 All references to EPCA in this document refer to the statute as amended through the American Energy 

Manufacturing and Technical Corrections Act, Pub. L. 112-210 (Dec. 18, 2012). 4 For more information, see www.ashrae.org.

2 
new ASHRAE efficiency level, unless clear and convincing evidence supports a determination 

that adoption of a more-stringent level would produce significant additional energy savings and 

would 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, then it must establish such morestringent standard not later than 30 months after publication of the amended ASHRAE Standard 

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

On December 19, 2007, the Energy Independence and Security Act of 2007 (EISA 2007), 

Pub. L. 110-140, was signed into law, which further revised the energy conservation standards 

for commercial and industrial equipment. EISA 2007 amended EPCA, in relevant part, to 

require that not later than six years after issuance of any final rule establishing or amending a 

standard, the Secretary of Energy publish either a notice of determination that the standards for a 

given type of equipment do not need to be amended, or a notice of proposed rulemaking (NOPR) 

including new proposed standards. This amendment was further modified by the American 

Energy Manufacturing Technical Corrections Act (AEMTCA), Pub. L. 112-210, which was 

signed into law on December 18, 2012. AEMTCA, amended EPCA to require that every six 

years, the Secretary of Energy shall take action regarding whether or not more-stringent 

standards are needed. (42 U.S.C. 6313(a)(6)(C)) In addition, AEMTCA also amended EPCA so 

as to trigger DOE to review of the energy savings potential of any ASHRAE/IES Standard 90.1 

amendment that changes the standard levels or design requirements applicable to a given product 

or type of equipment. (42 U.S.C. 6313(a)(6)(A)) 

1.2 History of Commercial Packaged Boiler Standards

The Energy Policy Act of 1992 (EPACT 1992), Public Law 102−486, amended EPCA to 

add commercial packaged boilers as a type of covered equipment. EPACT 1992 also amended 

EPCA with respect to packaged boilers by providing a definition, as well as provisions setting 

forth applicable requirements for energy conservation standards, test procedures, labeling, and 

compliance certification. (42 U.S.C. 6311(11)(B); 6313(a)(4); 6314(a)(4); 6315(e); 6316(a)-(b)) 

Most recently, DOE amended its energy conservation standards for commercial packaged boilers 

through a final rule published in the Federal Register (FR) on July 22, 2009 (hereafter referred to 

as the “July 2009 final rule”). 74 FR 36312. More specifically, the July 2009 final rule updated 

the energy conservation standards for commercial packaged boilers to correspond to the levels in 

the 2007 revision of ASHRAE Standard 90.1 (i.e., ASHRAE Standard 90.1-2007). Id. at 36355- 

56. Compliance with the amended standards was required beginning on March 2, 2012. These 

levels are shown in Table 1.1 below. Also in the July 2009 final rule, DOE again followed 

ASHRAE’s approach in Standard 90.1-2007 and adopted a second tier of energy conservation 

standards for two classes of commercial packaged boilers, which are shown in Table 1.2 below. 

Compliance with the latter standards will be required beginning on March 2, 2022. Id.

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Table 1.1 Energy Conservation Standards for Commercial Packaged Boilers 

Manufactured on or after March 2, 2012

Equipment type Subcategory Size category (input)

Efficiency

level—Effective 

date: March 2, 

2012*

Hot Water Commercial

Packaged Boilers

Gas-fired >=300,000 Btu/hr and

<=2,500,000 Btu/hr

80.0% ET

Hot Water Commercial

Packaged Boilers

Gas-fired >2,500,000 Btu/hr 82.0% EC

Hot Water Commercial

Packaged Boilers

Oil-fired >=300,000 Btu/hr and

<=2,500,000 Btu/hr

82.0% ET

Hot Water Commercial

Packaged Boilers

Oil-fired >2,500,000 Btu/hr 84.0% EC

Steam Commercial

Packaged Boilers

Gas-fired—all,

except natural draft

>=300,000 Btu/hr and

<=2,500,000 Btu/hr

79.0% ET

Steam Commercial 

Packaged Boilers

Gas-fired—all, 

except natural draft >2,500,000 Btu/hr 79.0% ET

Steam Commercial 

Packaged Boilers

Gas-fired—natural 

draft

>=300,000 Btu/hr and

<=2,500,000 Btu/hr

77.0% ET

Steam Commercial

Packaged Boilers

Gas-fired—natural

draft >2,500,000 Btu/hr 77.0% ET

Steam Commercial

Packaged Boilers

Oil-fired >=300,000 Btu/hr and

<=2,500,000 Btu/hr

81.0% ET

Steam Commercial

Packaged Boilers

Oil-fired >2,500,000 Btu/hr 81.0% ET

* ET means “thermal efficiency.” EC means “combustion efficiency.” 

Table 1.2 Energy Conservation Standards for Commercial Packaged Boilers 

Manufactured on or after March 2, 2022

Equipment type Subcategory Size category (input)

Efficiency 

level—Effective

date: March 2,

2022

Steam Commercial

Packaged Boilers

Gas-fired—natural

draft

>=300,000 Btu/hr and

<=2,500,000 Btu/hr

79.0% ET

Steam Commercial

Packaged Boilers

Gas-fired—natural

draft >2,500,000 Btu/hr 79.0% ET

DOE is initiating this rulemaking pursuant to 42 U.S.C. 6313(a)(6)(C), which requires 

that every six years DOE must publish either a notice of the determination that standards for the 

equipment do not need to be amended, or a NOPR including new proposed energy conservation 

standards. As noted above, DOE’s last final rule for commercial packaged boilers was issued on 

4 
July 22, 2009, so as a result, DOE is required to act by July 22, 2015. This rulemaking will 

satisfy this statutory obligation.5

1.3 Overview of the Rulemaking Process

Under EPCA, any new or amended standards must achieve the maximum level of energy 

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

(C)) In determining whether any new or amended standards are economically justified, DOE 

must assess whether the benefits of the proposed standard exceed its burdens by, to the 

maximum extent practicable, considering the following seven factors: 

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

the products subject to such 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 initial charges for, or 

maintenance expenses of the covered products which are likely to result from the 

standard; 

(3) The total projected amount of energy (or as applicable, water) savings likely to result 

directly from the standard; 

(4) Any lessening of the utility or the performance of the covered products likely to result 

from 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 standard; 

(6) The need for national energy and water conservation; and 

(7) Other factors the Secretary considers relevant. 

(42 U.S.C. 6313(a)(6)(B)(ii)) 

Additional statutory requirements of general applicability for prescribing new or 

amended standards are set forth in 42 U.S.C. 6295(o)(2)(A), (2)(B)(ii)-(iii), and (3)–(5), as well 

as 42 U.S.C. 6313(a)(6)(B). 

As discussed in further detail below, the standards rulemaking process for a given 

consumer product or commercial and/or industrial equipment type typically involves a four-step 

process with the following public notices published in the Federal Register: (1) announcement of 

the availability of the Framework Document in which DOE describes the overall approach it is 

considering; (2) announcement of the availability of the preliminary analysis, which focuses on 

5 DOE notes that since its last final rule in 2009, ASHRAE has not acted to amend its standards for commercial 

packaged boilers, as would trigger DOE rulemaking action under 42 U.S.C. 6313(a)(6)(A).

5 
the analytical methodology DOE is considering in setting potential standards; (3) the NOPR; and 

(4) the final rule. At each of the first three steps, DOE holds a public meeting and solicits 

comments from the interested parties on a variety of relevant issues under consideration in 

developing potential standards. Interested parties generally include manufacturers, trade 

associations, consumers, environmental and energy-efficiency advocates, State and Federal 

agencies, and other groups and individuals with an interest in energy conservation standards and 

test procedures. DOE considers the participation of interested parties to be a vital part of the 

rulemaking process for setting new and amended energy conservation standards. The broad 

array of interested parties who routinely provide comments promotes a balanced discussion of 

critical information required to conduct a standards or test procedure rulemaking, beginning with 

public comments on the Framework Document. Accordingly, DOE encourages the participation 

of all interested parties during the comment periods provided at each stage of the rulemaking. 

The following outlines next steps for the commercial packaged boilers energy 

conservation standards rulemaking:

 Preliminary Analysis (section 1.3.1). DOE plans to publish preliminary analyses to 

publicly vet the data, models, and tools that DOE expects to use in the rulemaking, and to 

facilitate public participation in developing the proposed rule. These data will include 

planned equipment classes and candidate standard levels (CSLs), which span the range of 

efficiencies from baseline equipment to equipment utilizing the most efficient 

technology. DOE will hold a public meeting and webinar related to the preliminary 

analyses and will seek public comment. 

 Notice of Proposed Rulemaking (section 1.3.2). The NOPR will present: (1) a discussion 

of comments received in response to the preliminary analyses; (2) DOE’s analysis of the 

impacts of potential standards on consumers, manufacturers, and the Nation; (3) DOE’s 

weighting of those impacts; and (4) any proposed standard levels for public comment. 

DOE will hold a public meeting and webinar related to the NOPR and will again seek 

public comment. 

 Final Rule (section 1.3.3). The final rule will present: (1) a discussion of and response to 

comments received on the NOPR; (2) the revised analysis (as appropriate) of the impacts 

of any amendments to the standards; (3) DOE’s weighting of the impacts; and (4) the 

new or amended standard levels (if any) that DOE is adopting. The final rule also will 

establish the compliance date of any adopted standards. 

In parallel with the energy conservation standards rulemaking, DOE will be conducting a 

test procedure rulemaking for commercial packaged boilers. Test procedure rulemakings follow 

a similar process as standards rulemakings; however, test procedure rulemakings typically only 

include the publication of a notice of proposed rule and a final rule in the Federal Register. 

After the NOPR is published, DOE holds a public meeting and solicits comments from interested 

parties on a variety of relevant issues under consideration in developing a potentially amended 

test procedure. 

6 
DOE encourages interested parties to develop and submit joint recommendations and will 

carefully consider any such recommendations in its decision making.

1.3.1 Preliminary Analysis

DOE’s preliminary analysis activities include identifying available equipment technology 

options and determining whether they warrant detailed analysis or can be eliminated from further 

consideration. This process includes a market and technology assessment (section 5) and a 

screening analysis (section 6). DOE applies four criteria in the screening analysis to determine 

whether a given technology option should be eliminated from further consideration: (1) 

technological feasibility; (2) practicability to manufacture, install, and service; (3) adverse 

impacts on equipment utility or availability; and (4) adverse impacts on health or safety. 

Technologies that pass the screening analysis are considered in the engineering analysis (section 

7) as methods of improving the efficiency of the covered equipment (design options). 

DOE consults with interested parties and independent technical experts and researches 

industry literature to identify the key issues and design options or efficiency levels that DOE will 

consider in the rulemaking. Also at this stage of the analysis, DOE collects manufacturer cost 

data, historical shipments data, shipments-weighted average efficiency data, and preliminary 

manufacturer impact data (e.g., capital conversion expenditures, marketing costs, and research 

and development (R&D) costs). As part of the preliminary analysis, DOE also conducts other 

principal analyses which are explained in subsequent sections of this Framework Document, 

including: 

1. Engineering analysis (section 7); 

2. Markups analysis (section 8);

3. Energy use analysis (section 9);

4. Consumer life-cycle cost (LCC) and payback period (PBP) analysis (section 10); 

5. Shipments analysis (section 11);

6. National impact analysis, which considers national energy savings (NES) and 

national consumer net present value (NPV) (section 12); and 

7. Preliminary manufacturer impact analysis (MIA) (section 14). 

DOE will present the results of these analyses in the preliminary analysis technical 

support document (TSD), which will be made available at the time of publication of the 

preliminary analysis. 

DOE selects CSLs from the energy efficiency or energy use levels considered in the 

preliminary analysis. Discussion of various CSLs in the preliminary analysis will facilitate 

review by interested parties of the spreadsheet models that underpin the analyses. DOE will use 

comments from interested parties to refine the models for the rulemaking analysis at the NOPR 

stage, where DOE will propose specific energy conservation standard levels for adoption. Based 

on the results, DOE selects CSLs from the energy efficiency or energy use levels considered in 

the preliminary analyses. In addition to the efficiency levels corresponding to the maximum 

7 
technologically feasible (“max-tech” 6

) design, DOE generally selects levels or design options for 

consideration that span the full range of technologically achievable efficiencies. DOE typically 

analyzes the following range of efficiency levels: 

 The baseline efficiency level (i.e., the minimum level) typically represents equipment 

with the lowest energy efficiency level currently sold on the market for a given 

equipment class. For classes where minimum energy efficiency standards already exist, 

the baseline efficiency level is typically defined by the existing energy conservation 

standard; 

 The highest energy efficiency level or lowest energy consumption level that is 

technologically feasible (i.e., the “max-tech” level); and 

 Levels that incorporate noteworthy technologies or fill in large gaps between other 

efficiency levels being considered. 

The preliminary analyses rely on analytical models and tools to assess the different 

equipment classes at each efficiency or energy use level analyzed. Many of these analytical 

models and tools are in the form of spreadsheets, some of which DOE uses to conduct the LCC 

and PBP analyses and to determine the NES and NPV of prospective standards. Preliminary 

results may facilitate discussions among interested parties on potential joint recommendations 

for standard levels. 

DOE will make the spreadsheet tools and results of the preliminary analyses available on 

its website for review.7 When it publishes the preliminary analysis, DOE will also make the 

preliminary TSD available, which will contain details of all the analyses performed to date. 

After publication of the preliminary analysis, DOE provides a public comment period and holds 

a public meeting to discuss these analyses. 

1.3.2 Notice of Proposed Rulemaking

In developing the NOPR for potential energy conservation standards for commercial 

packaged boilers, DOE will first review and consider all the comments it receives during the 

preliminary analysis public meeting and in written comments during the 60-day comment period 

following publication of the preliminary analysis. This process may result in revisions or 

refinements to the planned methodology for each analysis related to the energy conservation 

standards rulemaking, including the engineering and LCC analyses. DOE will also conduct 

additional in-depth economic and environmental impact analyses at this stage of the rulemaking. 

These analyses generally include: 

6 The “max-tech” level represents the most efficient design that is commercialized or has been demonstrated in a 

prototype with materials or technologies available today. “Max-tech” is not constrained by economic justification, 

and typically is the most expensive efficiency level considered in the analysis. 7 Materials associated with the commercial packaged boiler rulemakings will be available on DOE’s website at 

http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/74.

8 
1. Consumer subgroup analysis (section 13); 

2. Complete MIA (section 14);

3. Emissions analysis (section 15); 

4. Monetization of carbon dioxide and other emissions reductions (section 16); 

5. Utility impact analysis (section 17); 

6. Employment impact analysis (section 18); and 

7. Regulatory impact analysis (RIA) (section 19).

DOE will describe the methodology it used and post the results of all the analyses on its 

website for review and comment. DOE will present a summary of the analytical results in the 

NOPR, with the details of the analysis provided in an accompanying TSD. The NOPR analytical 

process culminates in the selection of proposed standard levels (if any), which DOE will present 

in the NOPR. DOE selects these proposed standard levels from the trial standard levels (TSLs)

8

analyzed prior to publication of the NOPR. The NOPR, published in the Federal Register, will 

document the evaluation and selection of any proposed standard levels, along with a discussion 

of other TSLs considered but not selected (and the reasons for not selecting them). Based on 

comments by interested parties, further revisions to the analysis and proposed standard levels 

may be undertaken during the final rule stage. 

For each equipment class, DOE will identify the maximum improvement in energy 

efficiency or maximum reduction in energy use that is technologically feasible. Beginning with 

the max-tech level, DOE will weigh the benefits and burdens of each level to determine whether 

that level meets the criteria outlined in EPCA discussed above (section 1.3). If DOE proposes a 

level that is below the max-tech level, it will explain the reasons for eliminating higher levels, 

beginning with the highest level considered. 

DOE considers many factors in selecting proposed standards, as described in section 1.3.

These factors are established by EPCA and consider the many benefits, costs, and other impacts 

of energy conservation standards. DOE encourages interested parties to develop joint 

recommendations for standard levels. DOE will consider such recommendations carefully in its 

decision process. 

When DOE publishes the NOPR proposing energy conservation standards for 

commercial packaged boilers, it will provide the U.S. Department of Justice (DOJ) with copies 

of the NOPR and TSD to solicit feedback on the competitive impact of the proposed standard 

levels on the commercial packaged boiler industry. DOJ will review these proposed standard 

levels to help assess the impacts from any lessening of competition that is likely to result from 

the imposition of standards. (42 U.S.C. 6313(a)(6)(B)(ii)(V)) DOE will consider DOJ’s 

determination regarding the impacts of the proposed standard(s) on competition in preparing the 

final rule. The NOPR is followed by a 60-day public comment period that includes a public 

meeting.

8 TSLs are assembled from the candidate standard levels analyzed for the individual equipment classes based on a 

set of criteria from the analytical results. 

9 
1.3.3 Final Rule

After publication of the NOPR, DOE will consider public comments it receives on the 

proposal (including TSLs) and accompanying analyses. On the basis of the public comments, 

DOE will review the engineering and economic impact analyses and proposed standards, making 

modifications as necessary. Before it issues the final rule, DOE will consider DOJ’s comments 

on the NOPR relating to the impacts of the proposed standard levels on competition to determine 

whether changes to these standard levels are needed. DOE publishes DOJ’s comments and 

DOE’s response as part of the final rule. 

The standards rulemaking will conclude with publication of the final rule. DOE will 

determine whether to amend existing standards, and if such determination is positive, select the 

final energy conservation standard levels based on the complete record of the standards 

rulemaking. The final rule will promulgate the final standard levels and the compliance date (or 

dates), and will explain the basis for their selection. The final rule will be accompanied by a 

final rule TSD.

2. SCOPE OF COVERAGE

2.1 Current Scope of Coverage

“Packaged boiler” is defined in EPCA 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 at 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/hr 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].” A “packaged low 

pressure boiler” is defined as “a packaged boiler that is: (1) A steam boiler designed to operate at 

or below a steam pressure of 15 psig [pounds per square inch gauge]; or (2) A hot water boiler 

designed to operate at or below a water pressure of 160 psig and a temperature of 250 °F; or (3) 

A boiler that is designed to be capable of supplying either steam or hot water, and designed to 

operate under the conditions in paragraphs (1) and (2) of this definition.” 10 CFR 431.82. 

DOE’s regulations for commercial packaged boilers that are currently in effect cover 

small and large, gas-fired and oil-fired, hot water and steam commercial packaged boilers that 

meet the definitions outlined above, as applicable.9 DOE notes that although there are not 

9 DOE’s regulations for commercial packaged boilers divide this equipment into equipment classes based on input 

capacity (i.e., size category). Throughout this Framework Document, DOE refers to units with an input capacity of

10 
currently Federal energy conservation standards for electric commercial packaged boilers, the 

definitions set forth above do not preclude DOE from adopting standards for such equipment if 

justified. In other words, electric commercial packaged boilers are within the scope of DOE’s 

authority under EPCA. 

In addition, DOE recently published a notice of proposed determination (NOPD) 

regarding coverage of natural draft commercial packaged boilers. 78 FR 49202 (August 13, 

2013). As explained in the NOPD, under DOE’s interpretation of the relevant statutory 

provisions, natural draft commercial packaged boilers are currently included as covered 

equipment with standards at 10 CFR part 431, subpart E. DOE is performing a coverage 

determination to explicitly clarify its statutory authority under EPCA to cover natural draft 

commercial packaged boilers, because explicit coverage of this equipment is necessary to carry 

out the purposes of part A-1 of EPCA. Coverage will promote conservation of energy and 

provide a more level playing field to the variety of commercial packaged boilers on the market, 

thereby discouraging potential substitution effects. Id. at 78 FR 49204. 

2.2 Proposed Scope of Coverage

DOE plans to maintain the scope of coverage as defined by its current regulations for this 

analysis of amended thermal and combustion efficiency standards for commercial packaged 

boilers. DOE is not considering standards for electric commercial packaged boilers at this time, 

because DOE may have difficulty in justifying that standard levels for electric commercial 

packaged boilers would save a significant amount of energy and be technologically feasible. A 

preliminary review of the market revealed that electric commercial packaged boilers account for 

a relatively small number of annual shipments (approximately 1,500-2,100 units), and the 

efficiency of this equipment already approaches 100 percent under the current metric (i.e., 

thermal efficiency). Thus, there is little to no room for improvement in efficiency, unless DOE 

were to consider adopting levels requiring installation of heat pump technology (a technological 

leap when setting initial standards). However, heat pump technology has not been used or 

demonstrated feasible for use in electric commercial packaged boilers, so it is unclear whether 

such a level would be a viable opportunity for energy savings at this time. 

DOE plans to include natural draft commercial packaged boilers within the scope of this 

rulemaking if the outcome of the August 2013 NOPD is ultimately to confirm DOE’s authority 

to cover natural draft commercial packaged boilers. 

Currently, there is no upper limit to the input capacity of commercial packaged boilers 

that are covered by DOE’s energy conservation standards. In this rulemaking, DOE seeks 

comment as to whether there are any size-related issues with conducting testing under the DOE 

test procedure which the agency should consider addressing in its test procedure rulemaking. 

DOE is also interested in any comments regarding whether there is a capacity limit beyond 

which amended energy conservation standards would not be technologically feasible and 

economically justified. 

≥ 300,000 Btu/h and ≤ 2,500,000 Btu/h as “small” and units with an input capacity ≥ 2,500,000 Btu/h as “large.” 

See 10 CFR 431.87.

11 
Since many commercial packaged boilers do not operate continuously, DOE also plans to 

consider establishing energy conservation standards for energy consumption of boilers operating 

in standby mode and off mode as part of this rulemaking. DOE will consider whether an energy 

efficiency metric with standby mode and off mode energy consumption integrated into the metric 

is technically feasible as part of the test procedure rulemaking for commercial packaged boilers. 

Item 2-1 DOE welcomes comment on the proposed scope of coverage and on whether 

there are any additional types of commercial packaged boilers that should or should not 

be included in the scope of this rulemaking.

Item 2-2 DOE welcomes comments regarding the need to include electric commercial 

packaged boilers in this rulemaking.

Item 2-3 DOE requests comment on pursuing standby mode and off mode energy 

conservation standards for commercial packaged boilers.

Item 2-4 DOE welcomes comment as to whether there are any size-related issues with 

conducting testing under the DOE test procedure which the agency should consider 

addressing in its test procedure rulemaking. DOE is also interested in any comments 

regarding whether there is a capacity limit beyond which amended energy conservation 

standards would not be technologically feasible and economically justified.

3. TEST PROCEDURES

DOE’s current energy conservation standards for commercial packaged boilers are 

expressed in terms of thermal efficiency for all equipment classes except for oil-fired and gasfired hot water commercial packaged boilers with input capacities above 2,500,000 Btu/hr. For 

these two equipment classes, combustion efficiency is used as the metric for energy conservation 

standards rather than thermal efficiency. The existing DOE test procedure for determining the 

efficiency of commercial packaged boilers is located in 10 CFR 431.86. The current DOE test 

procedure for commercial packaged boilers references the Hydronics Institute (HI) division of 

the Air Conditioning, Heating, and Refrigeration Institute (AHRI) standard HI BTS-2000, 

Method to Determine Efficiency of Commercial Space Heating Boilers, Second Edition (Rev 

06.07), 2007. 

In 2007, the Hydronics Institute made several changes to BTS–2000 and reaffirmed the 

continued use of BTS–2000 as the recommended testing standard. Therefore, in the July 22, 

2009 final rule, DOE amended the uniform test procedure for commercial packaged boilers to 

incorporate by reference HI BTS–2000 (Rev 06.07). 74 FR 36312, 36323. In addition, DOE 

removed the incorporation by reference of, and any references to, the American Society of 

Mechanical Engineers (ASME) Power Test Codes for Steam Generating Units, ASME PTC 4.1– 

12 
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. Id.

Prior to the July 2009 final rule, the uniform test method for the measurement of energy 

efficiency of commercial packaged boilers required that only the combustion efficiency be tested 

and calculated in accordance with the HI BTS–2000. 10 CFR 431.86(c)(1)(ii)(A). However, in 

the July 2009 final rule, DOE adopted as Federal energy conservation standards several thermal 

efficiency levels described in ASHRAE Standard 90.1–2007. In addition, DOE amended 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 (Rev 06.07). 74 FR 36312, 36354. DOE also amended 10 CFR 

431.86 to specify that thermal efficiency should be measured and rated for the commercial 

packaged boiler equipment classes which use thermal efficiency as the metric for energy 

conservation standards, and combustion efficiency should be measured and rated for the two 

commercial packaged boiler equipment classes which use the combustion efficiency as the 

metric for energy conservation standards (i.e., large gas hot water and large oil hot water 

commercial packaged boilers). Id. at 36355. 

In addition to requiring DOE to update its test method each time the relevant industry test 

procedure is modified (42 U.S.C. 6314(a)(4)(B)), EPCA requires that DOE conduct an 

evaluation of its test procedure for each covered class of equipment at least once every seven 

years. (42 U.S.C. 6314(a)(1)(A)) As noted, DOE last reviewed its test procedures for 

commercial packaged boilers in 2009, so DOE must evaluate the test procedures for this 

equipment not later than 2016. DOE is considering updating the test procedures for commercial 

packaged boilers in a separate proceeding that would occur in parallel with the energy 

conservation standards analysis outlined in this Framework Document. DOE aims to publish a 

final rule for the test procedure rulemaking prior to completing the energy conservation 

standards rulemaking.

Item 3-1 DOE welcomes comment on all aspects of the current DOE test procedure for 

commercial packaged boilers and on whether the test procedure is in need of updates or 

revisions.

3.1 Discussion of Alternative Test Procedure Approaches

In the test procedure rulemaking, DOE will consider alternative methods for measuring 

the energy efficiency, energy use, or average annual operating cost of commercial packaged 

boilers during a representative average-use cycle or period of use that is not unduly burdensome 

to conduct. (42 U.S.C. 6314(a)(2)) In prescribing new or amended test procedures, DOE takes 

into account relevant information including technological developments relating to energy use or 

energy efficiency of commercial packaged boilers. 

DOE believes that certain requirements of the current test procedure may cause testing to 

be either difficult or infeasible to conduct for certain commercial packaged boiler models. Some 

of the issues that DOE is aware of include: 

13 
 The requirement to conduct testing at atmospheric pressure or a steam pressure not 

to exceed 2 psi gauge which may not be possible for all equipment; 

Performing a steam quality test when the unit may not be operable below 2 psi; 

Using a thermocouple grid to measure the temperature of flue gases; and 

Conducting testing on equipment that may be assembled at the site of use. 

DOE is also aware of several aspects of the current test procedure that, due to the lack of 

specificity, may influence the testing of commercial packaged boilers and produce misleading 

efficiency results. These aspects include: 

The lack of an excess air requirement; 

The lack of a defined temperature range for room air; and 

The wide temperature range of allowable inlet water temperatures. 

BTS-2000 was adopted as the test method for commercial packaged boilers in the 

October 21, 2004 final rule. 69 FR 61949, 61961-62. In the rulemaking process preceding the 

October 21, 2004 final rule, DOE analyzed five industry-recognized test methods for rating the 

performance of commercial packaged boilers, as recommended by industry stakeholders. These 

standards included: 

 American National Standards Institute (ANSI) Standard Z21.13–1987, “Gas-fired 

Low Pressure Steam and Hot Water Boilers,” (revised as ANSI Z21.13–1991 with 

Addendum ANSI Z21.13a –1993). 

HI-1989 “Testing and Rating Standard for Heating Boilers,” sixth edition, 1989. 

ASME Power Test Codes (PTC) 4.1–1964 (reaffirmed R1991) “Power Test Codes 

for Steam Generating Units,” (revised in 1998 as ASME PTC 4–1998, Fired Steam 

Generators, issued on December 31, 1999). 

 Underwriters Laboratory Standard 795–1973, “Commercial-Industrial Gas Heating 

Equipment” (UL 795, revised in 1994 as UL 795–94). 

 Underwriters Laboratory Standard 726–1990, “Oil-fired Boiler Assemblies,” (UL 

726). 

65 FR 48838, 48841 (August 9, 2000).

In the October 21, 2004 final rule, DOE concluded that BTS-2000 was the most suitable 

standard to reference. 69 FR 61949, 61956. However, as noted above, several concerns with the 

BTS-2000 standard have come to light, and in particular, DOE is concerned about the standard’s 

applicability to all types of commercial packaged boilers. Thus, in a separate test procedure 

rulemaking, DOE plans to analyze the alternative test procedures that are available and widely 

accepted within the industry. In conducting this analysis, DOE will work closely with 

manufacturers, industry experts, and stakeholders to determine the test procedure (or procedures) 

that is best suited to meet the needs of the commercial packaged boiler industry and the statutory 

requirements of EPCA (42 U.S.C. 6314(a)). 

14 
Item 3-2 DOE requests feedback on issues or problems with the current test procedure 

that may make it burdensome or infeasible for manufacturers to conduct testing on some 

or all models of commercial packaged boilers. Specifically, DOE requests comment 

whether the operating pressures required by BTS-2000 are not achievable for any 

commercial packaged boilers within the scope of this rulemaking.

Item 3-3 DOE requests feedback on testing conditions within the current test procedure 

that may need to be refined to ensure fair comparison of efficiencies across commercial 

packaged boiler models.

Item 3-4 DOE welcomes comment on alternative industry test methods for determining 

the efficiency for commercial packaged boilers, particularly with regards to how an 

alternative standard would improve or not improve upon the current test procedure based 

on BTS-2000, and on the comparability of efficiency ratings determined using the 

alternative standards to those from a BTS-2000 test.

4. OVERVIEW OF ANALYSIS FOR ENERGY CONSERVATION STANDARDS 

RULEMAKING

The purpose of the analyses conducted in support of the standards rulemaking is to ensure 

that DOE selects energy conservation standards that achieve the maximum improvement in 

energy efficiency that is technologically feasible and economically justified, and will result in 

significant energy savings, as required by EPCA. Economic justification includes the 

consideration of economic factors set forth in EPCA (see section 1.3), which encompass the 

economic impacts on domestic manufacturers and consumers, national benefits (including 

environmental impacts), issues of consumer utility, and impacts from any lessening of 

competition. DOE expects the selection of such standards to achieve the maximum energy 

savings that are technologically feasible and economically justified without imposing an 

excessive financial burden on any particular party. 

Figure 4.1 summarizes the analytical components of the DOE standards-setting process. 

The analyses are presented in the center column. Each analysis has a set of key inputs, which are 

data and information required for the analysis. The identified approaches are the methods that 

DOE will use to obtain key inputs, which may vary depending on the information in question. 

For example, some key inputs can be found in public databases. In support of this rulemaking, 

DOE will also develop relevant information or collect such information from interested parties or 

experts with special knowledge. Key outputs from each analysis feed directly into the 

rulemaking. Arrows indicate the flow of information among the various analyses. DOE ensures 

a consistent approach to its analyses throughout the rulemaking by considering each analysis as a 

part of the overall standards-setting framework. 

15 
Figure 4.1 Flow Diagram of Analyses Conducted for an Energy Conservation Standards 

Rulemaking

16 
5. MARKET AND TECHNOLOGY ASSESSMENT

The market and technology assessment will provide information about the commercial 

packaged boiler industry and performance attributes of various types of commercial packaged 

boilers. DOE uses this information throughout the rulemaking. This assessment is particularly 

important at the outset of the rulemaking for developing equipment classes and for identifying 

technologies that improve efficiency for each of the boiler types being considered in this 

rulemaking. 

5.1 Market Assessment

In the market assessment, DOE will qualitatively and quantitatively characterize the 

structure of the market for commercial packaged boilers. DOE will identify and characterize the 

manufacturers of this equipment, estimate market shares and trends, address regulatory and nonregulatory initiatives intended to improve the efficiency or reduce the energy use of covered 

boilers, and explore the potential for technological improvements in the design and 

manufacturing of such equipment. 

The market assessment establishes the context for the rulemaking and serves as a 

resource to guide the analyses that follow. The market assessment allows DOE to gather data 

that can help identify important issues (e.g., potential small business impacts, technology 

options, competitive disruptions, manufacturers’ market shares, and other factors that may arise 

from enacting standards). For example, DOE may use historical shipments and prices as 

indicators of future shipments and prices. Similarly, DOE plans to use market structure data for 

the MIA, which will be particularly useful for assessing competitive impacts. This assessment 

also enables DOE to start updating design options by reviewing product literature, industry 

publications, and company websites. 

DOE is considering examining national market reports; however, DOE recognizes that 

there may be limited publicly-available information on national shipments, manufacturing costs, 

distribution channels, product literature, and manufacturer market shares of commercial 

packaged boilers. This type of data is an important input for analyses that determine whether 

amended energy conservation standards would be economically justified and capable of 

achieving significant energy savings. Therefore, DOE encourages interested parties to submit 

data that will improve DOE’s understanding of the commercial packaged boilers market. 

Data may be provided under a confidentiality agreement with DOE’s contractors 

responsible for the rulemaking analyses, Lawrence Berkeley National Laboratory (LBNL) and/or 

Navigant Consulting, Inc. (NCI). In other rulemakings, LBNL and NCI routinely work with 

confidential data provided by manufacturers and other organizations in preparing aggregated 

results for DOE’s analyses. These aggregated results do not divulge the sensitive, individual raw 

data, but enable other interested parties to comment on the aggregated dataset. 

17 
Alternatively, interested parties may submit confidential data to DOE, indicating in 

writing which data should remain confidential. Interested parties must submit confidential 

information to DOE according to the procedures outlined in 10 CFR 1004.11. Pursuant to 10 

CFR 1004.11, any person submitting information that he or she believes to be confidential and 

exempt by law from public disclosure should submit two copies. One copy of the document 

shall include all the information believed to be confidential, and the other copy shall have the 

information believed to be confidential deleted. DOE will make its own determination about the 

confidential status of the information and treat it accordingly.10

Item 5-1 DOE welcomes data that would contribute to the market assessment, including 

but not limited to information on national historical shipments, distribution channels, and 

manufacturer market shares of commercial packaged boilers.

5.2 Trade Associations and Manufacturers

DOE recognizes the importance of manufacturers and their representative trade groups in 

disseminating information and promoting the interests of the industry that they support. The two 

main trade groups for commercial packaged boilers are discussed immediately below. In 

addition, DOE notes that there are several commercial pacakaged boiler manufacturers that are 

not members of either of the trade associations discussed below. DOE welcomes information to 

inform the rulemaking from all manufacturers, including both members and non-members of 

trade associations, and will seek to inform and include all interested parties. 

5.2.1 Air-Conditioning, Heating, and Refrigeration Institute

The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) is a national trade 

association for manufacturers of heating, ventilation, air-conditioning, and refrigeration 

(HVACR) and water-heating equipment, including commercial packaged boilers. DOE expects 

that AHRI will play an important role in providing market information, including information on 

manufacturers, market shares, and trends in the market. AHRI maintains the Gas Appliance 

Manufacturers Association (GAMA) Efficiency Certification Program, which is a database of 

equipment ratings for all manufacturers who elect to participate in the program.11 DOE plans to 

use the data in this directory in its market assessment. DOE also plans to examine other data 

sources such as manufacturer literature, technical reports, and any other relevant information to 

provide a broad insight into the commercial packaged boilers market. 

10 Factors that DOE considers 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 public 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) a date 

after which such information might lose its confidential character; and (7) why disclosure of the information would 

be contrary to the public interest. 11 See http://www.ahridirectory.org/ahridirectory/pages/home.aspx. 

18 
5.2.2 American Boiler Manufacturers Association

The American Boiler Manufacturers Association (ABMA) is a national, nonprofit trade 

association of commercial, institutional, industrial, and electricity-generating boiler system 

manufacturing companies (> 400,000 Btu/hr heat input), dedicated to the advancement and 

growth of the boiler and combustion equipment industry.12

Item 5-2 DOE welcomes comment on the listed national trade associations for 

commercial packaged boilers. Specifically, are there trade associations not listed here 

that should be included?

5.3 Equipment Classes

DOE may divide covered equipment into equipment classes by: (a) the type of energy 

used; (b) the capacity of the equipment; and/or (c) any other performance-related feature that 

justifies different standard levels. In determining whether a feature justifies a different standard 

level, DOE considers the utility of the feature to the consumer and other factors DOE considers 

appropriate. DOE uses the market assessment to determine the appropriate equipment classes 

and their respective operating ranges. DOE will conduct its analysis to establish separate 

standard levels for each equipment class. 

The considered commercial packaged boiler equipment classes for this rulemaking are 

based on the current set as described in 10 CFR 431.87(a). The considered equipment classes are 

divided by fuel type (i.e., gas or oil), heating media (i.e., steam or hot water), and size (i.e., small 

(300,000-2,500,000 Btu/hr) or large (>2,500,000 Btu/hr)) (see Table 5.1). The type of energy 

used and capacity of the equipment are explicitly called out as criteria for creating separate 

equipment classes in EPCA. DOE will maintain equipment classes for gas-fired and oil-fired 

boilers and develop a new equipment class for electric boilers. Further, in creating separate 

standards for steam and hot water residential boilers in EISA 2007, Congress deemed heat 

transfer medium a performance-related feature that merits a separate equipment class. Steam 

offers a few benefits over hot water as a heat transfer medium, such as higher operating 

temperatures and fewer moving parts. Because steam boilers generally cannot reach the same 

efficiency levels as hot water boilers, combining steam boilers and hot water boilers into a single 

equipment class could result in standards that would potentially eliminate steam boilers from the 

market. EPCA does not allow DOE to promulgate efficiency standards that would result in the 

unavailability in the United States (U.S.) in any covered equipment type (or class) of 

performance characteristics (including reliability), features, sizes, capacities, and volumes that 

are substantially the same as those currently on the market (42 U.S.C. 6295(o)(4)), and thus, 

using this same logic, DOE believes that the commercial packaged boiler equipment classes for 

heating media (steam and hot water) should be maintained. 

As discussed in section 2, DOE recently published a notice of proposed determination 

(NOPD) regarding coverage of natural draft commercial packaged boilers. 78 FR 49202 (August 

12 See http://www.abma.com/.

19 
13, 2013). If the outcome of the August 2013 NOPD confirms DOE’s authority to cover natural 

draft commercial packaged boilers, DOE would create a separate equipment category for natural 

draft commercial packaged boilers which would include its own set of equipment classes. 

Table 5.1 Considered Commercial Packaged Boiler Equipment Classes

Commercial Packaged Boiler Equipment Class

Small (300,000-2,500,000 Btu/hr) Gas-Fired Hot Water

Small (300,000-2,500,000 Btu/hr) Gas-Fired Steam

Small (300,000-2,500,000 Btu/hr) Oil-Fired Hot Water

Small (300,000-2,500,000 Btu/hr) Oil-Fired Steam

Large (>2,500,000 Btu/hr) Gas-Fired Hot Water

Large (>2,500,000 Btu/hr) Gas-Fired Steam

Large (>2,500,000 Btu/hr) Oil-Fired Hot Water

Large (>2,500,000 Btu/hr) Oil-Fired Steam

Electric (all)

Item 5-3 DOE welcomes comments on its considered equipment classes. Are there any 

other performance-related features that should be considered for commercial packaged 

boilers equipment classes?

5.4 Technology Assessment

The technology assessment focuses on understanding how commercial packaged boilers 

use energy and on identifying potential technology changes that would improve the efficiency of 

this equipment. Measures that improve the rated equipment efficiency are called technology 

options, and they are based on existing technologies, as well as working prototypes. In 

consultation with interested parties, DOE will create a list of technology options for 

consideration in this rulemaking. Following research into this list of technology options, DOE 

will consider each option in light of the four screening criteria discussed in section 6. Those 

technology options that pass the screening criteria will be considered suitable options for 

improving the efficiency of the equipment in the engineering analysis, and will assist DOE in 

determining the max-tech design. 

5.4.1 Boiler Equipment

Commercial packaged boilers are pressure vessels designed to transfer heat via 

combustion to water or steam, used for space heating, and in some applications domestic hot 

water as well. Commercial packaged boilers can be condensing or noncondensing in design. 

Condensing design boilers recover additional heat by condensing part of the water vapor 

20 
produced by the burning fuel.13 A boiler consists of: (1) a tank/shell (or other form of pressure 

vessel to hold the water or steam); (2) a burner; (3) a combustion chamber (also sometimes 

referred to as a firebox); (4) a heat exchanger; (5) automatic controls; and (6) mechanical draft 

equipment (e.g., forced or induced draft blower) if the boiler is not of the natural draft type. The 

following provides further details regarding the components used in commercial packaged 

boilers. 

Construction Materials

Traditional noncondensing boilers are often made of cast iron, steel, copper, or copperclad steel, and are usually designed to prevent corrosion and thermal shock. Condensing boilers 

are usually made of stainless steel or aluminum construction, because the acidic condensate 

would corrode copper, cast iron, or carbon steel. Condensing boilers may include secondary heat 

exchangers which, due to exposure to corrosive flue gas condensate, must also be constructed of 

stainless steel and/or incorporate non-corroding plastic materials that will withstand the flue 

temperatures, such as chlorinated polyvinyl chloride (CPVC). 

Tank/Pressure Vessel

Boiler tanks (also called the pressure vessel or boiler shell) are frequently cylindrical in 

shape, but can also be of rectangular or other construction styles. The inside walls of the tank 

opposite combustion regions are sometimes lined with insulating materials to maintain sufficient 

flame temperature for clean combustion. The outside surfaces of the tank are usually covered 

with insulation to reduce heat losses through the boiler jacket. 

Burner

Burners combine the fuel and air and then ignite the mixture to start the combustion 

process. The boiler fuel type dictates the type of burner that is used. 

 Atmospheric burners typically use natural gas or propane in natural draft applications. 

An atmospheric burner uses the pressure-induced velocity of gas exiting an orifice to mix 

such gas with primary combustion air. An atmospheric burner then uses natural draft to

mix secondary air into the flame during combustion. 

 A gas power burner is a type of burner that uses a blower to push combustion air into the 

combustion zone. This may be an externally mounted gun-type burner similar to an oilpressure atomizing burner, or an incorporated fan and gas delivery system within the 

boiler. 

 An oil power burner may be a pressure atomizing burner or an air atomizing burner. A 

pressure atomization oil burner uses oil pumped through a nozzle to create a fine mist 

13 This requires that the water returning to the boiler system be cold enough to sufficiently carry out the 

condensation process of the water vapor in the exhaust. 

21 
that is then mixed with the combustion air and ignited at the front of the burner. An air 

atomizing burner uses compressed air to atomize the oil into a fine mist before being 

delivered and ignited in the combustion chamber. 

Heat Exchangers

A heat exchanger is a device used to transfer heat from one medium to another. All 

boilers come equipped with air-to-water heat exchangers. The primary boiler heat exchanger 

designs include: (1) water tube; (2) fire tube; (3) cast iron; and (4) tubeless.

14

For water tube boilers, combustion gases circulate around water or steam-filled tubes. 

Heat transfer is achieved by radiation from the flames as well as by convection from the hot 

combustion gases. There may be up to several thousand water tubes in a boiler, depending on 

the size of the unit.15 The water tubes are often welded together to form the walls of the 

combustion chamber, called a “waterwall.” Water-tube designs are often used in steam boilers. 

Finned copper water tube boilers are designed with rows of horizontal finned tubes located above 

the combustion chamber. Finned copper water tube boilers are general hot water boilers. The 

water-tube design can enable more rapid start-up due to lower thermal mass plus can enhance 

thermal shock resistance due to greater structural flexibility relating to thermal expansion and 

contraction. 

For fire tube boilers, the boiler tank is filled with water and heat is transferred16 as hot 

combustion gases pass through one to several metal tubes or other passageways in the heat 

exchanger. Fire tube boilers are often characterized by their number of passes (i.e., number of 

times combustion gases flow the length of the boiler). The combustion gas flows through the 

length of a bundle of tubes and then is turned around and passes back through an additional 

bundle of tubes.17 Fire tube boiler combustion chambers may be dry-base, wet-base, or wet-leg. 

Dry-base chambers are refractory-lined chambers that direct the combustion gases from the 

firebox to the heat transfer tubes; the chamber is usually located beneath the fluid-backed 

sections. Wet-base chambers often utilize a water-cooled turn-around chamber to direct the flue 

gases from the combustion chamber to the tube banks, although dry-backed turn-around 

chambers are also sometimes used. A wet-backed turn-around chamber is fully surrounded by 

fluid-backed sections except for the necessary openings – thereby eliminating the need for the 

refractory lining. Wet-leg combustion chambers have fluid-backed sections on the top and sides 

of the chamber. 

14 ASHRAE 2008 HVAC Systems and Equipment Handbook (Available at: https://www.ashrae.org/resources--

publications/handbook).

15 Characterization Industrial Commercial Boiler Population (2005) (Available at: 

https://www1.eere.energy.gov/manufacturing/distributedenergy/pdfs/characterization_industrial_commerical_boiler

_population.pdf).

16 The heat is transferred in the first pass of fire tube boiler by radiation and convection then by convection on the 

remaining passes of the boiler.

17 DOE's Improving Steam System Performance: A Sourcebook for Industry (2012) (Available at: 

http://www1.eere.energy.gov/manufacturing/tech_assistance/pdfs/steamsourcebook.pdf).

22 
Cast iron boilers are made up of cast pressure sections bolted together or connected by 

push nipples to form a block assembly.18 The water is contained inside cast iron sections, and 

combustion gases flow through designated passages outside the sections.19 Cast iron boilers may 

be of dry-base, wet-leg, or wet-base design. 

Tubeless boilers use the outside of its shell as part of the heat exchanger surface. There is 

a central flue surrounded by water which serves the first pass of the combustion gases.20 The 

combustion gases then exit the central flue through a nozzle that connects it to the hollow shell 

wall which has internal steel fins that run the length of the boiler tank. Then the combustion 

gases make several passes through the shell wall before exiting the stack.21

Controls

A boiler must be capable of providing immediate response to load demand variations 

while maintaining its efficiency and safety features. Thus, boilers come equipped with a variety 

of controls. 

 The main operating control (pressure-actuated for steam boilers and temperatureactuated for hot water boilers) controls the firing rate of the fuel by monitoring 

hot water temperature or steam pressure.22 Operating controls could provide 

on/off, high/low/off, and modulating functions.23

 The low-water cutoff switch stops fuel flow to the burner if minimum water levels 

are not detected.24

 The pressure gauge & regulator monitors boiler pressure and shuts off the fuel 

supply to the boiler if allowable boiler pressure is exceeded. Additionally, the 

temperature/pressure relief valve releases steam if the pressure gage/regulator 

fails and pressure builds dangerously high.25

 The flame safeguard control monitors the burner for proper operation and shuts 

off the fuel supply if a flame is not detected in the burner.26

18 Heselton, Kenneth E. Marcel Dekker, Boiler operator's handbook (2005).

19 BetterBricks “Boilers Introduction How Boilers Work” (Available at: 

http://www.betterbricks.com/sites/default/files/operations/om_of_ boilers_final.pdf). 

20 See http://www.spthermal.com/hurst.html. 21 Heselton, Kenneth E. Marcel Dekker, Boiler operator's handbook (2005). 22 BetterBricks “Boilers Introduction How Boilers Work” (Available at: 

http://www.betterbricks.com/sites/default/files/operations/om_of_boilers_final.pdf).

23 ASHRAE 2008 HVAC Systems and Equipment Handbook (Available at: https://www.ashrae.org/resources--

publications/handbook). 24 ASHRAE 2008 HVAC Systems and Equipment Handbook (Available at: https://www.ashrae.org/resources--

publications/handbook).

25 See http://homerepair.about.com/od/heatingcoolingrepair/ss/Residential-Steam-Boiler-Controls.htm. 26 See https://www.osha.gov/dte/grant.../fy07/sh.../mod_7_boiler_safety2.pptx.

23 
Draft

Draft types include natural and mechanical draft, as well as a forced-draft mechanism 

achieved by pulse combustion. A natural draft boiler is designed to work with a negative 

pressure in the firebox and flue connection, where the pressure difference is developed by the 

buoyancy of hot gases in the chimney. A mechanical draft boiler has either a forced draft or 

induced draft blower. A forced draft boiler uses a blower upstream of the combustion chamber, 

and the fan is located at the inlet of a boiler and pushes air through the burner, thereby ensuring 

that adequate air is delivered to the combustion process.

27 The blower pulls air from the boiler 

room or may be connected to a duct system which pulls in outside air, then delivers air to the 

combustion chamber at a positive pressure above atmospheric pressure. An induced draft boiler 

uses a blower located at the outlet side of the boiler to pull flue gases out of the boiler due to a 

negative pressure in the combustion chamber, thereby causing air flow into the inlet of the boiler. 

5.4.2 Technology Options to Improve Combustion and/or Thermal Boiler Efficiency

DOE is studying technology options by reviewing commercial packaged boiler 

manufacturer specification sheets and equipment literature, recent trade publications, technical 

journals, and patent filings. DOE also intends to consult with technical experts who have 

worked on commercial packaged boiler designs and to conduct manufacturer interviews about 

these technology options. At this time, DOE is aware of a set of technology options (discussed 

in further detail below) that could be used to improve commercial packaged boiler efficiency. 

Technology options that are applicable only to equipment subject to a thermal efficiency 

standard are noted. The following list includes technologies that would improve the rated 

efficiency: 

1. Jacket Insulation (Thermal Efficiency Only) 

2. Condensing Boilers and Other Heat Exchanger Improvements 

3. Burner Derating 

4. Improved Burner Technology 

5. Combustion Air Preheaters 

6. Economizers 

7. Integrated, High-Efficiency Steam Boilers 

Jacket Insulation (Thermal Efficiency Only)

The outside surfaces of the boiler tank/pressure vessel are usually covered with insulation 

to reduce heat losses through the boiler jacket. A poorly insulated jacket can result in heat loss 

of up to several percent of the boiler Btu/hr capacity. 

27 DOE's Improving Steam System Performance: A Sourcebook for Industry (Available at: 

http://www1.eere.energy.gov/manufacturing/tech_assistance/pdfs/steamsourcebook.pdf).

24 
Condensing Boilers and Other Heat Exchanger Improvements

At most operating temperatures, condensing commercial packaged boilers operate at 

higher efficiencies than the traditional noncondensing commercial packaged boiler by capturing 

some of the latent heat resulting from the phase change of the water vapor in the combustion 

gases. The level of efficiency gain by condensing boilers, compared to non-condensing designs, 

is usually greater at low distribution system operating temperatures, when non-condensing 

boilers sometimes use supply/return water mixing valves to maintain boiler temperatures that are 

high enough to prevent condensation and possible related corrosion. 

Improvements to the heat exchanger can be achieved by modifying baseline designs of 

standard boilers to: (1) increase heat exchanger surface area; (2) modify or add heat exchanger 

surface features; (3) modify or add heat exchanger baffles and turbulators; and (4) increase the 

corrosion resistance of the primary heat exchanger, or use a corrosion-resistant secondary heat 

exchanger, to withstand flue gas condensation. 

Mechanical draft systems can be added to boilers to enable the use of more-efficient heat 

exchangers. In natural draft systems, the movement of air through the boiler is driven by the 

buoyancy of the flue gases. Mechanical draft systems allow for extended heat exchange surfaces 

and/or tighter flueways by overcoming the drop in pressure associated with restrictive flow 

passages in more-efficient heat exchangers and by supplementing the loss of buoyancy in cooler 

flue gases to provide sufficient airflow to the burners. 

Improving the heat exchanger for a boiler can improve the effectiveness of heat transfer 

from the hot combustion gases to the water that is distributed to the heated space. The improved 

effectiveness of the heat exchanger can increase the combustion and thermal efficiency. High 

pressure-drop heat exchangers can also serve to reduce off-cycle draft losses by restricting the 

flow of air through the heat exchanger, and subsequent loss of heat, when the burner is not 

operating. 

Burner Derating

Burner derating is the operation of a boiler at a reduced firing rate. Reducing burner 

firing rate for gas and oil boilers while keeping heat exchanger geometry, the surface area, and 

the fuel-to-air ratio the same, will increase the ratio of heat transfer surface area to energy input, 

thereby increasing the efficiency of the boiler. However, depending on the degree of reduction, a 

lower energy input means that less heat will be produced, and, thus, lower utility may be 

provided than with conventional burner firing rates. 

Improved Burner Technology

Pulse Combustion

Pulse combustion burners operate on self-sustaining, resonating pressure waves that 

alternately depressurize the combustion chamber (drawing a fresh fuel-air mixture into the 

chamber) and pressurize it (through heating and expansion of the fuel/air mixture during 

25 
combustion). Pulse combustion systems feature high heat transfer rates, and can achieve higher 

efficiency levels than conventional boiler designs. 

Premix Burners

Premixing fuel gas and combustion air prior to arrival at the flame results in more 

complete combustion using lower levels of excess air. The lower levels of excess air not only 

reduce the amount of fuel required to heat the combustion air but also raise the temperature of 

the gases entering the heat exchanger which enhances heat exchange and improves efficiency. 

Lower levels of excess air also raise the water vapor due point which facilitates condensation and 

the recovery of latent heat and improves efficiency when the unit is operating in condensing 

mode. 

Low-Pressure, Air-Atomized Oil Burner

Fuel input rate is controlled by the size of the nozzle orifice. Pressure-atomizing nozzles 

that are designed for low firing rates suffer rapid fouling of the small internal passages, leading 

to inadequate spray patterns and poor combustion performance. To overcome the low input 

limitations of conventional oil burners, Brookhaven National Laboratory developed a lowpressure, air-atomized oil burner.28 In addition, it can operate with low levels of excess 

combustion air for lean-burning, ultra-clean combustion. A lower level of excess air generally 

improves combustion efficiency. 

Combustion Air Preheaters

Combustion air preheaters (also known as recuperators) are air-to-air heat exchangers 

that transfer energy from the flue gases back into the system. However, instead of transferring 

the energy into the feed water as is done with an economizer, the energy is transferred to increase 

the temperature of the incoming combustion air, thereby potentially resulting in improved 

efficiency. 

Economizers

Economizers may allow for an increase in boiler thermal efficiency29 by transferring 

excess flue gas heat into incoming feedwater.30 Economizers are usually air-to-water heat 

exchangers. There are noncondensing and condensing economizers available on the market. 

Condensing economizers are designed to allow condensation of the exhaust gas. 

Integrated, High-Efficiency Steam Boilers

Certain manufacturers have developed integrated, high-efficiency steam boilers that 

combine multiple design features to increase fuel-to-steam efficiency. Such features can include 

enhanced heat transfer surfaces (e.g., spiral fire tubes), as well as feedwater economizers and 

28 See: http://www.osti.gov/bridge/servlets/purl/248539-wWbYod/webviewable/248539.pdf. 29 Note that economizers would only show an increase in thermal efficiency if they are an integral component of the 

boiler. 

30 See https://www1.eere.energy.gov/manufacturing/tech_deployment/pdfs/steamsourcebook.pdf.

26 
high-turndown modulating burners capable of maintaining low levels of excess combustion air. 

Cleaver-Brooks, in partnership with DOE and the Gas Technology Institute (GTI), developed the 

first integrated, high-efficiency steam boilers called a "Super Boiler."31

5.4.3 Technology Options to Reduce Standby Mode and Off Mode Energy Consumption

In the event that standby mode and off mode standards are pursued, DOE has developed 

the following list of technologies that would reduce standby mode and/or off mode electrical 

energy consumption: 

1. Toroidal Transformer (Standby Mode/Off Mode) 

2. Control Relay for Models with Brushless Permanent Magnet (BPM) Motors 

(Standby Mode/Off Mode) 

3. Switching Mode Power Supply (Standby Mode/Off Mode) 

Toroidal Transformer (Standby Mode/Off Mode)

A toroidal transformer has an annular core made of tightly-wound, grain-oriented, silicon 

steel ribbons, which are arranged such that all their molecules are aligned with the direction of 

flux. This allows better performance (i.e., more quiet and efficient operation) than a traditional 

laminated transformer, in which unaligned molecules increase the core’s reluctance, or capacity 

for opposing magnetic induction. These improvements in efficiency allow an up to 50 percent 

reduction in size and weight, such that they can be used in new, innovative applications. Overall 

efficiency of toroidal transformers is 90 to 95 percent. 

Because transformers continue to supply power to the control board in all modes of 

operation (including standby mode), increasing their operating efficiency will also reduce the 

boiler’s standby electrical power consumption. 

Control Relay for Models with Brushless Permanent Magnet (BPM) Motors (Standby 

Mode/Off Mode)

During testing of standby mode and off mode components performed for the DOE 

furnace and central air conditioner rulemaking, 32 DOE found that BPM motors and their 

associated controls consume power while in standby and/or off modes, while permanent splitcapacitor (PSC) motors did not have any standby mode or off mode power draw. Therefore, for 

those boilers that utilize them, the BPM motor and associated controls could be disconnected 

while the system is in standby mode or off mode through the use of a control relay to further 

reduce a system’s standby mode/off mode power consumption. A typical control relay activates 

a switch when current runs through it, and when there is no current, a spring holds the switch in 

the open position. 

31 See http://www.cbboilers.com/superboiler.htm for further information. 

32 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Energy Conservation Program 

for Products: Technical Support Document: Energy Efficiency Standards for Products: Residential Furnaces and 

Central Air Conditioners and Heat Pumps Including: Market and Technology Assessment (2010) (Available at: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/residential_furnaces_central_ac_hp_dir ect_f

inal_rule_tsd.html).

27 
Switching Mode Power Supply (Standby Mode/Off Mode)

While linear power supplies regulate voltage supply to the direct current circuit with a 

series element, switching mode power supplies (SMPS) do so in an alternative, more-effective 

way. In a switching mode power supply, power handling electronics switch on and off (where 

“on” means the switch is closed and voltage drop is negligible, and “off” means the switch is 

open and current is negligible) with high frequency, effectively connecting and disconnecting the 

output (load) to the input source. Continuous power flow to the load can be 

maintained/controlled by varying the duty cycle or frequency of the SMPS.

Linear power supplies experience significant heat losses because they use resistance 

elements, which convert electrical energy to heat energy, to regulate power supply. By using a 

switch to control energy flow instead, switching mode power supplies avoid such heat losses and 

have much higher efficiency. SMPS do introduce transient losses that increase with frequency, 

but these losses are negligible in comparison with the energy saved. Thus, replacing a linear 

power supply with an SMPS has the potential to reduce the electrical power consumption of 

commercial packaged boilers in standby mode and off mode. 

5.4.4 Technology Options to Reduce Seasonal Boiler Energy Consumption

DOE is aware of a number of boiler technologies that exist that reduce overall fuel 

consumption by improving the average seasonal efficiency. DOE would like to better 

understand whether any of the following technologies should be considered as technology 

options to improve efficiency and how efficiency improvements could be captured in an updated 

test procedure. 

1. Modulating Burners 

2. Electronic Ignition 

3. Dampers 

4. Temperature Reset Controls 

5. Thermal Post-Purge Controls 

6. Delayed-Action Oil Pump Solenoid Valve 

Modulating Burners

Two-stage and modulating burners can decrease losses caused by burner cycling at partial 

loads. However, modulating burners may not accomplish net energy gains if excess combustion 

air levels must be increased at low firing rates (in order to maintain combustion performance) or 

if electrical power requirements for the burner do not decrease in linear proportion to the firing 

rate. In condensing boiler applications, an increase in excess combustion air ratio can result in 

reduced latent heat recovery due to decreased flue gas dew point temperatures. This can result in 

an energy loss that outweighs the benefit of reduced burner cycling.

28 
Electronic Ignition

Boilers can be equipped with electronic ignition systems, which ignite burners on 

demand using electrical components. 

There are different types of electronic ignition systems including:

(1) Intermittent Pilot Ignition: This is a device that lights a pilot light by generating a 

spark. The pilot light in turn lights the main burner. 

(2) Direct Spark Ignition (DSI): DSI ignites the main burner directly by generating a 

spark. 

(3) Interrupted Duty Ignition Systems: All modern oil burners have a type of 

electronic ignition called an interrupted duty ignition. A step-up transformer 

supplies power to two electrodes, which causes a spark to jump. The interrupted 

duty ignition system for an oil burner activates the spark until either a steady 

flame is established or the end of the trial-for-ignition (TFI) period.33

(4) Hot Surface Ignition: The igniter in this system is an electrically-heated resistance 

element that thermally ignites the main burner directly without the use of a pilot 

light. 

Unlike standing pilot ignition systems that consume fuel continuously, electronic devices 

and their control modules operate only during the active mode, which improves efficiency. 

Solid-state electronic ignition components can also achieve electricity savings compared to older, 

iron-core transformer technologies. 

Dampers

Off-cycle (which refers to the burner off-cycle) dampers restrict the intake and exhaust 

air flow through the venting system during standby mode by closing when the burner is not 

operating, thereby trapping residual heat in the heat exchanger. During the burner off-cycle, the 

boiler loses heat by natural convection and conduction through the combustion air inlet and flue. 

Installing a damper at these points improves efficiency by preventing heat from escaping and 

minimizing off-cycle heat losses. 

Temperature Reset Controls

Temperature reset controls monitor outside air temperature or burner operating hours 

(BOH) to estimate the required heating load, which can vary as a function of outdoor 

temperature, solar and wind conditions, internal heat gain, or thermostat setback/recovery. The 

hydronic water supply temperature is then modulated up or down to enable the thermal 

distribution capacity to match the actual heating demand.34

33 “Trial for ignition” is the period during which the burner is attempting to ignite the fuel it is delivering to the 

nozzle. 

34 2008 ASHRAE Handbook – HVAC Systems and Equipment (Available at: https://www.ashrae.org/resources--

publications/handbook).

29 
Thermal Post-Purge Controls

Thermal post-purge controls allow the hydronic circulating pump to continue operation 

after the termination of a thermostat demand for heat. The circulation pump continues to operate 

after the shutdown of the burner until the boiler temperature drops down to a programmed level 

that depends on type of boiler and fuel. The thermal post-purge concept functions most 

effectively when the control anticipates the end of the heating demand and shuts off the burner 

early enough so that the residual heat transferred during the post-purge cycle just satisfies the 

temperature requirement of the building. Substantial benefits are achieved by reduced boiler 

temperature during standby mode/off mode through reduced jacket and draft heat losses. 

Delayed-Action Oil Pump Solenoid Valve

A delayed-action oil pump solenoid valve is installed between the oil pump and the 

burner nozzle to supplement the fuel pump regulator. It does so by delaying the fuel release by 

three to six seconds after the igniter and burner blower start until the oil pressure reaches the 

level required to fully discharge the oil into the combustion chamber without dripping. This 

ensures that the oil burns more completely, which improves efficiency since heat exchangers will 

suffer less fouling. 

Item 5-4 DOE welcomes comments on the technologies identified, as well as any 

additional technology options which have not been identified.

6. SCREENING ANALYSIS

The purpose of the screening analysis is to screen out technology options that DOE will 

not analyze further in the engineering analysis or downstream analyses. DOE will develop a list 

of technology options (through its own research and in consultation with interested parties) as 

part of the technology assessment (section 5.4). The identified candidate technology options will 

encompass all those technologies that may improve the efficiency of commercial packaged 

boilers. DOE will then review each technology option considering the following four criteria, as 

provided under sections 4(a)(4) and 5(b) of 10 CFR Part 430, Subpart C, Appendix A: 

1. Technological feasibility. DOE will screen out technologies that are not incorporated 

in commercially-available equipment or working prototypes. 

2. Practicability to manufacture, install, and service. If DOE determines that mass 

production and reliable installation and servicing of the technology cannot be 

achieved on the scale necessary to serve the relevant market by the time of the 

compliance date of the standard, it will not consider that technology further. 

30 
3. Adverse impact on equipment utility or availability. If DOE determines that a 

technology will have a significant adverse impact on the utility of the relevant 

equipment for significant consumer subgroups, or will result in the unavailability of 

any covered equipment type with performance characteristics (including reliability), 

features, size, capacities, and volumes that are substantially the same as equipment 

generally available in the United States at the time, it will not consider that 

technology further. 

4. Adverse impacts on health or safety. If DOE determines that a technology will have 

significant adverse impacts on health or safety, it will not consider that technology 

further. 

DOE will fully document the reasons for eliminating any design options during the 

screening analysis and solicit interested parties’ comment. 

Item 6-1 Of the technologies listed in section 5.4, are there any that should be screened 

out based on the four screening criteria? If so, which criteria apply and why?

7. ENGINEERING ANALYSIS

After conducting the screening analysis, DOE will perform an engineering analysis based 

on the remaining technologies that are available to improve commercial packaged boiler 

efficiency. This section provides an overview of the engineering analysis (section 7.1), discusses 

baseline models (section 7.2.1), describes DOE’s planned approach for determining the costefficiency relationship (section 7.2.3), and addresses proprietary designs (section 7.2.4). 

7.1 Engineering Analysis Overview

The purpose of the engineering analysis is to determine the relationship between 

equipment efficiency and the manufacturer selling price (MSP). In determining the costefficiency relationship, DOE estimates the increase in manufacturer selling price associated with 

technology changes that increase the efficiency of commercial packaged boilers relative to the 

baseline model. DOE will develop cost estimates for boilers at a range of efficiency levels based 

on the technologies incorporated into equipment at those levels and the associated changes in 

material, labor, shipping, and overhead costs. This relationship between price and efficiency 

serves as the basis for cost/benefit calculations to individual consumers in the LCC analysis and 

to the Nation in the national impact analysis (NIA). 

DOE will develop separate engineering analyses for each of the baseline models it 

analyzes for the equipment classes considered in this rulemaking. Due to the large variation of 

sizes and characteristics of the equipment considered in this standards rulemaking, DOE may 

select a smaller subset of representative equipment to analyze. Typically, each representative 

equipment type would capture the features and characteristics common to the majority of the 

31 
shipments. However, in cases where equipment with different characteristics accounts for 

significant market share but cannot be reasonably assumed to be representative of the remaining 

equipment, multiple representative equipment types may be analyzed within an equipment class. 

Once DOE has identified the cost-efficiency relationships for the representative units, the 

analysis may be scaled to include commercial packaged boilers with other features (such as 

different capacities) if there is a significant difference between the cost-efficiency relationships 

of such units. 

The engineering analysis will identify and evaluate commercially-available packaged 

boilers within each equipment class that incorporate technologies that improve efficiency. The 

engineering analysis will also identify the highest-efficiency model that is technologically 

feasible within each equipment class (i.e., the “max-tech” model). DOE may determine the maxtech model by investigating the existence of any commercial packaged boiler working prototypes 

with higher efficiency than those commercially available. DOE will ensure that these 

technologies meet the screening criteria listed in section 6. 

7.2 Engineering Analysis Approach

For the engineering analysis, DOE will examine incremental increases in the 

manufacturer selling price associated with increases in commercial packaged boiler efficiency. 

For the preliminary analysis phase of the rulemaking, DOE intends to use manufacturer-provided 

cost and efficiency data, if available, to develop cost-efficiency relationships for the commercial 

packaged boilers analyzed. DOE will also utilize publicly-available data from manufacturer 

websites and catalogs for commercial packaged boilers in the market to categorize relationships 

between efficiency and technological options, where the technology options used can be 

identified. DOE encourages interested parties to submit test data or information that will 

improve DOE’s understanding of commercial packaged boiler performance as it relates to the 

different technology options. DOE will also use this information to select the characteristics of 

units that are representative of the boilers in each equipment class. DOE will then focus its 

analyses on these representative units. 

7.2.1 Baseline Models

For each equipment class, DOE will identify one or more baseline models that will serve 

as a reference point against which DOE can measure changes resulting from potential energy 

conservation standards. The baseline model (or models) will represent the characteristics and 

input capacity of a typical commercial packaged boiler in a given equipment class. The baseline 

model is typically the most common, least-efficient equipment sold in a given equipment class, 

and just meets (but does not exceed) current energy conservation standards. DOE may select 

more than one representative baseline model for the equipment class if all models in that class 

cannot be reasonably represented by a single set of common characteristics. 

32 
7.2.2 Efficiency Levels

For each equipment class, DOE will undertake analyses to determine potential efficiency 

levels and seek to develop incremental manufacturing cost data at each of these levels. DOE 

plans to conduct engineering and other downstream analyses at various efficiency levels for each 

equipment class. DOE will select efficiency levels between the baseline and max-tech levels 

based on information obtained in the market and technology assessment. The efficiency levels 

between the baseline and max-tech levels will be based on the most common efficiencies of 

models available, or on significant technologies for improving efficiency, or on a combination of 

these two factors. DOE may conduct testing on select units to aid in determining appropriate 

efficiency levels. 

To establish the efficiency levels for the analysis, DOE will consider the design changes 

associated with improving commercial packaged boiler efficiency from the baseline through the 

max-tech model. This will include considering the technologies identified in the technology 

assessment that are passed on through the screening analysis. DOE also intends to collect 

commercial packaged boiler efficiency data from various manufacturer catalogs and the AHRI 

Directory35 to establish the range of efficiencies currently available on the market in the market 

assessment (see section 5). DOE will also use these data to categorize relationships between 

efficiency and technological options where the technological options used can be identified. 

DOE notes that the maximum efficiency levels available in commercial packaged boilers 

currently on the market may not necessarily correspond to the max-tech levels. Models at the 

highest efficiency available on the market today may not incorporate all possible design options 

for increasing efficiency and, therefore, may not achieve the highest possible efficiency at the 

max-tech level. It is also possible that some of the design options that have met the screening 

criteria (i.e., passed the screening analysis) may be working prototypes that are not yet 

commercially available and, therefore, would not be found in today’s available maximum 

efficiency equipment. DOE will seek input from interested parties to determine appropriate 

max-tech efficiency levels. DOE will ensure that such units meet the screening criteria in section 

6 using other means, such as information gathered from manufacturer interviews. 

Item 7-1 DOE seeks input regarding the range of efficiency levels and any key efficiency 

levels that should be examined as part of its analysis.

Item 7-2 DOE seeks comment on the appropriate max-tech levels for commercial 

packaged boilers.

Item 7-3 DOE seeks input on the representative capacity and other representative 

characteristics for each commercial packaged boiler equipment class.

35 Air-Conditioning, Heating, and Refrigeration Institute (AHRI), 2013 Directory of Certified Product Performance: 

Commercial Packaged Boilers (Available at: http://www.ahridirectory.org/). 

33 
Item 7-4 DOE seeks input on characteristics which may require multiple representative 

equipment types within a single equipment class.

7.2.3 Methodology for Developing the Cost-Efficiency Relationship

The engineering analysis primarily involves estimating the production cost of commercial 

packaged boilers at various levels of increased efficiency. These estimates of production cost are 

then used in conjunction with equipment efficiency information to determine the cost-efficiency 

relationship for the equipment. DOE typically structures its estimation of the cost-efficiency 

relationship around one of three methodologies: (1) the design-option approach, which calculates 

the incremental cost of adding specific design options to the baseline model; (2) the efficiencylevel approach, which calculates the incremental costs of achieving increases in energy 

efficiency, without regard to the particular design options used to achieve such increases; and (3) 

the reverse engineering cost-assessment approach, which involves a “bottom-up” manufacturing 

cost assessment based on a detailed bill of materials (BOM) derived from teardowns of 

equipment being analyzed. Deciding which methodology to use for the engineering analysis 

depends on the equipment, the technologies under study, and any historical data DOE can draw 

upon. For the analysis of potential amended energy conservation standards for commercial 

packaged boilers, DOE has tentatively decided to use a combination of the design-option 

approach and the efficiency-level approach to identify incremental improvements in efficiency 

for each equipment class and to develop a cost for each efficiency level. In the event that 

standby mode or off mode standards are pursued, DOE would likely employ the design-option 

approach to evaluate the cost-efficiency relationship of the applicable technologies identified in 

section 5.4.3. 

After identifying the representative models for each equipment class and selecting 

efficiency levels for analysis, DOE plans to develop production cost estimates for each 

representative model through interviews with manufacturers and by building on expertise 

developed through cost-efficiency analyses of similar products or equipment. DOE plans to 

interview commercial packaged boiler manufacturers to discuss the manufacturing processes and 

production costs associated with each model and to use these discussions to inform its 

manufacturing cost estimates. DOE may supplement and validate its costs estimates by 

conducting surveys of the cost of similar models to contractors, adjusted for distribution chain 

markups. DOE may also consider performing teardown analyses, if necessary, to supplement the 

engineering analysis. If multiple types of equipment with different cost-efficiency relationships 

are included within a single equipment class, DOE will then aggregate the cost numbers by 

weighting individual data points by company-level sales volumes for each type of equipment 

within a given class to produce a single cost-efficiency relationship for that equipment class. 

Manufacturer cost information should reflect the variability in baseline models, design strategies, 

and cost structures that exist among manufacturers. 

DOE will estimate the contribution of the depreciation of capital conversion expenditures 

to the incremental overhead. During the interviews with manufacturers, DOE intends to gather 

information about the capital expenditures needed to increase the efficiency of baseline models 

34 
to various efficiency levels. DOE also intends to gather information about the depreciation 

method(s) used to expense the conversion expenditures. 

The proposed approach will enable DOE to characterize the cost-efficiency relationship 

for commercial packaged boilers across the entire efficiency range for each equipment class. 

DOE will maintain the confidentiality of proprietary data, while allowing the public to examine 

the cost and design assumptions that underlie the cost-efficiency estimates. 

After determining estimates for the manufacturer production cost (MPC), DOE plans to 

apply estimated manufacturer markups to convert manufacturer production costs to manufacturer 

selling prices. DOE intends to estimate manufacturer markups from publicly-available financial 

information (e.g., Securities and Exchange Commission (SEC) 10-K reports) and supplement the 

estimates with information obtained during discussions with manufacturers.36

7.2.4 Proprietary Designs

DOE will consider in its engineering and economic analyses all technologies that are 

commercially available or present in a working prototype, including proprietary designs that 

meet the screening criteria discussed in section 6. However, DOE will consider a proprietary 

design in the subsequent analyses only if it does not represent a unique path to a given efficiency 

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

then DOE will eliminate that efficiency level from further analysis. DOE will reject a standard 

level that can only be met with a single proprietary technology, because it could result in an anticompetitive market, a principle consistently applied in past DOE rulemakings as economically 

unjustifiable. However, if a given energy efficiency level can be achieved by a number of design 

approaches, including a proprietary design, DOE will continue to examine the given efficiency 

level, in spite of the proprietary nature of that one design. 

DOE is sensitive to manufacturer concerns about proprietary designs and will take steps 

to maintain the confidentiality of any proprietary data provided by manufacturers. This 

information will provide input to the competitive impacts assessment and other economic 

analyses. 

8. MARKUPS ANALYSIS

To carry out the life-cycle cost (LCC) and payback period (PBP) calculations, DOE 

needs to determine the cost to the commercial consumer of baseline equipment that satisfies any 

currently applicable energy conservation standards, as well as the cost of the more-efficient unit 

the commercial consumer would purchase under potential amended standards. This is done by 

applying a markup multiplier to the manufacturer’s selling price to estimate the commercial 

consumer’s price. 

36 See http://www.sec.gov/edgar.shtml.

35 
DOE uses retail (consumer) price data in its LCC, PBP, and national impact analyses. 

DOE typically uses distribution channel markups (and sales tax) to convert estimates of the 

manufacturer selling price derived from the engineering analysis (section 7) to consumer prices. 

Before developing markups, DOE first needs to identify how distribution from the 

manufacturer to the commercial consumer takes place. Two different markets exist for heating 

systems: (1) new construction and (2) replacements. Figure 8.1 shows how DOE plans to 

characterize the replacement distribution channels for commercial packaged boilers: 

Manufacturer Wholesaler Mechanical

Contractor

Consumer

Figure 8.1 Replacement Distribution Channel

Figure 8.2 shows how DOE plans to characterize the new construction distribution 

channel for commercial packaged boilers: 

Manufacturer Wholesaler Mechanical

Contractor

General 

Contractor

Consumer

Figure 8.2 New Construction Distribution Channel

In addition, DOE plans to consider distribution channels where the manufacturer sells the 

equipment directly to a commercial consumer through a national account (see Figure 8.3) or the 

commercial consumer purchases the equipment directly through a wholesaler (see Figure 8.4).

Manufacturer Consumer

Figure 8.3 National Account Distribution Channel

Manufacturer Wholesaler Consumer

Figure 8.4 Wholesaler Distribution Channel

36 
To develop markups for the parties involved in the distribution of commercial packaged 

boiler equipment, DOE plans to utilize several sources including: (1) the Heating, AirConditioning and Refrigeration Distributors International (HARDI) 2012 Profit Report37 to

develop wholesaler markups; (2) the 2005 Air Conditioning Contractors of America’s (ACCA) 

financial analysis for the HVACR contracting industry38 to develop mechanical contractor 

markups, and (3) the U.S. Census Bureau’s 2007 Economic Census data39 for the commercial 

and institutional building construction industry to develop general contractor markups. DOE 

previously derived general contractor markups for commercial packaged boilers from U.S. 

Census Bureau financial data for the commercial and institutional building construction sector. 

In addition, DOE plans to consider cases where the contractor’s sale of the equipment includes a 

start-up/check-out contract, in which cases the equipment markup is included in the contract 

costs. 

DOE will also develop and include regional sales taxes to calculate retail prices for 

replacement units. The State Tax Clearinghouse is an on-line source that DOE intends to use to 

calculate applicable sales taxes.40 DOE may use collected retail price data to validate the overall 

manufacturer-to-consumer markup. 

DOE plans to consider whether the wholesaler and contractors markups would be 

different depending on the boiler capacity, fuel type heating output (hot water or steam), and the 

type of boiler draft system (natural draft or mechanical draft). 

The markup analysis generates consumer prices for each considered efficiency level. 

DOE’s markups analysis captures the effect on consumer prices that may result from higher 

production volumes of more-efficient equipment as required by the standard. The overall 

markups, which include manufacturer, wholesaler, and contractor markups, are different for new 

and replacement markets, since different markups apply to each of them. The manufacturer cost 

is then multiplied by the overall markup to generate the consumer price. 

Item 8-1 DOE seeks interested party input on whether the distribution channels 

described above are appropriate for commercial packaged boilers.

Item 8-2 DOE seeks input on the percentage of equipment being distributed through the 

different distribution channels, and whether the share of equipment through each channel 

varies based on equipment class or equipment capacity.

37 Heating, Air Conditioning & Refrigeration Distributors International 2012 Profit Report, (URL: 

http://www.hardinet.org/Profit-Report) (Last accessed April 10, 2013). 

38 Air Conditioning Contractors of America (ACCA), Financial Analysis for the HVACR Contracting Industry: 

2005, (2005) (Available at: https://http://www.acca.org/store/product.php?pid=142) (Last accessed April 10, 2013). 

39 U.S. Census Bureau, 2007 Economic Census Data. (2007) (Available at: http://www.census.gov/econ/) (Last 

accessed April 10, 2013).

40 Sales Tax Clearinghouse, Inc. provides State sales tax rates, along with combined average city and county rates. 

(Available at: http://thestc.com/STrates.stm.) 

37 
Item 8-3 DOE welcomes suggestions and comments concerning its proposed approach 

to developing estimates of future commercial packaged boiler retail prices.

Item 8-4 DOE seeks recent data to establish the markups for the parties involved with 

the distribution of the equipment.

9. ENERGY USE ANALYSIS

The purpose of the energy use analysis is to determine the annual energy consumption of 

the commercial packaged boiler equipment classes described in the engineering analysis for 

representative users of commercial packaged boilers and to assess the energy-savings potential of 

increased equipment efficiencies. DOE uses the annual energy consumption and energy-savings 

potential in the LCC and PBP analysis to establish the savings in building owner operating costs 

at various equipment efficiency levels. 

DOE plans to estimate the annual energy consumption of commercial packaged boilers at 

specified energy efficiency levels across a range of applications, commercial building types, and 

climate zones. The annual energy consumption includes use of natural gas, liquefied petroleum 

gas (LPG), oil, or electricity for hot water or steam production, as well as use of electricity for 

the auxiliary components (e.g., circulating pumps, draft inducers, electronic ignition devices, and 

controls). DOE plans to account for the energy used to heat hot water for the fraction of 

commercial packaged boilers that provide both space heating and water heating. 

DOE intends to base the energy use analysis on building characteristics and energy use 

data from the Energy Information Administration’s (EIA) 2003 Commercial Building Energy 

Consumption Survey (CBECS)41 for the subset of building types that use commercial packaged 

boiler equipment covered by this standard. DOE does not plan to look at small residential 

applications for commercial packaged boilers, because it is unlikely that commercial packaged 

boilers would be used for small residential applications to any significant extent. Commercial 

packaged boilers used in large residential buildings (i.e., multi-family dwellings) will, however, 

be considered in this analysis; DOE intends to base this analysis on multi-family building 

characteristics and energy use data from EIA’s 2009 Residential Energy Consumption Survey 

(RECS).42

Both CBECS and RECS surveys include information on the physical characteristics of 

building units, heating equipment used, fuel types used, energy consumption and expenditures, 

41 Energy Information Administration (EIA), 2003 Commercial Building Energy Consumption Survey (CBECS) 

(Available at: http://www.eia.gov/consumption/commercial/)(Last accessed April 10, 2013). Please note that 

CBECS 2012 is currently in development, and DOE will use this later version if it becomes available in the required 

time frame. 42 Energy Information Administration (EIA), 2009 Residential Energy Consumption Survey (RECS) (Available at: 

http://www.eia.gov/consumption/residential/) (Last accessed April 10, 2013). Please note that DOE intends to 

characterize large multi-family buildings based on number of apartment units and floors of multi-family buildings. 

38 
and other relevant characteristics.43 Using CBECS and RECS data, as well as information from 

American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE),44 DOE 

will develop a building sample for each commercial packaged boiler equipment class based on 

the typical types and input capacity of commercial packaged boilers used in different building 

types and applications. 

Details on how DOE will determine the annual energy consumption of commercial 

packaged boilers are provided below. DOE plans to use the commercial building and climate 

zone data not only to establish each equipment type’s annual energy consumption, but also as the 

basis for conducting the LCC and PBP analysis (see section 10).

9.1 Estimating Annual Energy Consumption of Boilers

DOE will estimate annual energy consumption of commercial packaged boilers (by 

equipment class) by matching heating usage profiles to each building type considered in the 

analysis. 

To develop heating usage and water temperature profiles, DOE will calculate the number 

of hours that a commercial packaged boiler would have to run at full and part-load capacity to 

serve a total heating load. Based on ASHRAE and Electric Power Research Institute (EPRI) 

data, as well as data from National Renewable Energy Laboratory (NREL) and Lawrence 

Berkeley National Laboratory (LBNL), DOE will develop representative heating usage and 

water temperature profiles for various applications for each commercial packaged boiler and 

building type combination being analyzed.45,46 This approach will capture the variability in 

space heating use due to factors such as building activity, schedule, occupancy, local weather, 

building envelope characteristics, tank losses, cycling losses, and piping losses. 

To calculate the total heating load for different building types, DOE plans to use building 

characteristics and energy use data from CBECS 2003 and RECS 2009. DOE intends to develop 

a building sample for each equipment class based on the CBECS 2003 building types, as well as 

multi-family buildings from RECS 2009. 

ASHRAE Standard 90.1 and DOE set standards for commercial packaged boilers in 

terms of thermal efficiency for most equipment classes and in terms of combustion efficiency for 

two equipment classes. DOE does not intend to change the metric for standards, but for the 

purpose of estimating energy use, DOE will develop a relationship between boiler usage and 

43 Neither CBECS nor RECS provide data on whether the boiler used in the building is a commercial packaged 

boiler covered in this rulemaking (i.e., heating could also be provided by a residential size boiler). DOE intends to 

develop a methodology for adjusting its building sample to take into account only buildings that use a commercial 

packaged boilers covered in this rulemaking. 44 American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE), ASHRAE 

Handbook of HVAC Applications: Chapter 50 (Service Water Heating) (2011) pp. 50.1 to 50.32. 

45 National Renewable Energy Laboratory (NREL). U.S. Department of Energy Commercial Reference Building

Models of the National Building Stock (February 2011) (Available at: http://www.nrel.gov/docs/fy11osti/46861.pdf) 

(Last accessed April 10, 2013).

46 Huang, J., Akbari, H., Rainer, L, Ritschard. 481 Prototypical Commercial Buildings for 20 Urban Market Areas, 

LBL-29798 (April 1991)(Available at: http://gundog.lbl.gov/dirpubs/29798.pdf) (Last accessed April 10, 2013). 

39 
thermal efficiency to determine energy usage by efficiency level. DOE is intending to use 

thermal efficiency in the energy use analysis for all equipment classes because thermal efficiency 

is better suited for defining the relationship between energy input and useful output of the boiler. 

For equipment classes required to meet efficiency standards using the combustion efficiency 

metric, DOE could develop corresponding estimates for thermal efficiency based on the "average

percentage point difference" method used in the 2009 Final Rule.47 It should be noted that DOE 

anticipates the 2013 AHRI certification directory for commercial packaged boilers to provide 

both combustion and thermal efficiencies for most models.48

DOE recognizes that the thermal efficiency of a commercial packaged boiler in the field 

depends on the return-water conditions; this is especially true in the case of condensing boilers 

where most condensing boilers will not condense unless the return-water temperature is lower 

than some threshold or they are operating in a low-fire regime, or both. DOE plans to use 

representative water temperature profiles to adjust boiler efficiencies to reflect return-water 

conditions based on installation types in existing commercial buildings.49

In this rulemaking, DOE plans to also account for the electricity consumption of boiler 

components including but not limited to: pumps, fans, electronic ignition, and controls used in 

commercial packaged boilers. Many of these components come standard with commercial 

packaged boiler units, and DOE believes the electricity consumption should be considered. DOE 

also plans to consider, as applicable, any other energy use by the commercial packaged boilers, 

such as a pilot light. 

In addition to the energy use for space heating, DOE plans to account for commercial 

packaged boiler energy use for heating service water. DOE plans to use CBECS 2003, RECS 

2009, and other sources to determine the fraction of buildings that use commercial packaged 

boilers for heating water in addition to space heating.

To represent “normal” weather, the CBECS 2003 and RECS 2009 building energy 

consumption values will be adjusted based on 10-year average heating degree-day (HDD) data 

(2002−2011) for each geographical region.50 In addition, DOE will make adjustments to the 

47 In the 2009 Final Rulemaking (Chapter 4 of the TSD, section 4.3.1) for the two equipment classes with 

combustion efficiency as the required metric for rating, DOE developed estimates of the rated thermal efficiency 

based on an estimated 1.5 average percentage point difference between thermal and combustion efficiency for large, 

gas-fired hot-water boilers and an estimated 2.0 average percentage point difference between thermal and 

combustion efficiency for large, oil-fired hot-water boilers. The average percentage point values were based on 

average differences between thermal and combustion efficiencies for these two classes of equipment in the DOE 

boiler database used in the 2009 rulemaking. (Available at: http://www.regulations.gov/#!documentDetail;D=EERE2008-BT-STD-0013-0011) 

48 Air-Conditioning, Heating, and Refrigeration Institute (AHRI), 2013 Directory of Certified Product Performance: 

Commercial Packaged Boilers (Available at: http://www.ahridirectory.org/). 49 DOE assumed that most of the existing systems using hot-water boilers had been designed for typical hydronic 

system design conditions of 180 °F supply water and 160 °F return water to meet peak heating loads. DOE plans to 

develop a seasonal efficiency for condensing boilers to account for low supply-water temperatures at higher outdoor 

air temperatures. 

50 A 10-year average is used in order to match with EIA’s Annual Energy Outlook methodology (see Residential 

Demand Module at p. 32) (Available at: http://www.eia.gov/forecasts/aeo/assumptions/pdf/residential.pdf).

40 
building heating load to reflect the expectation that buildings using commercial packaged boilers 

in the year in which compliance with the amended standards is expected to be required will have 

a different heating load than the buildings sampled in the CBECS 2003 and RECS 2009 surveys. 

The adjustment will consider projected improvements in building envelope and other efficiency 

practices and increases in commercial building floor area at the 2019 compliance date of the 

standards. 

DOE also plans to assess the applicability of the “rebound effect” in the energy use 

analysis for commercial packaged boilers. A rebound effect occurs when a piece of equipment 

that is made more efficient is used more intensively, so that the expected energy savings from the 

efficiency improvement may not fully materialize. However, at this time, DOE is not aware of 

any information about a rebound effect for commercial packaged boilers. 

Item 9-1 DOE seeks input on the planned approach for determining the energy 

consumption of commercial packaged boilers in commercial buildings.

Item 9-2 DOE seeks historical shipment-weighted commercial packaged boiler 

efficiency data or shipment data by efficiency bins. DOE is primarily interested in 

obtaining this data during the last 10 years to capture the impact of the most current 

technologies on the boilers market.

Item 9-3 DOE seeks input on data sources that it can use to characterize the variability 

in annual energy consumption for commercial packaged boilers. DOE is particularly 

interested in field monitoring studies and data.

Item 9-4 DOE requests comment on what other energy use by commercial packaged 

boilers should be included in the energy use analysis.

Item 9-5 DOE welcomes comment on whether the rated thermal efficiencies for all 

commercial packaged boiler equipment should be adjusted to reflect return-water 

conditions (previously done for condensing boilers only).

Item 9-6 DOE seeks input on what fractions of hot-water commercial packaged boilers 

are used both for space heating and hot water.

Item 9-7 DOE seeks input on the fraction of commercial packaged boilers used in 

residential applications. Is this market large enough that DOE should take it into 

account?

Item 9-8 DOE seeks comments on the rebound effect that may be associated with moreefficient commercial packaged boilers.

41 
10. LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

This section describes the life-cycle cost and payback period analysis that DOE will 

perform for commercial packaged boilers, including how DOE develops the inputs to the 

calculations. The LCC analysis establishes the total cost of equipment over its lifetime 

(including purchase price, installation cost, and operating costs). The PBP analysis calculates the 

amount of time required for energy cost savings to pay back any increased cost of higherefficiency equipment. 

10.1 Overview

The effects of amended energy conservation standards on the consumer of commercial 

packaged boilers include a change in operating cost (usually decreased) and a change in purchase 

price (usually increased). DOE analyzes the net effect on consumers by calculating the LCC and 

PBP, incorporating the engineering performance data (described in section 7), the equipment 

retail price (described in section 8), and the energy consumption data (described in section 9). 

Inputs to the calculation of LCC and PBP include the total installed cost to the consumer 

(purchase price plus any installation cost) and operating cost (energy expenditures and, if 

applicable, repair and maintenance costs). Additional inputs to the LCC calculation include 

energy price projections, the lifetime of the equipment or other defined period of analysis, and 

discount rates. 

10.2 Approach

DOE will conduct the LCC and PBP analysis for the equipment classes on which it plans 

to perform an analysis (section 5.3). In the preliminary analysis stage of the commercial 

packaged boilers rulemaking, DOE will conduct the LCC and PBP analysis by using Monte 

Carlo simulation and probability distributions to model both the uncertainty and variability in the 

inputs. The Monte Carlo approach provides a significant advantage over alternative approaches 

(e.g., an approach using typical or average values to characterize inputs) because it identifies the 

percentages of consumers benefiting from or being impacted by a prospective standard. 

DOE plans to develop an LCC and PBP model that incorporates both Monte Carlo 

simulation and probability distributions by using computer spreadsheets combined with a 

commercially-available add-in program. Each Monte Carlo simulation will consist of 10,000 

LCC and PBP calculations. The model will perform each calculation using input values sampled 

from probability distributions where possible, or characterized using single-point values in other 

cases. The analytical results are a distribution of 10,000 data points showing the range of LCC 

savings and PBPs for a given efficiency level relative to the baseline level. 

DOE will use probability distributions to characterize most of the operating cost inputs to 

the LCC and PBP analysis, including equipment lifetimes and consumer discount rates. As 

described in section 9, DOE will establish the annual energy consumption of each equipment 

class. As described in section 10.3, the LCC and PBP analysis will capture the regional 

42 
variability in energy prices. The methodologies for developing maintenance/repair and 

installation costs are described in sections 10.4 and 10.5 respectively. 

As described in section 8, DOE will derive markups and sales taxes using probability 

distributions that capture regional variability, in order to calculate equipment cost. 

Another factor in identifying how consumers would be impacted by a particular standard 

is the expected distribution of equipment efficiencies in the absence of amended standards (the 

base case). In the case of commercial packaged boilers, equipment efficiency is expressed as 

combustion efficiency for large hot water gas-fired and large hot water oil-fired commercial 

packaged boilers and thermal efficiency for all other equipment classes (small gas-fired hot 

water, small gas-fired steam, small oil-fired hot water, small oil-fired steam, large gas-fired 

steam, large oil-fired steam, and electric). DOE notes that gas-fired natural draft commercial 

packaged boilers are subject to Tier 2 standard levels effective March 2022. Based on the 

outcome of the August 2013 NOPD51, DOE will account for this change in natural draft boiler 

base-case efficiency distribution (the absence of amended standards) in the LCC and PBP 

analyses in this rulemaking. DOE plans to develop probability distributions to characterize the 

current equipment mix, and will consider likely trends in projecting the efficiency distribution in 

the anticipated year of compliance (2019). 

DOE will determine the LCC and PBP for a particular standard level relative to the basecase distribution of efficiencies. In performing an iteration of the Monte Carlo simulation for a 

given consumer, equipment efficiency will be chosen based on its probability. If the chosen 

equipment efficiency is greater than or equal to the efficiency of the standard level under 

consideration, the LCC and PBP calculation will reveal that a consumer is not impacted by the 

standard level. By accounting for consumers who already purchase more-efficient equipment, 

DOE avoids overstating the potential benefits from increasing equipment efficiency. To enable 

DOE to use this methodology, DOE asks interested parties to provide data on the current mix of 

equipment efficiencies. DOE also plans to use the AHRI data described in section 5.1 to develop 

efficiency distributions based on availability of various models. 

The following sections discuss the methodologies DOE plans to use to develop several of 

the inputs to the LCC and PBP analysis, including: (1) electricity prices; (2) maintenance, repair, 

and installation costs; (3) equipment lifetimes; and (4) discount rates. The other inputs to the 

LCC and PBP analysis—manufacturer costs (section 7), markups for the determination of 

consumer retail prices (section 8), and annual energy consumption (section 9)—were discussed 

previously. 

DOE is also required to perform a PBP analysis to determine whether the rebuttable 

presumption of economic justification applies (where the higher installed cost of more energyefficient equipment is less than three times the value of the lowered operating costs in the first 

year of the energy conservation standard). (42 U.S.C. 6295(o)(2)(B)(iii)) To determine the 

rebuttable-presumption PBP, DOE will determine the value of the first year’s energy savings by 

calculating the quantity of those savings in accordance with DOE’s test procedure. Although 

DOE will examine the rebuttable-presumption criteria, DOE determines whether potential 

51 78FR49202 (August 13, 2013)

43 
standards are economically justified through an analysis of the economic impacts of increased 

efficiency pursuant to EPCA. (42 U.S.C. 6313(a)(6)(B)) 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). 

In preparing the NOPR, DOE carefully reviews all the comments it receives on the 

preliminary analysis LCC analysis, makes any necessary revisions to the analysis, and if 

necessary, evaluates additional parameters not included in the preliminary analysis. 

Item 10-1 DOE seeks interested party input on its proposed approach of using 

probability distributions and Monte Carlo simulation to conduct the LCC and PBP 

analysis.

Item 10-2 DOE requests data from interested parties to characterize the current mix of 

commercial packaged boiler efficiencies in the market.

10.3 Energy Prices

DOE intends to determine gas, oil, and electricity prices based on recent or current tariffs 

from a representative sample of utilities. This approach determines energy expenses based on 

actual energy prices that customers are paying. As an additional source, DOE plans to compare 

these results to data provided in EIA’s Form 861 data52 to calculate commercial electricity 

prices, EIA’s Natural Gas Navigator53 to calculate commercial natural gas prices, and EIA’s 

State Energy Data Systems (SEDS)

54 to calculate liquefied petroleum gas (LPG) and fuel oil 

prices. DOE will use projections of average energy prices by Census Division for commercial 

users—principally from EIA’s 2013 Annual Energy Outlook (AEO), or the most recent year 

available, to estimate future energy prices in its LCC analysis.55

Item 10-3 DOE seeks input on the planned approach for estimating future energy prices.

10.4 Maintenance and Repair Costs

DOE will consider any expected changes to maintenance and repair costs for the 

commercial packaged boilers subject to amended standards. Typically, small incremental 

changes in equipment efficiency incur little or no change in repair and maintenance costs over 

52 Energy Information Administration (EIA), Survey form EIA-861 -- Annual Electric Power Industry Report. 

(Available at: http://www.eia.gov/electricity/data/eia861/index.html) (Last accessed April 15, 2013). 

53 Energy Information Administration (EIA), Natural Gas Navigator. (Available at: 

http://tonto.eia.doe.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm) (Last accessed April 15, 2013). 54 Energy Information Administration (EIA), State Energy Data System (SEDS). (Available at: 

http://www.eia.gov/state/seds/) (Last accessed April 15, 2013). 55 Energy Information Administration (EIA). 2013 Annual Energy Outlook (AEO) Full Version (May 2, 2013).

(Available at: http://www.eia.gov/forecasts/aeo/er/index.cfm).

44 
baseline equipment. Equipment having efficiencies that are significantly higher than the baseline 

are more likely to incur increased repair and maintenance costs, because such equipment types 

are more likely to incorporate technologies that are not widely available. DOE will use input 

from manufacturers and other interested parties to develop appropriate repair and maintenance 

cost estimates, as necessary. In the 2009 Final Rule, DOE estimated annual routine maintenance 

costs and repair costs for commercial packaged boiler equipment from data provided in MARS 8 

Facility Cost Forecast System database.56 For this analysis, DOE intends to develop 

maintenance and repair costs for its analysis using the most recent RS Means data available.57

DOE plans also to consider the cases when the equipment is covered by service and/or 

maintenance agreements. DOE intends to assess whether repair costs vary with equipment 

efficiency as part of its analysis. 

Item 10-4 DOE seeks interested party input on the maintenance and repair costs 

approach. Specifically, DOE requests comment on frequency and cost of maintenance, 

major repair issues, repair frequency, and repair costs for commercial packaged boilers 

that meet the minimum efficiency standards, as well as for higher-efficiency boilers.

10.5 Installation Costs

DOE plans to derive national average installation costs for commercial packaged boilers 

from data provided in the most recent RS Means data for commercial boiler equipment with 

efficiencies at the current efficiency standard level.58 RS Means provides estimates for 

installation costs to set-up and put into place a new commercial packaged boiler by equipment 

capacity, fuel type, and material type, as well as cost indices that reflect the variation in 

installation costs for 656 cities in the United States. DOE plans to incorporate location-based 

cost indices into the analysis to capture variation in installation cost, depending on the location of 

the customer. In addition, DOE plans to take into account installation cost items such as piping, 

vent length, vent material, number of elbows, vent terminations, vent connectors, condensate 

removal, electrical requirements, control modifications, and modifications to the building such as 

drilling holes. 

Item 10-5 DOE seeks interested party input on its proposed installation cost approach.

Specifically, DOE requests data on the fractions of installations that would entail 

significant additional installation expenses.

56 Whitestone Research, MARS 8 Facility Cost Forecast System Database CDROM, Whitestone Research (2008). 57 RS Means, 2013 Facilities Maintenance & Repair Cost Data (Available at: 

http://rsmeans.reedconstructiondata.com/60303.aspx)(Last accessed April 10, 2013). 

58 RS Means, 2013 Mechanical Cost Data (Available at: http://rsmeans.reedconstructiondata.com/60023.aspx) (Last 

accessed April 10, 2013).

45 
10.6 Equipment Lifetime

DOE defines “equipment lifetime” as the age when a commercial packaged boiler is retired 

from service. In the 2009 Final Rule, DOE used a 30-year lifetime for commercial packaged 

boilers, as established in the 2000 Screening Analysis59 that was based on data from ASHRAE’s 

1995 Handbook of HVAC Applications.60 In today’s rulemaking, DOE plans to use 2011 data 

from ASHRAE’s Service Lifetime and Maintenance Cost Database, as well as review available 

literature and consult with industry experts to establish typical equipment lifetimes.

61,62 Based 

on these data, DOE plans to develop Weibull probability distributions to characterize 

commercial packaged boiler lifetime.63

Item 10-6 DOE seeks comments on the methodology used to determine equipment 

lifetimes for commercial packaged boilers.

10.7 Discount Rates

The calculation of LCC requires the use of an appropriate discount rate for those 

companies that purchase commercial packaged boilers in order to determine the present value of 

future costs/savings. DOE will derive the discount rates for these commercial users by 

estimating the capital costs for companies that purchase commercial packaged boilers. The cost 

of capital is commonly used to estimate the present value of cash flows to be derived from a 

typical company project or investment. Most companies use both debt and equity capital to fund 

investments, so the cost of capital is the weighted-average cost of equity and debt financing, 

which is referred to as the weighted-average cost of capital. 

Item 10-7 DOE seeks interested party input on its planned approach for estimating 

discount rates for commercial customers.

10.8 Energy Efficiency in the Base Case

In the market assessment, DOE attempts to characterize the distribution of equipment 

efficiencies currently being sold in the marketplace. If market share efficiency data are not 

available, DOE may develop efficiency distributions based on available models and information 

59 Somasundaram S., P.R. Armstrong, D.B. Belzer, S.C. Gaines, D.L. Hadley, S. Katipumula, D.L. Smith, and D.W. 

Winiarski, 2000 Screening Analysis for EPACT Covered Commercial HVAC and Water Heating Equipment. 

PNNL13232, Pacific Northwest National Laboratory. 

60 American Society of Heating, Refrigerating and Air Conditioning (ASHRAE), ASHRAE Handbook: 1995 

Heating, Ventilating, and Air Conditioning Applications (1995).

61 American Society of Heating, Refrigerating and Air Conditioning (ASHRAE), ASHRAE Handbook: HVAC 

Applications (2011) pp. 37.2 to 37.3.

62 American Society of Heating, Refrigerating and Air Conditioning (ASHRAE), ASHRAE: Service Life and 

Maintenance Cost Database (2013) (Available at: http://xp20.ashrae.org/publicdatabase/) (Last accessed May 10, 

2013).

63 If the data are available, DOE also plans to take into account differences in commercial packaged boiler lifetime 

based on usage and application. 

46 
from commercial packaged boilers manufacturers and other interested parties. In the LCC and 

PBP analysis, DOE will evaluate whether the current distribution provides a reasonable 

approximation of the commercial packaged boilers market in the compliance year in the absence 

of amended standards, or whether there is reason to expect improvement in efficiency as a result 

of market forces. 

Item 10-8 DOE requests data on the efficiency distribution and welcomes comment on 

the likelihood and degree of improvement in efficiency of commercial packaged boilers in 

the next 5 to 10 years as a result of market forces or industry trends (in the absence of 

amended energy conservation standards).

11. SHIPMENTS ANALYSIS

DOE’s shipment analysis requires shipment projections by equipment class to calculate 

the national impacts of standards on energy consumption, NPV, and future manufacturer cash 

flows. DOE plans to develop shipments projections based on an analysis of key market drivers 

(e.g., commercial building constructions trends, growth in industries that use commercial 

packaged boilers) for the commercial packaged boilers covered in this rulemaking. 

DOE’s approach considers that shipments of commercial packaged boilers are driven by 

the economic growth of commercial and industrial sectors that use this equipment. Historical 

data will be used to establish the relationship between shipments of commercial packaged boilers 

and the appropriate growth index for the sector. To establish historical shipments by equipment 

class, DOE plans to rely on publicly-available sources and industry-provided data.64 If public 

sources of shipments information are not available, then DOE plans to utilize the approach 

applied in the 2009 Final Rule and to rely on the 2007 boiler shipments data provided by AHRI. 

DOE then plans to disaggregate shipments by product class based on the number of available 

models in the AHRI certification directory. DOE also plans to utilize regional data, if available,

so that the national shipments data can be further disaggregated. 

DOE intends to use Gross Domestic Product (GDP) as an indicator of the performance in 

the industrial and commercial sectors where commercial packaged boilers are used. 

DOE plans to project shipments of commercial packaged boilers by primarily accounting 

for sales to two market segments: (1) the replacement market and (2) the new construction 

market. To project shipments to the new construction market, DOE plans to utilize estimates of 

projected new commercial floor space (from the NEMS projection published in the latest 

available edition of EIA’s AEO) and saturation rates of various boiler types in new buildings. In 

projecting future new building saturation rates of commercial packaged boilers, DOE will

64 For the 2009 Commercial Packaged Boilers Final Rulemaking (Chapter 6 of the TSD, section 6.3.1), historical 

shipments were not available. Therefore, DOE developed a model relying on industry-provided shipments for a 

single year (2007) to make its predictions. (Available at: http://www.regulations.gov/#!documentDetail;D=EERE2008-BT-STD-0013-0011).

47 
consider expected trends in builder and consumer preferences, including competition from other 

space heating products and equipment.65

To project shipments to the replacement market, DOE assumes that in most cases 

consumers replace a boiler with the same type of equipment; although in a limited amount of 

cases, replacements may result in fuel switching (oil to gas) and/or conversion from steam to hot 

water. The stock model accounts for retirements using methodology that applies the boiler 

lifetime distribution as described in section 10.6.

Item 11-1 DOE welcomes comment on the shipments projection methodology.

Item 11-2 DOE invites comments regarding the selection of appropriate economic 

drivers and sources of data for historical shipments and shipment breakdowns by 

equipment class.

Item 11-3 DOE seeks historical commercial packaged boiler shipments data from 

interested parties, disaggregated by equipment class and efficiency level if possible.

11.1 Impact of Amended Standards on Equipment Shipments

DOE will develop a set of shipment projections for each set of efficiency levels analyzed 

for each equipment class. DOE uses these standards-case projections to evaluate the impacts of 

amended standards on unit shipments. Because the standards-case projections take into account 

the increase in purchase price and the decrease in operating costs caused by amended standards, 

projected shipments for a standards case typically deviate from those for the base case. The 

magnitude of the difference between the standards-case and base-case shipment projections 

depends on the estimated purchase price increase, as well as the operating-cost savings from the 

standard. DOE plans to assess whether the purchase price will have a greater impact on 

equipment purchase decisions than operating cost, in which case the standards-case projections 

may show a decrease in shipments relative to the base case. To model the impact of the increase 

in relative price from a particular standard case on the shipments, DOE plans to assume that 

some consumers affected by an increase in total installed cost would repair their equipment 

rather than replace it, thus extending the life of the product. The extended repaired units will be 

replaced when they fail. 

DOE’s past standards analyses have attempted to quantify the sensitivity of shipments to 

increased purchase price and operating cost savings. DOE will attempt to develop purchase 

price and operating cost sensitivities specific to commercial packaged boilers. If the data 

required to develop those sensitivities are unavailable, DOE will consider modeling standardscase shipments projections using scenarios (i.e., specified impacts to equipment shipments). 

65 For the 2009 Commercial Packaged Boilers Final Rulemaking (Chapter 6 of the TSD, section 6.2.1.2), DOE 

assumed constant boiler saturation rates across the stock and in new constructions. (Available at: 

http://www.regulations.gov/#!documentDetail;D=EERE-2008-BT-STD-0013-0011).

48 
DOE typically projects shipments for a 30-year period beginning in the expected 

compliance date of any standards. 

Item 11-4 DOE seeks input from interested parties on the potential impact of amended 

standards on commercial packaged boiler shipments.

12. NATIONAL IMPACT ANALYSIS

In the national impact analysis (NIA), DOE estimates national energy savings (NES) 

from new or amended energy conservation standards and the net present value (NPV) of total 

consumer benefits. The NIA considers: (1) NES attributable to each potential standard; (2) 

monetary value of the NES to purchasers of the considered equipment; (3) increased total 

installed cost of the equipment because of standards; and (4) NPV of the difference between the 

operating cost savings and increased total installed cost. DOE performs all NIA calculations 

using a computer spreadsheet model. The spreadsheets combine the calculations for determining 

the NES and NPV for each considered equipment class with input from the shipments model. 

12.1 Projected Efficiency Trends

A key component of DOE’s estimates of NES and NPV are the equipment energy 

efficiencies projected over time for the base case (without new standards) and each standards 

case. Projected efficiencies represent the shipment-weighted annual energy consumption of 

covered commercial packaged boilers during the projection period (i.e., from the assumed 

compliance date of a new or amended standard to 30 years after that date). 

Section 9 describes how DOE establishes the shipment-weighted efficiency for the 

assumed compliance date of the standard. To project base-case efficiencies over the 30-year 

period, DOE intends to extrapolate from the historical trends to the extent that is reasonable. 

To develop the various standards cases, DOE plans to develop market-share efficiency 

data (i.e., data on the distribution of equipment shipments by efficiency) for the commercial 

packaged boiler equipment classes described in section 5.3 to estimate the impact that standards 

may have in the year compliance becomes required. Historically, DOE has used "roll-up" and/or 

"shift" scenarios in its standards rulemakings. Under the "roll-up" scenario, DOE assumes: (1) 

equipment efficiencies in the base case that do not meet the standard level under consideration 

would "roll up" to meet the new standard level; and (2) equipment shipments at efficiencies 

above the standard level under consideration would not be affected. Under the "shift" scenario, 

DOE retains the pattern of the base-case efficiency distribution but re-orients the distribution at 

and above the new minimum energy conservation standard. After DOE establishes the average 

efficiency for the assumed compliance date of a standard, it can estimate future efficiency by 

using the same rate of projected efficiency growth as for the base-case efficiency trend. DOE is 

considering the “roll-up” scenario for commercial packaged boilers. 

49 
Item 12-1 DOE seeks comments on the appropriate assumptions to use regarding longrun changes in commercial packaged boiler energy efficiency independent of amended 

energy conservation standards.

Item 12-2 DOE requests comment on whether it should pursue a roll-up or shift 

approach for the national impact analysis.

12.2 National Energy Savings

DOE will calculate annual national energy savings by fuel type for the base cases and for 

each standards-case analyzed where the energy savings will be calculated as the difference in 

energy consumption between the base case and the standards cases. DOE plans to perform this 

calculation through the use of a spreadsheet model that effectively accounts for the stock of 

equipment affected by standards.66 The energy savings are measured over the entire lifetime of 

equipment purchased in the 30-year shipments projection period.67

DOE intends to determine whether there is a rebound effect associated with more 

efficient commercial packaged boilers. If data indicates that there is a rebound effect, DOE will 

account for the rebound effect in its calculation of NES.

DOE has historically presented NES in terms of primary energy savings. On August 18, 

2011, DOE published in the Federal Register a notice announcing its intention to use full-fuelcycle (FFC) measures of energy use and greenhouse gas and other emissions in the national 

impact analyses and emissions analyses included in future energy conservation standards 

rulemakings. 76 FR 51281. While DOE stated in that notice that it intended to use the 

Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model to 

conduct the analysis, it also said it would review alternative methods, including the use of the 

National Energy Modeling System (NEMS). After evaluating both models and the approaches 

discussed in the August 18, 2011 notice, DOE has determined NEMS is a more appropriate tool 

for this purpose. 77 FR 49701 (Aug. 17, 2012). Therefore, DOE intends to use the NEMS 

model to conduct FFC analyses. The method used to derive the FFC multipliers will be 

described in the preliminary TSD.

12.3 Net Present Value of Consumer Savings

The inputs for determining NPV of the total costs and benefits experienced by 

commercial consumers of the considered equipment are: (1) total annual installed cost; (2) total 

66 Several examples of NES spreadsheet models from previous rulemakings can be found on DOE’s website at: 

http://www.eere.energy.gov/buildings/appliance_standards/. 67 In the past, DOE presented energy savings results for only the 30-year period that begins in the year of 

compliance. In the calculation of economic impacts, however, DOE considered operating cost savings measured 

over the entire lifetime of equipment purchased in the 30-year period. DOE has chosen to modify its presentation of 

national energy savings to be consistent with the approach used for its national economic analysis. 

50 
annual savings in operating costs; (3) a discount factor; (4) present value of costs; and (5) present 

value of savings. 

To develop the national NPV of user benefits from potential standards, DOE must 

calculate annual energy expenditures and annual equipment expenditures for the base case and 

the standards cases. DOE calculates increases in total installed costs as the difference in total 

installed cost between the base case and a standards case. DOE calculates annual energy 

expenditures by multiplying the annual operating cost per unit by the number of projected 

shipments, using the projections of shipments described in section 11.68 The difference each 

year between energy bill savings and increased equipment expenditures is the net savings (if 

positive) or net cost (if negative). DOE discounts those annual values to the present time and 

sums them to obtain a NPV to calculate savings over the life of each unit. DOE calculates NPV 

as the difference between the present value of operating cost savings and the present value of 

total installed costs. 

Based on U.S. Office of Management and Budget (OMB) guidelines for Federal 

agencies, DOE will conduct two NPV calculations, one using a real discount rate of 3 percent 

and another using a real discount rate of 7 percent.69 The discount rates for the determination of 

NPV are in contrast to the discount rates used in the LCC analysis, which are designed to reflect 

a consumer’s perspective. The 7-percent real value is an estimate of the average before-tax rate 

of return to private capital in the U.S. economy. The 3-percent real value represents the “societal 

rate of time preference,” which is the rate at which society discounts future consumption flows to

their present value. 

13. CONSUMER SUBGROUP ANALYSIS

The LCC analysis described in section 10 analyzes the impacts of amended energy 

conservation standards on all consumers of commercial packaged boilers. For the consumer 

subgroup analysis, DOE divides consumers into subgroups, which comprise subsets of the 

population that are likely, for one reason or another, to be affected disproportionately by new or 

amended energy conservation standards (e.g., firms that use commercial packaged boilers in 

particular applications where energy savings are likely to be small).70 The purpose of a subgroup 

analysis is to determine the extent of this disproportional impact. DOE will work with interested 

parties to identify any subgroups for consideration and will conduct a subgroup analysis for any 

NOPR developed for this rulemaking.

68 DOE expresses savings in operating costs as decreases associated with the lower energy consumption of 

equipment bought in the standards case compared to the base case. Total savings in operating costs are the product 

of savings per unit and the number of units of each vintage that survive in a given year.

69 OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003). 

70 These firms differ from any commercial packaged boiler manufacturers who may qualify as a small business 

under the size standards established by the Small Business Administration. DOE analyzes impacts to these small 

businesses, which would be directly impacted by any final standards DOE might establish, as required by the 

Regulatory Flexibility Act (see section 14.3). 

51 
Item 13-1 The Department requests input as to what consumer subgroups are 

appropriate to evaluate for commercial packaged boilers.

14. MANUFACTURER IMPACT ANALYSIS

DOE intends the MIA to provide an assessment of the potential impacts of amended 

energy conservation standards on manufacturers of commercial packaged boilers. A wide range 

of quantitative and qualitative effects may occur following the adoption of an amended standard 

that may require changes to manufacturing practices. DOE will identify these potential effects 

through interviews with manufacturers and other experts. 

For the NOPR, DOE will conduct an industry-wide cash-flow analysis using the 

Government Regulatory Impact Model (GRIM), identify and analyze subgroups of 

manufacturers whose businesses vary significantly from the industry as a whole, perform a 

competitive impacts assessment, and review the cumulative regulatory burden for the industry. 

14.1 Sources of Information for the Manufacturer Impact Analysis

Many of the analyses described earlier provide important information that DOE will use 

as inputs for the MIA. Such information includes financial parameters developed in the market 

assessment (section 5), cost data developed in the engineering analysis (section 7), and 

shipments forecasts (section 11). DOE will supplement this information with data gathered 

during manufacturer interviews, as discussed below.

During the preliminary analysis phase, DOE will conduct interviews with manufacturers 

to gain insight into the range of possible impacts from potential amended energy conservation 

standards. These interviews will coincide with preliminary technical interviews for the 

engineering analysis. 

During the NOPR phase, DOE will conduct more detailed MIA interviews with 

manufacturers. The interview process plays a key role in the MIA, because it provides an 

opportunity for directly-affected parties to express their views on important issues. During the 

interviews, DOE will solicit information on the possible impacts of potential amended standards 

on manufacturing costs, equipment prices, sales, direct employment, capital assets, and industry 

competitiveness. Both qualitative and quantitative information are valuable in this analysis. 

DOE prefers an interactive interview process because it helps to clarify manufacturer input and 

provides the opportunity to identify additional issues. 

DOE will ask interview participants to identify confidential information and will protect 

confidential information from disclosure, consistent with applicable law. DOE will also ask 

participants to identify any information they wish to have included in the public record, but do 

not want to have associated with their interview (thereby identifying that particular 

52 
manufacturer). DOE will incorporate such information into the public record, without 

attribution. 

DOE will collate the interview results and prepare a summary of the major issues and 

outcomes. This summary will become part of the technical support document for this 

rulemaking.

14.2 Industry Cash-Flow Analysis

The industry cash-flow analysis relies primarily on the GRIM. DOE uses the GRIM to 

analyze the financial impacts of new or amended energy conservation standards on the industries 

that produce the equipment covered by the standard. 

The GRIM analysis uses a number of inputs—annual expected revenues; manufacturer 

costs such as costs of goods sold; selling, general, and administrative (SG&A) costs; taxes; and 

capital expenditures (both ordinary capital expenditures and those related to standards)—to 

determine a series of annual cash flows beginning from the announcement of the new or 

amended standard and continuing through the analysis period. DOE compares the results against 

base-case projections that involve no new standards. The financial impact of new or amended 

standards is the difference between the two sets of discounted annual cash flows. Other 

performance metrics, such as return on invested capital, also are available from the GRIM. 

DOE will gather the inputs needed for the GRIM from two primary sources: (1) the 

analyses conducted to this point; and (2) interviews with manufacturers and other interested 

parties. Information gathered from previous analyses will include financial parameters, 

manufacturing costs, price forecasts, and shipments forecasts. Interviews with manufacturers 

and other interested parties supplement this information. 

14.3 Manufacturer Subgroup Analysis

Average industry cost values may not reveal differential impacts among commercial 

packaged boiler manufacturer subgroups. Smaller manufacturers, niche players, and 

manufacturers exhibiting a cost structure that differs significantly from the industry average may 

be affected differently by new or amended standards. Ideally, DOE would consider the impact 

on every firm individually. In highly concentrated industries, this may be possible. In industries 

having numerous participants, however, DOE uses the results of the market and technology 

assessment to group manufacturers into subgroups, as appropriate. For commercial packaged 

boilers, DOE is interested in feedback about potential subgroups, including small businesses. 

DOE will conduct a Regulatory Flexibility Act analysis to determine the impacts of any amended 

standards on small businesses consistent with the Regulatory Flexibility Act. 

Item 14-1 DOE seeks comment on appropriate manufacturer subgroups, if any, that DOE 

should consider in a manufacturer subgroup analysis for commercial packaged boilers.

53 
Item 14-2 DOE welcomes data on the names and number of small manufacturers in the 

commercial packaged boilers industry.

14.4 Competitive Impacts Assessment

EPCA directs DOE to consider any lessening of competition likely to result from the 

imposition of energy conservation standards. (42 U.S.C. 6313(a)(6)(B)(ii)(V)) It further directs 

the Attorney General to determine in writing the impacts, if any, of any lessening of competition 

likely to result from standards. Id. 

DOE will make a determined effort to gather firm-specific information regarding financial 

and other impacts associated with amended energy conservation standards and report the 

anticipated aggregate impact of the amended standard on manufacturers. A key aspect of the 

competitive impacts analysis will be to focus on assessing impacts on smaller manufacturers. 

DOE will base this assessment on manufacturing cost data and information collected from 

interviews with manufacturers. The manufacturer interviews will focus on gathering information 

that would help in assessing asymmetrical cost increases to some manufacturers, increased 

proportion of fixed costs potentially increasing business risks, and potential barriers to market 

entry (e.g., proprietary technologies). DOE will provide the Attorney General with a copy of the 

NOPR and the TSD for consideration in his evaluation of the impact of amended standards in 

terms of the lessening of competition. DOE will publish the Attorney General’s letter and 

address any related comments in the final rule. 

14.5 Cumulative Regulatory Burden

Other regulations (Federal, State, local, or international) may apply to manufacturers of 

commercial packaged boilers covered under this rulemaking and to other equipment made by 

these manufacturers. Multiple regulations may result in a significant, cumulative regulatory 

burden on these manufacturers. DOE will consider the impact on these manufacturers of 

multiple, equipment-specific regulatory actions. 

Item 14-3 DOE welcomes comments on what other existing regulations or pending 

regulations it should consider in its examination of cumulative regulatory burden.

15. EMISSIONS ANALYSIS

In the emissions analysis, DOE will estimate the reduction in power sector emissions of 

carbon dioxide (CO2), nitrogen oxides (NOX), sulfur dioxide (SO2), and mercury (Hg) from 

potential energy conservation standards for commercial packaged boiler equipment. In addition, 

DOE will estimate emissions impacts in production activities (extracting, processing, and 

transporting fuels) that provide the energy inputs to power plants. These are referred to as 

“upstream” emissions. Together, these emissions account for the full-fuel-cycle (FFC). In 

54 
accordance with DOE’s FFC Statement of Policy (76 FR 51281 (Aug. 18, 2011)), the FFC 

analysis includes impacts on emissions of methane and nitrous oxide, both of which are 

recognized as greenhouse gases. DOE is aware of the EISA 433 Fossil Fuel rulemaking which is 

currently under review. It plans to consider the impacts of this rule once it becomes effective. 

DOE conducts the emissions analysis using emissions factors derived from data in the 

latest version of EIA’s Annual Energy Outlook (AEO), supplemented by data from other sources. 

EIA prepares the Annual Energy Outlook using NEMS. Each annual version of NEMS 

incorporates the projected impacts of existing air quality regulations on emissions. The text 

below refers to AEO 2013, which generally represents current legislation and environmental 

regulations, including recent government actions, for which implementing regulations were 

available as of December 31, 2012. 

Because the on-site operation of commercial packaged boilers requires use of fossil fuels 

and results in emissions of CO2, NOx, and SO2 at the sites where these appliances are used, DOE 

also accounts for the reduction in these site emissions and the associated upstream emissions due 

to potential standards. 

SO2 emissions from affected electric generating units (EGUs) are subject to nationwide 

and regional emissions cap and trading programs. Title IV of the Clean Air Act sets an annual 

emissions cap on SO2 for affected EGUs in the 48 contiguous States and the District of Columbia 

(D.C.). SO2 emissions from 28 eastern States and D.C. were also limited under the Clean Air 

Interstate Rule (CAIR), which created an allowance-based trading program that operates along 

with the Title IV program in those States and D.C. 70 FR 25162 (May 12, 2005). CAIR was 

remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

Circuit), but remained in effect. See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 

North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On August 21, 2012, the D.C. Circuit 

issued a decision to vacate CSAPR. See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 

38 (D.C. Cir. 2012). The court ordered EPA to continue administering CAIR. AEO 2013 

assumes that CAIR remains a binding regulation through 2040. 

The attainment of emissions caps is typically flexible among EGUs and is enforced 

through the use of emissions allowances and tradable permits. Under existing EPA regulations, 

any excess SO2 emissions allowances resulting from the lower electricity demand caused by the 

adoption of an efficiency standard could be used to permit offsetting increases in SO2 emissions 

by any regulated EGU. In past rulemakings, DOE recognized that there was uncertainty about 

the effects of efficiency standards on SO2 emissions covered by the existing cap-and-trade 

system, but it concluded that no reductions in power sector emissions would occur for SO2 as a 

result of standards. 

Beginning in 2015, however, SO2 emissions will fall as a result of the Mercury and Air 

Toxics Standards (MATS) for power plants, which were announced by EPA on December 21, 

2011. 77 FR 9304 (Feb. 16, 2012). In the final MATS rule, EPA established a standard for HCl 

as a surrogate for acid gas hazardous air pollutants (HAP), and also established a standard for 

SO2 (a non-HAP acid gas) as an alternative equivalent surrogate standard for acid gas HAP. The 

same controls are used to reduce HAP and non-HAP acid gas; thus, SO2 emissions will be 

55 
reduced as a result of the control technologies installed on coal-fired power plants to comply 

with the MATS requirements for acid gas. AEO 2013 assumes that, in order to continue 

operating, coal plants must have either flue gas desulfurization or dry sorbent injection systems 

installed by 2015. Both technologies, which are used to reduce acid gas emissions, also reduce 

SO2 emissions. Under the MATS, NEMS shows a reduction in SO2 emissions when electricity 

demand decreases (e.g., as a result of energy efficiency standards). Emissions will be far below 

the cap that would be established by CSAPR, so it is unlikely that excess SO2 emissions 

allowances resulting from the lower electricity demand would be needed or used to permit 

offsetting increases in SO2 emissions by any regulated EGU. Therefore, DOE believes that 

efficiency standards will reduce SO2 emissions in 2015 and beyond. 

CAIR established a cap on NOX emissions in eastern States and the District of Columbia. 

Energy conservation standards are expected to have little or no physical effect on these emissions 

in those States covered by CAIR because excess NOX emissions allowances resulting from the 

lower electricity demand could be used to permit offsetting increases in NOX emissions. 

However, standards would be expected to reduce NOX emissions in the States not affected by 

CAIR, so DOE estimates NOX emissions reductions from potential standards in the States where 

emissions are not capped.

The MATS limit mercury emissions from power plants, but they do not include emissions 

caps, and, as such, DOE’s energy conservation standards would likely reduce Hg emissions. 

DOE will estimate mercury emissions reduction using emissions factors based on AEO 2013, 

which incorporates the MATS.

Power plants may emit particulates from the smoke stack, which are known as direct 

particulate matter (PM) emissions. NEMS does not account for direct PM emissions from power 

plants. DOE is investigating the possibility of using other methods to estimate reduction in PM 

emissions due to standards. The great majority of ambient PM associated with power plants is in 

the form of secondary sulfates and nitrates, which are produced at a significant distance from 

power plants by complex atmospheric chemical reactions that often involve the gaseous 

emissions of power plants, mainly SO2 and NOx. The monetary benefits that DOE estimates for 

reductions in SO2 and NOx emissions resulting from standards are in fact primarily related to the 

health benefits of reduced ambient PM. 

DOE will also account for the emissions from the boiler combustion at the building site. 

Item 15-1 DOE seeks input on its approach to conduct the emissions analysis for the 

commercial packaged boiler equipment covered by this rulemaking.

56 
16. MONETIZING CO2 AND OTHER EMISSIONS REDUCTIONS

DOE plans to consider the estimated monetary benefits likely to result from the reduced 

emissions of CO2 and NOX that are expected to result from each of the standard levels 

considered. 

To estimate the monetary value of benefits resulting from reduced emissions of CO2, 

DOE plans to use the most current Social Cost of Carbon (SCC) values developed and/or agreed 

to by an interagency process. The SCC is intended to be a monetary measure of the incremental 

damage resulting from greenhouse gas (GHG) emissions, including, but not limited to, net 

agricultural productivity loss, human health effects, property damage from sea level rise, and 

changes in ecosystem services. Any effort to quantify and to monetize the harms associated with 

climate change will raise serious questions of science, economics, and ethics. But with full 

regard for the limits of both quantification and monetization, the SCC can be used to provide 

estimates of the social benefits of reductions in GHG emissions. 

The Interagency Working Group on Social Cost of Carbon released an update of its 

previous report in 2013.71 The most recent estimates of the SCC in 2015, expressed in 2012$, 

were $12.9, $40.8, $62.2, and $117 per metric ton of CO2 avoided. For emissions reductions 

that occur in later years, these values grow in real terms over time. Additionally, the interagency 

group determined that a range of values from 7 percent to 23 percent should be used to adjust the 

global SCC to calculate domestic effects, although DOE will give preference to consideration of 

the global benefits of reducing CO2 emissions. 

DOE multiplies the CO2 emissions reduction estimated for each year by the SCC value 

for that year in each of the four cases. To calculate a present value of the stream of monetary 

values, DOE discounts the values in each of the four cases using the discount rates that had been 

used to obtain the SCC values in each case. 

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

DOE also estimates the potential monetary benefit of reduced NOX emissions resulting 

from the standard levels it considers. For NOx emissions, estimates suggest a very wide range of 

monetary values, ranging from $468 to $4,809 per ton in 2012$.72 In accordance with OMB 

guidance,

73 DOE calculates a range of monetary benefits using each of the economic values for 

NOX and real discount rates of 3 percent and 7 percent 

71 Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866. 

Interagency Working Group on Social Cost of Carbon, United States Government (May 2013) (Available at: 

http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf).

72 For additional information, refer to U.S. Office of Management and Budget, Office of Information and Regulatory 

Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on 

State, Local, and Tribal Entities, Washington, D.C. 

73 OMB, Circular A-4: Regulatory Analysis, 2003 (Posted Sept. 17, 2003). 

57 
DOE is evaluating appropriate valuation of avoided SO2 and Hg emissions. Whether 

monetization of reduced SO2 and Hg emissions will occur in this rulemaking is yet to be 

determined. 

Item 16-1 DOE requests comments on the approach it plans to use for estimating 

monetary benefits associated with emissions reductions.

17. UTILITY IMPACT ANALYSIS

In the utility impact analysis, DOE analyzes the changes in electric installed capacity and 

generation that result for each trial standard level. The utility impact analysis uses a variant of EIA’s 

NEMS, which is a public domain, multi-sectored, partial equilibrium model of the U.S. energy 

sector.74 Each year, DOE/EIA uses NEMS to produce an energy projection for the United States, 

the Annual Energy Outlook (AEO). DOE uses a variant of this model, referred to as NEMS-BT75

to account for selected utility impacts of new or amended energy conservation standards. DOE’s 

analysis consists of a comparison between model results for the most recent AEO Reference Case 

and for cases in which energy use is decremented to reflect the impact of potential standards. 

For the analysis of standards on commercial packaged boilers, DOE will use the version of 

NEMS based on the most recent AEO.

Item 17-1 DOE welcomes input from interested parties on its proposed approach to 

conduct the utility impact analysis.

18. EMPLOYMENT IMPACT ANALYSIS

Employment impacts include direct and indirect changes in the domestic workforce 

resulting from new or amended energy conservation standards. Direct employment impacts are 

any changes in the number of employees of manufacturers of the equipment subject to standards. 

The MIA addresses impacts in the number of employees working for the manufacturers. Indirect 

employment impacts from standards consist of the net jobs created or eliminated in the national 

economy, other than in the manufacturing sector being regulated, caused by: (1) reduced 

spending by end users on energy; (2) reduced spending on new energy supply by the utility 

industry; (3) increased spending on new equipment to which the new standards apply; and (4) the 

effects of those three factors throughout the economy. 

74 For more information on NEMS, refer to the U.S. Department of Energy, Energy Information Administration 

documentation. A useful summary is National Energy Modeling System: An Overview 2003, DOE/EIA-0581(2003), 

(March 2003). 75 DOE/EIA approves use of the name NEMS to describe only an official version of the model without any 

modification to code or data. Because this analysis entails some minor code modifications and the model is run 

under various policy scenarios that are variations on DOE/EIA assumptions, DOE refers to it by the name NEMSBT. (BT is DOE’s Building Technologies Office, under whose aegis this work has been performed.) 

58 
One method for assessing the possible effects on the demand for labor of such shifts in 

economic activity is to compare sector employment statistics developed by the Labor 

Department’s Bureau of Labor Statistics (BLS). The BLS regularly publishes its estimates of the 

number of jobs per million dollars of economic activity in different sectors of the economy, as 

well as the jobs created elsewhere in the economy by this same economic activity. Data from 

BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and 

indirectly) than expenditures in other sectors of the economy.76 There are many reasons for these 

differences, including wage differences and the fact that the utility sector is more capitalintensive and less labor-intensive than other sectors. Energy conservation standards have the 

effect of reducing consumer utility bills. Because reduced consumer expenditures for energy 

likely lead to increased expenditures in other sectors of the economy, the general effect of 

efficiency standards is to shift economic activity from a less labor-intensive sector (i.e., the 

utility sector) to more labor-intensive sectors (e.g., the retail and service sectors). 

In the NOPR stage of this rulemaking, DOE plans to estimate indirect national 

employment impacts using an input/output model of the U.S. economy called Impact of Sector 

Energy Technologies version 3.1.1 (ImSET).

77 ImSET is a special-purpose version of the “U.S. 

Benchmark National Input-Output” (I–O) model, which was designed to estimate the national 

employment and income effects of energy-saving technologies. The ImSET software includes a 

computer-based I–O model having structural coefficients that characterize economic flows 

among 187 sectors most relevant to industrial, commercial, and residential building energy use. 

DOE notes that ImSET is not a general equilibrium forecasting model and understands 

the uncertainties involved in projecting employment impacts, especially changes in the later 

years of the analysis. Because ImSET does not incorporate price changes, the employment 

effects predicted by ImSET may over-estimate actual job impacts over the long run. DOE may 

consider the use of other modeling approaches for examining long-run employment impacts. 

Item 18-1 DOE welcomes feedback on its proposed approach to assessing national 

employment impacts.

19. REGULATORY IMPACT ANALYSIS

In the NOPR stage of this rulemaking, DOE will prepare a regulatory impact analysis that 

will address the potential for non-regulatory approaches to supplant or augment energy 

conservation standards to improve the efficiency of commercial packaged boilers on the market. 

DOE recognizes that voluntary or other non-regulatory efforts by manufacturers, utilities, and 

other interested parties can result in substantial efficiency improvements. DOE intends to 

76 See Bureau of Economic Analysis, Regional Multipliers: A User Handbook for the Regional Input-Output 

Modeling System (RIMS II), U.S. Department of Commerce (1992). 77 J. M. Roop, M. J. Scott, and R. W. Schultz, ImSET 3.1: Impact of Sector Energy Technologies (PNNL-18412), 

Pacific Northwest National Laboratory (2009) (Available at: 

www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf ).

59 
analyze the likely effects of non-regulatory initiatives and compare such effects with those 

projected to result from amended energy conservation standards. DOE will attempt to base its 

assessment on the actual impacts of any such initiatives to date, but will also consider 

information presented regarding the impacts that any existing initiative might have in the future. 

If DOE proposes amended energy conservation standards for commercial packaged 

boilers and the NOPR constitutes a significant regulatory action, DOE would prepare and submit 

to OMB for review the assessment of costs and benefits required under section 6(a)(3) of 

Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993). 

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APPENDIX A – LIST OF ITEMS FOR COMMENT

Item 2-1 DOE welcomes comment on the proposed scope of coverage and on whether there 

are any additional types of commercial packaged boilers that should or should not be

included in the scope of this rulemaking. ................................................................... 12

Item 2-2 DOE welcomes comments regarding the need to include electric commercial

packaged boilers in this rulemaking. .......................................................................... 12

Item 2-3 DOE requests comment on pursuing standby mode and off mode energy conservation

standards for commercial packaged boilers ............................................................... 12

Item 2-4 DOE welcomes comment as to whether there are any size-related issues with

conducting testing under the DOE test procedure which the agency should consider

addressing in its test procedure rulemaking. DOE is also interested in any comments

regarding whether there is a capacity limit beyond which amended energy

conservation standards would not be technologically feasible and economically

justified ....................................................................................................................... 12

Item 3-1 DOE welcomes comment on all aspects of the current DOE test procedure for

commercial packaged boilers and on whether the test procedure is in need of updates

or revisions ................................................................................................................. 13

Item 3-2 DOE requests feedback on issues or problems with the current test procedure that 

may make it burdensome or infeasible for manufacturers to conduct testing on some

or all models of commercial packaged boilers. Specifically, DOE requests comment

whether the operating pressures required by BTS-2000 are not achievable for any

commercial packaged boilers within the scope of this rulemaking. ........................... 15

Item 3-3 DOE requests feedback on testing conditions within the current test procedure that

may need to be refined to ensure fair comparison of efficiencies across commercial

packaged boiler models .............................................................................................. 15

Item 3-4 DOE welcomes comment on alternative industry test methods for determining the

efficiency for commercial packaged boilers, particularly with regards to how an

alternative standard would improve or not improve upon the current test procedure

based on BTS-2000, and on the comparability of efficiency ratings determined using

the alternative standards to those from a BTS-2000 test. ........................................... 15

Item 5-1 DOE welcomes data that would contribute to the market assessment, including but 

not limited to information on national historical shipments, distribution channels, and

manufacturer market shares of commercial packaged boilers ................................... 18

Item 5-2 DOE welcomes comment on the listed national trade associations for commercial

packaged boilers. Specifically, are there trade associations not listed here that should

be included? ............................................................................................................... 19

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Item 5-3 DOE welcomes comments on its considered equipment classes. Are there any other

performance-related features that should be considered for commercial packaged

boilers equipment classes? ......................................................................................... 20

Item 5-4 DOE welcomes comments on the technologies identified, as well as any additional

technology options which have not been identified. .................................................. 30

Item 6-1 Of the technologies listed in section 5.4, are there any that should be screened out

based on the four screening criteria? If so, which criteria apply and why? ............... 31

Item 7-1 DOE seeks input regarding the range of efficiency levels and any key efficiency 

levels that should be examined as part of its analysis ................................................ 33

Item 7-2 DOE seeks comment on the appropriate max-tech levels for commercial packaged

boilers. ........................................................................................................................ 33

Item 7-3 DOE seeks input on the representative capacity and other representative

characteristics for each commercial packaged boiler equipment class ...................... 33

Item 7-4 DOE seeks input on characteristics which may require multiple representative

equipment types within a single equipment class ...................................................... 34

Item 8-1 DOE seeks interested party input on whether the distribution channels described

above are appropriate for commercial packaged boilers ............................................ 37

Item 8-2 DOE seeks input on the percentage of equipment being distributed through the

different distribution channels, and whether the share of equipment through each

channel varies based on equipment class or equipment capacity ............................... 37

Item 8-3 DOE welcomes suggestions and comments concerning its proposed approach to

developing estimates of future commercial packaged boiler retail prices ................. 38

Item 8-4 DOE seeks recent data to establish the markups for the parties involved with the

distribution of the equipment ..................................................................................... 38

Item 9-1 DOE seeks input on the planned approach for determining the energy consumption of

commercial packaged boilers in commercial buildings ............................................. 41

Item 9-2 DOE seeks historical shipment-weighted commercial packaged boiler efficiency data

or shipment data by efficiency bins. DOE is primarily interested in obtaining this 

data during the last 10 years to capture the impact of the most current technologies on

the boilers market ....................................................................................................... 41

Item 9-3 DOE seeks input on data sources that it can use to characterize the variability in

annual energy consumption for commercial packaged boilers. DOE is particularly

interested in field monitoring studies and data .......................................................... 41

Item 9-4 DOE requests comment on what other energy use by commercial packaged boilers

should be included in the energy use analysis ............................................................ 41

Item 9-5 DOE welcomes comment on whether the rated thermal efficiencies for all

commercial packaged boiler equipment should be adjusted to reflect return-water

conditions (previously done for condensing boilers only) ......................................... 41

Item 9-6 DOE seeks input on what fractions of hot-water commercial packaged boilers are

used both for space heating and hot water ................................................................. 41

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Item 9-7 DOE seeks input on the fraction of commercial packaged boilers used in residential

applications. Is this market large enough that DOE should take it into account? ...... 41

Item 9-8 DOE seeks comments on the rebound effect that may be associated with moreefficient commercial packaged boilers ....................................................................... 41

Item 10-1 DOE seeks interested party input on its proposed approach of using probability

distributions and Monte Carlo simulation to conduct the LCC and PBP analysis ..... 44

Item 10-2 DOE requests data from interested parties to characterize the current mix of

commercial packaged boiler efficiencies in the market. ............................................ 44

Item 10-3 DOE seeks input on the planned approach for estimating future energy prices ........ 44

Item 10-4 DOE seeks interested party input on the maintenance and repair costs approach.

Specifically, DOE requests comment on frequency and cost of maintenance, major

repair issues, repair frequency, and repair costs for commercial packaged boilers that

meet the minimum efficiency standards, as well as for higher-efficiency boilers ..... 45

Item 10-5 DOE seeks interested party input on its proposed installation cost approach.

Specifically, DOE requests data on the fractions of installations that would entail

significant additional installation expenses ................................................................ 45

Item 10-6 DOE seeks comments on the methodology used to determine equipment lifetimes for

commercial packaged boilers ..................................................................................... 46

Item 10-7 DOE seeks interested party input on its planned approach for estimating discount 

rates for commercial customers ................................................................................. 46

Item 10-8 DOE requests data on the efficiency distribution and welcomes comment on the

likelihood and degree of improvement in efficiency of commercial packaged boilers

in the next 5 to 10 years as a result of market forces or industry trends (in the absence

of amended energy conservation standards) .............................................................. 47

Item 11-1 DOE welcomes comment on the shipments projection methodology ....................... 48

Item 11-2 DOE invites comments regarding the selection of appropriate economic drivers and

sources of data for historical shipments and shipment breakdowns by equipment

class ............................................................................................................................ 48

Item 11-3 DOE seeks historical commercial packaged boiler shipments data from interested

parties, disaggregated by equipment class and efficiency level if possible ................ 48

Item 11-4 DOE seeks input from interested parties on the potential impact of amended standards

on commercial packaged boiler shipments ................................................................ 49

Item 12-1 DOE seeks comments on the appropriate assumptions to use regarding long-run

changes in commercial packaged boiler energy efficiency independent of amended

energy conservation standards ................................................................................... 50

Item 12-2 DOE requests comment on whether it should pursue a roll-up or shift approach for the

national impact analysis ............................................................................................. 50

Item 13-1 The Department requests input as to what consumer subgroups are appropriate to

evaluate for commercial packaged boilers ................................................................. 52

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Item 14-1 DOE seeks comment on appropriate manufacturer subgroups, if any, that DOE should

consider in a manufacturer subgroup analysis for commercial packaged boilers ...... 53

Item 14-2 DOE welcomes data on the names and number of small manufacturers in the

commercial packaged boilers industry ....................................................................... 54

Item 14-3 DOE welcomes comments on what other existing regulations or pending regulations 

it should consider in its examination of cumulative regulatory burden ..................... 54

Item 15-1 DOE seeks input on its approach to conduct the emissions analysis for the 

commercial packaged boiler equipment covered by this rulemaking. ....................... 56

Item 16-1 DOE requests comments on the approach it plans to use for estimating monetary

benefits associated with emissions reductions ........................................................... 58

Item 17-1 DOE welcomes input from interested parties on its proposed approach to conduct the

utility impact analysis ................................................................................................ 58

Item 18-1 DOE welcomes feedback on its proposed approach to assessing national employment

impacts ....................................................................................................................... 59

64