Energy Conservation Standards forCommercial Refrigeration Equipment(CRE)Notice of Proposed Rulemaking (NOPR)Public MeetingBuilding Technologies ProgramOffice of Energy Efficiency and Renewable EnergyU.S. Department of EnergySeptember 23, 2008http://www.eere.energy.gov/buildings/appliance_standards/commercial/refrigeration_equipment.html2Purposes•To invite comment on the proposed energy conservation standard level TSL 4 forcommercial refrigeration equipment and torequest recommendations for alternatives.•To present methodologiesand characterize results for this rulemaking analyses;•To discuss specific issuesrelated to each analysis;•To seek input from interestedparties on methodologies, assumptions, data sources, andresults from the analyses; and•To describe the next steps.Comments from Participants•Participants are invited to provide summary comments or statements;•Participants are invited toraise additional issuesfor discussion today; and•NOPR comment period closes October 24, 2008.Purpose of the Public Meeting andComments From ParticipantsOverview3Statutory Authority – Energy Policy andConservation Act as amendedAddresses requirements of 42 USC 6313(c)(4)(A):•(A) Not later than January 1, 2009, the Secretary shall issue, by rule, standardlevels for ice-cream freezers, self-contained commercialrefrigerators, freezers,and refrigerator-freezers without doors,and remote condensing commercialrefrigerators, freezers, and refrigerator-freezers, with the standard levelseffective for equipment manufactured on or after January 1, 2012.•This rulemaking is one of the scheduled actions described in DOE’s report tocongress, which was prepared in response to section 141(a) of the EnergyPolicy Act of 2005 (EPACT 2005).Overview4DOE Actions on CRETest Procedures•Final Rule published on December 8,2006, based on American NationalStandards Institute (ANSI)/Air-Conditioning and Refrigeration Institute (ARI)Standard 1200-2006 (Performance Rating of Commercial Refrigerated DisplayMerchandisers and Storage Cabinets). 71 FR 71340.Energy Conservation Standards•Framework Document publishedApril 25, 2006. 71 FR 23876.•Advance Notice of Public Rulemaking(ANOPR) published July 26, 2007. 72 FR41161.•Technical Support Document(TSD) posted on DOE website.•Notice of Proposed Rulemaking (NOPR) published in the Federal Register onAugust 25, 2008. 73 FR 50072.–Issued by DOE on August 12, 2008.–Available to stakeholders for review more than a month prior to the public meeting.•Final Rule scheduled for December 2008.Overview5The Energy Policy and Conservation Act (EPCA) directsDOE to consider seven factors when setting energyconservation standardsFactorAnalysis1. Economic impact on consumersand manufacturersLife-cycle cost analysisManufacturer impact analysis2. Lifetime operating cost savingsLife-cycle cost analysis3. Total projected energy savingsNational impact analysis4. Impact on utility or performanceScreening analysisEngineering analysis5. Impact of any lessening ofcompetitionManufacturer impact analysis6. Need for national energyconservationNational impact analysis7. Other factors the Secretaryconsiders relevantEnvironmental assessmentUtility impact analysisEmployment impact analysisOverviewSelection of Proposed StandardDOE considered five trial standardlevels (TSLs), beginning with the mostefficient level (TSL 5) and worked down to a level where the benefits ofpotential standards outweighed the burdens.•DOE tentatively concludes thatTSL 5 is not economicallyjustified because the knownestimated benefits (energy savings, commercial consumer average LCCsavings, andemission reductions) would notoutweigh the costs (national NPV decrease and loss ofmanufacturer INPV).•DOE proposes that TSL 4 represents the maximum improvementin energy efficiency thatis technologically feasible and economically justified andthat the estimated benefits tothe Nation outweigh thecosts. Therefore, DOE isproposing TSL 4 as the energyconservation standards forcommercial refrigeration equipment in this NOPR.DOE requests comments on whether it should adopt TSL 5 or some othermix of efficiency levels of the equipment classes.Proposed Standard67Proposed StandardProposed Amended Energy Conservation Standards (TSL 4)EquipmentCategoryCondensingUnitConfigurationEquipment FamilyRating Temp.(°F)OperatingTemp. (°F)EquipmentClassDesignationMaximum Daily EnergyConsumption (kWh/day)RemoteCondensingCommercialRefrigerators andCommercialFreezersRemote(RC)Vertical Open(VOP)38 (M)≥32VOP.RC.M0.82 x TDA + 4.070 (L)> -5 and < 32VOP.RC.L2.28 x TDA + 6.85Semivertical Open(SVO)38 (M)≥32SVO.RC.M0.83 x TDA + 3.180 (L)> -5 and < 32SVO.RC.L2.28 x TDA + 6.85Horizontal Open(HZO)38 (M)≥32HZO.RC.M0.35 x TDA + 2.880 (L)> -5 and < 32HZO.RC.L0.57 x TDA + 6.88Vertical ClosedTransparent (VCT)38 (M)≥32VCT.RC.M0.25 x TDA + 1.950 (L)> -5 and < 32VCT.RC.L0.6 x TDA + 2.61Horizontal ClosedTransparent (HCT)38 (M)≥32HCT.RC.M0.16 x TDA + 0.130 (L)> -5 and < 32HCT.RC.L0.34 x TDA + 0.26Vertical Closed Solid(VCS)38 (M)≥32VCS.RC.M0.11 x V + 0.260 (L)> -5 and < 32VCS.RC.L0.23 x V + 0.54Horizontal Closed Solid(HCS)38 (M)≥32HCS.RC.M0.11 x V + 0.260 (L)> -5 and < 32HCS.RC.L0.23 x V + 0.54Service Over Counter(SOC)38 (M)≥32SOC.RC.M0.51 x TDA + 0.110 (L)> -5 and < 32SOC.RC.L1.08 x TDA + 0.228Proposed StandardEquipment CategoryCondensingUnitConfigurationEquipment FamilyRatingTemp.(°F)OperatingTemp. (°F)EquipmentClassDesignationMaximum Daily EnergyConsumption (kWh/day)Self-ContainedCommercial Refrigeratorsand Commercial Freezerswithout DoorsSelf-Contained(SC)Vertical Open(VOP)38 (M)≥32VOP.SC.M1.74 x TDA + 4.710 (L)> -5 and < 32VOP.SC.L4.37 x TDA + 11.82Semivertical Open(SVO)38 (M)≥32SVO.SC.M1.73 x TDA + 4.590 (L)> -5 and < 32SVO.SC.L4.34 x TDA + 11.51Horizontal Open38 (M)≥32HZO.SC.M0.77 x TDA + 5.550 (L)> -5 and < 32HZO.SC.L1.92 x TDA + 7.08Proposed Amended Energy Conservation Standards (TSL 4) (Cont.)9Proposed StandardEquipmentCategoryCondensing UnitConfigurationEquipment FamilyRatingTemp. (°F)OperatingTemp. (°F)EquipmentClassDesignationMaximum DailyEnergy Consumption(kWh/day)CommercialIce-CreamFreezersRemote(RC)Vertical Open (VOP)-15 (I)≤-5VOP.RC.I2.9 x TDA + 8.7Semivertical Open (SVO)SVO.RC.I2.9 x TDA + 8.7Horizontal Open (HZO)HZO.RC.I0.72 x TDA + 8.74Vertical Closed Transparent (VCT)VCT.RC.I0.71 x TDA + 3.05Horizontal Closed Transparent (HCT)HCT.RC.I0.4 x TDA + 0.31Vertical Closed Solid (VCS)VCS.RC.I0.27 x V + 0.63Horizontal Closed Solid (HCS)HCS.RC.I0.27 x V + 0.63Service Over Counter (SVO)SOC.RC.I1.26 x TDA + 0.26Self-Contained(SC)Vertical Open (VOP)VOP.SC.I5.55 x TDA + 15.02Semivertical Open (SVO)SVO.SC.I5.52 x TDA + 14.63Horizontal Open (HZO)HZO.SC.I2.44 x TDA + 9.Vertical Closed Transparent (VCT)VCT.SC.I0.73 x TDA + 3.29Horizontal Closed Transparent (HCT)HCT.SC.I0.56 x TDA + 0.43Vertical Closed Solid (VCS)VCS.SC.I0.38 x V + 0.88Horizontal Closed Solid (HCS)HCS.SC.I0.38 x V + 0.88Service Over Counter (SVO)SOC.SC.I1.76 x TDA + 0.36Proposed Amended Energy Conservation Standards (TSL 4) (Cont.)10Opening Remarks•At this time, DOE welcomes opening remarks from interested parties on theNOPR for commercial refrigeration equipment.In addition, DOE specifically invites comment on the proposedenergy conservation standard levels, TSL 4, for commercialrefrigeration equipment, and requests suggestions for alternatives.Opening Remarks and Comments from InterestedParties on the Proposed Energy Conservation StandardsOpening Remarks and Comment11Summary of Issues on which DOEseeks comment - NOPR issues #1-7Issues for Public Comment1.Data or information onprojected LED cost reductions and bases for such projections. Also,consideration of projected LED prices.2.Base Case Efficiency Trends3.Determining operating temperatureranges for equipment classes.4.Use of offset factorsand the methodology used to calculate them.5.Extending the results of theengineering analysis tothe 23 secondary equipment classes.6.Determining appropriate standard levels for hybridcases and wedges.7.Consideration of TSL 5 and whether the benefits would outweigh the burdens.12NOPR Analyses Flow DiagramManufacturerImpactAnalysisUtilityImpactAnalysisTrialStandardLevelsReviseANOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEmploymentImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisPurpose•To characterize manufacturercost-efficiency relationships for higher efficiencyequipment.•To evaluate design options that improve efficiency relative to the baseline units.•Sensitivity analysis to lookat current material prices.Equipment classes analyzed•DOE prioritized the analysis byfocusing on theclasses with the highest shipmentvolumes•Equipment classes with at least 100 shipments per year were analyzedDesign-option approach•DOE analytically derived cost-efficiency curves for 15 equivalent classes withat least 100shipments per year.•Industry supplied cost-efficiency curves for the 4 highest shipment-volume equipmentclasses were used to supplementand validate the design-option approachEngineering AnalysisEngineering Analysis1314Equipment Class Operating Temperature Ranges(Issue #3)DOE invites comments on the selected temperature ranges used toorganize equipment classes.•Medium temperature:≥32°F•Low temperature: < 32 and > -5°F•Ice-cream temperature:≤-5°FEngineering Analysis15Offset Factors(Issue #4)Certain components of refrigeration loads (such as the conduction and end effects)do not scale proportionately with size.Offset factors are intended to approximate these constant loadsand provide a fixedend point, corresponding to a zero total display area (TDA) or zero volume case, inan equation that describes the relationship between energy consumption and thecorresponding TDA or volume metric.Engineering AnalysisDOE invites comments on the use of offset factors and the methodologyused to calculate them.16Extension of Proposed Energy Conservation Standards(Issue #5)This approach is intended to streamlinethe analysis by focusing on the highshipment volume equipment classes and avoiding direct analysis of less prevalentequipment classes.Engineering AnalysisDOE invites comments on the extension of the energy conservationstandard from the 15 equipment classes directly analyzed to the other 23equipment classes covered in this rulemaking.Open, RCÆOpen, SC (x 2.51)With Door, Low Temp.ÆWith Door, Ice-Cream Temp. (x 1.17)Open, Low Temp.ÆOpen, Ice-Cream Temp. (x 1.27)With Door, RC, Ice-Cream Temp.ÆWith Door, SC, Ice-Cream Temp. (x 1. 40)Trans. Door, RC, Med. Temp.ÆTrans. Door, RC, Low Temp. (x 2.10)17Extension of Proposed Energy Conservation Standards(Issue #6)Engineering AnalysisOpen, RCÆOpen, SC (x 2.51)With Door, Low Temp.ÆWith Door, Ice-Cream Temp. (x 1.17)Open, Low Temp.ÆOpen, Ice-Cream Temp. (x 1.27)With Door, RC, Ice-Cream Temp.ÆWith Door, SC, Ice-Cream Temp. (x 1.40)Trans. Door, RC, Med. Temp.ÆTrans. Door, RC, Low Temp. (x 2.10)VOP.RC.L to VOP.SC.LSVO.RC.I to SVO.SC.ISVO.RC.L to SVO.SC.LHZO.RC.I to HZO.SC.IVOP.RC.I to VOP.SC.ISOC.RC.L to SOC.RC.IHCT.RC.L to HCT.RC.IVOP.RC.L to VOP.RC.ISVO.SC.L to SVO.SC.ISVO.RC.L to SVO.RC.IHZO.SC.L to HZO.SC.IVOP.SC.L to VOP.SC.ISOC.RC.I to SOC.SC.IVCS.RC.I to VCS.SC.IHCT.RC.I to HCT.SC.IHCS.RC.I to HCS.SC.IVCT.RC.M to VCT.RC.LHCT.RC.M to HCT.RC.L18NOPR Analyses Flow DiagramManufacturerImpactAnalysisUtilityImpactAnalysisTrialStandardLevelsReviseANOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEmploymentImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysisEnergy Use Characterization•To develop electrical energy consumption savings estimates for selectedequipment efficiency levels.•To validate the energy savings estimates from the engineering analysis usingrefrigerant system and whole building modeling for a diverse set of climates.Markups for Equipment Price Determination•To characterize the channels for howequipment is distributed from themanufacturer to the customer.•To determine prices paid by customersbased on manufacturer selling pricesfor baseline and higherefficiency equipment.Life-Cycle Cost and Payback Period Analyses•To develop the customer life-cycle cost savings and payback period for higherefficiency equipment.Purpose1920ApproachDOE used the engineering estimates of energy consumption based on theARI 1200 Test ProcedureARI 1200 Test Procedure accounts for•direct energy consumption(evaporator fan motors,lighting, anti-sweatheaters, defrost and drain heaters,and condensate pan heaters in allequipment and compressor energy consumption) in self-contained equipmentIndirect energy consumption(compressor energy consumption) in remotecondensing equipment.DOE validated the engineering estimates using whole-building annualenergy simulation incorporating interactive refrigeration system modeling(DOE 2.2R) for seven classes ofremote condensing equipment.Energy Use Characterization21Distribution ChannelsMarkups to Determine Equipment PriceEstimated Fraction of Equipment Shipments by Distribution Channels(Modified from ANOPR based on public comment)Replacement&New Construction70%15%15%ManufacturerNational AccountConsumerWholesaler or Wholesale DistributionMechanical Contractor(New Construction or Replacement)ConsumerConsumer30%35%35%Self-ContainedRemote-Condenser22Inputs•Firm balance sheets:–Wholesalers:HARDI’s 2005 Profit Planning Report.–Mechanical Contractors:U.S. Census Bureau Financial Data for Plumbing,Heating, and Air-Conditioning Contractors, 2002 and Air ConditioningContractors of America (ACCA) financial analysis data.–General Contractors:U.S. Census Bureau Financial Data for Commercialand Institutional Building Construction Contractors•20% - 80% split of equipment between new construction and replacementmarket, respectively.Outputs•Weighted average baselinemarkups of 1.49 for remote condenser and 1.74 forself contained (new construction and replacement market) for baseline efficiencyequipment (including sales tax).•Weighted average incremental markups of1.18 for remote condenser and 1.26for self contained (new constructionand replacement market) for higherefficiency equipment (including sales tax).Markups to Determine Equipment PriceInputs and OutputsMarkups to Determine Equipment Price23Life-Cycle Cost (LCC) equals customer price plus the sum of annualoperating costs discounted to a particular base year (2012, in this case).Economic evaluation from the customer perspective.Analysis implemented in an Excel®spreadsheet with add-on macro toestimate impacts in individual statesResults are expressed as LCC savings (baseline minus standard level).Simple payback period (in years) is also calculated and reported in thisanalysis.Life-Cycle Cost and Payback Period AnalysesLife-Cycle Cost AnalysisCombine Changesin CostsLCC ResultsInstalled Cost(Customer Price + Installation Cost)Operating ExpensesConvertto PresentValue24LCC analysis was based on State-by-Stateaverage electricity prices paid by fourbusiness types thatuse CRE equipment (Large Grocery Stores, ConvenienceGrocery without Gasoline Pumps, Convenience Grocery with Gasoline Pumps, MultiLine Stores).Electricity prices by business type were developed using the ratioof average price in2003 CBECS by business type tocommercial average price.These ratios are then applied to the State-by-State average commercial sectorelectricity prices calculated from EIA data for 2006 (updated from ANOPR) to obtainState-by-State electricityprices by business type.These State-by-State prices by businesstype were projectedfor 2012 and beyond byusing EIA AEO 2007 national commercial electricity price trends.The final rule analysis will use the latest EIA data and the AEO 2008 forecast.Electricity PricesLife-Cycle Cost and Payback Period Analyses25Installation costs (updated and held constant with higher efficiency levels based onindustry comments).Discount rates (weighted average costof capital—data updated from 2007Damodaran Onlinewebsite).Equipment lifetime (distribution of lifetimes with a 10-year average for Large Groceryand Multi-line Retailers, and15 years for ConvenienceStores, based on industrycomments).Repair costs (baseline repair cost plusincrease due to higher cost componentscalculated for higher efficiency level). Increase withhigher cost components perindustry commentsMaintenance costs (based on RS Means Costworks, held constant with efficiencylevel). Lighting replacement costs separately calculated depending on technology.Other InputsLife-Cycle Cost and Payback Period Analyses26Life-cycle Cost Analysis ResultsInstalled Cost-LCC Tradeoff$25,000$25,500$26,000$26,500$27,000$27,500$28,000$28,500$8,518 $8,558 $8,656 $8,757 $9,052 $9,115 $11,685 #N/ALevel 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8Installed Cost

Life Cycle CostInstalled Cost-LCC TradeoffEquipment= Vertical Open (VOP), Operating Mode=Remote Condenser (RC), Temperature=Medium (M), FuelPrice=AEO 2007-Reference Case, Start Year=201227Life-cycle Cost Analysis ResultsInstalled Cost-LCC Tradeoff$31,000$32,000$33,000$34,000$35,000$36,000$37,000$38,000$13,192 $13,226 $13,307 $14,825 $14,888 $15,856 $15,988 #N/ALevel 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7 Level 8Installed Cost

Life Cycle CostInstalled Cost-LCC TradeoffEquipment= Vertical Closed Transparent (VCT), Operating Mode=Remote Condenser (RC), Temperature=Low (L),Fuel Price=AEO 2007-Reference Case, Start Year=201228NOPR Analyses Flow DiagramManufacturerImpactAnalysisUtilityImpactAnalysisTrialStandardLevelsReviseANOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEmploymentImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysis29PurposeShipments Analysis•To estimate CRE shipments over time.National Impact Analysis•To estimate the National Energy Savings (NES) from CREs at differentefficiency levels.•To estimate the national economic impact on the nation (or the Net PresentValue (NPV)) from equipment energy conservation standards at differentefficiency levels.Shipments Analysis30ApproachShipments AnalysisShipment forecasts (2012-2042) derived from:•Historical shipments;•Replacements based onequipment lifetimes;•New installations based on theprojected floor space construction published by the AnnualEnergy Outlook 2007 forecasts; and•Estimates of the equipment mix of baseline and higher-efficiency technologies in the stockand shipments.Shipments and stocks of equipment tracked by vintage, market (new andreplacement), and equipment class.Added estimate of shipments for VOP.RC.L at 5% of VOP.RC.M shipmentsbased on industry input.31Outcomes of Shipments Forecasts: ShipmentsShipments AnalysisTotal Shipments of CREs05001,0001,5002,0002,500 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042Years

Thousands of Linear FeetReplacements, Large, for Year 2000 StockReplacements, Small, Yr 2000 StockReplacements, Large, for New SalesReplacements, Small, for New SalesNew Sales, LargeNew Sales, SmallNational energy savings calculated from 2012-2042 and National NPVcalculated from 2012-2062.Base case incorporates the penetration of higher efficiency CREs.Example: No Amended Standard, VOP-RC-MApproachNational Impact AnalysisStandards “roll up” inefficient equipment,but do not affect efficient equipment.Example: Standard at Efficiency =Level 4Once a standard is in place, old equipment goes out of the inventory according tothe base case efficiency mix. New equipment is sold to replace equipmentaccording to the new efficiency mix.Use national average customer prices, annual energy use, energy prices, annualrepair and maintenance expenditures from LCC analysis. Streams of energy useand total costs calculated over analysistime periods and costs discounted to thepresent.32Below 1Level 1Level 2Level 3Level 4Level 5Level 6Level 7Level 8Total0%0.0%0.0%0.0%70.0%14.2%13.5%2.4%0.0%100%Below 1Level 1Level 2Level 3Level 4Level 5Level 6Level 7Level 8Total0%17.3%18.0%18.1%16.6%14.2%13.5%2.4%0.0%100%33Issues for which DOE seeks comments(Issue #2)National Impacts AnalysisDOE seeks comment on whether shipments of LED-equipped equipmentwould change if LED costs drop and if so, the extent and timing of suchshipment changes.DOE recognizes that baseline efficiency trends can change ifequipment costs are different than those projected. For example, ifLED prices drop more than assumed in the engineering analysis,consumer demand for LED-equipped equipment could change.34NOPR Analyses Flow DiagramManufacturerImpactAnalysisUtilityImpactAnalysisTrialStandardLevelsReviseANOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEmploymentImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysis35Purpose•To develop a list of standardlevels from which impacts areweighed and aproposed standardlevel is selected.–Each trial standard level consists of a set of potentialminimum efficiencylevels coveringall equipment classes, and may vary between equipment classes; and–NOPR analyses assess impacts for trial standard levels (not equipment classes).Method•Trial standard levels are assembled from theequipment classes identified in the NOPR.–Analyzed standard levelscover a range of efficiencies and can include:Most energy efficientlevel (max tech);Efficiency level with the lowest life-cycle cost;Efficiency level with a paybackperiod of three years or less;Efficiency levels with noteworthy technologies; andEfficiency levels that fill in largegaps between candidate standard levels.–Each trial standard level consists of the analyzed standard level fromeach equipmentclass that meets one ofthe above criteria.•“Mixed” TSLs were constructed based onNPV results for equipment classesTrial Standard LevelsSelection of Trial Standard Levels36Trial Standard LevelsTrial Standard Levels for the NOPREquipmentClassTest MetricTrial Standard Levels for Primary Equipment Classes AnalyzedBaselineTSL 1TSL 2TSL 3TSL 4TSL 5VOP.RC.MCDEC kWh/day1.01 x TDA + 4.070.9 x TDA + 4.070.87 x TDA + 4.070.82 x TDA + 4.070.82 x TDA + 4.070.68 x TDA + 4.07VOP.RC.LCDEC kWh/day2.84 x TDA + 6.852.5 x TDA + 6.852.38 x TDA + 6.852.35 x TDA + 6.852.28 x TDA + 6.852.28 x TDA + 6.85VOP.SC.MTDEC kWh/day2.34 x TDA + 4.712.09 x TDA + 4.711.92 x TDA + 4.711.74 x TDA + 4.711.74 x TDA + 4.711.57 x TDA + 4.71VCT.RC.MCDEC kWh/day0.48 x TDA + 1.950.46 x TDA + 1.950.43 x TDA + 1.950.31 x TDA + 1.950.25 x TDA + 1.950.25 x TDA + 1.95VCT.RC.LCDEC kWh/day1.03 x TDA + 2.610.97 x TDA + 2.610.68 x TDA + 2.610.67 x TDA + 2.610.6 x TDA + 2.610.6 x TDA + 2.61VCT.SC.ITDEC kWh/day1.63 x TDA + 3.291.2 x TDA + 3.290.85 x TDA + 3.290.75 x TDA + 3.290.73 x TDA + 3.290.73 x TDA + 3.29VCS.SC.ITDEC kWh/day0.55 x V + 0.880.49 x V + 0.880.43 x V + 0.880.38 x V + 0.880.38 x V + 0.880.38 x V + 0.88SVO.RC.MCDEC kWh/day1.01 x TDA + 3.180.91 x TDA + 3.180.89 x TDA + 3.180.83 x TDA + 3.180.83 x TDA + 3.180.69 x TDA + 3.18SVO.SC.MTDEC kWh/day2.23 x TDA + 4.592.04 x TDA + 4.591.9 x TDA + 4.591.73 x TDA + 4.591.73 x TDA + 4.591.58 x TDA + 4.59SOC.RC.MCDEC kWh/day0.62 x TDA + 0.110.59 x TDA + 0.110.55 x TDA + 0.110.51 x TDA + 0.110.51 x TDA + 0.110.39 x TDA + 0.11HZO.RC.MCDEC kWh/day0.51 x TDA + 2.880.45 x TDA + 2.880.39 x TDA + 2.880.36 x TDA + 2.880.35 x TDA + 2.880.35 x TDA + 2.88HZO.RC.LCDEC kWh/day0.68 x TDA + 6.880.62 x TDA + 6.880.58 x TDA + 6.880.57 x TDA + 6.880.57 x TDA + 6.880.57 x TDA + 6.88HZO.SC.MTDEC kWh/day1.14 x TDA + 5.551.02 x TDA + 5.550.91 x TDA + 5.550.78 x TDA + 5.550.77 x TDA + 5.550.77 x TDA + 5.55HZO.SC.LTDEC kWh/day2.63 x TDA + 7.082.41 x TDA + 7.082.2 x TDA + 7.081.94 x TDA + 7.081.92 x TDA + 7.081.92 x TDA + 7.08HCT.SC.ITDEC kWh/day1.33 x TDA + 0.431.16 x TDA + 0.430.64 x TDA + 0.430.61 x TDA + 0.430.56 x TDA + 0.430.56 x TDA + 0.4337NPV Results by TSLTSL 3 provides the maximum NPV of $1.20 Billion at 7 percent discount rate,all equipment classes show positive NPVTSL 4 provides NPV of $1.10 Billion at7 percent discount rate, all equipmentclasses with positive NPVTSL 5 provides NPV of -$0.20 Billionat 7 percent discount rate; fiveequipment classes(VOP.RC.M, VOP.SC.M, SVO.RC.M, SVO.SC.M,SOC.RC.M)have negative NPV.National Impacts Analysis38Issues for which DOE seeks comments(Issue #7)National Impacts AnalysisUnder a scenario of 50 percent cost reduction for LED lighting systemsby 2012, consistent with current DOE projections, all CRE equipmentclasses show maximum NPV at TSL5. DOE invites comments on theconsideration of TSL 5 and whether the benefits would outweigh theburdens.If, based on comment, DOE wereto revise the LED systemcosts to reflect projected costs as of 2012 as describedpreviously the economic impacts of TSL 5 would change.DOE requests data or information onprojected LED cost reductions andseeks comment on its consideration of projected LED prices.DOE also seeks comment on the extent to which stakeholders expectprojected LED cost reductions would occur, the timing of the projected LEDcost reductions, and the certainty ofthe projected LED cost reductions.DOE seeks comment on the extent towhich manufacturers would adoptLED technology into the design of commercial refrigeration equipment in theabsence of standards.39NPV Results by TSL assuming different scenarios of costreduction in LED Lighting by 2012At a 6 percent LED lighting cost reductionby 2012, TSL 5 provides a positive NPVoverall, but five classescontinue to show negativeNPV under 7 percent discountrate.At a 50 percent LED lighting cost reduction–consistent with DOE current costprojections for the LED industry–TSL 5 provides a positive NPV for all productclasses.National Impacts AnalysisIssues for which DOE seeks comments(Issue #1)40NOPR Analyses Flow DiagramManufacturerImpactAnalysisUtilityImpactAnalysisTrialStandardLevelsReviseANOPRAnalysesEnvironmentalAssessmentRegulatoryImpactAnalysisEmploymentImpactAnalysisEngineeringAnalysisLife-CycleCost &PaybackPeriodAnalysesNationalImpactAnalysis41LCC Subgroup AnalysisLife-Cycle Cost Subgroup AnalysisPurpose•To evaluate the economic impacts of standards on consumer subgroups who may bedisproportionately impacted compared with thegeneral user population.Method•DOE identified small businesses, exemplifiedby independent grocery and convenience storesas a customer subgroup that could be disproportionately affected,and examined the impact ofproposed standardson this group.•DOE used the LCC spreadsheet model to determine the impact on this CRE customersubgroup.Output•LCC savings and simply payback period (in years) forthe identified customer subgroup.•Determined small businesssubgroup were not disproportionately impacted by the standard42Manufacturer Impact AnalysisManufacturer Impact AnalysisPurpose•To assess the impacts of standards on CREmanufacturers;•To identify and estimate impacts on manufacturersub-groups that maybe more severelyimpacted than the industry as a whole; and•To examine the impact of cumulativeregulatory burdenson the industry.Method•Analyze industry cash flowand net present value throughuse of the GovernmentRegulatory ImpactModel (GRIM); and•Interview manufacturers torefine inputs to the GRIM,develop sub-groupanalyses, andaddress qualitative issues.43Manufacturer Impact Analysis ProcessManufacturer Impact AnalysisThe MIA consists of three phases:IndustryprofileDevelopstraw-manGRIM*DevelopinterviewguideInterviews& industrywide /subgroupanalysesAssess directemployment,competition,cumulativeburdenFinalizeMIA resultsfor NOPRPhase 2* Government Regulatory Impact Model (GRIM)Phase 3Phase 144Purpose•To investigate the effects on utilities from reduced energy sales and peak loaddemand due topotential standards.Method•Use National Energy Savings Results; and•Use the EIA’s National Energy Modeling System (NEMS-BT) tailored for DOE’s BuildingTechnologies Program.Output•Change in electricity sales and price by region;•Change in the mix of electricity generation; and•Change in installed capacity and generation.Utility Impact AnalysisUtility Impact Analysis45Purpose•To report net jobs created oreliminated nationally as aconsequence of new or amendedenergy conservation standards. Employment impacts include direct and indirect impacts.Method•Uses the Impact of SectorEnergy Technologies (ImSET) model to assess the indirectemployment impacts;•Estimate changes in employment, industry output, and wage income in the overall UnitedStates economy resulting fromchanges in expenditures inthe various sectors of theeconomy;•Estimate changes incosts and benefits using the NES analysis; and•Direct employment impacts are addressed inthe Manufacturer Impact Analysis (MIA).Output•Change in employment in national economy, other than in the manufacturingsector beingregulated, as a consequence of the amended energyconservation standards.Employment Impact AnalysisEmployment Impact Analysis46Purpose•To report environmental impacts as a consequence ofthe amended energyconservationstandards, including changesin power plant emissions.Output•Calculated the reductionin power plant emissions of carbon dioxide (CO2), oxides of nitrogen(NOX) and mercury (Hg), usingthe NEMS-BT computer model.•Sulfur dioxide (SO2) emission was not included due to the emission cap set by the Clean AirAct Amendments of1990. Impact on SO2emissions changes was estimated as too small toaffect value of emissionsallowances under the cap.•Monetized value of reductions in CO2, NOX, and Hg.Environmental AssessmentEnvironmental Assessment47Purpose•To investigate the national impacts due tonon-regulatory alternatives compared withmandatory energy conservation standards.•The non-regulatory alternatives that DOE analyzed include:–No New Regulatory Action;–Commercial Customer Rebates;–Commercial CustomerTax Credits; and–Voluntary Energy-Efficiency Targets—ENERGY STAR.Method•Modify NES spreadsheet model toconsider the four scenarios andtheir impact on shipmentsby efficiency level.Output•National Energy Savings andNet Present Value of the non-regulatory alternatives.•Impact of non-regulatory alternatives on usage of energy-efficient equipment.Regulatory Impact AnalysisRegulatory Impact Analysis48Summary of Issues on which DOEseeks comment - NOPR issues #1-7Issues for Public Comment1.Data or information onprojected LED cost reductions and bases for such projections. Also,consideration of projected LED prices.2.Base Case Efficiency Trends3.Determining operating temperatureranges for equipment classes.4.Use of offset factorsand the methodology used to calculate them.5.Extending the results of theengineering analysis tothe 23 secondary equipment classes.6.Determining appropriate standard levels for hybridcases and wedges.7.Consideration of TSL 5 and whether the benefits would outweigh the burdens.49How to Submit Comments...Public Meeting– Oral comments will be capturedin the transcript and becomepart of the public record.Written comments– NOPR comment period open untilOctober 24, 2008.Reference docket #: EE–2006–STD–0126 and/or RIN #: 1904–AB59.Email: commercialrefrigeration.rulemaking@ee.doe.govMail: Ms. Brenda EdwardsU.S. Department of EnergyBuilding TechnologiesProgram, Mailstop EE–2J1000 Independence Avenue, SW.Washington, DC 20585–0121.Telephone: (202) 586–2945.Courier: Ms. Brenda EdwardsU.S. Department of EnergyBuilding Technologies Program950 L’Enfant Plaza, SW., 6th Floor,Washington, DC 20024.Closing50Backup SlidesSummary of Results Based Upon the AEO2007 Reference Case Energy Price Forecast*TSL 1TSL 2TSL 3TSL 4TSL 5Primary Energy Saved (quads)0.1410.5450.7150.8321.2087% Discount Rate0.0340.1320.1730.2010.2923% Discount Rate0.0730.2840.3720.4330.603Generation CapacityReduction (GW)**0.1090.4210.5520.6430.934NPV (2007$billion):7% Discount Rate3% Discount Rate0.330.981.201.10(0.20)0.822.593.253.241.16Industry ImpactsIndustry NPV (2007$ million)Industry NPV (% Change)0 – (63)0 – (12)6 – (88)1 – (17)(17) – (129)(3) – (25)(40) – (180)(8) – (35)(18) – (285)(3) – (56)Cumulative EmissionsImpacts†:CO2(Mt)7.3728.4737.3743.5063.17NOx (kt)2.7410.5813.8816.1623.47Hg (t)0.090.360.470.540.80Life-Cycle CostNet Savings (%)17 - 4834 - 6861 - 8968 – 9324 – 93Net Increase (%)0000 – 190 – 71No Change (%)52 - 8332 - 6611 – 397 – 322 – 19Mean LCC Savings (2007$)192 - 3132551 - 4005710 - 4089693 - 3818(673) - 3818Mean PBP (yrs)0.4 - 1.20.6 - 2.61.3 - 4.61.4 – 6.11.4 - 12.6* Parentheses indicate negative(-) values. For LCCs, anegative value means anincrease in LCC by the amount indicated.** Change in installed generation capacity by the year 2042 based on AEO2007 Reference Case.†CO2emissions impacts include physical reductions at power plants. NOx emissions impacts include physical reductions at power plants as well as production of emissions allowancecredits where NOx emissions are subject to emissions caps.5152Market CharacteristicsMarket and Technology AssessmentFour manufacturers account for approximately 85% of the domesticmarket share of all types of covered equipment.Approximately 170,000 units covered by this rulemaking were shipped inyear 2005 (2006 ARI and Appliance Magazine data).Remote condensing equipment accounts for about 80% of the coveredmarket, while self-contained equipment accounts for the remaining 20%.Hussmann48%Tyler Refrigeration16%Hill Phoenix15%Kysor/Warren6%Other15%Source:Appliance Magazine,28th Annual Portrait of the U.S. Appliance Industry, September 2005.53Equipment ClassesMarket and Technology AssessmentEquipmentCategoryCondensingUnitConfigurationEquipmentFamilyRatingTemperature(°F)OperatingTemperature(°F)EquipmentClassDesignationRemoteCondensingCommercialRefrigerators,CommercialFreezers, andCommercialRefrigeratorFreezersRemoteVertical Open38≥32VOP.RC.M0< 32 and > -5VOP.RC.LSemivertical Open38≥32SVO.RC.M0< 32 and > -5SVO.RC.LHorizontal Open38≥32HZO.RC.M0< 32 and > -5HZO.RC.LVertical ClosedTransparent38≥32VCT.RC.M0< 32 and > -5VCT.RC.LHorizontal ClosedTransparent38≥32HCT.RC.M0< 32 and > -5HCT.RC.LVertical ClosedSolid38≥32VCS.RC.M0< 32 and > -5VCS.RC.LHorizontal ClosedSolid38≥32HCS.RC.M0< 32 and > -5HCS.RC.LService OverCounter38≥32SOC.RC.M0< 32 and > -5SOC.RC.L54Equipment ClassesMarket and Technology AssessmentEquipmentCategoryCondensingUnitConfigurationEquipmentFamilyRatingTemperature(°F)OperatingTemperature(°F)EquipmentClassDesignationSelf-ContainedCommercial Refrigerators,Commercial Freezers, andCommercial RefrigeratorFreezersWithout DoorsSelf-ContainedVertical Open38≥32VOP.SC.M0< 32 and > -5VOP.SC.LSemiverticalOpen38≥32SVO.SC.M0< 32 and > -5SVO.SC.LHorizontalOpen38≥32HZO.SC.M0< 32 and > -5HZO.SC.L55Equipment ClassesMarket and Technology AssessmentEquipmentCategoryCondensingUnitConfigurationEquipment FamilyRatingTemperature(°F)OperatingTemperature(°F)EquipmentClassDesignationCommercialIce-CreamFreezersRemoteVertical Open-15≤-5VOP.RC.ISemivertical OpenSVO.RC.IHorizontal OpenHZO.RC.IVertical Closed TransparentVCT.RC.IHorizontal ClosedTransparentHCT.RC.IVertical Closed SolidVCS.RC.IHorizontal Closed SolidHCS.RC.IService Over CounterSOC.RC.ISelf-ContainedVertical OpenVOP.SC.ISemivertical OpenSVO.SC.IHorizontal OpenHZO.SC.IVertical Closed TransparentVCT.SC.IHorizontal ClosedTransparentHCT.SC.IVertical Closed SolidVCS.SC.IHorizontal Closed SolidHCS.SC.IService Over CounterSOC.SC.I56Screening Analysis MethodScreening AnalysisDesign options screened using the following criteria:•Technological feasibility;•Practicability to manufacture, install and service;•Adverse impacts on product utility or product availability; and•Adverse impacts on health or safety.57Technologies Selected for Further ConsiderationScreening AnalysisTechnologies that can improve calculated daily energy consumption (CDEC)•higher-efficiency lighting•higher-efficiency lighting ballasts•remote lighting ballast location•higher-efficiency evaporator fan motors•evaporator fan motor controllers•higher-efficiency evaporator fan blades•increased evaporator surface area•low-pressure differential evaporators•improved or thicker insulation•defrost mechanism•defrost cycle control•higher-efficiency compressors (self-contained equipment only)•increased condenser surface area(self-contained equipment only)•higher-efficiency condenser fan motors (self-contained equipment only)•higher-efficiency condenser fan blades (self-contained equipment only)58Downstream Analyses•Life-Cycle Cost andPayback Period•National Impacts•Manufacturer ImpactAnalysisCost – EfficiencyRelationship

Incremental Manufacturing CostEEREngineering AnalysisCharacterize the relationship between manufacturer cost and efficiency (EER orCOP)Purpose of the Engineering Analysis59Baseline and Incremental MarkupsMarkupsrelate customer price tocost of goods sold (COGS)Baseline markupsrelate price to cost prior to a change in efficiency•Baseline markups indicate a customer price that covers allof a wholesaler’s or contractor’sexpenses plus profit.•Direct labor costs (salaries, payroll, rental and occupancy) are included.Incremental markupsrelate the incremental change in customer price to theincremental change in COGS beyond baseline•Some distribution costs remainconstant with COGS increases.•Incremental markups cover onlyexpenses that vary with an increase in equipment efficiency–For example, direct labor costs(salaries, payroll), rental, andoccupancy do not vary withefficiency-induced changes in COGS.•DOE assumes other operating costs and profit willscale proportionally with COGS.Markups to Determine Equipment Price60LCC Calculation FlowchartLife-Cycle Cost and Payback Period AnalysesBaselineManufacturerPriceStd-LevelManufacturerPriceTotal InstalledCostFromEngineeringAnalysis(Price is aFunction ofEfficiency)From Markupsfor EquipmentPriceDeterminationAnalysisElectricityPricesAnnual EnergyExpenseRepair CostMaintenanceCostAnnualOperatingExpenseLifetimeDiscount RateElectricityPrice TrendLifetimeOperatingExpenseFrom EnergyUseCharacterizationAnalysis(Energy Use as aFunction ofEfficiency)PaybackPeriodEnergyConsumptionDistributorMarkupSales TaxContractorMarkupCustomerPriceInstallationCost61National Impact Analysis ProcessShipmentsModelNationalEnergySavingsNationalEconomicImpactsLCCAnalysisResults andOther InputsNationalEnergy Savings(Quads)NationalNet Present Value(2006 US $, billion)National energy savings calculatedfor period from 2012-2042 (30 years)NPV calculated for period from 2012-206262Shipments ModelShipments AnalysisNEMS Food ServicesBldgConstruction ForecastARI Estimate ofShipments (2005)Initial ReplacementShipmentsInitial Shipments to NewConstructionInitial CRE StockEstimated Lifetimeof CRE StockShipments to NewConstructionReplacementShipmentsTotalShipments ByProduct Class% Shipments by ProductClass (2005)CRE Stockby ProductClass63Shipments by Equipment Class2012 2015 2020 2025 2030 2035 2040 2042 CumulativeVOP.RC.M451 436 451 464 497 531 582 60415,270VOP.RC.L23 22 23 23 25 27 29 30763VOP.SC.M30 29 30 31 33 36 39 41 1,027VCT.RC.M32 31 32 33 35 38 42 43 1,091VCT.RC.L448 433 448 461 494 527 578 60015,167VCT.SC.I11 11 11 11 12 13 14 15374VCS.SC.I3 3 3 3 3 3 4 4 93SVO.RC.M344 332 344 354 379 405 444 46011,647SVO.SC.M45 44 45 47 50 53 59 61 1,537SOC.RC.M87 84 87 89 96 102 112 1162,936HZO.RC.M53 51 53 54 58 62 68 71 1,790HZO.RC.L166 161 166 171 183 196 214 2225,627HZO.SC.M4 4 4 4 4 5 5 5 132HZO.SC.L8 8 8 8 9 10 10 11 274HCT.SC.I36 35 36 37 39 42 46 48 1,214Total1,742 1,682 1,739 1,7911,918 2,049 2,245 2,33058,941EquipmentThousands of Linear Feet Shipped by Year and Equipment Class64Outcomes of Shipments Forecasts: StockShipments AnalysisStock of CRE Units,Including Replacements-510152025 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060Years

Linear Feet (Million)Cumulative New Units (All Replaced through 2042) (Linear Feet)From Stock Existing in 2000 (Most Replaced) (Linear Feet)65NES and NPV Flow ChartStock of LinearFeet by YearLinear FeetShipped by YearLinear FeetShipped byEquipment Class,Efficiency Level byYearInstalled Costsper Linear Foot,Energy Use perLinear Foot,Energy Prices,Other OperatingCosts per LinearFootShipmentsAnalysisMarket Sharesby EquipmentClassAnnualizedCostsCalculations byRisk GroupMarket Sharesby EquipmentClassStock of LinearFeet by EquipmentClass andEfficiency, by YearInstalled Costs, byEquipment Class,Efficiency LevelTotal InstalledCosts by Year,Equipment Class,Efficiency LevelTotal EnergyUsed,Energy Costs, andOther OperatingCosts byEquipment Class,Efficiency Level,and YearElectricityPriceForecastsEnergyInformationAdministrationLCC ModelElectricity Used,Electricity Cost perUnit, OtherOperating Costsper Linear FootDiscountRates and TSLLevelsResults: Cumulative EnergyUse, PV andAnnualized Installed Cost and OperatingCosts, Net Present Value andAnnualized Costs66NPV Results by TSL(Seven-Percent Discount Rate)National Impacts AnalysisEquipment ClassTrial Standard Level (Billion 2007$)*TSL 1TSL 2TSL 3TSL 4TSL 5VOP.RC.M$0.11$0.10$0.19$0.19-$0.53VOP.RC.L$0.01$0.02$0.02$0.01$0.01VOP.SC.M$0.01$0.02$0.04$0.04-$0.01VCT.RC.M$0.00$0.00$0.01$0.00$0.00VCT.RC.L$0.07$0.60$0.62$0.55$0.55VCT.SC.I$0.02$0.04$0.04$0.04$0.04VCS.SC.I$0.00$0.00$0.00$0.00$0.00SVO.RC.M$0.06$0.06$0.12$0.12-$0.26SVO.SC.M$0.01$0.02$0.04$0.04-$0.01SOC.RC.M$0.00$0.01$0.02$0.02-$0.09HZO.RC.M$0.00$0.01$0.01$0.01$0.01HZO.RC.L$0.02$0.05$0.05$0.05$0.05HZO.SC.M$0.00$0.00$0.00$0.00$0.00HZO.SC.L$0.00$0.01$0.01$0.01$0.01HCT.SC.I$0.00$0.03$0.03$0.03$0.0367NPV Results for 50 Percent LED Cost Reduction Scenario(Seven-Percent Discount Rate)National Impacts AnalysisEquipment ClassTrial Standard Level (Billion 2007$)*TSL 1TSL 2TSL 3TSL 4TSL 5VOP.RC.M$0.11$0.10$0.18$0.18$0.33VOP.RC.L$0.01$0.02$0.02$0.02$0.02VOP.SC.M$0.01$0.02$0.03$0.03$0.04VCT.RC.M$0.00$0.00$0.01$0.02$0.02VCT.RC.L$0.06$0.57$0.58$0.80$0.80VCT.SC.I$0.02$0.04$0.05$0.05$0.05VCS.SC.I$0.00$0.00$0.00$0.00$0.00SVO.RC.M$0.06$0.05$0.11$0.11$0.18SVO.SC.M$0.01$0.02$0.04$0.04$0.05SOC.RC.M$0.00$0.01$0.01$0.01$0.01HZO.RC.M$0.00$0.01$0.01$0.01$0.01HZO.RC.L$0.02$0.05$0.05$0.05$0.05HZO.SC.M$0.00$0.00$0.00$0.00$0.00HZO.SC.L$0.00$0.01$0.01$0.01$0.01HCT.SC.I$0.00$0.03$0.03$0.03$0.03