## Friday, January 12, 2001



# Part X



# Department of Energy

Office of Energy Efficiency and Renewable Energy

10 CFR Part 431 Energy Efficiency Program for Commercial and Industrial Equipment: Efficiency Standards for Commercial Heating, Air 

## Conditioning and Water Heating Equipment; Final Rule

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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 431
[Docket No. EE-RMlSTD-OG-100]

RIN 1904-AB06
Energy Efficiency Program for Commercial and Industrial Equipment: Efficiency Standards for Commercial Heating, Air Conditioning and Water Heating Equipment

AGENCY: Office ofEnergy Efficiency and RenewableEnergy, Department of Energy.
ACTION: Finalrule.

SUMMARY: The Energy Policy and Conservation Act (EPCA), as amended, establishes energy efficiency standards for certain commercial heating, air conditioning and water heating products. For some ofthese products, the Department ofEnergy (DOE, Department or we) is adopting efficiency standards contained in the

new American Society ofHeating, Refrigerating andAir-Conditioning Engineers, Inc. (ASHRAE) and Illuminating Engineering Society of North America (IESNA) Standard 90.1,

as revised in October 1999, as uniform national standards. This final rule also identifies other products coveredby the recentlyrevised ASHRAE/IESNA Standard 90.1-1999 that DOE will analyze further to determine whether

more stringent standards are warranted.
DATES: Effective date: This rule is effective February 12, 2001.

ComplianceDates:The compliance date ofstandards adopted inthis rule for central water-cooled air conditioners, water source heat pumps, and evaporatively-cooled air conditioning products with cooling capacities rated at or above 135,000 Btul h and below 240,000 Btu/h is October 29, 2004. For all other standards adopted in this rule, the compliance date is October 29, 2003.

ADDRESSES: You canreadthe transcript ofthe public workshop regarding this rulemaking, the public comments received, and the Screening Analysis report referred to in this notice in the Freedom ofInformation Reading Room (Room No. lE-190) at the U.S. Department ofEnergy, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585, between the hours of9:00 a.m. and 4:00 p.m., Mondaythrough Friday, except Federal holidays. You can also obtain the ScreeningAnalysis report electronically from the Office ofBuilding Research and Standards world wide web site at the following URL address: [http:// www.eren.doe.gov!buildings! codes standards!index.htm].

Thisfinal rule also refers to certain industry standards established by ASHRAE and IESNA. These industry standards are referenced by the single comprehensive title "ASHRAE/IESNA Standard 90.1." The revision of ASHRAE/IESNA Standard 90.1 published in 1999 is referenced by the title "ASHRAE/IESNA Standard 90.1- 1999." You can view this standard at theDepartment's InformationReading Room at the address stated above. You

can also obtain copies by mail from the American Society ofHeating, Refrigerating, and Air-Conditioning Engineers, Inc., 1971 Tullie Circle, NE, Atlanta, GA 30329, or electronically from ASHRAE's web site, [http:// www.ashrae.org!book!bookshop.html.

FOR FURTHER INFORMATION CONTACT: Cyrus H. Nasseri, U.S. Department of Energy, Office ofEnergy Efficiency and Renewable Energy, Mail Station, EE-41, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586- 9138, FAX (202) 586-4617, e-mail: Cyrus.Nasseri@ee.doe.gov, or Edward Levy, Esq., U.S. Department ofEnergy, Office ofGeneral Counsel, Mail Station, GC-72, 1000 Independence Avenue, SW., Washington, DC 20585, (202) 586- 9507, e-mail: Edward.LeVY@hq.doe.gov.

SUPPLEMENTARY INFORMATION: 1. Introduction

A. Consumer Overview B. Authority C. Background 1. General 2. ASHRAE Action II. Discussion

A. The Screening Analysis andResults 1. Content andResults ofthe Screening

Analysis 2. Discussion ofIssues Raised Concerning

the ScreeningAnalysis B. Treatment ofSpecific Products
1. DOE Views Expressed inthe Workshop

Notice 2. Discussion ofComments on General

Issues SurroundingAdoption of Efficiency Standards in ASHRAE/IESNA Standard 90.1-1999 3. Discussion ofDOE Views Regarding

. Specific Products C. FinalRule and OtherDOE Actions III. Procedural Requirements

A. Review Under the National

Environmental Policy Act of 1969 B. Review UnderExecutive Order 12866,

"Regulatory Planning and Review" C. Review Under the Regulatory Flexibility

Act D. Review Under Executive Order 13132,

"Federalism" E. Review UnderExecutive Order 12630,

"Governmental Actions and Interference with Constitutionally Protected Property Rights"

. F. Review Underthe PaperworkReductlOn

Act G. Review UnderExecutive Order 12988,

"Civil Justice Reform" H. Review Under Section 32 ofthe Federal

Energy AdministrationAct of 1974 1. Review Under Unfunded Mandates

Reform Act of 1995 J. Review Underthe Plain Language

Directives K. Review Under the Treasury and General

Government Appropriations Act, 1999 1. Review Under the Small Business and

Regulatory Enforcement Fairness Act

I. Introduction

A. Consumer Overview

This rule adopts amended ASHRAEI IESNA Standard 90.1-1999 energy efficiency standards for 18 product categories ofcommercial air conditioners, heat pumps, furnaces,
water heaters, and hot water storage tanks. The effect is to replace standards specified inEPCA for these product categories for equipmentmanufactured after October 29, 2003, or October 29, 2004, in the case oflarge packaged air conditioners and heat pumps. DOE expects the imposition ofthese new standards to save in excess of 1.1 quadrillion Btu (Quads) ofenergy nationwide between 2004 and 2030.

The commercial air conditioners, heat pumps, furnaces, water heaters and hot
water storage tanks subject to the standards adopted today applyto equipmentgenerally found in commercial buildings. Today's standards do not apply to consumer products. EPCA established the efficiency standards for consumer appliances, and theDepartment is considering amendments for residential central air conditioners and heat pumps, clothes washers andwater heaters under separate proceedings. The new commercial standards apply to products manufactured after the dates specified,
to products installed in new construction as well as existing buildings.

DOE expects the energy costs for
space heating and cooling and water heating in commercial buildings to be reduced as a result oftoday's standards. In addition to reducing building cost-ofoperation, the standards will result in lower emissions due to less fuel being used for heating and for generating electricity.

In addition, the Department is considering more stringent standards thanthose adopted by ASHRAE for 11 categories ofcommercial products. The Departmentbelieves more stringent standards than those found in ASHRAEI IESNA Standard 90.1-1999 may save

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significant additional amounts ofenergy andbe technologically feasible and economicallyjustified. DOE also plans
to recommend to ASHRAE that it 

### consider new, amended standards for four categories ofcommercial central air conditioners and heat pumps not considered in the update ofASHRAE/ IESNA Standard 90.1-1999. Finally, the Department is rejecting a standard for electric water heaters thatwill increase energy use over the level specified in EPCA and leaving the EPCA level in place. A summary ofthe actions taken by the Department is presented inTable
1.

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### Table 1. 

### Summary ofDOE Actions

Action Product Category Adopt the ASHRAE/IESNA Standard Central Water Source HP <17 kBtulh 90.1-1999 efficiency level. Central Water Source HP 17

- 65 kBtulh
Central Water Source HP 65

- 135 kBtulh
Central Water Source HP 135

- 240kBtuIh
Central Water Cooled AC <65 kBtuIh
Central Water Cooled AC 65

- 135 kBtulh
Central Water Cooled AC 135

- 240 kBtulh EvaporativelyCooled AC Products
Gas-Fired Warm AirFurnaces 2 

### 225 kBtulh
Oil-Fired Warm Air Furnaces, 2 

### 225 kBtulh
Gas Storage WaterHeaters:::; 155 kBtulh
Oil-Fired Storage WaterHeaters:::; 155 kBtulh
Gas Storage Water Heaters >155 kBtulh
Oil-Fired Storage WaterHeaters >155 kBtulh
Gas-Fired Instantaneous Water Heaters with Tanks
Oil-Fired Instantaneous Water Heaters with Tanks
Tankless Oil-Fired Instantaneous WaterHeaters
Unfired Hot Water Storage Tanks
Propose consideration ofan addendum 3-Phase Single Package Air SourceAC <65 kBtuIh

to ASHRAE/IESNA 

### Standard 90.1- 3-Phase Split Air Source AC <65 kBtulh 1999. 3-Phase Single PackageAir Source HP <65 kBtulh
3-Phase Split Air Source HP <65 kBtulh Propose consideration ofan addendum Central Air Source AC 65

- 135 kBtulh

to ASHRAE/IESNA Standard 90.1- Central Air Source HP 65

- 135 kBtulh 1999 and evaluate whether a higher Central Air Source AC 135

- 240kBtulh standard isjustified. Central Air Source HP 135

- 240 kBtulh Packaged Terminal AirConditioners Packaged Terminal Heat Pumps Large Gas-Fired Boilers >2.5 MMBtulh Large Oil-Fired Boilers >2.5 MMBtulh
Small Gas-Fired Boilers 0.3

- 2.5 MMBtulh
Small Oil-Fired Boilers 0.3

- 2.5 MMBtulh
Tankless Gas-Fired Instantaneous WaterHeaters Reject the ASHRAE/IESNA Standard Electric Water Heaters 90.1-1999 efficiency level.

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B. Authority

Part B ofTitle III oftheEnergy Policy and ConservationAct (EPCA) of 1975, Pub. L. 94-163, as amended, by the National Energy Conservation Policy Act of 1978 (NECPA), Pub. L. 95-619, the National ApplianceEnergy Conservation Act of 1987 (NAECA), Pub. L. 100-12, the National Appliance Energy Conservation Amendments of 1988 (NAECA 1988), Pub. L. 100-357, and the Energy PolicyAct of 1992 (EPACT), Pub. L. 102-486, established the Energy Conservation Program for ConsumerProducts otherthan Automobiles. Part 3 ofTitle IV of NECPA amendedEPCA to add "Energy Efficiency ofIndustrial Equipment," which included air conditioners, furnaces, and other types ofequipment.

EPACT also amended EPCA with respect to industrial equipment, providing definitions, test procedures, labeling provisions, energy conservation standards, andthe authority torequire information andreports from manufacturers. EPCA sections 340-345, 42 U.S.C. 6311-6316. For example, EPCA specifies explicitminimum energy efficiency levels for certain commercial packaged air conditioning and heating products, packaged terminal air conditioners and heat
pumps, warm air furnaces, packaged boilers, water heaters and unfired hot
water storage tanks. EPCA section 342(a)(1)-:(5), 42 U.S.C. 6313(a)(1)-(5). The efficiency requirements in the
statute correspond to the levels in ASHRAE/IESNA Standard 90.1 as in effect on October 24,1992. The statute further provides that ifthe efficiency levels in ASHRAE/IESNA Standard 90.1

are amended after that date for any of the covered products, the Secretary of Energy (Secretary) mustestablish an amended uniform national standard at the new minimum level for each effective date specified in ASHRAEI IESNA Standard 90.1, unless (s)he determines, through a rulemaking supportedby clear and convincing evidence, that a more stringent standard is technologically feasible and economicallyjustified and would result in significant additional energy conservation. EPCA section 342(a)(6)(A), 42 U.S.C. 6313(a)(6)(A). Ifthe Secretary elects to publish such

a rule, it must containthe amended standard, and the determination must consider, to the greatest extent practicable: the economic impact on the manufacturers and consumers ofthe affected products; savings in operating
costthroughout the life ofthe product, compared to any increases in initial cost

ormaintenance expense; the total projected amount ofenergy savings likelyto result directly from the imposition ofthe standard; any lessening oftheutility or performance ofthe affected products; the impact of
any lessening ofcompetition; the need for national energy conservation; and other factors the Secretary considers relevant. The Secretary may not prescribe such an amended standardif (s)he finds (and publishes the finding) that interested persons have established by a preponderance ofevidencethatthe amended standardis likely to result in unavailability in the United States of products with performance characteristics (including reliability), features, sizes, capacities and volumes that are substantially the same as those generally available in the United States
atthe time ofthe Secretary's finding. EPCA section 342(a)(6)(B), 42 U.S.C. 6313(a)(6)(B).

Finally, the Secretary may not prescribe any amended standard which increases maximum allowable energy

use or decreases minimum required
energyefficiency. EPCA section 342(a)(6)(B)(ii), 42 U.S.c. 6313(a)(6)(B)(ii).

C. 

### Background

1. General

Pursuantto the EPACT amendments
to EPCA in 1992, DOE extendedits
energy conservation program for

consumer products to certain commercial and industrial equipment, and created a new Part431 in Title 10 ofthe Code ofFederal Regulations, entitled, "Energy ConservationProgram for Commercial and Industrial Equipment." This part includes commercial heating, air conditioning and water heating products, as well as large electric motors. The new program consists of: test procedures, Federal energy conservation standards, labeling, certification and enforcement procedures.

2. ASHRAE Action

ASHRAE's Board ofDirectors gave final approval to certainrevisions to ASHRAE/IESNA Standard 90.1 on October 29,1999. The revised Standard indicates thatthe amended commercial HVAC and water heater equipment efficiencies will become effective as part ofthe Standardtwo years after final ASHRAE approval (Le., on October 29, 2001).

ASHRAE changed the efficiency standards only for some products coveredby the ASHRAE/IESNA Standard 90.1. For the remaining products, ASHRAE considered some efficiency levels in the course of revising Standard 90.1 but left them at their preexisting values, and it deferred consideration ofotherproducts. The standard levels prescribed in EPCA and ASHRAE/IESNA Standard 90.1-1999
appear in Tables 2 and 3.

II. Discussion



### A. The ScreeningAnalysisandResults

1. Content and Results ofthe Screening Analysis

To decidewhether to adopt efficiency standards contained in ASHRAE/IESNA Standard 90.1-1999 or to initiate the
process ofdeveloping and analyzing

more stringent standards for particular product categories, DOE performed a simplified Screening Analysis and evaluated other information. This
process was designed to identify products coveredby EPCA for which it

was unlikely that a more detailed analysis wouldreveal evidence sufficienttojustify more stringent requirements, and also to identify products for which it was reasonably possible such evidence would be revealed byfurther analysis. Screening products in this way allows DOE to adopt several ASHRAE/IESNA Standard 90.1-1999 standards expeditiously without hindering appropriate consideration oftheremaining products.

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### Table 2. StandardLevels for Air Conditioners and HeatPumps



# I Efficiency Level'
Product ASHRAE 90.1- Category Product Subcategory EPCA 1999
Small <65 kBtuIh, Air-Cooled, 3 Phase, Central Split SEER: 10.0, SEER: 10.0, Commercial SystemAC, HP HSPF: 6.8 HSPF: 6.8 Packaged Air <65 kBtuIh, Air-Cooled, 3 Phase, Central Single 

# I

SEER: 9.7, SEER: 9.7, Conditioning Package AC, HP HSPF: 6.6 HSPF: 6.6 and Heating 2: 65 kBtuIh and <135 kBtulh, Air-Cooled, Central 

# I

EERb: 8.9, EERb: 10.3, Equipment AC,HP cope: 3.2 cope: 3 

# I <65 kBtuIh, Evaporatively-Cooled, Central AC 

# I EERb: 9.3 

# I EERb: 12.1 

# I I <65 kBtuIh, Water-Cooled, Central AC 

# I EERd: 9.3 

# I EERd: 12.1 

# I I <17 kBtuIh, Water-Source, Central HP 

# I EERd: 9.3 

# I EERc: 11.2 

# I

2: 17 kBtuIh and <65 kBtulh, Water-Source, 

# IEERd: 9.3 

# IEERc: 12.0 

# I Central HP

2: 65 kBtulh and <135 kBtuIh, Evaporatively- 

# IEERb: 10.5 

# IEERb: 1l.5 

# I Cooled, Central AC

2: 65 kBtuIh and <135 kBtuIh, Water-Cooled, 

# IEERd: 10.5 

# I

EERd: 11.5 

# I Central AC

2: 65 kBtuIh and <135 kBtuIh, Water-Source, 

# IEERd: 10.5 

# I

EERc
: 12.0 

# l

Central HP 

# I <135 kBtuIh, Water-Source, Central HP 

# I COpf: 3.8 

# I coPg: 4.2 

# I
Large 2: 135 kBtuIh and <240 kBtuIh, Air-Cooled, 

# !EERb: 8.5 

# IEERb: 9.7 

# I Commercial Central AC Packaged Air 2: 135 kBtulh and <240 kBtuIh, Air-Cooled, 

# IEERb; 8.5, EERb: 9.3, Conditioning Central HP cope: 2.9 cope: 3.1 and Heating 2: 135 kBtulh and <240 kBtuIh, Water cooled, 

# IEERh; 9.6 

# IEERh: 11.0 

# I Equipment Evaporatively-Cooled, Central AC Packaged Air-Cooled EER, cop vary EER, COP vary Terminal Air by capacity by capacity Conditioners (different (different and Heat Pumps formulas) formulas)

•Heating efficiency levels do not apply to cooling only air conditioners. bAt 95°F dry-bulb temperature.

c At47°F dry-bulb temperature. dAt 85°F entering water temperature.

c At 86°F entering water temperature.

rAt 70°F entering water temperature.

g At 68°F entering water temperature.

hAccording to ARl Standard 360.

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### Table 3. Standard Levels for Furnaces, Boilers, Water Heaters, and Unfired Hot Water Storage Tanks

Product 

# I Efficiency Level
Product Category Subcategory EPCA 

# I ASHRAE 90.1-1999
WannAir Furnaces 

# I**~** 225,000 BtuIh Thermal Efficiency": Thermal Efficiency":
80% Gas, 81% Oil 80% Gas, 81% Oil Packaged Boilers 

# I**~** 300,000 BtuIh Combustion Efficiency": Thermal Efficiency": 80% Gas, 83% Oil 75% Gas, 78% Oil Storage Water 

# I Standby Lossb: Standby Lossc: Heaters 0.3 + 

### 27N.(%/h) 20 + 35/V (BtuIh) (V.=Measured Storage (V=Rated Storage Volume in Volume in Gals.) Gals.) 

# IGas Thermal Efficiency: 78%, Thermal Efficiency: 80%, Standby Lossb: Varies by Standby Lossc: Varies by Volume Volume 

# IOil Thermal Efficiency: 78%, Thermal Efficiency: 78%, Standby Lossb: Varies by Standby Lossc: Varies by Volume Volume
Instantaneous Water 

# I V<lO gal 

# I Thernlal Efficiency: 80% 

# I Thermal Efficiency: 80%
Heaters V**~** 10 gal, Gas- Thermal Efficiency: 77%, Thermal Efficiency: 80%, fired Standby Lossb: Varies by StandbyLossc: Varies by Volume Volume
V**~** 10 gal, Oil- Thermal Efficiency: 77%, Thermal Efficiency: 78%, fired Standby Lossb: Varies by Standby LossC

: Varies by Volume Volume
Unfired Hot Water 

# I All 

# IHeat Lossb: 

# IR-12.5 Insulation Storage Tanks s 6.5 Bt:ulhr/ff

• Atthe Ulaximum rated capacity.

b Storage water heaters and hot water storage tanks having more than 140 gallons ofstorage capacity need not

meet the standby loss orheat loss requirement ifthe tank surface area is thermally insulated to R-12.5 and ifa standing pilot light is notused.

C Water heaters having more than 140 gallons ofstorage capacity are not required to meet the standby loss

requirement ifthe tank surface is thermally insulated to R-12.5, ifa standing pilot light is not installed, and

gas- oroil-fired storage waterheaters have a flue damper or fan-assisted combustion. 

# I

I



# I

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In conducting the ScreeningAnalysis, the Department used existing data from industry and other sources, including the analysis usedby ASHRAE in support ofits deliberations over the new ASHRAE/IESNA Standard 90.1-1999 efficiency levels. For each product category, we estimated the likely cost of achieving several highertechnologically feasible efficiency levels and then calculated for each such level the correspondingrate ofenergy consumptionrequired to fulfill the product's function. Applying appropriate climate data, typical building design characteristics, inventories ofbuildings in different regions ofthe country, equipment sales volumes, economic discountrates, and
energy prices, we computed cost/benefit

measures corresponding to the higher efficiency levels and also estimated the nationwide energy and net cost savings, ifany, that would result from setting

more stringent standards than the levels in ASHRAE/IESNA Standard 90.1-1999. While the conclusions ofthe Screening Analysis by themselves do not constitute clear and convincing evidence tojustify more stringent standards, they do serve to differentiate those products for which such evidence is unlikely to emerge from further analysis from those for which a reasonable likelihood exists.

The Department examined a range of efficiency levels for each product analyzed. The range includedthe levels specified inEPCA and ASHRAE/IESNA Standard 90.1-1999, as well as more efficient levels characteristic ofthe most efficient products now available in the market and those associated withthe lowest life-cycle cost. For each level above theEPCA standard, DOE estimated: (1) The incremental national energy and carbon emission savings, and (2) the net nationwide direct economic benefit, represente'd by the national net presentvalue (NPV), that would result from setting a standard at that level, comparedto the corresponding levels now inASHRAE/ IESNA Standard 90.1-1999 andEPCA.

Table 4 lists the 24 productcategories studied in the ScreeningAnalysis. It shows for each one the efficiency level thatthe ScreeningAnalysis indicates would correspond to the lowest average life-cycle cost, taking into accountboth the costs ofefficiency improvements and the savings from reduced energy consumption. In addition, where that efficiency level lies above the level specified inASHRAE/IESNA Standard 90.1-1999, Table 4 shows the following potential benefits thatthe Screening Analysis suggests would result over the period from 2004 to 2030 from setting

a standard at the higher level:

1. The estimated nationwide energy savings, expressed in trillions ofBtu (TBtu);

2. The estimated net nationwide direct economicbenefit, represented by the net present value (NPV); and

3. The estimated reductions in atmospheric carbon emissions, in millions oftons.

When Table 4 shows a zero for a productin all three ofthese categories, the Screening Analysis indicates that the efficiency level that corresponds with the product's lowest average life cycle cost is the same as the level specified in ASHRAE/IESNA Standard 90.1-1999.

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### Table4. Energy Savings, Net Present Value and Carbon Emission Reductions from 2004

to 2030 at Energy Efficiency Levels corresponding to Lowest Life-Cycle Cost

Relative to ASHRAE 90.1-1999

National Efficiency Carbon ProductCategory Level at National National Emission Minimum Energy TotalNPV Reductions Life-Cycle Savings (Millions of (Million Cost (TBtu) 1998 $'s) Tons)
13-Phase Smgle Package AIr Source AC <65 kBtulh 12.0 1,412.7 

# I 897.7 21
I Central Air SourceAC 135-240kBtu/h lOA 

### 428.8 I 417.9 6
I Packaged Tenninal Air Conditioners 10.5 311.7 I 274.7 5
13-Phase Split Air Source AC <65 kBtu/h 11.0 278.6 

# I 109.1 4
I Packaged Terminal Heat Pumps 9.9 249.0 

# I 241.9 4
ISmail Gas-Fired Boilers :s; 

### 2.5 MMBtu/h 78.7% 200.0 

# r- 146.0 3
13-Phase Single Package Air Source HP <65 kBtu.1b 12.0 183.6 

# I 91.3 3 

# I Tankless Gas Instantaneous Water Heaters 81.5% 102.0 I 45.3 2 ILarge Gas-Fired Boilers >2.5 MMBtu/h 85.3%* 79.0 I 86.6
/3-Phase SplitAir Source HP <65 kBtulh 12.0 66.4 I 47.0 ICentral, Water Source HP 17

- 65 kBtu/h 12.5 65.0 

# I 23.0
ICentral Air Source HP 135

- 240 kBtu/h 10.4 31.4 I 3.2 IElectric Water Heater (120 gal) 1.0 6.6 

# I l.l 

### 0
ICentral Water Cooled AC 65

- 135 kBtu/h 12.4 2.7 

# I 0.8 0
I Central Water Cooled AC 135

- 240 kBtu/h 11.5 2.5 

# I 3.0 0
ICentral Air Source AC 65

- 135 kBtu/h 10.3 0.0 I 0.0 0
ICentral Air Source HP 65

- 135 kBtu/h 10.1 0.0 I 0.0 0
ICentral Water Cooled AC <65 kBtulh 12.1 0.0 

# I 0.0 0
ICentral Water Source HP <17 kBtu/h 11.2 0.0 

# I 0.0 0
ICentral Water Source HP 65

- 135 kBtulh 12.0 0.0 I 0.0 0
I Gas-Fired Warm Air Furnaces

### ~ 225 kBtu/h 77.5% 0.0 I 0.0 0
IGas Storage Water Heaters :s; 

### 155 kBtu/h 80.0% 0.0 

# I

0.0 0
IGas Storage Water Heaters >155 kBtulh 80.4% 0.0 0.0 0
IInstantaneous Gas Water Heaters with 

### Tanks 80.0% 0.0 

# I 0.0 0 

## *Efficiency shown is shipment-averagedvalue ofLarge StearnBoilers (76%

- 81%), andLargeHotWater Boilers (78%

- 88%)

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OnMay 15, 2000, the Department published a Notice ofDocument Availability andPublic Workshop (Workshop Notice), in which we describedthe Screening Analysis, announced the public availability ofthe ScreeningAnalysis report, and published our preliminary inclinations withrespectto the commercial heating, air conditioning, and water heating products coveredby EPCA, including several productcategories not included inthe ScreeningAnalysis. 65 FR 30929. We also invited comments and conducted a public workshop onJuly 11,2000.

2. Discussion ofIssues Raised Concerningthe ScreeningAnalysis

Several comments took issue with different aspects ofthe Screening Analysis. These views are listed below, along with DOE's responses. In general, many ofthe comments will be useful in

more detailed evaluations ofASHRAEI 

### IESNA 90.1-1999 efficiency levels which are notadopted as national standards intoday's rule. Onthe other hand, none ofthe comments on the analysis itselfindicates that clear and convincing evidence exists to justify

more stringent standards thanthose adoptedtoday.



### Comment: DOE relied too heavily on equipment cost and efficiency relationships initially developed in 1994 for ASHRAE's deliberations in amending ASHRAE/IESNA 

### Standard 90.1. These relationships are out ofdate and contain errors. (No.8, Rheem Manufacturing Company, p. 1; No. 11, Air-Conditioning and Refrigeration Institute, p. 6; No. 16, California Energy Commission, p. 2; No. 19, American Council for an Energy-Efficient Economy, p. 3; No. 22, Lennox Industries, Inc., p. 3).



### Response:DOE updatedbaseline cost data inthe ScreeningAnalysis through interviews with manufacturers, distributors and contractors andby application ofappropriate price indices. However, the relative costs of alternative efficiency levels are assumed
not to have changed since 1994. DOE did not expectthat these costs had changed sufficiently to warrant collecting newindependent data as part ofan analysis to provide a framework for deciding which efficiency levels in ASHRAE/IESNA 

### Standard 90.1-1999 to adopt, and which required further study. Notwithstanding, we did invite andreceive public comments related to cost and efficiency relationships, and these are reflected intoday's rule. The analysis in support ofa future rulemaking for any product will entail collection ofcurrent cost and efficiency data, which will be subjected to public
comment.



### Comment:The ScreeningAnalysis shouldhave included copies ofall referenced material from non-published

sources. (No. 15, GARD Analytics/Gas Research Institute, p. 2).



### Response:Although DOE attempts to make all referenced material available to interested parties, including copies of this material inreports is not always practical due to its volume.



### Comment: The seven percent discount rate, taken from OMB Circular A-94 to reflect the time value ofmoney inDOE's economic analysis, is too low. (No.2, Air Conditioning and Refrigeration Institute, p. 10; No. 11, Air-Conditioning and Refrigeration Institute, p. 7), or too high. (No. 12, American Gas Association, p. 3).



### Response:DOE believes thatthe OMB guidance is appropriate, reflecting the approximate marginal pretaxrate of
return on average investments, expressed in real terms (net ofinflation), for evaluatingthe economic impact of Federal actions on the economy. In pursuing further evaluation ofproducts for which amended efficiency levels are not adopted intoday's rule, DOE will
account for differing opinions concerning discountrates through sensitivity analyses in evaluatingthe economic impact ofstandards on
consumers and manufacturers. For example, in pastrulemakings, DOE has evaluated the impact on consumer lifecycle-cost by considering alternative discount rates varying from two percent to fifteen percent.



### Comment: DOE's level gas price projections underestimate the effect of gas industry restructuring and technological innovation. The Gas Research Institute projects a 1.5% annual decline in gas prices between 2000 and 2015. (No. 12, American Gas Association, p. 3).



### Response:DOE considers the projections,taken from the Energy Information Administration's Annual Energy Outlook 2000, to be authoritative andreasonable for the purposes ofthe ScreeningAnalysis. In addition, concerning products for which DOE is adopting ASHRAE/IESNA 

### Standard 90.1-1999 levels, any decline in gas prices that does occur would likely make higher efficiencies less costeffective for gas-fueled equipment and thus diminish the likelihood of uncovering clear and convincing evidence that more stringent standards

are technically feasible and economicallyjustified. For all covered gas-fueled products, except gas-fired boilers, DOE has decided to adopt the ASHRAE/IESNA 

### Standard 90.1-1999 levels as they are, so any diminished likelihood offinding evidence to support more stringent standards for these products would serve to reinforce DOE's decision withrespectto them. In evaluating the potential impacts ofmore stringent standards for gas-fired boilers, DOE will assess the impact of alternative fuel price scenarios on the life-cycle costs ofachieving higher efficiency levels as well as the impacts of standards on theNetPresentValue (NPV).



### Comment: It

### is unclear whether the energy conversion factor inthe Screening Analysis for electricity includes losses offuel delivered to the powerplant. (No. 15, GARD Analyticsl Gas Research Institute, p. 2).



### Response: Losses offuel delivered to the powerplantpriorto combustion are not included inthe conversion factors, butDOE considers these losses to be small inrelation to the fuel actually consumed and thus to have little impact

on national aggregate energy savings and greenhouse gas emissions reduction estimates.



### Comment: The 15-zone prototype building model does not represent individualbuildingtypes adequately,

use ofhistorical CBECS building data does not account for newerbuildings builtto 1989 and 1999 ASHRAE standards, nottreating health care buildings as a separate category creates inaccuracy, andwindow-to-wall ratios

seem too low. (No. 15, GARD Analyticsl Gas Research Institute, p. 2).



### Response:The 15-zone model provides estimates ofbuilding energy consumption which, DOE believes, are representative ofmostbuildingtypes, and from which we can infer the effects ofstandards on products used in most building types with sufficient precision. We recognize that individualbuildings
may have different energy uses, depending onbuilding location, operation, age and other buildingspecific factors. However, we believe this modeling approach is valid for the purpose ofreaching a decision on whether the potential exists for additional energy savings, beyond those resulting from the adoption ofthe ASHRAE/IESNA Standard 90.1-1999 levels, thatwarrant consideration of higher standards.



### Comment: Air conditioners and heat pumps often exceed the minimum energy efficiency level specified in EPCA, leading DOE to overestimatethe energy savings impacts ofmore stringent standards. (No.2, Air Conditioning and Refrigeration Institute, p.6; No.4, Carrier Corporation, p. 4-5; No. 11, Air-Conditioning and Refrigeration Institute, p. 6; No. 13,

### Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Rules and Regulations 3345

Carrier Corporation, p. 2; No. 22, Lennox Industries, Inc., p. 3). ARI believes the current shipment-weighted efficiencies for PTAC's and PTHP's exceed current minimum efficiency levels by about 10 percent. (No. 11, AirConditioning andRefrigeration Institute, p.4).



### Response: To the extent DOE, in computing the base case, 

### i.e., no adoption ofa further standard, used an average efficiency lower than what actually occurs, ARI may have a valid pointbecause a more stringent standard wouldresult in lower energy savings than what was estimated. ButARI has provided no datato indicate the amount ofthe possible overstatement ofenergy savings. Morever, to some extent, any such overstatement wouldbe offset because, for the purpose ofthis analysis,

we also assumed that under new standards the average efficiency would be equal to the new standard. We expect the shipment-weighted efficiencyto be higherthan the standard, however, and this would have the effect ofmodestly underestimatingthe energy savings due
to standards. Aside from these considerations, given the amount of energy that could potentiallybe saved by more stringent standards onthese products, even ifit is less than estimated, webelieve they warrant further consideration as candidates for

more stringent standards. In evaluating the impacts ofmore stringent standards, DOE will attemptto capture the effect ofthe market demand for more efficient products thanrequired by a minimum efficiency standard.



### Comment: Use ofFull Load Equivalent Operating Hours (FLEOH's)
overstates energy consumptionby air conditioning equipment, since part-load operation is more efficient than at full load for this equipment. (No.2, Air Conditioning andRefrigeration Institute, p. 8; No.4, Carrier Corporation, p. 4; No. 11, Air-Conditioning and Refrigeration Institute, p. 4; No. 13,Carrier Corporation, p. 2-3; No. 15, GARD Analytics/Gas Research Institute, p. 1; No. 22, Lennox Industries, Inc., p. 3).



### Response:DOE agrees that FLEOH's do not capturethe part load performance ofproducts. The Department used FLEOH's for the ScreeningAnalysis because ofa limited
amount ofpartload efficiency data and because the standardunder investigation is expressed in terms of full load operation. DOE believes that any discrepancies introducedby use of FLEOH's would not materially alter the likelihood that clear and convincing evidence supporting stricter standards will ultimatelybe found, because efficiencies at full and part load are correlated. Nonetheless, the Department welcomes suggestions concerning better ways to account for performance under part-load conditions as it conducts further analysis ofair-conditioning products.



### Comment: DOE understated energy costs for air conditioners by failing to account adequately for seasonal electric
rate variation and demand charges. (No. 15, GARD Analytics/Gas Research Institute, p. 1,2;No. 19, American Council for an Energy-Efficient Economy, p. 5-6).



### Response:The ScreeningAnalysis includes calculations ofenergy savings and life-cycle costs for specific products
at regional and national levels, and DOE believes that it handled electric costs appropriately, based on surveys of actual rate data, and that its conclusions reflect existing market conditions today. DOE recognizes, however, thatrate levels and structures could change in the future in unpredictable ways with utility industry restructuring, but we believe thatthis uncertainty does not

remove the reasonable likelihood that

more stringent standards may be justified in the case ofproducts DOE plansto analyze further, nor does uncertainty by itselfmake finding such

ajustification appreciably more likely in the case ofproducts for whichDOE is adopting standards in today's rule. Any seasonal rates and demand charges that increase the cost ofenergy consumedby air conditioners will serve to make more stringent efficiency requirements costeffective, thus reinforcing DOE's decision to study air-cooled air conditioners further before adoptingthe levels contained inASHRAE/IESNA Standard 90.1-1999. For water-cooled air-conditioners, DOE is adopting ASHRAE/IESNA Standard 901.-1999 efficiency requirements today, because these products are less common and for this reason do not appear to afford opportunities for significant energy savings. This determination does not depend onthe cost ofelectric power. In conducting further investigation of electric product efficiencies, we may also apply appropriate sensitivity analysis to capture prevailing ranges of opinion concerning the various rate scenarios. We welcome suggestions from stakeholders regarding better methodologies to account for seasonal
rates and demand charges within any detailed rulemaking, including suggestions on how to address their wide variety in the commercial sector (e.g., specific utility service territory, type ofbuilding, end-use application, hours ofusage, prior usage patterns, and correlations with kWh consumption). 

### Comment: Heating operation should be included along with cooling in analyzing heat-pumps, since cooling efficiency improvements canreduce energy costs for heating as well. (No. 15, GARD Analytics/Gas Research Institute, p.l).



### Response: DOE agrees withthis point andwill include heating and cooling operations together in the detailed analysis ofefficiency levels for airsource heat pumps. Higher efficiencies in cooling mode are likely to result in improved heating performance as well, increasing the likelihood that higher standards for these products are economicallyjustified and will lead to significant additional conservation of energy. This consideration therefore reinforces DOE's decision to conduct further analysis ofair-source heat pumps along with corresponding airsource air-conditioners. For watersource heat pumps, DOE is adopting ASHRAE/IESNA Standard 90.1-1999 efficiency requirements, becausethese products are less common and for this

reason do not appear to afford opportunities for significant energy savings. This determination does not depend onthe combined cost or efficiency ofheating and cooling.



### Comment: Cost and efficiency relationships used by ASHRAE and subsequently in the ScreeningAnalysis reflect use ofR-22 refrigerant, which
mustbe replacedby 2010. (No.2, Air Conditioning and Refrigeration Institute, p. 9-10; No.8, Rheem Manufacturing Company, p. 1; No. 11, Air-Conditioning andRefrigeration Institute, p. 6).



### Response:DOE recognizes the possibility that alternatives to R-22 may alter the cost effectiveness ofachieving higher efficiency levels for equipment sold after 2010 andwill take this factor into account in conducting further analysis ofair-source heat pumps and air-cooled air-conditioners. Sincethe effect ofas yet undetermined alternative refrigerants onthe cost ofachieving higher efficiency levels is unknown at this point and the subject ofdebate, DOE does not believe that the refrigerant requirement eradicates thereasonable likelihood ofuncovering evidence supporting higher standards for aircooled products. As indicated above, the decision to adoptASHRAE 90.1- 1999 efficiency requirements for watersource, water-cooled, and evaporatively cooled equipment stems from low aggregate energy consumption and not cost-effective efficiency considerations.



### Comment: DOE's analysis ofpackaged terminal air conditioners and heat pumps does not accurately reflect the life and usage characteristics ofthese products, thereby incorrectly estimating3346 

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the energy savings and life-cycle-cost effects ofmore stringent standards. Packaged terminal air conditioners and heat pumps have a useful life of 10 years or less, not 15 as assumed in the ScreeningAnalysis. The shorter lifetime is due to application in hotels and motels, which undergo more frequent renovations, andto corrosion from salt

near the seacoast. (No.2, Air Conditioning andRefrigeration Institute, p. 6; No.4, Carrier Corporation, p. 3; No. 11, Air-Conditioning andRefrigeration Institute, p. 4; No. 13, Carrier Corporation, p. 2; No. 14, EnviroMaster International Corporation, p. 2). The "genericbuilding" approach to estimating heating and cooling loads fails to reflect the unique design characteristics ofhotels and motels, where PTAC's and PTHP's are most commonly used. (No. 11, AirConditioning and Refrigeration Institute, p. 4). These products are used less duringhours ofpeak electric demand than other air-conditioning equipment, since the rooms are frequently vacant during the day. (No. 14, EnviroMaster International Corporation, p. 1).



### Response:DOE accepts the possibility that the lifetime assumed for these products in the Screening Analysis may notreflect the likelihood ofthe units being replaced earlier during routine renovations. A more frequent replacement would increase the cost associated with these products. Itis also possiblethat these products are used less during hours ofpeakelectric demand than other air-conditioning products and thus do not conform to a "genericbuilding" operating schedule, andthat a different operating schedule maybe warranted for them during analyses. Although shorterworking life and fewer hours ofoperation under peak conditions wouldreduce the estimated energy and cost savings associated with more stringent standards, the potential saving identifiedby the Screening Analysis for these products is so large, inDOE's view, as to compensate for the simplifying assumptions involved in calculating them. Potential national energy savings ofover 500 trillion Btu for packaged terminal heat pumps leaves considerable room for error in determiningthat a reasonable likelihood exists that evidence would support

more stringent standards. However, we welcome additional independent data on equipment life and operating schedules for these products, so we can improve the precision ofthe detailed analysis we will be undertaking for these products.



### Comment: DOE overestimated the feasibility and underestimated the cost ofimproving efficiencies ofPTAC's and PTHP's by failing to take into account the small wall openings (16" by 42") into which they must fit, especially for retrofit applications. (No.2, Air Conditioning and Refrigeration Institute, p. 7-8; No.4, Carrier Corporation, p. 3; No.9, First Company, p. 2; No. 11, AirConditioning and Refrigeration Institute, p. 5; No. 13, Carrier Corporation, p. 2; No. 14, EnviroMaster International Corporation, p. 1). Also, DOE failed to account for recently introduced "vertical" PTAC's, which have different design constraints from traditional units covered by the analysis. (No. 14, EnviroMaster International Corporation, p.l).



### Response:DOE will model PTAC's andPTHP's performance in simulated environments that match their actual applications as closely as possible. However, the comments contain no conclusions bearing on the impact of these two sets ofconsiderations on DOE's decision to continue its evaluation ofthese products before adopting uniform national efficiency standards for them, andDOE does not believe thatthe considerations eliminate thereasonable likelihood ofuncovering evidence supportingmore stringent standards under the terms ofEPCA.



### Comment: The ScreeningAnalysis may nothave correctly reflected the preponderance ofcommercial boiler shipments to the Northeast andNorth Central regions ofthe country, greatly overstated shipments ofcopper tube or coil-type commercial gas water heaters, and overestimated potential energy savings for these products. (No. 20, Gas Appliance Manufacturers Association, p. 1-3). Fluctuations in the GAMA shipment data for gas water heaters need further explanation, and the projected one percent annual growth
rate for water heaters until 2030 is overly optimistic. (No. 12, American Gas Association, p. 3, 4). The shipment figures for oil-fired boilers appeartoo high, possibly because they include dual-fuel boilers, and the analysis does
not adequately account for differences inboiler installation costs at higher efficiencies. (No. 15, GARD Analytics/ Gas Research Institute, p. 2).



### Response:DOE will verify shipment data during its further analysis ofboilers and tankless water heaters, and we will
account for differences in installation
costs at higher efficiencies. However, DOE does notbelieve thatthese considerations remove the reasonable likelihood ofdiscovering adequate evidence to support more stringent standards for these products according
to EPCA criteria. Installation is only a small component ofthe total cost of acquisition, and alternative shipping patterns andgrowth rates could effect
energy savings and economic justification either way. Greater predominance ofshipments to states with colder climates, for example, increases the likelihood that more stringent standards wouldbe cost effective, while slower growth in shipments diminishes the energy savings likely to result from higher efficiencies in the future.



### Comment: The Screening Analysis didnot handlejacket and standby losses properly. (No. 20, Gas Appliance Manufacturers Association, p. 1-3).



### Response:With regard to jacket and standby loss, webelieve thatthe Standby Loss Correction for boilers is in fact needed to estimate the energy use ofthese devices correctly. The difference between thermal and combustion efficiency is primarily reflected in the shell loss oftheboiler, and during operating hours, the thermal efficiency ofthe boiler accounts for these losses. However for much ofthe year, the boiler is maintained on a hot standby status. The amount oftime on hot standby is assumed in the Screening Analysis to be the total number of hours theboiler is available for use minus the full load operating hours for the year. Values for the hot standby periods were taken from the 1997 ASHRAE Handbook ofFundamentals, as shown in Appendix A (A.9) ofthe Screening Analysis. Duringthese hot standby periods, we have assumed theboiler standby loss to be 5% for the base boiler (the assumed difference between combustion and thermal efficiency). To capture the energy used during the hot standby period, the ScreeningAnalysis applied

an adjustment factor for the FLEOH, calculated as:

Ad' t tF _F_L_E_O_H_+_(c:-A_v_a_ila_b_le_H_o_u_rs_-_F_L_E_O

__

H-L)x_%

__ S_h_el_IL_o_ss**~us** men actor = FLEOH

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Variation inboiler design or setback of systemtemperature through the year will have some effect onthis adjustment factor, however for purposes ofthe ScreeningAnalysis, webelieve the methodology outlined above to be a fair
assessment ofthe contribution ofhot standby to energy consumption.

Comment: Inthe amended ASHRAEI IESNA Standard 90.1-1999, ASHRAE changed the definition of "storage volume" for electric storage water heaters from "measuredvolume" to "ratedvolume." (No. 16, California Energy Commission, p. 3; No. 17, Oregon Office ofEnergy, p. 3).

Response:DOE recognized this change and accounted for it in the ScreeningAnalysis.

B. Treatment ofSpecific Products

1. DOE Views Expressed in the Workshop Notice

In theWorkshop Notice, DOE stated its inclinationto adopt as national standards, without further study, the efficiency levels in ASHRAE/IESNA Standard 90.1-1999 for 12 ofthe 24 products includedinthe Screening Analysis. 65 FR at 30933, 30935. The 12 products comprise several categories of air conditioners and heat pumps, warm air furnaces, and certain waterheating products. DOE stated that the Analysis estimatedthat most ofthese efficiency levels have the lowestlife-cycle cost (LCC) for the product, and for the remainder a slightly higher efficiency would have the lowest LCC butwould

save relatively little additional energy.

For four categories of3-phase air conditioners and heat pumps with capacities under 65,000 Btu per hour, DOE stated its inclination to take no action to adopt standards atthis time butto encourage ASHRAE to consider

an addendum to ASHRAE/IESNA Standard 90.1-1999. 65 FR at 30933-34, 30935. DOE noted that ASHRAE did not address these products inrevising Standard 90.1, although the Screening Analysis indicates that higher efficiency standards for them maywell have benefits.

For seven ofthe eight remaining categories analyzed in the Screening Analysis, DOE stated its inclination to propose consideration ofan addendum
to ASHRAE/IESNA Standard 90.1-1999, and to further study whether more stringent efficiency levels thanthose adoptedby ASHRAE are warranted. 65 FR at 30934, 30935. DOE stated that it appears such levels wouldresult in significant, cost-effective energy savings. The products involved are certaintypes ofair conditioners and heat pumps, as well as boilers and tankless instantaneous gas water heaters. Electric water heaters was the other product included in the Analysis, and DOE tentatively decided to leave the EPCA standard in force based on its view thatthe efficiency level in ASHRAE/IESNA Standard 90.1-1999 would increase energy use relative to that standard. 65 FR at 30934, 30935.

DOE excluded certain commercial air conditioning, heating and water heating products from the ScreeningAnalysis for reasons such as insufficient data, small sales volumes, and difficulty in assessing efficiency performance. 65 FR at 30934. For several ofthese products, DOE stated its intentto adopt ASHRAEI IESNA Standard 90.1-1999 standards because the products have small markets and higher standards are unlikely to result in significant energy savings. For the heating COP ofseveral heat pump categories, and the efficiency level for oil-firedboilers, DOE indicated it did not plan to adopt the levels in ASHRAE/IESNA Standard 90.1-1999 because they shouldbe considered either as part ofother evaluations that would be undertaken or subsequentto such other evaluations. 65 FR at 30934- 35. For all other heat pumps covered by EPCA, DOE stated its intention to adopt the amended ASHRAE/IESNA Standard 90.1-1999 COP levels as uniform national standards.

2. Discussion ofComments on General Issues SurroundingAdoption of Efficiency Standards in ASHRAEI IESNA Standard 90.1-1999

Comment: Stakeholders were divided

onDOE's discretionto impose more stringent standards than those in ASHRAE/IESNA Standard 90.1-1999 and on the Department's duty to scrutinize each efficiency level strictly. Some emphasized the limitations on DOE's authority to set more stringent standards than those contained in ASHRAE 90.1-1999 in the absence of certain clear and convincing evidence, and they encouraged adoption of ASHRAE's amended standards in their entirety. (No.2, Air Conditioning and Refrigeration Institute, pp. 4-5; No.3, Gas Appliance Manufacturers Association, pp. 1-2; No. 10, Edison Electric Institute, pp. 1-2; No. 11, AirConditioning andRefrigeration Institute,
p. 3). Others emphasizedwhat they felt

was DOE's duty to seek such evidence

more exhaustively before adopting any ofthe ASHRAE standards. (No. 16, CaliforniaEnergy Commission, pp. 1-2; No. 17, Oregon Office ofEnergy, pp. 1- 2; No. 19, American Council for an Energy-Efficient Economy, pp. 1, 10-11)

Response:DOE believes ithas struck

an appropriate balance, consistent with EPCA, between the requirementto adoptthe efficiency standards contained in ASHRAE/IESNA Standard 90.1-1999 and the discretion to adopt more stringent standards ifthey are warranted by clear and convincing evidence. Specifically, DOE performed a Screening Analysis ofthe amended standards in ASHRAE/IESNA Standard 90.1-1999, and invited public
comments onthe Analysis, in orderto

assess the likelihood ofuncovering such clear and convincing evidence. Based

onthose steps, DOE is adopting in today's rule over halfofthe amended standards in ASHRAE Standard 90.1- 1999, and is undertaking further analysis ofvirtually all ofthe remaining ASHRAE standards. The Department believes itis exercising due care in performingtherole defined in the
statute for the Secretary.

Comment:Numerous comments addressed ASHRAE's process in arriving
at ASHRAE/IESNA Standard 90.1-1999. Several comments commended ASHRAE for its analytical and procedural integrity and recommended adopting the resulting standards onthe strength ofASHRAE's process. (No.1, ASHRAE, p. 1; No.2, Air Conditioning andRefrigeration Institute, pp. 2-3; No. 4, Carrier Corporation, p. 1; No. 10, Edison Electric Institute, p. 1; No. 11, Air-Conditioning and Refrigeration Institute, pp. 2-3; No. 13, Carrier Corporation, p. 1; No. 18, National Rural Electric Cooperative Association, p. 1; No. 22, Lennox Industries, Inc., p. 2). Others criticized ASHRAE's process for analytical and procedural shortcomings andrecommended strict scrutiny ofthe standards. (No.5, CaliforniaEnergy Commission, pp. 1-2;No. 16, California Energy Commission, pp. 2-3; No. 17, Oregon Office ofEnergy, pp. 1-4; No. 19, American Council for an EnergyEfficient Economy, pp. 1-3).

Response: DOE recognizes that opinions differ onthe strengths and weaknesses ofASHRAE's process in arriving at the requirements in Standard 90.1-1999. Nevertheless, EPCA stipulates that DOE must adopt the amended ASHRAE standards unless certain conditions are met, and, for the

reasons stated in ourresponse to the previous comment, webelieve our actions here properly reflectthe status thatEPCA affords to Standard 90.1- 1999.

Comment: Subjecting standards to further DOE analysis would delay the realization ofenergy savings that might

occur sooner ifamended ASHRAE standards were adopted immediately. (No.8, Rheem Manufacturing Company, p. 1). On the other hand, voluntary adherence to the amended standards3348 

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### 66, No. 9/Friday, January 12, 2001/Rules and Regulations

and state adoption ofthe updated ASHRAE/IESNA Standard 90.1-1999 in building codes will serve to offset the effect ofany delay atthe Federal leveL (No. 16, CaliforniaEnergy Commission,
pp. 4-5; No. 17, Oregon Office of Energy, p. 4). In addition, DOE's further analysis could create a situation in which manufacturers would haveto redesign their products twice in rapid succession: Once to comply with ASHRAE/IESNA Standard 90.1-1999 and shortly afterward, to comply with standardsresulting from a possible DOE rulemaking. (No.4, Carrier Corporation,
p. 2; No. 11, Air-Conditioning and Refrigeration Institute, p. 7; No. 13, Carrier Corporation, p. 3; No. 14, EnviroMaster International Corporation,
p. 2; No. 22, Lennox Industries, Inc., p. 3-4).



### Response:Any future rulemakingby DOE will take into account the impacts ofmore stringent standards on affected manufacturers, includingthe effect of timing on product development cycles, and itwill analyze the influence of effective dates on energy savings resulting from the standards. DOE notes also thatthe process it envisions can be terminated for any productwhenever DOE concludes that the EPCA criteria for a more stringent standard are not likely to be satisfied. This could occur either as a result offurther analysis by DOE during a rulemaking process or by ASHRAE adopting a newAddendum to ASHRAE/IESNA Standard 90.1-1999 for which a more stringent alternative is
notjustified.



### Comment: DOE has no authority to propose that ASHRAE consider addenda
to Standard 90.1 in cases where itfeels thatthe requirements in ASHRAEI IESNA Standard 90.1-1999 are not sufficiently stringent. In these cases, the Department mustproceed with a rulemaking ifhigher efficiencies meet therequirements ofEPCA. (No. 12, American Gas Association, pp. 1-2).



### Response:WhileEPCA does not specifically authorize the Departmentto propose addendato ASHRAE standards, DOE can find no statutory prohibition against doing so and indeedhas traditionally provided technical support to ASHRAE's standard-setting processes in the interest ofencouraging and taking advantage ofopen, consensus-based approaches. In addition, section 307(b) ofthe Energy Conservation and ProductionAct, 42. U.S.C. 6836, seems to contemplate thatDOE would provide such supportto ASHRAE, and even that it would propose addenda to ASHRAE. 3. Discussion ofDOE Views Regarding Specific Products



### Comment: Industry data used in ASHRAE's standard setting process and DOE's Screening Analysis overstated the
cost ofefficiency improvements for central air-source air-conditioners between 65,000 Btu perhour and 135,000 Btu per hour. (No. 19, American Council for an Energy-Efficient Economy, pp. 3-5). Some industry
comments opposedthis view. (No. 11, Air-Conditioning andRefrigeration Institute, p. 5; No. 13, Carrier Corporation, p. 3).



### Response: Since the American Council for anEnergy-Efficient Economy (ACEEE) supported its contention regarding air-source airconditioners withprice survey data, and the potential savings from efficiency improvements for this product category

are potentially large on account ofits widespread use, DOE has decided that clear and convincing evidence may exist
tojustifymore stringent standards for air-source air-conditioners inthe 65,000 Btu/h to 135,000 Btu/hrange. The Department has therefore added this product category to those that will be subjected to further study and will review the cost-efficiency data.



### Comment: Industry data used in ASHRAE's standard setting process and DOE's Screening Analysis also overstated the cost ofefficiency improvements for 3-ton water-source heat pumps. (No. 19, American Council for anEnergy-Efficient Economy, pp. 3- 5).



### Response:For water-source heat pumps, the datato supportthe ACEEE
comment is considered proprietary and has notbeen submitted to DOE, so the Department is unable to verify the
comment. In any case, the nation-wide energy use for this product appears to be

so small that the Department considers it unlikely that more stringent standards for this productwould satisfy EPCA criteria. Accordingly, the Department is adopting the ASHRAE/IESNA Standard 90.1-1999 efficiency level for this product category in today's rule.



### Comment: Industry data used in ASHRAE's standard setting process and DOE's Screening Analysis also overstated the cost ofefficiency improvements for gas-fired boilers. (No. 19, American Council for an EnergyEfficient Economy, pp. 3-5).



### Response:Since the gas-fired boilers

are proposed to be analyzed further, based onthe Screening Analysis, ACEEE's commentwould not affect the decision embodied in today's rule.



### Comment:DOE should include Integrated Part-Load Values in standards governing air conditioning equipment. (No. 16, California Energy Commission, p. 5; No. 17, Oregon Office ofEnergy, p. 3).



### Response:DOE recognizes that Integrated Part-Load Value is increasingly common as a rating metric andbelieves that ithas the authority to establish minimumrequirements using this metric ifASHRAE has amended the standard corresponding to the airconditioning equipment in question, and EPCA's requirements for a more stringent standard are met. DOE is also

aware that IntegratedPart Load Value only applies to the performance of equipmentwith modulated capacity and thus will not capture part-load efficiencies for most single-stage airconditioners. DOE will therefore consider including Integrated Part-Load Values in any prospective rulemaking for air conditioning equipment. However theDepartmenthas reached no conclusions ontheir appropriateness as part ofa future standard and will seek public commentbefore proceeding.



### Comment: Standards for 3-phase airconditioners and heat pumps under 65,000 Btu perhour shouldbe the same

as those for single phase models, which

are used inresidential applications and

are more numerous. (No.8, Rheem Manufacturing Company, p. 2; No. 11, Air-Conditioning and Refrigeration Institute, pp. 3-4; No. 13, Carrier Corporation, p. 3; No. 22, Lennox Industries, Inc., p. 2-3).



### Response:DOE agrees thatthe products are closely related, and that standard-setting for them shouldbe coordinated. There may be valid
reasons, however, for the standards themselves to differ. Once ASHRAEI IESNA Standard 90.1-1999 is amended withrespectto these products, DOE will evaluate the new standards to determine ifthey shouldbe adopted or ifa more stringent standard is likelyto save a significant amount ofenergy, andbe technologically feasible and economicallyjustified.



### Comment: More stringent standards for gas space heating and water heating equipmentwill serve to shift customers to electric equipment, with a detrimental effect ongas equipment sales and energy consumption. (No. 12, American Gas Association, p. 2). Further changes in efficiency levels for PTAC's andPTHP's will particularly hurt small manufacturers. (No.9, First Company, p. 3).



### Response: Under EPCA, ifDOE adopts

a more stringent standard, it must consider, to the greatest extent practicable, the economic impact onthe manufacturers and consumers ofthe affected products, savings in operating

### Federal Register/Vol. 

### 66, No. 9/Friday, January 12, 2001/Rules and Regulations 3349

cost throughoutthe life ofthe product comparedto any increases in initial cost

or maintenance expense, and the total projected amount ofenergy savings likely to result directly from the imposition ofthe standard. EPCA section 342(a)(6)(B)(i), 42 U.S.C. 6313(a)(6)(B)(i). DOE willtherefore carefully consider possible effects due
to fuel switching as well as impacts on small businesses as itproceeds with any further analysis ofthese products that might leadto more stringent standards.



### Comment: More stringent standards could affect the availability oftypes of boilers that have no cost-effective substitute for certain building applications. (No.3, Gas Appliance Manufacturers Association, pp. 2-5). They could also affect the availability of PTAC's and PTHP's thatwill fit in existing limited spaces. (No.9, First Company, pp. 1-2).



### Response:DOE recognizes thatEPCA prohibits an amended standardthatis likely to result in unavailability inthe United States ofproducts with performance characteristics (including reliability), features, sizes, capacities and volumes that are substantially the

same as those generally available beforehand. EPCA section 342(a)(6)(B)(ii), 42 U.S.C. 6313(a)(6)(B)(ii). This prohibitionwould govern any future rulemaking with respectto these products. 

### Comment: Since ASHRAE amended the standard for electric waterheaters, DOE has the authorityto evaluate and consider more stringent standards than those inEPCA for these products and should do so. (No. 15, GARD Analyticsl Gas Research Institute, p. 2; No. 16, CaliforniaEnergy Commission, p. 3). Heat pump water heaters shouldbe considered among the technological alternatives. (No. 15, GARD Analyticsl Gas Research Institute, p. 2)



### Response:DOE agrees with the
commentregarding DOE's authority. However, inrejecting the ASHRAEI 

### IESNA Standard 90.1-1999 provision, which allows for increased energy consumption, the Department does not intendto subject electric water heaters
to further evaluation or consideration of

more stringent standards. The standard for electric water heaters will remain as originally stipulated inEPCA. This decision is based on the low likelihood offinding sufficient evidenceto support

a more stringent standard for them. The heat pump water heater is the most promising (but significantly more complex) technology to significantly improve the heating efficiency of electric water heaters above current levels. However, when DOE considered this technology for our residential water heater rulemaking, we concluded that it

was not economicallyjustified due to the cost ofmanufacturing, installing, servicing, and sometimes a potential loss ofproduct utility. These concerns might also applyto commercial heat pump water heaters. Furthermore, currently there is no suitabletest procedure for these products to measure the efficiency in commercial applications, so a standard predicated

on heat pump technology would be difficult to enforce.

C. 

### Final Rule and OtherDOEActions

EPCA requires DOE to adopt ASHRAE's amended efficiency standards for certain commercial heating, air conditioning and water heating products unless the Secretary determines, supportedby clear and convincing evidence, that adoption ofa

more stringent uniform national standard is technologicallyfeasible and economicallyjustified and would result in significant additional energy conservation. DOE believes thatthis language places a burden on DOE notto initiate a standards development process unless there is at least a reasonable possibility that strong evidence exists to showthat significant additional energy savings could be achieved through more stringent efficiency standards that would be both technologically feasible and economicallyjustified.

To decide whetherto adopt efficiency standards contained in ASHRAE/IES 

### Standard 90.1-1999, or to initiate the process ofdeveloping and analyzing

more stringent standards for particular product categories, DOE performed a simplified Screening Analysis and evaluated other information. This process was designed to identify products covered by EPCA for which it

was reasonable to expectthat more detailed and sophisticated analysis was unlikely to reveal evidence sufficient to justify more stringent requirements, and also to identify other products for which such evidence was reasonably likely to berevealed by further analysis. Screening products inthis way allows DOE to adopt several ASHRAE 90.1- 1999 standards expeditiously and thereby to:

• Minimize any possible adverse effects on energy savings ofdelaying the imposition ofmore stringent national efficiency standards;

• Minimize uncertainty faced by manufacturers as they design products
to meet future standards; and

• Manage the resources within DOE efficiently, concentrating comprehensive analyses ofthe costeffectiveness and energy savings of alternatives to ASHRAE standards where the clear and convincing evidence requiredbyEPCA for more stringent standards is most likelyto be found.

As further discussedbelow, based on evaluation ofthe results ofthe ScreeningAnalysis, other information for products not included inthe analysis, and the comments received in response to theWorkshop Notice, the Department has decided to pursue, for each product category, one offour

courses ofaction:

• Adopt immediately the ASHRAEI 

### IES Standard 90.1-1999 efficiency level

as a uniform national standard;

• Propose consideration ofan addendum to ASHRAE/IES 

### Standard 90.1-1999 where ASHRAE did not consider a more efficient level, and a
more efficient level appears warranted;

• Propose consideration ofan addendum to ASHRAE/IES 

### Standard 90.1-1999 and undertake a more thorough evaluation to determine whether a higher standard is justified, whereASHRAE considered amending

or amended the standard, and a more efficient level appears warranted than is contained in ASHRAE/IES 

### Standard 90.1-1999; or

• Reject the'ASHRAE/IES 

### Standard 90.1-1999 efficiency level ifitincreases maximum allowable energy use or decreases minimumrequired efficiency.

As to theASHRAE 90.1-1999 efficiency levels thatDOE is immediately adopting, these standards

are being adopted because (a) significant improvements in energy efficiency beyond the level recommendedby ASHRAE appearunlikely to be technically feasible or economically justified, (b) the national energy savings that wouldresult from any cost-effective efficiency improvements appear unlikely to be significant, or (c) the additional energy savings resulting from

a more stringent standard are notlikely
to offset the loss in energy savings likely
to result from the delay that wouldbe caused by the DOE analytical and rulemaking process.

As to efficiency levels inthe third category above-whereDOE is proposing further consideration by ASHRAE and undertaking further analysis-DOE selectedthese products for further analysis, because the findings ofthe ScreeningAnalysis suggested at least a reasonable possibility, and in several instances a high likelihood, of uncovering clear and convincing evidence thatmore stringent standards wouldbe technologically feasible and economicallyjustified and would result in significant additional energy conservation. Implicit in DOE's

### 3350 

### Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Rules and Regulations

selection is thejudgmentthat additional energy savings resulting from more stringent standards are likelyto offset the loss in energy savings likely to result from the delay in the imposition ofa

new standard due to DOE's analytical and rulemaking process.

Based on ourconsideration ofthe Screening Analysis, DOE has identified the ten products listed below as not warranting further consideration of standards that are more stringent than those in ASHRAE/IESNA Standard 90.1-1999 and is consequently adopting the ASHRAE/IESNA Standard 90.1- 1999 efficiency levels for these products today as uniform national standards.

• Central Water Source Heat Pumps, 17 kBtu/h-65 kBtu/h

• CentralWater CooledAir Conditioners, 65 kBtu/h-135 kBtu/h

• Central Water Cooled Air Conditioners, 135 kBtu/h-240 kBtu/h

• Central Water Cooled Air Conditioners, <65 kBtu/h

• Central Water Source Heat Pumps, <17 kBtu/h

• Central Water Source Heat Pumps, 65 kBtu/h-135 kBtu/h

• Gas-Fired Warm Air Furnaces, :::::225 kBtu/h

• Gas Storage Water Heaters, $155 kBtu/h

• Gas Storage Water Heaters, >155 kBtu/h

• Gas Instantaneous Water Heaters with Tanks

In all exceptthe first three ofthe ten product categories listed above, the ASHRAE/IESNA Standard 90.1-1999 efficiency levels are the same as those identified in the Screening Analysis as achieving the lowest life-cycle costs. Therefore, the Department considers it unlikelythat further analysis would reveal clear and convincing evidence that more stringent standards wouldbe economicallyjustified for these products. For the central water-source heat pumps between 17 and 65 thousand Btu/hour, and the two sizes of central water-cooled air conditioners between 65 and 240 thousandBtu/hour, the Screening Analysis estimates that the efficiency levels corresponding to minimum life-cycle cost are slightly higher than ASHRAE's, butthe total cumulative energy savings thatcouldbe achieved cost-effectively by adopting the three higher levels would amountto only 70 trillion Btu between 2004 and 2030. Inthe case ofthese products, for which potential energy savings appear to berelatively small, the Department considers itunlikely that further analysis wouldreveal clear and convincing evidence that a more stringent standard wouldresult in significant energy conservation. Ofthe remainingproducts studied in the Screening Analysis, the Analysis suggests that efficiency standards higher than those in ASHRAE/IESNA Standard 90.1-1999 for four categories of3-phase air conditioners and heat pumps with capacities under 65,000 Btu per hour may well have significant energy savings potential and economic benefits. According to the ScreeningAnalysis, adoptingthe efficiency levels correspondingto the lowest average lifecycle cost for all four ofthese product categories would result in estimated cost-effective nationwide cumulative energy savings ofas much as 1.9 quadrillionBtubetween 2004 and 2030, leadingtheDepartmentto believe that further evaluation could reasonably be expected to uncover clear and convincing evidence supporting a more stringent standard. However, these products were not addressed by ASHRAE inrevising ASHRAE/IESNA Standard 90.1, so DOE has decided not to take any action at this timeto adopt

a standard with respectto them. Based

onthe results ofthe ScreeningAnalysis, DOE encourages ASHRAE to consider adopting an addendum to ASHRAEI IESNA Standard 90.1-1999 andwill supportASHRAE in its future deliberations concerningthese products in conjunction with ongoing development ofNAECA standards for similar, but single phase, residential equipment. Should ASHRAE amendthe efficiency standards for these air conditioners or heat pumps in the future, DOE will then act on such amendments as requiredbyEPCA. The four categories of3-phase air conditioners and heat pumps with capacities under 65,000 Btu per hour

are:

• 3-phase Single Package Air Source Air Conditioners, <65 kBtu/h;

• 3-phase Split Air Source Air Conditioners, <65 kBtu/h;

• 3-phase Single Package Air Source Heat Pumps, <65 kBtu/h; and

• 3-phase Split Air Source Heat Pumps, <65 kBtu/h.

For seven ofthe eightremaining product categories analyzed, ASHRAE amended the efficiency standards contained in ASHRAE/IESNA Standard 90.1, butthe Screening Analysis indicates that it is at leastreasonably likely that significant, cost-effective energy savings wouldresult from even

more stringent standards. Therefore, DOE believes thatthe clear and convincingevidence required byEPCA may well be revealed by further analysis. These products are the following:

• Central air-source air conditioners, 135 kBtu/h-240 kBtu/h; • Central air-source heat pumps, 135 kBtu/h-240 kBtu/h;

• Packaged terminal air conditioners;

• Packaged terminal heat pumps;

• Small gas-fired steam and hot water boilers, 0.3 MMBtu/h-2.5 MMBtu/h;

• Large gas-fired stearn and hot water boilers, >2.5 MMBtu/h; and

• Tankless Gas Instantaneous Water Heaters.

Although the ScreeningAnalysis did
not identify a potential for cost-effective
energy savings for central air-cooled air conditioners and air-source heat pumps between 65 kBtu/h and 135 kBtu/h, the Departmentreceived public comments thatincluded data, derived from sale price surveys, supportingthe contention that higher efficiencies couldbe achieved at lower cost than indicated in the ScreeningAnalysis for these products. Based onthe data we received, the Departmentbelieves that evidence to support more stringent standards is sufficiently likely to be uncovered by further study to warrant a

more thorough evaluation, with

resources allocated within the Department's priority-setting framework, to determine whether higher standards arejustified undertheterms ofEPCA for these products. DOE also intends to propose consideration ofan addendum to ASHRAE/IESNA Standard 90.1-1999.

For one product category, electric
waterheaters, the new efficiency level in ASHRAE/IESNA Standard 90.1-1999 would increase energy consumption relative to the standard inEPCA. Under these circumstances, DOE cannot adopt the new level, sinceEPCA stipulates thatthe standards it contains cannotbe relaxed. Therefore, DOE is not adopting the requirement in ASHRAE/IESNA Standard 90.1-1999 for this product, and the original standardremains in force.

Eighteen commercial products covered by Section 342(a) ofEPCA were notanalyzed in the Screening Analysis. These products, for which performance characteristics were not analyzed in detail, fall into groups as follows:

• Heating coefficients ofperformance (COP) and heating seasonal performance factors (HSPF) for all heat pump product categories;

• Efficiencies ofwater-cooled air conditioners and water-source heat pumps with capacities between 135 kBtu/h and 240 kBtu/h;

• Evaporatively cooled airconditioning products;

• Oil-fired warm air furnaces, storage and instantaneous water heaters, and packaged boilers; and

• Unfired hot water storage tanks

### Federal Register 

### IVaI. 

### 66, No.9 I

### Friday, January 12, 2001 I

### Rules and Regulations 

### 3351

DOE believes that the water-cooled and evaporatively cooled airconditioning products, oil-fired warm air furnaces and water heaters, and unfired hot water storage tanks have small markets and are therefore unlikely
to represent significantenergy savings

as required to justify more stringent standards underEPCA, so we are adopting ASHRAE/IESNA Standard 90.1-1999 standards for these products in today's rule. Sincethe heating COP is closely related to the cooling efficiency for heat pumps, DOE is not adopting atthis pointthe heating COP levels containedin ASHRAE/IESNA Standard 90.1-1999 for: (1) Three-phase heat pumps with capacities under 65 thousand Btu per hour, whichASHRAE did not address informulating Standard 90.1-1999; (2) central air-source heat pumps with capacities between 65 thousand and 240 thousand Btu per hour, which wouldbe the subject of further analysis withrespect to cooling

as a result ofthe Screening Analysis and public comments; and (3) packaged terminal heat pumps, which also would be the subject offurther analysis oftheir cooling performance.

DOE recognizes that ASHRAE did not evaluate the efficiency levels for oilfired packaged boilers explicitly, and the published values in ASHRAEI IESNA Standard 90.1-1999 were tiedto the corresponding efficiencies for gasfired packaged boilers. Since DOE intends to evaluategas-fired packaged boilers as a result ofthe Screening Analysis, we planto wait for that evaluationto be completebefore adopting efficiency standards for the equivalent oil-fired products. Finally, ASHRAE/IESNA Standard 90.1-1999 provides, in effect, that its boiler efficiency standards apply onlyto low pressure boilers. In another rulemaking, DOE is addressing the question of whether EPCA efficiency requirements apply also to high pressure boilers. (See 65 FR 48838, 48843, Aug. 9, 2000). We intendto address in that proceeding the impact, ifany, ofASHRAE/IESNA Standard 90.1-1999 on efficiency standards under EPCA for high pressure boilers.

In sum, today's rule adopts ASHRAEI IESNA Standard 90.1-1999 standard levels as uniform national standards for
18 product categories. These product categories appear inTable 5, along with theDepartment's intentions with respectto an additional 16 products, for which DOE is not adopting new efficiency levels at the presenttime. For the latter products, the levels prescribed inEPCA remain unaltered at present.

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### Table 5. DOE Actions

ProductCategory Action
Central Air Source AC 135

- 240 kBtuIh Evaluate Further/Encourage ASHRAEIIESNA
Central Air Source HP 135

- 240 kBtulh Addendum
Central Air Source AC 65

- 135 kBtuIh
Central Air Source HP 65

- 135 kBtulh
Central Water Cooled AC 135

- 240 kBtulh Adopt ASHRAE/IESNA Standard 90.1-1999
Central Water Source HP 135

- 240 kBtulh
Central Water Cooled AC 65

- 135 kBtuIh
Central Water Source HP 65

- 135 kBtuIh
Central Water Cooled AC <65 kBtuIh Central, Water Source HP 17

- 65 kBtuIh
Central Water Source HP <17 kBtulh Packaged Terminal Air Conditioners Evaluate FurtherlEncourage ASHRAE/IESNA Packaged Terminal Heat Pumps Addendum
3-Phase Single Package Air Source AC <65 kBtuIh Encourage ASHRAE/IESNA Addendum
3-Phase Split Air Source AC <65 kBtuIh
3-Phase Single Package Air Source HP <65 kBtulh
3-Phase Split Air Source HP <65 kBtuIh Evaporatively Cooled AC Products Adopt ASHRAE/IESNA Standard 90.1-1999
Gas-Fired Warm Air Furnaces**~** 

### 225 kBtulh
Oil-Fired Warm Air Furnaces**~** 

### 225 kBtuIh Large Gas-Fired Boilers >2.5 MMBtuIh Evaluate FurtherlEncourage ASHRAE/IESNA Addendum Large Oil-Fired Boilers >2.5 MMBtulh Evaluate Further (with Gas-Fired Boilers)
Small Gas-Fired Boilers 0.3

- 2.5 MMBtulh Evaluate FurtherlEncourage ASHRAE/IESNA 

### Addendum
Small Oil-Fired Boilers, 0.3

- 2.5 MMBtuIh Evaluate Further (with Gas-Fired Boilers)
Gas Storage WaterHeaters>155 kBtuIh Adopt ASHRAEIIESNA Standard 90.1-1999
Oil-Fired Storage Water Heaters >155 kBtuIh
Gas Storage WaterHeaters 5. 

### 155 kBtuIh
Oil-Fired Storage WaterHeaters 5. 

### 155 kBtulh
Tankless Gas-Fired Instantaneous WaterHeaters Evaluate Further/Encourage ASHRAEIIESNA Addendum
Tankless Oil-Fired Instantaneous Water Heaters Adopt ASHRAEIIESNA Standard 90.1-1999
Gas-Fired Instantaneous Water Heaters with Tanks
Oil-Fired Instantaneous Water Heaters with Tanks
Unfired Hot Water Storage Tanks
Electric Water Heaters Reiect ASHRAE/IESNA Standard 90.1-1999

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### Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Rules and Regulations 3353

III. Procedural Requirements

A. Review Under theNational EnvironmentalPolicyActof1969

EPCA prescribes energy efficiency standards for certain commercial products and stipulates that ifASHRAEI IESNA Standard 90.1 is amended, the Secretary must adopt new efficiency requirements in ASHRAE/IESNA Standard 90.1 for covered products, unless (s)he determines that certain conditions for requiringmore stringent standards are met. Where these conditions are not met, the Secretary has no discretion to adopt a higher standard. In today's rule, we are adopting standards for a variety of commercial products includedin ASHRAE/IESNA Standard 90.1-1999, as published in October of 1999, as uniform national standards. Under the
terms ofEPCA, these standards are at the lowest levels permittedby law.

We have reviewedtoday's rule under the National Environmental PolicyAct of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations ofthe Council on Environmental Quality, 40 CFR parts 1500-1508, the Department's regulations for compliance withNEPA, 10 CFR Part 1021, and the Secretarial Policy onthe National Environmental Policy Act (June 1994). Implementation oftoday's rule would not result in negative environmental impacts. We have therefore determined that today's rule is covered underthe Categorical Exclusion found at paragraph A6 of appendixA to subpartD ofthe Department's NEPA Regulations, which applies to rulemakings that are strictly procedural. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

B. Review UnderExecutive Order 12866, "RegulatoryPlanningandReview"

Today's rule has been determined not to be a "significantregulatory action,"

as defined in section 3(f) ofExecutive Order 12866, "Regulatory Planning and Review" 58 FR 51735 (October 4,1993). Accordingly, this actionwas not subject
to review under the Executive Order by the Office ofInformation andRegulatory Affairs.

C. Review Under theRegulatory FlexibilityAct

The Regulatory Flexibility Act of 1980,5 U.S.C. 603, requires the preparation ofan initialregulatory flexibility analysis for every rulewhich the agency must propose for public comment,by law, unless the agency certifies that the rule, ifpromulgated, will not have a significant economic impact on a substantial number ofsmall entities. A regulatory flexibility analysis examines the impact ofthe rule on small entities and considers alternative ways ofreducing negative impacts.

The Regulatory Flexibility Act does
not apply inthis case. First, today's rule need not have been proposed for
comment. Second, even ifthe rule were required to be proposed for comment,

no less stringent standardis permitted underthe statute, so any impact on small business is due to EPCA and not to today's rule.

D. Review UnderExecutive Order 13132, "Federalism"

Executive Order 13132 (64 FR 43255, August 4,1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action thatwould limit the policymaking discretion ofthe States and carefully assess the necessity for such actions. Therule published today will primarily codify energy efficiency standards atthe minimum levels allowedbyEPCA and will not regulate the states. We have determined that today's rule does not have a substantial direct effect onthe States, on the relationship between the national government and the States, or on the distribution ofpower and responsibilities among the various levels ofgovernment. No further action is requiredby Executive Order 13132.

E. Review UnderExecutive Order 12630, "GovernmentalActions and Interference with Constitutionally ProtectedPropertyRights"

We have determined underExecutive Order 12630, "Governmental Actions and Interference with Constitutionally Protected PropertyRights," 52 FR 8859 (March 18, 1988), thatthis regulation would notresult in any takings which might require compensation under the Fifth Amendmentto the United States Constitution.

F. Review Under thePaperwork ReductionAct

Today's rule will codify energy efficiency standards for certain commercial products and will not require any additional reports or recordkeeping. Accordingly, this action was
not subjectto review underthe PaperworkReduction Act.

G. Review UnderExecutive Order 12988, "CivilJustice Reform"

With respect to the review ofexisting regulations and the promulgation of

newregulations, Section 3(a) of Executive Order 12988, "Civil Justice Reform," 61 FR 4729 (February 7, 1996), imposes on executive agencies the general duty to**adh~re**.to the foll?wing requirements: (1) Ehmmate draftmg

errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conductratherthan a general standard and promote simplification and burdenreduction. With regard to the review requiredby Section 3(a), Section 3(b) ofthe Executive Order specifically requires thatExecutive agencies make every reasonable effort to

ensurethatthe regulation: (1) Clearly specifies the preemptive effect, ifany; (2) clearly specifies any effect on existing Federal law or regulation; (3) provide a clear legal standard for affected conductwhile promoting simplification and burdenreduction; (4) specifies theretroactive effect, ifany; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issuedby the Attorney General. Section 3(c) oftheExecutive Orderrequires agencies to review regulations in light of applicable standards Section 3(a) and Section 3(b) to determine whether they

are met or itis unreasonable to meet one
or more ofthem.

We reviewedtoday's rule under the standards ofSection 3 ofthe Executive Order and determined that, to the extent permittedby law, it meets the requirements ofthose standards.

H. Review Under Section 32 ofthe Federal EnergyAdministrationActof
1974

Under Section 301 ofthe Department ofEnergy OrganizationAct (Pub. L. 95- 91), the Department ofEnergy must comply with Section 32 ofthe Federal Energy AdministrationAct of 1974, as amended bythe Federal Energy Administration Authorization Act of 1977 (FEAA). 15 U.S.c. 788. Section 32(c) provides thatthe Secretary may not incorporate commercial standards within any rule nor prescribe any rule specifically authorizing or requiring commercial standards, unless (s)he has consulted with theAttorney General andthe Chairman ofthe Federal Trade Commission concerningthe impact of the standards on competition, and neither official recommends against incorporating orusing them.

This rule incorporates efficiency levels specified by a commercial standard, ASHRAE/IESNA Standard 90.1-1999, for certain commercial products. However, since**EP~A** specifically directs the adoptIOn ofthese

### 3354 

### Federal Register/Vol. 66, No. 9/Friday, January 12, 2001/Rules and Regulations

levels at a minimum, Section 32 ofthe FEAA does not apply to the incorporation ofthese commercial standards in today's rule.



### /. Review Under UnfundedMandates ReformActof1995

Section 202 ofthe Unfunded Mandates Reform Act of 1995 requires each Federal agency, unless otherwise prohibitedby law, to assess the effects ofFederal regulatory actions on state, local and tribal governments andthe private sector (other than to the extent that suchregulations incorporate requirements specifically set forth in law). 2 U.S.C. 1531. The statute also requires a written statement, before promulgating anygeneralnotice of proposedrulemaking or any final rule for which a general notice ofproposed rulemakingwas published, iftherule in question contains a mandate that may result in aggregate expenditures ofover $100,000,000 by state, local and tribal governments andthe private sector. 2 U.S.C. 1532 (a).

In adopting the efficiency standards in today's rule, DOE is incorporating requirements specifically set forth in EPCA. Furthermore, no notice of proposedrulemaking was required, nor has one been published. Therefore, the requirements ofTitle II ofthe Unfunded Mandates Reform Act do not apply to this action. 

### J. Review Under thePlain Language Directives

The President'sMemorandum, "Plain Language in GovernmentWriting," 63 FR 31885 Oune 10,1998) directs each Federal agency to write all published rulemaking documents in plain language. The Memorandum includes general guidance on what constitutes "plain language." Plain language requirements will vary from one documentto another, depending onthe intended audience, but all plain language documents shouldbe logically organized and clearly written.

We have written this final rule to be
easy to understand by organizingitto suitthe needs ofstakeholders better, by avoiding unnecessary technicaljargon, and byfollowing Departmental instructions andguidelines related to plain language. We conclude that, to the
extent practicable, the language ofthis final rule is consistent with the President's Memorandum on "Plain Language in Government Writing." 

### K. Review Under the Treasury and General GovernmentAppropriations Act. 1999

Section 654 ofthe Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family PolicymakingAssessment for any proposed rule or policy that may affect family well-being. Today's rule is not a proposed rule, nor will the rule have
any impact on the autonomy or the integrity ofthe family as an institution. Accordingly. DOE has concluded that it is not necessary to prepare a Family PolicymakingAssessment.



### L. Review Under the SmallBusiness and RegulatoryEnforcementFairnessAct

Consistentwith SubtitleE ofthe Small Business and Regulatory EnforcementFairness Act of 1996, 5 U.S.C. 801-808, DOE will submit to Congress a reportregarding the issuance oftoday's final rulebefore the effective date set forth at the outset ofthis notice. The report will state that it has been determined that this rule is not a "major rule" as definedby 5 U.S.C. 804 (2).

List ofSubjects in 10CFR Part 431

Administrative practice and procedure, Commercial and Industrial Equipment, Energy conservation,

Issued inWashington. DC, onJanuary 4, 2001. Dan

### J. Leiter, PrincipalDeputyAssistantSecretary, Energy EfficiencyandRenewableEnergy.

For the reasons set forth inthe preamble, Title 10, Part 431 ofthe Code ofFederal Regulations is amended as set forth below:

PART 431-ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND INDUSTRIAL EQUIPMENT

1. The authority citation for Part 431 continues to read as follows:

Authority: 42 U.S.C. 6311-6316.

2. Subpart 

### Qis added to read as follows: Subpart Q-Amended Energy Conservation Standards for Certain Commercial Equipment, and Effective Dates
Sec. 431.701 Purpose and scope. 431.702 Commercial warm air furnaces. 431.703 Small and large commercial package air conditioning and heating equipment.
431.704 Commercial waterheaters and unfiredhot water storage tanks. Subpart Q-Amended Energy Conservation Standardsfor Certain Commercial Equipment, and Effective Dates

§431.701 Purpose and scope.

This subpart sets forth the minimum efficiency levels for commercial equipment, contained in ASHRAE/IES Standard 90.1-1999, thatthe Department ofEnergy has adopted as national standards, effective in 2003 or 2004 as specified in §§431.701 through 431.704. On their effective dates, these levels will amend and replace some of the efficiency levels required for certain commercial equipmentby Section 342(a) ofEPCA. The Department has not adopted the efficiency levels specified in ASHRAE/IES Standard 90.1-1999 for products not identified in this subpart, andthe levels specified in Section 342(a) ofEPCA for those products will remain in force unless and until they are amended. The Department adoptedthe efficiency levels inthis subpart pursuantto Section 342(a)(6) ofEPCA, which addresses the establishment of national standards atminimum levels specified in amendments to ASHRAEI IES Standard 90.1, in place ofthe efficiency levels required in Section 342(a) ofEPCA.

§431.702 Commercial warm air furnaces.

Each commercial warm air furnace manufactured after October 29, 2003
mustmeetthe following energy efficiency standard levels:

(a) For a gas-fired commercial warm air furnace with capacity of225,000 Btu per hour or more, the thermal efficiency
at the maximum rated capacity mustbe
not less than 80 percent.

(b) For an oil-fired commercial warm air furnace with capacity of225,000 Btu perhour or more, the thermal efficiency
atthe maximum rated capacity mustbe
not less than 81 percent.

§431.703 Small and large commercial package air conditioning and heating equipment.

Each commercial water- or evaporatively-cooled air conditioner and water-source heat pump manufactured after October 29, 2003 (except for large commercial package air-conditioning and heating equipment, for which the effective date is October 29, 2004) must meet the applicable minimum energy efficiency standard level(s) for heating and cooling set forth inTables 1 and 2 ofthis section.

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### 3355



### 'fableI-Miltimu-mt-{)(}lingEffK:ien(:y Levels

Required Effective' Product Category Cooling capacity Subcategory Minimum Date Efficiency Level I 

### Small Commercial Water-Cooled, <17,000 Btulh Air Conditioners EER: 12.1 10/29/2003 

### Packaged Air Evaporatively Cooled, Heat Pumps EER: 11.2 10/2912003 

### Conditioning and and Water-Source ? 

### 1 7,000 Btu/h and Air Conditioners EER: 12.1 10/29/2003 

### Heating Equipment <65,000 Btu/h Heat Pumps EER: 12.0 10/29/2003

? 

### 65,000 Btu/h and Air Conditioners EER: 11.52 

### 10/29/2003 

### <135,000 Btulh Heat Pumps EER: 12.0 10/29/2003 

### Large Commercial Water-Cooled, and**~** 

### 135,000 Btulh and All EER: 

### 11.0 10/29/2004 

### Packaged Air Evaporatively Cooled <240,000 Btulh Conditioning and Heating Equipment

Table 2 - Minimum HeatingEfficiency Levels

Product Category Cooling Subcategory Required Minimum Effective Capacity



# - Efficiency Levell Date

Small Commercial Packaged Air Water- <135,000 Btulh All COP: 4.2 

### 10/29/2003 

### Conditioning and Heating Equipment Source

I 

### All EER values mustberated at 95°F outdoor dry-bulb temperature for air-cooled products and evaporatively-cooled products and at 85of entering water temperature for water-source and water-cooledproducts.

2 

### Deduct 0.2 from therequired EER for units with heating sections otherthan electric resistance heat.

3 

### All COP values mustbe rated at 70°F entering water temperature for water-sourceproducts.
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### Rules and Regulations

§431.704 Commercial water heaters and unfired hot water storage tanks.

Each commercial storage water heater, instantaneous water heater, and hot water supply boiler manufactured after October 29, 2003 must meet

the applicable energy conservation standard level(s) as follows:

Equipment Type Category Size or Rating Energy Efficiency Required Energy Efficiency Effective Descriptor Levelt Date
Gas Storage Water <4,000 :;; 155,000 Btulhr Min. Thermal Efficiency 80% 

### 10/29/2003 Heaters Btulhr/gal Max. StandbyLoss2

. __**~OO** 

### + i 1 

### o,f"Y. (Btulhr) 

### 10/29/2003



### > 155,000 Btulhr Min. Thermal Efficiency t-. 80% 

### 10/2912003
Max. Standby Loss! 

### Q/800 

### + 11O,f"y, (Btulhr) 

### 10/2912003

Gas Instantaneous**~** 4,000**~** 10 gal Min. Thermal Efficiency 80% 

### 10/29/2003 Water Heaters Btulhr/gal Max. Standby Loss2 

### Q/800 

### + 11

### M"Y, (Btulhr) 

### 10/2912003

Oil Storage Water <4,000 

### s: 155,000 Btulhr Min. Thermal Efficiency 78% 

### 10/29/2003 Heaters Btulhr/ga\ Max. Standby Loss! 

### Q/800 

### + 1J(}/V (Btulhr) 

### 10/29/2003



### > 155,000 Btulhr Min. Thermal Efficiency 78% 

### 10129/2003

Max. Standby LOSSl 

### Q/800 

### + 11rNV, (Btulhr) 

### 10/29/2003

Oil Instantaneous**~** 4,000 < 10 gal Min. Thermal Efficiency 80% 

### 10/2912003 Water Heaters Btulhr/gal**~** 10 gal Min. Thermal Efficiency 78% 

### 10129/2003 Max. Standby Loss2 

### Q/800 

### + IIO..fV (Btulhr) 

### 10/29/2003 Gas Hot Water Supply**~** 4,000**~** 10 gal Min. Thermal Efficiency 80% 

### 10/2912003 Boilers Btulhr/gaJ Max. Standby Loss2 

### Q/800 

### + 11rNV, (Btulhr) 

### 10/29/2003 Oil Hot Water Supply**~** 4,000**~** 10 gal Min. Thermal Efficiency 78% 

### 10/2912003 Boilers 

### Btulhr/gal Max. Standby Loss2 Q/800 

### + 11rNV. (Btulhr) 

### 10/2912003
Unfired Hot Water 

### All All Minimum Insulation R-12.5 

### 10/2912003 Storage Tanks Requirement

1Standby loss is based on a 70· temperature difference between stored water and ambient requirements. In the Standby Loss equations, V, is the rated volume in gallons, and Q is the nameplate input rate in Btulh.

2 Water heaters and hot water supplyboilers having more than 140 galions ofstorage capacity are not required meet the standby loss requirement ifthe tank surface is thermally insulated to R-12.5. ifa standing pilot light is not installed. and gas- oroil-fired storage water heaters have a nue damper or fan-assisted comhustion. Q:IEE-4IIPriority ruleslCmrel HVAC and Wlr htr\Standards Final Rule. 18.wpd