`[Federal Register Volume 90, Number 12 (Tuesday, January 21, 2025)]
[Rules and Regulations]
[Pages 7464-7648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-31214]



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Vol. 90

Tuesday,

No. 12

January 21, 2025

Part IV





Department of Energy





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10 CFR Part 431





Energy Conservation Program: Energy Conservation Standards for 
Commercial Refrigerators, Freezers, and Refrigerator-Freezers; Final 
Rule

  Federal Register / Vol. 90 , No. 12 / Tuesday, January 21, 2025 / 
Rules and Regulations  

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DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2017-BT-STD-0007]
RIN 1904-AD82


Energy Conservation Program: Energy Conservation Standards for 
Commercial Refrigerators, Freezers, and Refrigerator-Freezers

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Final rule.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including commercial 
refrigerators, freezers, and refrigerator-freezers (``commercial 
refrigeration equipment'' or ``CRE''). EPCA also requires the U.S. 
Department of Energy (``DOE'') to periodically review its existing 
standards to determine whether more-stringent standards would be 
technologically feasible and economically justified and would result in 
significant energy savings. In this final rule, DOE is adopting new and 
amended energy conservation standards for CRE. It has determined that 
the new and amended energy conservation standards for this equipment 
would result in significant conservation of energy and are 
technologically feasible and economically justified.

DATES: The effective date of this rule is March 24, 2025. Compliance 
with the new and amended standards established for commercial 
refrigerators, freezers, and refrigerator-freezers in this final rule 
is required on and after Monday, January 22, 2029. The incorporation by 
reference of certain material listed in this rule was approved by the 
Director of the Federal Register as of March 10, 2009 and October 23, 
2013.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, public meeting attendee lists and transcripts, 
comments, and other supporting documents/materials, is available for 
review at www.regulations.gov. All documents in the docket are listed 
in the www.regulations.gov index. However, not all documents listed in 
the index may be publicly available, such as information that is exempt 
from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2017-BT-STD-0007. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact the 
Appliance and Equipment Standards Program staff at (202) 287-1445 or by 
email: [email protected].

FOR FURTHER INFORMATION CONTACT: 
    Mr. Jeremy Dommu, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 586-9870. Email: [email protected].
    Ms. Kristin Koernig, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 586-4798. Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Final Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Commercial Refrigerators, 
Freezers, and Refrigerator-Freezers
    3. Applicability of this Final Rule to Large-Capacity CRE
III. General Discussion
    A. General Comments
    1. General Support
    2. General Opposition
    a. Proposed Compliance Date
    b. Proposed Standards
    c. Rulemaking Process
    B. Scope of Coverage
    C. Test Procedure
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared to Increase in Price (LCC 
and PBP)
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
    A. Market and Technology Assessment
    1. Equipment Classes and Definitions
    a. Current Equipment Classes and Definitions
    b. Modifications to Equipment Classes and Definitions
    c. Equipment Without Standards Proposed in the October 2023 NOPR
    d. Pull-Down Equipment
    2. CRE Market
    3. Technology Options
    a. High-Efficiency Single-Speed Compressors
    b. Expansion Valves
    c. Doors for Open Units
    B. Screening Analysis
    1. Screened-Out Technologies
    a. Increased Insulation Thickness and Other Technologies That 
Affect Internal or External Dimensions
    b. Vacuum-Insulated Panels
    c. Linear Compressors
    d. Air-Curtain Design
    e. Permanent Magnet Synchronous AC Motors
    f. Evaporator Fan Control
    g. Microchannel Condensers
    2. Remaining Technologies
    a. Other Technologies Not Screened-Out
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Baseline Energy Use
    b. Higher Efficiency Levels
    c. Equipment Classes With Unique Energy Use Characteristics
    d. DOE Test Data
    e. Development of Standard Equations
    f. Engineering Spreadsheet
    g. Capacity Metrics
    2. Cost Analysis
    a. General Approach of the Cost Analysis
    b. Costs of Specific Components
    c. Variable-Speed Compressor
    d. Doors With Krypton Gas Fill
    e. Cost-Efficiency Results
    f. Manufacturer Markup
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Equipment Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Equipment Lifetime
    7. Residual Value for Refurbished CRE
    8. Discount Rates
    9. Energy Efficiency Distribution in the No-New-Standards Case
    10. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Equipment Efficiency Trends
    2. National Energy Savings
    3. Net Present Value Analysis
    a. Sensitivity Analysis for Equipment With Unique Energy Use 
Characteristics
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Product and Capital Conversion Costs

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    d. Manufacturer Markup Scenarios
    3. Discussion of MIA Comments
    a. Conversion Costs
    b. Impacts on Direct Employment
    c. Laboratory Resource Constraints
    d. Supply Chain
    e. Cumulative Regulatory Burden
    f. Refrigerant Transition
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. National Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Equipment
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for CRE Standards
    2. Annualized Benefits and Costs of the Adopted Standards
    3. Removal of Obsolete Provisions
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Review Under the Regulatory Flexibility Act
    1. Need for, and Objectives of, Rule
    2. Significant Issues Raised by Public Comments in Response to 
the IRFA
    3. Response to Comments Filed by Chief Counsel for Advocacy of 
the Small Business Administration
    4. Description and Estimated Number of Small Entities Affected
    5. Description of Reporting, Recordkeeping, and Other Compliance 
Requirements
    6. Significant Alternatives Considered and Steps Taken To 
Minimize Significant Economic Impacts on Small Entities
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
    M. Congressional Notification
VII. Approval of the Office of the Secretary

I. Synopsis of the Final Rule

    EPCA, Public Law 94-163, as amended,\1\ authorizes DOE to regulate 
the energy efficiency of a number of consumer products and certain 
industrial equipment. (42 U.S.C. 6291-6317, as codified) Title III, 
Part C of EPCA,\2\ added by Public Law 95-619, Title IV, section 
441(a), established the Energy Conservation Program for Certain 
Industrial Equipment, which sets forth a variety of provisions designed 
to improve energy efficiency. (42 U.S.C. 6311-6317, as codified) Such 
equipment includes CRE, the subject of this rulemaking. (42 U.S.C. 
6311(1)(E))
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflects the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was redesignated Part A-1.
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    Pursuant to EPCA, DOE is required to review its existing energy 
conservation standards for covered equipment no later than 6 years 
after issuance of any final rule establishing or amending a standard. 
(42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) Pursuant to that statutory 
provision, DOE must publish either a notification of determination that 
standards for the product do not need to be amended, or a notice of 
proposed rulemaking (``NOPR'') including new proposed energy 
conservation standards (proceeding to a final rule, as appropriate). 
(Id.) Any new or amended energy conservation standard must be designed 
to achieve the maximum improvement in energy efficiency that DOE 
determines is technologically feasible and economically justified. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or 
amended standard must result in significant conservation of energy. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B)) DOE has conducted this 
review of the energy conservation standards for CRE under EPCA's 6-
year-lookback authority described herein. (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(m)(1))
    In accordance with these and other statutory provisions discussed 
in this document, DOE analyzed the benefits and burdens of six trial 
standard levels (``TSLs'') for CRE. The TSLs and their associated 
benefits and burdens are discussed in detail in sections V.A through 
V.C of this document. As discussed in section V.C of this document, DOE 
has determined that TSL 3 represents the maximum improvement in energy 
efficiency that is technologically feasible and economically justified. 
The adopted standards, which are expressed in maximum daily energy 
consumption (``MDEC'') as a function of the volume or total display 
area (``TDA''), are shown in table I.1. These standards apply to all 
equipment listed in table I.1 and manufactured in, or imported into, 
the United States starting on the date 4 years after the publication of 
the final rule for this rulemaking. As discussed in section II.B.3 of 
this document, DOE is not, at this time, amending standards for the 
large-capacity CRE ranges presented in table IV.6 for the VOP.SC.M, 
SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.L 
equipment classes.
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BILLING CODE 6450-01-C
    ARI Standard 1200-2006 and AHRI Standard 1200 (I-P)-2010 are 
referenced in the amendatory text of this document and were previously 
approved for Sec.  431.66.

A. Benefits and Costs to Consumers 3
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    \3\ All monetary values in this document are expressed in 2023 
dollars unless indicated otherwise. For purposes of discounting 
future monetary values, the present year in the analysis was 2024.
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    Table I.3 summarizes DOE's evaluation of the economic impacts of 
the adopted standards on consumers of CRE, as measured by the average 
life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\4\ The average LCC savings are positive for all equipment 
classes, and the PBP is less than the average lifetime of CRE, which is 
estimated to be 14.0 years (see section IV.F of this document).
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    \4\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.9 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.C of this document).
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BILLING CODE 6450-01-C
    DOE's analysis of the impacts of the adopted standards on consumers 
is described in section IV.F of this document.

B. Impact on Manufacturers

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2024-2058). Using a real discount rate of 
10.0 percent, DOE estimates that the INPV for manufacturers of CRE in 
the case without new and amended standards is $3,022.3 million in 
2023$. Under the adopted standards, DOE estimates the change in INPV to 
range from -2.6 percent to -1.7 percent, which is approximately -$77.8 
million to -$51.3 million. In order to bring equipment into compliance 
with new and amended standards, it is estimated that industry will 
incur total conversion costs of $117.7 million.
    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in section IV.J of this document. The 
analytic results of the manufacturer impact analysis (``MIA'') are 
presented in section V.B.2 of this document.

C. National Benefits and Costs

    DOE's analyses indicate that the adopted energy conservation 
standards for CRE would save a significant amount of energy. The 
adopted TSL is TSL 3. Relative to the case without new and amended 
standards, the lifetime energy savings for CRE purchased during the 30-
year period that begins in the anticipated year of compliance with the 
new and amended standards (2029-

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2058) amount to 1.11 quadrillion British thermal units (``Btu''), or 
quads.\5\ This represents a savings of 6.5 percent relative to the 
energy use of this equipment in the case without new and amended 
standards (referred to as the ``no-new-standards case'').
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    \5\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.2 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the standards for CRE ranges from $1.32 billion 2023$ (at a 
7-percent discount rate) to $3.43 billion 2023$ (at a 3-percent 
discount rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased equipment costs 
for CRE purchased during the period 2029-2058.
    In addition, the adopted standards for CRE are projected to yield 
significant environmental benefits. DOE estimates that the standards 
will result in cumulative emission reductions (over the same period as 
for energy savings) of 19.7 million metric tons (``Mt'') \6\ of carbon 
dioxide (``CO2''), 6.0 thousand tons of sulfur dioxide 
(``SO2''), 36.9 thousand tons of nitrogen oxides 
(``NOX''), 168 thousand tons of methane 
(``CH4''), 0.2 thousand tons of nitrous oxide 
(``N2O''), and 0.04 tons of mercury (``Hg'').\7\
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    \6\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 represents current federal and 
state legislation and final implementation of regulations as of the 
time of its preparation. See chapter 13 of this final rule TSD for 
further discussion of AEO2023 assumptions that affect air pollutant 
emissions.
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    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using different estimates of the social cost 
of CO2 (``SC-CO2''), the social cost of methane 
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of GHG 
(``SC-GHG''). DOE used an updated set of SC-GHG estimates (in terms of 
benefit per ton of GHG avoided) published in 2023 by the Environmental 
Protection Agency (``EPA'') (``2023 SC-GHG''), as well as the interim 
SC-GHG values developed by an Interagency Working Group on the Social 
Cost of Greenhouse Gases (``IWG'') in 2021 (``2021 Interim SC-GHG''), 
which DOE used in the notice of proposed rulemaking for this rule 
before the updated values were available.\8\ These values are discussed 
in section IV.L of this document. The climate benefits associated with 
the average SC-GHG at a 2-percent near-term Ramsey discount rate using 
the 2023 SC-GHG estimates are estimated to be $4.6 billion, and the 
climate benefits associated with the average 2021 Interim SC-GHG 
estimates at a 3-percent discount rate are estimated to be $1.12 
billion. DOE notes, however, that the adopted standards would be 
economically justified even without inclusion of the estimated 
monetized benefits of reduced GHG emissions.
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    \8\ Technical Support Document: Social Cost of Carbon, Methane, 
and Nitrous Oxide Interim Estimates Under Executive Order 13990 
published in February 2021 by the IWG. (``February 2021 SC-GHG 
TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf 
https://www.epa.gov/system/files/documents/2023-12/eo12866_oil-and-gas-nsps-eg-climate-review-2060-av16-final-rule-20231130.pdf; 
https://www.epa.gov/system/files/documents/2023-12/epa_scghg_2023_report_final.pdf (last accessed July 3, 2024).
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    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions using benefit-per-ton estimates 
from the EPA's Benefits Mapping and Analysis Program \9\ as discussed 
in Section IV.L of this document. DOE did not monetize the change in 
mercury emissions because the quantity is very small. DOE estimated the 
present value of the health benefits would be $0.86 billion using a 7-
percent discount rate, and $2.19 billion using a 3-percent discount 
rate.\10\ DOE is currently only monetizing health benefits from changes 
in ambient fine particulate matter (``PM2.5'') 
concentrations from two precursors (SO2 and NOX), 
and from changes in ambient ozone from one precursor (NOX), 
but will continue to assess the ability to monetize other effects such 
as health benefits from reductions in direct PM2.5 
emissions.
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    \9\ Estimating the Benefit per Ton of Reducing Directly-Emitted 
PM2.5, PM2.5 Precursors and Ozone Precursors 
from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
    \10\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
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    Table I.4 summarizes the monetized benefits and costs expected to 
result from the new and amended standards for CRE. There are other 
important unquantified effects, including certain unquantified climate 
benefits, unquantified public health benefits from the reduction of 
toxic air pollutants and other emissions, unquantified energy security 
benefits, and distributional effects, among others.
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BILLING CODE 6450-01-C
    The benefits and costs of the adopted standards can also be 
expressed in terms of annualized values. The monetary values for the 
total annualized net benefits are: (1) the reduced consumer operating 
costs, minus (2) the increase in equipment purchase prices and 
installation costs, plus (3) the value of climate and health benefits 
of emission reductions, all annualized.\11\
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    \11\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2024, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2020 or 2030), and then discounted the present value from 
each year to 2024. Using the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in the 
compliance year, that yields the same present value.
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    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered equipment and are measured for the lifetime of CRE shipped 
during the period 2029-2058. The benefits associated with reduced 
emissions achieved as a result of the adopted standards are also 
calculated based on the lifetime of CRE shipped during the period 2029-
2058. Total benefits for both the 3-percent and 7-percent cases are 
presented using the average SC-GHG with a 2 percent near-term Ramsey 
discount rate for the 2023 SC-GHG estimates and the average SC-GHG with 
3-percent discount rate for the 2021 interim SC-GHG estimates.\12\
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    \12\ DOE notes that using consumption-based discount rates 
(e.g., 2 or 3 percent) is appropriate when discounting the value of 
climate impacts. Combining climate effects discounted at an 
appropriate consumption-based discount rate with other costs and 
benefits discounted at a capital-based rate (i.e., 7 percent) is 
reasonable because of the different nature of the types of benefits 
being measured.
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    Table I.5 presents the total estimated monetized benefits and costs 
associated with the adopted standard, expressed in terms of annualized 
values. The results under the primary estimates are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and either the 2-percent near-term Ramsey discount rate case 
or the 3-percent discount rate case for climate benefits from reduced 
GHG emissions, the estimated cost of the standards adopted in this rule 
is $71 million per year in increased equipment costs, while the 
estimated annual benefits are $210 million in reduced equipment 
operating costs, $222 million per year in climate benefits (using the 
2023 SC-GHG estimates) or $64 million per year in climate benefits 
(using the 2021 interim SC-GHG estimates), and $90 million in health 
benefits. In this case, the net benefit would amount to $452 million 
per year (using the 2023 SC-GHG estimates) or $294 million per year 
(using the 2021 interim SC-GHG estimates).
    Using a 3-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and either the 2-percent near-term Ramsey discount rate case 
or the 3-percent discount rate case for climate benefits from reduced 
GHG emissions, the estimated cost of the standards is $68 million per 
year in increased equipment costs, while the estimated annual benefits 
are $265 million in reduced operating costs, $222 million in climate 
benefits (using the 2023 SC-GHG estimates) or $64 million in climate 
benefits (using the 2021 interim SC-GHG estimates), and $126 million in 
health benefits. In this case, the net benefit would amount to $545 
million per year (using the 2023 SC-GHG estimates) or $387 million per 
year (using the 2021 interim SC-GHG estimates).
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BILLING CODE 6450-01-C
    DOE's analysis of the national impacts of the adopted standards is 
described in sections IV.H, IV.K, and IV.L of this document.

D. Conclusion

    DOE concludes that the standards adopted in this final rule 
represent the maximum improvement in energy efficiency that is 
technologically feasible and economically justified and would result in 
the significant conservation of energy. Specifically, with regards to 
technological feasibility, design options used to achieve these 
standard levels are already commercially available for all equipment 
classes covered by this final rule. As for economic justification, 
DOE's analysis shows that the benefits of the standards exceed, to a 
great extent, the burdens of the standards.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 2-percent 
near-term Ramsey discount rate case or the 3-percent discount rate case 
for GHG social costs, the estimated cost of the standards for CRE is 
$71 million per year in increased equipment costs, while the estimated 
annual benefits are $210 million in reduced equipment operating costs, 
$222 million in climate benefits (using the 2023 SC-GHG estimates) or 
$64 million in climate benefits (using the 2021 interim SC-GHG 
estimates), and $90 million in health benefits. The net benefit amounts 
to $452 million per year (using the 2023 SC-GHG estimates) or $294 
million per year (using the 2021 interim SC-GHG estimates). DOE notes 
that the net benefits are substantial even in the absence of the 
climate benefits,\13\ and DOE would adopt the same standards in the 
absence of such benefits.
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    \13\ The information on climate benefits is provided in 
compliance with Executive Order 12866.
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    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\14\ For 
example, some covered equipment have most of their energy consumption 
occur during periods of peak energy demand. The impacts of these 
equipment on the energy infrastructure can be more pronounced than the 
impacts of equipment with relatively constant demand. Accordingly, DOE 
evaluates the significance of energy savings on a case-by-case basis.
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    \14\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
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    As previously mentioned, the standards are projected to result in 
estimated national energy savings (``NES'') of 1.11 quad full-fuel-
cycle (``FFC''), the equivalent of the primary annual energy use of 7.4 
million homes. Based on these findings, DOE has determined the energy 
savings from the

[[Page 7475]]

standard levels adopted in this final rule are ``significant'' within 
the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of 
the basis for these conclusions is contained in the remainder of this 
document and the accompanying technical support document (``TSD'').

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this final rule, as well as some of the relevant historical 
background related to the establishment of standards for CRE.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. (42 U.S.C. 6291-
6317, as codified) Title III, Part C of EPCA,\15\ added by Public Law 
95-619, Title IV, section 441(a), established the Energy Conservation 
Program for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. (42 U.S.C. 6311-6317) 
EPCA specifies a list of equipment that constitutes covered equipment 
(hereafter referred to as ``covered equipment'').\16\ This equipment 
includes commercial refrigerators, freezers, and refrigerator-freezers, 
the subject of this document. (42 U.S.C. 6311(1)(E))
---------------------------------------------------------------------------

    \15\ As noted previously, for editorial reasons, upon 
codification in the U.S. Code, Part C was redesignated Part A-1.
    \16\ ``Covered equipment'' means one of the following types of 
industrial equipment: Electric motors and pumps; small commercial 
package air-conditioning and heating equipment; large commercial 
package air-conditioning and heating equipment; very large 
commercial package air-conditioning and heating equipment; 
commercial refrigerators, freezers, and refrigerator-freezers; 
automatic commercial ice makers; walk-in coolers and walk-in 
freezers; commercial clothes washers; packaged terminal air 
conditioners and packaged terminal heat pumps; warm air furnaces and 
packaged boilers; and storage water heaters, instantaneous water 
heaters, and unfired hot water storage tanks. (42 U.S.C. 6311(1)(A)-
(K))
---------------------------------------------------------------------------

    The energy conservation program under EPCA consists essentially of 
four parts: (1) testing, (2) labeling, (3) the establishment of Federal 
energy conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 
6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 
6315), energy conservation standards (42 U.S.C. 6313), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6296(a), (b), and (d)).
    Federal energy efficiency requirements for covered equipment 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6316(e)(2)-(3); 42 U.S.C. 6297(a)-(c)) DOE may, however, grant 
waivers of Federal preemption in limited circumstances for particular 
State laws or regulations, in accordance with the procedures and other 
provisions set forth under EPCA. (42 U.S.C. 6316(e)(2)-(3); 42 U.S.C. 
6297(d))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of covered equipment. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) 
Manufacturers of covered equipment must use the Federal test procedures 
as the basis for certifying to DOE that their equipment complies with 
the applicable energy conservation standards and as the basis for any 
representations regarding the energy use or energy efficiency of the 
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s); 42 U.S.C. 
6314(d)). Similarly, DOE must use these test procedures to evaluate 
whether a basic model complies with the applicable energy conservation 
standard(s). (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s)). The DOE test 
procedures for CRE appear at 10 CFR 431, subpart C, appendix B 
(``appendix B'').
    EPCA prescribed energy conservation standards for CRE (42 U.S.C. 
6313(c)) and directs DOE to conduct future rulemakings to determine 
whether to amend these standards. (42 U.S.C. 6313(c)(6)) Not later than 
six years after the issuance of any final rule establishing or amending 
a standard, DOE must publish either a notice of determination 
(``NOPD'') that standards for the equipment do not need to be amended, 
or a NOPR including new proposed energy conservation standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(m)(1)) DOE must make the analysis on which a NOPD or NOPR 
is based publicly available and provide an opportunity for written 
comment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(2)) Not later than 
two years after a NOPR is issued, DOE must publish a final rule 
amending the energy conservation standard for the equipment. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(m)(3)(A))
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered equipment, including CRE. Any new or 
amended standard for covered equipment must be designed to achieve the 
maximum improvement in energy efficiency that the Secretary of Energy 
(``Secretary'') determines is technologically feasible and economically 
justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) Furthermore, 
DOE may not adopt any standard that would not result in the significant 
conservation of energy. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
    Moreover, DOE may not prescribe a standard if: (1) for certain 
equipment, including CRE, no test procedure has been established for 
the product; or (2) DOE determines by rule that the establishment of 
such standard will not result in significant conservation of energy 
(or, for certain products, water), or is not technologically feasible 
or economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)) DOE must make this determination after receiving 
comments on the proposed standard, and by considering, to the greatest 
extent practicable, the following seven statutory factors:

    (1) The economic impact of the standard on manufacturers and 
consumers of the equipment subject to the standard;
    (2) The savings in operating costs throughout the estimated 
average life of the covered equipment in the type (or class) 
compared to any increase in the price, initial charges, or 
maintenance expenses for the covered equipment that are likely to 
result from the standard;
    (3) The total projected amount of energy (or as applicable, 
water) savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 
covered equipment likely to result from the standard;
    (5) The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
standard;
    (6) The need for national energy and water conservation; and
    (7) Other factors the Secretary considers relevant.

(42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing equipment complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(iii))

[[Page 7476]]

    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of covered 
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(1)) Also, the 
Secretary may not prescribe an amended or new standard if interested 
persons have established by a preponderance of the evidence that the 
standard is likely to result in the unavailability in the United States 
in any covered equipment type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for covered equipment that has two or more 
subcategories. A rule prescribing an energy conservation standard for a 
type (or class) of equipment must specify a different standard level 
for a type or class of equipment that has the same function or intended 
use if DOE determines that equipment within such group (A) consumes a 
different kind of energy from that consumed by other covered equipment 
within such type (or class); or (B) has a capacity or other 
performance-related feature which other products within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(1)) In determining 
whether a performance-related feature justifies a different standard 
for a group of equipment, DOE considers such factors as the utility to 
the consumer of such a feature and other factors DOE deems appropriate. 
(Id.) Any rule prescribing such a standard must include an explanation 
of the basis on which such higher or lower level was established. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)(2))
    DOE is publishing this final rule pursuant to the six-year-lookback 
review requirement in EPCA described herein.

B. Background

1. Current Standards
    DOE most recently completed a review of its CRE standards in a 
final rule published in the Federal Register on March 28, 2014 (``March 
2014 Final Rule''), through which DOE prescribed the current energy 
conservation standards for CRE manufactured on and after March 27, 
2017. 79 FR 17725. These standards are set forth in DOE's regulations 
at 10 CFR 431.66(e) and are shown in table II.1.
    For CRE with two or more compartments (i.e., hybrid refrigerators, 
hybrid freezers, hybrid refrigerator-freezers, and non-hybrid 
refrigerator-freezers), 10 CFR 431.66(e)(2) specifies that the maximum 
daily energy consumption for each model shall be the sum of the 
applicable standard for each of the compartments, as specified in 10 
CFR 431.66(e)(1). For wedge cases, 10 CFR 431.66(e)(3) specifies 
instructions to comply with the applicable standards specified in 10 
CFR 431.66(e)(1). Certain exclusions to the standards at 10 CFR 
431.66(e)(1) are specified at 10 CFR 431.66(f).
BILLING CODE 6450-01-P

[[Page 7477]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.098


[[Page 7478]]


BILLING CODE 6450-01-C
2. History of Standards Rulemaking for Commercial Refrigerators, 
Freezers, and Refrigerator-Freezers
    On July 16, 2021, DOE published a request for information (``RFI'') 
in the Federal Register to undertake an early assessment review for 
amended energy conservation standards for CRE to determine whether to 
amend applicable energy conservation standards for this equipment 
(``July 2021 RFI''). 86 FR 37708. Specifically, through the published 
notice and RFI, DOE sought data and information that could enable the 
agency to determine whether amended energy conservation standards 
would: (1) result in a significant savings of energy, (2) be 
technologically feasible, and (3) be economically justified. Id.
    On June 28, 2022, DOE published in the Federal Register a 
notification of the availability of a preliminary TSD for CRE (``June 
2022 Preliminary Analysis''). 87 FR 38296. In that notification, DOE 
sought comment on the analytical framework, models, and tools that DOE 
used to evaluate potential standards for CRE, the results of 
preliminary analyses performed, and the potential energy conservation 
standard levels derived from these analyses, which DOE presented in the 
accompanying preliminary TSD (``June 2022 Preliminary TSD'').\17\ Id. 
DOE held a public meeting related to the June 2022 Preliminary Analysis 
on August 8, 2022.
---------------------------------------------------------------------------

    \17\ The June 2022 Preliminary TSD is available in the docket 
for this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------

    On October 10, 2023, DOE published in the Federal Register a NOPR 
to establish and amend energy conservation standards for CRE (``October 
2023 NOPR''). 88 FR 70196. DOE also sought comment on the analytical 
framework, models, and tools that DOE used to evaluate the proposed 
standards for CRE, the results of the NOPR analyses performed, and the 
proposed new and amended energy conservation standard levels derived 
from these analyses, which DOE presented in the accompanying NOPR TSD 
(``October 2023 NOPR TSD'').\18\ Id. DOE held a public meeting related 
to the October 2023 NOPR on November 7, 2023 (hereafter, the ``November 
2023 Public Meeting'').
---------------------------------------------------------------------------

    \18\ The October 2023 NOPR TSD is available in the docket for 
this rulemaking at www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
---------------------------------------------------------------------------

    DOE received comments in response to the October 2023 NOPR from the 
interested parties listed in table II.2.
BILLING CODE 6450-01-P

[[Page 7479]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.099

BILLING CODE 6450-01-C
    To the extent that interested parties have provided written 
comments that are substantively consistent with any oral comments 
provided during the

[[Page 7480]]

November 2023 Public Meeting, DOE cites the written comments throughout 
this document. Any oral comments provided during the November 2023 
Public Meeting that are not substantively addressed by written comments 
are summarized and cited separately throughout this document.
    On August 28, 2024, DOE published in the Federal Register a notice 
of data availability (``NODA'') to provide updated analytical results 
that reflect updates to the analysis that DOE is considering based on 
feedback received in response to the October 2023 NOPR (``August 2024 
NODA''). 89 FR 68788. DOE also sought comment, data, and information 
regarding the updated analyses. Id.
    DOE received comments in response to the August 2024 NODA from the 
interested parties listed in table II.3.

[[Page 7481]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.100


[[Page 7482]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.101

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\19\
---------------------------------------------------------------------------

    \19\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for CRE. (Docket NO. EERE-2017-BT-STD-
0007, which is maintained at www.regulations.gov). The references 
are arranged as follows: (commenter name, comment docket ID number, 
page of that document).
---------------------------------------------------------------------------

3. Applicability of This Final Rule to Large-Capacity CRE
    As discussed in section I of this document, DOE is establishing and 
amending standards in this final rule for the classes of equipment 
shown in table I.1. This includes all classes of CRE currently subject 
to energy conservation standards, and DOE is additionally establishing 
standards for chef bases or griddle stands. However, DOE is not, at 
this time, amending standards for large-capacity CRE ranges presented 
in table IV. for the VOP.SC.M, SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, 
VCT.SC.L, and VCS.SC.L equipment classes. Large-capacity CRE in these 
classes would remain subject to the current energy conservation 
standards applicable to those classes for which compliance was required 
beginning on March 27, 2017.
    DOE has summarized the comments it received in response to the 
October 2023 NOPR and August 2024 NODA specific to the large-capacity 
analysis as follows. Zero Zone, ASAP et. al., AHRI, and Hussmann 
commented in support of DOE's decision to separate self-contained units 
into two groups, and of DOE's updated assumption that larger self-
contained equipment will use an A2L refrigerant, such as R-454C, when 
the refrigeration cooling load of the case is more than can be achieved 
using an allowable R-290 charge size. (Zero Zone, No. 114 at p. 1, 
(ASAP et al., No. 106 at pp. 1-2, AHRI, No. 104 at p. 9, Hussmann, No. 
108 at p. 3) Hussmann and AHRI additionally agreed with DOE's finding 
that compressors using R-454C and R-455A have performance similar to 
compressors with refrigerants already in use (e.g., R-404A) in larger 
equipment. (Hussmann, No. 108 at p. 3, AHRI, No. 104 at p. 9) 
Hillphoenix agreed with DOE's A2L compressor cost assumptions. 
(Hillphoenix, No. 110 at p. 3). Hussmann, AHRI, and Continental 
disagreed with DOE's A2L compressor cost assumptions and stated that 
the price of an A2L compressor is similar to an R-404A compressor at 
the same cooling capacity. (Hussmann, No. 108 at p. 3; AHRI, No. 104 at 
p. 9; Continental, No. 107 at p. 2). Hussmann and Due North commented 
with concerns that large volume units would be susceptible to 
discontinuation as they face some of the most severe proposed energy 
use reductions. (Hussmann, No. 80 at p. 7, Due North, No. 87, at pp. 1-
2) The CA IOUs recommended that DOE reconsider how it defines `large' 
and `non-large' capacity equipment, and that DOE reconsider its 
assumption that all `large' units will require A2L refrigerants. (CA 
IOUs, No. 113 at p. 4)
    For all comments received in response to the October 2023 NOPR and 
August 2024 NODA, DOE appreciates the comments and continues to analyze 
the large-capacity ranges presented in table IV.5 for the VOP.SC.M, 
SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.L 
equipment classes.
    Further, DOE is not addressing nor discussing any analytical 
methodologies or results for the large-capacity ranges of these 
equipment classes in this document as DOE continues to consider the 
comments submitted in response to the October 2023 NOPR and August 2024 
NODA.

III. General Discussion

    DOE developed this final rule after considering all oral and 
written comments, data, and information from interested parties that 
represent a variety of interests. This document addresses issues raised 
by these commenters.

A. General Comments

    This section summarizes general comments received from interested 
parties regarding rulemaking timing and process.
1. General Support
    In response to the October 2023 NOPR, Ravnitzky, ASAP et al., 
NYSERDA, NEEA and NWPCC, and Killin supported the October 2023 NOPR, 
citing large national energy savings and considerable savings for 
businesses. (Ravnitzky, No. 57 at p. 1; ASAP et al., No. 79 at p. 1; 
NYSERDA, No. 88 at pp. 1-2; NEEA and NWPCC, No. 89 at p. 3; Killin, No. 
59 at p. 1) Ravnitzky commented that the proposed rule would have 
significant environmental and public health benefits and that the net 
economic benefits for consumers and manufacturers would outweigh the 
costs of complying with the proposed rule. (Ravnitzky, No. 57 at p. 1)
    In response to the October 2023 NOPR, Ravnitzky also commented that 
the rule creates a level playing field for manufacturers by harmonizing 
standards across different types and classes of CRE. (Ravnitzky, No. 57 
at p. 1) Ravnitzky urged DOE to finalize and implement the rule as soon 
as possible,

[[Page 7483]]

while also continuing to monitor and evaluate its impacts and outcomes 
and to seek feedback and input from stakeholders and experts. (Id. at 
p. 5)
    In response to the October 2023 NOPR, NEEA and NWPCC supported the 
proposal of TSL 5 as it represents the highest standard level that is 
technically feasible and economically justified and provides a large 
amount of cost-effective energy savings for the Nation. (NEEA and 
NWPCC, No. 89 at p. 3)
    In response to the August 2024 NODA, ASAP et al. supported DOE's 
updates to the analysis presented in the NODA and believe the updated 
analysis provides a strong basis for finalizing amended CRE standards, 
and encourages the adoption of the highest efficiency levels (``ELs'') 
that have positive life-cycle cost savings. (ASAP et al., No. 106 at p. 
1) Based on DOE's updated analysis for the NODA, ASAP et al. estimated 
that amended standards meeting this criteria would yield about 1.5 
quads of energy savings and up to about $4.5 billion in net present 
value savings for purchasers based on DOE's updated analysis for the 
August 2024 NODA. (Id.)
    An anonymous commenter expressed general support for adopting the 
max-tech level. (Anonymous, No. 105 at p. 1)
    Lepak commented in support of the rulemaking because, while it may 
increase costs for consumers, without these regulations innovation 
would not occur and consumers rely on regulations like this one to 
ensure that they have access to quality, energy efficient products. 
(Lepak, No. 116, at p. 1; Lepak, No. 117, at p. 1) Lepak added that 
energy efficiency measures help the county to meet its climate goals. 
(Id.)
2. General Opposition
    DOE also received comments, in response to the October 2023 NOPR 
and the August 2024 NODA, outlining numerous concerns with the proposed 
new and amended energy conservation standards. These included concerns 
about other cumulative regulatory changes the industry is currently 
addressing, including a final rule published by the EPA regarding 
refrigerant prohibitions in certain equipment, leading to requests to 
delay the rulemaking and/or extend the compliance date of the proposed 
standards; questions about the economic justification; technical 
feasibility and cost-effectiveness of the proposed standards; potential 
inaccuracies in the supporting analysis; potential issues regarding 
food safe temperatures; and concerns with certain rulemaking processes, 
including the public comment period. These comments are included and 
discussed throughout section III of this document.
a. Proposed Compliance Date
    In the October 2023 NOPR, DOE estimated the publication of a final 
rule regarding amended energy conservation standards for CRE in the 
second half of 2024; therefore, for purposes of the October 2023 NOPR, 
DOE modeled a 3-year compliance period and 2028 as the first full year 
of compliance with any amended standards, consistent with the 
requirements of EPCA (see 42 U.S.C. 6313(c)(6)(C)(i)). 88 FR 70196, 
70237.
    In response to the October 2023 NOPR, FMI and NACS, NAFEM, ITW, and 
NAMA recommended DOE extend its compliance deadline to 5 years due to 
the requirements of the AIM Act and the significant investment and 
redesign associated with the ongoing EPA rulemakings. (FMI and NACS, 
No. 78 at p. 2; NAFEM, No. 83 at p. 2; ITW, No. 82 at p. 6; NAMA, No. 
85 at p. 34)
    In response to the August 2024 NODA, NAFEM, NAMA, and Hillphoenix 
commented in support of additional time for compliance, and suggested a 
5 year compliance period. (NAFEM, No. 101 at pp. 4-5; NAMA, No. 112 at 
p. 3; Hillphoenix, No. 110 at p. 12) In response to the August 2024 
NODA, Continental stated that adopting standards with a 3 year 
compliance period would force them to exit the market for many 
equipment configurations. (Continental, No. 107 at p. 3) Hoshizaki 
commented that more than 100 of its CRE models would be affected by the 
energy conservation standards proposed in the October 2023 NOPR, and 
corresponding UL safety and NSF sanitation testing will be difficult or 
impossible to complete within the 3-year compliance period. (Hoshizaki, 
No. 76 at pp. 6-7)
    In response to the October 2023 NOPR, NAMA recommended that DOE 
increase the time of compliance to recoup investments and alleviate the 
stress of staffing, supply chain issues, and platform changes to use 
low GWP refrigerants. (Id. at p. 18) NAMA suggested that DOE allow the 
industry 2-3 years after the effective date of EPA's final rule 
published in the Federal Register on October 24, 2023, to address HFCs 
through the AIM Act (``October 2023 EPA Final Rule''; 88 FR 73098) to 
absorb the costs of the refrigerant transition before redesigning their 
products to the next CRE energy conservation standards. (Id. at pp. 19, 
27)
    DOE acknowledges the concerns raised by manufacturers regarding the 
cumulative regulatory burden from the October 2023 EPA Final Rule and 
DOE energy conservation standards rulemakings, which is compounded by 
changes to Underwriters Laboratories (``UL'') safety standards for the 
equipment covered by this rulemaking. DOE notes that it has some 
flexibility under EPCA to delay the effective date of new and amended 
standards: if the Secretary determines that a 3-year period is 
inadequate, the Secretary may establish an effective date that would 
apply to CRE on or after a date that is not later than 5 years after 
the final rule is published in the Federal Register. (See 42 U.S.C. 
6313(c)(6)(C)) Based on stakeholder comments and DOE's assessment of 
the overlapping Federal refrigerant regulations and recent changes to 
UL safety standards for CRE, DOE is extending the compliance period 
from the 3-years analyzed in the October 2023 NOPR (modeled as a 2028 
compliance year) to 4-years (modeled as a 2029 compliance year) for 
this final rule.
    Generally, DOE understands that aligning compliance dates to avoid 
multiple successive redesigns can help to reduce cumulative regulatory 
burden. However, stakeholder comments indicate and make clear that the 
rulemaking timelines and compliance periods for DOE and EPA regulations 
make it challenging to redesign and retest CRE simultaneously to meet 
both the October 2023 EPA Final Rule and new and amended DOE standards. 
As discussed in more detail in section IV.J.3.c of this document, 
manufacturers indicated that testing facilities and engineering 
resources are currently fully consumed by the transition to low-GWP 
refrigerants and new UL safety standards. Many manufacturers expressed 
concern that third-party laboratories already have backlogs and are 
experiencing delays, meaning that requiring new and amended standards 
for CRE within a short time period could exacerbate the issue. DOE has 
determined that a 4-year compliance period to redesign CRE to meet the 
adopted standards will help alleviate manufacturers' concerns about 
engineering and laboratory resource constraints. Furthermore, the 
longer compliance period will help mitigate cumulative regulatory 
burden by allowing manufacturers more flexibility to spread investments 
across 4 years instead of 3 years. Manufacturers will also have more 
time to recoup any investments made to redesign CRE to comply with the 
October 2023 EPA Final Rule as compared to a 3-year compliance period.
    Regarding manufacturers' requests to extend the compliance period 
to 5 years,

[[Page 7484]]

DOE notes that much of the CRE market has already transitioned to low-
GWP refrigerants and the portion of the market that has not 
transitioned will likely complete the conversion to low-GWP 
refrigerants 2 to 4 years prior to when compliance is required for new 
and amended energy conservation standards. Furthermore, as compared to 
the October 2023 NOPR, DOE is adopting generally less stringent 
efficiency levels in this final rule. As such, DOE expects that a 4-
year compliance period (compliance with adopted standards required in 
2029) provides industry sufficient time to redesign CRE to comply with 
new and amended standards.
    In the notice of proposed rulemaking published in the Federal 
Register on December 15, 2022 (``December 2022 EPA NOPR''), EPA 
proposed a January 1, 2025, compliance date for the refrigeration 
categories that apply to CRE. 87 FR 76738, 76773-76774 (Dec. 15, 2022). 
For self-contained CRE, which account for approximately 86 percent of 
industry CRE shipments covered by this final rule, the October 2023 EPA 
Final Rule finalized the compliance date as proposed. 88 FR 73098, 
73150. For remote-condensing CRE, which account for the remaining 14 
percent of industry CRE shipments covered by this final rule, the 
October 2023 EPA Final Rule finalized a compliance date of January 1, 
2026 or January 1, 2027, depending on the category. Id. As discussed in 
the October 2023 EPA Final Rule, EPA considered updates to UL standard 
60335-2-89 and the subsequent incorporation of those updates by 
electing to extend the compliance dates for many subsectors in retail 
food refrigeration, including remote-condensing CRE. However, EPA 
determined that self-contained CRE would not require a delayed 
compliance date because low-GWP refrigerants such as R-290 have been 
used in self-contained CRE applications for years, and, therefore, the 
industry is much further along in the transition to low-GWP 
refrigerants compared to other refrigeration subsectors. Id. at 88 FR 
73154. DOE agrees with EPA and notes that it has observed, and 
manufacturers concur,\20\ that a significant number of CRE models have 
already been transitioned to refrigerants that comply with the October 
2023 EPA Final Rule. For example, 93 percent of CRE models currently 
rated to ENERGY STAR[supreg]'s CRE database use either R-290 or R-
600a.\21\ This is supported by NAFEM members and CRE industry 
statements captured in the comments from NAFEM, which stated that 
``most self-contained CRE today, in the commercial bar space, already 
uses alternate refrigerants, (almost exclusively R-290),'' and ``we 
already made the change to R-290 from R-134a more than 5 years ago.'' 
(NAFEM, No. 83 at pp. 3-5) This demonstrates that data and technology 
are currently known and available for manufacturers to understand 
performance impacts of this refrigerant transition.
---------------------------------------------------------------------------

    \20\ See Storemasters, No. 68 at pp. 1-2.
    \21\ See www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results (last accessed Oct. 
23, 2024).
---------------------------------------------------------------------------

    As previously mentioned, compared to the October 2023 NOPR, DOE is 
adopting generally less stringent efficiency levels (in terms of 
percent energy use below the analyzed baseline) for 22 out of the 28 
directly analyzed equipment classes. DOE notes that there were several 
changes made to the analysis in response to comments and data submitted 
on the October 2023 NOPR and the August 2024 NODA that resulted in DOE 
adopting generally less stringent standards, including but not limited 
to, the updates made to single-speed and variable-speed compressors, 
screening out design options such as evaporator fan controls and 
microchannel condensers, and updated baseline design options. Due to 
these updates and other considerations detailed throughout this final 
rule, DOE is adopting generally less stringent standards than the 
standards proposed in the October 2023 NOPR. As such, DOE expects fewer 
CRE models would require redesign to meet the levels adopted in this 
final rule compared to the levels proposed in the October 2023 NOPR. 
For example, DOE estimated that approximately 11 percent of shipments 
would meet the proposed TSL in the October 2023 NOPR by the analyzed 
compliance date. Comparatively, DOE estimates that approximately 49 
percent of shipments would meet the TSL adopted in this final rule by 
the analyzed compliance date. Furthermore, DOE expects that the 
investment and redesign effort required to meet the adopted standards 
would be lower since fewer models would require redesign at the adopted 
standard level.
    As permitted under EPCA and discussed in the preceding paragraphs, 
DOE is extending the compliance period from the three years analyzed in 
the October 2023 NOPR (modeled as a 2028 compliance year) to four years 
(modeled as a 2029 compliance year) for this final rule. (See 42 U.S.C. 
6313(c)(6)(C))
b. Proposed Standards
    In response to the October 2023 NOPR, FMI and NACS commented that 
the proposed energy conservation standards are neither required nor 
justified under EPCA. (FMI and NACS, No. 78 at p. 2) FMI and NACS 
commented that DOE has not adequately demonstrated that these standards 
would be technologically feasible and cost-effective, adding that, in 
many cases, the proposed standards would require design elements and 
technology that is not economically justified or technically feasible. 
(Id.) FMI and NACS commented that DOE significantly underestimates the 
costs of compliance with the proposed rule and provided an example that 
one FMI member's analysis showed an increased case cost of 20-25 
percent to comply with the proposed rule as well as more difficult and 
costly servicing. (FMI and NACS, No. 78 at p. 4). FMI and NACS 
commented that with more accurate cost and benefit information, it is 
likely that DOE's rebuttable payback period analysis will result in 
much longer payback periods. (Id.)
    In response to the comments from FMI and NACS, DOE notes that for 
the proposed levels in the October 2023 NOPR, the analyzed cost 
increases were consistent with FMI and NACS' comment (i.e., up to the 
20 to 25 percent increase), thus it is not clear that there is a 
disconnect on technologies required to get to the proposed levels. DOE 
further notes that the finalized standard levels presented in this 
final rule (i.e., TSL 3) are generally less stringent and the cost 
increases to attain the finalized levels are less, on average, than the 
levels proposed in the October 2023 NOPR and were determined to be 
cost-effective. DOE further notes that in its analysis, the servicing 
costs were set proportional to the equipment cost (i.e., higher cost 
for more efficient equipment--see section IV.F.5 of this document and 
chapter 8 of the final rule TSD for more details on these costs).
    An anonymous commenter stated that the cost benefits of the October 
2023 NOPR are inflated by the assumption of social and health benefits, 
which are speculative, and added that higher costs from the October 
2023 NOPR will render CRE unaffordable for consumers and industry. 
(Anonymous, No. 73 at p. 1)
    In response to the anonymous commenter, DOE notes that the October 
2023 NOPR stated that the estimated total NPV is provided for 
additional information; however, DOE primarily relies upon the NPV of 
consumer benefits when determining whether a

[[Page 7485]]

proposed standard level is economically justified. See 88 FR 70196, 
70292.
    In response to the August 2024 NODA, Bice commented that she 
opposes the October 2023 NOPR, citing concerns with the multitude of 
proposals being published by the DOE. (Bice, No. 92 at p. 1) Bice 
commented also that these proposals are adding burdensome energy 
conservation standards to products that Americans use on a regular 
basis. (Id.) Bice stated her belief that the proposed standards would 
increase production costs for manufacturers and retail prices for 
consumers and small businesses, costing millions of dollars with few 
long-term benefits. (Id.) Bice commented that past rules published by 
the DOE are an unnecessary overreach of the Federal government, and 
that these regulations limit consumer choice, drive up prices, and 
impose onerous regulations on American manufacturers, many of whom 
being small businesses. (Id.)
    In response to Bice, as discussed in section II.A of this document, 
EPCA authorizes DOE to regulate the energy efficiency of a number of 
consumer products and certain industrial equipment; this equipment 
includes commercial refrigerators, freezers, and refrigerator-freezers. 
(42 U.S.C. 6291-6317, as codified; 42 U.S.C. 6311(1)(E)) EPCA also 
includes a lookback period which directs DOE to conduct future 
rulemakings to determine whether to amend standards not later than six 
years after the issuance of any final rule establishing or amending a 
standard. (42 U.S.C. 6313(c)(6); 42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(m)(1)) DOE notes that as compared to the October 2023 NOPR, DOE is 
extending the compliance period from the three years analyzed in the 
October 2023 NOPR to four years for this final rule, which would allow 
manufacturers an additional year to redesign equipment and comply with 
the new or amended standards. Additionally, as discussed in III.A.2.a 
of this document, DOE is adopting generally less stringent standards 
than what DOE proposed in the October 2023 NOPR. DOE discusses the 
benefits and burdens of each TSL considered in section V.C of this 
document. Regarding the impacts to small businesses, DOE analyzes the 
impacts to small business consumers in section V.B.1.b of this document 
and small business manufacturers in section VI.B of this document.
    In response to the August 2024 NODA, Zycher commented that energy 
savings analyzed as a result of the proposed standards are about 2 
tenths of one percent of the energy consumed in 2023 by the 
residential, commercial, and industrial sectors and are trivial. 
(Zycher, No. 97 at p. 3) Zycher further commented that, accordingly the 
reduction in GHG emissions and resulting decline in global temperatures 
are negligible. (Id. at pp. 3-4)
    In response to Zycher's comment, DOE notes that CRE are one of many 
regulated products and equipment within DOE's authority to set 
efficiency standards, and that the appliance standards program has 
helped the United States avoid 2.6 billion tons of carbon dioxide 
emissions.\22\ Additionally, DOE notes that the energy savings analyzed 
as a result of new and amended standards in this final rule are 
compared to the overall energy use of the CRE market, not the overall 
energy consumed by the residential, commercial, and industrial sectors.
---------------------------------------------------------------------------

    \22\ See www.energy.gov/eere/buildings/about-appliance-and-equipment-standards-program.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR and the August 2024 NODA, 
commenters expressed concern regarding the stringency of proposed 
standards, requesting no-new standards or alternate levels, citing 
technological feasibility, and expressing concern about equipment 
elimination, as discussed in the following sections.
No-New-Standards
    In response to the October 2023 NOPR and August 2024 NODA, 
Storemasters, Kirby, Continental, NAFEM, Hoshizaki, ITW, AHRI, NAMA, 
and Hussmann recommended that DOE issue a no-new-standards rule at this 
time. (Storemasters, No. 68 at p. 2; Kirby, No. 66 at p. 2; 
Continental, No. 86 at p. 7; NAFEM, No. 83 at p. 2; NAFEM, No. 101 at 
p. 5; Hoshizaki, No. 76 at p. 1; ITW, No. 82 at p. 1; AHRI, No. 81 at 
p. 5; NAMA, No. 112 at p. 3; Hussmann, No. 80 at p. 13)
    In response to the August 2024 NODA, Continental stated that while 
the August 2024 NODA revises some analysis and provides support 
documents, it does not provide updated standards levels, and 
Continental could not adequately conclude whether the updated 
determinations are sufficient to establish proposed energy standards 
that are technologically feasible and economically justified. 
(Continental, No. 107 at p. 3) Continental stated its understanding 
that DOE has statutory obligations and a court mandate however requests 
DOE not rush into adopting more stringent standards, and leave new 
energy savings for future rulemakings. (Id.)
    AHRI commented that no significant technologies have been developed 
since 2017 to bring about the additional energy efficiency that DOE 
expects in the October 2023 NOPR. (AHRI, No. 81 at p. 11) AHRI 
commented that a no-new-standards rule would allow time to collect data 
on products in the market, evaluate safety mitigation measures 
associated with the refrigerant transition, reduce the burden on 
manufacturers and end-users, and increase time for product re-design. 
(Id.)
    In response to the October 2023 NOPR, ITW stated that a ``no new 
standards'' decision at this time would give the industry and DOE time 
to work together on analyzing the correct data and new data for the new 
categories for which DOE has proposed energy use multipliers. (ITW, No. 
82 at p. 6)
    In response to the October 2023 NOPR, notwithstanding Hussmann's 
comments regarding both a pause in the rulemaking and timing of the 
rulemaking, Hussmann commented that while it requests that DOE impose 
no new standards, the focus should not be on timing but rather on the 
proposed energy limits themselves being unachievable. (Hussmann, No. 80 
at p. 13)
    Hussmann commented that they are currently amending to the UL/CSA 
60335-1 and 60335-2-89 standards, which consumes laboratory resources, 
space, and time. (Hussmann, No. 108 at p. 2). Hussmann asserted that 
this shift requires new design modifications and the addition of new 
components, which may take 1-3 years of laboratory time to fulfill. 
(Id.) Hussmann stated that this limits their ability to fulfill new DOE 
requirements. (Id.) Hussmann stated that there is significant benefit 
to all stakeholders, the retailers, as well as the consumer to abstain 
from additional DOE energy efficiency regulation at this time. (Id.)
    In response to the August 2024 NODA Zycher commented that the CRE 
standards analyzed in the August 2024 NODA are flawed and should not be 
finalized. (Zycher, No. 97 at p. 10)
    With regard to stakeholders' request for DOE to adopt a ``no-new-
standards'' determination to allow industry additional time to analyze 
data related to the proposed energy use multipliers, DOE notes that 
manufacturers and other commenters were provided with an additional 
opportunity to provide feedback on the updated results presented in the 
August 2024 NODA, which offered manufacturers approximately eight 
months after the October 2023 NOPR comment period ended to analyze data 
related to the proposed energy use multipliers. In response to 
Continental's comment about not having a proposed standard

[[Page 7486]]

level in the August 2024 NODA, DOE notes that while one specific 
standard level was not proposed in the August 2024 NODA, standard 
equations at each efficiency level were presented in the August 2024 
NODA. The August 2024 NODA provided stakeholders an additional 
opportunity to comment on the revisions to the analysis from the 
October 2023 NOPR, and the revised relationships between design, cost, 
and efficiency that were the basis of DOE's analysis leading to the 
standards established and amended in this final rule. Furthermore, EPCA 
specifies that any new or amended energy conservation standard that DOE 
adopts for any type (or class) of covered equipment must be designed to 
achieve the maximum improvement in energy efficiency that the Secretary 
determines is technologically feasible and economically justified. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) As discussed in section V.C 
of this document, DOE has determined that TSL 3 represents the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. However, DOE notes that, as discussed in 
section III.A.2.a of this document, DOE is extending the compliance 
period from the 3-years analyzed in the October 2023 NOPR to 4-years 
for this final rule to mitigate concerns of commenters about cumulative 
regulatory burden and associated engineering and laboratory resource 
constraints, which have been exacerbated by the ongoing refrigerant 
transition in response to the October 2023 EPA Final Rule and updated 
safety standards (e.g., UL 60335-2-89).
Requested Alternate Levels
    In response to the October 2023 NOPR, Continental commented that if 
a no-new-standards determination is not possible, DOE should publish 
new standards levels that align with the ENERGY STAR Product 
Specification for Commercial Refrigerators and Freezers Version 5.0, 
which will provide energy reductions at levels that have been 
substantially evaluated by stakeholders. (Continental, No. 86 at p. 7)
    In response to the October 2023 NOPR and the August 2024 NODA, 
Delfield commented that, while it is reasonable for DOE to push 
regulations toward the ENERGY STAR version 5.0 levels,\23\ in general, 
DOE should limit reductions to no more than 20 percent compared to 2017 
DOE levels. (Delfield, No. 71 at p. 1; Delfield, No. 99 at p. 1)
---------------------------------------------------------------------------

    \23\ Available at: www.energystar.gov/products/spec/commercial_refrigerators_and_freezers_specification_version_5_0_pd 
(last accessed October 3, 2024).
---------------------------------------------------------------------------

    DOE appreciates the feedback from Continental and Delfield, and 
notes that out of the 11 ESTAR equipment classes analyzed in this final 
rule, the amended standards for 8 classes are at similar or less 
stringent levels than ENERGY STAR version 5.0 levels. In addition, in 
this final rule, of the 49 equipment classes analyzed, 28 equipment 
classes did not have greater than 20 percent energy use reduction from 
the current standard, as suggested by Delfield, and 36 equipment 
classes did not have greater than 20 percent energy use reduction from 
the baseline analyzed in this final rule. However, DOE disagrees that 
all equipment classes should align with these comments. All results of 
this analysis are based on DOE's final rule analysis, which shows that 
for 22 equipment classes, energy conservation standards more stringent 
than ENERGY STAR or 20% reduction from the current standard are 
technologically feasible and economically justified. For the full list 
of cost-efficiency results, see chapter 5 of the final rule TSD.
    In response to the August 2024 NODA, the CA IOUs commented that DOE 
should set standards at the highest EL with positive LCC savings for 
all equipment classes for the final rule. (CA IOUs, No. 113 at p. 6)
    As discussed in section III.F of this document, the potential 
impacts to individual consumers such as the changes in LCC and PBP 
associated with new or amended standards is one aspect of the seven 
factors that DOE evaluates when determining whether a potential energy 
conservation standard is economically justified. (42 U.S.C. 6316(e)(1); 
42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) As discussed in section V.C of 
this document, DOE has determined that TSL 3 represents the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. DOE has determined that establishing standards 
at TSL 3 balances the benefits of the energy savings and impacts to 
consumers at TSL 3 with the potential burdens placed on CRE 
manufacturers. DOE notes that at TSL 3, affected purchasers for each 
CRE equipment class experience an average LCC savings ranging from $8 
to $1,868 with a payback period ranging from 0.9 years to 7.0 years. 
Overall, approximately 91 percent of affected CRE purchasers would 
experience a net benefit or not be affected at TSL 3.
Technological Feasibility
    In response to the October 2023 NOPR, Hoshizaki, ITW, SCC, and 
NAFEM commented that the proposal is not technologically feasible or 
economically justified, and that many technologies analyzed are already 
in use. (Hoshizaki, No. 76 at pp. 1, 3; ITW, No. 82 at p. 1; SCC, No. 
74 at p. 1; NAFEM, No. 83 at p. 2)
    Hoshizaki commented that the proposed energy standards would 
require over 30-percent reductions to meet the amended standards--
VCS.SC.M, VCT.SC.M, VCS.SC.L, SOC.SC.M, and classi[filig]cations with 
RT, PT, and RI doors. (Hoshizaki, No. 76 at p. 3)
    In response to the October 2023 NOPR, Due North generally supported 
the October 2023 NOPR but expressed concern regarding the severe 
reductions of the proposed conservation standards to VCT.SC.L, 
VCT.SC.M, VOP.SC.M, VCT.SC.M.PT, and VCT.SC.M.SDPT equipment classes. 
(Due North, No. 87 at pp. 1-2) Due North commented that, based on its 
analysis, the proposed energy conservation standards would reduce the 
current threshold levels for VCT.SC.L by 19 percent, VCT.SC.M by 17-41 
percent, depending on the unit refrigerated volume, and VOP.SC.M by 26 
percent. (Id. at p. 1) Due North stated that these reductions are 
severe and hard to achieve using present energy-saving technologies 
such as variable-speed compressors, electronically commutated fan 
motors, adaptive defrosts, efficient light-emitting diode (``LED'') 
lighting, and smart controls. (Id.)
    In response to the October 2023 NOPR, Hussmann stated that DOE's 
proposed energy limits, that are up to 70 percent less than the current 
DOE standard levels, are unattainable for Hussmann products. (Hussmann, 
No. 80 at p. 6) Hussmann additionally commented that other Hussmann 
models would be required to meet 20-to-40-percent drops in energy 
limits while already using electronically commutated motors (``ECMs''), 
LED lights, and optimized air curtains/doors and insulation, and, in 
the face of these unattainable limits, Hussmann would need to weigh the 
benefits between feasibility, increased cost, development time, and 
consumer interest with the decision to discontinue certain product 
lines entirely. (Id. at pp. 6-7)
    In response to the October 2023 NOPR, Storemasters and FMI and NACS 
stated their concern with the proposed changes set forth in the October 
2023 NOPR on the grounds that DOE has overestimated the energy 
efficiency benefits of its proposed rule because manufacturers may stop 
offering certain cases in order to comply with the proposed standards. 
(Storemasters, No.

[[Page 7487]]

68 at p. 1; FMI and NACS, No. 78 at p. 4).
    In response to the comments from Hoshizaki, ITW, SCC, NAFEM, Due 
North, Hussmann, and FMI and NACS, DOE notes that, in this final rule, 
it updated its October 2023 NOPR engineering analysis based on testing 
conducted, teardowns conducted, and stakeholder feedback received since 
the October 2023 NOPR, including comments received from Hoshizaki, ITW, 
SCC, NAFEM, Due North, Hussmann, and FMI and NACS. Furthermore, as 
compared to the October 2023 NOPR, DOE is adopting generally less 
stringent efficiency levels in this final rule.
    NAFEM indicated its belief that DOE has made high-level changes 
from the October 2023 NOPR to the August 2024 NODA and did not clearly 
explain what changes result from the changes made, and if they resolve 
the issues which were present in the October 2023 NOPR. (NAFEM, No. 101 
at p. 2)
    In response to the comment from NAFEM, DOE notes that the 
engineering changes from the October 2023 NOPR to August 2024 NODA were 
explained in section II.A of the August 2024 NODA and are further 
detailed in section IV.C.1.a.iii of this document. 89 FR 68788, 68790-
68794. For example, in section II.A.3.a of the August 2024 NODA on 
evaporator fan controls, DOE explained that ``recognizing current 
uncertainty as to whether such food safety requirements could be 
maintained in certain applications of self-contained, closed CRE with 
the use of evaporator fan controls, DOE has tentatively screened out 
evaporator fan control as a design option for CRE. As a result, this 
NODA presents an updated engineering analysis that does not include 
evaporator fan control as a design option.'' 89 FR 68788, 68793.
    In this final rule analysis, DOE is adopting TSL 3. DOE discusses 
the benefits and burdens of each TSL considered and DOE's conclusion in 
section V.C of this document. As discussed in that section, TSL 3 
represents the maximum energy savings that are technically feasible and 
economically justified, as required by EPCA.
Food Safety
    In response to the October 2023 NOPR, Hillphoenix, NAMA, and NAFEM 
stated that most CRE are certified to National Sanitation Foundation 
(``NSF'') 7 for food safe storage, which is required by U.S. and 
Canadian food safety standards and local health codes. (Hillphoenix, 
No. 77 at p. 3; NAMA, No. 85 at p. 16; NAFEM, No. 83 at pp. 10-11) ITW 
and NAFEM commented that to meet the energy efficiency standard 
proposed in the October 2023 NOPR, equipment would require design 
downgrades that would make it unable to consistently meet food safety 
standards, in which safe operating temperatures are required to be 
between 33 [deg]F and 40 [deg]F inside the cabinet. (ITW, No. 82 at p. 
6; NAFEM, No. 83 at p. 10) NAMA requested that design options be 
reviewed not only for their efficiency but also for the ability to 
maintain food safe performance. (NAMA, No. 85 at p. 16) ITW added that 
the proposed levels threaten to mandate equipment that cannot keep food 
at safe temperatures. (ITW, No. 82 at p. 1)
    In response to the October 2023 NOPR, FMI and NACS commented that, 
according to their members, the October 2023 NOPR does not evaluate the 
potential impact of the standards on food safety, because CRE that meet 
the proposed standards may be unable to consistently meet the 
refrigeration necessary to meet food safety standards. (FMI and NACS, 
No. 78 at p. 3)
    In response to the October 2023 NOPR, NAFEM commented that DOE's 
proposed energy limits would likely force manufacturers to make the 
choice between a DOE-compliant product with a smaller refrigeration 
system and a product designed with adequate capacity to maintain food 
safety in the many different environmental conditions and general 
product conditions. (NAFEM, No. 83 at p. 11)
    In response to the October 2023 NOPR and the August 2024 NODA, 
Hillphoenix suggested that DOE should categorize different CRE products 
based on the type of product or food displayed, and in the August 2024 
NODA stated that current energy limits for CRE displaying perishable 
food products are too difficult to obtain while meeting NSF 7. 
(Hillphoenix, No. 77 at p. 3 and No. 110 at p. 2) In response to the 
October 2023 NOPR, Hillphoenix also commented that bottle coolers 
operate at warmer temperatures than CRE displaying perishable products, 
in order to maintain product temperatures at 41 [deg]F or less, but 
both have the same energy limits established by a single equipment 
class. (Hillphoenix No. No. 77 at p. 3)
    In response to the October 2023 NOPR, Ravnitzky commented that the 
October 2023 NOPR should consider the impacts of energy efficiency 
standards on food quality and safety and balance the benefits of energy 
savings with the costs of food loss and waste. (Ravnitzky, No. 57 at p. 
3)
    In response to comments about reviewing design options for 
efficiency but also for the ability to maintain food safe performance, 
and accounting for food loss and waste, DOE notes that in this final 
rule, consistent with the August 2024 NODA, DOE screened out evaporator 
fan controls after review of NSF 7 and other public comments stating 
that evaporator fan controls could potentially lead to internal case 
temperatures outside of NSF 7 tolerances, as further discussed in 
section IV.B.1.f. DOE has reviewed all design options analyzed to 
improve efficiency in this final rule and has determined, based on data 
and information available to DOE at the time of this final rule, that 
all other design options analyzed to improve efficiency would not 
affect the ability of CRE equipment to maintain food safe temperatures.
    In response to Hillphoenix's comment regarding categorizing 
different CRE equipment based on the type of product or food displayed, 
DOE notes that the CRE equipment classes do differentiate between 
frozen merchandise (i.e., low-temperature freezers and ice-cream 
freezers) and refrigerated merchandise (i.e., medium-temperature 
refrigerators and high-temperature refrigerators).
    In response to Hillphoenix's comment regarding bottle coolers 
operating at warmer temperatures than CRE displaying perishable 
products, DOE notes that all equipment certified to an equipment class 
must test their equipment according to the rating temperature for that 
equipment class, unless the equipment meets the definition of lowest 
application product temperature. See 10 CFR 431.62.
Equipment Elimination
    In response to the October 2023 NOPR, SCC and NAFEM expressed 
concern that the October 2023 NOPR proposed standard level would force 
manufacturers to discontinue products or exit the CRE space. (SCC, No. 
74 at p. 4; NAFEM, No. 83 at p. 2) NAFEM and Continental added this 
would harm consumers, reduce competition, and may increase energy 
consumption. (NAFEM, No. 83 at p. 2; Continental, No. 86 at p. 6)
    In response to the October 2023 NOPR, Due North commented that it 
still found the energy standards for the VCT.SC.M.PT and VCT.SC.M.SDPT 
classes to be too stringent, given their extensive installation at 
store checkout counters. (Due North, No. 87 at p. 2) Due North called 
this situation a potential threat to the future existence of these 
classes on the market. (Id.)
    With respect to these comments regarding the stringency of the 
proposed standards in the October 2023 NOPR

[[Page 7488]]

and the equipment modifications needed to meet those standards, 
pursuant to EPCA, any new or amended energy conservation standard must 
be designed to achieve the maximum improvement in energy efficiency 
that DOE determines is technologically feasible and economically 
justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A)) In the 
October 2023 NOPR, DOE tentatively determined that TSL 5 represented 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified and to establish new energy 
conservation standards for covered equipment not yet subject to energy 
conservation standards. 88 FR 70196, 70197. In response to the October 
2023 NOPR, DOE received feedback from commenters suggesting changes to 
the October 2023 NOPR analysis. After consideration of this feedback 
and a review of new test data, in this final rule, DOE has adjusted 
certain aspects of the October 2023 NOPR analysis approach. In this 
final rule, DOE is adopting new and amended energy conservation 
standards(i.e., TSL 3) that DOE has determined represent the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified based on the numerous revisions to inputs and 
the analysis, resulting in revised analytical outputs since the October 
2023 NOPR, discussed throughout section IV of this final rule. Further 
detail on changes to the engineering analysis from the October 2023 
NOPR can be found in section IV.C of this document.
    As stated, in the preceding paragraphs, the results presented in 
this final rule are generally less stringent than the standards 
proposed in the October 2023 NOPR. In the October 2023 NOPR, the PT and 
SDPT multiplier values were 1.04 and 1.11 respectively. 88 FR 70196, 
70231. In the August 2024 NODA, DOE analyzed a single multiplier with 
value of 1.07. 89 FR 68788, 68794. In this final rule, consistent with 
the August 2024 NODA, DOE is analyzing equipment classes with features 
that allow for higher energy use. As discussed further in section 
IV.C.1.c of this document, the adjusted maximum daily energy use 
equation for equipment classes with features is equal to 1.07 
multiplied by the corresponding equipment class equation (adjusted for 
backsliding if needed). Although the multiplier analyzed in this final 
rule is less than that in the October 2023 NOPR for the SDPT 
multiplier, at the representative capacity the amended standard for 
VCT.SC.M with feature is 24.8 percent less stringent than the 
VCT.SC.M.PT equation and 18.3 percent less stringent than the 
VCT.SC.M.SDPT equation proposed in the October 2023 NOPR.
    Hussmann commented that, several of its models would be required to 
meet energy levels with energy use reductions up to 40 percent compared 
to 2017 DOE levels, and that Hussmann already put in work to meet the 
2017 limits, limiting its ability to further improve energy 
consumption. (Hussmann, No. 80 at p. 10) Hussmann commented that if 
reduced energy limits reduce door and lighting options available for 
case energy performance, it will delay the conversion and prolong the 
use of open cases using far more energy than saved by tighter limits on 
door cases, leading to the obsolescence of some VCT equipment and 
driving customers to substitute products in the VOP classes that 
consume more energy, and Hussmann provided a table with additional 
detail. (Id. at pp. 10-11) Hussmann commented also that it has been 
continuously innovating for years due to marketplace demand. (Id. at p. 
11) Hussmann pointed to a graph depicting its highest-volume dairy case 
from 1985 to 2023 and indicating that energy consumption has been 
reduced by 46 percent over the time period. (Id. at p. 12)
    In response to the comment from Hussmann regarding door and 
lighting technology, DOE notes that the screening criteria in IV.B of 
this document screens out any technology options that are determined to 
have ``a significant adverse impact on the utility of the equipment to 
subgroups of consumers, or result in the unavailability of any covered 
equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as equipment generally available in the United 
States at the time.'' See section IV.B of this document for more 
details. Further, in response to Hussmann's comment regarding their 
efficiency improvements, DOE notes that the typical new consumer 
refrigerator uses one-quarter the energy than in 1973, despite offering 
20 percent more storage capacity and being available at half the retail 
cost since EPCA was established in 1975, showing that there could be 
more potential savings than already achieved for the example cited by 
Hussmann.\24\
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    \24\ See www.energy.gov/eere/buildings/articles/appliance-and-equipment-standards-fact-sheet.
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    NAMA recommended that DOE champion and celebrate the changes that 
the industry has been making toward energy efficiency and reduce the 
demands to make additional changes. (NAMA, No. 85 at p. 9) NAMA 
commented that manufacturers have made changes that have further-
reaching, more immediate impacts on energy efficiency than the design 
options being shown in the engineering analysis in the October 2023 
NOPR TSD. (Id.) NAMA commented that the industry would appreciate some 
acknowledgement of these improvements over the past 10 years. (Id.)
    Kirby stated that changes made to comply with energy conservation 
standards and low-GWP HFC restrictions that went into effect in 2017 
have led to price increases. (Kirby, No. 66 at pp. 1-2)
    In response to the August 2024 NODA, Storemasters commented that 
equipment manufacturers have already made significant changes to 
equipment to comply with the 2017 standards and much of the current 
equipment incorporates new refrigerants, particularly self-contained 
models that utilize R-290. (Storemasters, No. 68 at p. 1)
    In response to NAMA's, Kirby's, and Storemasters' comments about 
the industry improvements over the past 10 years (i.e., since the 
publication of the March 2014 Final Rule), DOE does acknowledge that in 
response to the March 2014 Final Rule, manufacturers generally made 
several changes: changing from fluorescent to LED lighting; updating 
compressors to either higher efficiency compressors using HFC 
refrigerants, or compressors using hydrocarbon refrigerants; improved 
evaporators and condensers; and, in some cases, higher-efficiency fan 
motors. These changes are acknowledged in the October 2023 NOPR and 
August 2024 NODA as DOE updated the baseline design specifications and 
costs for each ``primary equipment class'' (i.e., directly analyzed 
class, see IV.C.1 for further description) based on test data, 
manufacturer feedback, and publicly available market data (e.g., spec 
sheets). See 88 FR 70196, 70225-70231, 89 FR 68788, 68792.
    Kirby and Storemasters commented that additional equipment 
modifications to meet the proposed standards in the October 2023 NOPR 
would represent a significant burden on their business because of 
increased equipment complexity and costs coupled with the potential for 
reduced equipment reliability, longevity, and consumer choice. (Kirby, 
No. 66 at p. 2, Storemasters, No. 68 at p. 1)

[[Page 7489]]

Storemasters also stated that the new CRE it purchases includes 
significant changes over the past 6 years to comply with the 2017 
standards and low-GWP HFC restrictions. (Storemasters, No. 68 at p. 1)
    An individual commenter further expressed concern with the new 
technologies, stating components necessary to achieve the proposed 
standards add cost, complexity to the designs, and result in limiting 
availability and extended lead times. (Individual Commenter, No. 70 at 
p.1)
    In response to the comments from Kirby and Storemasters, DOE notes 
that the commenters did not specify what design options may reduce 
equipment reliability. DOE screens out technology options that would 
result in the unavailability of any covered equipment type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as equipment 
generally available in the United States at the time.
    In response to the comments from Kirby, Storemasters, and an 
individual commenter regarding the potential for reduced equipment 
longevity and consumer choice due to increased complexity, DOE is not 
aware of any data on how the analyzed design options affect equipment 
lifetime and consumer choice for consumers. See section IV.B of this 
document for additional information on the screening analysis and 
section IV.F.6 for a discussion on CRE lifetime.
    In response to the individual commenter regarding limiting 
availability and extended lead times, DOE notes that the screening 
analysis screens out any technology options that result in the 
unavailability of any covered equipment type with performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as equipment generally 
available in the United States at the time. See section IV.B of this 
final rule.
c. Rulemaking Process
    In response to the October 2023 NOPR, NAMA commented that while it 
appreciates DOE's willingness to schedule face-to-face meetings on 
these important rulemakings, questions posed by industry 
representatives during the November 2023 Public Meeting went largely 
unanswered by DOE and DOE consultants beyond providing information 
already provided in the October 2023 NOPR TSD or the October 2023 NOPR. 
(NAMA, No. 85 at p. 4) NAMA further commented that when industry 
broached many of these issues at the November 2023 Public Meeting, DOE 
read prepared answers but did not answer the original questions. (Id.)
    NAMA stated that there does not appear to have been any contact 
between DOE consultants and its manufacturing members. (Id. at p. 6) 
NAMA commented that there are no records of manufacturer interviews, no 
record of emails exchanged, and no attempts made to contact these 
companies. (Id.) NAMA commented also that if DOE had conferred with 
manufacturers, it is more likely that the information in the October 
2023 NOPR TSD would be closer to accurate information and more 
reflective of today's market. (Id at p. 6)
    Hussmann recommended that, in future rulemakings, DOE engage 
manufacturers, component suppliers, retailers, and other stakeholders 
early in the process, because Hussmann alleged their equipment has 
already implemented available technologies, which yielded slight 
returns in energy savings with excessive cost. (Hussmann, No. 80 at p. 
15)
    In response to the August 2024 NODA, NAMA added that DOE turned 
down its offer to work with them and DOE did not substantially change 
the NODA support document based on NAMA's comments on the October 2023 
NOPR TSD. (NAMA, No. 112 at p. 3, 7)
    In response to the comment from NAMA about the November 2023 Public 
Meeting, DOE responded to all questions asked during the November 2023 
Public Meeting to the best of its ability. (See November 2023 Public 
Meeting Transcript, No. 64). In response to the comment from NAMA 
regarding contact with its manufacturing members and the comment from 
Hussmann about engaging manufacturers, as stated in the October 2023 
NOPR, DOE's contractors reached out to a range of representative 
manufacturers and conducted formal manufacturer interviews with nine 
manufacturers (representing approximately 60 percent of industry CRE 
shipments) in advance of the October 2023 NOPR. 88 FR 70196, 70251. 
During that process, DOE's contractors reached out to NAMA to inquire 
about its members' interest in participating in formal manufacturer 
interviews under a nondisclosure agreement but did not receive a 
response from NAMA. After the October 2023 NOPR was published, DOE held 
the November 2023 Public Meeting to receive comment on the standards 
proposed in the October 2023 NOPR and associated analyses and results. 
DOE has engaged with manufacturers through the rulemaking process, 
including hosting two Ex Parte meetings with AHRI, NAMA, and NAFEM; the 
first on Friday, January 27, 2023,\25\ and the second on Monday, 
September 16, 2024,\26\ and the October 2023 NOPR, the November 2023 
Public Meeting, and the August 2024 NODA provided opportunity for NAMA 
and its members to provide comment, data, and information on the 
proposals and supporting analyses.
---------------------------------------------------------------------------

    \25\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
    \26\ See www.energy.gov/gc/ex-parte-communications.
---------------------------------------------------------------------------

    The CA IOUs recommended that DOE consider an informal or 
abbreviated negotiation to maximize energy savings for this rulemaking. 
(CA IOUs, No. 84 at pp. 6-7) The CA IOUs commented that they will 
support this rulemaking process by submitting test data for chef bases 
or griddle stands and high-efficiency, vertical, self-contained 
equipment in early 2024 and that the CA IOUs plan to send test results 
for prep tables to help DOE establish energy conservation standards for 
this equipment class in future rulemakings. (Id. at p. 7) In the 
November 2023 Public Meeting, Continental and NAFEM recommended that 
there be continued dialogue between DOE and stakeholders concerning 
energy efficiency standards for CRE. (November 2023 Public Meeting 
Transcript, No. 64 at pp. 150, 152) Hoshizaki similarly requested 
negotiations with DOE to find realistic energy savings for this 
rulemaking. (Id. at p. 21)
    In response to the comments from the CA IOUs, Continental, NAFEM, 
and Hoshizaki, DOE appreciates the recommendation but has not pursued a 
negotiation for this rulemaking. Additionally, DOE welcomes test data 
for any equipment category, including chef bases or griddle stands; 
buffet tables or preparation tables; or high-efficiency, vertical, 
self-contained equipment, submitted by the CA IOUs or any other 
stakeholder for consideration in future rulemakings.
    Continental commented that the proposed rulemaking will have a 
major impact on its business and pointed out that section 3(a) of 10 
CFR part 430, subpart C, appendix A (``Process Rule'') specifies a 75-
day comment period while DOE is providing only 60 days--which is 
insufficient for a small business like Continental to review the 
October 2023 NOPR, the 567-page October 2023 NOPR TSD, and the many 
other supporting documents. (Continental, No. 86 at pp. 1-2) 
Continental commented also that DOE deviated from the requirement in 
the Process Rule that the amended test

[[Page 7490]]

procedures be finalized at least 180 days prior to the close of the 
comment period for the October 2023 NOPR, instead providing an interval 
of 76 days for review and evaluation prior to the deadline of the 
comment period, which Continental stated is insufficient. (Id. at pp. 
2-3)
    In response to the comment from Continental, DOE notes that the 
current Process Rule at Section 6(b)(2) specifies that there will be 
not less than 60 days for public comment on the NOPR, which is 
consistent with the comment period in the October 2023 NOPR. This 60-
day period is also consistent with EPCA requirements. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(p)). Further, the October 2023 NOPR stated 
that given that the analysis presented in the NOPR remained largely the 
same as the June 2022 Preliminary Analysis, and in light of the 45-day 
comment period DOE had already provided with the July 2021 RFI and the 
60-day comment period DOE had already provided with its June 2022 
Preliminary Analysis, DOE determined that a 60-day comment period was 
appropriate and provided interested parties with a meaningful 
opportunity to comment on the proposed rule. 88 FR 70196, 70205. DOE 
appreciates the considerable volume of comments and information it 
received in response to the October 2023 NOPR and the August 2024 NODA, 
which contributed to significant revisions to the final rule analysis 
and aided in DOE's ability to establish efficiency levels that would be 
technologically feasible and economically justified.
    DOE also notes that, in the October 2023 NOPR, DOE initially 
determined that the requirement that the amended test procedures be 
finalized at least 180 days prior to the close of the comment period 
for the October 2023 NOPR was sufficiently met because, for the 
equipment whose measured energy use was impacted by the CRE test 
procedure final rule (``September 2023 Test Procedure Final Rule''; 88 
FR 66152 (Sept. 26, 2023)), the CRE industry has thoroughly vetted both 
Air Conditioning, Heating, and Refrigeration Institute (``AHRI'') 1200-
2023 and the proposed addendum B to American Society of Heating, 
Refrigerating and Air-Conditioning Engineers (``ASHRAE'') 72-2022. Id. 
at 88 FR 70205. Additionally, DOE believes that stakeholders have had 
sufficient time for review and evaluation of the September 2023 Test 
Procedure Final Rule, especially because commenters had an additional 
opportunity to provide comment on this rulemaking through the August 
2024 NODA, which was published more than 180 days after the publication 
of the September 2023 Test Procedure Final Rule.
Rulemaking Timeline
    In response to the October 2023 NOPR, ITW commented that if DOE 
cannot issue a ``no new standards'' ruling, DOE should extend the 
review period by 1 year to allow for sufficient time for manufacturers 
to conduct verification tests to validate the proposed energy standards 
for the various new equipment categories with different door 
characteristics and to provide informed comments to DOE. (ITW, No. 82 
at p. 2)
    Hussmann, Hillphoenix, NAFEM, FMI and NACS, and Hoshizaki requested 
a pause in DOE rulemakings due to the requirements of the AIM act and 
other new regulations (Hussmann, No. 80 at p. 1; Hillphoenix, No. 77 at 
p. 2; NAFEM, No. 83 at p. 26; FMI and NACS, No. 78 at pp. 2-3; 
Hoshizaki, No. 76 at p. 1) In response to the August 2024 NODA, 
Hillphoenix commented requesting a pause in rulemakings for CRE given 
the ongoing efforts to transition to new refrigerants, pursuant to the 
AIM Act. (Hillphoenix, No. 110 at p. 2) In response to the October 2023 
NOPR, Hoshizaki, SCC, AHRI, ITW, NAFEM, and Hussmann commented that a 
delay in the rulemaking would allow additional time for manufacturers 
to complete the transition to low-GWP refrigerants (Hoshizaki, No. 76 
at pp. 1-2, 7; SCC, No. 74 at p. 2; AHRI, No. 81 at p. 5; ITW, No. 82 
at p. 1; NAFEM, No. 83 at p. 26; Hussmann, No. 80 at pp. 6-7, 10)
    In response to comments requesting that DOE pause or delay the 
rulemaking, DOE is statutorily required to publish either a NOPD, if it 
finds that standards for the equipment do not need to be amended, or a 
NOPR including new proposed energy conservation standards not later 
than 6 years after the issuance of any final rule establishing or 
amending a standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(1)) Not 
later than two years after a NOPR is issued, DOE must publish a final 
rule amending the energy conservation standard for the equipment. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(m)(3)(A)) The final rule that amended 
the current standards for CRE was issued in 2014. DOE is conducting 
this rulemaking pursuant to these statutory requirements. Additionally, 
pursuant to a consent decree entered on September 20, 2022 and amended 
on September 25, 2024, DOE has agreed to sign and post on DOE's 
publicly accessible website a rulemaking document for CRE by December 
30, 2024, that, when effective, would be DOE's final agency action for 
standards for CRE.\27\ Regarding delaying compliance due to the 
transition to low-GWP refrigerants, see sections III.A.2.a and IV.J.3.f 
of this document.
---------------------------------------------------------------------------

    \27\ Consent Decree, Nat. Res. Def. Council, Inc. v. Granholm, 
No. 1:20-cv-09127 (S.D.N.Y.), Sept. 20, 2022).), Amend. Consent 
Decree, State of N.Y. v. Granholm, No. 1:20-cv-09362 (S.D.N.Y. Sept. 
25, 2024). See www.nrdc.org/sites/default/files/ee-standards-settlement-20220920.pdf. September 25, 2024 amendment available at 
ecf.nysd.uscourts.gov/doc1/127136202802.
---------------------------------------------------------------------------

    In response to the August 2024 NODA, GAAS, NAMA, and Zero Zone 
commented that DOE did not allow sufficient time to review the 
documents, with an updated support document version published 10 days 
before the end of the comment period. (GAAS, No. 96 at p. 2; NAMA, No. 
112 at p. 3; Zero Zone, No. 114 at p. 1) Zero Zone also commented that 
DOE should have made a comparison of changes between the October 2023 
NOPR TSD and NODA support document. (Zero Zone, No. 114 at p.1)
    In response to these comments, DOE notes that updates to the NODA 
support document were minor clarifications, and all changes were 
detailed under ``Revision History'' in Section 8. With regards to Zero 
Zone's request for a list of changes, DOE detailed any changes from the 
October 2023 NOPR throughout the August 2024 NODA.

B. Scope of Coverage

    This final rule covers the commercial refrigeration equipment that 
meet the definition of ``commercial refrigerators, freezers, and 
refrigerator-freezers,'' as codified at 10 CFR 431.62.
    ``Commercial refrigerators, freezers, and refrigerator-freezers'' 
means refrigeration equipment that: (1) is not consumer equipment (as 
defined in section 430.2 of part 430); (2) is not designed and marketed 
exclusively for medical, scientific, or research purposes; (3) operates 
at a chilled, frozen, combination chilled and frozen, or variable 
temperature; (4) displays or stores merchandise and other perishable 
materials horizontally, semi-vertically, or vertically; (5) has 
transparent or solid doors, sliding or hinged doors, a combination of 
hinged, sliding, transparent, or solid doors, or no doors; (6) is 
designed for pull-down temperature applications or holding temperature 
applications; and (7) is connected to a self-contained condensing unit 
or to a remote condensing unit. 10 CFR 431.62.
    In the October 2023 NOPR, DOE proposed establishing equipment 
classes for high-temperature refrigerators and chef bases or griddle 
stands. 88 FR 70196, 70214-70215. DOE

[[Page 7491]]

received several comments in response to the October 2023 NOPR 
regarding this proposal.
    In response to the October 2023 NOPR, NYSERDA and NEEA and NWPCC 
supported DOE's addition of chef bases and high-temperature 
refrigerators to the scope of coverage for the CRE energy conservation 
standards, agreeing with DOE's assertion that there are technically 
feasible opportunities for significant cost-effective energy savings 
from these categories. (NYSERDA, No. 88 at p. 1; NEEA and NWPCC, No. 89 
at pp. 4-5)
    In response to the October 2023 NOPR, Continental disagreed with 
DOE's proposal to include standards for refrigerated chef bases and 
griddle stands at this time. (Continental, No. 86 at p. 2) Continental 
commented that while it concurred with this decision in the September 
2023 Test Procedure Final Rule to prescribe new test conditions for 
refrigerated chef bases and griddle stands, actual testing has not been 
conducted to form a basis for establishing standards efficiency levels 
at the mandated conditions. (Id. at pp. 2-3)
    In response to the comment from Continental comment about lack of 
test data, as discussed in section IV.C.1.c of this document, DOE has 
tested chef bases or griddle stands per the amended test procedure 
prescribed by the September 2023 Test Procedure Final Rule. In 
addition, manufacturers have had additional time to test chef bases and 
submit data since the publication of the October 2023 NOPR, and the 
August 2024 NODA provided additional opportunity to comment on the chef 
base or griddle stand analysis. For example, the CA IOUs commented on 
the August 2024 NODA stating that they conducted testing on CRE units, 
including chef bases or griddle stands. (The CA IOUs, No. 113, at p. 
2). The CA IOUs tested 15 vertical solid door units (9 VCS.SC.M, 6 
VCS.SC.L) and 5 chef bases or griddle stands (3 CB.SC.M, 2 CB.SC.L) to 
evaluate daily energy consumption and performance. Id. The CA IOUs 
commented that with DOE's test data published in the August 2024 NODA, 
the CA IOUs can confirm that the daily energy consumption values for 
the units they tested are consistent with DOE's data, and that the CA 
IOUs plan to share anonymized test results with the public once the CA 
IOUs finalize their test report. Id.
    Therefore, DOE continues to include high-temperature refrigerators 
and chef bases and griddle stands within the scope of this final rule.
    However, the scope of this final rule does not include some types 
of commercial refrigerators, refrigerator-freezers, and freezers that 
meet the definition at 10 CFR 431.62. These include blast chillers, 
blast freezers, buffet tables or preparation tables, mobile 
refrigerated cabinets, refrigerated bottled- or canned-beverage vending 
machines, and, as discussed in section II.B.3 of this document, the 
large-capacity CRE ranges presented in table IV.6 for the VOP.SC.M, 
SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and VCS.SC.L 
equipment classes.
    See section IV.A.1 of this document for discussion of the equipment 
classes analyzed in this final rule.

C. Test Procedure

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) 
Manufacturers of covered equipment must use these test procedures as 
the basis for certifying to DOE that their product complies with the 
applicable energy conservation standards and as the basis for any 
representations regarding the energy use or energy efficiency of the 
equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(s); and 42 U.S.C. 
6314(d)). Similarly, DOE must use these test procedures to evaluate 
whether a basic model complies with the applicable energy conservation 
standard(s). 10 CFR 429.110(e). The current test procedure for CRE is 
codified at appendix B and includes provisions for determining daily 
energy consumption, the metric on which current standards are based. 10 
CFR 431.66(e) This test procedure was amended in the September 2023 
Test Procedure Final Rule, in which DOE amended and established test 
procedures for CRE as follows:

    (1) Established new definitions for high-temperature 
refrigerator, medium-temperature refrigerator, low-temperature 
freezer, and mobile refrigerated cabinet, and amended the definition 
for ice-cream freezer;
    (2) Incorporated by reference the most current versions of 
industry standards AHRI 1200, ASHRAE 72, and AHRI 1320;
    (3) Established definitions and a new appendix C including test 
procedures for buffet tables and preparation tables;
    (4) Established definitions and a new appendix D including test 
procedures for blast chillers and blast freezers;
    (5) Amended the definition and certain test conditions for chef 
bases or griddle stands;
    (6) Specified refrigerant conditions for CRE that use R-744;
    (7) Allowed for certification of compartment volumes based on 
computer-aided design (``CAD'') models;
    (8) Incorporated provisions for defrosts and customer order 
storage cabinets specified in waivers and interim waivers;
    (9) Adopted product-specific enforcement provisions;
    (10) Clarified use of the lowest application product temperature 
(``LAPT'') provisions;
    (11) Removed the obsolete test procedure in appendix A; and
    (12) Specified a sampling plan for volume and total display area 
(``TDA'').
88 FR 66152, 66154.

    In response to the October 2023 NOPR, Ravnitzky commented that the 
proposed rule lacks clear and detailed guidance on the test conditions 
and procedures for measuring energy consumption in CRE that use 
alternative refrigerants, such as hydrocarbons or CO2. 
(Ravnitzky, No. 57 at pp. 1-2) Ravnitzky added that these alternative 
refrigerants have different performance characteristics than 
conventional HFC refrigerants and may require different test methods to 
ensure accurate and consistent results. (Id. at p. 2) Ravnitzky 
suggested that DOE specify or reference the test conditions and 
procedures for measuring the energy consumption of CRE that use 
alternative refrigerants, and that these should be consistent with 
ASHRAE or AHRI standards or best practices for testing CRE. (Id.)
    In response to the comment from Ravnitzky, the DOE CRE test 
procedure for CRE currently subject to energy conservation standards at 
10 CFR 431.66(e) is located at appendix B and is applicable to CRE 
using any type of refrigerant. DOE notes that, consistent with ASHRAE 
72-2022 with Errata, testing for self-contained equipment with 
hydrocarbon refrigerants (e.g., R-290), CO2 refrigerant 
(i.e., R-744), or A2L refrigerants does not require a different test 
method than for self-contained equipment using conventional 
refrigerants. In appendix B, DOE provides specific instructions for CRE 
connected to a direct-expansion remote-condensing unit with R-744, 
which requires different liquid refrigerant measurements than direct-
expansion remote-condensing units specified in appendix A to ASHRAE 72-
2022 with Errata. Therefore, the appendix B is applicable to CRE using 
any type of refrigerant and is consistent with industry standards.
    NEEA and NWPCC expressed concern that the October 2023 NOPR misses 
savings opportunities for the remote condensing equipment classes. 
(NEEA and NWPCC, No. 89 at p. 4) Specifically, NEEA and NWPCC 
recommended that remote condenser energy be accounted for in the 
testing and rating of CRE so that these energy-saving features can be 
assessed in the

[[Page 7492]]

energy use analysis. (Id.).\28\ NEEA and NWPCC explained that DOE's 
present analysis does not test the remote condenser; therefore, the 
energy-saving design options that impact the consumption of the remote 
condenser do not impact the tested rating. (Id.) NEEA and NWPCC 
commented that this approach fails to consider efficiency options such 
as ECMs, evaporator fans, variable-speed compressors (``VSCs''), or 
controls for remote condensing CRE--all of which create opportunities 
for significant energy savings. (Id.)
---------------------------------------------------------------------------

    \28\ Remote condenser energy use is addressed in the current 
test procedure with standardized EER values rather than direct 
measurement of remote condenser performance. See section 5.1 of AHRI 
1200-2023.
---------------------------------------------------------------------------

    In response to the comment from NEEA and NWPCC, the definition of 
``commercial refrigerator, freezer, and refrigerator-freezer'' was 
established in EPCA. See 42 U.S.C. 6311(9)(A). The definition requires 
that the refrigeration equipment is connected to a self-contained 
condensing unit or to a remote condensing unit. The self-contained 
condensing unit is defined as an integral part of the refrigerated 
equipment, whereas the remote condensing unit is defined as being 
remotely located from the refrigerated equipment. Based on these 
definitions, the remote condensing unit energy use is currently 
accounted for by the DOE test procedure through a calculation approach 
specified in section 5.1 of AHRI 1200-2023, which is incorporated by 
reference in the DOE test procedure at appendix B. In the September 
2023 Test Procedure Final Rule, DOE stated it is aware of remote 
condensing CRE models for which specific dedicated condensing units are 
intended for use with specific refrigerated cases. 88 FR 66152, 66205. 
For CRE used with dedicated condensing units, the actual compressor 
used during normal operation is known (i.e., the compressor in the 
dedicated condensing unit). Id. Accordingly, testing the whole system 
using the same approach as required for a self-contained CRE unit may 
produce energy use results that are more representative of how this 
equipment actually operates in the field. Id. DOE understands that 
remote CRE are most commonly installed with rack condensing systems, 
and that installations with dedicated condensing units represent a very 
small portion of the remote CRE market. Id. DOE is not aware of any 
remote CRE that are capable of installations only with a dedicated 
remote condensing unit (i.e., DOE expects that all remote CRE may be 
installed with rack condensing systems). Id. In the June 2022 NOPR, DOE 
requested comment on its tentative determination not to propose amended 
test procedures for dedicated remote condensing units. Id. DOE only 
received comments agreeing with the June 2022 NOPR approach and DOE 
determined not to adopt test provisions for dedicated remote condensing 
units at this time. Id.
    In response to the October 2023 NOPR, Continental commented that 
designing commercial refrigerators and freezers with technology options 
to meet energy limits in 75 [deg]F/55-percent relative humidity 
(``RH'') ambient conditions has shown to cause performance issues when 
these technologies are employed in real-world commercial kitchen 
conditions. (Continental, No. 86 at p. 3)
    In response to the August 2024 NODA, Continental disagreed with DOE 
establishing test procedures and efficiency standards for commercial 
refrigerators and freezers using ambient testing conditions of 75 
[deg]F/55 percent RH, stating that these conditions do not correspond 
with energy consumption during a representative average use period as 
required by EPCA. (Continental, No. 107 at p. 2)
    In response to the October 2023 NOPR and August 2024 NODA, Delfield 
disagreed with the 86 [deg]F test ambient criteria for chef bases/
griddle stands because it conflicts with the recently established 
Energy Star requirement, creating additional burden for manufacturers 
by requiring different test rooms from other equipment that is tested 
at 75/55 percent, and because it creates confusion for end-users when 
comparing energy consumption between unit types. (Delfield, No. 71, p. 
1; Delfield, No. 99 at p. 2) Delfield added that 75/55 percent has been 
the primary ambient condition for CRE for around 40 years so they do 
not see a reason that this should change. (Id.) Delfield requested that 
DOE review this change and align with Energy Star version 5 regulations 
for ambient conditions and energy usage. (Id. at pp. 2-3)
    In response to the comments from Continental and Delfield, the test 
procedure for equipment included in the scope of this rulemaking is 
prescribed at 10 CFR 431.64 and appendix B, and was finalized in the 
September 2023 Test Procedure Final Rule. As part of the test procedure 
rulemaking process, DOE provided stakeholders opportunity to comment on 
potential test procedure amendments, including on test conditions such 
as ambient temperature and humidity for testing. The September 2023 
Test Procedure Final Rule provides discussion of its deliberations in 
finalizing test procedures, for example regarding test ambient 
conditions for chef bases in section III.C.4 of the September 2023 Test 
Procedure Final Rule. See 88 FR 66152, 66203 (Sept. 26, 2023). DOE 
notes that the September 2023 Test Procedure Final Rule is consistent 
with the proposed addendum B to ASHRAE 72-2022,\29\ which proposes the 
same test conditions for chef bases or griddle stands as in the DOE 
test procedure. In response to the comment from Delfield regarding end 
users' comparisons of products, DOE noted in the September 2023 Test 
Procedure Final Rule that manufacturers may not offer CRE in a 
different CRE equipment class with similar designs to any chef base or 
griddle stand, in which case end-users are likely concerned primarily 
about comparing chef bases or griddle stands to each other at the same 
ambient conditions. 88 FR 66152, 66200.
---------------------------------------------------------------------------

    \29\ See www.ashrae.org/file%20library/technical%20resources/standards%20and%20guidelines/standards%20addenda/72_2022_b_20240830.pdf.
---------------------------------------------------------------------------

    Hoshizaki and AHRI disagreed that the DOE test procedure for 
refrigerated buffet and preparation tables was a valid test procedure. 
(Hoshizaki, No. 76 at p. 2; AHRI, No 81 at p.6) Hoshizaki encouraged 
DOE to work with industry to make ASTM F2143, which is currently under 
review for final changes and votes, a valid test procedure with changes 
DOE requests. (Hoshizaki, No. 76 at p. 2)
    In response to Hoshizaki and AHRI, DOE notes that the DOE test 
procedure for refrigerated buffet and preparation tables, located at 
appendix C to subpart C of part 431, already references the latest 
version of ASTM F2143 as one of several references for the test 
procedure for refrigerated buffet and preparation tables. As noted in 
the September 2023 Test Procedure Final Rule, DOE evaluated ASTM F2143-
16 and identified the need for additional provisions or alternate 
requirements. 88 FR 66152, 66175. DOE noted that NSF 7 is intended to 
ensure refrigerating performance and food safety, not energy use; while 
ASTM F2143-16 was developed to evaluate energy performance, and with 
the additional requirements established in the September 2023 Test 
Procedure Final Rule, DOE determined that referencing ASTM F2143-16 is 
appropriate and meets the EPCA requirements. Id. DOE will consider any 
updates to industry test standards that are currently incorporated by 
reference, as well as any potential new industry test

[[Page 7493]]

standards relevant to refrigerated buffet and preparation tables in 
future test procedure rulemakings.
    See section IV.A.1.c for additional comments and responses on 
refrigerated buffet or preparation tables and blast chillers and 
freezers.
    ITW and NAFEM also commented that DOE's current test procedure 
tests CRE in given ambient temperature, humidity, and door opening 
conditions that fall short of actual field conditions. (ITW, No. 82 at 
p. 6; NAFEM, No. 83 at pp. 10-11) ITW and NAFEM commented that the 
total door-open time that the ASHRAE 72 test calls for amounts to 0.6 
percent of a commercial refrigerator's operating day, whereas based on 
its empirical application data, a reach-in refrigerator in a 24-hour 
quick-service restaurant kitchen is open nearly 25 percent of the time, 
and a freezer is open nearly 12 percent of the time. (ITW, No. 82 at p. 
6; NAFEM, No. 83 at p. 10) NAFEM also commented that most CRE are 
certified to NSF 7 for food storage, which requires passing a test at 
100 [deg]F. (NAFEM, No. 83 at p. 10) ITW commented that quickly 
restoring safe operating temperatures inside the cabinet requires a 
sizable refrigeration system and, unfortunately, this workload requires 
more electricity than the proposed regulations would allow. (ITW, No. 
82 at p. 6) NAFEM stated that CRE must be designed with enough capacity 
to meet both NSF and customers' requirements, meaning large enough 
refrigeration systems to operate in these environments. (NAFEM, No. 83 
at p. 11) NAFEM commented that CRE may not be able to keep potentially 
hazardous food products at safe temperatures when conditions are 
unfavorable under the proposed standards. (Id.)
    In response to ITW and NAFEM's comments on the DOE test procedure 
not aligning with field conditions, EPCA sets forth the criteria and 
procedures DOE must follow when prescribing or amending test procedures 
for covered equipment. 42 U.S.C. 6314. EPCA requires that any test 
procedures prescribed or amended under this section must be reasonably 
designed to produce test results which reflect energy efficiency, 
energy use, or estimated annual operating cost of a given type of 
covered equipment during a representative average use cycle, and 
requires that test procedures not be unduly burdensome to conduct. (42 
U.S.C. 6314(a)(2)). With respect to CRE, EPCA requires DOE to use the 
test procedures determined by the Secretary to be generally accepted 
industry standards, or industry standards developed or recognized by 
the American Society of Heating, Refrigerating, and Air-Conditioning 
Engineers (``ASHRAE'') or American National Standards Institute 
(``ANSI''). (42 U.S.C. 6314(a)(6)(A)(i)) With regard to self-contained 
CRE to which statutory standards are applicable, the required initial 
test procedure is the ASHRAE 117 test procedure in effect on January 1, 
2005. (42 U.S.C. 6314(a)(6)(A)(ii)) Additionally, EPCA requires that if 
ASHRAE 117 is amended, the Secretary shall, by rule, amend the test 
procedure for the product as necessary to ensure that the test 
procedure is consistent with the amended ASHRAE 117 test procedure, 
unless the Secretary makes a determination, by rule, and supported by 
clear and convincing evidence, that to do so would not meet the 
statutory requirements regarding representativeness and burden. (42 
U.S.C. 6314(a)(6)(E)) Finally, EPCA states that if a test procedure 
other than the ASHRAE 117 test procedure is approved by ANSI, DOE must 
review the relative strengths and weaknesses of the new test procedure 
relative to the ASHRAE 117 test procedure and adopt one new test 
procedure for use in the standards program. (42 U.S.C. 
6314(a)(6)(F)(i)) In the September 2023 Test Procedure Final Rule, DOE 
determined that the amended DOE test procedure, by reference to AHRI 
1200-2023 and ASHRAE 72-2022 with Errata for conventional CRE, provides 
a measure of energy use of CRE during a representative average use 
cycle and is not unduly burdensome to conduct. 88 FR 66152, 66205. DOE 
notes that the test procedure instructions in section 2.3 of appendix B 
allow for the use of integrated average temperatures and ambient 
conditions used for NSF testing in place of the DOE-prescribed 
integrated average temperatures and ambient conditions provided they 
result in a more stringent test.
    In response to NAFEM and ITW's comments on refrigeration system 
size, DOE notes that no specific information on the refrigeration size 
to meet food safety requirements was received, and that DOE's 
representative analysis accounts for a variety of equipment when 
analyzing design specifications, including refrigeration system size. 
DOE further discusses food safety in relation to design options in 
section IV.B.1.f.

D. Technological Feasibility

1. General
    As discussed, any new or amended energy conservation standard must 
be designed to achieve the maximum improvement in energy efficiency 
that DOE determines is technologically feasible and economically 
justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(A))
    To determine whether potential amended standards would be 
technologically feasible, DOE first develops a list of all known 
technologies and design options that could improve the efficiency of 
the products or equipment that are the subject of the rulemaking. DOE 
considers technologies incorporated in commercially available products 
or in working prototypes to be ``technologically feasible.'' 10 CFR 
431.4; 10 CFR 430, subpart C, appendix A, sections 6(b)(3)(i) and 
7(b)(1). Section IV.A.3 of this document discusses the technology 
options identified by DOE for this analysis. For further details on the 
technology assessment conducted for this final rule, see chapter 3 of 
the final rule TSD.
    After DOE has determined which, if any, technologies and design 
options are technologically feasible, it further evaluates each 
technology and design option in light of the following additional 
screening criteria: (1) practicability to manufacture, install, and 
service; (2) adverse impacts on product utility or availability; (3) 
adverse impacts on health or safety; and (4) unique-pathway proprietary 
technologies. 10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, 
sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5). Those technology options that 
are ``screened out'' based on these criteria are not considered 
further. Those technology options that are not screened out are 
considered as potential design options for the basis for higher 
efficiency levels that DOE could consider for potential amended 
standards. Section IV.B of this document discusses the results of this 
screening analysis conducted for this final rule. For further details 
on the screening analysis conducted for this final rule, see chapter 4 
of the final rule TSD.
2. Maximum Technologically Feasible Levels
    EPCA requires that for any proposed rule that prescribes an amended 
or new energy conservation standard, or prescribes no amendment or no 
new standard for a type (or class) of covered equipment, DOE must 
determine the maximum improvement in energy efficiency or maximum 
reduction in energy use that is technologically feasible for each type 
(or class) of covered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(p)(1)) Accordingly, in the engineering analysis, DOE identifies 
the maximum efficiency level currently available on

[[Page 7494]]

the market. DOE also defines a ``max-tech'' efficiency level, 
representing the maximum theoretical efficiency that can be achieved 
through the application of all available technology options retained 
from the screening analysis.\30\ In many cases, the max-tech efficiency 
level is not commercially available because it is not currently 
economically feasible.
---------------------------------------------------------------------------

    \30\ In applying these design options, DOE would only include 
those that are compatible with each other that when combined, would 
represent the theoretical maximum possible efficiency.
---------------------------------------------------------------------------

    The max-tech levels that DOE determined for this analysis are 
described in section IV.C.1.b of this document and in chapter 5 of the 
final rule TSD.

E. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from application of the 
TSL to CRE purchased during the 30-year period that begins in the year 
of compliance with the new and amended standards (2029-2058).\31\ The 
savings are measured over the entire lifetime of CRE purchased during 
the 30-year analysis period. DOE quantified the energy savings 
attributable to each TSL as the difference in energy consumption 
between each standards case and the no-new-standards case. The no-new-
standards case represents a projection of energy consumption that 
reflects how the market for a product would likely evolve in the 
absence of new and amended energy conservation standards.
---------------------------------------------------------------------------

    \31\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet models 
to estimate NES from amended or new standards for CRE. The NIA 
spreadsheet model (described in section IV.H of this document) 
calculates energy savings in terms of site energy, which is the energy 
directly consumed by products at the locations where they are used. For 
electricity, DOE reports NES in terms of primary energy savings, which 
is the savings in the energy that is used to generate and transmit the 
site electricity. For natural gas, the primary energy savings are 
considered to be equal to the site energy savings. DOE also calculates 
NES in terms of FFC energy savings. The FFC metric includes the energy 
consumed in extracting, processing, and transporting primary fuels 
(i.e., coal, natural gas, petroleum fuels), and thus presents a more 
complete picture of the impacts of energy conservation standards.\32\ 
DOE's approach is based on the calculation of an FFC multiplier for 
each of the energy types used by covered products or equipment. For 
more information on FFC energy savings, see section IV.H.2 of this 
document.
---------------------------------------------------------------------------

    \32\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as 
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standards for a covered equipment, DOE 
must determine that such action would result in significant energy 
savings. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B))
    The significance of energy savings offered by a new or amended 
energy conservation standard cannot be determined without knowledge of 
the specific circumstances surrounding a given rulemaking.\33\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
the impacts of products with relatively constant demand. Accordingly, 
DOE evaluates the significance of energy savings on a case-by-case 
basis, taking into account the significance of cumulative FFC national 
energy savings, the cumulative FFC emissions reductions, and the need 
to confront the global climate crisis, among other factors.
---------------------------------------------------------------------------

    \33\ The numeric threshold for determining the significance of 
energy savings established in a final rule published on February 14, 
2020 (85 FR 8626, 8670) was subsequently eliminated in a final rule 
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------

    As stated, the standard levels adopted in this final rule are 
projected to result in NES of 1.11 quad full-fuel-cycle (``FFC''), the 
equivalent of the primary annual energy use of 7.4 million homes. Based 
on the amount of FFC savings, the corresponding reduction in emissions, 
and the need to confront the global climate crisis, DOE has determined 
the energy savings from the standard levels adopted in this final rule 
are ``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).

F. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
determining whether a potential energy conservation standard is 
economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of potential new or amended standards on 
manufacturers, DOE conducts an MIA, as discussed in section IV.J of 
this document. First, DOE uses an annual cash flow approach to 
determine the quantitative impacts. This step includes both a short-
term assessment--based on the cost and capital requirements during the 
period between when a regulation is issued and when entities must 
comply with the regulation--and a long-term assessment over a 30-year 
period. The industry-wide impacts analyzed include: (1) INPV, which 
values the industry on the basis of expected future cash flows; (2) 
cash flows by year; (3) changes in revenue and income; and (4) other 
measures of impact, as appropriate. Second, DOE analyzes and reports 
the impacts on different types of manufacturers, including impacts on 
small manufacturers. Third, DOE considers the impact of standards on 
domestic manufacturer employment and manufacturing capacity, as well as 
the potential for standards to result in plant closures and loss of 
capital investment. Finally, DOE takes into account cumulative impacts 
of various DOE regulations and other regulatory requirements on 
manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national NPV of the consumer 
costs and benefits expected to result from particular standards. DOE 
also evaluates the impacts of potential standards on identifiable 
subgroups of consumers that may be affected disproportionately by a 
standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered equipment in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered equipment 
that are likely to result from a standard. (42 U.S.C. 6316(e)(1); 42 
U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC 
and PBP analyses.
    The LCC is the sum of the purchase price of an equipment (including 
its installation) and the operating cost (including energy, 
maintenance, and repair expenditures) discounted over

[[Page 7495]]

the lifetime of the equipment. The LCC analysis requires a variety of 
inputs, such as equipment prices, equipment energy consumption, energy 
prices, maintenance and repair costs, equipment lifetime, and discount 
rates appropriate for consumers. To account for uncertainty and 
variability in specific inputs, such as equipment lifetime and discount 
rate, DOE uses a distribution of values, with probabilities attached to 
each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analyses, DOE assumes that consumers will 
purchase the covered equipment in the first year of compliance with new 
or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analyses are discussed in further detail in section IV.F of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(III)) As discussed in section IV.H of this document, 
DOE uses the NIA spreadsheet models to project NES.
d. Lessening of Utility or Performance of Products
    In establishing equipment classes, and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered equipment. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
adopted in this document would not reduce the utility or performance of 
the equipment under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a standard. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a standard and to transmit such determination to the Secretary 
within 60 days of the publication of a proposed rule, together with an 
analysis of the nature and extent of the impact. (42 U.S.C. 6316(e)(1); 
42 U.S.C. 6295(o)(2)(B)(ii)) To assist the Department of Justice 
(``DOJ'') in making such a determination, DOE transmitted copies of its 
proposed rule and the October 2023 NOPR TSD to the Attorney General for 
review, with a request that DOJ provide its determination on this 
issue. In its assessment letter responding to DOE, DOJ concluded that 
the proposed energy conservation standards for CRE are unlikely to have 
a significant adverse impact on competition. DOE is publishing the 
Attorney General's assessment at the end of this final rule.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are 
likely to provide improvements to the security and reliability of the 
Nation's energy system. Reductions in the demand for electricity also 
may result in reduced costs for maintaining the reliability of the 
Nation's electricity system. DOE conducts a utility impact analysis to 
estimate how standards may affect the Nation's needed power generation 
capacity, as discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The adopted standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and GHGs associated with energy production and use. DOE 
conducts an emissions analysis to estimate how potential standards may 
affect these emissions, as discussed in section IV.K of this document; 
the estimated emissions impacts are reported in section V.B.6 of this 
document. DOE also estimates the economic value of emissions reductions 
resulting from the considered TSLs, as discussed in section IV.L of 
this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant 
information regarding economic justification that does not fit into the 
other categories described previously, DOE could consider such 
information under ``other factors.''
2. Rebuttable Presumption
    EPCA creates a rebuttable presumption that an energy conservation 
standard is economically justified if the additional cost to the 
equipment that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. (42 U.S.C. 6316(a); 
42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC and PBP analyses generate 
values used to calculate the effect potential amended energy 
conservation standards would have on the PBP for consumers. These 
analyses include, but are not limited to, the 3-year PBP contemplated 
under the rebuttable-presumption test. In addition, DOE routinely 
conducts an economic analysis that considers the full range of impacts 
to consumers, manufacturers, the Nation, and the environment, as 
required under 42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section V.B.1.c of this document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to CRE. Separate subsections address each 
component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards considered in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation

[[Page 7496]]

standards. The NIA uses a second spreadsheet set that provides 
shipments projections and calculates NES and NPV of total consumer 
costs and savings expected to result from potential energy conservation 
standards. DOE uses the third spreadsheet tool, the Government 
Regulatory Impact Model (``GRIM''), to assess manufacturer impacts of 
potential standards. These three spreadsheet tools are available on the 
DOE website for this rulemaking: www.energy.gov/eere/buildings/commercial-refrigeration-equipment. Additionally, DOE used output from 
the latest version of the Energy Information Administration's 
(``EIA's'') Annual Energy Outlook (``AEO'') for the emissions and 
utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the equipment 
concerned, including the purpose of the equipment, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the equipment. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include: (1) a determination of the 
scope of the rulemaking and equipment classes, (2) manufacturers and 
industry structure, (3) existing efficiency programs, (4) market and 
industry trends, and (5) technologies or design options that could 
improve the energy efficiency of CRE. The key findings of DOE's market 
assessment are summarized in the following sections. See chapter 3 of 
the final rule TSD for further discussion of the market and technology 
assessment.
1. Equipment Classes and Definitions
    When evaluating and establishing or amending energy conservation 
standards, DOE establishes separate standards for a group of covered 
equipment (i.e., establish a separate equipment class) based on the 
type of energy used, or if DOE determines that an equipment's capacity 
or other performance-related feature justifies a different standard. 
(42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)) In making a determination 
whether a performance-related feature justifies a different standard, 
DOE considers such factors as the utility of the feature to the 
consumer and other factors DOE determines are appropriate. (Id.)
    DOE currently sets forth energy conservation standards and relevant 
definitions for CRE equipment classes at 10 CFR 431.66 and 10 CFR 
431.62, respectively. The October 2023 NOPR proposed some new equipment 
classes. In this final rule, DOE is maintaining the equipment classes 
and definitions proposed in the October 2023 NOPR as well as adopting 
several new equipment class modifications and new definitions that were 
introduced in the August 2024 NODA. The current equipment classes and 
the new definitions and equipment class modifications being finalized 
in this document and considered in the analysis are outlined as 
follows.
a. Current Equipment Classes and Definitions
    DOE currently separates CRE into 49 equipment classes, which are 
categorized according to the following physical and functional 
attributes and equipment efficiency:

    (1) operating temperature--refrigerator (>=32 [deg]F), freezer 
(<32 [deg]F), or ice-cream freezer (<=-5 [deg]F);
    (2) presence of doors--open (without doors) or closed (with 
doors);
    (3) door type--solid or transparent;
    (4) condensing unit--remote or self-contained;
    (5) configuration--horizontal, vertical, semivertical, or 
service over counter; and
    (6) temperature pull-down capability.

    Definitions supporting the current equipment classes are as 
follows:
    Closed solid means equipment with doors, and in which more than 75 
percent of the outer surface area of all doors on a unit are not 
transparent.
    Closed transparent means equipment with doors, and in which 25 
percent or more of the outer surface area of all doors on the unit are 
transparent.
    Commercial freezer means a unit of commercial refrigeration 
equipment in which all refrigerated compartments in the unit are 
capable of operating below 32 [deg]F (2 [deg]F).
    Commercial refrigerator means a unit of commercial refrigeration 
equipment in which all refrigerated compartments in the unit are 
capable of operating at or above 32 [deg]F (2 [deg]F).
    Commercial refrigerator, freezer, and refrigerator-freezer means 
refrigeration equipment that:

    (1) is not a consumer product (as defined in section 430.2 of 
part 430);
    (2) is not designed and marketed exclusively for medical, 
scientific, or research purposes;
    (3) operates at a chilled, frozen, combination chilled and 
frozen, or variable temperature;
    (4) displays or stores merchandise and other perishable 
materials horizontally, semivertically, or vertically;
    (5) has transparent or solid doors, sliding or hinged doors, a 
combination of hinged, sliding, transparent, or solid doors, or no 
doors;
    (6) is designed for pull-down temperature applications or 
holding temperature applications; and
    (7) is connected to a self-contained condensing unit or to a 
remote condensing unit.

    Door means a movable panel that separates the interior volume of a 
unit of commercial refrigeration equipment from the ambient environment 
and is designed to facilitate access to the refrigerated space for the 
purpose of loading and unloading product. This includes hinged doors, 
sliding doors, and drawers. This does not include night curtains.
    Holding temperature application means a use of commercial 
refrigeration equipment other than a pull-down temperature application, 
except a blast chiller or freezer.
    Horizontal closed means equipment with hinged or sliding doors and 
a door angle greater than or equal to 45[deg].
    Horizontal open means equipment without doors and an air-curtain 
angle greater than or equal to 80[deg] from the vertical.
    Ice-cream freezer means:
    (1) prior to the compliance date(s) of any amended energy 
conservation standard(s) issued after January 1, 2023 for ice-cream 
freezers, a commercial freezer that is capable of an operating 
temperature at or below -5.0 [deg]F and that the manufacturer designs, 
markets, or intends specifically for the storing, displaying, or 
dispensing of ice cream or other frozen desserts; or
    (2) upon the compliance date(s) of any amended energy conservation 
standard(s) issued after January 1, 2023 for ice-cream freezers, a 
commercial freezer that is capable of an operating temperature at or 
below -13.0 [deg]F and that the manufacturer designs, markets, or 
intends specifically for the storing, displaying, or dispensing of ice 
cream or other frozen desserts.
    Low-temperature freezer means a commercial freezer that is not an 
ice-cream freezer.
    Medium-temperature refrigerator means a commercial refrigerator 
that is capable of an operating temperature at or below 40.0 [deg]F.
    Pull-down temperature application means a commercial refrigerator 
with doors that, when fully loaded with 12-ounce beverage cans at 90 
[deg]F, can cool those beverages to an average stable temperature of 38 
[deg]F in 12 hours or less.
    Remote condensing unit means a factory-made assembly of 
refrigerating components designed to compress and liquefy a specific 
refrigerant that is remotely located from the refrigerated equipment 
and consists of one or more refrigerant compressors, refrigerant

[[Page 7497]]

condensers, condenser fans and motors, and factory-supplied 
accessories.
    Self-contained condensing unit means a factory-made assembly of 
refrigerating components designed to compress and liquefy a specific 
refrigerant that is an integral part of the refrigerated equipment and 
consists of one or more refrigerant compressors, refrigerant 
condensers, condenser fans and motors, and factory-supplied 
accessories.
    Semivertical open means equipment without doors and an air-curtain 
angle greater than or equal to 10[deg] and less than 80[deg] from the 
vertical.
    Service over counter means equipment that has sliding or hinged 
doors in the back intended for use by sales personnel, with glass or 
other transparent material in the front for displaying merchandise, and 
that has a height not greater than 66 inches and is intended to serve 
as a counter for transactions between sales personnel and customers.
    Transparent means greater than or equal to 45-percent light 
transmittance, as determined in accordance with the ASTM Standard E 
1084-86 (Reapproved 2009) (incorporated by reference, see section 
431.63), at normal incidence and in the intended direction of viewing.
    Vertical closed means equipment with hinged or sliding doors and a 
door angle less than 45[deg].
    Vertical open means equipment without doors and an air-curtain 
angle greater than or equal to 0[deg] and less than 10[deg] from the 
vertical.

10 CFR 431.62.
    On March 28, 2014, DOE published the March 2014 Final Rule that 
established the current equipment classes and corresponding standards 
for CRE. 79 FR 17725. Table IV.1 shows the current CRE equipment 
classes and standards.
BILLING CODE 6450-01-P

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[GRAPHIC] [TIFF OMITTED] TR21JA25.102


[[Page 7499]]


BILLING CODE 6450-01-C
b. Modifications to Equipment Classes and Definitions
    Since the publication of the March 2014 Final Rule, there have been 
several proposed modifications to the equipment classes and definitions 
for CRE.
Chef Bases or Griddle Stands and High-Temperature Refrigerators
    In the September 2023 Test Procedure Final Rule amending and 
establishing test procedures for CRE, DOE established and amended 
definitions and test procedures for high-temperature refrigerators, 
medium-temperature refrigerators, and chef bases or griddle stands. 88 
FR 66152, 66154-66155. Specifically, DOE established definitions for 
``high-temperature refrigerators'' and ``medium-temperature 
refrigerators,'' amended the definition for ``chef bases or griddle 
stands,'' and incorporated by reference AHRI Standard 1200-2023 (I-P), 
which provides an integrated average temperature (``IAT'') of 55 [deg]F 
 2.0 [deg]F for which high-temperature refrigerators may be 
tested. Id. DOE also established a definition for ``low-temperature 
freezers'' and amended the definition for ``ice-cream freezers.'' Id. 
The newly established and amended definitions in the September 2023 
Test Procedure Final Rule for chef bases or griddle stand and high-
temperature refrigerator are as follows:
    Chef base or griddle stand means commercial refrigeration equipment 
that has a maximum height of 32 inches, including any legs or casters, 
and that is designed and marketed for the express purpose of having a 
griddle or other cooking appliance placed on top of it that is capable 
of reaching temperatures hot enough to cook food.\34\
---------------------------------------------------------------------------

    \34\ The definition for ``chef base or griddle stand'' was 
established in the April 2014 CRE Test Procedure Final Rule. 79 FR 
222778, 22282 (April 24, 2014). However, DOE has not, prior to this 
rulemaking, established standards for chef bases or griddle stands.
---------------------------------------------------------------------------

    High-temperature refrigerator means a commercial refrigerator that 
is not capable of an operating temperature at or below 40.0 [deg]F.
    In the June 2022 Preliminary TSD, DOE had initially determined that 
additional equipment classes may be appropriate to address certain CRE 
available on the market. Specifically, DOE initially determined to 
split several commercial refrigerator equipment classes and establish 
separate classes for high-temperature refrigerators. Also, DOE 
indicated that it was considering establishing standards for chef bases 
or griddle stands with operating temperatures of >= 32 [deg]F or < 32 
[deg]F, because this equipment is currently excluded from energy 
conservation standards.\35\ See chapter 3 of the June 2022 Preliminary 
TSD.
---------------------------------------------------------------------------

    \35\ See 10 CFR 431.66(f).
---------------------------------------------------------------------------

    In the October 2023 NOPR, based on CRE models certified to DOE's 
Compliance Certification Database (``CCD'') under the lowest 
application product temperature \36\ (``LAPT'') designation for 
commercial refrigerators, DOE proposed that high-temperature 
refrigerators be categorized under the self-contained and remote 
condensing unit configurations and under the VCT, VCS, SOC, VOP, SVO, 
and HZO equipment families. 88 FR 70196, 70213. For these equipment 
families with high-temperature equipment, DOE proposed to subcategorize 
them as high-temperature refrigerators (operating temperature greater 
than 40.0 [deg]F) and medium-temperature refrigerators (operating 
temperature greater than or equal to 32.0 [deg]F and less than or equal 
to 40.0 [deg]F). Id. DOE proposed to maintain a single class for both 
medium and high temperature refrigerators, commercial refrigerator 
(operating temperature greater than or equal to 32.0 [deg]F), for the 
remaining equipment families (i.e., any horizontal closed transparent 
(``HCT''), horizontal closed solid (``HCS''), chef base or griddle 
stand (``CB''), or pull-down (``PD'') equipment that operates above 40 
[deg]F, if commercialized, would be considered a ``commercial 
refrigerator'' and required to comply with the ``medium-temperature 
refrigerator'' standard when tested at the LAPT). Id. For the October 
2023 NOPR, DOE directly analyzed high-temperature refrigerators in the 
self-contained condensing unit configuration for the VCT and VCS 
equipment families. Id.
---------------------------------------------------------------------------

    \36\ Lowest application product temperature means the integrated 
average temperature (or for buffet tables or preparation tables, the 
average pan temperature of all measurements taken during the test) 
at which a given basic model is capable of consistently operating 
that is closest to the integrated average temperature (or for buffet 
tables or preparation tables, the average pan temperature of all 
measurements taken during the test) specified for testing under the 
DOE test procedure. 10 CFR 431.62.
---------------------------------------------------------------------------

    In the October 2023 NOPR, DOE also tentatively determined that chef 
bases or griddle stands can be categorized under the remote condensing 
or self-contained condensing unit configurations and the >= 32 [deg]F 
or < 32 [deg]F operating temperatures (i.e., commercial refrigerator or 
low-temperature freezer, respectively). Id.
    Therefore, in the October 2023 NOPR, DOE considered potential 
equipment classes for high-temperature refrigerators and chef bases or 
griddle stands and proposed potential equipment class structure 
modifications as presented in table IV.2. Id. at 88 FR 70214.

[[Page 7500]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.103


[[Page 7501]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.104

    In response to the October 2023 NOPR, ASAP et al. commented that 
they supported DOE's proposed standards for chef bases or griddle 
stands, which for medium- and low-temperature chef bases or griddle 
stands (CB.SC.M, CB.SC.L) would reduce energy usage by over 50 percent 
versus a baseline unit and provide significant cost savings for 
purchasers. (ASAP et al., No. 79 at p. 2) ASAP et al. supported DOE's 
proposed standards for high-temperature refrigerators, stating that by 
moving away from existing medium-temperature standards, the new 
procedure better accounts for expected differences in energy use 
between medium- and high-temperature units. (Id.)
    In this final rule, DOE is finalizing definitions and new equipment 
classes as proposed in the October 2023 NOPR for high-temperature 
refrigerators, medium-temperature refrigerators, ice-cream freezers, 
low-temperature freezers, and chef bases or griddle stands. In this 
final rule, DOE is also finalizing the same equipment class 
modifications, as proposed in the October 2023 NOPR, outlined in table 
IV.2.
New and Amended Definitions Adopted in This Final Rule
    To account for the unique features and different energy use 
characteristics of certain types of CRE, in the October 2023 NOPR, DOE 
proposed to allow certain equipment classes that contain CRE with 
unique design characteristics, such as forced-air evaporators, pass-
through doors, roll-in doors, roll-through doors, and sliding doors, to 
use a higher amount of energy than the newly proposed standards for 
their counterpart equipment without these features, defined using a 
``multiplier'' value unique for each characteristic such that maximum 
energy use for a model with the characteristic is equal to the 
multiplier multiplied by the unadjusted maximum energy use for the 
equipment class. As proposed in the October 2023 NOPR, this equipment 
has the specified performance-related features and different maximum 
energy use to represent separate additional equipment classes. The 
multiplier values were selected with consideration that maximum allowed 
energy use for these models would comply with EPCA's ``anti-
backsliding'' provision. 88 FR 70196, 70213. Therefore, in the October 
2023 NOPR, DOE proposed definitions, to distinguish models with the 
unique design features, for the terms ``cold-wall evaporator,'' 
``forced-air evaporator,'' ``pass-through doors,'' ``roll-in door,'' 
``roll-through doors,'' and ``sliding door,'' at 10 CFR 431.62. 88 FR 
70196. Id. at 88 FR 70212-70213. These definitions, as proposed in the 
October 2023 NOPR, are as follows:
    Cold-wall evaporator means an evaporator that comprises a portion 
or all of the commercial refrigerator, freezer, and refrigerator 
freezer cabinet's interior surface that transfers heat through means 
other than fan-forced convection.
    Forced-air evaporator means an evaporator that employs the use of 
fan-forced convection to transfer heat within the commercial 
refrigerator, freezer, and refrigerator-freezer cabinet.
    Pass-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and refrigerator-freezer.
    Roll-in door means a door that includes a door sweep to seal the 
bottom of the door and may include a ramp that allows wheeled racks of 
product to be rolled into the commercial refrigerator, freezer, and 
refrigerator-freezer.
    Roll-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and

[[Page 7502]]

refrigerator-freezer, that includes a door sweep to seal the bottom of 
the door and may include a ramp that allows wheeled racks of product to 
be rolled into and through the commercial refrigerator, freezer, and 
refrigerator-freezer.
    Sliding door means a door that opens when a portion of the door 
moves in a direction generally parallel to its surface.
    Section IV.C.1.a of this document discusses energy use allowances 
for CRE with the unique features defined in this section.
    In the October 2023 NOPR, DOE also reviewed the current definitions 
for CRE at 10 CFR 431.62 and proposed to revise the definition for 
``rating temperature'' to update the reference to the required IAT or 
LAPT, as applicable, as follows:
    Rating temperature means the integrated average temperature a unit 
must maintain during testing, as determined in accordance with section 
2.1 or section 2.2 of appendix B to subpart C of part 431, as 
applicable.
    In response to the October 2023 NOPR, SCC agreed with DOE's 
definitions for ``cold-wall evaporator,'' ``forced-air evaporator,'' 
``pass-through door,'' ``roll-in door,'' ``roll-through door,'' 
``sliding door,'' and ``rating temperature.'' (SCC, No. 74 at p. 3)
    In response to the October 2023 NOPR, DOE received comments 
suggesting additional design features that should be provided 
additional energy use allowance, and definitions to distinguish them. 
ITW and Delfield recommended that DOE add definitions and energy use 
allowances for cabinets with drawers. (ITW, No. 82 at pp. 2, 4; 
Delfield, No. 71 at p. 2)
    Based on these comments and DOE's review of energy use differences 
between door and drawer units--discussed in section IV.C.1.c of this 
document--DOE is establishing a definition for ``drawer unit'' in this 
final rule. Commenters did not provide specific suggestions regarding a 
definition for drawer, hence DOE reviewed the definition of ``drawer 
unit'' at 20 California Code of Regulations (``CCR'') Sec.  1602, and 
DOE is establishing the following definition for ``drawer unit'' in 
this final rule:
    Drawer unit means a commercial refrigerator, freezer, or 
refrigerator-freezer in which all the externally accessed compartments 
are drawers.
    In response to the October 2023 NOPR, SCC and AHRI commented that 
rear-door definitions should be added for SVO and VOP models to allow 
more energy for rear door options. (SCC, No. 74 at p. 3; AHRI, No. 81 
at p. 5)
    DOE notes that commenters did not provide data or other information 
to suggest that SVO or VOP equipment with rear doors use more energy 
than the representative unit. For this reason, DOE is not expanding the 
definitions to include SVO or VOP equipment classes.
    In summary, in this final rule, DOE is maintaining the definitions 
proposed in the October 2023 NOPR for ``cold-wall evaporator,'' 
``forced-air evaporator,'' ``pass-through door,'' ``sliding door,'' 
``rating temperature,'' ``roll-in door,'' and ``roll-through door.'' In 
this final rule, DOE is also establishing the ``drawer unit'' 
definition. Energy conservation standards, in terms of kWh/day, 
established in this final rule for equipment of certain classes which 
have these performance-related features allow for a higher maximum 
energy consumption (i.e., less stringent) than the standards of the 
corresponding classes without these performance-related features, 
consistent with EPCA's requirements for establishing separate equipment 
classes. (42 U.S.C. 6316(e)(1); 42 U.S.C. 6295(q)) More detail 
regarding these classes is provided in IV.C.1.c of this document.
Units Under 30 Cubic Feet
    In response to the October 2023 NOPR, NAMA commented that DOE does 
not fully account for the existence of smaller self-contained, 
refrigerated single- and double-door beverage and food coolers. (NAMA, 
No. 85 at p. 5) NAMA hypothesizes that inaccuracies in the October 2023 
NOPR analysis (e.g., engineering, shipments, economic impact, and 
utility impact) are due to DOE's focus on larger-capacity equipment 
than 24-cubic-foot (ft\3\) CRE models that are typical of the market 
for NAMA's members. (Id.) NAMA stated that what may apply in cost and 
energy efficiency for a 60-ft\3\ unit may not apply to a 24-ft\3\ unit. 
(Id. at p. 6) NAMA stated that doors, insulation, fan motors, 
compressors, and evaporator coils would be different for 30-ft\3\ 
models compared to 60-ft\3\ models. (Id.) NAMA commented that, for 
DOE's analysis, units under 30 ft\3\ should be considered as different 
from those over 30 ft\3\ in refrigerated volume. (Id.) Furthermore, 
NAMA commented that between the June 2022 Preliminary Analysis and 
October 2023 NOPR, DOE changed the categories of products to include a 
number of door types but did not acknowledge that the capacity also 
causes a significant difference in cost and efficiency. (Id.) 
Therefore, NAMA recommended that DOE split the VCT.SC.M units into two 
categories because the characteristics are considerably different for 
units under 30 cubic feet than for those over 30 ft\3\. (Id.) In 
response the August 2024 NODA, NAMA commented that DOE did not address 
its request to split VCT.SC.M, VOP.SC.M, and HZO.SC.L units under 30 
cubic feet into separate categories, and that the NODA analysis has not 
substantially changed the overall impact to reflect that these products 
do not use as much energy as the larger units because the 
characteristics are considerably different compared to larger units. 
(NAMA, No. 112 at pp. 4-5)
    In response to the October 2023 NOPR, NAMA and NAFEM commented that 
some components that are available for large grocery store machines are 
not available for smaller units using R-290 refrigerant. (Id.; NAFEM, 
No. 83 at p. 16)
    In response to similar comments regarding components for models 
using R-290 refrigerant made by NAMA during the November 2023 public 
meeting, True Manufacturing Company, Inc. (``True'') stated that, when 
it comes to self-contained CRE, the component availability to 
transition to R-290 is already there. (Public Meeting Transcript, No. 
64 at p. 74) True added that even today, it is more expensive to buy a 
shaded pole motor than an ECM, and ECMs available today all comply with 
all the regulations needed for non-sparking. (Id. at p. 75)
    In response to these comments, DOE notes that, based on currently 
available compressors for small self-contained units, R-290 and R-600a 
refrigerant compressors are the most widely available compressor types. 
DOE also notes that the smallest model currently available in DOE's CCD 
\37\ for VCT.SC.M uses R-600a. In addition, as described in section 
IV.A.3.a, DOE analyzed an average compressor efficiency to account for 
a wide range of use cases.
---------------------------------------------------------------------------

    \37\ See www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
---------------------------------------------------------------------------

    In response to the comment from True, DOE agrees with True that R-
290 compatible components are currently available for self-contained 
CRE, including CRE that have a volume of less than 30 ft\3\. DOE 
conducted a review of the CRE market, based on directly analyzed units 
and publicly available information (e.g., specification sheets), and 
found no evidence of a difference in availability of R-290 compatible 
components used in less- than- 30- ft\3\ models compared to larger 
models. Therefore, without additional data, DOE disagrees that there is 
a need for smaller equipment classes to analyze a different design 
option pathway than larger R-290 units.
    In response to NAMA's comments regarding the applicability of the 
cost

[[Page 7503]]

and energy efficiency for a 60-ft\3\ unit compared to a 24-ft\3\ unit, 
DOE notes that the representative analyzed volume for the VCT.SC.M 
class in the October 2023 NOPR was 49 ft\3\, not 60 ft\3\, and the 
representative volume has two doors (see table 5A.2.6 in the October 
2023 NOPR TSD) which is within the range of number of doors that NAMA 
commented is typical of the market for NAMA's members. DOE reviewed the 
list of CRE manufacturers it identified as NAMA members in chapter 3, 
section 3.2.3.1 of the final rule TSD and found that these 
manufacturers have VCT.SC.M models with rated volumes of up to 63.32 
ft\3\ and two doors. A majority of these manufacturers also have models 
with certified volumes close to the VCT.SC.M representative volume 
analyzed in this final rule (e.g., 43.75 ft\3\, 41.11 ft\3\, and 40.7 
ft\3\).
    DOE is maintaining the 49 ft\3\ representative volume for the 
VCT.SC.M (V <= 100) class in this final rule. Using information 
available to DOE at the time of this final rule regarding components 
and dimensions that would be used in CRE models with approximately 24 
ft\3\, DOE conducted an analysis using its engineering spreadsheet to 
estimate the energy use of a CRE model with 24 ft\3\ and concluded that 
the analysis is representative of test results for such a model. DOE 
has determined that including a representative volume of 24 ft\3\ for 
the VCT.SC.M class would not significantly affect results and 
conclusions for the VCT.SC.M (V <= 100) class regarding efficiency 
levels that would be cost-effective. Therefore, DOE has determined that 
DOE's analysis accounts for CRE across the full capacity range of the 
VCT.SC.M (V <= 100) class, not just at the representative capacity, 
and, in the August 2024 NODA and this final rule, DOE did not present 
an analysis for CRE models with a volume of less than 30 ft\3\.
c. Equipment Without Standards Proposed in the October 2023 NOPR
    In the October 2023 NOPR, due to a lack of data and information 
regarding performance and related design options of refrigerated buffet 
tables and preparation tables and blast chillers and blast freezers, 
DOE did not conduct an analysis of potential energy conservation 
standards for these equipment categories. 88 FR 70196, 70215-70216. DOE 
requested comment on refrigerated buffet and preparation tables and 
blast chillers and blast freezer design options, design specifications, 
and energy consumption data tested per the DOE test procedures located 
in appendices C and D of 10 CFR 431.64. Id.
    In response to the October 2023 NOPR, SCC, Hoshizaki, AHRI, and 
Continental commented that manufacturers have not had time to test 
their equipment and evaluate the test procedure and agreed with DOE's 
tentative determination to not include energy conservation standards 
for buffet and preparation tables in this rulemaking. (SCC, No. 74 at 
p. 3; Hoshizaki, No. 76 at p. 2; AHRI, No. 81 at p. 6; Continental, No. 
86 at p.2) Hoshizaki offered to make chef bases or griddle stands, 
preparation tables, or other model samples available to DOE to help 
create the most accurate rulemaking possible. (Hoshizaki, No. 76 at p. 
7)
    In contrast, in response to the October 2023 NOPR, NEEA and NWPCC 
recommended that DOE include blast chillers and blast freezers and 
buffet tables in the scope of CRE energy conservation standards, 
develop a test procedure for blast chillers/freezers, and conduct 
analysis on the energy-saving potential for blast chillers/freezers and 
buffet tables. (NEEA and NWPCC, No. 89 at pp. 2-3) NEEA and NWPCC 
commented that by developing a test procedure that is applicable for 
their design intent, DOE could solve the issues of: (1) inadequate 
performance data and information for blast chillers and freezers, and 
(2) inapplicability of the established CRE test procedure for the 
design intent of ``rapid temperature pull-down'' (versus other typical 
CRE categories, which are intended for ``holding temperature 
application''). (Id.) NEEA and NWPCC added that test procedures are 
particularly important for these classes because they are key to 
allowing the missing data to be collected, and NEEA and NWPCC 
recommended that DOE gather information on test methodology from all 
interested parties. (Id.) Regarding buffet tables, NEEA and NWPCC 
commented that because an established test procedure exists, DOE should 
gather performance data and then conduct an energy-savings analysis and 
consider standards for these equipment classes. (Id.)
    Consistent with the October 2023 NOPR and comments received in 
response to that proposal, DOE has determined that it lacks sufficient 
data and information regarding blast chillers and blast freezer 
performance and related design options for units tested via the DOE 
test procedure. As stated in the September 2023 Test Procedure Final 
Rule, blast chillers and blast freezers are designed for ``rapid 
temperature pull-down'' capable of reducing the internal temperature 
from 135 [deg]F to 40 [deg]F within a period of 4 hours. 88 FR 66152, 
66189. Therefore, DOE is not currently able to model expected 
performance of this equipment, because the established test procedure 
is significantly different from the test procedure applicable to other 
CRE categories, which are intended for ``holding temperature 
application.'' Due to a lack of data and information regarding 
performance of blast chillers and blast freezers, DOE has not conducted 
an analysis of potential energy conservation standards for these 
equipment categories in this final rule.
    With regard to buffet tables and preparation tables, while DOE 
acknowledges that California Energy Commission's (``CEC's'') Modernized 
Appliance Efficiency Database System (``MAEDbS'') contains data for 
buffet and preparation tables, DOE notes that Title 20 of the CCR 
requires refrigerated buffet and preparation tables to follow the 
American National Standards Institute (``ANSI'')/American Society for 
Testing and Materials (``ASTM'') F2143-01 test method.\38\ This test 
method has been revised several times, with ASTM F2143-16 being the 
most recent version. In the September 2023 Test Procedure Final Rule, 
DOE stated that ASTM F2143-16 cannot be referenced as a stand-alone 
test method, but it determined the approach based on ASTM F2143-16 with 
additional requirements is representative for buffet and preparation 
tables. 88 FR 66152, 66175. Therefore, in this final rule, DOE is not 
able to model expected performance of this equipment at this time 
because the established test procedure is significantly different from 
the test procedure applicable to other CRE categories and from the test 
procedure used to measure energy consumption for CEC's MAEDbS. Due to a 
lack of data and information regarding performance and related design 
options of refrigerated buffet and preparation tables, DOE has not 
conducted an analysis of potential energy conservation standards for 
these equipment categories in this final rule.
---------------------------------------------------------------------------

    \38\ See table A-1 in 20 CCR Sec.  1604.a.2 located at 
govt.westlaw.com/calregs/Document/I132868504AC611EF8D0AD9C609AF9EC3?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default
).
---------------------------------------------------------------------------

    In this final rule, consistent with the October 2023 NOPR, DOE is 
not establishing energy conservation standards for buffet tables or 
preparation tables, blast chillers, or blast freezers.
    However, any representations, including for certification of 
compliance, made with respect to the energy use or efficiency of buffet 
tables

[[Page 7504]]

or preparation tables, blast chillers, and blast freezers must be made 
in accordance with the results of testing pursuant to appendices C and 
D of 10 CFR 431.64.
    DOE will continue to evaluate buffet tables or preparation tables, 
blast chillers, and blast freezers for potential future energy 
conservation standards rulemakings, and DOE continues to request data 
and information for this equipment.
d. Pull-Down Equipment
    In response to the October 2023 NOPR, ASAP et al. encouraged DOE to 
consider amended standards for PD equipment that are consistent with 
the efficiency improvements required for other CRE equipment classes, 
stating that while no PD.SC.M models are certified in DOE's CCD, a unit 
could be certified as a PD unit in order to be subject to a less 
stringent standard--a concern stated by ASAP et al. in the past. (ASAP 
et al., No. 79 at p. 4) ASAP et al. commented that current standards 
for a 49-ft\3\ unit (the VCT.SC.M representative volume in the October 
2023 NOPR analysis) permit about 8 percent more energy usage (6.20 kWh/
day) for a PD.SC.M versus a VCT.SC.M unit of the same volume (5.76 kWh/
day). (Id.) ASAP et al. commented that under DOE's proposal in the 
October 2023 NOPR, the 49-ft\3\ PD.SC.M unit would be permitted to use 
nearly 80 percent more energy than a VCT.SC.M of the same volume (3.51 
kWh/day). (Id.) ASAP et al. commented that manufacturers might design 
equipment that meets the ``pull-down'' definition to be subject to less 
stringent standards due to the September 2023 Test Procedure Final Rule 
establishing verification provisions for PD temperature applications. 
(Id.)
    With respect to the comment from ASAP et al., the ``pull-down 
temperature application'' is defined in 42 U.S.C. 6311(9)(d) and the 
equipment class was established by the Energy Policy Act of 2005 (Pub. 
L. 109-58).\39\ In the September 2023 Test Procedure Final Rule, DOE 
established verification provisions for pull-down temperature 
applications based on the EPCA definition, which are intended to ensure 
CRE are certified correctly as pull-down temperature applications. See 
88 FR 66152, 66187-66189. DOE anticipates that it is unlikely that 
manufacturers would design equipment that meets the ``pull-down 
temperature application'' definition to be subject to less stringent 
standards because manufacturers do not appear to be doing so in 
response to the current DOE CRE standards. For example, there are no 
models currently certified to DOE's CCD in the PD.SC.M class,\40\ and 
the PD.SC.M energy use standard is less stringent than the comparable 
VCT.SC.M- class energy use standard above 5 ft\3\. Consistent with the 
October 2023 NOPR, DOE did not directly analyze the pull-down, self-
contained, medium temperature equipment class as a primary equipment 
class in this final rule. DOE has determined to maintain the current 
standard level for PD.SC.M because DOE did not receive any data or 
feedback regarding energy use characteristics and design options of PD 
equipment. DOE will continue to monitor the PD.SC.M equipment class and 
any models certified to this class, including assessment testing and 
verification of any model's ability to meet the pull-down temperature 
application definition.
---------------------------------------------------------------------------

    \39\ See 119 STAT. 639 at www.govinfo.gov/content/pkg/PLAW-109publ58/pdf/PLAW-109publ58.pdf.
    \40\ See www.regulations.doe.gov/certification-data/CCMS-4-Refrigeration_Equipment_-_Commercial__Single_Compartment.html#q=Product_Group_s%3A%22Refrigeration%20Equipment%20-%20Commercial%2C%20Single%20Compartment%22.
---------------------------------------------------------------------------

2. CRE Market
    In the October 2023 NOPR, DOE requested comment on publicly 
available market data on CRE manufacturers or identification of any CRE 
manufacturers with large market shares not identified in chapter 3 of 
the October 2023 NOPR TSD. 88 FR 70196, 70218.
    AHRI provided a list of known suppliers of CRE products for the 
United States that are not listed on the CCD site: Amteko Industries, 
Inc.; Atlantic Food Bars; Borgen Merchandising Systems; Buffalo 
Outfront; Carrier; Cayuga Displays; Custom Deli's Inc.; Duke 
Manufacturing Co.; Federal Industries; GTI Designs; MTL COOL, a Due 
North brand; NAFCOOL; Picadeli; Pure Cold; USR Brands; Unity[supreg] 
Commercial Refrigeration; and Vortex Refrigeration. (AHRI, No. 81 at p. 
6)
    As part of DOE's market assessment for the October 2023 NOPR and 
this final rule, DOE compiled an equipment database of CRE models 
available in the United States. To develop a comprehensive equipment 
database of CRE basic models, DOE reviewed its CCD \41\ supplemented by 
information from CEC's MAEDbS,\42\ individual company websites, 
stakeholder comments (see AHRI, No. 81 at p. 6), and prior CRE 
rulemakings. To identify chef bases or griddle stands and high-
temperature units, DOE reviewed publicly available data from web 
scraping of retail websites. DOE then reviewed its comprehensive 
equipment database to identify the original equipment manufacturers 
(``OEMs'') of the CRE models identified. DOE compared the list of 
suppliers provided by AHRI against its list of CRE manufacturers to 
ensure completeness. Based on this comparison, DOE amended its market 
assessment (see chapter 3 of the final rule TSD) to include two 
additional small, domestic OEMs, Atlantic Food Bars and Borgen 
Merchandising Systems, for this final rule. DOE determined that both 
OEMs would qualify as small, domestic businesses. Therefore, for this 
final rule, DOE updated its small business assessment and included 
these companies in its small business manufacturer subgroup analysis 
(i.e., ``regulatory flexibility analysis'') discussed in section VI.B 
of this document.
---------------------------------------------------------------------------

    \41\ U.S. Department of Energy's Compliance Certification 
Database is available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed Jan. 31, 2024).
    \42\ California Energy Commission's Modernized Appliance 
Efficiency Database is available at cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx (last accessed Jan. 31, 2024).
---------------------------------------------------------------------------

3. Technology Options
    In the October 2023 NOPR market analysis and technology assessment, 
DOE identified technology options initially determined to improve the 
efficiency of CRE, as measured by the DOE test procedure and shown in 
table IV.3.
BILLING CODE 6450-01-P

[[Page 7505]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.105

BILLING CODE 6450-01-C
88 FR 70196, 70244.

    DOE received several comments on the technology options presented 
in the October 2023 NOPR. DOE received general comments regarding the 
technology options along with comments specifically regarding single-
speed compressors, expansion valves, and doors for open units. These 
are discussed in the following paragraphs.
    In response to the October 2023 NOPR, and the August 2024 NODA, 
Hillphoenix commented that the many other additional regulatory changes 
underway have narrowed manufacturers' ability to explore new energy-
efficient technologies. (Hillphoenix, No. 77 at p. 2; Hillphoenix, No. 
110 at p. 2)
    DOE appreciates Hillphoenix's candor in indicating that they have 
little quantitative information to provide regarding energy savings 
potential for some of the newer technology options. In this final rule, 
DOE has not analyzed technologies that fail the screening criteria, 
including ``technologies that are not incorporated in commercial 
equipment or in commercially viable, existing prototypes will not be 
considered further''. DOE has undertaken its analysis based on the best 
information available.
    In response to the October 2023 NOPR, NAFEM commented that meeting 
that the October 2023 NOPR's proposed standards may force reductions in 
the capacity of certain CRE, which reduces its utility and may lead to 
increased energy consumption. (NAFEM, No. 83 at pp. 22-23) NAFEM stated 
that many of its members shared a concern that substantially bulking up 
insulation may be the only way to meet many of the standards outlined 
in the October 2023 NOPR, which eats into the capacity of CRE models 
and may force customers to add more energy-using equipment to store the 
same amount of product--equipment that impacts the environment. (Id. at 
p. 23) NAFEM commented that this is another reason why refurbished 
equipment might be the only choice for some customers. (Id.) NAFEM 
added that its members fear that customers may ``tinker'' with products 
to circumvent efficiency measures to achieve a better-performing 
product, with the end result being that DOE's targeted energy-
efficiency gains will never materialize in practice, and that the 
proposed standards may even cause an increase in energy consumption. 
(Id.)
    In response to this comment from NAFEM, DOE notes that the 
screening criteria in section IV.B of this document screens out any 
technology options that are determined to have ``a significant adverse 
impact on the utility of the equipment to subgroups of consumers, or 
result in the unavailability of any covered equipment type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as equipment 
generally available in the United States at the time,'' including 
increased insulation thickness and other technologies that affect 
internal or external dimensions. Additionally, the baseline insulation 
thicknesses analyzed in this final rule were revised from the October 
2023 NOPR, consistent with comments received in response to the October 
2023 NOPR. See section IV.B.1.a of this document for more details on 
the screening analysis for the increased insulation thickness 
technology option and section IV.C.1.a.iii of this document for more 
details on the revised baseline insulation thicknesses. Additionally, 
see sections IV.F.7 and IV.G of this document for a detailed discussion 
on refurbished equipment.
a. High-Efficiency Single-Speed Compressors
    In the October 2023 NOPR, DOE considered the design option of

[[Page 7506]]

improved compressor efficiency, which would have consisted of applying 
a compressor with improved energy efficiency in comparison to the 
baseline compressor analyzed. 88 FR 70196, 70228. In the October 2023 
NOPR, DOE presented a baseline for self-contained equipment based on R-
290 and expected the energy efficiency improvement associated with the 
change to R-290 to be due to the compressor. Id. DOE did not directly 
analyze an improved compressor efficiency design option beyond the R-
290 baseline. Id.
    In the August 2024 NODA, DOE updated its analysis of R-290 
compressor performance to reflect the average compressor efficiency 
from the database of CRE compressors it has collected, instead of the 
maximum compressor efficiency as considered in the October 2023 NOPR. 
89 FR 68788, 68792-68793. DOE was able to incorporate into the August 
2024 NODA compressor data that was not available to DOE for the October 
2023 NOPR. Id. In the August 2024 NODA, DOE presented updated baseline 
energy use associated with each equipment class, expressed as a 
reduction in energy compared to the currently applicable standard. Id. 
Additionally, in the August 2024 NODA, based on the AHRI January 2017 
white paper, Tolerances and Uncertainties in Performance Data of 
Refrigerant Compressors, which is referenced by the AHRI 540 compressor 
performance rating standard (``AHRI 540''),\43\ DOE revised its 
calculation of energy use for all compressors to be 5 percent higher 
than calculated using compressor performance coefficients, to account 
for the uncertainty associated with compressor energy performance 
prediction using coefficients that are determined based on a limited 
number of compressor tests. Id.
---------------------------------------------------------------------------

    \43\ For the AHRI white paper see www.ahrinet.org/system/files/2023-06/compressors-white-paper.pdf.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, the CA IOUs and ASAP et al. 
recommended that DOE consider more efficient single-speed compressors 
as a design option in the engineering analysis. (CA IOUs, No. 84 at pp. 
2-3; ASAP et al., No. 79 at pp. 3-4) The CA IOUs commented that the 
single-speed compressor efficiency upgrades may be more cost-effective 
than variable-speed compressors. (CA IOUs, No. 84 at p. 3) The CA IOUs 
further commented that the energy efficiency ratio (``EER'') for R-290 
single-speed compressors varies between 5.8 to 7.4 Btu/kWh in the 
capacity range of 5,000 to 6,000 Btu/h and between 6.0 to 7.5 Btu/kWh 
in the capacity range of 4,000 to 5,000 Btu/h. (Id. at p. 2) The CA 
IOUs additionally stated that upgrading to the most energy-efficient 
single-speed compressors may add a minimal marginal cost to the unit's 
price. (Id. at p. 3) ASAP et al. stated there appears to be a range of 
R-290 single-speed compressor efficiencies available for a given 
compressor type, capacity, input voltage, and power supply (i.e., 
single vs. polyphase) and asked DOE to further consider improved 
single-speed compressor efficiency. (ASAP et al., No. 79 at pp. 3-4)
    In response to the August 2024 NODA, ASAP et al. commented that 
DOE's analysis overstates energy use of compressors due to increasing 
energy use in the calculations by 5 percent, using the average 
efficiency of available R-290 compressors (even though manufacturers 
have the option to use the highest efficiency compressors), and the 
expectation that additional high-efficiency compressors will be 
introduced to the market in advance of the compliance date of amended 
standards. (ASAP et al, No. 106 at p. 3)
    The CA IOUs recommended that DOE reduce its Compressor Energy Use 
Adjustment from 5% to no more than 2.5%. (CA IOUs, No. 113, at p. 4) 
The CA IOUs commented that the AHRI white paper does not specify 
whether these curve-fitting methodologies tend to overestimate or 
underestimate compressor performance, so the uncertainty should not be 
assumed to be biased in either direction. (Id.)
    In response to the CA IOUs and ASAP et al., DOE notes that the R-
290 compressor market is still evolving due to the October 2023 EPA 
Final Rule and other refrigerant related rulemakings associated with 
the AIM Act. Because of this, DOE cannot confidently assert that all 
manufacturers would be able to easily source the most efficient 
compressors available for all equipment classes. DOE notes that the 
most efficient compressor for a CRE unit varies based on many factors 
such as temperature application (i.e., high, medium, low, or ice-cream 
temperature), unit capacity (i.e., rated TDA or Volume), and physical 
differences in the units (e.g., open versus closed, horizontal versus 
vertical, compressor space constraints). As a result, in this final 
rule, consistent with the August 2024 NODA, DOE has analyzed the 
average compressor efficiency based on the compressor data available at 
the time of this rulemaking. See section IV.C.1.a.ii for a discussion 
of the results of this baseline energy use analysis.
    In response to the ASAP et al. and CA IOUs comments on the 5 
percent compressor adjustment that was applied for all compressors in 
the August 2024 NODA, DOE notes that the August 2024 NODA analysis was 
recalibrated to accommodate updates made since the October 2023 NOPR 
analysis, including the 5 percent compressor adjustment, such that the 
analyzed baseline energy use is representative of baseline equipment. 
As discussed by commenters in the October 2023 NOPR, and the AHRI 
January 2017 white paper, this 5 percent compressor adjustment is 
appropriate based on the uncertainty tolerances for compressor 
performance coefficients, and therefore DOE disagrees that the energy 
use of the compressors are overstated.
    In response to the August 2024 NODA, Storemasters commented that 
equipment manufacturers have already made significant changes to 
equipment to comply with the 2017 standards and much of the current 
equipment incorporates new refrigerants, particularly self-contained 
models that utilize R-290. (Storemasters, No. 68 at p. 1)
    As discussed later in section IV.C.1.a.ii, DOE does acknowledge 
that many CRE units have already transitioned to R-290 refrigerant. 
However, for most equipment classes, R-290 refrigerant is used in units 
that use less energy than the current standard allows. Therefore, DOE 
conducted an analysis to determine an appropriate baseline for 
equipment classes using R-290 refrigerant, which is discussed in detail 
in section IV.C.1.a.ii.
b. Expansion Valves
    As discussed in chapter 5 of the October 2023 NOPR TSD, higher-
efficiency expansion valves can control the flow of refrigerant to 
adapt to varying loads and ambient conditions, reducing the energy 
consumption in some CRE units. However, in the October 2023 NOPR 
analysis, DOE did not consider improved thermal expansion valves as a 
design option, because this technology is not likely to improve energy 
efficiency across all equipment classes.
    In response to the October 2023 NOPR, the CA IOUs recommended that 
DOE consider thermal expansion valves (``TXVs'') as a technology option 
over capillary tubes for self-contained refrigeration equipment. (CA 
IOUs, No. 84 at p. 4) The CA IOUs commented that TXVs are more 
efficient than simple fixed orifice capillary tubes at regulating 
refrigerant flow under changing load conditions and save energy at the 
compressor, especially at very low load conditions (e.g., an 
infrequently opened door). (Id.) The CA IOUs additionally

[[Page 7507]]

stated that the DOE test procedure, based on ASHRAE 72, requires 16 
hours with no door openings for refrigeration units and can capture the 
energy savings of TXVs in self-contained units. (Id.)
    The CA IOUs also recommended that DOE include electronic expansion 
valves (``EEVs'') as a design option for remote condensing units, as 
EEVs are a reliable and cost-effective technology that provide a lower 
stable superheat than TXVs, allowing more of the evaporator surface to 
be utilized in latent energy exchange, reducing compressor run times, 
and resulting in a 10-to-20-percent reduction in energy use for these 
units. (Id. at pp. 3-4)
    In response to the comment from the CA IOUs regarding expansion 
valves for self-contained equipment, DOE notes that many self-contained 
refrigeration systems likely already use TXVs. In addition, the range 
of conditions experienced by most self-contained refrigeration systems 
during the DOE test procedure are very limited (IAT must be maintained 
within  2 [deg]F), and the refrigerant mass flow is 
determined more by the capacity of the compressors used in most models 
than the thermal load. Also, the pressure available to move refrigerant 
through the expansion device is mostly influenced by the ambient 
temperature, which does not vary significantly during the DOE test 
procedure. Finally, for closed cabinets the variation in evaporator 
exit superheat, outside of the time that the door is actually open, 
when the system can draw much warmer near-ambient-temperature air into 
the evaporator, is dampened by the thermal mass of product typically in 
a field-installed cabinet, which is simulated by the loads in the 
cabinet during the DOE test procedure. Hence, DOE expects that savings 
of TXVs as compared to optimized capillary tubes would be small, and 
DOE has not seen data showing that this impact would be significant.
    In response to the comment from the CA IOUs regarding expansion 
valves for remote condensing equipment, although the CRE test procedure 
does give credit for an increase in measured evaporator temperature 
through the use of the AHRI 1200 EER table, similar to testing 
associated with self-contained equipment described above, the 
variations in expansion device inlet conditions and also of conditions 
affecting the evaporator exit refrigerant state are sufficiently 
limited that an EEV would save little energy.
c. Doors for Open Units
    In response to the October 2023 NOPR, NEEA and NWPCC expressed 
concern that DOE's proposal misses savings opportunities for the open 
equipment classes. (NEEA and NWPCC, No. 89 at pp. 3-4) NEEA and NWPCC 
stated that DOE's LCC analysis shows open equipment classes consume 
three to eight times the energy of comparable closed transparent/solid 
door-type units. (Id. at p. 4) NEEA and NWPCC commented that for some 
open-equipment families (e.g., VOP.RC.M and VOP.RC.L), DOE only 
considers occupancy sensors and night curtains and does not allow 
efficiency increases beyond these design options (Id.) NEEA and NWPCC 
commented also that it favors a standard for open-type equipment 
classes that has parity with closed-door counterparts rather than 
increasing the gap between the two equipment types. (Id.) NEEA and 
NWPCC stated that if DOE raised the standard, some manufacturers may 
add doors on their open units to decrease energy losses from the unit. 
(Id.)
    DOE understands NEEA and NWPCC's comment to mean that if DOE 
amended the standard, manufacturers may add doors on their open units 
to decrease energy losses from the unit; however, DOE notes that based 
on equipment classes already established in the CFR, the addition of 
doors would change the equipment class from being considered as an open 
case to being considered a closed case. As DOE has previously stated in 
the October 2023 NOPR, there are different physical and functional 
attributes for open and closed cases, thus parity in standards is 
likely not possible due to the increased air infiltration and radiation 
loads on open units. See 88 FR 70196,70220. Therefore, in this final 
rule, DOE considered all the technology options that are generally 
known to be available in the engineering analysis for open cases.

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:

    (1) Technological feasibility. Technologies that are not 
incorporated in commercial equipment or in commercially viable, 
existing prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it 
is determined that mass production of a technology in commercial 
equipment and reliable installation and servicing of the technology 
could not be achieved on the scale necessary to serve the relevant 
market at the time of the projected compliance date of the standard, 
then that technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the equipment to 
subgroups of consumers, or result in the unavailability of any 
covered equipment type with performance characteristics (including 
reliability), features, sizes, capacities, and volumes that are 
substantially the same as equipment generally available in the 
United States at the time, it will not be considered further.
    (4) Safety of technologies. If it is determined that a 
technology would have significant adverse impacts on health or 
safety, it will not be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving 
a given efficiency level, it will not be considered further, due to 
the potential for monopolistic concerns.

10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, 6(c)(3) and 7(b).
    In sum, if DOE determines that a technology, or a combination of 
technologies, fails to meet one or more of the listed five criteria, it 
will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed in 
the following sections.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
    In the October 2023 NOPR, DOE tentatively determined to screen out 
increased insulation thickness and vacuum-insulated panels (``VIPs'') 
for ``impacts on product utility'' and linear compressors and air-
curtain design for ``practicability to manufacture, install, and 
service.'' 88 FR 70196, 70222-70224. In the August 2024 NODA, DOE 
additionally presented a revised analysis with microchannel condensers 
screened out for ``practicability to manufacture, install, and 
service'' and evaporator fan controls screened out for ``impacts on 
product utility.'' 89 FR 68788, 68793.
    DOE received several comments on the screening analysis in response 
to the October 2023 NOPR and August 2024 NODA, as discussed in the 
following sections.
a. Increased Insulation Thickness and Other Technologies That Affect 
Internal or External Dimensions
    In the October 2023 NOPR analysis, and the August 2024 NODA, DOE 
screened out increased insulation thickness. See 88 FR 70196, 70222-

[[Page 7508]]

70223. Also, DOE did not consider increased-size evaporators or 
condensers in its analysis. 88 FR 70196, 70220.
    In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI, 
and SCC agreed with DOE's decision to screen out increased insulation 
thickness as a design option. (Hussmann, No. 80 at p. 4; Hoshizaki, No. 
76 at p. 2; AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3)
    In response to the October 2023 NOPR, Hoshizaki commented that 
increased insulation will decrease volume due to set box sizes for 
restaurants and institutions, and it stated that due to customer 
demand, a smaller volume could result in lost sales for units that 
changed to lower capacity. (Hoshizaki, No. 76 at p. 2)
    In response to the October 2023 NOPR, NAMA commented that several 
design options shown in the October 2023 NOPR TSD may have an impact on 
the overall machine capacity and that any design option that requires 
more space inside the machine must reflect the reduction of overall 
capacity. (NAMA, No. 85 at p. 15) NAMA commented also that larger 
condensers or evaporators, more insulation, and changes to type of 
glass resulting in new structural components all affect the overall 
capacity. (Id.) NAMA stated that the external dimensions of CRE are 
limited by the height of the building structure in break rooms or 
built-in areas, while the width and length are limited by the footprint 
of the machine and integration with other machines (i.e., snack 
machines) to which CRE are paired. (Id.)
    In response to the October 2023 NOPR, AHRI, SCC, and NAMA commented 
that DOE's NOPR analysis reflected consideration of increased 
insulation thickness for baseline models analyzed in its analysis. 
(AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3; NAMA, No. 85 at pp. 28-29) 
Specifically, AHRI commented that for a number of equipment classes, 
the baseline insulation thicknesses used by DOE in its 2023 NOPR 
analysis are thicker than the thicknesses associated with the 
efficiency levels selected as energy conservation standards for those 
same classes in the 2014 final rule analysis. (Id.) NAMA stated that 
DOE did not discuss the resultant change in utility or performance in 
the October 2023 NOPR TSD, highlighting that the best example of this 
is the design option to add \1/2\ inch of insultation to each of the 
product classes, which would result in smaller capacity, longer times 
for consumers to keep the doors open, and more frequent restocking. 
(Id.) NAMA further commented that DOE consultants reported at the 
November 2023 Public Meeting that the baseline units had 1-1.5 inches 
of foam, but that the NOPR TSD indicates use of 2-2.5 inches insulation 
thickness used in the analysis. (NAMA, No. 85 at pp. 28-29)
    DOE notes that, while the October 2023 NOPR analysis did screen out 
insulation thickness increase (see 88 FR 70196, 70222-70223), the 
comments from NAMA indicate that some clarification regarding 
insulation thicknesses used in the analysis is appropriate. Tables 
5A.2.5-5A.2.8 in the October 2023 NOPR TSD show the baseline insulation 
thickness used in the analysis, which ranged from 2 inches to 2.5 
inches depending on the equipment class. This was based on teardown 
data that DOE had at the time the October 2023 NOPR analysis was 
completed, and is thicker than the baseline insulation thickness of 1 
inch to 1.5 inches used in the preliminary analysis. Additional 
teardown information collected after the October 2023 NOPR analysis was 
completed suggested the values used in the October 2023 NOPR analysis 
were too large for some equipment classes. Hence, for the NODA 
analysis, DOE updated the baseline insulation thicknesses to the 
following representative values: 1.5 inches for medium- and high-
temperature equipment; 2.0 inches for low-temperature equipment; and 
2.5 inches for ice-cream temperature equipment. These thicknesses were 
also used for the final rule analysis. See section IV.C.1.a.iii for 
more details.
    Regarding the comment from NAMA that the baseline insulation 
thickness is 1 to 1.5 inches, NAMA may be referring to an exchange 
between True and DOE consultants at the November 2023 Public 
Meeting,\44\ discussing the increased baseline insulation thickness 
increases stated by AHRI, SCC, and NAMA between the June 2022 
Preliminary Analysis and the October 2023 NOPR. DOE's consultants 
responded in the November 2023 Public Meeting that the October 2023 
NOPR baseline insulation thicknesses used in the NOPR analysis were 
representative of the baseline insulation thickness from teardown data 
available to DOE at the time of the October 2023 NOPR--as already noted 
above, these insulation thickness values were changed in the August 
2024 NODA and final rule analyses based on additional teardown 
information and in consideration of stakeholder comments.
---------------------------------------------------------------------------

    \44\ See November 2023 Public Meeting Transcript, No. 64 at pp. 
59-60.
---------------------------------------------------------------------------

    As discussed in chapter 3 of the final rule TSD, increasing 
insulation thickness increases the thermal resistivity of the exterior 
of the unit, which in turn reduces the heat load that must be removed 
by the CRE's refrigeration system. Therefore, this technology option 
can reduce the energy use of CRE. However, consistent with comments 
from Hoshizaki and NAMA, because CRE is typically required to meet 
standard dimensions to fit into a fixed amount of space, the 
refrigerated volume of the unit may need to be decreased to accommodate 
increased insulation thickness, thus limiting the capacity of the unit. 
As a result, DOE has determined that, for certain configurations of 
CRE, increased insulation thickness meets the screening criterion of 
``impacts on product utility.'' In this final rule, DOE has screened 
out increased insulation thickness as a design option for improving the 
energy efficiency of CRE.
    DOE notes that, while increased insulation thickness has been 
screened out in this final rule, DOE may consider updating the 
representative baseline insulation thickness to reflect the current 
market in any future DOE actions or rulemakings.
    In response to the comment from NAMA regarding consideration of 
larger condensers or evaporators as design options, DOE notes that 
these design options were not analyzed in the cost-efficiency results 
for the October 2023 NOPR or August 2024 NODA analysis, and is 
maintaining that approach in this final rule. Also, in response to the 
NAMA comment, design options associated with improvements to glass 
doors did not meet the screening criteria in the October 2023 NOPR or 
August 2024 NODA, and DOE maintains this approach for this final rule. 
DOE notes that some CRE currently available on the market incorporate 
the improved transparent door design options, which demonstrates the 
ability of CRE to use this technology. DOE discusses these design 
options in section IV.C.1 of this document and chapters 3 and 5 of the 
final rule TSD.
b. Vacuum-Insulated Panels
    In the October 2023 NOPR, and the August 2024 NODA, DOE tentatively 
determined that vacuum-insulated panels meet the screening criterion of 
``impacts on product utility'' and screened out vacuum-insulated panels 
as a design option for improving the energy efficiency of CRE. 88 FR 
70196, 70223.
    In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI, 
and SCC agreed with DOE's decision to

[[Page 7509]]

screen out VIPs as a design option. (Hussmann, No. 80 at p. 4; 
Hoshizaki, No. 76 at p. 2; AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3)
    In response to the October 2023 NOPR, NAMA recommended that DOE 
remove VIPs from the rulemaking and from future rulemakings, due to the 
reasoning given in its response to the June 2022 Preliminary Analysis. 
(NAMA, No. 85 at p. 29)
    In response to the October 2023 NOPR, Hoshizaki commented that VIPs 
are not a good alternative due to susceptibility of breakage and 
because the increased space needed to store VIPs for production 
preparation would necessitate much larger production facilities, 
resulting in larger capital expenditures. (Hoshizaki, No. 76 at p. 2)
    As a confirmed by comments received in support of screening out 
VIPs, DOE is not aware of any implementations of VIPs--either in 
commercial equipment or in commercially viable, existing prototypes 
that could accommodate these structural requirements specific to CRE. 
As a result, DOE has determined that, at this time, vacuum-insulated 
panels implemented in CRE meet the screening criterion of 
``technological feasibility.'' In this final rule, DOE has screened out 
vacuum-insulated panels as a design option for improving the energy 
efficiency of CRE.
    In response to the comment from NAMA about future rulemakings, DOE 
notes that this screening analysis only applies to this final rule, and 
not to future actions or rulemakings. EPCA's 6-year lookback provision 
allows DOE to consider technological advances and new technologies in 
future actions or rulemakings. Therefore, DOE may reconsider VIPs when 
conducting the screening analysis in any future action or rulemaking.
c. Linear Compressors
    In the October 2023 NOPR, DOE tentatively determined that linear 
compressors meet the screening criterion of ``practicability to 
manufacture, install, and service'' and screened out linear compressors 
as a design option for improving the energy efficiency of CRE. 88 FR 
70196, 70223.
    In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI, 
and SCC agreed with DOE's decision to screen out linear compressors as 
a design option. (Hussmann, No. 80 at p. 4; Hoshizaki, No. 76 at p. 2; 
AHRI, No. 81 at p. 7; SCC, No. 74 at p. 3)
    NAMA recommended that DOE remove linear compressors from the 
rulemaking and from future rulemakings, due to the reasoning given in 
its response to the June 2022 Preliminary Analysis. (NAMA, No. 85 at p. 
29)
    As a result of comments received in support of screening out linear 
compressors, DOE has determined that linear compressors meet the 
screening criterion of ``practicability to manufacture, install, and 
service.'' In this final rule, DOE has screened out linear compressors 
as a design option for improving the energy efficiency of CRE.
    In response to the comment from NAMA about future rulemakings, DOE 
notes that this screening analysis only applies to this final rule, and 
not to future actions or rulemakings. EPCA's 6-year lookback provision 
allows DOE to consider technological advances and new technologies in 
future actions or rulemakings. Therefore, DOE may reconsider linear 
compressors when conducting the screening analysis in any future action 
or rulemaking.
d. Air-Curtain Design
    In the October 2023 NOPR, DOE tentatively determined that air-
curtain design meets the screening criterion of ``practicability to 
manufacture, install, and service'' and screened out air-curtain design 
as a design option for improving the energy efficiency of CRE. 88 FR 
70196, 70224.
    In response to the October 2023 NOPR, Hussmann, Hoshizaki, AHRI, 
and SCC agreed with DOE's decision to screen out air-curtain design as 
a design option. (Hussmann, No. 80 at p. 4; Hoshizaki, No. 76 at p. 2; 
AHRI, No. 81 at p. 7; SCC, No. 74 at p. 2)
    As a result of comments received in support of screening out air-
curtain design, DOE has determined that air-curtain design meet the 
screening criterion of ``practicability to manufacture, install, and 
service.'' In this final rule, DOE has screened out air-curtain design 
as a design option for improving the energy efficiency of CRE.
e. Permanent Magnet Synchronous AC Motors
    In the October 2023 NOPR, DOE did not include permanent magnet 
synchronous motors (``PMS motors'') as a design option in its October 
2023 NOPR engineering analysis. 88 FR 70196, 70221.
    In response to the October 2023 NOPR, the CA IOUs recommended that 
DOE consider PMS motors as a design option for closed-door units. (CA 
IOUs, No. 84 at p. 6) The CA IOUs commented that PMS motors are 30 
percent more efficient than electronically commutated motors and are 
considered the most efficient fan motor technology. (Id.) The CA IOUs 
commented also that while some manufacturers report avoiding the use of 
PMS motors in their equipment due to noise concerns, noise should not 
be an issue for closed-door refrigeration units and there should be no 
significant barrier to adoption. (Id.) The CA IOUs stated that although 
DOE does not recommend PMS motors as a design option because specific 
commercialized PMS designs of the appropriate size and airflow were not 
identifiable, retrofit applications have used PMS motors in CRE 
connected to a remote condensing unit, vertical, transparent and open 
cases because of their appropriate size and airflow. (Id.)
    With respect to the comment from the CA IOUs, DOE has observed that 
PMS motors are available for retrofit applications from one 
manufacturer,\45\ but has not observed them in any new CRE. While PMS 
motors may be available for certain retrofit applications, DOE has not 
observed specific commercialized designs with the appropriate size and 
rated airflow for the range of equipment analyzed in support of this 
final rule. Based on these observations, along with discussions with 
manufacturers, DOE has determined that PMS motors meet the screening 
criterion of ``practicability to manufacture, install, and service'' to 
be excluded in the engineering analysis. Therefore, in this final rule, 
DOE has screened out PMS motors as a design option for improving the 
energy efficiency of CRE.
---------------------------------------------------------------------------

    \45\ See qmpower.com/products/.
---------------------------------------------------------------------------

f. Evaporator Fan Control
    In the October 2023 NOPR, DOE assumed that evaporator fans of 
baseline equipment runs continuously for 24 hours a day (except during 
electric defrost). DOE considered in its analysis a design option, 
``evaporator fan control,'' in which evaporator fans cycle off for a 
portion of the compressor off cycles. DOE assumed for its analysis that 
evaporator fan control allows the fan to run during compressor off 
cycles 20-percent longer than the compressor on cycles, excluding the 
time period when the unit is in defrost mode. See chapter 5 of the 
October 2023 NOPR TSD. Based on testing of directly analyzed units, DOE 
observed that evaporator fan control is already implemented in certain 
models available on the market. DOE determined that 20-percent 
additional run time compared to the compressor on cycles is 
representative based on observation of its directly tested units that 
incorporate evaporator fan control. Based on manufacturer feedback on 
the June 2022 Preliminary Analysis, in the

[[Page 7510]]

October 2023 NOPR, DOE tentatively determined that evaporator fan 
control would only be suitable for closed, self-contained equipment--
DOE limited the consideration of this design option in its October 2023 
NOPR analysis to this equipment category.\46\
---------------------------------------------------------------------------

    \46\ See section 5.5.6 of the October 2023 NOPR TSD, located at 
www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, Hillphoenix, ITW, NAMA, 
NAFEM, and Ravnitzky commented with concern regarding the food safety 
implications of incorporating evaporator fan controls in the proposed 
standards. (Hillphoenix, No. 77 at p. 3; ITW, No. 82 at p. 6; NAMA, No. 
85 at p. 16; NAFEM, No. 83 at pp. 10-11; Ravnitzky, No. 57 at p. 3)
    In the November 2023 Public Meeting, Continental commented that it 
concluded that evaporator fan control resulted in freeze-ups on coils 
in the field, and it stopped using it for that reason. (November 2023 
Public Meeting Transcript, No. 64 at pp. 68-69)
    ITW commented that DOE should revise its October 2023 NOPR 
engineering spreadsheet assumptions to better reflect the current state 
of the industry in its application of fan control strategies. (ITW, No. 
82 at p. 2) ITW stated that most manufacturers are already running fan 
duty cycles lower than 100 percent, so it is inaccurate to consider 
100-percent fan duty cycle as the current industry baseline. (Id.) ITW 
also commented that to allow for proper off-cycle defrost and cabinet 
thermal performance, DOE should increase the duty cycle runtime 
multiplier to be a function of both compressor runtime and off-cycle 
defrost time, while allowing for additional run time for cabinet 
thermal destratification in the baseline calculation. (Id.)
    ITW further commented that it disagrees with the fan control 
assumptions in the October 2023 NOPR engineering spreadsheet 
calculations, where the energy savings calculation for the ``fan 
control strategy'' is based on the difference between EFC1 (no fan 
control) and EFC2 (fan control), where the baseline EFC1 strategy 
assumes current products have 100-percent fan duty cycle and the 
improved EFC2 strategy assumes the fan duty cycle is equal to 120 
percent of the compressor duty cycle. (Id. at p. 3) ITW stated that all 
ITW products have already adopted some form of fan control strategy to 
meet DOE's 2017 energy standards and that, based on a recent NAFEM 
survey, 87.5 percent of the CRE manufacturers surveyed are already 
utilizing some form of fan control strategy. (Id.) Furthermore, ITW 
commented that the proposed EFC2 strategy does not properly account for 
the need to run the evaporator fan during off-cycle defrost as well as 
outside of compressor and defrost cycles in order to provide adequate 
cooling and defrost performance and proper destratification of the 
cabinet air temperatures. (Id.) ITW elaborated that outside the 
compressor run period and off cycle defrost period is the only time 
zone that the fan control strategy can be played. (Id. at pp. 8-9) ITW 
stated that it conducted a study showing that 50 percent on, 50 percent 
off for an evaporator fan during a compressor off period is a good 
strategy to save energy while still maintaining a relatively uniform 
air and product temperature. (Id.) ITW stated that the evaporator fan 
run state during the compressor off period is irrelevant to compressor 
run time, and it will be the percentage of compressor off time. (Id.) 
ITW requested that for the EFC2 strategy, the fan duty cycle in the CRE 
engineering spreadsheet be calculated considering the formula: RT + 
OCDT + 50% x (24-CRT-OCDT), where RT = Compressor Runtime OCDT = Off-
Cycle Defrost Time. (Id. at pp. 3, 8) ITW provided an example for VCS.M 
case, claiming that DOE's estimated evaporator fan run time is 7 hours 
less than the real application. (Id. at p. 9)
    The CA IOUs recommended that DOE consider evaporator fan control as 
a design option for all closed, self-contained refrigeration equipment 
classes and not just for solid-door refrigeration units. (CA IOUs, No. 
84 at pp. 4-5) The CA IOUs commented that variable-speed evaporator fan 
controls turn off the fans when the refrigeration door opens, reducing 
hot- air infiltration and the equipment's energy use, and such controls 
also save fan energy when the compressor is off. (Id. at p. 4) The CA 
IOUs added that although evaporator frost buildup and temperature 
stratification may occur, fan ``stir'' cycles can mitigate these 
issues. (Id.)
    In response to these comments, DOE reviewed the NSF 7 standard 
mentioned by commenters and found that section 6.10, ``Performance--
storage refrigerators and refrigerated food transport cabinets,'' 
requires CRE to maintain an air temperature at or below 40 [deg]F for 
all compartments; section 6.11, ``Performance--storage freezers,'' 
requires CRE to maintain an air temperature at or below 0 [deg]F for 
all compartments; section 9.14, [Display Refrigerator] ``Performance,'' 
requires CRE to maintain an air temperature at or below 41 [deg]F for 
display refrigerators intended to hold potentially hazardous foods; 
section 9.15, [Display Refrigerator] ``Performance--temperature 
recovery test,'' requires CRE with automatic lockout to restore the air 
temperature in its food storage compartment to 41 [deg]F or below after 
having its door open for 15 minutes; section 9.16, [Display 
Refrigerator] ``Performance--automatic lockout,'' requires CRE with 
automatic lockout to activate the door lock if the air temperature in 
the food storage compartment is greater than 41 [deg]F for more than 30 
minutes.
    Evaporator fan control, as analyzed in the October 2023 NOPR, could 
reduce air distribution and temperature uniformity in the refrigerated 
compartment, potentially leading to temperatures outside of the NSF 7 
tolerances. As mentioned in the comment from Continental, temperatures 
outside of the NSF 7 tolerances could also occur if the evaporator coil 
freezes up due to a lack of consistent airflow.
    In response to the comment from ITW stating that most manufacturers 
currently incorporate evaporator fan control, DOE notes that it is 
unclear if the models referenced by ITW that meet DOE's 2017 standards 
are units that have energy use at the current standard level, or at an 
energy use level more efficient than the current standards.
    Further, DOE received feedback during manufacturer interviews that 
in CRE connected to remote condensing units, evaporator fans are always 
on, due to constant refrigerant flow through the system. Additionally, 
open CRE have evaporator fans on constantly to maintain the air 
curtain.
    Although some self-contained, closed CRE may be able to use 
evaporator fan controls, there is insufficient information currently 
available to conclude that a significant number of CRE can use this 
approach and also comply with NSF 7 requirements. Therefore, in the 
August 2024 NODA, DOE removed evaporator fan controls as a design 
option. NAFEM, Continental, Hussmann, AHRI, Delfield, and Hillphoenix 
all commented in support of this decision. (NAFEM, No. 101 at pp. 2-3; 
Continental, No. 107 at p. 2; Hussmann, No. 108 at p. 2; AHRI, No. 104 
at p. 8; Delfield, No. 99 at p.2; Hillphoenix, No. 110 at p. 4)
    The CA IOUs recommended that DOE reevaluate evaporator fan control 
as a design option for six CRE equipment classes: VCS.SC.H, VCS.SC.M, 
VCS.SC.L, VCS.SC.I, SOC.SC.M, and HCS.SC.M. (CA IOUs, No. 113 at p. 3) 
The CA IOUs commented that they subjected four commercially available

[[Page 7511]]

units with evaporator fan controls from two manufacturers (3 VCS.SC.M, 
1 VCS.SC.L) to a modified, more stringent NSF 7 test. Id. The CA IOUS 
added that they based the modified NSF 7 test on the formal NSF 7 test 
for display coolers, with modifications to unit loading and ambient dry 
bulb temperature. Id. The CA IOUs commented that, for cooler to pass 
the modified NSF 7 test, the average temperature of the warmest 
internal thermocouple must not exceed 41 [deg]F, and no individual 
temperature readings shall exceed 43 [deg]F. Id. For freezers, the 
integrated average temperature of all internal thermocouples must fall 
within 0  2 [deg]F. Id. The CA IOUs commented that all four 
units met the internal temperature criteria despite these stringent 
test conditions. Id. The CA IOUs commented that, therefore, testing 
conducted by the CA IOUs on VCS.SC.M and VCS.SC.L CRE units indicates 
that units with evaporator fan controls can maintain internal 
compartment temperatures consistent with NSF 7. Id. The CA IOUs 
recommended that DOE gather more evidence related to these concerns to 
reevaluate the inclusion of evaporator fan controls in its engineering 
analysis, instead of simply removing a viable energy-saving technology 
from the analysis due to `uncertainty.' Id.
    ASAP et al. encouraged DOE to be less conservative in this 
rulemaking. (ASAP et al., No. 106 at p. 2) ASAP et al. stated that DOE 
screened out evaporator fan controls due to comments concerned about 
food safety, however DOE discussed in the October 2023 NOPR that the 
Department tested CRE units that incorporated evaporator fan controls, 
and the Department acknowledges in the NODA that NSF 7 food safety 
requirements do not preclude the use of evaporator fan controls, thus 
ASAP et al. encouraged DOE to include the technology. (Id.)
    DOE recognizes that some self-contained, closed, CRE are able to 
use evaporator fan controls and comply with NSF 7 requirements, 
however, there is not sufficient information currently available to 
conclude that a significant number of CRE can use evaporator fan 
controls and comply with NSF 7.
    Consistent with the results presented in the August 2024 NODA, DOE 
has determined that evaporator fan controls meet the screening 
criterion of ``safety of technologies'' for self-contained, closed CRE 
and ``impacts on product utility'' for CRE connected to remote 
condensing units and open CRE for this final rule. In this final rule, 
consistent with the results presented in the August 2024 NODA, DOE's 
engineering analysis has the evaporator fan running constantly, except 
during electric defrost, in the baseline and all efficiency levels. 
This approach improves the ability of CRE to achieve better temperature 
uniformity, which can assist in ensuring food safe temperatures inside 
the unit.
g. Microchannel Condensers
    In the October 2023 NOPR, DOE considered microchannel condensers as 
a design option for self-contained CRE, having observed the use of 
microchannel condensers in other commercial refrigeration equipment 
such as automatic commercial ice makers (``ACIMs''), including ACIMs 
that use R-290. 88 FR 70196, 70222.
    In response to the October 2023 NOPR, SCC, NAFEM, and NAMA 
mentioned that microchannel condensers have clogging issues in the 
field. (SCC, No. 74 at p. 2; NAFEM, No. 83 at p. 7; NAMA, No. 85 at p. 
12) Hoshizaki, NAMA, NAFEM, and Hussmann commented that microchannel 
condensers need more frequent cleaning than tube and fin heat 
exchangers. (Hoshizaki, No. 76 at p. 5; NAMA, No. 85 at p. 12; 
Hussmann, No. 80 at p. 12; NAFEM, No. 83 at pp. 6-7) SCC commented that 
clogging leads to increased energy consumption, while NAFEM and 
Hussmann stated that microchannels have little to no energy savings 
compared to tube and fin heat exchangers. (SCC, No. 74 at p. 2; NAFEM, 
No. 83 at p. 5; Hussmann, No. 80 at p. 5) AHRI added that microchannel 
condensers cannot always be substituted for fin and tube heat 
exchangers. (AHRI, No. 81 at p. 12) AHRI also stated the following 
microchannel condenser considerations: supplier tooling costs for 
custom configurations; existing and potential tariffs on components; 
significant lab testing to validate temperature and energy performance; 
field testing for reliability; product line changeovers; consideration 
for refrigerant charge; and air flow analysis to determine the impact 
on the air curtain. (Id.) Hoshizaki commented that microchannel 
condensers have shorter lifetimes than current condensers, and NAMA 
added that when not maintained, microchannel condensers can cause 
premature failure of the compressor. (Hoshizaki, No. 76 at p. 5; NAMA, 
No. 85 at p. 12) NAMA and NAFEM commented that microchannel condensers 
can have leaks, which is not acceptable with flammable refrigerants, 
and are screened out in the household refrigeration rulemaking. (NAMA, 
No. 85 at pp. 12, 34; NAFEM, No. 83 at pp. 6-7) NAMA further stated 
that microchannels show greater likelihood of pinhole leaks, and thus 
their use with flammable refrigerants could constitute a safety hazard. 
(NAMA, No. 85 at pp. 25, 34) NAMA added that microchannel condensers 
are not yet available in configurations for R-290 refrigerants, and 
NAMA has no information to suggest that they will be in the years 
ahead. (Id. at p. 25)
    Hoshizaki commented that microchannel condensers would need time 
for engineering personnel to determine the best circuit for the 
refrigeration system and best way to join the piping. (Hoshizaki, No. 
76 at p. 4) Hoshizaki stated that there will be a learning curve adding 
more time compared to that of current condensers to make sure the 
system is made in an optimal way and require value lost on increase of 
labor time for installation and testing. (Id. at pp. 4-5)
    NAMA commented that it identified an inconsistency in DOE's 
acceptance of microchannel condensers. (NAMA, No. 85 at pp. 12-13) NAMA 
and NAFEM pointed out that in the 2021 household refrigerator 
rulemaking, DOE decided not to pursue a rulemaking design option based 
on microchannel condensers.\47\ (Id. at p. 13; NAFEM, No. 83 at pp. 6-
7) NAMA requested clarification on whether microchannels are 
unacceptable or whether the TSD for household refrigeration is 
inaccurate. (NAMA, No. 85 at p. 13) NAMA recommended that DOE be 
consistent and screen out microchannels in CRE because the 2021 DOE 
household refrigeration appliances energy conservation standards 
rulemaking on household refrigeration appliances screened out 
microchannel condensers. (Id. at p. 34)
---------------------------------------------------------------------------

    \47\ See section 5.5.2 of the Residential Refrigerator NOPR TSD 
at www.regulations.gov/document/EERE-2017-BT-STD-0003-0045.
---------------------------------------------------------------------------

    NAMA stated that microchannels require more frequent servicing and 
cleaning and added that DOE underestimated the extra time and cost. 
(Id. at p. 33) NAMA estimated the cost for fittings, machinery for 
insertion, other capital improvements, and additional servicing to be 
well over $100. (Id.)
    In response to the comments regarding microchannel condensers, DOE 
has observed microchannel condensers in other commercial refrigeration 
equipment such as ACIMs, including ACIMs that use R-290. However, DOE 
is not currently aware of microchannel condensers in use for CRE and 
did not observe microchannel condensers in any of the equipment in the 
teardown analysis. Even though

[[Page 7512]]

DOE tentatively determined in the October 2023 NOPR that microchannel 
condensers would be technically feasible for use in CRE, feedback from 
commenters in response to the October 2023 NOPR suggests that there is 
current uncertainty as to the practicability to manufacturer, install, 
or service this technology on the scale necessary to serve the CRE 
market at the time of the effective date of any new or amended 
standards. Recognizing this uncertainty, DOE tentatively screened out 
microchannel condensers as a design option in the August 2024 NODA. 89 
FR 68788, 68793.
    In response to the August 2024 NODA, ITW supported DOE's 
determination to screen-out microchannel condensers from consideration 
as a design option. (ITW, No. 111 at p. 1) Hillphoenix, NAFEM, 
Delfield, and Continental also commented in support of DOE's decision 
to screen-out microchannel condensers. (Hillphoenix, No. 110 at p. 4; 
NAFEM, No. 101 at pp. 2-3; ; Delfield, No. 99 at p.2; Continental, No. 
107 at p. 2)
    Based on the uncertainty associated with microchannel condensers, 
and consistent with the August 2024 NODA, DOE screened-out microchannel 
condensers as a design option in this final rule. See chapter 4 of the 
final rule TSD for more information.
2. Remaining Technologies
    Through a review of each technology, DOE concludes that all of the 
other technologies listed in table IV.4 met all five screening criteria 
to be examined further as design options in DOE's final rule analysis. 
In summary, DOE did not screen out the following technology options:
[GRAPHIC] [TIFF OMITTED] TR21JA25.106

a. Other Technologies Not Screened-Out
    In response to the August 2024 NODA, ITW commented that they 
manufacture chef base and griddle stand models with both refrigerator 
(CB.SC.M) and freezer (CB.SC.L) storage compartment temperatures, and 
that these models have widths ranging from 36'' to 139'', and model 
volumes ranging from 4.5 cu-ft to 30.5 cu-ft. (ITW, No. 111 at p. 2) 
ITW commented that refrigerator models having widths great than 
(CB.SC.M > 84'') and freezer models having widths great than (CB.SC.L > 
60'') use two or more evaporator coils spread along the width of the 
cabinet interior. (Id.) ITW commented that they currently do not 
understand the implications associated with the application of variable 
speed reciprocating compressors in self-contained refrigeration systems 
with multiple evaporator circuits. (Id.) ITW urged DOE to provide 
additional information to stakeholders, and suggested that DOE screen-
out EL3--``R-290 Variable Speed Reciprocating Compressor'' from the 
list of available design options for both CB.SC.M and CB.SC.L CRE in 
their energy analysis. (Id).
    In response to the ITW comment, DOE notes that it had considered 
variable-speed compressors in its preliminary analysis (see pages 5-51 
and 5-52 of the Preliminary Analysis TSD) and for its October 2023 NOPR 
analysis for chef bases (see pages 5-54 and 5-55 of the October 2023 
NOPR TSD). Although DOE received many comments regarding setting of 
standards for chef bases and regarding use of variable-speed 
compressors, DOE received no comments specifically about use of 
variable-speed compressors in this equipment class, nor use of 
variable-speed compressors in systems with multiple evaporator 
circuits. DOE also did not receive input regarding this topic in 
manufacturer interviews. DOE notes that variable-capacity compressor 
systems serving multiple evaporator circuits are quite common, e.g., in 
supermarkets, where a single compressor rack can serve many individual 
evaporators in cabinets distributed throughout the store. DOE concludes 
that, while additional factors may need to be considered in the design 
and development for such systems,

[[Page 7513]]

there is no available information that would be the basis of screening 
the technology for the self-contained chef base equipment classes. 
Hence, DOE has considered variable speed compressors as a design option 
for these classes.
    In response to the August 2024 NODA, NAFEM commented that DOE only 
removed some of the technologies NAFEM had suggested screening out in 
its comments in response to the October 2023 NOPR, and DOE did not 
provide a clear reason for why some technologies were removed and not 
others. (NAFEM, No. 101 at pp. 2-3)
    NAFEM commented that it did not agree with DOEs decision to keep 
insulation, lighting, improved transparent doors, compressors, 
evaporators, condensers, fans, and other technologies including defrost 
systems, expansion valve, night curtains, and liquid suction heat 
exchangers in the analysis, as these are all already in-use 
technologies. (Id. at p.3) Additionally, NAFEM stated that occupancy-
based lighting, microchannel condensers, and night curtains suffer from 
technical shortcomings, as NAFEM previously identified in their 
comments. (Id.)
    DOE notes that in short, NAFEM commented that all identified 
technology options remaining after the screening analysis should be 
screened out. DOE notes that some of the technologies mentioned by 
NAFEM (i.e., lighting, evaporators, and condensers) are analyzed in the 
baseline for all applicable equipment classes and are not analyzed as 
design options to improve efficiency (See appendix 5A of the October 
2023 NOPR TSD for more details). In addition, some technologies were 
not directly analyzed in the October 2023 NOPR or August 2024 NODA, and 
continue to not be analyzed in this final rule (i.e., defrost systems, 
expansion valves, and liquid suction heat exchangers) (See section 
5.5.8 Design Options Not Directly Analyzed in the October 2023 NOPR 
TSD). While these technologies did not, and continue to not meet the 
screening criteria, DOE has not directly analyzed these design options 
as discussed further in chapter 5 of the final rule TSD. Finally, DOE 
did analyze design options in the October 2023 NOPR and August 2024 
NODA for improved transparent doors, compressors, fans, occupancy 
sensors, and night curtains for applicable equipment classes, but notes 
that there are instances where DOE analyzed these technologies in the 
baseline, and did not consider those technologies as design options to 
improve efficiency (i.e., baseline EC condenser or evaporator fan motor 
for certain equipment classes and R-290 baseline at the current 
standard for certain equipment classes). For a full list of technology 
options analyzed at the baseline, see appendix 5A of the final rule 
TSD. DOE evaluated technology options to be implemented at and beyond 
baseline on an equipment class basis based on testing, component/
equipment teardowns, manufacturer interviews, public comments, and 
review of online sources (e.g., spec sheets), and therefore disagrees 
with NAFEM that all technologies should be screened out. See section 
IV.C.1 for further discussion on this topic.
    DOE determined that these technology options are technologically 
feasible because they are being used or have previously been used in 
commercially available equipment or working prototypes. DOE also finds 
that all of the remaining technology options meet the other screening 
criteria (i.e., practicable to manufacture, install, and service; do 
not result in adverse impacts on consumer utility, product 
availability, health, or safety; and do not utilize unique-pathway 
proprietary technologies). For additional details, see chapter 4 of the 
final rule TSD.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of the equipment. There 
are two elements to consider in the engineering analysis: the selection 
of efficiency levels to analyze (i.e., the ``efficiency analysis''), 
and the determination of equipment cost at each efficiency level (i.e., 
the ``cost analysis''). In determining the performance of higher-
efficiency equipment, DOE considers technologies and design option 
combinations not eliminated by the screening analysis. For each 
equipment class, DOE estimates the baseline cost, as well as the 
incremental cost for the equipment at efficiency levels above the 
baseline. The output of the engineering analysis is a set of cost-
efficiency ``curves'' that are used in downstream analyses (i.e., the 
LCC and PBP analyses and the NIA).
1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing equipment (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual equipment on the market) may be 
extended using the design option approach to interpolate to define 
``gap fill'' levels (to bridge large gaps between other identified 
efficiency levels) and/or to extrapolate to the ``max-tech'' level 
(particularly in cases where the ``max-tech'' level exceeds the maximum 
efficiency level currently available on the market).
    In the October 2023 NOPR, DOE relied on a design-option approach, 
supported with the testing and reverse engineering of directly analyzed 
CRE. 88 FR 70196, 70224. Consistent with the precedent set by March 
2014 Final Rule analysis (see chapter 5 of the March 2014 Final Rule 
TSD),\48\ DOE estimated the performance of design option combinations 
using an engineering analysis spreadsheet model. Id. at 88 FR 70225. 
This model estimates the daily energy consumption of CRE in kWh/day at 
various performance levels based on design details. Id. DOE generally 
relied on test data, CCD information, feedback from manufacturer 
interviews and public comments, publicly available component 
information, and reverse engineering to support and calibrate the 
engineering analysis spreadsheet model and the values of inputs to the 
models, such as compressor performance information, insulation 
thickness and thermal resistance, air infiltration, etc. Id. The model 
calculates energy consumption at each efficiency level separately for 
each analysis configuration. Id.
---------------------------------------------------------------------------

    \48\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    In the March 2014 Final Rule analysis, DOE selected 25 high 
shipment volume equipment classes, referred to as ``primary'' classes, 
selecting a representative capacity (defined by refrigerated volume or 
TDA, depending on the class), to analyze using the engineering 
analysis. DOE has used the term ``directly analyze'' to refer to use of 
the engineering spreadsheet to calculate energy use for the 
representative unit of a given primary

[[Page 7514]]

equipment class. Analyses or energy use levels of so-called 
``secondary'' equipment classes were based on the analysis results 
determined for the primary equipment classes (see chapter 5 of the 
March 2014 Final Rule TSD).\49\ In the October 2023 NOPR analysis, DOE 
followed a similar approach of directly analyzing 28 primary equipment 
classes. Id. DOE directly analyzed the same primary equipment classes 
as the March 2014 Final Rule, with the following changes: the PD.SC.M 
equipment class was not included, and DOE directly analyzed 4 new 
equipment classes, including VCT.SC.H, VCS.SC.H, chef base or griddle 
stand self-contained medium temperature (``CB.SC.M''), and chef base or 
griddle stand self-contained low temperature (``CB.SC.L''). Id.
---------------------------------------------------------------------------

    \49\ See www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, ASAP et al. supported DOE's 
approach for the engineering analysis, which was supported by testing, 
physical and catalog teardowns, and manufacturer feedback and estimated 
both the energy use and the manufacturer production cost (``MPC'') from 
use of additional design options in CRE that increase efficiency. (ASAP 
et al., No. 79 at p. 2) ASAP et al. commented that DOE's design option 
approach represents a robust method for estimating the incremental cost 
and expected efficiency improvements associated with specific design 
options for CRE and stated that this approach is consistent with DOE's 
analysis for other rulemakings. (Id.)
    In this final rule analysis, DOE has followed the same methodology 
as the October 2023 NOPR, except for the updates outlined in the 
following sections. In this final rule, consistent with the analysis in 
the August 2024 NODA, DOE analyzed a different representative capacity 
for the SOC.SC.M equipment class that assumes the use of R-290. DOE 
also made changes to the baseline analysis, including updating the R-
value and thickness of insulation, updating the compressor performance 
assumptions, updating certain baseline components, and updating 
baseline design specifications for some equipment classes. Additionally 
in this final rule, DOE removed some design options (as discussed in 
section IV.B of this document) and updated the analysis approach or key 
performance characteristics of some design options (as discussed in 
section IV.C of this document).
    Also consistent with the August 2024 NODA, DOE made updates to the 
multiplier approach, as discussed in section IV.C.1.c of this document.
a. Baseline Energy Use
    For each equipment class, DOE generally selects a baseline model as 
a reference point for each class, and measures anticipated changes 
resulting from potential energy conservation standards against the 
baseline model. The baseline model in each product/equipment class 
represents the characteristics of a product/equipment typical of that 
class (e.g., capacity, physical size). Generally, a baseline model is 
one that just meets current energy conservation standards, or, if no 
standards are in place, the baseline is typically the most common or 
least efficient unit on the market.
i. Representative Unit Capacity
    In performing the engineering analysis for CRE, DOE selected 
representative units for each primary equipment class to serve as 
analysis points in the development of cost-efficiency curves. In the 
October 2023 NOPR, DOE directly analyzed 28 primary equipment classes, 
at a single representative capacity for each CRE equipment class. 88 FR 
70196, 70225.
    Few of the NOPR comments explicitly addressed the DOE approach of 
conducting analysis at a single representative capacity for each class. 
Some comments regarding selection of the slope or intercept of the 
energy conservation standard line as a function of volume or TDA are 
related to the single-capacity approach--this is because determination 
of appropriate slope could potentially be evaluated on the basis of 
conducting analysis for two representative capacities. Such comments 
are discussed in section IV.C.1.d of this document. For some equipment 
classes, the topic of representative capacity is also affected by 
refrigerant transition--this is discussed in more detail in section 
IV.C.1.a.ii of this document. Finally, NAMA submitted a comment 
regarding VCT.SC.M models with refrigerated volume less than 30 cu.ft. 
(NAMA, No. 85 at pp. 5-6). This comment addresses both the potential 
for establishing a separate class for such models, as well as the 
representativeness of DOE's selected representative capacity. Hence, 
this comment is addressed in section IV.A.1.b of this document and is 
not discussed here.
    In response to the August 2024 NODA, ITW commented that after 
reviewing table 1.2 in the NODA support document, it would appear DOE's 
analysis focused on models with interior volumes <10 cu-ft for 
refrigerators and <12 cu-ft for freezers, and that the engineering 
spreadsheet used an example model of 9.5 cu-ft. (ITW, No. 111 at p. 2) 
ITW commented expressed concern for the proposed standards encompassing 
models with volumes greater than 12 cu-ft employing technology at an 
energy efficiency level of EL3. Id.
    In response to this comment from ITW, DOE notes that it not only 
considered the test data presented in table 1.2 of the NODA support 
document, but also reviewed information publicly available online, as 
well as information gathered through manufacturer interviews and 
comments in response to the October 2023 NOPR and August 2024 NODA. 
While DOE acknowledges there are chef bases or griddle stands larger 
than the units DOE directly tested, based on the additional chef base 
or griddle stand data DOE received and reviewed for larger volumes, DOE 
determined that this data was consistent with the analysis for DOE's 
representative unit volumes.
    No other comments were submitted related to use of a single 
representative capacity for each class in the analysis.
ii. Addressing Refrigerant Transition
    In the October 2023 NOPR analysis, DOE addressed the ongoing 
refrigerant transition mandated by the AIM Act and EPA regulations. 
70196, 70226-70228. Specifically, DOE noted that, pursuant to the AIM 
Act, EPA proposed in the December 2022 EPA NOPR that all commercial 
refrigeration equipment would have to transition to refrigerants with 
GWP less than 150 or less than 300, depending on equipment 
characteristics (e.g., self-contained vs. operating with a remote 
condenser), by January 1, 2025. Id. After publication of the October 
2023 NOPR, EPA published a final rule, ``Phasedown of 
Hydrofluorocarbons: Restrictions on the Use of Certain 
Hydrofluorocarbons Under the American Innovation and Manufacturing Act 
of 2020'' (``October 2023 EPA Final Rule''), which extended the 
compliance date for equipment operating with a remote condenser to 
January 1, 2026, for remote-condensing equipment used in supermarkets 
to January 1, 2027, for refrigerated food processing and dispensing 
equipment except for equipment within the scope of UL 621 to January 1, 
2027, and for refrigerated food processing and dispensing equipment 
within the scope of UL 621 to January 1, 2028. 88 FR 73098, 73209 
(October 24, 2023). See table IV.5 for a list of all GWP limits and 
compliance dates applicable to CRE that

[[Page 7515]]

were finalized in the October 2023 EPA Final Rule.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR21JA25.107


[[Page 7516]]


BILLING CODE 6450-01-C
    As discussed in the October 2023 NOPR, DOE assumed that 
manufacturers would convert self-contained CRE models to R-290. 88 FR 
70196, 70227-70228. The use of R-290 is generally expected to provide 
higher efficiency performance at the baseline level (compared to 
current refrigerants), such that the baseline efficiency levels defined 
in the October 2023 NOPR for each self-contained class generally 
reflected a lesser energy use than the currently applicable DOE 
standards for CRE. Id. In the October 2023 NOPR, DOE's analysis 
considered that these efficiency improvements, equipment costs, and 
manufacturer investments required to comply with the December 2022 EPA 
NOPR would be in effect prior to the time of compliance for the amended 
CRE standards for all equipment classes and sizes as proposed in the 
October 2023 NOPR. Id. Therefore, in the October 2023 NOPR, DOE noted 
that the October 2023 NOPR analysis did not consider benefits and costs 
resulting from the December 2022 EPA NOPR. Id. DOE clarifies that DOE 
has not double counted any energy savings from the October 2023 EPA 
Final Rule in the October 2023 NOPR, in the August 2024 NODA, or in 
this final rule.
    In the October 2023 NOPR, DOE requested comment on its proposal to 
use baseline levels for CRE equipment based upon the anticipated design 
changes that will be made by manufacturers in response to the December 
2022 EPA NOPR. Id.
    DOE received numerous comments indicating that R-290 may not be 
suitable for use in large-capacity self-contained equipment--these 
comments are addressed in the section below discussing large-capacity 
self-contained equipment using A2L refrigerant. DOE also received 
comments addressing analysis for smaller self-contained equipment that 
do not have an issue using R-290--these are addressed in the following 
section for non-large self-contained equipment using R-290. Additional 
more general comments regarding the refrigerant transition are 
discussed in the following paragraphs.
    AHRI commented that the new refrigerants must conform to safety 
standards now being updated and revised, such as ASHRAE 15 and UL 
60335-2-89, and these refrigerants are not universally compatible with 
all end uses covered in EPA's proposed Significant New Alternatives 
Policy (``SNAP'') approvals, requiring further refinement and other 
regulatory actions to clear the path forward. (AHRI, No. 81 at p. 2) 
AHRI cited as an example UL 60335-2-89 Second Edition (2021), which has 
been proposed for most end uses of A2Ls and a replacement for UL 471. 
(Id.)
    AHRI commented that some product types have not switched to R-290, 
especially large CRE products that require larger charges of R-290, 
exceeding 150g. (AHRI, No. 81 at p. 8) AHRI commented that technology 
is just becoming available for larger units as manufacturers are 
working on preliminary designs to meet the proposed SNAP 26 rule and UL 
60335-2-89; AHRI added that until these go into effect, larger charge 
quantities of R-290 cannot be used. (Id.)
    Hussmann also pointed out that even though UL 60335-2-89 ed. 2 
allows an increased 494 g R-290 charge size, this is not yet approved 
by SNAP. (Hussmann, No. 80 at p. 5)
    In response to the October 2023 NOPR, SCC and AHRI commented that 
EPA has not published the SNAP Program Rule 26, which approves larger 
charges for R-290 products and that, currently, the charge limit for R-
290 products is 150 grams, which limits the size of these products. 
(SCC, No. 74 at p. 2; AHRI, No. 81 at p. 5)
    Hussmann stated that, because SNAP Rule 26 is still in the proposal 
stage, Hussmann has been unable to release equipment that uses higher-
charge R-290 refrigerant or new A2L refrigerants and, therefore, how 
these refrigerants impact energy consumption is not yet known. 
(Hussmann, No. 80 at p. 2)
    Hussmann and AHRI commented that DOE should refrain from new 
rulemakings until SNAP 26 and building codes are updated, and the 
transition to low-GWP refrigerants is completed, for a better 
understanding of baseline energy use. (Hussmann, No. 80 at pp. 2-3; 
AHRI, No. 81 at p. 5) AHRI stated that two key factors in lowering GWP 
and developing new systems--increased R-290 charge limits and SNAP 
approval of A2L--are not yet finalized by EPA and these technologies 
are representative of products retailers will use in 2027. (Id.) AHRI 
commented that, for self-contained products, these options will reduce 
the number of condensing units per display case (larger model display 
cases). (Id.)
    In response, DOE notes that many of the ongoing regulatory and 
standards processes that were not finalized by the time of publication 
of the October 2023 NOPR have in the interim been finalized. Most 
notably, EPA finalized the October 2023 EPA Final Rule and the SNAP 26 
Final Rule, which harmonizes with UL Standard 60335-2-89, Edition 2 and 
ASHRAE 15. 89 FR 50410 (June 13, 2024). Also relevant for the full 
capacity range of self-contained CRE, SNAP 26 increased the allowable 
charge of R-290 from 150 grams in self-contained CRE to 304 grams for 
closed equipment and 494 grams for open equipment and allows the use of 
certain A2L refrigerants, such as R-454C and R-455A.
    FMI and NACS commented that DOE's assumption that the market will 
have transitioned to the October 2023 EPA Final Rule in its baseline is 
overly speculative and that there are challenges related to technical 
feasibility, availability of installers and service technicians, local 
codes, and more that will make it impossible for industry to comply 
with AIM Act regulations within the allotted compliance timeframe. (FMI 
and NACS, No. 78 at p. 2)
    In response to comments about additional time needed for out-of-
date building codes to be updated, ACHR News \50\ stated that ``in the 
U.S., states usually adopt mechanical codes from either the 
International Code Council (``ICC'') or the International Association 
of Plumbing and Mechanical Officials (``IAMPO'').'' In May 2024, the 
ICC published the 2024 I-Codes,\51\ including the 2024 International 
Mechanical Code (``2024 IMC'').\52\ The 2024 IMC includes provisions 
for refrigeration equipment building codes that are commonly adopted by 
most states, and in the May 2024 version, section 1101.2.1, ``Group 
A2L, A2, A3 and B1 high probability equipment,'' states that equipment 
using Group A2L, A2, A3 or B1 refrigerant shall comply with UL 484, UL/
CSA 60335-2-40, or UL/CSA 60335-2-89. Therefore, DOE expects that all 
States will have updated their building codes to reference the ICC or 
other equivalent standards to reference updated safety standards by the 
2029 compliance year.
---------------------------------------------------------------------------

    \50\ See www.achrnews.com/articles/147113-finalizing-the-a2l-provisions-in-2024-mechanical-codes.
    \51\ See http://codes.iccsafe.org/codes/i-codes/2024-icodes.
    \52\ See http://codes.iccsafe.org/content/IMC2024V1.0/chapter-11-refrigeration.
---------------------------------------------------------------------------

    In response to the comment from FMI and NACS about market 
transition to alternative refrigerants, as discussed in section 
III.A.2.a of this document, NAFEM commented that most self-contained 
CRE today, in the commercial bar space, already uses alternate 
refrigerants, (almost exclusively R-290) and stated that they already 
made the change to R-290 from R-134a more than 5 years ago. (NAFEM, No. 
83 at pp. 3-5) Kirby also commented that much of the current equipment 
incorporates new refrigerants, particularly self-contained models that 
utilize R-290. (Kirby, No.

[[Page 7517]]

66 at p. 2) Additionally, DOE notes that over 93 percent of ENERGY STAR 
equipment have already transitioned to low GWP, hydrocarbon 
refrigerants.\53\ In response to FMI and NACs comment, DOE assumes that 
manufacturers will comply with applicable regulations. As a result, DOE 
does not anticipate that the challenges referenced by FMI and NACS will 
make it impossible for industry to comply with AIM Act regulations 
within the allotted compliance timeframe.
---------------------------------------------------------------------------

    \53\ www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results (last accessed Oct. 
23, 2024).
---------------------------------------------------------------------------

Large-Capacity Self-Contained Equipment Using A2L Refrigerants
    This sub-section addresses large-capacity self-contained CRE.
    In response to the October 2023 NOPR, Hussmann commented that DOE 
applied a design option of R-290 variable-speed compressor to classes 
such as SVO.SC.M that contain some very large models, such as a 12-ft-
long by 6-ft-wide shop-around island case with a refrigeration load of 
approximately 24,000 Btu/hr that Hussmann manufactures. (Hussmann, No. 
80 at p. 5) Hussmann stated that not all self-contained product types 
have been switched over to R-290 yet, especially large CRE that require 
larger charges of R-290 or an A2L refrigerant. (Hussmann, No. 80 at p. 
6) Hussmann recommended that DOE establish baselines with what is 
currently available in the market. (Id.) Hussmann further stated that 
these models will have to be transitioned to a new A2L refrigerant by 
January 1, 2025 to comply with the October 2023 EPA Final Rule, so the 
assumed R-290 energy efficiency improvement in DOE's analysis does not 
apply. (Id.) Hussmann commented that, regarding the self-contained 
equipment that will transition to an A2L refrigerant, Hussmann 
anticipates that there is no appreciable reduction in energy 
consumption based on preliminary lab testing. (Id. at p. 6)
    Zero Zone stated that DOE only evaluated and tested equipment with 
relatively small volume, adding that the smaller-volume equipment is 
not representative of the entirety of the market with self-contained 
equipment available over 200 ft\3\ of volume. (Zero Zone, No. 75 at p. 
3)
    Zero Zone, Hussmann, and SCC commented that larger volume CRE would 
require multiple condensing units for R-290. (Zero Zone, No. 75 at p. 
3; Hussmann, No. 80 at p. 5; SCC, No. 74 at p. 2) SCC further commented 
that this would result in compressors with lower EER, given that 
compressors with lower capacity tend to be less efficient. (SCC, No. 74 
at p. 2) Hussmann added that R-290 is not a practical refrigerant to 
use because multiple separate condensing units/refrigerant circuits 
would be needed, which is prohibited by a lack of physical space and by 
product cost constraints. (Hussmann, No. 80 at p. 5)
    Zero Zone commented that the use of larger charge propane systems 
is not as simple as buying and attaching larger units because the 
safety standards will require additional testing to confirm the larger 
charge will not be a safety issue for larger charge propane systems. 
(Zero Zone, No. 75 at p. 4) Zero Zone also commented that equipment 
with larger charges will need additional mitigation components, 
including sensors, controls, and fans. (Id.) Zero Zone stated that 
instead of the additional complexity and higher costs of the larger-
charge propane systems, end users may want to purchase larger-charge 
A2L self-contained equipment, and DOE should set energy levels that 
would allow the use of other refrigerants. (Id.)
    In the August 2024 NODA, DOE updated its approach for selecting 
representative units for the engineering analysis from the October 2023 
NOPR. 89 FR 68788, 68790. The updated approach was based on feedback, 
such as the comments summarized in the preceding paragraphs, received 
from manufacturers and additional analysis conducted since the October 
2023 NOPR. This updated approach indicated that larger CRE units, which 
contain more refrigerant than smaller units, would require more R-290 
refrigerant than the maximum allowable charge size specified by UL 
60335-2-89. Id. For such equipment, manufacturers will likely instead 
need to implement other low-GWP refrigerant options to comply with the 
GWP limits in the October 2023 EPA Final Rule. Id. In the August 2024 
NODA, DOE identified R-454C and R-455A as alternatives that are mildly 
flammable (designated ``A2L'') refrigerants currently available and 
could be used for units with cooling capacities greater than would be 
achievable using an allowable R-290 charge size. Id.
    In recognition of this, DOE evaluated the volume or TDA limit which 
corresponded to the UL standard charge limits based on refrigeration 
load per cabinet size and refrigerant charge per refrigeration system 
capacity. Based on the results, in the August 2024 NODA, DOE analyzed 
two different representative capacities for the following seven 
equipment classes: VOP.SC.M, SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, 
VCT.SC.L, and VCS.SC.L.\54\ Id. For each of these seven classes, DOE 
assumed the use of an A2L refrigerant for the large capacities and R-
290 for the non-large capacities in the August 2024 NODA. Id.
---------------------------------------------------------------------------

    \54\ The equipment classes are designated by equipment family, 
condensing unit configuration, and operating temperature. Equipment 
Families: VOP--Vertical Open; SVO--Semi-Vertical Open; HZO--
Horizontal Open; VCT--Vertical Closed Transparent; HCT--Horizontal 
Closed Transparent; VCS--Vertical Closed Solid; HCS--Horizontal 
Closed Solid; SOC--Service Over Counter; CB--Chef Base; PD--Pull 
Down. Condensing Unit Configurations: RC--Remote Condensing; SC--
Self Contained. Operating Temperatures: H--High Temperature; M--
Medium Temperature; L--Low Temperature; I--Ice Cream Temperature.
---------------------------------------------------------------------------

    Also, in the August 2024 NODA, DOE analyzed a smaller 
representative capacity using R-290 refrigerant for the SOC.SC.M 
equipment class, as compared to the representative capacity proposed in 
the October 2023 NOPR. Id. DOE concluded that the representative 
capacity analyzed for the SOC.SC.M equipment class in the October 2023 
NOPR using R-290 refrigerant exceeds the likely capacity limit for R-
290 based on the 304 g charge limit. Instead, DOE analyzed an A2L 
refrigerant in the August 2024 NODA. Id. Updating the representative 
capacity for SOC.SC.M is consistent with the precedent the March 2014 
Final Rule where DOE changed the representative total display area for 
HCT.SC.I from 5.12 ft\2\ in the 2013 NOPR to 4.78 ft\2\ in the March 
2014 Final Rule.\55\
---------------------------------------------------------------------------

    \55\ The 2013 NOPR TSD and 2014 Final Rule TSD are available at: 
www.regulations.gov/document/EERE-2010-BT-STD-0003-0051; 
www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    Table IV.6 presents the seven equipment classes for which DOE 
analyzed two representative capacities in the August 2024 NODA. In the 
August 2024 NODA, DOE presented analytical results of this approach for 
each of these seven equipment classes. Id. at 89 FR 68790-68791.
BILLING CODE 6450-01-P

[[Page 7518]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.108

BILLING CODE 6450-01-C
    DOE received no comments indicating that the suggested refrigerated 
volume or TDA levels delineating transition to the large-capacity range 
should be changed for any of the seven identified classes, nor that 
additional classes should have separate large-capacity ranges. Hence, 
DOE is finalizing these ranges as presented in the August 2024 NODA.
    DOE notes that while DOE is amending the standards in this final 
rule for the non-large capacity ranges for the seven equipment classes 
listed in table IV., DOE is continuing to analyze the large capacity 
ranges for these classes. Therefore, DOE is not discussing comment 
specific to the analysis for the large capacity ranges and is not 
amending the standards for the large capacity ranges in this final 
rule.
    Therefore, for the seven large self-contained equipment classes, 
the standards presented in this rulemaking remain the same as the 
current standards for each respective class. DOE has addressed all cost 
related comments, including comments about the cost of A2L equipment in 
section II.B.3 of this document.
Non-Large Self-Contained Equipment Using R-290 Refrigerant
    This sub-section addresses comments and issues specific to analysis 
for the self-contained classes determined to be in the smaller capacity 
range for which R-290 refrigerant is appropriate.
    To account for the December 2022 EPA NOPR, DOE proposed that all 
manufacturers would be able to convert self-contained CRE to R-290 and, 
therefore, proposed a more stringent efficiency level than the current 
DOE standard as the analyzed baseline in the October 2023 NOPR. 88 FR 
70196, 70227-70228. DOE initially determined the energy use associated 
with the defined baseline efficiency levels for each equipment class 
assuming use of single-speed R-290 compressors, and selecting for the 
analysis of each representative unit the more-efficient suitably-sized 
compressor based on data available at the time of the analysis from two 
commonly used compressor manufacturers. Id. at 88 FR 70228. The 
equipment daily energy use reduction determined for the use of R-290 in 
baseline models presented in the October 2023 NOPR is shown below in 
table IV.7. Baseline efficiency levels used in the analysis for these 
classes were equal to the current DOE energy conservation standard 
level for the class, expressed in kWh per day, reduced by these 
percentages, to account for the refrigerant transition.

[[Page 7519]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.109

    In response to the October 2023 NOPR, DOE received several comments 
on the proposed baseline levels for self-contained equipment.
    NEEA and ASAP et al. supported the adoption of R-290 as the new 
baseline for self-contained CRE. (NEEA, No. 89 at p. 5; ASAP et al., 
No. 79 at p. 4) Kirby commented that much of the current equipment 
incorporates new refrigerants, particularly self-contained models that 
utilize R-290. (Kirby, No. 66 at p. 2)
    ASAP et al., agreed with DOE's approach but expressed concern that 
DOE could be underestimating the efficiency improvements, noting that, 
in the November 2023 Public Meeting, Zero Zone referenced a 40-percent 
reduction in energy usage for the VCT.SC.M equipment class when using 
propane compared to 18.8 percent in DOE's analysis. (ASAP et al., No. 
79 at p. 4) ASAP et al., commented that underestimating the efficiency 
gains yielded by switching to propane refrigerant would result in CRE 
standards that are less stringent (i.e., requiring less additional 
design options) than anticipated by the engineering analysis. (Id.)
    In response to the comment from ASAP et al. about DOE 
underestimating energy savings, DOE notes that this was a 
misunderstanding by Zero Zone that was explained during the November 
2023 Public Meeting. (See November 2023 Public Meeting Transcript, No. 
64 at pp. 88-89) Zero Zone's comment suggested that they thought that 
the percentage energy use reduction of the proposed TSL level (roughly 
40 percent) was due only to conversion to R-290, when reduction for the 
R-290 conversion alone was 18.8 percent.
    Zero Zone and AHRI disagreed with DOE's decision to reevaluate 
energy levels based only on R-290. (Zero Zone, No. 75 at p. 3; AHRI, 
No. 81 at p. 8) AHRI stated that the engineering analysis worksheet 
used R-404A as the pre-baseline with the new baseline of EL 0 based on 
R-290. (Id. at p. 8) However, AHRI stated that EL 0 (i.e., the baseline 
efficiency level) should have been based on R-404A refrigerant and DOE 
should not assume that all CRE products have been converted to R-290 
because this is not yet allowed by the EPA. (Id.) AHRI commented that 
other options currently used include R-450A, R-513A, and R-600a. (Id.) 
AHRI stated that DOE's analysis does not align with UL safety 
requirements as R-290 cannot be used in cases with shaded pole fan 
motors. (Id.) AHRI added that the speculation in the DOE analysis does 
not reflect current models; therefore, DOE cannot expand on what 
options are available. (Id.)
    NAMA recommended against using baseline levels for CRE based on 
anticipated manufacturer design changes made in response to the 
December 2022 EPA NOPR, as design changes for the EPA regulation are 
not the baseline for an energy efficiency rulemaking. (NAMA, No. 85 at 
p. 29) NAMA commented that the EPA-proposed regulation requires 
reductions in GWP, not an automatic effective date for every unit, for 
every platform, and the December 2022 EPA NOPR is not final; 
consequently, it would be impossible for NAMA to provide empirical data 
on the amount of energy savings assigned to meeting the EPA proposed 
regulation. (Id.)
    In response to AHRI suggestions to analyze additional refrigerants 
other than R-290 for self-contained equipment classes, DOE notes that 
its analysis assumes prior conversion of refrigerant to meet the 
October 2023 EPA Final Rule, which requires GWP less than 150. 88 FR 
73098, 73149. Both R-450A and R-513A have higher GWPs (601 and 630 
respectively),\56\ thus they would not be appropriate options to 
represent an EPA-compliant baseline. DOE also notes that R-600a has 
similar compressor efficiencies to R-290, and therefore the performance 
of units using R-290 should be similar to that of those using R-600a. 
Regarding the comment that not all models have transitioned to R-290, 
as indicated, the analysis assumption was that a transition to a 
refrigerant with GWP less than 150 would be required by January 1, 
2025--and this requirement was finalized in the October 2023 EPA Final 
Rule. Consistent with comments that many models have already converted 
to R-290 (see, e.g., NAFEM, No. 83 at p. 5) and feedback in 
manufacturer interviews that manufacturers expect the market to 
transition to R-290 for models for which the charge limits are 
sufficient, DOE has finalized its analysis assuming conversion to R-290 
to meet EPA regulations when charge limits prescribed by UL-60335-2-89 
and SNAP would not be exceeded.
---------------------------------------------------------------------------

    \56\ The values included in the text have been calculated as 
prescribed by the EPA in 40 CFR 64.64.
---------------------------------------------------------------------------

    NAFEM commented that, as stated during the November 2023 Public

[[Page 7520]]

Meeting, there are several components that must be flame-resistant or 
spark-proof and available in a number of applications, particularly in 
fan motors and both the condenser and the evaporator fan motors, as 
well as other remote sensing equipment. (NAFEM, No. 83 at p. 16) NAFEM 
pointed out that, for its small manufacturers, parts are not available 
for being spark-proof and available at R-290, and volumes are so low 
that they do not intend to put those products in. (Id.) NAFEM commented 
that DOE assumes a complete conversion to R-290, especially in self-
contained units, and advised DOE to slow down its process for CRE until 
the industry has a better understanding of how to meet AIM Act 
requirements, which do not require R-290. (Id.)
    In response to the comment from NAFEM about spark-proof components, 
DOE notes that, in this final rule and consistent with the October 2023 
NOPR and August 2024 NODA, DOE has accounted for the cost of spark-
proof components. Because DOE has analyzed R-290 as the baseline for 
all non-large self-contained classes in response to the October 2023 
EPA Final Rule, the costs associated with additional components 
necessary to comply with safety standards for R-290 are incorporated 
into the core case cost. In addition, DOE has tested units as small as 
7 ft\3\ utilizing R-290 refrigerant and observed units utilizing R-290 
as small as 2.34 ft\3\.\57\ Based on that testing, DOE disagrees that 
parts are not available at low volumes. Further, during the November 
2023 Public Meeting, True Manufacturing commented that the technology 
for self-contained refrigeration to transition to R-290 is already 
available. (November 2023 Public Meeting Transcript, No. 64 at pp. 74-
75)
---------------------------------------------------------------------------

    \57\ See www.regulations.doe.gov/certification-data/CCMS-4-
Refrigeration_Equipment_-
_Commercial__Single_Compartment.html#fq=Chilled_or_Frozen_Volume_in_c
ubic_feet__ft3if_Applicable_d%3A%5B0.33%20TO%202.29%5D&fq=modelNumber
%3A''UCF20HC%5C-25''&fq=Basic_Model_Number_m%3A''UCF20HC%5C-
25''&q=Product_Group_s%3A''Refrigeration%20Equipment%20-
%20Commercial%2C%20Single%20Compartment''.
---------------------------------------------------------------------------

    Hoshizaki and Hussmann disagreed with DOE's approach of accounting 
for only one refrigerant in the baseline. (Hoshizaki, No. 76 at p. 3; 
Hussmann, No. 80 at p. 6) Hoshizaki commented after reviewing the 
ENERGY STAR website it found that the top 25 percent of the market uses 
multiple refrigerants and recommended that DOE should review 
refrigerants used in each category and size and analyze energy savings 
for each refrigerant type for each machine type and size. (Hoshizaki, 
No. 76 at p. 3)
    In response to the comments from Hoshizaki and Hussmann, DOE notes 
that after reviewing the ENERGY STAR website,\58\ only two refrigerants 
used in rated equipment meet the GWP limit finalized in the October 
2023 EPA Final Rule: R-600a and R-290. As previously noted in the 
October 2023 NOPR TSD, DOE is aware of small CRE equipment using R-
600a; however, DOE has determined that R-600a has similar 
refrigeration-cycle efficiency as R-290 and that the performance of CRE 
using R-290 is representative of CRE using R-600a. Therefore, in this 
final rule analysis, DOE has determined that the R-290 baseline in 
response to the October 2023 EPA Final Rule is representative of the 
alternative refrigerants that may be used in non-large self-contained 
equipment.
---------------------------------------------------------------------------

    \58\ See www.energystar.gov/productfinder/product/certified-commercial-refrigerators-and-freezers/results.
---------------------------------------------------------------------------

    Hillphoenix commented that, according to DOE's engineering 
spreadsheet, the R-290 versus R-404A efficiency gains attributed to the 
compressor are 34.7 percent for medium-temperature (``MT'') and 5.6 
percent for low-temperature (``LT'') applications. (Hillphoenix, No. 77 
at p. 7) Hillphoenix requested that Copeland, the largest U.S.-based 
refrigeration compressor manufacturer, compare LT and MT compressor 
efficiencies. (Id.) Hillphoenix commented that, based on Copeland's 
actual compressor performance and EER data, the percentage in energy 
savings for R-290 versus R-404A in LT applications averages 
approximately 14 percent, compared to DOE's value of 5.7 percent, and 
in MT applications it averages approximately 22 percent, compared to 
DOE's value of 34.7 percent. (Id. at p. 8)
    NAFEM commented that the CRE industry only saw an energy efficiency 
improvement closer to 10 percent when switching from R-134a to R-290 
more than 5 years ago. (NAFEM, No. 83 at p. 5) AHRI commented that, 
looking at only the refrigerant, its members anticipate that no 
appreciable reduction in energy consumption will result from 
transitioning to low-GWP refrigerants. (AHRI, No. 81 at p. 8)
    In response to comments from Hillphoenix, NAFEM, and confidential 
comments received by DOE that the energy use reduction attributed in 
the October 2023 NOPR analysis to conversion to R-290 may not be 
appropriate, DOE reviewed new available compressor performance data and 
updated its analysis. This is similar to DOE's action in the March 2014 
Final Rule, in which DOE updated its compressor assumptions in response 
to comments received on the 2013 NOPR. 79 FR 17725, 17760. Similarly, 
in this rulemaking, DOE has updated its analysis for the R-290 baseline 
energy use level. As described above, in the October 2023 NOPR, DOE 
determined energy use reduction associated with R-290 transition based 
on the more efficient appropriately-sized compressor option for which 
performance data was available from two commonly used compressor 
manufacturers. 88 FR 70196, 70228. However, based on updated compressor 
data and feedback provided by commenters, in the August 2024 NODA and 
this final rule, DOE added compressor data from an additional 
compressor manufacturer and determined energy use reduction using the 
average rather than best efficiency of appropriately-sized available 
compressors. 89 FR 68788, 68792. Based on the updated data, on average, 
the medium-temperature energy savings presented in this final rule are 
smaller than in the October 2023 NOPR and the low-temperature energy 
savings presented in this final rule are larger than in the October 
2023 NOPR, an adjustment that is consistent with feedback from 
Hillphoenix. These updated energy savings were presented in the August 
2024 NODA and are also shown in table IV. of this final rule.
BILLING CODE 6450-01-P

[[Page 7521]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.110

BILLING CODE 6450-01-C
    In response to the August 2024 NODA, Delfield commented that it 
agrees with DOE's updated compressor approach of using an average EER 
rather than the best EER value, especially for new compressors whose 
EER values have not been validated. (Delfield, No. 99 at p. 2) 
Hillphoenix and the CA IOUs also supported DOE's updated approach. 
(Hillphoenix, No. 110 at p. 3, CA IOUs, No. 113, at p. 2) Hillphoenix 
commented that they support DOE's revised compressor energy savings for 
low and medium temperature applications, and the CA IOUs commented that 
the updated R-290 compressor efficiency approach provides a more 
accurate representation of the baseline energy use for R-290 
compressors. Id.
    However, Delfield disagreed with DOE's inclusion of energy 
efficiency improvements resulting from switching to R-290 refrigerant 
in the baseline given that most of the industry has already switched to 
R-290 refrigerant over 7 years ago. (Delfield, No. 99 at pp. 1-2) 
Delfield further commented that the CRE models that DOE tested and 
reverse engineered include a combination of HC and HFC/HFO. (Id.) 
Delfield expressed concern that the HFC/HFO units would inflate the 
baseline energy use. (Id.) Delfield requested further explanation of 
how including R-290 single-speed compressor as an EL 0 for VCS.SC.M and 
L classes is not double counting the energy savings attributed to 
switching to R-290. (Id.)
    In response to Delfield, the March 2014 Final Rule, which 
established the current standards that became effective on March 27, 
2017, was based on an analysis using the most commonly-used, industry-
standard refrigerants at the time of the March 2014 Final Rule. 79 FR 
17725, 17754. DOE stated that it considered two refrigerants, R-134a 
and R-404A, because these are the industry-standard choices for use in 
the vast majority of commercial refrigeration equipment. 79 FR 17725, 
17753. In support of this final rule, DOE reviewed models that are 
representative of energy use at or near the current standard and found 
that, for most analyzed equipment classes, R-134a and R-404A are 
representative. Therefore, to account for the refrigerant transition 
mandated by the October 2023 EPA Final Rule, DOE developed a baseline 
for self-contained equipment subject to this final rule using R-290 as 
the baseline. Because R-290 has a higher refrigeration-cycle efficiency 
than R-134a and R-404A, DOE reviewed R-290 compressors currently 
available for CRE and similarly found that R-290 compressors typically 
have higher EERs than R-134a and R-404A. Therefore, the R-290 baseline 
developed for this final rule uses less energy than the current 
standard for most equipment classes. As noted in table IV.8, DOE has 
analyzed the current standard as the R-290 baseline for the HCT.SC.M, 
HCT.SC.L, HCS.SC.L, VCT.SC.I, and HCT.SC.I equipment classes based on 
DOE's determination that R-290 is representative of baseline CRE for 
these classes. These findings are also supported by a review of models 
with these refrigerants certified to DOE's CCD and tested by DOE.
CRE in Public Spaces
    In response to the October 2023 NOPR, NAMA commented that in order 
to be compliant with ASHRAE, manufacturers are required to use no more 
than 114 grams of R-290 for equipment placed in public hallways or 
lobbies rather than up to 150 grams, and that a 114-gram refrigerant 
charge will not allow a significant number of machine models to be 
updated or enlarged, and the leak testing required by the new 60335-2-
89 version will likely require a very precise flammable refrigerant 
sensor that does not exist. (NAMA, No. 85 at p. 7)
    NAFEM relayed a comment from one of its members that manufacturers 
are interested in converting to R-290, but if a piece of equipment is 
used in a public space, it must meet ASHRAE 15, which limits the actual 
charge amount to 114 grams, not 150 grams as stated in the October 2023 
NOPR TSD and October 2023 NOPR. (NAFEM, No. 83 at p. 16) NAFEM 
commented manufacturers are limited in size of equipment by that

[[Page 7522]]

conversion and cannot convert if the product cannot be sold. (Id.)
    In response to the comments from NAMA and NAFEM, DOE notes that 
this same restriction applies to refrigerated bottled- or canned-
beverage vending machines (``BVMs''), and DOE has tentatively 
determined that the 114 g limit would not restrict any currently 
available BVM units from transitioning to R-290 refrigerant. 88 FR 
33968, 33976. While there are differences between the BVM and CRE test 
procedures and cabinet construction, DOE anticipates that any CRE 
designed to serve the same market as BVMs (e.g., in public hallways or 
lobbies) would also be able to transition to R-290 compressors without 
exceeding the 114g limit.
    In addition, commenters did not provide examples of specific models 
or types of models that are intended for areas of egress and would use 
more than 114 grams of R-290 refrigerant. DOE reviewed the three 
VCT.SC.M models under 30 ft\3\ using R-290 that it tested, based on 
NAMA's request for separate consideration of these models, and found 
that all three models used less than 114 grams of R-290. The volume of 
these three models are 8.72 ft\3\, 12.98 ft\3\, and 23.90 ft\3\.
Remote Condensing Equipment
    In the October 2023 NOPR, DOE noted that remote condensing CRE is 
also impacted by the December 2022 EPA NOPR, however, in AHRI 1200 the 
test procedure calculates an expected compressor energy consumption 
based on the case refrigeration load, independent of the refrigerant 
type of the compressor. 88 FR 70196, 7028870228. Hence, DOE initially 
determined that alternative refrigerants in remote CRE cases do not 
result in changes in measured energy consumption. Id.
    DOE did not receive comments on this approach, and therefore, 
consistent with the analysis in the August 2024 NODA, in this final 
rule DOE is analyzing the current standard as the baseline for remote 
condensing equipment.
    Hussmann commented that, while EPA's effective date for self-
contained equipment classes is January 1, 2025, the effective date for 
the same equipment classes for remote condensing products is January 1, 
2026 or January 1, 2027, based on the type of connected refrigeration 
system. (Hussmann, No. 80 at p. 6) Hussmann stated its belief that, for 
these remote condensing classes, it is too soon to comment on energy 
use reduction for equipment that will be transitioned to A2L 
refrigerants not even yet allowed by EPA SNAP and many building codes 
around the nation. (Id.)
    In response to the comment from Hussmann on SNAP approval and 
building codes, as noted in the previous section, SNAP 26 was finalized 
to allow A2L refrigerants in accordance with UL 60335-2-89 and ASHRAE 
15/34. In addition, based on a webinar by AHRI,\59\ as of June 2024, 
only 6 states do not currently allow A2L refrigerants, far fewer than 
in August 2022 when 36 states did not allow A2L refrigerants. 
Therefore, DOE anticipates that by the compliance year of 2029 building 
codes should not impact a manufacturer's ability to transition to A2L 
refrigerants.
---------------------------------------------------------------------------

    \59\ See www.youtube.com/watch?v=aETuPis5cAM.
---------------------------------------------------------------------------

iii. Engineering Assumptions
    Appendix 5A of the October 2023 NOPR TSD itemized baseline design 
details and key engineering assumptions regarding component performance 
affecting energy use that were used in the engineering spreadsheet 
analysis of primary equipment class representative units. The October 
2023 NOPR notice provides additional discussion regarding baseline 
designs. 70196, 70228-70230. DOE received comments in response to the 
baseline engineering assumptions used in the October 2023 NOPR 
analyses. Specifically, DOE received several comments regarding the 
insulation R-value, insulation thickness, fan motors, anti-sweat heater 
controls, lighting, and conduction loads in the engineering analysis 
for the baseline. The August 2024 NODA and its accompanying support 
document present revisions made to the analyses that DOE made in 
response to the October 2023 NOPR comments. DOE received additional 
comments on these topics in response to the August 2024 NODA. Both the 
NOPR and NODA comments and DOE's final determinations regarding 
baseline design details are discussed in the following paragraphs.
    In response to the August 2024 NODA, The CA IOUs commented that 
they supported the updated baseline design components because these 
they more accurately reflect current baseline models in the CRE market. 
(CA IOUs, No. 113, at p. 1)
Insulation R-Value
    In the October 2023 NOPR engineering analysis, DOE assumed an R-
value for polyurethane foam of 8 (ft\2\- [deg]F-hr/Btu) per inch. DOE 
received the following comments in response.
    In response to the October 2023 NOPR, Hussmann commented that DOE's 
assumption of the R-value per inch of the equipment insulation is 
unrealistic, stating that R-values per inch of the foam itself for CRE 
are much closer to 6.5 per inch than they are to the 8.0 shown in DOE's 
engineering spreadsheet.\60\ (Hussmann, No. 80 at p. 5) Hussmann agreed 
with DOE's determination in the October 2023 NOPR TSD to use an 
adjusted R-value per inch of 4.0 for the finished foam panels to 
account for edge effects and gasket heat losses. (Id.)
---------------------------------------------------------------------------

    \60\ The October 2023 NOPR engineering analysis spreadsheet is 
available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0055.
---------------------------------------------------------------------------

    ITW commented that DOE should revise its CRE engineering 
spreadsheet assumptions to better reflect the current state of the 
industry in terms of the thermal conductivity of the insulating foam 
used in the construction of refrigerated cabinets. (ITW, No. 82 at p. 
2) ITW commented that the average CRE industry R-value is between 6.3 
and 7.1 and that this is backed up by data and a recent NAFEM survey in 
which 71.5 percent of the CRE manufacturers surveyed reported an R-
value for their insulation between 6.4 and 7.4. (Id. at p. 3) Based on 
ITW's product experience, competitive evaluations, technical data 
points, and the responses from the NAFEM survey, ITW requested DOE 
change the baseline R-value from 8 to 6.5. (Id. at p. 4)
    NAFEM provided results of its manufacturer survey. Results of this 
summary regarding insulation K factor are summarized in table IV.9. 
(NAFEM, No. 83 at pp. 38-39)
BILLING CODE 6450-01-P

[[Page 7523]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.111

BILLING CODE 6450-01-C
    In response to the comment from Hussmann, DOE notes that the R-
value used in the October 2023 NOPR engineering analysis was 8 per 
inch, not an adjusted R-value of 4.0 per inch. DOE believes that 
Hussmann was referring to the June 2022 Preliminary TSD, which applied 
a multiplier of 0.5 to the R-value per inch, resulting in an adjusted 
R-value of 4.\61\ This adjustment was done to adjust the heat load in 
addition to other adjustments to design specifications for heat load 
adjustments (i.e., infiltrated air mass flow), however, in the October 
2023 NOPR, based on comments in response to the June 2022 Preliminary 
Analysis, DOE analyzed a revised R-value of 8 per inch with the 
infiltrated air mass flow to be more consistent with the March 2014 
Final Rule. 88 FR 70196, 70234.
---------------------------------------------------------------------------

    \61\ See table 5.5.4 of the Preliminary Analysis TSD, available 
at www.regulations.gov/document/EERE-2017-BT-STD-0007-0016.
---------------------------------------------------------------------------

    In response to comments on the October 2023 NOPR analyzed R-value 
of 8 per inch, DOE reviewed these comments, and based on this review 
and consistent with commenter feedback, DOE presented a revised 
analysis in the August 2024 NODA with the R-value of polyurethane foam 
changed from 8 per inch to 6.5 per inch to represent the baseline R-
value used by CRE models. 89 FR 68788, 68792.
    In response to the August 2024 NODA, Hussmann agreed with DOE's 
update of the insulation R-value from 8 per inch to 6.5 per inch, as 
this is in line with the R-value of polyurethane blown foams used in 
the CRE market. (Hussmann, No. 108 at p. 2) Continental, AHRI, 
Hillphoenix, Delfield, and ITW also commented in support of DOE's 
updated R-values from 8 to 6.5 per inch. (Continental, No. 107 at p. 2; 
AHRI, No. 104 at p. 8; Hillphoenix, No. 110 at p. 4; Delfield, No. 99 
at p. 2; ITW, No. 111 at p. 1)
    In this final rule, DOE is maintaining 6.5 per inch to represent 
the baseline R-value used by CRE models.
Insulation Thickness
    Several commenters expressed concerns with the insulation thickness 
analyzed in the October 2023 NOPR. For ease of reference, Evaporator 
Fan Control shows the insulation thickness assumed for each equipment 
class in the March 2014 Final Rule, the June 2022 Preliminary Analysis, 
and the October 2023 NOPR and the updated insulation thickness analyzed 
in this final rule, which is the same as presented in the August 2024 
NODA.

[[Page 7524]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.112

    In response to the October 2023 NOPR, AHRI, SCC, and Hillphoenix 
stated that despite screening out increased insulation thickness as a 
design option, DOE has increased the 2023 baseline insulation thickness 
from the March 2014 Final Rule selected design levels. (AHRI, No. 81 at 
p. 7; Hillphoenix, No. 77 at pp. 3-4; SCC, No. 74 at p. 3) Hillphoenix 
also commented that equipment used to manufacture insulated structures 
is typically used to produce products in multiple covered DOE classes, 
therefore changes in insulation thickness of one equipment class would 
require changes in multiple classes, resulting in an increase in 
testing, recertification, and validation. (Hillphoenix, No. 77 at p. 4)
    NAMA, Hussmann, and ITW commented that the insulation thickness 
assumed in the October 2023 NOPR is not representative of CRE products 
on the market today. (NAMA, No. 85 at p. 5; Hussmann, No. 80 at p. 4; 
ITW, No. 82 at pp. 2, 5) ITW commented that it is contradictory that 
DOE screened out increased insulation as a design option but have 
included an additional 0.5 inches of insulation in the baseline 
calculation for CRE in the October 2023 NOPR compared to the June 2022 
Preliminary TSD. (ITW, No. 82, at p. 5)
    NAMA stated that 1 inch to 1.5 inches is typical of nearly all 
machines including VCT.SC.M equipment. (NAMA, No. 85 at pp. 5, 15) 
Hussmann stated that the standard insulation thickness for medium-temp 
commercial refrigeration equipment is 1.5 inches and for low-temp 
equipment is 2.0 inches, and this should be considered when determining 
the energy limits. (Hussmann, No. 80 at p. 4) ITW requested that DOE 
change the baseline insulation thickness from 2.5 inches to 2.0 inches. 
(ITW, No. 82, at pp. 2, 5)
    NAFEM provided results of a survey of its manufacturers for the 
insulation thickness in its units, which is presented in Table IV.. 
(NAFEM, No. 83 at pp. 36-37) DOE notes that the survey results provided 
by NAFEM do not specify the operating temperature of the surveyed 
equipment.

[[Page 7525]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.113

    DOE reviewed comments in response to the October 2023 NOPR that 
requested that DOE review the baseline assumptions. Based on these 
comments, DOE presented a revised analysis in the August 2024 NODA. 89 
68788, 68792. DOE has revised the insulation thicknesses to be 
consistent with the insulation thicknesses analyzed in the March 2014 
Final Rule,\62\ which are also consistent with comments received in 
response to the October 2023 NOPR, including the survey results 
presented by NAFEM, and DOE's reverse engineering data. DOE's 
engineering analysis is based on the following updated insulation 
thicknesses: medium- and high-temperature equipment with an insulation 
thickness of 1.5 inches, low-temperature equipment with an insulation 
thickness of 2.0 inches, and ice cream temperature equipment with an 
insulation thickness of 2.5 inches. See table IV.10 presented at the 
beginning of this section for further details.
---------------------------------------------------------------------------

    \62\ See Table 5A.2.2 Baseline Specifications in the March 2014 
Final Rule TSD at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    In response to these updates in the August 2024 NODA, Hillphoenix 
and ITW agreed with DOE's decision to align insulation R-values and 
thickness to reflect current industry offerings. (Hillphoenix, No. 110, 
p. 4; ITW, No. 111 at p. 1) DOE has maintained these insulation 
thickness values in this final rule.
Fan Motors
    In the October 2023 NOPR, DOE assumed a combination of ECM, shaded 
pole, and permanent split capacitor (``PSC'') evaporator, and condenser 
fan motors in the baseline representative unit, depending on the 
equipment class. For more details about the baseline evaporator and 
condenser fan motor types assumed in the October 2023 NOPR, see tables 
5A.2.1 through 5A.2.4 of the October 2023 NOPR TSD.
    In response to the October 2023 NOPR, NAMA, AHRI, Hussmann, and SCC 
commented that ECMs are already widely in use in the CRE industry since 
the 2017 standards. (NAMA, No. 85 at pp. 14, 23; AHRI, No. 81 at pp. 4-
5; Hussmann, No. 80 at p. 4; SCC, No. 74 at p. 1) NAMA added that ECMs 
have been used in CRE designs for at least 5 years and several of its 
companies mentioned that they have been using ECM condenser and 
evaporator fan motors since 2013. (NAMA, No. 85 at pp. 14, 23) Hussmann 
and NAMA stated that DOE's baseline component assumptions should 
reflect the widespread use of ECMs. (Hussmann, No. 80 at p. 4; NAMA, 
No. 85 at p. 23) NAMA commented that this design option applies to 
VCT.SC.M units, and also VOP, and HZO units. (NAMA, No. 85 at p. 23) 
NAMA further commented that the savings achieved from transitioning to 
ECMs was in the vicinity of 2-2.5-percent improvement when it was 
introduced, adding that they agreed with DOE that the savings would be 
in the vicinity of 0.139 kWh/day. (Id.)
    With respect to the comments from NAMA, AHRI, Hussmann, and SCC, 
DOE has reviewed the CRE teardown data it conducted on analysis units 
in support of this rulemaking and observed that a significant number of 
units, but not all units, contained ECM evaporator and condenser fan 
motors. Therefore, based on DOE's teardown data and consistent with 
commenters' feedback, DOE updated its assumptions regarding baseline 
fan motors for certain equipment classes in the August 2024 NODA. The 
analysis sets ECM as the baseline evaporator and condenser fan motor 
type for most equipment classes, but not all classes, which is 
consistent with the data available to DOE.
    In response to the August 2024 NODA, Continental agreed with DOE's 
revised use of ECMs as the baseline, and stated that this revision 
should be applied to all equipment classes. (Continental, No. 107 at p. 
2) Continental additionally stated that it does not utilize shaded pole 
(``SP'') motors in any R-290 products due to safety concerns and 
attempts to maximize product performance. (Id.)
    ITW also commented in support of DOE's revised assumption that 
current CRE already incorporates the use of electronically commutated 
motors for evaporator and some condenser fan applications, and that 
revised efficiency levels now take this into consideration. (ITW, No. 
111 at p. 1)
    Hussmann and AHRI also agreed with DOE's assumption that EC fan 
motors should be the baseline fan motor assumption for the vast 
majority, if not all, equipment classes. (Hussmann, No. 108 at p. 2; 
AHRI, No. 104 at p. 8)
    AHRI disagreed with DOE's assumption that shaded pole fan motors 
are used as the baseline for self-contained equipment using R-290 as a 
refrigerant, e.g., in the SOC.SC.M class, noting that SP motors are 
considered potential ignition sources for a flammable mixture of R-290 
and air that could be created in a leak scenario. (AHRI, No. 104 at p. 
8) AHRI stated that it has always opted for EC fan motors for both the 
evaporator and condenser when using R-290. (Id.) ARHI stated that the 
additional cost of EC motors is worth the reduction in risk and 
avoidance of additional safety testing required by the UL standards 
when shaded pole motors are used with R-290. (Id.)
    Delfield commented that several OEMs already use DC condenser fans 
and expressed concern that DOE expects savings on something that is 
already implemented to meet current energy regulations. (Delfield, No. 
99 at p. 2) Delfield added that they have several units using DC fans 
that barely make current regulations so any reduction

[[Page 7526]]

would likely prevent them from selling those products that are 
currently in demand from customers. (Id.)
    Regarding the comment from Delfield, in this final rule DOE has 
analyzed ECM as the baseline evaporator and condenser fan motor type 
for most, but not all, equipment classes, consistent with the data 
available to DOE. In response to AHRI's comment about the use of shaded 
pole motors with R-290 refrigerant, DOE notes that these motors can be 
enclosed to be suitable for use with R-290, but agrees it may be more 
cost-effective to switch to ECM motors. On the other hand, the switch 
to ECM motors would make the model more efficient than simply 
converting the refrigerant. Rather than assume a manufacturer would, in 
response to the EPA October 2023 final rule requiring use of low-GWP 
refrigerants, implement ECMs on top of converting the refrigerant, thus 
achieving a higher efficiency as a post-refrigerant-transition 
baseline, DOE instead assumed that the baseline should be based only on 
the refrigerant conversion. For further details, see section 2, 
``Design Specifications and Baseline Design Options'' in the NODA 
support document (see EERE-2017-BT-0007-0090 at pp. 10-14).
Anti-Sweat
    In response to the October 2023 NOPR, Hillphoenix commented that, 
DOE utilized different amounts of anti-sweat heat for remote vs. self-
contained equipment classes for the equipment classes SOC.SC.M and 
SOC.RC.M with the same case design options. (Hillphoenix, No. 77 at p. 
4) Hillphoenix commented also that these two equipment classes are 
identical products (with the exception of an added compressor) and 
should use the same amount of anti-sweat wattage. (Id.) Hillphoenix 
stated that in DOE's engineering spreadsheet for the October 2023 NOPR, 
the self-contained class uses 90 watts of heat versus the remote 
class's 200 watts, and the lower wattage in the self-contained class 
will create sweating and condensation issues. (Id.) Hillphoenix stated 
that this violates the prohibition in EPCA of adopting energy standards 
that impair the functionality of a pre-existing product. (Id.) \63\
---------------------------------------------------------------------------

    \63\ EPCA states the following at 42 U.S.C. 6295(o)(4): the 
Secretary may not prescribe an amended or new standard under this 
section if the Secretary finds (and publishes such finding) that 
interested persons have established by a preponderance of the 
evidence that the standard is likely to result in the unavailability 
in the United States in any covered equipment type (or class) of 
performance characteristics (including reliability), features, 
sizes, capacities, and volumes that are substantially the same as 
those generally available in the United States at the time of the 
Secretary's finding and the failure of some types (or classes) to 
meet this criterion shall not affect the Secretary's determination 
of whether to prescribe a standard for other types (or classes). (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(4))
---------------------------------------------------------------------------

    In response to Hillphoenix, DOE notes that, in the section 5.5.2 of 
the October 2023 NOPR TSD, DOE stated that the anti-sweat heater 
assumptions were based on data from directly analyzed units and 
manufacturer feedback. However, based on additional test data and 
feedback from commenters, DOE has updated the anti-sweat heater power 
for the SOC.SC.M class in this final rule, consistent with the August 
2024 NODA. As indicated in the NODA support document, DOE revised its 
anti-sweat wattage assumptions in the August 2024 NODA analysis such 
that the wattages for the self-contained and remoted condensing 
service-over-counter models with 51 sq.ft. TDA are nearly the same at 
190 W and 200 W, respectively (see table 2.9 for SOC.RC.M table 2.10 
for SOC.SC.M).
    Zero Zone commented that reduced energy levels will result in 
equipment designs with very low energy anti sweat heaters, which will 
be more likely to have condensate on surfaces because many end users do 
not have reliable humidity control on the store air conditioning. (Zero 
Zone, No. 75 at p. 4) Zero Zone commented also that customers will 
request anti-sweat heaters with higher power and, therefore, 
manufacturers will need to apply anti-sweat heater controllers. (Id.) 
Zero Zone stated that DOE should add the cost of anti-sweat controllers 
to the equipment cost when DOE calculates payback and energy savings. 
(Id.)
    With respect to the comment from Zero Zone about additional costs 
associated with anti-sweat heater controllers, DOE has revised the 
anti-sweat heater powers assumed in the baseline for this final rule, 
which are consistent with the CRE market and are designed to prevent 
condensation buildup on surfaces. Therefore, DOE has determined that 
anti-sweat heater controllers are not required for baseline equipment 
in this final rule analysis. Additionally, DOE included neither anti-
sweat heater controllers nor anti-sweat heat wattage reduction as 
design options in the August 2024 NODA analysis. DOE did not analyze 
additional cost for anti-sweat heater controllers because this was not 
considered as a design option.
    DOE did not receive any comments in response to the August 2024 
NODA which suggested alternative baseline anti-sweat heater wattages. 
Thus, DOE used the same wattage values for the final rule analysis.
Lighting for the HZO Equipment Family
    In the October 2023 NOPR, DOE updated the lighting design 
specifications based on data available at that time to account for the 
energy consumed per foot of LED lights.\64\ DOE received several 
comments in response to this update for the HZO equipment class.
---------------------------------------------------------------------------

    \64\ See section 5.5.8.2 and appendix 5A.2 of the October 2023 
NOPR TSD.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, NAMA and Hussmann stated that 
DOE applied lighting control design options to HZO equipment, which 
typically does not have lighting. (NAMA, No. 85 at p. 24; Hussmann, No. 
80 at p. 5)
    In response to the comments from NAMA and Hussmann, DOE reviewed 
its CRE test data for HZO units and observed that lighting is not 
included for them. Therefore, based on DOE's test data and commenter 
feedback, DOE removed lighting from the baseline design specifications, 
and the lighting control design option, for the HZO equipment class in 
its August 2024 NODA analysis. For further details, see the August 2024 
NODA support document, (Tables 2.6, 2.7, 2.10, 3.8, 3.9, 3.22, 3.23, 
and 3.38). Additionally, DOE notes that updating the lighting design 
specifications for the HZO equipment family is consistent with the 
approach in the March 2014 Final Rule, where DOE updated the number of 
bulbs in the conditioned space for PD.SC.M from 2 to 3.\65\
---------------------------------------------------------------------------

    \65\ See tables 5.A.2.2 of the NOPR and March 2014 Final Rule 
TSD available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    DOE did not receive comments regarding lighting design 
specifications in response to the August 2024 NODA. Hence, DOE used the 
same lighting design specifications for its final rule analysis.
Conduction Loads
    In response to the October 2023 NOPR, ITW commented that DOE should 
revise its CRE engineering spreadsheet assumptions to account for 
ancillary transmission losses (i.e., conduction loads through thermal 
breaks, drain tubes, refrigerant lines, screws, bolts, internal 
assembly flanges, etc.). (ITW, No. 82 at p. 2) ITW stated that the 
accounting for these ancillary losses was dropped out between the June 
2022 Preliminary Analysis and the October 2023 NOPR versions of the CRE 
engineering spreadsheet. (Id.) Specifically, ITW requested that DOE 
revert to the assumptions from the June

[[Page 7527]]

2022 Preliminary Analysis engineering spreadsheet, where it included a 
50-percent multiplier to calculate the adjusted R-value and, therefore, 
more properly account for these ancillary losses. (Id.)
    With respect to the comment from ITW, DOE notes that, in this final 
rule analysis, DOE analyzed a revised R value of 6.5, which is on the 
low end of survey results provided by NAFEM. In addition, DOE 
calibrated the design specifications in the engineering spreadsheet to 
be representative of all units in each equipment class and account for 
a variety of factors that could affect energy use. Therefore, DOE has 
determined that an adjustment factor to the insulation thickness is not 
necessary for this final rule. As previously noted in the Insulation R-
Value section, while DOE did include a 0.5 adjustment factor for the R-
value in the June 2022 Preliminary Analysis, along with updates to 
infiltrated air-mass flow, DOE received feedback disagreeing with the 
infiltrated airflow approach in response to the June 2022 Preliminary 
Analysis. 88 FR 70196, 70234. Based on this feedback and feedback 
provided during manufacturer interviews, DOE re-evaluated the 
infiltrated-air mass flow and insulation design specifications in the 
October 2023 NOPR to be more consistent with the March 2014 Final Rule, 
i.e. increasing the infiltrated air assumptions for the October 2023 
NOPR analysis as compared to the June 2022 Preliminary Analysis. Id. As 
a result, DOE determined that an R-value adjustment factor would have 
resulted in calculation of energy use far higher than the baseline for 
representative equipment designs in the October 2023 NOPR analysis. DOE 
similarly determined that an R-value adjustment factor would have been 
inappropriate for the August 2024 NODA analysis and did not apply such 
a factor.
    DOE did not receive comments regarding conduction loads in response 
to the August 2024 NODA. Hence, DOE used the same input assumptions 
affecting conductions loads for its final rule analysis.
Other Engineering Assumptions
    In response to the October 2023 NOPR, DOE received comments on 
several other proposed baseline engineering assumptions.
    AHRI requested that DOE review the engineering analysis based on 
current technology in the field. (AHRI, No. 81 at p. 7)
    NAMA commented that the assumptions about efficiency options 
outlined in the October 2023 NOPR TSD are deeply flawed, as are the 
baseline efficiency levels. (NAMA, No. 85 at p. 5) NAMA stated that 
current units at baseline already utilize LED lighting, higher 
efficiency compressors, higher efficiency fan motors, a high-
performance door, and several other design options which have been used 
for the last several years, and that the design option list is 
therefore based on inaccurate baseline assumptions. (Id.) NAMA further 
commented requesting that DOE conduct a complete revision of its 
engineering analysis and all of the downstream analyses to show the 
very real impacts of standards in the October 2023 NOPR as well as in 
the August 2024 NODA. (Id. at p. 19) (NAMA, No. 112 at pp. 9) In 
response to the August 2024 NODA, NAMA further commented that it was 
disappointed in the accuracy of the design changes. (NAMA, No. 112 at 
p. 7) NAMA added that DOE did not substantially change the August 2024 
NODA TSD based on NAMA's comments on the October 2023 NOPR TSD (NAMA, 
No. 112 at p. 7) NAMA added that DOE said that the August 2024 NODA 
analysis was updated in response to NAMA's comments on the October 2023 
NOPR, however, it is not clear where the cost or energy efficiency 
pertaining to NAMA products has been updated. (Id.)
    In addition, DOE received confidential comments requesting that DOE 
review certain baseline assumptions in the October 2023 NOPR.
    In response to the comments from AHRI, NAMA, and the anonymous 
confidential commenter, in this final rule, DOE has revised certain 
baseline components and design specifications not already discussed in 
this section. Table IV.12 shows every baseline design specification 
that was updated in this final rule, consistent with the August 2024 
NODA. For more details, see appendix 5A of the final rule TSD.
BILLING CODE 6450-01-P

[[Page 7528]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.114

BILLING CODE 6450-01-C
    The updates to the final rule engineering assumptions outlined 
above are consistent with the approach in the March 2014 Final Rule 
where DOE

[[Page 7529]]

changed certain baseline design specifications between the NOPR and the 
final rule. For example, in the March 2014 Final Rule, DOE updated: the 
number of bulbs in the conditioned space for PD.SC.M from 2 to 3 and 
the number of ballasts not in the conditioned space from 0 to 1, the 
non-door anti-sweat power for VCS.SC.M from 0W to 20W, the evaporator 
fan shaft power, condenser fan shaft power for VCT.SC.M from 6W to 9W 
and from 6W to 16W respectively, the number of fans for VCT.SC.M from 2 
condenser fans to 1 condenser fan, the infiltrated air mass flow rate 
for VCT.SC.M from 10.61 lb/hr to 13.7 lb/hr, the evaporator temperature 
conditions for VCT.SC.M from a baseline evaporator temperature of 27 
[deg]F to 23 [deg]F, and the compressor oversize multiplier for 
VCT.SC.M from 1.3 to 2.6.\66\
---------------------------------------------------------------------------

    \66\ See tables 5.A.2.2 of the 2013 NOPR and 2014 Final Rule TSD 
available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0051 
and www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

b. Higher Efficiency Levels
    As part of DOE's analysis, the maximum available efficiency level 
is the highest efficiency unit currently available on the market. DOE 
also defines a ``max-tech'' efficiency level to represent the maximum 
possible efficiency for a given product.
    In response to the October 2023 NOPR, ASAP et al. generally 
supported the engineering analysis but stated that there are some 
equipment classes where the max-tech levels are exceeded by a 
significant number of models on the market today. (ASAP et al., No. 79 
at p. 1) Thus, ASAP et al. encouraged DOE to further investigate these 
products and consider whether higher standards may be appropriate. 
(Id.)
    ASAP et al. encouraged DOE to evaluate max-tech levels that are at 
least as high as the most efficient models available on the market. 
(Id. at p. 3) ASAP et al. commented that for several of the equipment 
classes analyzed, many models available on the market using R-290 
refrigerant appear to exceed the max-tech efficiency level, including 
many ENERGY STAR-rated models for the VCS.SC.L equipment class, which 
represents 10 percent of CRE shipments. (Id.) ASAP et al. also pointed 
to DOE's CCD, which shows available models for the SVO.SC.M, VOP.RC.M, 
and SOC.RC.M that also exceed DOE's max-tech levels. (Id.) ASAP et al. 
commented that for several of these equipment classes (e.g., VCS.SC.L, 
SVO.SC.M, VOP.RC.M), DOE has proposed to adopt the max-tech level as 
evaluated in the engineering analysis, suggesting that if DOE were to 
evaluate higher efficiency levels for these equipment classes, it is 
plausible that these higher levels would be cost-effective for 
purchasers. (Id.)
    In response to the comment from ASAP et al, DOE reviewed certified 
CRE models currently available on the market that exceed the efficiency 
of the max-tech levels proposed in the October 2023 NOPR and found 
several potential explanations as to why certain models use less energy 
than the proposed and final max-tech levels. DOE observed a range of 
lighting powers for units with similar volumes, with some units using 
very low light compared to the industry average. DOE also noted 
differences in insulation thickness that exceeded the industry average. 
Additionally, DOE noted examples of units rated to the CCD using 
evaporator fan controls, particularly for units that are not intended 
to store perishable food or beverages. Evaporator fan controls are not 
considered as a design option in the final rule analysis, so they are 
not considered in the final rule max-tech level (see section IV.B.1.f 
of this document). DOE also found examples of units that exceed the 
max-tech efficiency levels due to unique technologies which other 
manufacturers may not be able to adopt. Based on this review, DOE has 
not found higher standards to be appropriate.
    In response to the October 2023 NOPR, NAMA disagreed with DOE's 
energy saving estimates and design option levels for vertical, self-
contained, transparent doors, medium temperature, and other categories 
using similar options. (NAMA, No. 85 at pp. 10, 11-12) NAMA commented 
that, according to its screening analysis, DOE presents inaccurate 
energy savings resulting from changes to more energy-efficient 
condenser fan motors, variable-speed compressors, occupancy-based 
lighting controls, triple-pane glass doors, insulation in door glass, 
and microchannel condensers. (Id. at pp. 11-12) NAMA commented also 
that DOE's estimate of 26.9-percent energy savings in the case of using 
design options 2-7 is overstated by a factor of at least three. (Id. at 
p. 12) NAMA stated that once design options that DOE has double counted 
(e.g., DC condenser fan motors) are eliminated, the real estimate 
should result in a minimum energy standard that returns at 9 percent 
rather than 26.9 percent. (Id.) NAMA further commented that this also 
applies to categories such as VOP, SC, M and HZO, SC, and L. (Id.)
    In response to the October 2023 NOPR, AHRI and Hoshizaki stated 
that it is unclear how DOE determined that manufacturers are able to 
reach a 55-percent reduction in energy use in the energy use analysis 
and DOE should clarify how this reduction can be achieved. (AHRI, No. 
81 at p. 9; Hoshizaki No. 76 at p. 4)
    In response to the October 2023 NOPR, Hoshizaki requested that DOE 
review any section showing a reduction of 15 percent or more to verify 
that these numbers are accurate due to the high requirement that must 
be met. (Hoshizaki, No. 76 at p. 4)
    In response to the October 2023 NOPR, Hillphoenix, Hoshizaki, and 
NAFEM commented that the design options at the higher efficiency levels 
are not technologically feasible or cost-effective. (Hillphoenix, No. 
77 at p. 1; Hoshizaki, No. 76 at p. 4; NAFEM, No. 83 at pp. 7-8)
    As discussed in section IV.C.1.a of this document, after 
considering the comments received in response to the October 2023 NOPR, 
DOE has considered revised set of baseline components and design 
specifications in this final rule. In addition, DOE has also considered 
changes to design options analyzed beyond baseline based on feedback as 
discussed in the following sections.
Design Options Not Directly Analyzed
    As described in section IV.B.2 of this document, defrost controls 
and variable-speed fan motors did not meet the criteria for screening 
them out. However, some design options are not considered in the 
engineering analysis and are categorized as design options not directly 
analyzed. As described in sections 5.5.8.7 and 5.5.8.10 of the October 
2023 NOPR TSD, variable-speed fan motors and defrost controls, 
respectively, were considered design options not directly analyzed. In 
response to the October 2023 NOPR, DOE received several comments 
regarding these design options.
i. Defrost Controls
    As described in section 5.5.8.10 of the October 2023 NOPR TSD, 
defrost controls were considered a design option not directly analyzed.
    In response to the October 2023 NOPR, the CA IOUs recommended that 
DOE consider adaptive defrost as a design option for CRE because it is 
a cost-effective option that will reduce the energy consumption of 
refrigeration units. (CA IOUs, No. 84 at pp. 5-6) The CA IOUs commented 
that adaptive defrost saves energy by using less resistance heat and 
reduces the need for refrigeration energy to cool down the unit 
afterward. (Id. at p. 5) The CA IOUs commented that three major CRE

[[Page 7530]]

manufacturers offer low-temperature models with adaptive defrost and 
that DOE's 24-hour test procedure based on ASHRAE 72 should demonstrate 
the energy-saving benefits of adaptive defrost over standard automatic 
timed defrost. (Id. at pp. 5-6) The CA IOUs commented that although 
many manufacturers use timers for defrost initiation and air 
temperature for defrost termination, this method differs from the 
adaptive defrost method, which reduces the equipment's energy use by 
decreasing the number of unnecessary defrost cycles. (Id. at p.6)
    As discussed in chapter 5 of this final rule TSD, defrost cycle 
control can reduce energy consumption by reducing the frequency of the 
defrost period. While DOE considered variable defrost as a design 
option in the June 2022 Preliminary Analysis, DOE tentatively 
determined not to directly analyze this design option in the October 
2023 NOPR. 88 FR 70196, 70232. Full defrost cycle control would involve 
a method of detecting frost buildup, which can be accomplished through 
an optical sensor or sensing the air temperature differential across 
the evaporator coil, and initiating defrost only as often as required. 
However, DOE understands that there is uncertainty for both of these 
methods due to potential fouling of the coil with dust and other 
surface contaminants, which becomes more of an issue as cases age. If 
the sensor driving the adaptive defrost malfunctions, the resulting 
freezing of the coils is difficult to reverse. Therefore, due to the 
current uncertainty and lack of test data, DOE maintained the same 
approach and did not consider variable approach as a design option in 
this final rule. See chapter 5 of the final rule TSD for more 
information.
ii. Variable Speed Fan Motors
    As described in chapter 5, section 5.5.8.7 of the October 2023 NOPR 
TSD, variable-speed fan motors were considered a design option not 
directly analyzed.
    In response to the October 2023 NOPR, the CA IOUs recommended that 
DOE consider variable-speed condenser fan controls as a cost-effective 
technology option for self-contained equipment classes. (CA IOUs, No. 
84 at p. 5) The CA IOUs commented that variable-speed condenser fan 
controls, like variable-speed compressors, can modulate capacity under 
partial refrigeration load during compressor operations. (Id.) The CA 
IOUs commented also that while variable-speed condenser fans may not 
provide the same energy savings as variable-speed compressors, they are 
much less expensive, and DOE has considered variable-speed condenser 
fan control a viable and cost-effective technology option for walk-in 
coolers and freezers (``WICFs.'') (Id.) The CA IOUs stated that the 
energy savings and cost effectiveness of variable-speed condenser fan 
control should be comparable between WICFs and CRE. (Id.) The CA IOUs 
additionally commented that variable-speed condenser fan controls are 
not applicable for remote condensed equipment classes because the rack 
compressor systems are not covered products. (Id.)
    With respect to the comment from the CA IOUs, DOE notes that, in a 
Final Rule amending energy conservation standards for WICFs, variable-
speed condenser fans for WICF dedicated condensing units were 
considered only for those dedicated condensing units located outdoors, 
in which the fan speed is reduced during cool outdoor conditions when 
less airflow is needed to cool the condensing refrigerant. See chapter 
5 of the WICF Final Rule TSD for more details.\67\ The technology would 
not achieve similar savings for self-contained systems located indoors, 
where the fan speed is set appropriate for the relatively constant 
difference in temperature between the condensing refrigerant and the 
ambient air. For this reason, DOE has not considered variable-speed 
condenser fans as a design option to improve the efficiency of CRE in 
this final rule.
---------------------------------------------------------------------------

    \67\ See section 5.7.2.8, Variable-Speed Condenser Fan Control, 
at www.regulations.gov/document/EERE-2017-BT-STD-0009-0093 at pp. 5-
60.
---------------------------------------------------------------------------

Design Options Directly Analyzed
    DOE received several comments stating that directly analyzed design 
options in the October 2023 NOPR were already in use for baseline 
equipment.
    Hoshizaki, Hillphoenix, AHRI, NAFEM, SCC, Kirby, and an individual 
commenter expressed concern that many of the technologies presented in 
the October 2023 NOPR analysis have already been implemented in CRE to 
meet the 2017 regulations. (Hoshizaki, No. 76 at p. 3; Hillphoenix, No. 
77 at pp. 1, 11; AHRI, No. 81 at pp. 4-5; SCC, No. 74 at p. 2; Kirby, 
No. 66 at pp. 1-2; Individual Commenter, No. 70 at p.1) Kirby, Zero 
Zone, NAMA, and an individual commenter stated that DOE has 
overestimated the achievable efficiency levels in the proposed rule 
because many of the efficiency options are already in use. (Kirby, No. 
66 at pp. 1-2; Zero Zone, No. 75 at pp. 3, 4; NAMA, No. 85 at p. 5; 
Individual Commenter, No. 70 at p.1) NAMA commented that DOE is taking 
additional credit for energy efficiency by adding certain technologies 
(i.e., LED lighting, brushless DC evaporator fan motor, high-
performance door, and brushless DC condenser fan motor) beyond the 
baseline to justify the proposed efficiency levels, essentially 
doubling the energy efficiency benefits from technologies already in 
use and the future design options in the October 2023 NOPR TSD. (NAMA, 
No. 85 at p. 6) NAMA stated that following the removal of the design 
options that are not technically feasible or were accomplished many 
years ago, it becomes clear that the actual energy savings from the 
remaining items might result in a baseline energy reduction of 5-10 
percent, which is a significant deviation from the 41 percent estimated 
by DOE. (Id. at p. 9)
    Zero Zone commented that its large self-contained propane display 
freezers and coolers (e.g., VCT-SC-L, VCT-SC-M), which already include 
propane fixed-speed compressors, ECM evaporator and condenser fan 
motors, triple-pane high-efficiency doors with no glass heat, and 2.5-
inch insulated panels and LED lights are able to meet current DOE 
energy levels, and the addition of variable-speed motors and motions 
sensors are unlikely to provide enough savings to meet the proposed 
energy levels. (Zero Zone, No. 75 at p. 4)
    Hoshizaki added that technologies including fan controls, improved 
fan motors, improved glass doors, and occupancy sensors are already in 
use and therefore the ensuing review cannot be economically justified. 
(Hoshizaki, No. 76 at p. 3) SCC commented that ``enhanced'' coils are 
already in place and designed to reduce charge for A3 flammable 
refrigerants. (SCC, No. 74 at pp. 1-2) AHRI commented that technologies 
including the use of LED lighting, R-290 for self-contained units, and 
ECM evaporator fan motors are already in use. (AHRI, No. 81 at pp. 4-5) 
During the November 2023 Public Meeting, AHRI additionally stated that 
its members are already using adaptive defrost systems, increased 
insulation thickness, and improved evaporator coil design. (November 
2023 Public Meeting Transcript, No. 64 at p. 19) NAFEM commented that 
CRE manufacturers already use most of the screened-in technologies 
listed in the October 2023 NOPR, including: insulation; lighting; 
improved transparent doors (low-emissivity coatings, inert gas, and 
additional panes); compressors (improved efficiency, alternative 
refrigerants, and variable-speed

[[Page 7531]]

compressors); evaporators (increased surface area and evaporator coil 
design); condensers (increased surface area and tube and fin 
enhancements); fans (fan motors controls); and ``other'' (defrost 
systems and liquid suction heat exchangers). (NAFEM, No. 83 at p. 3)
    NAFEM and NAMA requested that DOE revise the October 2023 NOPR and 
accompanying NOPR TSD to address NAFEM and NAMA's comments. (NAFEM, No. 
83 at p. 26; NAMA, No. 85 at pp. 19-20)
    NAFEM commented that the proposed standards in the October 2023 
NOPR would substantially increase manufacturing costs because many of 
the design options analyzed in the October 2023 NOPR are already in 
place, and other screened-in technologies have substantial 
shortcomings, leaving the CRE industry no other available and feasible 
technologies to meet the standards. (Id. at p. 18) Therefore, NAFEM 
commented that its members will turn to proposed technologies such as 
variable-speed compressors, which have shown promise in certain 
applications to reduce energy consumption but have not proven to be 
economically a viable option for many CRE within the timeline of this 
rulemaking. (Id.)
    In response to commenters requesting DOE review the design options 
assumed in the baseline, DOE reviewed the design options identified in 
this final rule and determined that ECM evaporator and condenser fan 
motors in most equipment classes and LED lighting in all equipment 
classes are typically present in baseline units. Therefore, for the 
final rule analysis DOE assumed that ECM evaporator and condenser fan 
motors would be used in baseline equipment in most classes and LED 
lighting would be used in baseline equipment in all classes and thus 
could not be considered as energy-saving design options for those 
classes. DOE's reverse-engineering showed that many units at baseline 
do not use the design options that the above commenters have claimed 
are already widely in use (i.e., occupancy sensors, variable-speed 
compressors, and improved transparent doors). DOE has also observed a 
range of cabinet wall thicknesses in its reverse engineering analysis. 
Therefore, DOE has determined that the baseline assumptions in this 
final rule are representative of baseline CRE currently available in 
the market, and DOE disagrees that energy savings are being double 
counted in this final rule. See appendix 5A of the final rule TSD for a 
full list of baseline components analyzed for each equipment class.
    AHRI resubmitted data collected from AHRI, NAFEM, and NAMA in 
response to the June 2022 Preliminary Analysis, which showed that data 
used for the analysis was outdated and did not align with current 
market conditions. (AHRI, No. 81 at pp. 3-4) NAFEM commented that many 
of the proposed technologies are widely used in VCS equipment. (NAFEM, 
No. 83 at p. 5) AHRI commented that, after reviewing the June 2022 
Preliminary TSD, AHRI, NAFEM, and NAMA conducted a survey of members 
that manufacture CRE in an effort to share with DOE up-to-date 
information (``Trade Associations Survey''). (AHRI, No. 81 at p. 3) 
AHRI submitted survey results in an attachment to its comment detailing 
that the June 2022 Preliminary TSD design options include many that are 
currently in use to meet existing standards and others that raise 
concerns regarding applicability, as well as some design options that 
manufacturers could support. (Id.) AHRI commented that, according to 
the Trade Associations Survey, the efficiency levels proposed by DOE 
raise questions and concerns and there is uncertainty that implementing 
anticipated design options would result in energy efficiency 
improvements. (Id. at pp. 3-4)
    Continental commented that the design options included in DOE's 
analysis are not technically feasible and/or economically justified to 
achieve the proposed reductions in energy use for all product 
configurations within each covered equipment type in the October 2023 
NOPR. (Continental, No. 86 at pp. 3-6) Continental commented that 
development of its new line of R-290 products required entire redesign 
of all cooling systems--including new compressors, evaporator coils, 
and condenser coils--along with new electrical components for 
compatibility with flammable refrigerants. (Id. at p. 3)
    In response to the August 2024 NODA, NAMA commented that the NODA 
design options for VCT.SC.M, VOP.SC.M, and HZO.SC.L contain engineering 
solutions that have been part of the production of CRE products for 
more than 10 years. (NAMA, No. 112 at p. 4) NAMA commented also that 
DOE has double counted the energy savings from the design options in 
the baseline so the improvement in energy efficiency based on the 
August 2024 NODA and October 2023 NOPR are much greater than reality. 
(Id.)
    DOE acknowledges that the Trade Associations Survey may indicate 
the use by some manufacturers of certain technologies proposed as 
design options in the October 2023 NOPR. However, the survey results do 
not provide information regarding the efficiency levels achieved by the 
specific equipment using those technologies, so the results do not 
indicate which technologies are used at baseline and which technologies 
are used in equipment that exceed the baseline. For this reason, DOE 
cannot assume based on the survey results that all technologies 
mentioned are already in use at baseline. For the survey results to be 
useful for DOE's analysis, the survey would need to provide information 
of the correlation of the design options with efficiency levels.
    In response to the comment from Continental on technological 
feasibility, DOE notes that all technology options considered in this 
final rule were initially determined to pass the screening criteria, 
which includes technological feasibility. While not all technology 
options that pass the screening criteria are directly analyzed in this 
final rule, the technology options are all considered technologically 
feasible based on DOE's screening criteria. In addition, DOE does not 
remove design options based on cost-effectiveness. Rather, DOE analyzes 
the cost-effectiveness through the cost-efficiency curves (presented in 
chapter 5 of the final rule TSD) and other analyses presented in 
section IV.F of this document.
    In response to the October 2023 NOPR, DOE also received more 
extensive comments on specific design options analyzed in the October 
2023 NOPR, including night curtains, variable-speed compressors, 
occupancy sensors, and door design changes. These comments are 
discussed in the following paragraphs.
iii. Night Curtains
    In the October 2023 NOPR and the August 2024 NODA,\68\ DOE 
considered night curtains as a design option in its analyses. 88 FR 
70196, 70224.
---------------------------------------------------------------------------

    \68\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0090.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, NAFEM commented that its 
members report substantial customer resistance to night curtains 
because of the difficulty for customers to access items behind the 
curtains, especially shoppers who are not using a basket or cart and 
are carrying multiple items. (NAFEM, No. 83 at pp. 6-7) Hussmann 
commented DOE's assumption that night curtains and lighting controls 
will lead to new energy savings for VOP.RC.M and SVO.RC.M equipment 
classes is flawed. (Hussmann, No. 80 at pp. 5-6) Hussmann also stated 
that

[[Page 7532]]

these equipment options have been available to order on Hussmann's 
merchandisers for nearly 20 years in the case of night curtains and 15 
years for lighting controls, and if retailers are not ordering these 
options now, they do not want them and will not use them in their 
stores, even if they are automatically applied to the merchandisers 
they purchase. (Id.) Hillphoenix commented that it did not implement 
night curtains on CRE to meet the 2017 energy requirements and it has 
reduced energy consumption using other technology design options. 
(Hillphoenix, No. 77 at p. 5) Hillphoenix also stated that night 
curtains should not be considered a preferred option to achieve lower 
energy consumption. (Id.)
    In response to the comment from NAFEM, DOE notes that the CRE test 
procedure accounts for 6 hours of night curtain use per 24-hour period, 
and, in this final rule, DOE analyzes energy savings based on the DOE 
test procedure. DOE assumes that night curtains would not be in use 
when customers are in the store, and therefore, they would not need to 
access items behind the curtain as described in NAFEM's comment.
    In response to the comment from Hillphoenix, DOE notes that if 
night curtains were not implemented to meet the 2017 energy 
conservation standards, then it is appropriate for DOE to consider this 
design option as a potential pathway to decrease energy use.
    In response to the comment from Hussmann, DOE notes that, as stated 
by Hillphoenix, not all manufacturers have implemented this design 
option (other than as an optional feature), and it is therefore still 
appropriate to consider as a design option to improve efficiency.
    In response to the August 2024 NODA, Zero Zone commented that the 
majority of grocers do not specify night curtains, and that the life 
span is only 1-3 years, making pay back on energy savings unlikely. 
(Zero Zone, No. 114 at p. 2)
    Hillphoenix commented that while night curtains promote energy 
reduction, they also negatively impact the refrigeration system by 
causing short cycling of the compressor, refrigerant oil logging, or in 
the worst case, liquid slugging of the compressor. (Hillphoenix, No. 
110 at p. 10) Hillphoenix commented that this increases stress on start 
components of fixed speed compressor units on self-contained models. 
(Id.)
    DOE responds that neither the October 2023 NOPR nor the August 2024 
NODA comments provide clear justification for screening out night 
curtains. Specifically, Hussmann indicates that they have been 
available for use for 20 years, despite potential for short cycling. 
Although Hussmann claims that savings estimates are flawed, they have 
not provided explanation or data that would allow DOE to adjust its 
analysis of night curtain savings. DOE notes that, in response to Zero 
Zone's comment regarding night curtain life span, the life-cycle cost 
and payback period analysis has considered replacement costs for night 
curtains prior to the equipment end of life, see section IV.F.5 of this 
document for details.
iv. Variable-Speed Compressors
    In the October 2023 NOPR, DOE used performance data for variable-
speed R-290 compressors currently available on the market in DOE's 
engineering spreadsheet to estimate the performance impacts of 
transitioning to a variable-speed compressor. 88 FR 70196, 70219. DOE 
assumed that variable-speed compressors would operate at the minimum 
speed under steady-state operation, and also assumed that the fan 
motors would operate during the compressor run time (i.e., the fan 
motor operating duration would likely increase compared to a single-
speed compressor). Id. Overall, DOE estimated a 0.5-25 percent energy 
consumption reduction when implementing variable-speed compressors, 
with savings varying depending on equipment class. Id.
    In response to the October 2023 NOPR, Zero Zone stated that DOE 
makes a very specific assumption on the energy efficiency gains of a 
variable-speed motor, but according to its supplier, it is very 
difficult to predict the efficiency gains of a variable-speed motor. 
(Zero Zone, No. 75 at p. 4) Zero Zone added that the improvement 
depends on the duty cycle of the compressor, which depends on the size 
of the fixed-speed compressor compared to the size of the variable-
speed compressor. (Id.) Zero Zone commented that it doubts the 
efficiency gains listed by DOE, and Zero Zone requested that DOE remove 
variable-speed motors from the analysis until data can be gathered and 
reviewed. (Id.)
    NAMA stated that a change to a VSC would not save 13.4 percent of 
the baseline. (NAMA, No. 85 at pp. 11-12) NAMA added that variable-
speed compressors would save 0.1 kWh/day, in comparison to DOE's 
estimate of 0.625 kWh/day for the VCT.SC.M equipment class. (Id. at p. 
14) NAMA further stated that for many models of smaller bottle coolers 
(< 30 ft\3\), these variable-speed compressor motors are not available 
for units using R-290 refrigerant. (Id. at p. 23) NAMA added that the 
October 2023 NOPR energy savings of 0.625 kWh/day is five times more 
savings than NAMA has seen in its experiments with variable-speed 
compressors. (Id.) NAMA stated that this may be the improvement of the 
part in a bench test, but this is not the result in the actual unit 
tested to the DOE test procedure. (Id.) NAMA stated also a discrepancy 
between the VSC energy savings found in the June 2022 Preliminary 
Analysis and the October 2023 NOPR. (Id.)
    Hoshizaki commented that VSCs will require design controls to 
perfect the cycles for optimum energy use, adding time for staff to 
prepare the compressors and fans for the control features to make sure 
each unit has its own controls based on the defrost and run time. 
(Hoshizaki, No. 76 at p. 5) Hoshizaki commented that VSCs and fan motor 
lifetimes may be less than current components. (Id.) Hoshizaki stated 
that the warranties for VSCs may be closer to 3-5 years compared to the 
5-7-year warranties for compressors that is currently common in the 
market, due to increased repairs if manufacturers are forced to 
transition to VSCs without adequate time for full-life testing at many 
ambient and humidity conditions. (Id.) Hoshizaki added that, if the 
defrost settings are incorrect, freeze-ups may occur due to true-to-
life door-opening conditions. (Id.)
    Hillphoenix commented that VSC technology can have an approximately 
15-percent minimum efficiency improvement to the overall CRE product's 
energy due to fewer starts and stops and continuous compressor speed 
control to match the load requirement. (Hillphoenix, No. 77 at p. 8) 
Hillphoenix commented that Copeland reported that the variable-speed 
compressor motor itself only adds approximately 5 percent efficiency 
gain due to compressor motor enhancements, whereas the calculated 
compressor energy reduction from DOE's engineering spreadsheet shows a 
44.9-percent energy savings when comparing an R-290 reciprocating with 
an R-290 variable-speed compressor. (Id.) Hillphoenix stated that the 
energy values DOE used to represent the impact of changing refrigerants 
to R-290 with VSCs are broad assumptions and are not reflective of 
actual tested values. (Id.) Hillphoenix commented that to estimate the 
performance impacts of transitioning to a variable-speed compressor, 
DOE should use values established by testing physical units. (Id.)

[[Page 7533]]

    In support of the August 2024 NODA, DOE reviewed variable-speed 
compressors on the market at the time of the analysis, updated its 
database of variable-speed compressor performance, and updated its 
variable-speed compressor analysis. 89 FR 68788, 68793
    Specifically, DOE observed that some manufacturers have updated 
their VSC coefficients since publication of the October 2023 NOPR. Due 
to these updates, and to maintain a methodology consistent with that 
used for single-speed compressors, DOE has updated results in this 
final rule based on the average efficiency of the market for variable-
speed compressors if three or more compressor brands have available 
variable-speed compressors at the appropriate capacity, and selecting 
the lower-efficiency compressor if only two compressor brands are 
available at a specific cooling capacity. DOE also adjusted the 
calculation for the evaporator and condenser temperatures when 
operating at part load using variable-speed compressors. DOE used in 
the analysis an evaporator temperature 3 [deg]F higher than for single-
speed compressor operation, and a condenser temperature 5 [deg]F lower 
to represent the benefit of operation at part load. This simplified the 
analysis as compared to the approach taken in the October 2023 NOPR, in 
which DOE based the evaporator and condenser temperature differences on 
a logarithmic mean temperature difference (``LMTD'') calculation that 
was adjusted based on the change in duty cycle when switching from 
single- speed to variable-speed compressors.\69\ Based on these 
updates, in the August 2024 NODA analysis, DOE estimated that the 
energy consumption reduction from implementing variable-speed R-290 
compressors would range from approximately 2.5 to 19.2 percent, 
depending on the equipment class and the representative capacity. 
Comparatively, in the October 2023 NOPR, DOE estimated approximately 
0.5 to 25 percent energy consumption reduction when implementing 
variable-speed R-290 compressors.\70\ In the March 2014 Final Rule, 
precedent was established for an update to the analysis approach for 
compressors, where DOE updated the single-speed compressor assumptions 
in response to commenter feedback on the NOPR. See 79 FR 17725, 17760. 
For further details of the calculations, see the August 2024 NODA 
engineering spreadsheet.\71\ DOE notes that its updated approach 
provides a conservative estimate of energy use reduction associated 
with conversion to variable-speed R-290 compressors, due to use of the 
average or lower performance levels of available compressor models, and 
no consideration of potential additional savings associated with fan 
speed reductions.
---------------------------------------------------------------------------

    \69\ See the calculations tab of the engineering spreadsheet at 
www.regulations.gov/document/EERE-2017-BT-STD-0007-0055.
    \70\ See section 5.5.3.1 of the October 2023 NOPR TSD at 
www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
    \71\ See www.regulations.gov/document/EERE-2017-BT-STD-0007-0091.
---------------------------------------------------------------------------

    In addition to updating the variable-speed compressor performance 
analysis, DOE updated the baseline assumption costs to include 
electronic controls at the baseline for all equipment classes in 
response to commenter feedback and based on observation of the CRE 
units torn down by DOE. While there would be development costs to 
program controls for variable-speed operation, there would be 
insignificant control hardware costs (other than the compressor motor 
inverter, which was included in the cost analysis), since baseline 
models would already have electronic controls. DOE notes that the 
development costs to optimize variable-speed compressors are accounted 
for the MIA, see section IV.J.2.c of this document for additional 
details on DOE's conversion cost methodology and section V.B.2.a of 
this document for the estimated conversion costs at each analyzed TSL. 
See section IV.F.5 for discussion on maintenance and repair costs.
    In response to the comment from Hillphoenix, DOE reiterates that 
DOE estimated that the range of energy use reduction associated with 
implementing variable-speed compressors was between approximately 0.5 
and 25 percent in the October 2023 NOPR. This was reduced to a range of 
up to 19.2 percent in the August 2024 NODA analysis. DOE is not aware 
of any equipment class where the October 2023 NOPR engineering 
spreadsheet showed a 44.9 percent reduction in energy use attributed to 
implementing variable-speed R-290 compressors.
    In response to the August 2024 NODA, Continental continued to 
oppose the inclusion of VSCs as a design option to be incorporated over 
the next 3 years given their complexity and increased costs. 
(Continental, No. 107 at pp. 2-3) Continental argued that VSCs are 
currently only used in specialty configurations, and more time is 
needed to determine long-term savings as well as train staff on 
repairs. (Id.) Continental commented that they have extended product 
warranties in recent years, covering parts and service for 5, 6 or 7 
years from first use, which presents exposure to any risks from 
premature introduction of new features or components that have not been 
fully vetted. (Continental, No. 107 at p. 3)
    In response, DOE notes that it is adopting a 4-year compliance 
period in this final rule, which provides an additional year for 
manufacturers to redesign CRE models to meet new and amended standards 
as compared to the October 2023 NOPR. Additionally, DOE notes that it 
considers the development costs associated with implementing variable-
speed technology in its MIA (see section IV.J.2.c of this document for 
additional information on DOE's conversion cost methodology). See 
section IV.F.5 for discussion on maintenance and repair costs.
    Hillphoenix commented that they agree with the temperature 
reduction values when applying variable-speed compressors, but does not 
agree with the max energy reduction of 19.2 percent, and stated that 
test data from the VCS.SC.L class reflects approximately 13 percent max 
energy savings. (Hillphoenix, No. 110 at p. 4,) Since variable speed 
compressor technology is new, test data is not available for VCS.SC.M 
models, but based on industry knowledge Hillphoenix estimated the 
savings will be similar to the low temperature class. (Id. at pp. 4-5)
    DOE notes that 19.2 percent energy use reduction associated with 
the variable-speed compressor design option is the maximum energy 
savings of all the analyzed classes and that for the VCS.SC.L and 
VCS.SC.M classes, the analyzed energy savings are 15.7 percent and 10.6 
percent, respectively, which aligns well with Hillphoenix's statement 
of expectations for the VCS.SC.L and VCS.SC.M classes.
    Delfield commented they have tested their own units and found that 
the energy consumption of CRE with a variable-speed compressor compared 
to a well-designed system with a fixed-speed compressor is essentially 
the same because the efficiency gained by using a variable-speed 
compressor is offset by increased runtime of fans and heaters. 
(Delfield, No. 99 at p. 2) Delfield further commented that the cost of 
a variable-speed compressor and the required inverter is double the 
cost of an efficient fixed-speed compressor. (Id.) Delfield requested 
that DOE remove this technology from the analysis. (Id.)
    In response, DOE notes that its analysis for variable-speed 
technology did consider increased run time of fans, but did not 
consider additional improvement that could be achieved

[[Page 7534]]

through the use of fan speed reduction during compressor part-load 
operation. Further, Delfield's mention of heater runtime increase 
suggests that they control the antisweat heaters to run when the 
compressor is energized and did not adjust antisweat heater wattage 
during variable-speed compressor testing to arrive at the same heater 
runtime and therefore the same antisweat heater energy use as without a 
variable-speed compressor. Since a variable-speed compressor runs 
longer than a single-speed compressor, if Delfield's antisweat heater 
is energized whenever the compressor is energized then it runs longer 
than it would otherwise with a single-speed compressor. Therefore, 
Delfield claims its testing using a variable-speed compressor shows 
little difference in energy use despite the energy savings from the 
variable-speed compressor because the antisweat heater was not adjusted 
to have the same runtime and energy use as without a variable-speed 
compressor. It is not clear why heater energy use should be increased 
for a variable-speed compressor, so it is not clear that their testing 
represents an optimized variable-speed system. DOE notes that 
Delfield's statement regarding variable-speed compressor costs are 
consistent with DOE's estimates. DOE concludes that insufficient 
evidence has been provided to justify removing variable speed 
compressor technology from the analysis.
v. Occupancy Sensors
    In response to the October 2023 NOPR, Zero Zone, Hussmann, and 
NAFEM commented that occupancy sensors have been available for purchase 
and use for more than 10 years and were initially used by customers. 
(Zero Zone, No. 75 at p. 4; Hussmann, No. 80 at pp. 5-6; NAFEM, No. 83 
at p. 6) However, Zero Zone, Hussmann, NAFEM, Hillphoenix, and NAMA 
commented that food retail establishments have stopped purchasing 
occupancy sensors on units or they turn off the motion sensors because 
their customers may think the unit is malfunctioning, which has a 
negative impact on sales and the utility of the unit. (Zero Zone, No. 
75 at p. 4; Hussmann, No. 80 at pp. 5-6; NAFEM, No. 83 at p. 6; 
Hillphoenix, No. 77 at p. 6; NAMA, No. 85 at p. 24) NAMA also stated 
that occupancy sensors are more expensive and do not save as much 
energy as analyzed in the October 2023 NOPR and that with newer LED 
lighting technology available, occupancy sensors may become outdated. 
(NAMA, No. 85 at pp. 12, 24) Hussmann added that if a store is closed 
during nighttime hours, it is a widely used practice to separately wire 
all the display case lighting to dedicated electrical circuits that can 
be turned off on a fixed schedule, which is a more cost-effective way 
of saving lighting energy than individual lighting controllers on each 
display case. (Hussmann, No. 80 at p. 5)
    In response to the August 2024 NODA, Zero Zone commented that the 
majority of their customers do not request motion sensors, and some 
removed it from their specifications, as having lights off indicates to 
customers that the case is broken. (Zero Zone, No. 114 at p. 2) 
Continental disagreed with DOE's statement that 75 percent of products 
would benefit from the use of occupancy sensors, and argued that this 
is not a viable feature due to mis-application which would result in 
service issues, and requested the removal of the design option. 
(Continental, No. 107 at p. 2)
    ASAP et al. commented that while they understand the reduced 
savings from the occupancy sensors, they state that manufacturers will 
be able to utilize occupancy sensors to meet any amended standards. 
(ASAP et al., No. 106 at p. 3) ASAP et al. added that CRE test 
procedure does not include any comparable assumption about de-
activation (i.e., the test procedure gives full credit to occupancy 
sensors). (Id.)
    In response to comments about occupancy sensors either not being 
desired by certain end users, or certain end users using their own on-
site control system, DOE has revised the energy use analysis for 
occupancy sensors to consider that they would not be used by all end-
use customers. Specifically, the revised energy use analysis assumes 
only 75 percent of end users would use occupancy sensors, as discussed 
in section IV.E of this document. However, although DOE has considered 
partial non-use of occupancy sensors in the energy use analysis, it has 
not revised the engineering assumptions related to the occupancy 
sensors in this final rule because the engineering analysis is based on 
the DOE test procedure, which does not consider potential non-use of 
the technology. The DOE test procedure is not intended to anticipate 
how end users may modify the unit in the field, including de-activation 
of occupancy sensors. Further, DOE did not revise its MPCs for 
occupancy sensors, as suggested by NAMA, because DOE did not receive 
any data from commenters to suggest an alternative MPC would be more 
representative. Also, DOE notes that it does not expect manufacturers 
would need to incorporate occupancy sensors with dimming capability to 
meet the adopted TSL (i.e., TSL 3).
vi. Door Design Changes
    In response to the October 2023 NOPR, Hillphoenix commented that 
vacuum-insulated glass (``VIG'') is not applicable for low-temperature 
applications due to the glass bending in the extreme temperature 
difference. (Hillphoenix, No. 77 at p. 7) Hillphoenix commented that, 
more importantly, all suppliers of VIG stopped production for CRE 
products due to the low demand and refused to supply the market. (Id.) 
Hillphoenix stated that DOE referenced information in the October 2023 
NOPR TSD that is no longer valid and that Anthony International 
discontinued VIG in 2019.\72\ (Id.)
---------------------------------------------------------------------------

    \72\ See www.buildinggreen.com/product-review/saving-energy-supermarkets-vacuum-insulated-glass.
---------------------------------------------------------------------------

    NAMA expressed concern with the safety hazard presented by the 
additional weight from increased panes in doors together with noble gas 
insulation, which could make the product excessively top heavy. (NAMA, 
No. 85 at pp. 24-25) NAMA further commented that the June 2022 
Preliminary Analysis results for door design options are no longer 
relevant. (Id. at p. 25)
    SCC commented that VIG would eliminate any curved glass models as 
this technology simply does not exist except in flat structural glass. 
(SCC, No. 74 at p. 2) SCC commented that, on SOC models, the glass is 
lifted and held by gas cylinders for ease of loading product, not a 
swing door like VCT units, and the extra weight and constant opening 
would severely degrade the reliability of the equipment and may 
constitute a safety issue for merchandisers. (Id.)
    Hillphoenix commented that medium-temperature doors are currently 
manufactured with double-pane glass that is filled with argon gas and 
low-temperature doors are currently manufactured with triple-pane glass 
that is filled with argon gas. (Hillphoenix, No. 77, p. 6) Hillphoenix 
stated that the cost of krypton gas is more than double the cost of 
argon gas and there is a limited supply of krypton gas available to the 
market. (Id.) Hillphoenix commented that triple-pane glass on medium-
temperature CRE would increase cost for a minimal efficiency gain. (Id. 
at p. 7)
    In response to the comments regarding increased cost, DOE does not 
screen out a technology based on its cost-effectiveness. In response to

[[Page 7535]]

comments about weight concerns, DOE notes that low-temperature freezers 
already primarily use triple-pane glass packs, which demonstrates the 
ability of CRE to use this technology. In response to comments with 
concerns about VIG supply and application in low-temperature 
applications, DOE notes that there are examples of manufacturers that 
continue to offer VIG doors on commercial freezers.\73\ And in response 
to comments regarding the cost of krypton gas, DOE has revised its MPC 
for this design option based on commenter feedback. As discussed in 
section V.C.1 of this document, DOE does not expect manufacturers would 
need to implement VIG doors or triple-pane glass doors with krypton 
fill to meet the adopted TSL. In response to the comment from SCC about 
VIG not being suitable for curved glass, DOE notes that the analyzed 
SOC classes in this final rule only considered multiple-glass-layer or 
VIG design options for the flat glass rear doors and not the non-door 
glass area. Furthermore, it is DOE's understanding that the upward-
lifting front glass mentioned by SCC for SOC models can be curved, but 
because DOE's analysis does not consider an increase in glass layers 
for the non-door glass area, SCC's comment about the impact on 
durability of the gas cylinders used to support the curved glass when 
open is not relevant. Also, DOE notes that it does not expect 
manufacturers would need to incorporate vacuum-insulated glass doors to 
meet the adopted TSL (i.e., TSL 3).
---------------------------------------------------------------------------

    \73\ See valprorefrigeration.com/glass-door-merchandisers/glass-door-freezer-merchandisers/two-swing-glass-door-merchandiser-freezer-vp2f-48hc/.
---------------------------------------------------------------------------

    NAMA commented that the savings from increased door panes together 
with noble gas insulation are more likely to be 0.3-0.6 kWh/day, rather 
than the projected 1.270 kWh/day. (NAMA, No. 85 at p. 25)
    In response to the comment from NAMA, it appears that NAMA is 
referencing the VCT.SC.M results provided in the June 2022 Preliminary 
Analysis, for which the ``high performance door'' design option for 
VCT.SC.M saved 1.270 kWh/day compared to the previous design option 
step; \74\ however, section 5.8 of the October 2023 NOPR TSD presents 
savings based on the revised analysis, which result in less than 0.1 
kWh/day of savings. Therefore, DOE has revised the analysis addressed 
by NAMA's comment in the August 2024 NODA and in this final rule, 
resulting in comparable results to NAMA's comment.
---------------------------------------------------------------------------

    \74\ See chapter 5, section 5.8 of the June 2022 Preliminary TSD 
at www.regulations.gov/document/EERE-2017-BT-STD-0007-0013.
---------------------------------------------------------------------------

c. Equipment Classes With Unique Energy Use Characteristics
    In the October 2023 NOPR, DOE proposed additional energy use 
allowances for certain equipment classes having unique features. DOE 
also proposed definitions to clarify which features are eligible (see 
section IV.A.1.b for more description regarding the definitions). 88 FR 
70196, 70230-70231. DOE determined potential energy use allowances for 
these features based on CCD data, information from commenters, and 
manufacturer interviews, and DOE's directly analyzed units showing an 
energy use difference between certain types of CRE. Id. at 88 FR 70230. 
As proposed in the October 2023 NOPR, these equipment have the 
specified performance-related features and different maximum energy use 
to represent separate additional equipment classes.
    In the October 2023 NOPR, DOE tentatively developed multipliers for 
pass-through, sliding, roll-in doors, and roll-through features. Id. at 
88 FR 70231. See table IV.13 for additional details on what was 
proposed in the October 2023 NOPR.
[GRAPHIC] [TIFF OMITTED] TR21JA25.115

    In the October 2023 NOPR, DOE additionally tentatively developed 
multipliers for forced-air evaporators. Id. at 88 FR 70212. Based on 
CCD data, information from commenters and manufacturer interviews, and 
DOE's directly analyzed units showing an energy use difference between 
certain types of CRE, DOE tentatively

[[Page 7536]]

developed an energy use multiplier for equipment classes that were 
directly analyzed in the October 2023 NOPR as CRE with a cold-wall 
evaporator and for which DOE observed models with forced-air 
evaporators in those equipment classes on the market. Id. at 88 FR 
70231. DOE tentatively developed this multiplier to account for the 
additional energy use associated with a forced-air evaporator as 
compared to a cold-wall evaporator. Id. See table IV.14 for additional 
details of what was proposed in the October 2023 NOPR.
[GRAPHIC] [TIFF OMITTED] TR21JA25.116

    In response to the October 2023 NOPR, SCC and AHRI commented that 
they appreciate that DOE is applying the definitions to VCT and VCS 
equipment classes to allow for more energy for rear-door options. (SCC, 
No. 74, p. 3; AHRI, No. 81 at pp. 5-6) Due North supported DOE's 
proposal to separate out the newly introduced VCT.SC.M.PT and 
VCT.SC.M.SDPT classes from the VCT.SC.M class to address their 
construction uniqueness and the related increased energy use. (Due 
North, No. 87 at p. 2)
    ITW, the CA IOUs, and Continental supported DOE's proposal to add 
provisions for non-traditional door designs including sliding, rolling, 
and pass-through doors; Continental expressed support for the 
provisions proposed for horizontal closed low-temperature models with 
forced air evaporators. (ITW, No. 82 at p. 6; CA IOUs, No. 84 at p. 1; 
Continental, No. 86 at p. 2) Continental commented that these equipment 
types have differentiating characteristics that impact energy 
consumption. (Continental, No. 86 at p. 2) The CA IOUs commented that 
creating separate standards for these designs acknowledges the energy 
impact of non-traditional door designs on specialty refrigeration 
equipment. (CA IOUs, No. 84 at p. 1)
    SCC, AHRI, Hoshizaki, and Hussmann agreed in principle to the use 
of an energy use multiplier for certain equipment classes but stated 
DOE has not allowed enough time for manufacturers to test and validate 
the multipliers. (SCC, No. 74 at p. 4; AHRI, No. 81 at p. 8; Hoshizaki, 
No. 76 at p. 3; Hussmann, No. 80 at p. 6) AHRI and Hussmann commented 
that they require 1 year of testing, and Hoshizaki requested time in 
the first quarter of 2024 to access its test room and validate the 
numbers in the October 2023 NOPR. (AHRI, No. 81 at p. 8; Hussmann, No. 
80 at p. 6; Hoshizaki, No. 76 at p. 3) ITW also commented that it would 
like to conduct laboratory evaluations of the new equipment categories 
and provide DOE with test data to validate the differences in 
performance for these new categories. (ITW, No. 82 at p. 6) SCC and 
NEEA and NWPCC commented that they would like to see the data and 
analysis around how the energy use multipliers have been developed. 
(SCC, No. 74 at p. 4; NEEA and NWPCC, No. 89 at p. 1) NEEA and NWPCC 
stated that while they understand DOE's intent for the energy use 
multipliers, DOE's explanation for how the energy use multipliers were 
developed is not clear. (NEEA and NWPCC, No. 89 at p. 2) NEEA and NWPCC 
added that stakeholders cannot provide comment on whether the 
multipliers are too conservative or too aggressive without knowing what 
information or data the multipliers are based on and expressed concern 
that these multipliers are creating an insufficiently justified 
loophole for less efficient equipment to be manufactured. (Id. at p. 2) 
NAMA commented that it does not understand the concept of using a 
``multiplier'' within the CRE rulemaking and the information given in 
the October 2023 NOPR does not contain enough information for NAMA 
members to comment on. (NAMA, No. 85 at p. 30)
    NEEA and NWPCC stated that ENERGY STAR currently certifies sliding, 
roll-in, and pass-through units that meet the energy use requirements 
of their respective equipment classes, which would indicate that there 
may be no need for an energy multiplier solely based on these door 
types, as equipment already exists that meets a higher efficiency 
threshold than DOE's current standard without a separate threshold from 
their single-door counterparts. (NEEA and NWPCC, No. 89 at p. 2)
    Delfield commented that the suggested allowances for most 
categories of specialty cabinets are not reasonable and that any 
additional allowances should consider the refrigerated volume of the 
cabinet rather than a fixed number, as proposed in some of the 
categories. (Delfield, No. 71 at p. 1) Delfield recommended that DOE 
implement a 20-percent allowance for pass-throughs, sliding doors, and 
roll-ins used in VCS.SC.M, VCS.SC.L, VCT.SC.M, and VCT.SC.L equipment 
classes, as well as an additional 20 percent for roll-throughs and also 
for pass-throughs with sliding doors . (Id.) Delfield added that these 
low-volume, specialty cabinets have very little impact on national 
energy consumption and the environment. (Id.)
    ITW recommended that DOE create an additional category for cabinets 
with drawers and Delfield recommended an additional category 
specifically for freezers with drawers. (ITW, No. 82 at pp. 2, 4; 
Delfield, No. 71 at p. 2) Delfield commented that freezer drawers 
require additional heater wires and gaskets, which contribute to 
increased energy consumption and suggested a 20-percent additional 
allowance for freezers with drawers to be classified as VCS.SC.L.DRW. 
(Delfield, No. 71 at p. 2) ITW commented that its test data shows that 
the energy use is measurably greater in equipment with drawers versus 
equipment with doors, thus meriting DOE's creation of a separate 
category for this type of equipment. (ITW, No. 82 at p. 2) ITW 
commented that it had conducted testing on the same cabinet with both 
drawer and door configuration, and test results showed that there is a 
27-percent higher energy consumption on the drawer freezer compared to 
same- size door freezer. (Id. at p. 4)
    In the August 2024 NODA, DOE presented revised analysis results for 
a range of potential efficiency levels. 89 FR 68788. 68802-68825. As 
part the August 2024 NODA, DOE applied a simplified multiplier approach 
to the eligible equipment classes discussed in the October 2023 NOPR, 
evaluating the use of a single multiplier for all evaluated equipment 
classes and feature groupings, including pass-through, sliding door, 
sliding-door pass-through, roll-in, roll-through, forced-air 
evaporator, and drawers. Id. at 89 FR

[[Page 7537]]

68794. To select a single multiplier representative of the range of 
features analyzed, DOE used an equipment class shipment-weighted 
average of the eligible equipment class unweighted average multiplier 
values based on the features applicable for each class. Id. The result 
of this single multiplier analysis yielded a multiplier of 1.07. Id. 
DOE applied this multiplier to the representative energy use at each 
efficiency level for each eligible class and presented the resulting 
energy use equations in the August 2024 NODA. Id.
    In response to the August 2024 NODA, ITW commented that it supports 
the concept of a ``simplified multiplier'' for eligible equipment 
classes and feature groupings, including pass-through, sliding door, 
sliding-door pass-through, roll-in, roll-through and drawers. (ITW, No. 
111, pp. 1-2) ITW commented that they do not support DOE's proposed 
1.07 multiplier, because their analysis indicates a multiplier value 
significantly higher associated with some features and recommends a 
compromise for the ``simplified multiplier'' of 1.11 to 1.15 rather 
than 1.07. (Id. at p. 2) ITW's analysis yielded a multiplier of 1.07 
for pass-through classes and sliding classes, 1.11 for pass-through and 
sliding classes, 1.06 for roll-in classes, 1.14 for roll-through 
classes, and 1.27 for drawer classes. Id.
    ITW commented that they appreciate DOE's understanding that 
ancillary losses are significantly higher in equipment with drawers 
versus equipment with doors to merit their inclusion in the grouping of 
CRE with features that affect energy use. (Id.)
    Hillphoenix commented that the forced-air evaporator configuration 
proposed in the October 2023 NOPR only applied to equipment class 
HCS.SC.L. (Hillphoenix, No. 110 at p. 6) Hillphoenix commented also 
that in the October 2023 NOPR engineering analysis spreadsheet for 
HCT.SC.M, L, and I product classes, there was no energy included for 
the evaporator fans motors or anti-sweat heat, which assumes that all 
products in this class are considered by DOE to utilize cold wall 
evaporators. (Id.) Hillphoenix stated that this assumption does not 
accurately reflect the larger units in this class which utilize 
evaporators and fans. (Id.) Hillphoenix commented that the forced air 
evaporator configuration needs to be included in the HCT.SC class, and 
that this class must include evaporator fans and anti-sweat energy. 
(Id). Hillphoenix stated its belief that HCT.RC, HCT.SC, HZO.RC, HZO.SC 
with glass sides are not suitable for cold wall evaporators because the 
refrigerant piping cannot be installed in the glass which surrounds the 
product. (Id.)
    Delfield supported the need for new classifications on specialty 
cabinets, however, they found that the suggested allowances for most of 
these categories are not reasonable. (Delfield, No. 99 at p. 2) 
Delfield commented that any additional allowances for these categories 
should consider the refrigerated volume of the cabinet rather than a 
fixed number as proposed in some of the categories. (Id.) Delfield 
disagreed that a single use multiplier can be used effectively on pass-
through doors, sliding doors and roll-ins since these categories have 
different challenges with widely different energy consumptions. (Id.) 
Delfield recommend either leaving these categories at DOE 2017 levels 
or moving forward with a 20 percent allowance for pass-through doors, 
sliding doors and roll-ins versus VCS.SC.M, VCS.SC.L, VCT.SC.M and 
VCT.SC.L classifications and an additional 20 percent for roll-throughs 
and pass-throughs with sliding doors. (Id.)
    Delfield also suggested that DOE add an additional classification 
for freezers with drawers stating they require additional heater wires 
and gaskets which contribute to increased energy consumption. (Id. at 
p. 3) Delfield ultimately recommended that DOE stays at 2017 DOE levels 
for freezers with drawers. (Id.)
    In response to ITW's and Delfield's comments requesting an 
alternative single multiplier, DOE notes that neither ITW, Delfield, 
nor any other commenter, provided data to support a multiplier 
different from the multiplier presented in the August 2024 NODA. DOE 
conducted a review of the data that supported the August 2024 NODA 
multiplier and has determined that it continues to be representative of 
the eligible features included in the August 2024 NODA and this final 
rule.
    In response to Hillphoenix's comment, DOE notes that it is not 
aware of any models certified to DOE's CCD in the HCT.SC class which 
use forced-air evaporators, including the HCT.SC models Hillphoenix has 
certified to DOE.\75\ Further, the HCT.SC and HCT.RC models that 
Hillphoenix has certified to the CCD are all medium-temperature 
refrigerators and low-temperature freezers. In this final rule, DOE is 
not amending the standards for HCT.SC.M, HCT.SC.L, HCT.RC.M, and 
HCT.RC.L. In regards to the HZO.RC and HZO.SC classes, in the October 
2023 NOPR analysis, the August 2024 NODA analysis, and this final rule, 
DOE has assumed that the HZO.RC and HZO.SC classes use forced air 
evaporators, which is consistent with Hillphoenix's feedback. 
Therefore, DOE has determined that its analysis is representative of 
the current market.
---------------------------------------------------------------------------

    \75\ See www.regulations.doe.gov/certification-data/CCMS-4-Refrigeration_Equipment_-_Commercial__Single_Compartment.html#fq=%7B!tag%3DBrand_Name_s__s%7DBrand_Name_s__s%3AHillphoenix&fq=%7B!tag%3DEquipment_Family_Description_s%7DEquipment_Family_Description_s%3A%22Horizontal%20Closed%20Transparent%20%5C(HCT%5C)%22&fq=%7B!tag%3DCondensing_Unit_Configuration_De
scription_s%7DCondensing_Unit_Configuration_Description_s%3A%22Self%5
C-
Contained%20%5C(SC%5C)%22&q=Product_Group_s%3A%22Refrigeration%20Equi
pment%20-%20Commercial%2C%20Single%20Compartment%22. Accessed on 10/
30/24.
---------------------------------------------------------------------------

    In response to Delfield's comment, the multiplier equations 
presented in the August 2024 NODA do vary by capacity (i.e., volume or 
TDA). Additionally, based on the data supporting the development of the 
multipliers in this final rule, DOE has determined that a single energy 
use multiplier is representative of the entire capacity range of the 
equipment class. In support of this final rule, DOE is not aware and 
has not received any data to support different multipliers for 
different capacity ranges within an equipment class.
    In response to these comments and consistent with the August 2024 
NODA analysis, in this final rule, DOE is adopting a single 1.07 
multiplier for all equipment classes proposed in the October 2023 NOPR 
with qualifying features, including pass-through doors, sliding door, 
sliding-door pass-through doors, roll-in door, roll-through doors, 
forced-air evaporator, and drawer units. These performance-related 
features may have interdependencies that affect energy performance, 
and, therefore, DOE has determined that a single, consolidated 1.07 
multiplier for all equipment classes is representative of the energy 
use characteristics of these features. DOE is adopting separate 
equipment classes for certain equipment categories with one or more 
qualifying performance-related features. Table IV.15 indicates for 
which equipment classes and features this distinction (and the allowed 
additional energy use) is applicable. DOE is establishing these 
equipment classes with features with an energy conservation standard 
(in kWh/day) that equals 1.07 multiplied by the equation for the 
related equipment class that does not contain these features. With 
respect to comments from ITW and Delfield regarding the inclusion of 
units with drawers in the multiplier, DOE notes that the August 2024 
NODA

[[Page 7538]]

and this final rule include units with drawers in the list of 
qualifying features. Id. at 89 FR 68793, 68795
[GRAPHIC] [TIFF OMITTED] TR21JA25.117

    DOE notes that EPCA, as codified, contains what is known as an 
``anti-backsliding'' provision, which prevents the Secretary from 
prescribing any amended standard that either increases the maximum 
allowable energy use or decreases the minimum required energy 
efficiency of a covered product. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(1)) Therefore, any equipment classes with features in this 
final rule may be limited or adjusted due to the anti-backsliding 
provision. In this final rule, the energy use of the selected 
efficiency level in TSL 3 is adjusted accordingly, if needed, to avoid 
backsliding against the current standard.
    Due North commented that the proposed conservation standards in the 
October 2023 NOPR do not provide an energy use allowance for smart 
technology accessories, such as connectivity devices for remote control 
and monitoring; inventory management smart shelves, image recognition 
cameras, and associated computers; pay terminals; and similar 
technology-based accessories. (Due North, No. 87 at p. 2) Due North 
added that the advent of smart technologies, including artificial 
intelligence, will result in rapidly growing demand for these types of 
accessories, and DOE energy conservation standards may serve as 
obstacles for new technologies and innovation. (Id.)
    In response to the comment from Due North regarding smart 
technologies, DOE did not propose an energy use allowance for smart 
technology accessories in the October 2023 NOPR. DOE notes that neither 
Due North, nor any other commenter, has provided data on the energy use 
of these technologies for CRE currently available on the market. 
Therefore, in this final rule, DOE is not including an energy use 
allowance for smart technologies. DOE welcomes any data stakeholders 
can provide on the energy use and adoption of these technologies in CRE 
for consideration in any potential future rulemaking.
Supporting Data
    DOE found drawer units in CCD and compared them to analogous units 
with doors to analyze the increase in daily energy consumption 
associated with drawer units, taking into account volume differences. 
Characteristics shared between the pairs of analogous units include 
manufacturer, basic model line, and approximate dimensions. Differences 
in rated refrigerated volume were normalized by dividing the rated 
energy consumption of each unit by the rated volume, using that value 
to compare units in a pair with each other. The CCD data used for this 
analysis is compiled in table IV.16, and the average of these results 
is 9.9 percent increase in energy use, corresponding to a multiplier of 
1.099.

[[Page 7539]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.118

d. DOE Test Data
    In response to the October 2023 NOPR, AHRI commented it did not 
find any specific information on when DOE tested products or conducted 
physical teardowns specific to the October 2023 NOPR. (AHRI No. 81 at 
p. 10) AHRI listed the sections that include discussion of the 
``teardown analysis,'' which include 2.4.2 Cost Analysis, 5.1 
Introduction, 5.6 Core Case Costs, and Energy Consumption Model. (Id.) 
AHRI, NAMA, NAFEM, SCC, and Hoshizaki requested that DOE make data 
related to CRE units tested and torn down for this rulemaking 
available, while maintaining manufacturer confidentiality, as concerns 
have been raised about the age of the units. (AHRI, No. 65 at pp. 1-2 ; 
NAMA, No. 85 at p. 7; NAFEM, No. 83 at pp. 8-9; Hoshizaki, No. 76 at p. 
3; SCC, No. 74 at p. 2) AHRI and NAFEM expressed concern that DOE may 
be using units in the CRE teardowns that fail to align with those 
currently on the market, as significant changes were made with the 
energy conservation standards that went into effect in 2017. (AHRI, No. 
65 at p. 2; NAFEM, No. 83 at pp. 8-9) AHRI and NAFEM added that changes 
in refrigerants have also taken place, such as the switch from R-134a 
and R-404A to low-GWP R-290 in self-contained equipment. (AHRI, No. 65 
at p. 2; NAFEM, No. 83 at p. 9)
    AHRI requested that DOE add to the docket all documents and data 
referenced in the October 2023 CRE NOPR for stakeholder review and 
input; AHRI further requested that DOE add an additional 60 days to the 
public comment period for stakeholders to have adequate time to review 
the data and provide meaningful comments. (AHRI, No. 65 at pp. 1-2) 
AHRI added that DOE has failed to make available to interested parties 
all data it relied upon for calculations and conclusions in this 
rulemaking, as required by the Administrative Procedure Act (``APA''). 
(AHRI, No. 81 at p. 4) AHRI commented that DOE's failure to provide the 
technical materials and analysis for its calculations does not align 
with precedence from the courts \76\ on this issue. (Id.)
---------------------------------------------------------------------------

    \76\ AHRI specifically referenced American Public Gas 
Association v U.S. Department of Energy, 72 F. 4th 124, July 7, 
2023.
---------------------------------------------------------------------------

    NAMA commented in support of these comments made by AHRI. (NAMA, 
No. 85 at pp. 9-10). NAMA added that several instances in the October 
2023 NOPR do not appear to present the data DOE utilized to arrive at 
the provided conclusions and that this is a violation of the U.S. Court 
of Appeal for the District of Columbia's statement that an agency is 
required to allow the public to review and analyze any technical 
materials that it relies upon in a proposed rule. (Id. at p. 9)
    NAMA commented it was concerned that DOE had tested units using a 
computer rather than actual units and requested that DOE provide 
detailed information on the analysis. (Id. at p. 8)
    Zero Zone stated that DOE's description of how baseline levels are 
established in the October 2023 NOPR does not indicate that equipment 
was tested, and that baselines were established solely using data from 
the CCD. (Zero Zone, No. 75 at p. 1) Zero Zone questioned how DOE 
determined the efficiency increase of the technology options proposed 
without testing. (Id.) Zero Zone commented that if testing was not 
completed, DOE should reevaluate the assumptions for design options. 
(Id.) Zero Zone stated that competitors in the database already employ 
most of the design features proposed by DOE, and Zero Zone asked for 
additional detail on how DOE determined the energy reduction of the 
design options if no testing was performed. (Id. at p. 5)
    NAMA stated that, to the industry, the fact that many of the 
efficiency options

[[Page 7540]]

have already been in use for years serves as additional proof that the 
teardowns, analysis, and reverse engineering were performed on machines 
that were not representative of today's production and did not follow 
the final test procedure for CRE. (NAMA, No. 85 at p. 5)
    Hoshizaki commented that, if given the opportunity, it could 
accurately guide DOE on which Hoshizaki models were manufactured before 
and after the 2017 rulemaking based on model numbers. (Hoshizaki, No. 
76 at p. 3) Hoshizaki commented that if DOE included units produced 
before the 2017 rulemaking, this would explain why many of the design 
factors mentioned in the October 2023 TSD were not identified as 
already in use. (Id.)
    In response to the August 2024 NODA, AHRI commented that DOE had 
not made available the data that it relied upon in the NOPR, and 
continues to request DOE provide access to all information, technical 
studies, and data that it used for this commercial refrigeration 
equipment rulemaking. (AHRI, No. 104 at p. 6) AHRI commented that the 
Administrative Procedure Act and recent case law requires that all 
information used be publicly available. (Id.)
    NAMA commented that DOE stated in the November 2023 public hearing 
that they would make available more information on the tear-down and 
testing of units, however, the NODA does not contain any new 
information on this. NAMA commented that all of the testing was done on 
older machines: VCT.SC.M units were purchased in 2020 with R-290 
refrigerant, VOP.SC.M unit was purchased in 2019 at 13 cu ft with R-
404A refrigerant, no HZO.SC.L units were purchased or tested. (NAMA, 
No. 112 at p. 5)
    Zero Zone commented that DOEs provided list of tear down equipment 
points to years of standards development that was not based on actual 
test data, and that DOE should have tested remote equipment. (Zero 
Zone, No. 114 at p. 1) Zero Zone requested that DOE postpone release of 
the rule until it has tested a more representative group of equipment. 
(Id.) Zero Zone stated that the standards are set at the average energy 
value, however manufacturers must develop equipment that has an average 
energy consumption below the standard so all the equipment found in a 
normal distribution of manufacturing would meet the standard. Zero Zone 
suggests that DOE should increase the allowed energy by 3 standard 
deviations. (Id.)
    NAFEM commented that there was new information analyzed in the 
August 2024 NODA, for which the data had not been shared publicly. 
(NAFEM, No. 101 at pp. 4-5) NAFEM stated that this includes 
specifically the update of R-290 compressor performance to reflect that 
of the database of CRE compressors, as well as that DOE conducted 
additional teardown tests to reduce the R-value from 8 to 6.5 per inch, 
baseline fan motor assumptions and use of electronic controls. (Id. at 
p.5)
    NAFEM additionally referenced the comment from AHRI in response to 
the October 2023 NOPR which requested DOE's teardown information, which 
has not been provided. (NAFEM, No. 101 at p. 5) NAFEM stated that this 
contravenes well settled law and provided the examples of the decisions 
in Am. Pub. Gas Ass'n v. U.S. Dep't of Energy, 72 F.4th 1324, 1337 
(D.C. Cir. 2023) (``Generally, the technical studies and data upon 
which the agency relies must be revealed for public evaluation. . . 
.).'' and Conn. Light & Power Co. v. Nuclear Regulatory Comm'n Com., 
673 F.2d 525, 530-31 (1982) (``An agency commits serious procedural 
error when it fails to reveal portions of the technical basis for a 
proposed rule in time to allow for meaningful commentary.'') (Id.)
    In response to the comments regarding units tested, DOE provided 
information on the CRE units tested in this rulemaking cycle in table 
IV.17 of the August 2024 NODA. DOE notes that Section 1.2 of the NODA 
support document DOE stated the year the test unit was purchased. 
Teardowns were conducted after purchase (i.e., between 2017-2024). In 
the August 2024 NODA, DOE stated that, based on feedback in response to 
the October 2023 NOPR and November 2023 Public Meeting and additional 
test and teardown data conducted since the October 2023 NOPR, DOE 
updated certain design specifications and components assumed to be used 
in models at the baseline efficiency level in the NODA. 89 FR 68788, 
68792. As stated in the August 2024 NODA, DOE conducted additional 
component teardowns and reviewed the teardown data it compiled in 
support of this rulemaking and observed that a significant number of 
units contained electronically commutated motor (ECM) evaporator and 
condenser fan motors. Id. Therefore, based on DOE's teardown data, DOE 
presents a revised analysis in the August 2024 NODA with updated 
baseline fan motor components for certain equipment classes. Id.
    Additionally, DOE provided the supporting spreadsheets that the 
analyses were based on for the June 2022 Preliminary Analysis, the 
October 2023 NOPR, the August 2024 NODA, and this final rule.
    With respect to comments regarding the APA, DOE has met the APA's 
requirements as DOE has provided throughout this final rule, the final 
rule TSD, and the final rule supporting documents all of the details of 
the analysis conducted by DOE and the information relied upon in 
conducting that analysis.
    In response to Zero Zone's comment regarding CRE connected to a 
remote condensing unit, as stated in section 1.2 of the August 2024 
NODA support document, DOE did not conduct any testing on CRE with 
remote condensing units in support of this rulemaking. Instead, the 
analysis for directly analyzed remote equipment classes was based on 
the engineering spreadsheet model methodology of the March 2014 Final 
Rule, and DOE updated certain design specifications and design options 
for this rulemaking with current information, based on models currently 
available on the market, and supporting data and information provided 
during manufacturer interviews conducted during this rulemaking 
process. This approach was also supported by calibrations conducted on 
the self-contained CRE analysis for inputs that apply to both the self-
contained analysis and the remote-condensing analysis.
    When compiling the list of tested units for the August 2024 NODA 
and this final rule, DOE refined the October 2023 NOPR list of tested 
CRE that were used to support the engineering analysis, which resulted 
in a total of 64 units. DOE has provided anonymized data with the year 
purchased, refrigerant type, equipment class, volume or TDA, and daily 
energy consumption in table IV.17. DOE used the results of this testing 
as well as market research and manufacturer interviews to inform its 
engineering analysis spreadsheet for this final rule.

[[Page 7541]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.119


[[Page 7542]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.120

Chef Base or Griddle Stand Test Data
    In response to the October 2023 NOPR regarding the amended test 
conditions for chef bases or griddle stands in the September 2023 Test 
Procedure Final Rule, NAFEM commented that DOE has provided no 
empirical data in support of the conclusion that the amendments adopted 
in the September 2023 Test Procedure Final Rule will not alter the 
measured efficiency of CRE currently subject to energy conservation 
standards. (NAFEM, No. 83 at p. 13) NAFEM stated that, in the November 
2023 Public Meeting, DOE stated it tested chef bases or griddle stands 
at the 75 [deg]F ambient temperature and calibrated the engineering 
analysis to that condition, then cross walked that condition to the 86 
[deg]F condition. (Id.) NAFEM commented that when DOE was asked about 
test data at 86 [deg]F, DOE stated it did not receive any data for that 
condition. (Id.) Continental and NAFEM disagreed with DOE's decision to 
use simulated estimates of energy consumption for chef base or griddle 
stand units under the newly instated conditions as a crosswalk in lieu 
of actual test results. (Continental, No. 86 at p. 3; NAFEM, No. 83 at 
pp. 13-14) In response to the August 2024 NODA, Continental stated that 
it disagrees with the inclusion of chef bases and griddle stands until 
sufficient testing has been conducted at prescribed conditions, and 
properly vetted. (Continental, No. 107 at p. 2)
    In response to the comment from NAFEM, DOE notes that chef bases or 
griddle stands are not currently subject to energy conservation 
standards, therefore, NAFEM's comment about the September 2023 Test 
Procedure Final Rule not altering the measured efficiency of CRE 
currently subject to energy conservation standards is not applicable to 
chef bases or griddle stands.
    In response to the comments from NAFEM and Continental about test 
data versus modeling energy consumption in the engineering spreadsheet, 
DOE performed additional testing on chef bases or griddle stands at an 
86 [deg]F ambient dry-bulb temperature, as summarized in table IV., in 
accordance with the amended test conditions for chef bases and griddle 
stands prescribed in the September 2023 Test Procedure Final Rule.
    In response to the October 2023 NOPR, Hoshizaki, NAFEM, 
Continental, and Delfield commented requesting more information on how 
standards for chef bases or griddle stands were established because the 
amended test procedure requires a different ambient temperature than 
other CRE and whether testing had been conducted on chef base or 
griddle stand units. (Hoshizaki, No. 76 at p. 4; NAFEM, No. 83 at pp. 
13-14; Continental, No. 86 at pp 2-3; Delfield, No. 71 at p. 1)
    In response to the October 2023 NOPR, Hoshizaki requested that DOE 
allow manufacturers to send chef bases or griddle stands to third-party 
labs for testing over a 2-year period to see where energy levels should 
be set, and then grant manufacturers 3 years to make necessary changes 
to meet this new standard. (Hoshizaki, No. 76 at p. 4)
    While DOE initially tested chef bases or griddle stands at a 75 
[deg]F ambient dry-bulb temperature to inform the October 2023 NOPR 
analysis, the September 2023 Test Procedure Final Rule amended the 
tested ambient dry-bulb temperature for chef bases or griddle stands 
from 75 [deg]F to 86 [deg]F; therefore, in the October 2023 NOPR DOE 
revised the chef bases or griddle stand analysis using the CRE 
engineering spreadsheet model to calculate the energy use at an 86 
[deg]F ambient dry-bulb temperature. In the October 2023 NOPR analysis, 
DOE had analyzed a saturated condensing temperature (``SCT'') of 95 
[deg]F for all equipment classes, a 20-degree temperature difference 
with the 75 [deg]F ambient temperature. To maintain a 20-degree 
temperature difference with the amended 86 [deg]F ambient temperature 
for chef bases or griddle stands, in the analysis presented in the 
August 2024 NODA and this final rule, DOE analyzed a SCT of 106 [deg]F 
for chef base or griddle stand equipment.\77\
---------------------------------------------------------------------------

    \77\ See Section 1.3 of the NODA support document at https://www.regulations.gov/document/EERE-2017-BT-STD-0007-0090.
---------------------------------------------------------------------------

    In response to the August 2024 NODA, The CA IOUs commented that, 
changing engineering assumptions from

[[Page 7543]]

75.2 [deg]F to 86.0 [deg]F ambient dry bulb temperature in the NODA 
engineering spreadsheet increases modeled energy use by 20.3% for chef 
base coolers (CB.SC.M) and 9.5% for chef base freezers (CB.SC.L). (CA 
IOUs, No. 113, at p. 5) The CA IOUs commented that they tested popular 
models of chef bases based on DOE's current test procedure at 75.2 
[deg]F and 86.0 [deg]F. (Id.) The CA IOUs commented that their test 
data and DOE's test data from the NOPR TSD show significantly higher 
energy consumption increases than those indicated in the NODA 
engineering spreadsheet at 86 [deg]F compared to 75 [deg]F. (Id.) The 
CA IOUs commented that, since DEC is a function of refrigerated volume 
for chef bases, the percent difference in DEC from 75 [deg]F to 86 
[deg]F should also be a function of refrigerated volume. (Id.) The CA 
IOUs commented that DOE should update its engineering analysis and use 
available test data to validate its engineering model, ensuring more 
accurate predictions of standard levels and energy savings. (Id.)
    In response to the CA IOUs comment, DOE notes that the analysis 
supporting the August 2024 NODA and this final rule for chef bases or 
griddle stands was not based on a percent difference of tested energy 
use from 75 [deg]F to 86 [deg]F. The chef base or griddle stand test 
data conducted at 86 [deg]F and the subsequent teardown information 
from those test units were used to inform the engineering spreadsheet 
assumptions and calculations used to conduct this analysis. DOE did not 
use the test data conducted at 75 [deg]F to inform the August 2024 NODA 
or this final rule analysis. Therefore, the CA IOUs request that DOE 
make the percent difference in DEC from 75 [deg]F to 86 [deg]F a 
function of refrigerated volume is irrelevant to this analysis. DOE 
agrees with the CA IOUs comment in response to the August 2024 NODA 
that the daily energy consumption values for the units the CA IOUs 
tested are consistent with DOE's data. (The CA IOUs, No. 113, at p. 2).
    Since the October 2023 NOPR, DOE has updated certain baseline 
design specifications for chef bases or griddle stands including: the 
number of evaporator fans for CB.SC.L, the infiltrated air mass flow 
rate assumption for CB.SC.M and CB.SC.L, the discharge air temperature 
(``DAT'') for CB.SC.M, and the baseline evaporator temperature 
(``SET'') for CB.SC.L. For more details, see appendix 5A of the final 
rule TSD. As previously discussed in section IV.C.1.a.iii of this 
document, updating certain baseline design specifications is consistent 
with the approach in the March 2014 Final Rule.\78\
---------------------------------------------------------------------------

    \78\ See tables 5.A.2.2 of the NOPR and March 2014 Final Rule 
TSD, available at .regulations.gov/document/EERE-2010-BT-STD-0003-
0051 and www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

e. Development of Standard Equations
    In the October 2023 NOPR, in three directly analyzed equipment 
classes, VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE tentatively determined 
to maintain the current standard equation intercept and calculated a 
slope based on the current standard intercept and the proposed energy 
use level at the representative volume or TDA. 88 FR 70196, 70216-70217 
This approach was consistent with the approach taken in the March 2014 
Final Rule for certain classes, in which DOE retained the offset 
factors for classes DOE had calculated the offset factor for in the 
March 2009 CRE final rule, as DOE stated in the March 2014 Final Rule 
that it believed that those figures continued to represent the end 
effects inherent in the operation of those equipment types.\79\
---------------------------------------------------------------------------

    \79\ See section 5.8 at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, Zero Zone commented that it 
believes that DOE's approach in the October 2023 NOPR to keep the 
current standard equation intercept and calculate a new slope based on 
proposed use level and representative volume approach is incorrect, 
resulting in a close to 50-percent reduction in allowable energy use. 
(Zero Zone, No. 75 at p. 2)
    Hoshizaki stated that equations for the model families result in 
curves that do not accurately give a levelized curve that provides 
nominal energy reduction across the full range of volumes. (Hoshizaki, 
No. 76 at p. 3) Hoshizaki commented that areas of the curve show a 10-
20-percent reduction and some areas range from 30-60 percent 
reductions, which are not feasible based on the technology available 
today. (Id.)
    In response to Zero Zone's and Hoshizaki's comments regarding the 
slope, DOE notes that in the October 2023 NOPR, consistent with the 
analysis described in the March 2014 Final Rule TSD for certain classes 
in which DOE retained the offset factors for classes DOE had calculated 
the offset factor for in the March 2009 CRE final rule, for all classes 
except VCT.SC.M, VCS.SC.I, and HCT.SC.I, DOE adjusted both the slope 
and intercept based on the percent reduction for the selected EL to 
maintain an equal percent reduction across the volume or TDA range. 88 
FR 70196, 70217. DOE has updated its methodology in this final rule, 
consistent with the equations presented in the August 2024 NODA, to 
apply the energy use reduction percentage to the baseline energy use 
equation's slope and intercept for all classes. For VCT.SC.M, this is 
consistent with the March 2014 Final Rule TSD, where DOE adjusted the 
slope and intercept for the EPACT 2005 equipment classes. See section 
5.8 of the March 2014 Final Rule TSD for more details. Additionally, as 
discussed in section IV.A.1.b, DOE is maintaining the 49 ft\3\ 
representative volume for the VCT.SC.M (V <= 100) class in this final 
rule, which is supported by an analysis conducted by DOE to confirm 
that the representative analysis at 49 ft\3\ is also representative for 
volumes less than 49 ft\3\.
    Updating the standard line intercept for certain classes is 
consistent with the approach in the March 2014 Final Rule, where DOE 
adjusted the offset factors, or y-intercept, for certain classes in 
response to comments received on the NOPR. See 79 FR 17725, 17742.
    Furthermore, as compared to the October 2023 NOPR, DOE is adopting 
less stringent efficiency levels in this final rule for the majority of 
equipment classes.
    Zero Zone recommended that DOE review the EPA ENERGY STAR approach 
and the resulting multiple slope equations for different volumes. (Zero 
Zone, No. 75 at p. 2) Zero Zone commented this approach would consider 
the additional compressor units required to maintain safe food product 
temperatures in medium-temperature self-contained equipment. (Id.) Zero 
Zone added that EPA did not identify significant energy improvements 
for commercial refrigerators and freezers in its November 2022 ENERGY 
STAR 5.0 Commercial Refrigerators and Freezers Specification,\80\ and 
Zero Zone recommended that DOE should follow EPA's analysis and not 
change the efficiency level for this product. (Id.)
---------------------------------------------------------------------------

    \80\ See www.energystar.gov/products/commercial_refrigerators_freezers/partners?_gl=1*mzqc33*_ga*MTkwMzQyNTg3LjE3MDU0MjQ1OTk.*_ga_S0KJTVVLQ6*MTcxNDA4Mzg1MC4xNy4xLjE3MTQwODM4NTMuMC4wLjA.
---------------------------------------------------------------------------

    In response to the August 2024 NODA, Zero Zone commented that DOE 
should not use a single line, 2-point formula, as energy use in large 
self-contained equipment is not strictly proportional to the volume of 
the unit. (Zero Zone, No. 114 at p. 2) Zero Zone requested DOE review 
EPA's ENERGY STAR levels for SC.M for an example of energy level 
variation as equipment volume increases. (Id.)

[[Page 7544]]

    In response to the comment from Zero Zone, the standard lines for 
the analyzed classes and capacity ranges in this final rule reflect an 
even application of the energy use percent reduction of the 
representative capacity across the capacity range of each equipment 
class. DOE notes that DOE's current, new, and amended standards do 
allow for more energy use as capacity increases, and DOE is continuing 
to analyze the large capacities of the seven self-contained equipment 
classes as discussed in section II.B.3 of this document.
f. Engineering Spreadsheet
    In response to the October 2023 NOPR, ITW commented that DOE's 
October 2023 NOPR engineering spreadsheet should account for component 
performance variability. (ITW, No. 82 at p. 5) ITW provided the example 
of compressors, which are subject to variability in their EER due to 
variations in motor efficiency, copper slot fill, magnetic properties 
of lamination steel, machining tolerances, etc. (Id.) ITW commented 
that the extent of this normal variation was well documented in a joint 
study conducted by AHRI and the Association of European Refrigeration 
Component Manufacturers (``ASERCOM'') in 2017, which reported a normal 
expected variation of between 5 and 10 percent in the compressor EER. 
(Id.) Based on the above-mentioned considerations for variability, ITW 
requested that DOE account for a 5-10 percent discount factor to the 
system energy efficiency as part of any baseline or energy improvement 
scenario calculation. (Id.)
    In the March 2014 Final Rule, DOE updated its compressor 
assumptions in response to comments received on the NOPR. 79 FR 17725, 
17760. In this final rule, DOE is also updating its compressor 
assumptions in response to commenter feedback. With respect to the 
comment from ITW, DOE reviewed the white paper ITW provided, which is 
also referenced by the AHRI 540 compressor performance rating standard 
(``AHRI 540''), and DOE is applying a 5- percent increase in energy use 
for all compressors to account for the performance prediction 
uncertainty as a result of curve-fitting compressor performance maps in 
this final rule. This adjustment is made by increasing the overall 
compressor power by 5 percent in the engineering spreadsheet and aligns 
with commenters' feedback that a 5-10 percent increase in energy use 
for all compressors should be included to account for the potential 
variability in compressor performance. See the final rule engineering 
spreadsheet for further details.
    Hillphoenix commented that the engineering spreadsheet contains an 
error for calculating the efficiency of variable-speed compressors. 
(Id. at p. 11) Hillphoenix commented also that all except three classes 
that used the CP4 code as a selected option show ``VALUE'' in the kWh 
cell for evaporator fan motors, condenser fan motors, and compressors 
for the selected TSL 5 energy level. (Id.) Hillphoenix stated that 
classes with CP4 code and ``VALUE'' showing in Excel include VOP.SC.M, 
SVO.SC.M, HZO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.L, VCS.SC.H, VCS.SC.L, 
and VCS.SC.I. (Id.)
    With respect to the comment from Hillphoenix regarding errors in 
the engineering spreadsheet, DOE recommends that manufacturers follow 
the instructions in the engineering spreadsheet on enabling iterative 
calculations and refreshing calculations after changing equipment 
classes. Without more detailed information, DOE is unable to further 
assist in a response to the comment from Hillphoenix.
    Hillphoenix commented that the VCT.SC.M equipment class selected EL 
in the October 2023 NOPR does not pass the proposed energy limit. 
(Hillphoenix, No. 77 at p. 11) Hillphoenix commented that the formula 
for this error from the October 2023 NOPR is (0.05 * 49 ft\3\ + 0.9) 
and equals a 3.35 kWh calculated energy limit, and EL 3 was selected 
for this class and has an energy consumption of 3.52 kWh, which is ~ 5 
percent over the proposed energy limit. (Id.)
    In response to the comment from Hillphoenix, in the October 2023 
NOPR, the proposed maximum energy use formula for the VCT.SC.M 
equipment class was 0.054 x V + 0.86. Using the representative volume 
for that equipment class, 49.00 ft\3\, to calculate the maximum energy 
use proposed in the October 2023 NOPR for that class results in 3.506 
kWh/day. In the October 2023 NOPR, DOE proposed EL 3 for the VCT.SC.M 
class, which was associated with an energy use of 3.515 kWh/day. These 
values are 0.3 percent different from each other. The equation and 
values that Hillphoenix cited are different from the values in the 
October 2023 NOPR.
g. Capacity Metrics
    In response to the October 2023 NOPR, Zero Zone stated that some 
manufacturers have taken advantage of the energy formula's use of 
refrigerated volume and increased their equipment's volume in order to 
have more allowable energy. (Zero Zone, No. 75 at p. 3) Zero Zone 
stated its belief that this approach offers limited value to the end 
user and does not address the goal of energy efficiency. (Id.) Zero 
Zone recommended the use of TDA for energy calculations of product 
classes that have transparent doors or no doors. (Id.)
    While DOE acknowledges that some equipment with unique designs 
could have more or less TDA than the TDA of the representative unit 
analyzed at a specific volume, DOE currently assumes that these designs 
are manufactured for specific end-use cases and are not representative 
of the equipment class. DOE considers all models when developing the 
representative design specifications and has presented updated design 
specifications in this final rule. As stated in the October 2023 NOPR, 
given the mixed response regarding revising the capacity metrics for 
equipment classes, DOE has not evaluated revising the capacity metrics 
for any equipment classes. 88 FR 70196, 70217. In the absence of clear 
data to support a change in metric, it is not appropriate for DOE to 
make a change at this time.
2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
equipment, the availability and timeliness of purchasing the equipment 
on the market. The cost approaches are summarized as follows:
    [squ] Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available equipment component-by-component, 
to develop a detailed bill of materials for the equipment.
    [squ] Catalog teardowns: In lieu of physically deconstructing 
equipment, DOE identifies each component using parts diagrams 
(available from manufacturer websites or appliance repair websites, for 
example) to develop the bill of materials for the equipment.
    [squ] Price surveys: If neither a physical nor catalog teardown is 
feasible (e.g., for tightly integrated products such as fluorescent 
lamps, which are infeasible to disassemble and for which parts diagrams 
are unavailable), cost-prohibitive, or otherwise impractical (e.g., 
large commercial boilers), DOE conducts price surveys using publicly 
available pricing data published on major online retailer websites and/
or by

[[Page 7545]]

soliciting prices from distributors and other commercial channels.
    In the present case, DOE conducted the analysis using physical and 
catalog teardowns. Except for updates presented in this section that 
are consistent with the August 2024 NODA, the cost analysis used in 
this final rule is the same as the cost analysis in the October 2023 
NOPR. See chapter 5 of the final rule TSD for additional details.
    The resulting bill of materials provides the basis for the MPC 
estimates for equipment at various efficiency levels spanning the full 
range of efficiencies from the baseline to max-tech.
    In the October 2023 NOPR, DOE requested comment on the method for 
estimating manufacturer production costs. 88 FR 70196, 70236. In the 
August 2024 NODA, DOE also requested comment on the updated analysis 
that was presented. 89 FR 68788, 68832.
a. General Approach of the Cost Analysis
    In response to the October 2023 NOPR, Hussmann and AHRI requested 
that DOE clarify its question about the method for estimating 
manufacturer production costs and asked if DOE is referring to 2014 or 
2023 cost information. (AHRI, No. 81 at p. 8; Hussmann, No. 80 at p. 6)
    In response to the October 2023 NOPR, Hoshizaki requested more 
information on price-learning models that were reviewed with specific 
manufacturers and model numbers, as well as the parts that were 
evaluated for efficiency gains with manufacturer names, part numbers, 
and 2023 costs to verify that the parts analyzed were from 2022 and not 
2014. (Hoshizaki, No. 76 at p. 4) Hoshizaki commented that DOE 
mentioned in the November 2023 public meeting that costs were adjusted 
for inflation, but the last 3 years have not been a normal inflation 
track, with parts and materials shortages that have led to vast price 
increases and longer lead times. (Id.) Hoshizaki commented that 
verification of costs to 2023 figures would be helpful to validate cost 
to change to higher energy efficiency. (Id.)
    As discussed in the October 2023 NOPR, DOE updated the October 2023 
NOPR analysis to reflect current inflation rates at the time of the 
analysis, which reflects 2022 dollars. 88 FR 70196, 70235. DOE 
acknowledges that there have been abnormal price trends, but notes that 
DOE uses inflation indices specific to the materials included in CRE to 
update its cost analysis in order to account for any abnormal price 
trends. DOE also notes that for raw metal materials, DOE uses the 5-
year average prices, further described in chapter 5 of the final rule 
TSD. In response to Hussmann and AHRI, DOE's request for comment on 
manufacturer production costs in the October 2023 NOPR was referring to 
the 2022 dollar year analyzed in the October 2023 NOPR.
    In response to the October 2023 NOPR, Zero Zone requested that if 
DOE maintains the current proposed levels, DOE should reevaluate the 
case cost analysis to account for redesign and new foam fixtures, as 
Zero Zone will need to make these investments to achieve a compliant 
product. (Zero Zone, No. 75 at p. 3) Zero Zone further requested that 
DOE reevaluate the engineering analysis and the proposed energy 
conservation standard for the VCT.SC.M product class, as well as the 
cost analysis for product classes anticipated to switch to R-290. (Id.)
    In response to the comment from Zero Zone, in this final rule, DOE 
analyzed design option steps based on what is most representative of 
the current market, and DOE does not anticipate manufacturers needing 
to increase insulation thickness to meet the current standard and has 
screened out increased insulation thickness as described in section 
IV.B.1.a. In this final rule, DOE reviewed the cost analysis to ensure 
that the costs reflected R-290 designs for equipment classes in which 
the representative baseline was based on R-290. For further details on 
the cost analysis, see chapter 5 of the final rule TSD. In addition to 
accounting for the switch to R-290 in its cost analysis, DOE also 
analyzed investments required by the industry to make the switch. For 
details on those conversion costs, see section IV.J.3.a of this 
document.
    In response to the October 2023 NOPR, NAMA commented that there 
were significant discrepancies in design option costs across equipment 
classes, and included a table of design options for four different 
equipment classes that had different costs for design options including 
condenser fan motors, occupancy sensors, microchannel heat exchangers, 
improved-insulation doors, and variable speed compressors. (NAMA, No. 
85 at pp. 13-14) NAMA also recommended that DOE check the accuracy of 
estimates for machines under 30 cubic feet in capacity. (Id. at p. 14)
    In response to the comment from NAMA, DOE did not receive data to 
suggest that machines under 30 ft\3\ in capacity would use design 
options significantly different than larger equipment; therefore, DOE 
has not considered different costs for machines under 30 ft\3\ in the 
analysis in this final rule. In response to NAMA's comment on design 
option cost differences, DOE notes that the costs for the design 
options that NAMA listed differ for each equipment class due to their 
representative units' different design specifications, including unit 
dimensions, capacity, and power requirements. For example, there is 
significant difference between costs for improved-insulation door 
design options for each equipment class because each equipment class 
representative unit has a different sized door. For further discussion 
on how DOE determined representative unit design specifications, see 
section IV.C.1 of this document and chapter 5 of the final rule TSD.
    In response to the October 2023 NOPR, NAMA recommended that DOE 
refer to labor cost data from 2021-2023, not 2018, because the latter 
does not reflect overtime wages in a labor shortage, which contributes 
to the financial burden on manufacturers. (NAMA, No. 85 at p. 15)
    DOE notes that at the NOPR stage, the unburdened fabrication and 
assembly wages--factors that affect the labor component of the MPC--
were determined to be $16.00 per hour based on previous feedback from 
manufacturer interviews. DOE is unclear about NAMA's reference to using 
labor cost data from 2018. After reviewing recent data from the Bureau 
of Labor Statistics (``BLS''),\81\ DOE updated its labor rates for the 
final rule engineering analysis to $22.00 per hour for unburdened 
assembly wages and $24.00 per hour for unburdened fabrication process 
wages. This update in the final rule analysis results in higher labor 
costs to make CREs of all efficiencies. Additionally, DOE accounts for 
fully burdened labor costs by estimating additional costs to employers 
associated with providing employee benefits. See chapter 5 of the final 
rule TSD for further details.
---------------------------------------------------------------------------

    \81\ Occupational wage statistics data are available at 
www.bls.gov/oes/.
---------------------------------------------------------------------------

    As discussed in the October 2023 NOPR, DOE updated the NOPR 
analysis to reflect current inflation rates at the time of the 
analysis, which reflects 2022 dollars. 88 FR 70196, 70235. In this 
final rule, DOE uses 2023 dollars.
b. Costs of Specific Components
    In response to the October 2023 NOPR, NAMA stated that DOE 
significantly underestimates the cost of components that comprise a CRE 
unit. (NAMA, No. 85 at pp. 10-11, 13-14) NAMA commented that DOE should 
not base the cost of design options on one

[[Page 7546]]

product category to another with spreads of 400 percent. (Id. at p. 13)
    In response to the October 2023 NOPR, NAMA also commented that it 
does not agree with the cost of the change in DC condenser fan options 
as shown in the October 2023 NOPR TSD, as NAMA found that the cost for 
the motors was greater than $20 based on what its companies paid for 
the motor, the installation, and the capital costs. (NAMA, No. 85 at p. 
23)
    In response to the comment from NAMA regarding the cost of DC 
condenser fan motors, DOE notes that, in the final rule engineering 
analysis, DOE analyzed costs for brushless DC fan motors ranging 
between $23.71 and $28.80, depending on the rated wattage of the motor. 
In response to the comment from NAMA regarding the accuracy of 
component costs, DOE notes that costs were obtained from teardown 
analyses as well as data from manufacturer feedback. For further 
details on the cost analysis, see chapter 5 of the Final Rule TSD.
    In response to the October 2023 NOPR, NAMA commented that for the 
2022 preliminary analysis, DOE estimated a cost increase of $167 for 
improved insulated doors; however, NAMA estimated that the cost today 
is expected to be over $500, which would result in a negative payback 
for over 20 years. (NAMA, No. 85 at p. 25)
    Regarding the comment from NAMA about the cost increase for 
improved insulated doors, NAMA has not provided information, such as 
the size, number of panes, and fill type, about the door referenced in 
their comment, making it difficult to provide an accurate comparison. 
DOE also notes it appears that NAMA is referencing the VCT.SC.M results 
provided in the June 2022 Preliminary Analysis, for which the ``high 
performance door'' design option for VCT.SC.M costs approximately $167 
more than the previous design option step, and comparing that cost 
increase to the total cost of the door. In this final rule, consistent 
with the August 2024 NODA, DOE revised the door cost estimates 
resulting in a total cost (i.e., not incremental cost) of around $380 
for triple pane, argon filled glass packs on the VCT.SC.M 
representative unit analyzed in this final rule. DOE notes that triple 
pane, argon filled glass packs were the most efficient door design 
option analyzed at the TSL level finalized in this final rule (TSL 3), 
and that at TSL 3 for the VCT equipment class, the subject of NAMA's 
comment, DOE did not analyze a door design option beyond the baseline 
to improve efficiency. In this final rule analysis, DOE has updated the 
cost of the door design but adjusted for differences in market size and 
purchasing volume.
    In response to the October 2023 NOPR, NAMA commented that when 
estimating costs for microchannel condenser coils, DOE did not include 
a fully burdened, amortized cost of engineering, design, creation of 
test models, testing, tooling, factory assembly line upgrades, 
fixtures, molding changes, packaging for larger and heavier machines, 
and other costs. (NAMA, No. 85 at p. 26)
    With respect to the comment from NAMA regarding microchannel 
condenser coils, DOE is no longer considering microchannel condenser 
coils as a design option in this final rule, and has screened out this 
design option as discussed in section IV.B.1.g.
    In response to the August 2024 NODA, NAMA commented that, while DOE 
did adjust some of the NOPR costs in the NODA TSD, several design 
options (e.g., krypton filled doors, brushless DC condenser fan motors, 
argon filled triple pane doors, occupancy sensors with dimming) are 
shown as improving efficiency by amounts not proven in NAMAs testing, 
and the cost is significantly higher than what is shown. (NAMA, No. 112 
at p. 6)
    With regards to the comment from NAMA, DOE maintains its position 
that its door costs are representative of the industry based on 
commercial available door designs, performance of commercial available 
door designs, current costs of various door technologies, as well as 
feedback directly from manufacturers. NAMA did not provide additional 
detail to support their complains including the testing they reference 
in the comment. Therefore, DOE has not made any adjustments to the 
engineering analysis from the August 2024 NODA.
c. Variable-Speed Compressor
    In response to the October 2023 NOPR, NAMA commented that the 
estimated cost of a VSC, $200, has not changed since its response to 
the June 2022 Preliminary Analysis, except for a 10-percent increase 
due to compressor manufacturer pricing. (NAMA, No. 85 at p. 24) NAMA 
commented that DOE underestimates the purchase price, the cost of the 
other parts necessary to make a VSC work (i.e., computer controls), and 
the changes to the cooler. (Id.)
    DOE disagrees with the comment from NAMA that DOE is 
underestimating the cost of the variable-speed compressors. In the 
October 2023 NOPR, DOE proposed that the MPC of a VSC at the 
representative volume for VCT.SC.M class was $220.52, consistent with 
NAMA's comment that the estimated cost of a VSC is $200 plus a 10-
percent increase. $94 represents the cost differential between the cost 
of the single-speed compressor and a variable-speed compressor. In this 
final rule, DOE is maintaining the cost differential of $94.
    DOE notes that NAMA did not elaborate on what it meant by 
``computer controls.'' NAMA may have been referring to the need for 
electronic controls to set appropriate compressor speeds. DOE has 
determined that the cost to add additional hardware to implement 
variable-speed control as compared to single-speed control using an 
electronic control platform would be minimal (i.e., the required 
sensors would already be in place, and the cost of any required 
additional microprocessor capacity would be minimal).
    In addition, DOE received confidential comments related to the 
electronic controls assumed in the baseline in response to the October 
2023 NOPR.
    In response to the August 2024 NODA, Hillphoenix commented that one 
of the largest North American manufacturers of compressors estimates 
that the variable-speed compressor controller cost would be a 100 
percent increase over fixed speed compressor cost, and that DOE 
neglected to account for cost increase of a required variable-speed 
compressor controller and additional components. (Hillphoenix, No. 110 
at p. 4) Hillphoenix stated that there are additional costs associated 
with variable speed compressors, such as programming, installation, 
training, and the increased time for ``end of line'' testing that are 
not reflected in the engineering analysis. (Id.at p. 4-5)
    Based on the preponderance of CRE units DOE tested and tore down in 
support of this CRE rulemaking that are currently using electronic 
controls, DOE determined that CRE already have the other parts 
necessary to make a variable-speed compressor work (e.g., electronic 
controls are already present in existing CRE). Therefore, the main 
difference between single-speed and variable-speed compressors that 
would contribute significantly to cost is the inclusion of an inverter 
drive to control the speed of the compressor, which DOE has accounted 
for in the VSC design option MPC.
    Further, in response to commenter feedback and based on the CRE 
units DOE tested and tore down, DOE has updated the analysis to reflect 
the use of electronic controls at the baseline

[[Page 7547]]

efficiency level for all equipment classes in this final rule.
    In response to the comment from Hillphoenix that DOE neglected to 
account for additional costs associated with programming, installation, 
training, and increased testing time, DOE notes that it accounts for 
non-production costs (i.e., selling, general and administrative 
expenses (``SG&A''), research and development (``R&D'') expenses, and 
interest) as part of the manufacturer markup, described in section 
IV.C.2.f of this document and chapter 12 of this final rule TSD. 
Additionally, research and development investments associated with 
variable-speed compressors were accounted for as part of the product 
conversion costs in the manufacturing impact analysis, as discussed in 
section IV.J.3.a of this document.
d. Doors With Krypton Gas Fill
    In response to the October 2023 NOPR, Zero Zone stated that 40 
percent of krypton gas is manufactured in Ukraine and the war makes 
obtaining krypton gas difficult. (Zero Zone, No. 75 at pp. 3-4) Zero 
Zone commented that its suppliers estimate krypton would increase the 
cost of a door by $35, whereas DOE estimated a cost increase of $5-6. 
(Id. at p. 4)
    DOE reviewed current krypton gas prices and has observed that a 
cost increase of approximately $30, based on the representative unit 
sizes analyzed for self-contained VCT units, is representative of the 
current market, consistent with the comment from Zero Zone, and DOE has 
presented updated costs for doors with krypton gas fill in this final 
rule that are consistent with the August 2024 NODA. This change is 
similar with the March 2014 Final Rule, where DOE updated the cost 
assumptions for certain door design options.\82\
---------------------------------------------------------------------------

    \82\ See the NOPR and March 2014 Final Rule engineering 
spreadsheets available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0098 and www.regulations.gov/document/EERE-2010-BT-STD-0003-0059, respectively.
---------------------------------------------------------------------------

    In response to the August 2024 NODA, Hillphoenix, Continental, 
Hussmann, AHRI, and Zero Zone agreed with DOE's observation that 
triple-pane doors with krypton gas are significantly more costly than 
with argon. (Hillphoenix, No. 110 at p. 5; Continental, No. 107 at p. 
2; Hussmann, No. 108 at p. 3; AHRI, No. 104 at p. 8; Zero Zone, No. 114 
at p. 2)
    Therefore, in this final rule, consistent with commenters, DOE has 
maintained the August 2024 NODA values for its pricing of triple-pane 
doors with krypton gas.
e. Cost-Efficiency Results
    The results of the engineering analysis are reported as cost-
efficiency data (or ``curves'') in the form of daily energy consumption 
(in kWh) versus MPC (in dollars). DOE developed curves representing the 
primary equipment classes. The methodology for developing the curves 
started with determining the energy consumption for baseline equipment 
and MPCs for this equipment. Above the baseline, design options were 
implemented until all available technologies were employed (i.e., at a 
max-tech level). DOE presents these results in chapter 5 of the final 
rule TSD. See chapter 5 of the final rule TSD for additional details on 
the engineering analysis and appendix 5B of the final rule TSD for 
complete cost-efficiency results.
Design Option Ordering
    Based on all the comments received in response to the October 2023 
NOPR and August 2024 NODA, and consistent with the precedent set by the 
March 2014 Final Rule, DOE has reordered the design options in the 
cost-efficiency results based on cost-effectiveness and likely order of 
implementation.\83\ For more details on the updated design option 
ordering, see chapter 5 of the final rule TSD.
---------------------------------------------------------------------------

    \83\ See the NOPR TSD and the March 2014 Final Rule TSD for more 
details on changes to the design option ordering in the 2014 Final 
Rule. The NOPR TSD is available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0051 and the March 2014 Final Rule TSD is 
available at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

f. Manufacturer Markup
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a multiplier (the manufacturer markup) to the MPC. 
The resulting manufacturer selling price (``MSP'') is the price at 
which the manufacturer distributes a unit into commerce. DOE developed 
an industry average manufacturer markup by examining the prior CRE 
rulemaking and annual Securities and Exchange Commission (``SEC'') 10-K 
reports \84\ filed by publicly traded manufacturers primarily engaged 
in commercial refrigeration manufacturing and whose combined equipment 
range includes CRE. 79 FR 17725, 17758. As discussed in the following 
paragraphs, DOE revised the industry average manufacturer markup for 
this final rule analysis based on stakeholder comments. See section 
IV.J.2.d of this document and chapter 12 of the final rule TSD for 
additional information on the manufacturer markup.
---------------------------------------------------------------------------

    \84\ SEC's Electronic Data Gathering, Analysis, and Retrieval 
system is available at www.sec.gov/edgar/searchedgar/companysearch 
(last accessed April 15, 2024).
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, Hillphoenix commented that 
the manufacturer markup of 1.40 used in the October 2023 NOPR is high 
based on competitive market conditions. (Hillphoenix, No. 77 at p. 7) 
Hillphoenix commented that the NOPR Engineering Analysis Spreadsheet 
Model \85\ referenced a manufacturer markup of 1.42. (Id.) In response 
to the August 2024 NODA, Hillphoenix commented that DOE's suggested 
manufacturer markup value of 1.38 used in the August 2024 NODA was 
still too high based on the current competitive market pricing 
conditions and not representative of the CRE industry. (Hillphoenix, 
No. 110 at p. 5)
---------------------------------------------------------------------------

    \85\ Available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0055.
---------------------------------------------------------------------------

    With respect to the comments from Hillphoenix, DOE developed the 
industry average manufacturer markup of 1.40 used in the October 2023 
NOPR by reviewing prior CRE rulemakings, SEC Form 10-K reports, 
feedback gathered during confidential manufacturer interviews conducted 
in advance of the October 2023 NOPR, and market share weights. For the 
August 2024 NODA, DOE reassessed its manufacturer markup in response to 
stakeholder comments and adjusted its estimate using manufacturer 
feedback and market share weights. As a result, DOE used a manufacturer 
markup of 1.38 for the August 2024 NODA. DOE notes that the 
manufacturer markup of 1.38 is meant to represent the overall CRE 
industry, on average. DOE understands that manufacturer markups can 
vary by manufacturer, model, feature, etc. Based on the information 
available, DOE maintains an industry average manufacturer markup of 
1.38 for all CRE equipment classes in this final rule analysis (i.e., 
the manufacturer markup used in the LCC and PBP analyses and MIA), 
consistent with the August 2024 NODA. The Engineering Analysis 
Spreadsheet Model developed for this final rule also reflects a 
manufacturer markup of 1.38.\86\
---------------------------------------------------------------------------

    \86\ The Final Rule Engineering Analysis Spreadsheet Model is 
available at www.regulations.gov/docket/EERE-2017-BT-STD-0007/document.
---------------------------------------------------------------------------

    NAMA stated that DOE's method for estimating manufacturing 
production costs is inaccurate, due to lack of inclusion of costs for 
testing, outside certification of energy, outside certification of 
safety, tooling, and amortization of other factory costs,

[[Page 7548]]

along with inaccurate estimation of units over which tooling and 
manufacturing fixtures are spread. (NAMA, No. 85 at p. 30) NAMA 
recommended that DOE restructure the system for estimating energy 
savings and cost analysis. (Id.)
    NAMA commented also that many of the analyzed design options, such 
as specialized glass doors, microchannel condensers, occupancy sensors 
with dimmer controls, and variable speed compressors, would result in 
additional installation time, training, and many other skill 
considerations compared with baseline equipment. (NAMA, No. 85 at p. 
31)
    Regarding the comments on testing and certification costs, DOE 
accounts for manufacturers' non-production costs, including selling, 
general and administrative expenses, and research and development 
expenses (e.g., testing, certification, marketing costs) in its MSP 
through the application of a manufacturer markup to the MPCs. As such, 
DOE notes that the MSPs derived in the engineering analysis, which are 
then used in the LCC and PBP analyses and MIA, incorporate industry 
average research and development expenses (and other non-production 
costs, along with profit). DOE also accounts for the one-time, upfront 
investments in research, development, testing, marketing, and other 
non-capitalized costs necessary to make product designs comply with new 
or amended energy conservation standards (i.e., product conversion 
costs) in its MIA. See section IV.J.2.c of this document or chapter 12 
of the final rule TSD for additional information on conversion costs.
    Regarding the comment on tooling and equipment costs, DOE accounts 
for manufacturing equipment, tooling, and building depreciation in its 
MPCs and the one-time, upfront investments in property, plant, and 
equipment necessary to adapt or change existing production facilities 
(i.e., capital conversion costs) in its MIA. As such, DOE notes that 
the depreciation component of the MPCs in the engineering analysis 
require estimates of capital investments (e.g., tooling, fixtures, 
equipment). To estimate those capital investments for the engineering 
analysis, DOE uses data collected from teardowns and manufacturer 
interviews and estimated annual production volumes for each equipment 
class to model a ``greenfield'' facility--using brand-new equipment 
that has not depreciated through use--which includes the equipment, 
tooling, and space requirements necessary to carry out the 
manufacturing processes on a representative unit. See chapter 5 of the 
final rule TSD for additional details on the cost model and estimation 
of MPCs.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., 
distributor markups, retailer markups, contractor markups) in the 
distribution chain and sales taxes to convert the MSP estimates derived 
in the engineering analysis to consumer prices, which are then used in 
the LCC and PBP analysis. At each step in the distribution channel, 
companies mark up the price of the equipment to cover business costs 
and profit margin.
    As part of the analysis, DOE identifies key market participants and 
distribution channels. In the October 2023 NOPR, DOE considered the 
following distribution channels:

1a. Contractor channel with replacement: Manufacturer [rarr] Wholesaler 
[rarr] Mechanical Contractor [rarr] Consumer
1b. Contractor channel with new construction: Manufacturer [rarr] 
Wholesaler [rarr] Mechanical Contractor [rarr] General Contractor 
[rarr] Consumer
2. Wholesale channel: Manufacturer [rarr] Wholesaler [rarr] Consumer
3a. National account channel: Manufacturer [rarr] Consumer
3b. National account channel with general contractor: Manufacturer 
[rarr] General Contractor [rarr] Consumer

88 FR 70196, 70236.
    In response to the October 2023 NOPR, AHRI suggested that DOE 
update channel 1a and 1b, create additional channels for reused or 
refurbished equipment, and refer to consumers as ``end-users'' because 
the term ``consumer'' may imply individuals or families. (AHRI, No. 81 
at p. 9) AHRI also recommended that DOE include other CRE purchaser 
categories, such as buyers' clubs, restaurant consortia, food service 
consultants, and governmental bids. (Id.)
    In consideration of the feedback from AHRI, DOE determined that the 
slight update to channels 1a and 1b does not impact the overall markup 
estimation for those channels. With regard to the suggested addition of 
distribution channels for reused or refurbished equipment, DOE notes 
that such equipment is not subject to new standards; therefore, DOE did 
not consider such distribution channels in the markups analysis. 
However, refurbishments were considered in the LCC analysis by 
adjusting the mean lifetime distribution assumptions and assigning a 
credit equivalent to the residual value of the used equipment at the 
selling year (see section IV.F of this document for details). DOE 
clarifies that it considers all purchasers of CRE in its analyses and 
is using the terms CRE ``purchaser'' and ``consumer'' interchangeably 
in this document.
    NAMA recommended that DOE consider additional channels that involve 
the brand owner who specifies the performance of the equipment and then 
sells the equipment to a bottling company, which then passes the 
equipment down to a local retailer. (NAMA, No. 85 at p. 30) DOE 
appreciates the comment submitted by NAMA. DOE understands that NAMA is 
referring to the situation in which CRE are manufactured or packaged 
for sale under the name of a third-party company (i.e., the brand 
owner) rather than that of the OEM. As part of its market and 
technology assessment, DOE reviews public equipment databases to 
identify the companies that import, private label, produce, or 
manufacture covered CRE. DOE identified OEMs by reviewing information 
from manufacturer websites, import and export data (e.g., bills of 
lading from ImportYeti),\87\ and basic model numbers. As part of that 
process, DOE also determined the owner of each brand listed in DOE's 
CCD, using the U.S. Patent and Trademark Office's Trademark Search \88\ 
and other public sources (e.g., trademark information from JUSTIA).\89\ 
Based on a review of DOE's CCD, DOE estimates that approximately 10 to 
12 percent of individual CRE model listings in its CCD are certified 
and marketed under a trademarked brand not owned by the actual OEM. See 
chapter 3 of the final rule TSD for additional information on DOE's 
market review.
---------------------------------------------------------------------------

    \87\ ImportYeti, LLC. ``ImportYeti.'' Available at: 
www.importyeti.com/ (Last accessed April 25, 2024).
    \88\ The U.S. Patent and Trademark Office's Trademark Search is 
available at tmsearch.uspto.gov/search/search-information (last 
accessed Sept. 9, 2024).
    \89\ JUSTIA, ``Trademarks.'' Available at trademarks.justia.com/ 
(last accessed Sept. 9, 2024).
---------------------------------------------------------------------------

    DOE developed baseline and incremental markups for each actor in 
the distribution chain. Baseline markups are applied to the price of 
equipment with baseline efficiency, while incremental markups are 
applied to the difference in price between baseline and higher-
efficiency models (the incremental cost increase). The incremental 
markup is typically less than the baseline markup and is designed to 
maintain similar per-unit operating profit before and after new or 
amended standards.\90\
---------------------------------------------------------------------------

    \90\ Because the projected price of standards-compliant 
equipment is typically higher than the price of baseline equipment, 
using the same markup for the incremental cost and the baseline cost 
would result in higher per-unit operating profit. While such an 
outcome is possible, DOE maintains that in markets that are 
reasonably competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.

---------------------------------------------------------------------------

[[Page 7549]]

    DOE developed baseline and incremental markups for wholesalers and 
contractors using U.S. Census Bureau data from the ``2017 Annual 
Wholesale Trade Report'' and the 2017 U.S. Economic Census, 
respectively.
    Chapter 6 of the final rule TSD provides details on DOE's 
development of markups for CRE.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of CRE at different efficiencies in representative 
U.S. commercial buildings, and to assess the energy savings potential 
of increased CRE efficiency. The energy use analysis estimates the 
range of energy use of CRE in the field (i.e., as they are actually 
used by consumers). The energy use analysis provides the basis for 
other analyses DOE performed, particularly assessments of the energy 
savings and the savings in consumer operating costs that could result 
from adoption of new or amended standards.
    For the October 2023 NOPR, DOE calculated CRE energy consumption as 
part of the engineering analysis. 88 FR 70196, 70237. DOE used average 
single-point energy use values for each design option, as described in 
the October 2023 NOPR engineering analysis (see chapter 5 of the 
October 2023 NOPR TSD). These values consider field energy use factors 
prescribed in the CRE test procedure, such as typical door-opening 
schedules, ambient conditions, typical food and beverage loads, etc. 
Also, as discussed in chapter 7 of the October 2023 NOPR TSD, during 
the analysis for the 2009 final rule for CRE (74 FR 1092 (Jan. 9, 
2009)), DOE conducted an energy use analysis for certain remote 
condensing equipment and concluded that the results agreed reasonably 
well with those calculated by the energy consumption model used in the 
engineering analysis.
    In response to the October 2023 NOPR, Ravnitzky suggested that DOE 
should account for uncertainty and variability in the energy 
consumption of CRE due to factors such as ambient temperature, door 
openings, defrost cycles, load patterns, maintenance practices, and 
user behavior. (Ravnitzky, No. 57 at p. 4) Ravnitzky provided examples 
of how widely these factors can vary in the field and recommended DOE 
provide sensitivity analyses or confidence intervals showing the range 
of possible outcomes under different scenarios and conditions, using 
probabilistic methods such as Monte Carlo simulations or Bayesian 
inference. (Id.) NAFEM commented that CRE operate at various 
conditions, which can be more extreme than the conditions specified by 
the ASHRAE 72 test conditions, on which DOE is basing its analysis. 
(NAFEM, No. 83 at p. 24) Similarly, Continental stated that testing CRE 
at 75 [deg]F/55-percent RH does not accurately represent average real-
world conditions and, as a result, the energy consumption levels 
evaluated for this rulemaking do not reflect actual usage conditions 
for this equipment. (Continental, No. 86 at p. 3) ITW commented that 
ambient temperature, humidity, and door-opening frequency and durations 
in the field differ from the CRE test procedure. (ITW, No. 82 at p. 6) 
Specifically, regarding door-opening frequency, ITW suggested that, 
based on data from a quick-service restaurant kitchen, a reach-in 
refrigerator opens more than 400 times per day for more than 50 seconds 
per opening and a freezer opens about 500 times per day for more than 
20 seconds per opening. (Id.) ITW added that such conditions would 
require more electricity use in the field than what would be required 
by the proposed standard. (Id.)
    In response to the August 2024 NODA, Continental restated that 
using test procedure ambient conditions of 75 [deg]F/55 percent RH does 
not reflect real-world ambient conditions, leading to a flawed energy 
use analysis and corresponding standard levels. (Continental, No. 107 
at p. 2)
    For this final rule, DOE calculated CRE energy consumption as part 
of the engineering analysis, which estimates the daily energy 
consumption in kWh/day at each analyzed efficiency level at the 
representative equipment volumes or TDAs for each equipment class (see 
chapter 5 of the final rule TSD). DOE calculated the annual energy 
consumption by multiplying the daily energy consumption by the number 
of days in a year. With respect to the comments regarding the 
variability in the energy consumption of CRE, DOE acknowledges that 
using a single-point estimate to characterize the energy use of each 
efficiency level in each equipment class may not capture the wide range 
of ways CRE are used in the field and the varying conditions at which 
CRE operate (e.g., ambient temperature and humidity; door opening time 
and frequency; amount, temperature and distribution of food products 
inside CRE). DOE has the technical capability to include a distribution 
of values weighted by different factors, including the aforementioned 
environmental conditions and user behaviors; however, DOE does not have 
either data or information with enough detail from which to construct a 
meaningful distribution to accurately and properly characterize both 
the variability of the aforementioned factors and the effect those 
factors may have on the energy use of each analyzed equipment class. 
For example, DOE does not have data on how door opening frequency and 
duration vary among purchasers and their associated effect on CRE 
energy consumption in the field. DOE notes that it also considered 
typical CRE behavior practices in this analysis, such as the 
replacement of lighting fixtures, a typical maintenance practice 
considered also in the March 2014 Final rule. In addition, DOE 
accounted for typical user behavior in CRE lifetime estimates, which 
are driven primarily from store renovations. DOE notes that it accounts 
for uncertainty and variability in the LCC analysis by using a CRE 
purchaser sample based on the EIA 2018 Commercial Buildings Energy 
Consumption Survey (``2018 CBECS''),\91\ which allows for regional 
variations in electricity prices and sales tax, and incorporating 
uncertainty into other parameters, such as discount rates. 
Additionally, DOE emphasizes that its energy usage analysis adopts a 
conservative approach in cases where purchaser's door-opening 
frequency, ambient temperatures, or food and beverage thermal loads 
surpass those assumed in the CRE test procedure. This is because 
increased energy consumption would typically result in increased 
operating cost savings for higher efficiency equipment compared to CRE 
at baseline.
---------------------------------------------------------------------------

    \91\ U.S. Department of Energy--Energy Information 
Administration. ``2018 Commercial Buildings Energy Consumption 
Survey (CBECS).'' 2018. Available at www.eia.gov/consumption/commercial/data/2018/ (last accessed Sept. 9, 2024).
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, NAFEM commented that its 
members report that night curtains are often viewed as an unwanted 
``accessory'' by their customers and, even if purchased, are not 
consistently used. (NAFEM, No. 83 at p. 7) NAFEM also stated that 
internal testing performed to DOE guidelines of night curtains being 
drawn for 6 hours resulted in only a 12-percent reduction of energy 
usage over a 24-hour period. (Id.) Additionally, SCC commented that 
stores open 24 hrs/day are not suitable for night curtains. (SCC, No. 
74 at p. 2)
    DOE notes that the current energy use assumptions for night 
curtains are based on the CRE test procedure, which

[[Page 7550]]

assumes that night curtains are used for 6 hours per day (``hrs/day'') 
and attributes less than a 12 percent energy use reduction associated 
with this design option. Furthermore, DOE acknowledges that night 
curtains may not be consistently used across CRE purchasers, whether 
due to staff behavior or store business hours, but DOE is not aware of 
data on the distribution of average daily usage of night curtains that 
could serve as an alternative to the assumption used in the test 
procedure, which uses a single-point estimate. DOE also clarifies that 
night curtain daily operating hours in the field may vary from zero 
hrs/day, for establishments continuously open to the public, to 24 hrs/
day, for establishments that close certain days of the week.
    In response to the October 2023 NOPR, as discussed in section 
IV.C.1.b of this document, several commenters stated that occupancy 
sensors are not a desired feature by most purchasers of CRE because 
consumers may perceive CRE with deactivated lighting (when LED 
occupancy sensors are not activated) as malfunctioning and, therefore, 
they may not use this feature. (NAFEM, No. 83 at p. 6; Zero Zone, No. 
75 at p. 4; Hillphoenix, No. 77 at p. 6; Hussmann, No. 80 at pp. 5-6; 
AHRI, No. 81 at p. 10)
    In response to these comments, DOE performed additional research 
but found no data on field usage patterns of occupancy sensors. DOE 
acknowledges that some consumers may select to deactivate CRE occupancy 
sensors and thus forgo energy savings associated with this design 
option. Accordingly, for the August 2024 NODA, DOE updated its energy 
use analysis for CRE at efficiency levels with occupancy sensors so 
that the benefit of an occupancy sensor is applied to only 75 percent 
of purchasers of this feature. 89 FR 68788, 68794. The remaining 25 
percent would incur the increased equipment cost but not the associated 
energy savings.\92\ Id. In the August 2024 NODA, DOE also requested 
comments, data, and information on the fraction of CRE purchasers that 
may choose to deactivate their CRE occupancy sensors. Id.
---------------------------------------------------------------------------

    \92\ DOE selected 25 percent as a reasonable estimation of the 
fraction of CRE purchasers that may choose to deactivate their 
occupancy sensors despite purchasing this feature.
---------------------------------------------------------------------------

    In response to the August 2024 NODA, Hillphoenix, Continental, and 
Zero Zone commented that CRE end-users may believe the equipment to be 
malfunctioning if the equipment lights are off. (Hillphoenix, No. 110 
at p. 8; Continental, No. 107 at p. 2; Zero Zone, No. 114 at p. 2) 
Hillphoenix added that, for this reason, open case CRE are not sold 
with lighting occupancy sensors to food retail buildings, such as 
supermarkets, while Continental stated that lighting occupancy sensors 
are not viable for food service buildings, such as busy commercial 
kitchens. (Hillphoenix, No. 110 at p. 8; Continental, No. 107 at p. 2) 
AHRI commented that its members are unable to determine the fraction of 
CRE purchasers that buy and then deactivate lighting occupancy sensors. 
AHRI suggested that lighting occupancy sensors only save energy in 
terms of lighting power consumption reduction and not via refrigeration 
cooling load reduction because the CRE setpoint temperature cannot be 
changed due to food regulations. (AHRI, No. 104 at p. 7-8) ASAP et al. 
commented that DOE is taking a conservative approach by considering 
that only 75 percent of consumers benefit from lighting occupancy 
sensors, noting that manufacturers will be able to utilize occupancy 
sensors to meet any amended standards because the test procedure does 
not include any comparable assumption about de-activation and, as a 
result, will give full credit for occupancy sensors. (ASAP et al., No. 
106 at p. 3) ASAP et al. also stated that, after the August 2024 NODA 
updates, VCT.SC.M and VCT.SC.I equipment classes no longer include this 
design option in the highest cost-effective efficiency level. Id.
    In response to August 2024 NODA comments, DOE clarifies that its 
energy use analysis is based on the engineering analysis and the CRE 
test procedure, which consider that lighting occupancy sensors reduce 
direct component energy use as well as cabinet heat load for equipment 
that has lighting inside the refrigerated space (see section 5.1.1 of 
the final rule TSD for more details). For this final rule, DOE retained 
the use of 25 percent as a reasonable estimate for the fraction of 
purchasers of CRE with LED occupancy sensors that choose to deactivate 
this feature. However, to account for the uncertainty regarding this 
estimate and its effect on the energy use and LCC analysis, DOE also 
performed a sensitivity analysis using 50 percent for the fraction of 
purchasers of CRE with lighting occupancy sensors that choose to 
deactivate this feature. The results of this analysis show that for the 
selected TSL (TSL 3), the LCC savings for all equipment classes with 
occupancy sensors remain positive at both 75 percent and 50 percent 
usage. See appendix 8D for more details on this sensitivity analysis.
    Chapter 7 of the final rule TSD provides details on DOE's energy 
use analysis for CRE.

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
CRE. The effect of new or amended energy conservation standards on 
individual consumers usually involves a reduction in operating cost and 
an increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
    [ballot] The LCC is the total consumer expense of equipment over 
the life of that equipment, consisting of total installed cost 
(manufacturer selling price, distribution chain markups, sales tax, and 
installation costs) plus operating costs (expenses for energy use, 
maintenance, and repair). To compute the operating costs, DOE discounts 
future operating costs to the time of purchase and sums them over the 
lifetime of the equipment.
    [ballot] The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of more-efficient equipment through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of CRE in the absence of new or 
amended energy conservation standards. In contrast, the PBP for a given 
efficiency level is measured relative to the baseline equipment.
    For each considered efficiency level in each equipment class, DOE 
calculated the LCC and PBP for a nationally representative set of 
commercial buildings that use CRE. As stated previously, DOE developed 
commercial buildings samples from the 2018 CBECS. For each sample 
building, DOE determined the energy consumption for the CRE and the 
appropriate energy price. By developing a representative sample of 
buildings, the analysis captured the variability in energy consumption 
and energy prices associated with the use of CRE.
    Inputs to the LCC calculation include the installed cost to the 
consumer, operating expenses, the lifetime of the equipment, and a 
discount rate. Inputs to the calculation of total installed cost

[[Page 7551]]

include the cost of the equipment--which includes MPCs, manufacturer 
markups, retailer and distributor markups, and sales taxes--and 
installation costs. Inputs to the calculation of operating expenses 
include annual energy consumption, energy prices and price projections, 
repair and maintenance costs, equipment lifetimes, and discount rates. 
Inputs to the PBP calculation include the installed cost to the 
consumer and first year operating expenses. DOE created distributions 
of values for equipment lifetime, discount rates, and sales taxes, with 
probabilities attached to each value, to account for their uncertainty 
and variability.
    The computer model DOE uses to calculate the LCC relies on a Monte 
Carlo simulation, which is a standard analytical technique used in many 
academic disciplines, to incorporate uncertainty and variability into 
the analysis. The Monte Carlo simulations sample input values from the 
probability distributions and CRE user samples. For this rulemaking, 
DOE conducted probability analyses by sampling from probability 
distributions using Python. To calculate the LCC and PBP for CRE, DOE 
performed 10,000 Monte Carlo simulations for each variable. During a 
single trial, values are selected from the defined probability 
distributions for each variable, which enables the estimation of LCC 
and PBP with uncertainty evaluation. The analytical results include a 
distribution of 10,000 data points showing the range of LCC savings for 
a given efficiency level relative to the no-new-standards case 
efficiency distribution. In performing an iteration of the Monte Carlo 
simulation for a given purchaser, equipment efficiency is chosen based 
on its probability. If the chosen equipment efficiency is greater than 
or equal to the efficiency of the standard level under consideration, 
the LCC calculation reveals that a consumer is not impacted by the 
standard level. By accounting for consumers who already purchase more-
efficient equipment, DOE avoids overstating the potential benefits from 
increasing equipment efficiency.
    DOE calculated the LCC and PBP for consumers of CRE as if each were 
to purchase new equipment in the expected year of required compliance 
with new and amended standards. New and amended standards would apply 
to CRE manufactured 4 years after the date on which any new or amended 
standard is published in the Federal Register. 42 U.S.C. 
6313(a)(6)(C)(iv)(I) or (C)(iv)(II) Therefore, DOE used 2029 as the 
first full year of compliance with any new and amended standards for 
CRE.
    Table IV. summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the final rule TSD and its appendices.
---------------------------------------------------------------------------

    \93\ For further information, see the ``Assumptions to AEO2023'' 
report that sets forth the major assumptions used to generate the 
projections in the AEO2023. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed Sept. 9, 2024).
[GRAPHIC] [TIFF OMITTED] TR21JA25.121


[[Page 7552]]


1. Equipment Cost
    To calculate consumer equipment costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline equipment and higher-efficiency equipment, because DOE applies 
an incremental markup to the increase in MSP associated with higher-
efficiency equipment.
    DOE used a price-learning analysis to account for changes in LED 
lamp prices that are expected to occur between the time for which DOE 
has data for lamp prices (2023) and the assumed compliance date of the 
rulemaking (2029). The price trend was derived from a price learning 
factor experience curve that computes changes in price as a function of 
cumulative LED lighting lamp shipments. See chapter 8 of the final rule 
TSD for more details on how price learning for LED lighting was 
applied.
    As discussed in the engineering analysis (see section IV.C of this 
document), DOE included variable-speed compressors as a technology 
option for higher efficiency levels in certain self-contained equipment 
classes. To develop future prices specific to that technology, DOE 
applied a different price trend to the electronic control board of the 
variable-speed compressor. DOE estimated that the cost of that control 
board was 50 percent of the cost of the variable frequency drive 
(``VFD'') included in the variable speed compressor. DOE used Producer 
Price Index (``PPI'') data on ``semiconductors and related device 
manufacturing'' between 1967 and 2021 to estimate the historic price 
trend of electronic components in the control.\94\ The analysis used an 
exponential curve to model the data and found that the trend closely 
matches the data (R-square = 0.99). This suggests prices are dropping 
around 6 percent per year on average. See chapter 8 of the final rule 
TSD for further details on this topic.
---------------------------------------------------------------------------

    \94\ Semiconductors and related device manufacturing PPI series 
ID: PCU334413334413; available at www.bls.gov/ppi/ (last accessed 
Sept. 9, 2024).
---------------------------------------------------------------------------

2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. In response to the 
October 2023 NOPR, several stakeholders commented that increased 
installation costs would occur for design options with electronic 
controllers, such as lighting controllers, due to additional programing 
time and higher technician skill requirements. (Hillphoenix, No. 77 at 
p. 6; FMI and NACS, No. 78 at pp. 2-3; Hussmann, No. 80 at p. 8; AHRI, 
No. 81 at p. 10) FMI and NACS also commented that increasing energy 
efficiency would lead to increased installation costs due to additional 
floor space rearrangement needs. (FMI and NACS, No. 78 at p. 3)
    Based on these comments, DOE conducted additional research and 
found no evidence that any of the analyzed design options considered in 
this final rule require additional installation time, as electronic 
controls for variable-speed compressors and LED lighting occupancy 
sensors are typically factory-finished with pre-set configurations that 
do not require additional setup time by field technicians compared to 
baseline equipment. DOE also estimated that installation workers may 
already have the required skills to install the analyzed design options 
or would adjust their labor rates equally across all efficiency levels 
if the necessary skills were lacking. DOE clarifies that CRE external 
dimensions do not vary by efficiency level within each equipment class. 
Therefore, in this final rule, as in the October 2023 NOPR, DOE assumed 
that installation costs do not vary by efficiency level (within the 
same equipment class), and DOE did not account for installation costs 
in the LCC and PBP analyses.
    For further information on installation costs, see chapter 8 of the 
final rule TSD.
3. Annual Energy Consumption
    For each sampled equipment class, DOE determined the energy 
consumption for CRE at different efficiency levels using the approach 
described previously in section IV.E of this document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the equipment 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2023 using data from Edison 
Electric Institute (``EEI'') Typical Bills and Average Rates reports. 
Based upon comprehensive, industry-wide surveys, this semi-annual 
report presents typical monthly electric bills and average kilowatt-
hour costs to the customer as charged by investor-owned utilities. For 
the commercial sector, DOE calculated electricity prices using the 
methodology described in Coughlin and Beraki (2019).\95\
---------------------------------------------------------------------------

    \95\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. Available at ees.lbl.gov/publications/non-residential-electricity-prices (last accessed Sept. 9, 2024).
---------------------------------------------------------------------------

    To estimate energy prices in future years, DOE multiplied the 2023 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the Reference case in AEO2023, 
which has an end year of 2050.\96\ To estimate price trends after 2050, 
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------

    \96\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed Sept. 9, 2024).
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region, and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis. For CRE, 
DOE calculated weighted-average values for average and marginal price 
for the nine census divisions for the commercial sector for both large-
size (greater than 5,000 ft\2\) and small-size (less than 5,000 ft\2\) 
buildings. As the EEI data are published separately for summer and 
winter, DOE calculated seasonal prices for each division and sector. 
Each EEI utility in a given region was assigned a weight based on the 
number of consumers it serves. DOE adjusted these regional weighted-
average prices to account for systematic differences between IOUs and 
publicly owned utilities, as the latter are not included in the EEI 
data set. See chapter 8 of the final rule TSD for details.
5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing equipment 
components that have failed; maintenance costs are associated with 
maintaining the operation of the equipment. Typically, small 
incremental increases in equipment efficiency entail no, or only minor, 
changes in repair and maintenance costs compared to baseline efficiency 
equipment.
    In the October 2023 NOPR, DOE calculated repair costs by 
considering the typical failure rate of refrigeration system components 
(compressor, lighting, and evaporator and condenser

[[Page 7553]]

fan motors), component MPCs and associated markups, and the labor cost 
of repairs, which is assumed to be performed by private vendors. 88 FR 
70196, 70239. DOE considered the following specific CRE components and 
associated failure probabilities during typical CRE lifetime in its 
repair cost approach: compressor (25 percent), evaporator fan motor (50 
percent), condenser fan motor (25 percent), and LED lighting (100 
percent), with the presence of occupancy sensors decreasing LED 
lighting repair frequency by half. Id.
    In response to the October 2023 NOPR, Hussmann and NAFEM commented 
that EEVs, lighting controllers, and anti-sweat energy controllers 
require ongoing maintenance and servicing throughout the equipment 
lifespan. (Hussmann, No. 80 at p. 8; NAFEM, No. 83 at pp. 5, 7, 21, 22) 
AHRI also stated that the programming of these components requires 
higher technician skill and that variable-speed compressors, variable-
speed condenser and evaporator fan motors, three pane glass for medium 
temperature reach-in cases can lead to higher maintenance and repair 
costs. (AHRI, No. 81 at pp. 5, 10) AHRI and Hussmann expressed concern 
regarding the use of technologies in CRE applications that do not have 
an established lifetime estimation, such as variable-speed compressors. 
(AHRI, No. 81 at p. 10; Hussmann, No. 80 at p. 9) Hoshizaki also 
indicated that variable-speed compressors could have lower lifespans 
than single-speed compressors. (Hoshizaki, No. 76 at p. 5) NAFEM 
commented that leak detection is required for some refrigerants, such 
as A2L and R-290, and impact maintenance and repair costs, that 
technicians would replace rather than repair electronic controllers in 
case of failure, that increasing the number of components in CRE leads 
to higher failure probability, and that CRE repair downtime would 
increase for equipment with electronic controls. (NAFEM, No. 83 at pp. 
21-22) Hoshizaki stated that incorrect defrost settings could result in 
increased maintenance costs due to the frequency of door-opening in 
real-world conditions. (Hoshizaki, No. 76 at p. 5) Additionally, 
Hoshizaki stated a similar possibility for fan motors compared to less 
efficient components. (Id.) NAMA commented that DOE underestimated 
repair and maintenance costs. (NAMA, No. 85 at p. 31)
    In response to these comments, DOE clarifies that EEVs and anti-
sweat energy controllers are not design options considered in this 
final rule, that refrigerant type does not vary by efficiency level 
within each equipment class, and that only repair and maintenance costs 
that vary by CRE efficiency level are included in the LCC and PBP 
analyses. DOE also clarifies that the energy use analysis assumes CRE 
to be in operation continuously (24 hrs/day, 365 days per year). 
Therefore, DOE does not consider energy savings resulting from downtime 
for CRE repairs or any other related operational impacts, as they would 
have a negligible impact in the LCC and PBP analyses. Regarding 
concerns on the lifetime of variable-speed compressors, DOE notes that 
this technology option has been available in the CRE market for over a 
decade. DOE is also not aware of data differentiating compressor and 
fan motor lifetime by efficiency level or technology type. DOE did not 
find data suggesting that LED lighting occupancy sensors require 
ongoing maintenance. As stated in section IV.F.2 of this document, DOE 
estimates that technician workers may already have the required skills 
to maintain the analyzed design options or would adjust their labor 
rates equally across all efficiency levels if the necessary skills were 
lacking. Therefore, as in the October 2023 NOPR, DOE assumed that 
maintenance costs do not vary by efficiency level (within the same 
equipment class), and DOE did not account for maintenance costs in the 
LCC and PBP analyses in this final rule.
    In response to the October 2023 NOPR, regarding the use of night 
curtains in CRE, DOE received comments from Zero Zone, Hillphoenix, 
Hussmann, NAFEM, and AHRI stating that these devices incur associated 
operating expenses, maintenance costs, and need to be replaced before 
the end of the CRE lifetime. (Zero Zone, No. 75 at p. 4; Hillphoenix, 
No. 77 at p. 5; Hussmann, No. 80 at p. 8; NAFEM, No. 83 at p. 7; AHRI, 
No. 81 at p. 10) Zero Zone stated that it contacted a major national 
store chain that purchases night curtains, who indicated the maximum 
lifespan to be 3 years but estimated an average lifetime of 18 months. 
(Zero Zone, No. 75 at p. 4) AHRI stated that night curtains have a 3-
year lifetime. (AHRI, No. 81 at p. 10) NAFEM commented that night 
curtains tend to wear out within 1-2 years, requiring additional 
maintenance or repair during the lifetime of the CRE. (NAFEM, No. 83 at 
p. 7) Hillphoenix commented that night curtains are not typically 
ordered by customers due to their shorter lifespan and the additional 
costs of installation, maintenance, and operating expense due to the 
labor or power to close the curtains each night. (Hillphoenix, No. 77 
at p. 5)
    In response to the August 2024 NODA, Hillphoenix commented that CRE 
night curtains can lead to increased repair and maintenance costs as 
they contribute to short cycling of the compressor, refrigerant oil 
logging, or, at worse, liquid slugging of the compressor, and increased 
stress on start components of fixed speed compressor units on self-
contained models. (Hillphoenix, No. 110 at p. 10) The CA IOUs commented 
that they agree with DOE's approach of considering night curtain 
replacement before the end of CRE lifetime. (CA IOUs, No. 113 at p. 2) 
Zero Zone stated that the life expectancy of night curtains can be 1 to 
3 years. (Zero Zone, No. 114 at p. 2)
    In light of the comments received, DOE reviewed data on night 
curtain lifespans, operational expenses, maintenance, and repair costs, 
assessing their potential influence on the analytical results of the 
LCC and PBP analysis. As stated in the August 2024 NODA, DOE also 
contacted retailers and manufacturers of night curtains of similar cost 
to the ones contained in the engineering analysis. 89 FR 68788, 68795-
68796. These manufacturers and sellers reported lacking information on 
night curtain lifespan but stated that the lifetime varies according to 
user care. Id. One manufacturer reported a recent replacement from a 
unit that lasted 10 years. Id.
    Regarding the comment by Hillphoenix stating that CRE night 
curtains could lead to increased repair and maintenance costs, it is 
unlikely that night curtains would cause short-cycling of the 
compressor because night curtains offer extra insulation against 
ambient conditions, which reduces the rate of temperature increase 
within the refrigerated spaces. This results in shorter on-cycles and 
longer off-cycles, reducing overall compressor run time and, 
potentially, wear on CRE components. In terms of the other potential 
effects mentioned (i.e., liquid slugging of the compressor, refrigerant 
oil logging, or increased stress on start components of fixed speed 
compressor units on self-contained models), DOE found no literature or 
data reporting field use patterns of night curtains and whether the use 
of night curtains has a positive or negative effect on CRE compressors 
and components. However, in a DOE report prepared by the National 
Renewable Energy Laboratory

[[Page 7554]]

(``NREL''),\97\ a study on the energy performance of grocery stores 
evaluating the effect of night curtains on 103 open refrigerated cases 
found positive operation and maintenance savings resulting from the 
installation of night curtains.
---------------------------------------------------------------------------

    \97\ See Advanced Energy Retrofit Guides for Grocery Stores, 
available at www.nrel.gov/docs/fy13osti/54243.pdf (last accessed 
Sept. 9, 2024).
---------------------------------------------------------------------------

    In any case, whether positive or negative, DOE did not account for 
the potential repair and maintenance impacts associated with the daily 
operation of night curtains due to the lack of specific data. In light 
of the NREL report, DOE understands this is a likely conservative 
approach. DOE also assumed that the daily operation of night curtains 
may be part of the regular job duty of existing employees. DOE 
reasonably expects new equipment sold with night curtains to come 
properly balanced and configured upon installation.
    In this final rule, consistent with the August 2024 NODA approach 
and based on commenter feedback and DOE's additional research, DOE 
retained the following assumptions on the repair costs of night 
curtains. First, DOE used 5 years as a reasonable estimate for the 
average lifetime of all night curtains. As a result, depending on the 
lifetime associated with each CRE and the building type it may be 
installed in, night curtains may be replaced once or several times 
during the CRE lifetime. Second, DOE assumed a half-hour night curtain 
replacement labor duration at the same labor rates (according to 
RSMeans 2023) as other CRE components assumed to be replaced during the 
CRE lifetime (e.g., compressors) in the LCC analysis. DOE assigned 
these labor rates according to each purchaser's census division to 
better account for national labor cost variability.
6. Equipment Lifetime
    For CRE, DOE used a lifetime distribution to characterize the 
probability equipment will be retired from service at a given age. For 
the October 2023 NOPR, DOE estimated an average lifetime of 10 years 
for CRE in large buildings and 20 years for CRE in small buildings, 
with a maximum lifetime of 40 years for each. 88 FR 70196, 70240. DOE 
also assumed that the probability function for the annual survival of 
CRE would take the form of a Weibull distribution. Id. A Weibull 
distribution is a probability distribution commonly used to measure 
failure rates.\98\ In response to the October 2023 NOPR, AHRI and 
Hussmann agreed with DOE's CRE lifetime assumptions. (AHRI, No. 81 at 
p. 10; Hussmann, No. 80 at p. 9) NAMA also agreed with DOE's lifetime 
assumptions but stated that they do not accurately reflect the 
lifetimes of refurbished equipment. (NAMA, No. 85 at p. 32) 
Storemasters commented that additional CRE modifications could increase 
equipment complexity and cost, thus potentially reducing CRE lifetime. 
(Storemasters, No. 68 at p. 1) Hussmann stated that smaller food-
retailers use their CRE longer than large food-retailers and that 
smaller food-retailers may attempt to expand CRE lifetimes through 
repairs. (Hussmann, No. 80 at p. 9) NAFEM and Hussmann commented that 
purchasers may attempt to expand CRE lifetimes through repairs. (NAFEM, 
No. 83 at p. 23; Hussmann, No. 80 at p. 9)
---------------------------------------------------------------------------

    \98\ Weibull distributions are commonly used to model appliance 
and equipment lifetimes.
---------------------------------------------------------------------------

    In this final rule, DOE retained the lifetime assumptions from the 
October 2023 NOPR: the mean lifetime distribution assumption for CRE 
was assumed to be 10 years for large-size buildings and 20 years for 
small-size buildings, with a maximum lifetime of 40 years for each.
    With respect to the comments regarding the lifetimes of refurbished 
CRE, DOE clarifies that it does not analyze the energy use of 
refurbished CRE because such equipment is not subject to new standards. 
However, DOE accounted for purchasers who sell their CRE to companies 
that refurbish CRE before the end of the equipment lifetime by 
assigning a credit equivalent to the residual value of the used 
equipment at the selling year. See the following section (IV.F.7 of 
this document) for details on the residual value approach.
    See chapter 8 of the final rule TSD for more information on 
equipment lifetime.
7. Residual Value for Refurbished CRE
    To model the phenomenon of CRE sold for refurbishment, DOE utilized 
a residual value for such equipment in the LCC. The residual value 
represents the remaining dollar value of surviving CRE at the average 
age of refurbishment. In the October 2023 NOPR, DOE estimated that 
refurbishments would occur at 5 years for small-size food-service 
buildings (e.g., restaurants) and 10 years for small-size food-sales 
and other commercial buildings. 88 FR 70196, 70240. To account for the 
value of CRE with remaining life to the consumer, the LCC model applies 
this residual value as a ``credit'' at the end of the CRE lifetime and 
discounts it back to the start of the analysis period. Id. This credit 
was applied to a fraction of self-contained CRE, totaling about 10 
percent of all CRE in the LCC sample. Id.
    In response to the October 2023 NOPR, Hussmann commented estimating 
that remote cases are typically refurbished after 10-12 years of use, 
while self-contained CRE are refurbished less frequently but sooner, 
after 7-9 years of use. (Hussmann, No. 80 at p. 9) During the November 
2023 Public Meeting, True commented that the CRE manufacturers have 
little knowledge and data about the refurbishment market but suggested 
that restaurant chains typically buy new CRE and, after usage, resell 
them, while, small-business restaurants tend to buy refurbished 
equipment due to the lower cost associated with refurbished units. 
(November 2023 Public Meeting Transcript, No. 64 at pp. 126-128) 
Hussmann also commented that smaller independent retailers are more 
likely to refurbish their CRE compared to other businesses due to 
having less capital available to purchase new units. (Hussmann, No. 80 
at p. 9) However, NAFEM commented that larger restaurant chains can 
also buy refurbished equipment when opening a new store and could later 
replace them with new equipment if the store remains open. (November 
2023 Public Meeting Transcript, No. 64 at pp. 128-129) Hillphoenix 
stated that refurbished equipment are usually 50 percent the cost of 
new equipment. (Hillphoenix, No. 77 at p. 2)
    Following the August 2024 NODA, the CA IOUs commented in support of 
the NODA analysis update that expanded the self-contained CRE 
refurbishment market to include all businesses, regardless of size. (CA 
IOUs, No. 113 at p. 2) Several commenters stated that, in addition to 
self-contained CRE, remote-condensing CRE are also subject to 
refurbishments when stores close or undergo remodeling. (AHRI, No. 104 
at p. 8; Hillphoenix, No. 110 at p. 11; Hussmann, No. 108 at p. 2)
    In response to these comments, DOE acknowledges that remote-
condensing CRE may also be subject to refurbishments when stores close 
or undergo remodeling. However, the refurbishment schedule of remote-
condensing CRE is more likely to coincide with the estimated 
corresponding CRE lifetimes in the LCC analysis. As discussed in the 
previous section, CRE in large-size buildings (in which remote-
condensing CRE are typically installed) are estimated to have a 10-year 
average lifetime -primarily reflecting store renovations or closures. 
Therefore, in the LCC analysis, DOE did not account for a refurbishment 
credit to CRE purchasers. Nonetheless, as

[[Page 7555]]

discussed in the following section (IV.G of this document), DOE applied 
price elasticity to all CRE (including remote-condensing units) as part 
of a sensitivity analysis. The results of this analysis can be found in 
Appendix 10C of the final rule TSD.
    In this final rule, consistent with the August 2024 NODA approach, 
DOE applied a credit to about 10 percent of all CRE in the sample. This 
credit may apply to any self-contained equipment regardless of building 
size, based on the premise that if the refurbishment market offers a 
favorable economic opportunity, it could be utilized by all businesses, 
not just businesses in small-size buildings. DOE retained the same 
assumptions as in the October 2023 NOPR regarding the average CRE 
lifetimes at the time of refurbishment, occurring after 5 years for 
food-service buildings (e.g., restaurants) and after 10 years for food-
sales, and other building types (e.g., grocery stores).
8. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to commercial consumers to estimate the present value of future 
expenditures and savings.
    For purchasers of CRE in the commercial sector, DOE used the cost 
of capital to estimate the present value of cash flows to be derived 
from a typical company project or investment. Most companies use both 
debt and equity capital to fund investments, so the cost of capital is 
the weighted-average cost to the firm of equity and debt financing. 
This corporate finance approach is referred to as the weighted-average 
cost of capital. DOE used currently available economic data in 
developing commercial discount rates, with Damodaran Online being the 
primary data source.\99\ The weighted-average discount rate for the 
commercial sector for CRE is 6.4 percent.
---------------------------------------------------------------------------

    \99\ Damodaran, A. Data: Cost of Capital by Industry Sector, 
United States. 2023. Available at pages.stern.nyu.edu/~adamodar/ 
(last accessed Sept. 9, 2024).
---------------------------------------------------------------------------

    See chapter 8 of the final rule TSD for further details on the 
development of discount rates.
9. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of equipment efficiencies under the no-
new-standards case (i.e., the case without amended or new energy 
conservation standards) in the compliance year. This approach reflects 
the fact that some consumers may purchase equipment with efficiencies 
greater than the baseline levels in the absence of new or amended 
standards.
    To estimate the energy efficiency distribution of CRE for 2029, DOE 
used test data, feedback from manufacturer interviews, surveys (see 
Trade Associations Survey, No. 50), and the ``Single Compartment 
Commercial Refrigeration Equipment'' data from DOE's CCD, accessed in 
February 2024.\100\
---------------------------------------------------------------------------

    \100\ U.S. Department of Energy. Compliance Certification 
Database (``CCD'') for Refrigeration Equipment--Commercial, Single 
Compartment. Available at www.regulations.doe.gov/certification-data/ (last accessed February. 9, 2024).
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, NEEA and NWPCC commented that 
DOE uses R-290 as the no-new-standards case (i.e., baseline) for self-
contained CRE because the proposed standard compliance dates will occur 
after EPA refrigerant restriction compliance dates that require R-290 
or another low-GWP refrigerant. (NEEA and NWPCC, No. 89 at p. 5) NEEA 
and NWPCC commented that R-290 is expected to improve efficiency 
compared to current refrigerants because of its higher refrigeration-
cycle efficiency over current refrigerants, so accounting for this 
ensures DOE is not overestimating savings from increased standards. 
(Id.) As discussed in the engineering analysis (section IV.C.1.a.i of 
this document), DOE assumed that all manufacturers will switch to R-290 
for self-contained CRE in response to the December 2022 EPA NOPR. The 
EPA compliance date is 2025, which is earlier than the expected DOE CRE 
energy conservation standards compliance date of 2029. This approach 
reduces the potential maximum energy savings below the baseline 
compared to the June 2022 Preliminary Analysis. The October 2023 EPA 
Final Rule maintained a 2025 compliance date for self-contained CRE. As 
such, DOE maintains its approach from the October 2023 NOPR for self-
contained CRE within the scope of this rulemaking.
    To create a robust sample for the energy efficiency distribution 
used in the LCC analysis, DOE separated the analyzed CRE equipment 
classes into 20 separate groups. For the equipment classes that DOE 
relied on CCD model count data to formulate the efficiency 
distributions, this approach was used to allow equipment classes with a 
limited sample to share the efficiency distribution of a group of 
similar classes with a larger sample in the CCD. DOE compared energy 
use data from the CCD with energy use equations from the engineering 
analysis to derive model counts at each efficiency level. Equipment 
classes whose efficiency distributions were derived from aggregated 
data from manufacturer interviews, surveys, and test data were assigned 
their own groups. The estimated market shares for the no-new-standards 
case for CRE and the corresponding groupings are shown in table IV.. 
See chapter 8 of the final rule TSD for further information on the 
derivation of the efficiency distributions.
    In advance of the October 2023 NOPR, DOE conducted manufacturer 
interviews and collected shipments data for several equipment classes. 
88 FR 70196, 70241. The equipment classes for which data was collected 
account for 75 percent of total shipments and are marked with an 
asterisk in table IV.\101\ Id. For the remainder of the equipment 
classes for which DOE was not able to collect representative shipments 
data from manufacturers due to low sample sizes, DOE utilized the CCD 
database to estimate the no-new-standards-case efficiency distribution. 
Id. DOE followed this same approach for this final rule.
---------------------------------------------------------------------------

    \101\ For some of these classes, such as chef bases or griddle 
stands and high-temperature refrigerators, DOE also developed the 
efficiency distributions based on DOE's test data, data submitted by 
manufacturers, ENERGY STAR certified data, and data from DOE's CCD.

---------------------------------------------------------------------------

[[Page 7556]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.122

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and assign an efficiency to the CRE purchased by each 
sample consumer in the no-new-standards case. The resulting percent 
shares within the sample match the market shares in the efficiency 
distributions. For further details on probability analysis and Monte 
Carlo simulation, see appendix 8B of the final rule TSD.
    While DOE acknowledges that economic factors may play a role when 
consumers purchase CRE, assignment of CRE efficiency for a given 
installation based solely on economic measures, such as life-cycle cost 
or simple payback period, most likely would not fully and accurately 
reflect actual real-world installations. There are a number of market 
failures discussed in the economics literature that illustrate how 
purchasing decisions in the commercial sector with respect to energy 
efficiency are unlikely to be perfectly correlated with energy use. One 
study in particular showed evidence of substantial gains in energy 
efficiency that could have been achieved without negative repercussions 
on profitability, but the investments had not been undertaken by 
firms.\102\ The study found that multiple

[[Page 7557]]

organizational and institutional factors caused firms to require 
shorter payback periods and higher returns than the cost of capital for 
alternative investments of similar risk. A number of other case studies 
similarly demonstrate the existence of market failures preventing the 
adoption of energy-efficient technologies in a variety of commercial 
sectors around the world, including office buildings,\103\ 
supermarkets,\104\ and the electric motor market.\105\
---------------------------------------------------------------------------

    \102\ DeCanio, S. J. (1998). ``The Efficiency Paradox: 
Bureaucratic and Organizational Barriers to Profitable Energy-Saving 
Investments,'' Energy Policy, 26(5), 441-454.
    \103\ Prindle 2007, op. cit. Howarth, R.B., Haddad, B.M., and 
Paton, B. (2000). ``The economics of energy efficiency: insights 
from voluntary participation programs,'' Energy Policy, 28, 477-486.
    \104\ Klemick, H., Kopits, E., Wolverton, A. (2017). ``Potential 
Barriers to Improving Energy Efficiency in Commercial Buildings: The 
Case of Supermarket Refrigeration,'' Journal of Benefit-Cost 
Analysis, 8(1), 115-145.
    \105\ de Almeida, E.L.F. (1998), ``Energy efficiency and the 
limits of market forces: The example of the electric motor market in 
France,'' Energy Policy, 26(8), 643-653.
    Xenergy, Inc. (1998), United States Industrial Electric Motor 
Systems Market Opportunity Assessment. Available at www.energy.gov/sites/default/files/2014/04/f15/mtrmkt.pdf (last accessed Sept. 9, 
2024).
---------------------------------------------------------------------------

    While this literature is not specific to CRE, DOE finds that the 
method of assignment simulates behavior in the CRE market, where market 
failures and other consumer preferences result in purchasing decisions 
not being perfectly aligned with economic interests, more realistically 
than relying only on apparent cost-effectiveness criteria derived from 
the limited information in CBECS.\106\ DOE further emphasizes that its 
approach does not assume that all purchasers of CRE make economically 
irrational decisions (i.e., the lack of a correlation is not the same 
as a negative correlation). As part of the sample assignment, some 
buildings with high refrigeration load will be assigned higher 
efficiency CRE, and some buildings with particularly low refrigeration 
energy use will be assigned baseline CRE. By using this approach, DOE 
acknowledges the variety of market failures and other consumer 
behaviors present in the CRE market, and does not assume certain market 
conditions unsupported by the available evidence.
---------------------------------------------------------------------------

    \106\ CBECS identifies CRE in each representative building (and 
further breaks down to `open' and `closed' refrigeration cases in 
each building with CRE). Also, as discussed in section IV.F.6, 
building size and category (i.e., food sales, food service, or other 
building categories) are correlated with CRE lifetimes, which are 
sampled using probability distributions.
---------------------------------------------------------------------------

    First, consumers are motivated by more than simple financial trade-
offs. There are consumers who are willing to pay a premium for more 
energy-efficient equipment because they are environmentally 
conscious.\107\ There are also several behavioral factors that can 
influence the purchasing decisions of complicated multi-attribute 
products, such as CRE. For example, consumers (or decision makers in an 
organization) are highly influenced by choice architecture, defined as 
the framing of the decision, the surrounding circumstances of the 
purchase, the alternatives available, and how they're presented for any 
given choice scenario.\108\ The same consumer or decision maker may 
make different choices depending on the characteristics of the decision 
context (e.g., the timing of the purchase, competing demands for 
funds), which have nothing to do with the characteristics of the 
alternatives themselves or their prices. Consumers or decision makers 
also face a variety of other behavioral phenomena including loss 
aversion, sensitivity to information salience, and other forms of 
bounded rationality.\109\ R.H. Thaler, who won the Nobel Prize in 
Economics in 2017 for his contributions to behavioral economics, and 
Sunstein point out that these behavioral factors are strongest when the 
decisions are complex and infrequent, when feedback on the decision is 
muted and slow, and when there is a high degree of information 
asymmetry.\110\ These characteristics describe almost all purchasing 
situations of appliances and equipment, including CRE. The installation 
of a new or replacement CRE is done infrequently, as evidenced by their 
mean lifetime. Further, if the purchaser of the CRE is not the entity 
paying the energy costs (e.g., a building owner and tenant), there may 
be little to no feedback on the purchase.
---------------------------------------------------------------------------

    \107\ Ward, D. O., Clark, C. D., Jensen, K. L., Yen, S. T., & 
Russell, C. S. (2011): ``Factors influencing willingness-to pay for 
the ENERGY STAR[supreg] label,'' Energy Policy, 39(3), 1450-1458. 
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (Last accessed January 5, 2024).
    \108\ Thaler, R.H., Sunstein, C.R., and Balz, J.P. (2014). 
``Choice Architecture'' in The Behavioral Foundations of Public 
Policy, Eldar Shafir (ed).
    \109\ Thaler, R.H., and Bernartzi, S. (2004). ``Save More 
Tomorrow: Using Behavioral Economics in Increase Employee Savings,'' 
Journal of Political Economy 112(1), S164-S187. See also Klemick, 
H., et al. (2015) ``Heavy-Duty Trucking and the Energy Efficiency 
Paradox: Evidence from Focus Groups and Interviews,'' Transportation 
Research Part A: Policy & Practice, 77, 154-166. (providing evidence 
that loss aversion and other market failures can affect otherwise 
profit-maximizing firms).
    \110\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving 
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale 
University Press.
---------------------------------------------------------------------------

10. Payback Period Analysis
    The PBP is the amount of time (expressed in years) it takes the 
consumer to recover the additional installed cost of more-efficient 
equipment, compared to baseline equipment, through energy cost savings. 
PBPs that exceed the life of the equipment mean that the increased 
total installed cost is not recovered in reduced operating expenses.
    The inputs to the PBP calculation for each efficiency level are the 
change in total installed cost of the equipment and the change in the 
first-year annual operating expenditures relative to the baseline. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    As noted previously, EPCA establishes a rebuttable presumption that 
a standard is economically justified if the Secretary finds that the 
additional cost to the consumer of purchasing equipment complying with 
an energy conservation standard level will be less than three times the 
value of the first year's energy savings resulting from the standard, 
as calculated under the applicable test procedure. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(iii)) For each considered 
efficiency level, DOE determined the value of the first year's energy 
savings by calculating the energy savings in accordance with the 
applicable DOE test procedure, and multiplying those savings by the 
average energy price projection for the year in which compliance with 
the new and amended standards would be required.
    In response to the October 2023 NOPR, Hussmann commented that 
retailers purchasing equipment will not consider PBPs greater than 3 
years for design options and prefer payback periods under 2 years. 
(Hussmann, No. 80 at p. 8) Hussmann further commented that DOE's 
payback periods at the proposed standard levels for many of the 
equipment classes are above the rebuttable presumption threshold of 3 
years according to EPCA. (Id.) In response to the October 2023 NOPR, 
Hillphoenix commented that the reported payback periods are beyond the 
industry standard of 2-3 years. (Hillphoenix, No. 77 at p. 5) 
Hillphoenix added that these increased costs will be passed onto 
consumers, and particularly low-income consumers, by citing a 2023 
study by the U.S. Government Accountability Office (``GAO'') \111\ (Id. 
at pp. 5-6) NAFEM commented that many payback periods are longer than 
the equipment lifetime; thus, consumers will never enjoy the economic 
benefit of the more expensive

[[Page 7558]]

CRE. (NAFEM, No. 83 at p. 17) NAFEM suggested that PBPs above 3-7.6 
years will cause consumers to turn to cheaper refurbished equipment. 
(Id. at pp. 17-18) In response to the October 2023 NOPR, Zero Zone 
commented suggesting that DOE should use a maximum payback of 3 years 
and eliminate any TSLs that exceed 3 years. (Zero Zone, No. 75 at p. 3) 
Kirby commented that the proposed standards will significantly require 
excessive payback periods for redesigning equipment and refrigeration. 
(Kirby, No. 66 at p. 2) In addition, in the November 2023 Public 
Meeting, Arneg USA commented that, in its experience, customers are not 
interested in anything with a payback period of more than 3 years. 
(November 2023 Public Meeting Transcript, No. 64 at pp. 112-113)
---------------------------------------------------------------------------

    \111\ Available at www.gao.gov/assets/gao-23-105846.pdf (last 
accessed Sept. 9, 2024).
---------------------------------------------------------------------------

    In response to the August 2024 NODA, Zero Zone commented that the 
CRE industry invests in features that have a 1-2 year payback period, 
thus DOE should include design components that have a relatively 
shorter payback. (Zero Zone, No. 114 at p. 2) Hillphoenix also 
commented reiterating their NOPR comment. (Hillphoenix, No. 110 at p. 
9)
    In response to the comments from Hussmann, Hillphoenix, NAFEM, Zero 
Zone, and Kirby, and Arneg USA, DOE acknowledges that the estimated 
payback periods in the October 2023 NOPR are longer than the 2-3 years 
typically expected for voluntary efficiency upgrades in some equipment 
classes. However, while DOE strives to propose standards that encourage 
adoption by industry stakeholders, when deciding whether a proposed 
standard is economically justified, DOE determines whether the benefits 
of the standard exceed its burdens by considering the seven statutory 
factors discussed in section II.A of this document ((1) economic 
impact; (2) operating cost savings; (3) energy savings; (4) utility 
impact; (5) competition; (6) the need of the nation to conserve; (7) 
other factors). DOE considers the seven statutory factors when 
evaluating a TSL and provides a detailed comparative discussion and 
rigorous justification on that TSL (see section V.C of this document 
for a detailed discussion on the adopted TSL for this final rule). DOE 
notes that, for most of the analyzed equipment classes, the payback 
period at the selected TSL in the October 2023 NOPR is below the 
equipment's lifetime, or within the range suggested by NAFEM. In 
addition, the shipment-weighted average PBP for all equipment classes 
at the selected TSL (TSL 3) is 3.5 years. Regarding the GAO study cited 
by Hillphoenix, the report mentions many factors that affect the food 
supply chain and can affect retail food prices to consumers but it does 
not cite the cost increase of CRE, or any other grocery store equipment 
capital cost, as a relevant factor influencing food price inflation. 
DOE also clarifies that, according to 42 U.S.C. 6316(e)(1) and 42 
U.S.C. 6295(o)(2)(B)(iii), when the rebuttable presumption criterion is 
not met, this criterion is not taken into consideration when 
determining whether a standard is economically justified.

G. Shipments Analysis

    DOE uses projections of annual equipment shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy use, NPV, and future manufacturer cash flows.\112\ 
The shipments model takes an accounting approach, tracking market 
shares of each equipment class and the vintage of units in the stock. 
Stock accounting uses equipment shipments as inputs to estimate the age 
distribution of in-service equipment stocks for all years. The age 
distribution of in-service equipment stocks is a key input to 
calculations of both the NES and NPV, because operating costs for any 
year depend on the age distribution of the stock.
---------------------------------------------------------------------------

    \112\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    For the shipments analysis conducted for this final rule, DOE 
followed the same approach as the October 2023 NOPR, with the exception 
of CRE that may be subject to refurbishment, as discussed in the 
following paragraphs.
    DOE categorized CRE based on the building types in which they are 
used as food sales, food service, and all other building types, 
according to the 2018 CBECS, as discussed earlier in this document. DOE 
also used the 2018 CBECS to further differentiate CRE into open and 
closed refrigeration units. DOE estimates demand for these equipment 
categories by calculating demand coming from new construction as well 
as the replacement of retiring units for each year.
    To calculate new demand for CRE in each category, DOE combined new 
and existing floorspace projections from AEO2023 with saturation 
estimates based on 2018 CBECS and AEO2023. DOE also collected shipments 
data during manufacturer interviews and re-estimated the market shares 
for each equipment class based on the collected data. DOE scaled the 
shipment and stock estimates from the floorspace and saturations 
calculations to the data obtained from manufacturers for the year 2022. 
DOE notes that, due to lack of shipments data for some equipment 
classes with a small market share, DOE estimated their shipments based 
on other equipment classes with similar characteristics for those 
equipment classes. For example, in this final rule, DOE assumed that 
shipments of VCT.SC.H are 1 percent of VCT.SC.I and that shipments for 
HZO.SC.M are equivalent to HZO.SC.L. More information on these 
assumptions can be found in chapter 9 of the final rule TSD. DOE also 
compared its shipments data with numbers reported by ENERGY STAR in its 
unit shipment and market penetration report for the calendar year 
2022.\113\ DOE's shipment results are generally consistent with the 
figures provided by ENERGY STAR, which reported 50-percent market 
penetration for the reported year. Shipments for CRE categories in each 
application are then disaggregated across the analyzed CRE classes, 
using fixed market shares derived from data collected during 
manufacturer interviews.
---------------------------------------------------------------------------

    \113\ ENERGY STAR[supreg]. ENERGY STAR Unit Shipment and Market 
Penetration Report Calendar Year 2022 Summary. 2023. U.S. 
Environmental Protection Agency and U.S. Department of Energy. 
Available at www.energystar.gov/sites/default/files/2022%20Unit%20Shipment%20Data%20Summary%20Report.pdf (last accessed 
July 29, 2024).
---------------------------------------------------------------------------

    Historically, the annual amount of CRE capacity shipped has been 
depicted in linear feet, which is also an alternative way to express 
shipments data. The linear feet shipped for any given year can be found 
by multiplying each unit shipped by its associated average length and 
then summing all the linear footage values. Chapter 9 of the final rule 
TSD presents the representative equipment-class lengths used for the 
conversion of per-unit shipments to linear footage within each 
equipment class.
    To compute demand for replacements, DOE used the lifetime 
distributions determined in the LCC analysis, which estimates an 
average lifetime of 10 years for large grocery/multi-line stores (food-
sales buildings) and restaurants (food-service buildings), and an 
average lifetime of 20 years for small food-sales and food-service 
buildings, with a maximum lifetime of 40 years for all equipment. In 
each analysis year of the model, DOE calculated retirements across the 
distribution to compute all demand arising from the retirements.
    In response to the October 2023 NOPR, several stakeholders provided 
comments related to CRE

[[Page 7559]]

refurbishments. AHRI commented that energy efficiency gains are lost 
when consumers refurbish CRE and argued that refurbished CRE could cost 
up to 45 percent less than new CRE, causing the refurbished market to 
grow. (AHRI, No. 81 at pp. 8, 11-12) According to AHRI, their surveyed 
suppliers of refurbished equipment reported double-digit growth in the 
past few years. (Id. at p. 12) Hussmann emphasized the growth of the 
refurbishment market due to increased costs and payback periods and 
commented that the compound annual growth rate (``CAGR'') of the 
refurbishment industry in FY20, FY21, FY22 was 23 percent, 25 percent, 
and 11 percent, respectively. (Hussmann, No. 80 at p. 9) Further, 
Hussmann estimated a 10 percent annual growth in this market since 
2015. (Id. at pp. 9-10) Hillphoenix commented that the cost of 
refurbished equipment is usually 50 percent less than the cost of new 
CRE, and that two large U.S. retailers are currently considering 
establishing their own in-house refurbishment program. (Hillphoenix, 
No. 77 at p. 2) Hillphoenix emphasized the growth of the refurbished 
market due to supply chain shortage and component cost increases, and 
stated there are at least 20 companies that refurbish CRE and suggested 
DOE reach out to those companies. (Id.) NAFEM commented that increased 
equipment prices are leading to refurbishment in all business sizes. 
(NAFEM, No. 83 at pp. 18, 23) NAMA also requested that DOE evaluate the 
energy use of refurbished machines and estimate the impact that 
equipment price increases associated with new standards may have on 
delaying purchase of new CRE or incentivizing purchase of refurbished 
CRE. (NAMA, No. 85 at pp. 16-17) NAMA added that any changes in the 
design options will cause significant increases in the cost of the 
machines, which will cause the purchaser to consider other alternatives 
including delaying the purchase of new equipment, purchasing 
refurbished machines, and importing machines from overseas, all of 
which will delay energy savings from being realized. (NAMA, No. 85 at 
p. 19) Furthermore, Storemasters commented that increased equipment 
prices would lead to fewer independent retailers opening new branches 
or remodeling existing ones. (Storemasters, No. 68 at p. 1)
    In response to the August 2024 NODA, several stakeholders 
reiterated their concern about the growth of the refurbishment market, 
and its impact on energy savings as an unregulated industry. 
Hillphoenix commented that the lower cost of refurbished CRE drives the 
growth of the refurbishment market and suggested that DOE reach out to 
the more than 20 retailers dealing in refurbished equipment for data on 
the size and growth of the refurbishment industry. (Hillphoenix, No. 
110 at p. 2) NAMA commented that the design options analyzed would 
significantly increase equipment costs, which could result in consumers 
purchasing refurbished CRE or delaying the purchase of new CRE. (NAMA, 
No. 112 at p. 6) AHRI restated their concern that the new standards 
will increase CRE costs, causing customers to buy less energy 
efficient, refurbished CRE. (AHRI, No. 104 at p. 8)
    To account for the effect of a potential increase in refurbished 
CRE as a result of increased prices from CRE standards, in the October 
2023 NOPR, DOE had assumed a price elasticity effect for a small 
fraction of CRE shipments, which was limited to small-sized buildings. 
88 FR 70196, 70242. In response to the stakeholder comments on 
refurbished CRE, in the August 2024 NODA, DOE modified its price 
elasticity approach based on the premise that if the refurbishment 
market offers a favorable economic opportunity, it could be utilized by 
all businesses. Accordingly, for the August 2024 NODA DOE applied price 
elasticity to all self-contained units, regardless of the building size 
where those units are installed. DOE notes that the price elasticity 
effect and a resulting reduction in CRE shipments is dependent on the 
price difference between the price consumers pay in the no-new-
standards case and the standards case. DOE applied an elasticity 
constant of -0.5 to shipments for self-contained CRE and scaled this 
constant down to -0.15 over a period of 20 years (then constant 
thereafter) from the current year of calculations. DOE also 
acknowledges that, while a CRE refurbishment market may well exist and 
its magnitude may have recently increased due to supply chain and 
equipment price increases, this phenomenon applies to the CRE market 
overall and is not a result of energy efficiency standards on CRE. With 
regard to self-contained units, DOE estimates that their market share 
is approximately 86 percent of the new (i.e., not refurbished) CRE 
market within the scope of this final rule. DOE notes that decision 
makers consider many other factors aside CRE purchase price when 
evaluating business openings or expansions, including the operating 
cost of CRE over the lifetime of the equipment, as well as other 
business factors. Nonetheless, because more efficient CRE would 
actually lead to increased shipments in the standards cases if DOE were 
to account for efficiency elasticity, DOE followed a conservative 
approach and did not account for efficiency elasticity in its shipments 
analysis. In response to the comment from NAMA regarding importing 
machines from overseas, DOE notes that 10 CFR 429.5(a) states that any 
person importing any covered product or covered equipment into the 
United States shall comply with the provisions of this part, and parts 
430 and 431, and is subject to the remedies of this part.
    As discussed in section IV.F.7, following the August 2024 NODA, 
AHRI, Hillphoenix and Hussmann commented that, in addition to self-
contained CRE, remote-condensing CRE are also subject to refurbishments 
when stores close or undergo remodeling. (AHRI, No. 104 at p. 8; 
Hillphoenix, No. 110 at p. 11; Hussmann, No. 108 at p. 2)
    In response to these comments, DOE acknowledges that remote-
condensing CRE may also be subject to refurbishments when stores close 
or undergo remodeling, potentially rendering such CRE subject to price 
elasticity, in addition to self-contained CRE. To account for the 
potential impact in the NIA and MIA of all CRE being subject to 
refurbishments, DOE applied price elasticity to all CRE shipments as 
part of a sensitivity analysis. The results of this analysis show that 
at the selected TSL (TSL 3), there is a 0.39 percent decrease in the 
cumulative shipments compared to the no-new standards case, in the 
first 5 years after the rulemaking compliance year (2029). See appendix 
10C of the final rule TSD for more details. The MIA results of the 
sensitivity analysis indicate a minimal impact in the change in INPV at 
TSL 3 as compared to the change in INPV at TSL 3 for the reference 
scenario. See chapter 12 of the final rule TSD for the MIA results of 
the price elasticity sensitivity analysis. Consistent with the August 
2024 NODA, in this final rule, DOE continues to apply price elasticity 
to all-self-contained CRE as its reference scenario. At the selected 
TSL for the reference scenario, there is a 0.37 percent decrease in the 
cumulative shipments compared to the no-new standards case, in the 
first 5 years after the rulemaking compliance year (2029).
    In response to the October 2023 NOPR and the August 2024 NODA, 
Hillphoenix commented that the proposed standards for many of the 
closed equipment classes (e.g., HCT, VCT, and VCS) are concerning, as 
the industry continues to transition to

[[Page 7560]]

closed cases for additional energy savings. (Hillphoenix, No. 77 at p. 
1; Hillphoenix, No. 110 at p. 1) Hillphoenix commented that the cost 
increase of closed cases required to implement the design changes 
necessary will slow the transition from open cases to more energy-
efficient closed-door models. (Id.) Hillphoenix stated that any CRE 
with lids or doors saves approximately 60-percent energy over their 
open-display counterparts. (Id.) Hillphoenix stated that many retailers 
have converted their VOP/HZO open cases to VCT/HCT classes by 
retrofitting doors in existing installations to capture the 
aforementioned energy savings, but requirements for further energy 
reduction will lead to many closed products being discontinued from the 
market, which is counter to the goal of reducing energy consumption. 
(Id.)
    Regarding the transition from open to closed cases and how 
standards may affect this transition, DOE reviewed the first cost 
increase of open cases (VOP and HZO equipment families) relative to 
corresponding door cases (VCT and HCT equipment families, respectively) 
between the no-new-standards case and the standards-cases evaluated by 
DOE and determined that, overall, the increase in first cost for door 
case equipment classes is smaller than that for open case equipment 
classes at the considered standard levels. Therefore, DOE concludes 
that the transition from open to closed cases will not be affected by 
standards.
    In response to the October 2023 NOPR, NAMA commented that DOE's 
shipments estimates are incorrect and may be off by as much as 50 
percent and added that there is no specific information on shipments by 
category in the October 2023 NOPR TSD. (NAMA, No. 85 at p. 3) 
Furthermore, NAMA commented that while most of the projections on cost, 
capital, and utility concerns in the October 2023 NOPR TSD refer to CRE 
connected to a refrigerant supply system, the impact on self-contained 
units is much greater and stated that this is not acknowledged in the 
October 2023 NOPR TSD or the October 2023 NOPR. (Id. at p. 10) NAMA 
recommended that DOE review data from ENERGY STAR regarding shipments 
with which to modify the percentages according to sales-weighted 
numbers, which would likely result in a significant effect on the 
equipment within NAMA's scope. (Id.) NAMA also requested that DOE use 
shipment data of new rather than a collection of new and refurbished 
units. (Id. at p. 20)
    In response to the August 2024 NODA, NAMA reiterated the claim that 
DOE's shipments estimates are off by as much as 50 percent, and that 
refurbished units have not been accounted for in this data. (NAMA, No. 
112 at p. 5) NAMA also repeated their request for information on 
shipments. (Id. at p. 6-7)
    In response to the comments from NAMA, DOE notes that shipment 
estimates by equipment class are available in chapter 9 of the October 
2023 NOPR TSD, as well as chapter 9 of this final rule TSD. In this 
final rule, total CRE shipments in 2029 are estimated to be 1.42 
million units. DOE clarifies that all data inputs for shipments 
estimates are associated with new units. Also, as discussed earlier in 
this section, DOE reviewed historical CRE ENERGY STAR shipments data to 
estimate CRE shipments and self-contained units specifically. For self-
contained units, DOE used estimates based on manufacturer interviews in 
2022 to determine that their market share is approximately 86 percent 
of the CRE market covered by this final rule.
    Chapter 9 of the final rule TSD provides additional details 
regarding the shipments analysis.

H. National Impact Analysis

    The NIA assesses the NES and the NPV from a national perspective of 
total consumer costs and savings that would be expected to result from 
new or amended standards at specific efficiency levels.\114\ 
(``Consumer'' in this context refers to consumers of the equipment 
being regulated.) DOE calculates the NES and NPV for the potential 
standard levels considered based on projections of annual equipment 
shipments, along with the annual energy consumption and total installed 
cost data from the energy use and LCC analyses. For the present 
analysis, DOE projected the energy savings, operating cost savings, 
equipment costs, and NPV of consumer benefits over the lifetime of CRE 
sold from 2029 through 2058.
---------------------------------------------------------------------------

    \114\ The NIA accounts for impacts in the United States and U.S. 
territories.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new or amended standards by comparing 
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each 
equipment class in the absence of new or amended energy conservation 
standards. For this projection, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. DOE compares the no-new-standards case with 
projections characterizing the market for each equipment class if DOE 
adopted new or amended standards at specific energy efficiency levels 
(i.e., the TSLs or standards cases) for that class. For the standards 
cases, DOE considers how a given standard would likely affect the 
market shares of equipment with efficiencies greater than the standard.
    DOE utilized the Python programming language for its NIA to 
calculate the energy savings and the national consumer costs and 
savings for each TSL. The final results of this analysis are available 
in the NIA spreadsheet, accessible at www.regulations.gov/docket/EERE-2017-BT-STD-0007. Interested parties can review DOE's analyses by 
changing various input quantities within the spreadsheet. The NIA 
spreadsheet model uses typical values (as opposed to probability 
distributions) as inputs.
    Table IV. summarizes the inputs and methods DOE used for the NIA 
analysis for this final rule. Discussion of these inputs and methods 
follows table IV. See chapter 10 of the final rule TSD for further 
details.

[[Page 7561]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.123

1. Equipment Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.9 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case (which 
yields a shipment-weighted average efficiency) for each of the 
considered equipment classes for the year of anticipated compliance 
with an amended or new standard.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2029). In this scenario, the market 
shares of equipment in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of equipment above the standard would 
remain unchanged.
    In the October 2023 NOPR, due to an absence of data on trends in 
efficiency, DOE assumed no efficiency trend over the analysis period 
for both the no-new-standards and standards cases. 88 FR 70196, 70244. 
For a given equipment class, market shares by efficiency level were 
held fixed to their estimated distribution in 2029.\115\ Id.
---------------------------------------------------------------------------

    \115\ DOE notes that, as discussed in section IV.C.1.a.i of this 
document, DOE has accounted for CRE efficiency trends by assuming 
that all self-contained units will have transitioned to R-290 
(propane) by the compliance year (2029).
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, AHRI recommended that DOE 
review its CCD for efficiency data and trends. (AHRI, No. 81 at p. 12) 
Hussmann provided data on the efficiency improvement of one of its 
highest volume cases in the VOP.RC.M equipment class and showed a 46-
percent reduction in energy use between 1985 and 2023. (Hussmann, No. 
80 at p. 11-12) Hussmann further stated that other equipment classes, 
such as VCT.RC.L, have shown similar trends. (Id.) DOE appreciates the 
comments and data provided by AHRI and Hussmann. DOE reviewed CCD data 
between 2017 and 2024 and did not identify a significant pattern in CRE 
efficiency trends. Furthermore, DOE notes that the energy efficiency 
improvement from the March 2014 Final rule and the energy efficiency 
improvement reported by Hussmann for the VOP.RC.M class between 2012 
and 2023 are similar. Therefore, the efficiency improvement provided by 
Hussmann in recent years may be a result of the March 2014 Final Rule, 
and not an efficiency improvement trend in the absence of standards. 
Hence, for this final rule, DOE continued to assume no trend in 
efficiency in the no-new-standards and the standards cases.
2. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered equipment between each potential 
standards case (i.e., TSL) and the case with no new or amended energy 
conservation standards. DOE calculated the national energy consumption 
by multiplying the number of units (i.e., stock) of equipment (by 
vintage or age) by the unit energy consumption (also by vintage). DOE 
calculated annual NES based on the difference in national energy 
consumption for the no-new-standards case and for each higher 
efficiency standard case. DOE estimated energy consumption and savings 
based on site energy and converted the electricity consumption and 
savings to primary energy (i.e., the energy consumed by power plants to 
generate site electricity) using annual conversion factors derived from 
AEO2023. Cumulative energy savings are the sum of the NES for each year 
over the timeframe of the analysis.
    Use of higher-efficiency equipment is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the equipment due to the increase in efficiency and reduction in 
operating cost. DOE did not find any data on the rebound effect 
specific to CRE that would indicate end-users or CRE purchasers would 
alter the utilization of their equipment as a result of an increase in 
efficiency. CRE are typically plugged in and operate continuously; 
therefore, DOE assumed a rebound rate of 0.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and GHG 
and other emissions in the NIA and emissions analyses included in 
future energy conservation standards

[[Page 7562]]

rulemakings. 76 FR 51281 (August 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (August 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \116\ 
that EIA uses to prepare its AEO. The FFC factors incorporate losses in 
production and delivery in the case of natural gas (including fugitive 
emissions) and additional energy used to produce and deliver the 
various fuels used by power plants. The approach used for deriving FFC 
measures of energy use and emissions is described in appendix 10B of 
the final rule TSD.
---------------------------------------------------------------------------

    \116\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2018, DOE/EIA-0581(2019), April 2019. 
Available at www.eia.gov/outlooks/aeo/nems/overview/pdf/0581(2018).pdf (last accessed July 22, 2024).
---------------------------------------------------------------------------

    At the November 2023 Public Meeting, EEI suggested that DOE 
consider modifying its analysis to account for the captured energy 
approach that EIA is now using and/or the zero emissions approach by 
ASHRAE for noncombustible renewables as alternative FFC factors. 
(November 2023 Public Meeting Transcript, No. 64 at p. 149) EEI also 
requested that DOE review the NREL Cambium databases \117\ and conduct 
a sensitivity analysis using alternative FFC factors. (Id. at pp. 149-
150) With respect to the comment from EEI, it has been DOE's practice 
for many years to rely on EIA's AEO for deriving site-to-primary and 
FFC energy factors. DOE is aware that, starting with the September 2023 
Monthly Energy Review, EIA began converting electricity generation from 
noncombustible renewables into primary energy using the captured energy 
approach rather than the fossil fuel equivalency approach that it had 
previously used. However, the AEO2023 that DOE used for this final rule 
still reflects the fossil fuel equivalency approach. DOE will consider 
conducting a sensitivity analysis using the captured energy approach, 
as well as a sensitivity analysis using a scenario with a high level of 
renewable energy market share for any future rulemakings.
---------------------------------------------------------------------------

    \117\ See www.nrel.gov/docs/fy23osti/84916.pdf for more 
information (last accessed July 22, 2024). The Cambium datasets 
include alternative projections on the U.S. electric sector under 
different scenarios.
---------------------------------------------------------------------------

    In response to the August 2024 NODA, NAMA commented that DOE 
addressed their request to separate some equipment classes into two 
categories based on size being above or below 30 cubic feet. (NAMA, No. 
112 at pp. 4-5) However, NAMA stated that this change is not reflected 
in DOE's national impacts analysis to show lesser projected energy 
savings for smaller units. Id. In response, DOE notes that the energy 
savings shown in the NIA depend not only on the energy savings of a 
single unit, but also on its market share and shipment numbers over the 
analysis period. A unit with lesser energy savings might register 
higher savings on a national level due to its larger volume of 
shipments. For example, VCT.SC.M (non-large) is shown to have 0.09 
quads of FFC savings while VCT.SC.M (large) is shown to have 0.02 quads 
of FFC savings at max EL (EL 6) in the August NODA. While the average 
daily energy consumption of the large representative unit is more than 
three times higher than that of the non-large representative unit, the 
ratio of their market shares (shipments) is approximately 1:9.
3. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are: (1) total annual installed cost, (2) 
total annual operating costs (which include energy costs and repair and 
maintenance costs), and (3) a discount factor to calculate the present 
value of costs and savings. DOE calculates net savings each year as the 
difference between the no-new-standards case and each standards case in 
terms of total savings in operating costs versus total increases in 
installed costs. DOE calculates operating cost savings over the 
lifetime of equipment shipped during the projection period.
    As discussed in section IV.F.1 of this document, DOE developed 
price trends for CRE of each equipment class containing variable-speed 
compressors and/or LED lighting. By 2058, which is the end date of the 
projection period, the average CRE LED lighting price is expected to 
drop by approximately 25 percent, while the average price of variable-
speed compressors is expected to decrease by approximately 85 percent, 
relative to projected 2029 prices. Because these component prices do 
not typically contribute substantively to the overall price of 
equipment, overall equipment prices are projected to decrease by at 
most 4.0 percent by 2058 relative to 2029. The price of equipment at 
the current baseline efficiency level is expected to drop by at most 3 
percent in the same period. For details on the price learning 
methodology and assumptions, see chapter 8 of the final rule TSD.
    The operating cost savings are energy cost savings, which are 
calculated using the estimated energy savings in each year and the 
projected price of the appropriate form of energy. To estimate energy 
prices in future years, DOE multiplied the average regional energy 
prices by the projection of annual national-average commercial energy 
price changes in the Reference case from AEO2023, which has an end year 
of 2050. To estimate price trends after 2050, the 2046-2050 average was 
used for all years. To estimate repair and maintenance costs, as 
discussed in section IV.F.5 of this document, DOE considered the 
typical failure rate of refrigeration system components, component MPCs 
and associated markups, and the labor cost of repairs. As part of the 
NIA, DOE also analyzed scenarios that used inputs from variants of the 
AEO2023 Reference case that have lower and higher economic growth. 
Those cases have lower and higher energy price trends compared to the 
Reference case. In addition, the low economic benefits scenario 
reflects a no-price-learning approach to calculate the equipment costs. 
NIA results based on these cases are presented in appendix 10C of the 
final rule TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
final rule, DOE estimated the NPV of consumer benefits using both a 3-
percent and a 7-percent real discount rate. DOE uses these discount 
rates in accordance with guidance provided by the Office of Management 
and Budget (``OMB'') to Federal agencies on the development of 
regulatory analysis.\118\ The discount rates for the determination of 
NPV are in contrast to the discount rates used in the LCC analysis, 
which are designed to reflect a consumer's perspective. The 7-percent 
real value is an estimate of the average before-tax rate of return to 
private capital in the U.S. economy. The 3-percent real value 
represents the ``social rate of time preference,'' which is the rate at 
which society discounts future consumption flows to their present 
value.
---------------------------------------------------------------------------

    \118\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed Aug. 19, 2024). 
DOE used the prior version of Circular A-4 (September 17, 2003) in 
accordance with the effective date of the November 9, 2023 version. 
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed Aug. 19, 
2024).

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[[Page 7563]]

a. Sensitivity Analysis for Equipment With Unique Energy Use 
Characteristics
    As discussed in section IV.C.1.c of this document, to account for 
CRE with certain features (e.g., pass-through, sliding door, sliding-
door pass-through, roll-in, roll-through, forced-air evaporator, and 
drawers), DOE applied a single multiplier of 1.07 to the energy use of 
CRE with these features. To evaluate the impact of such CRE on the NIA, 
DOE conducted a sensitivity analysis in this final rule and estimated 
the NES and NPV by applying a 1.07 energy use multiplier to CRE with 
these features.
    Given a lack of market data regarding CRE with these unique energy 
use characteristics, DOE modeled two sensitivities, each with a 
different approach to assumptions regarding market shares. In the first 
approach, DOE relied on CCD model counts to estimate market shares of 
CRE with unique energy use characteristics. In the second approach, DOE 
assumed that these CRE hold a flat 5 percent market share within their 
equipment class.
    To model this sensitivity, DOE assumed that the efficiency 
distribution of the equipment with unique features is the same as that 
of the overall equipment class. DOE assumed an increased energy 
consumption for the affected equipment by a factor of 7 percent. The 
results of these sensitivity analyses are shown in Appendix 10C of the 
final rule TSD.

I. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended energy 
conservation standards on consumers, DOE evaluates the impact on 
identifiable subgroups of consumers that may be disproportionately 
affected by a new or amended national standard. The purpose of a 
subgroup analysis is to determine the extent of any such 
disproportional impacts. DOE evaluates impacts on particular subgroups 
of consumers by analyzing the LCC impacts and PBP for those particular 
consumers from alternative standard levels. In response to the October 
2023 NOPR, an individual commenter submitted a confidential comment 
that expressed support for the proposed rule but also stated concern 
that the standards could impose a significant financial burden on small 
and medium-sized businesses. (Individual Commenter, No. 58 at pp. 1-2) 
Kirby commented that the proposed purchase prices will limit the growth 
of small and midsize companies. (Kirby, No. 66 at p. 2) NAMA stated 
that the cost of the new and amended standards will be significantly 
higher, with lower energy savings than DOE's estimates, and added that 
this will affect NAMA's members in ``food deserts.'' (NAMA, No. 85 at 
p. 2)
    For this final rule, DOE analyzed the impacts of the considered 
standard levels on small businesses. Regarding the comment from NAMA on 
this rulemaking's impact on ``food deserts'' (i.e., areas where 
consumers have limited access to healthy and affordable food options), 
DOE does not have specific data on the businesses that operate in such 
areas but assumes that most of them are small businesses. For this 
subgroup, DOE applied discount rates and electricity prices specific to 
small businesses to the same consumer sample that was used in the 
standard LCC analysis. DOE used the LCC and PBP spreadsheet model to 
estimate the impacts of the considered efficiency levels on these 
subgroups. Chapter 11 in the final rule TSD describes the consumer 
subgroup analysis and provides detailed results. See also section 
V.B.1.b of this document for a summary of the subgroup analysis 
results.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new and 
amended energy conservation standards on manufacturers of CRE and to 
estimate the potential impacts of such standards on employment and 
manufacturing capacity. The MIA has both quantitative and qualitative 
aspects and includes analyses of projected industry cash flows, the 
INPV, investments in research and development (``R&D'') and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how new and amended energy 
conservation standards might affect manufacturing employment, capacity, 
and competition, as well as how standards contribute to overall 
regulatory burden. Finally, the MIA serves to identify any 
disproportionate impacts on manufacturer subgroups, including small 
business manufacturers.
    The quantitative part of the MIA primarily relies on the GRIM, an 
industry cash flow model with inputs specific to this rulemaking. The 
key GRIM inputs include data on the industry cost structure, unit 
production costs, unit shipments, manufacturer markups, and investments 
in R&D and manufacturing capital required to produce compliant 
equipment. The key GRIM outputs are the INPV, which is the sum of 
industry annual cash flows over the analysis period, discounted using 
the industry-weighted average cost of capital, and the impact to 
domestic manufacturing employment. The model uses standard accounting 
principles to estimate the impacts of more-stringent energy 
conservation standards on a given industry by comparing changes in INPV 
and domestic manufacturing employment between a no-new-standards case 
and the various standards cases (i.e., TSLs). To capture the 
uncertainty relating to manufacturer pricing strategies following new 
and amended standards, the GRIM estimates a range of possible impacts 
under different manufacturer markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as a potential standard's impact on manufacturing capacity, 
competition within the industry, the cumulative impact of other DOE and 
non-DOE regulations, and impacts on manufacturer subgroups. The 
complete MIA is outlined in chapter 12 of the final rule TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the CRE manufacturing industry 
based on the market and technology assessment and publicly available 
information. This included a top-down analysis of CRE manufacturers 
that DOE used to derive preliminary financial inputs for the GRIM 
(e.g., revenues; materials, labor, overhead, and depreciation expenses; 
selling, general, and administrative expenses (``SG&A''); and R&D 
expenses).
    DOE also used public sources of information to further calibrate 
its initial characterization of the CRE manufacturing industry, 
including company filings of form 10-K from the SEC,\119\ corporate 
annual reports, the U.S. Census Bureau's Annual Survey of Manufactures 
(``ASM''),\120\ the U.S. Census Bureau's Economic Census,\121\ the U.S. 
Census Bureau's Quarterly

[[Page 7564]]

Survey of Plant Capacity Utilization,\122\ and reports from Dun & 
Bradstreet.\123\
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    \119\ U.S. Securities and Exchange Commission. Electronic Data 
Gathering, Analysis, and Retrieval system. Available at www.sec.gov/edgar/searchedgar/companysearch (last accessed April 11, 2024).
    \120\ U.S. Census Bureau. Annual Survey of Manufactures. (2012-
2021). Available at www.census.gov/programs-surveys/asm/data.html 
(last accessed April 11, 2024).
    \121\ U.S. Census Bureau. Economic Census. (2012 and 2017). 
Available at www.census.gov/programs-surveys/economic-census.html 
(last accessed April 15, 2024).
    \122\ U.S. Census Bureau. Quarterly Survey of Plant Capacity 
Utilization. (2010-2022). Available at www.census.gov/programs-surveys/qpc/data/tables.html (last accessed April 11, 2024).
    \123\ Dun & Bradstreet Hoovers. Subscription login accessible at 
app.dnbhoovers.com/(last accessed March 15, 2024).
---------------------------------------------------------------------------

    In Phase 2 of the MIA, DOE prepared a framework industry cash-flow 
analysis to quantify the potential impacts of new and amended energy 
conservation standards. The GRIM uses several factors to determine a 
series of annual cash flows starting with the announcement of the 
standard and extending over a 30-year period following the compliance 
date of the standard. These factors include annual expected revenues, 
costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. 
In general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) creating a need for increased 
investment, (2) raising production costs per unit, and (3) altering 
revenue due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of CRE in order to develop other key GRIM 
inputs, including product and capital conversion costs, and to gather 
additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital assets, 
industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. As part of Phase 3, DOE also evaluated subgroups of 
manufacturers that may be disproportionately impacted by new and 
amended standards or that may not be accurately represented by the 
average cost assumptions used to develop the industry cash flow 
analysis. Such manufacturer subgroups may include small business 
manufacturers, low-volume manufacturers, niche players, and/or 
manufacturers exhibiting a cost structure that largely differs from the 
industry average. DOE identified one subgroup for a separate impact 
analysis: small business manufacturers. The small business subgroup is 
discussed in section VI.B of this document, ``Review under the 
Regulatory Flexibility Act,'' and in chapter 12 of the final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
or amended standards that result in a higher or lower industry value. 
The GRIM uses a standard, annual discounted cash-flow analysis that 
incorporates manufacturer costs, manufacturer markups, shipments, and 
industry financial information as inputs. The GRIM models changes in 
costs, distribution of shipments, investments, and manufacturer margins 
that could result from a new or amended energy conservation standard. 
The GRIM spreadsheet uses the inputs to arrive at a series of annual 
cash flows, beginning in 2024 (the base year of the analysis) and 
continuing to 2058. DOE calculated INPVs by summing the stream of 
annual discounted cash flows during this period. For manufacturers of 
CRE, DOE used a real discount rate of 10.0 percent, which was derived 
from industry financials and then modified according to feedback 
received during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the new or 
amended energy conservation standard on manufacturers. As discussed 
previously, DOE developed critical GRIM inputs using a number of 
sources, including publicly available data, results of the engineering 
analysis, results of the shipments analysis, and information gathered 
from industry stakeholders during the course of manufacturer interviews 
and public comments in response to the October 2023 NOPR. The GRIM 
results are presented in section V.B.2 of this document. Additional 
details about the GRIM, the discount rate, and other financial 
parameters can be found in chapter 12 of the final rule TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient equipment is typically more expensive 
than manufacturing baseline equipment due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered equipment can affect the revenues, 
gross margins, and cash flow of the industry. For this final rule, DOE 
relied on a design-option approach, supported with testing and reverse 
engineering of directly analyzed CRE, similar to the approach in the 
August 2024 NODA and October 2023 NOPR. The design options were 
incrementally added to the baseline configuration and continued through 
the ``max-tech'' configuration (i.e., implementing the ``best 
available'' combination of available design options).
    For a complete description of the MPCs, see section IV.C of this 
document and chapter 5 of the final rule TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency mix over time 
can significantly affect manufacturer finances. For this analysis, the 
GRIM uses the NIA's annual shipment projections derived from the 
shipments analysis from 2024 (the base year) to 2058 (the end year of 
the analysis period). See section IV.G of this document and chapter 9 
of the final rule TSD for additional details.
c. Product and Capital Conversion Costs
    New or amended energy conservation standards could cause 
manufacturers to incur conversion costs to bring their production 
facilities and equipment designs into compliance. DOE evaluated the 
level of conversion-related expenditures that would be needed to comply 
with each considered efficiency level in each equipment class. For the 
MIA, DOE classified these conversion costs into two major groups: (1) 
product conversion costs, and (2) capital conversion costs. Product 
conversion costs are investments in research, development, testing, 
marketing, and other non-capitalized costs necessary to make equipment 
designs comply with new or amended energy conservation standards. 
Capital conversion costs are investments in property, plant, and 
equipment necessary to adapt or change existing production facilities 
such that new compliant equipment designs can be fabricated and 
assembled.
    DOE based its estimates of the product conversion costs that would 
be required to meet each efficiency level on information obtained from 
manufacturer interviews; the design pathways analyzed in the 
engineering analysis; the equipment teardown analysis; the shipments 
analysis; and model count information. DOE estimated the product 
development effort--including engineer, laboratory technician, and 
marketing resources--associated with each design option and scaled the 
costs based on the number of basic models (or model

[[Page 7565]]

platforms, depending on the nature of the design option). The product 
development effort varied by design option. DOE-modeled door design 
changes (i.e., moving from a double-pane to triple-pane door, 
incorporating vacuum-insulated glass) would require more complex system 
redesigns and more cost, as compared to implementing more efficient 
components (e.g., incorporating a PSC motor or an ECM). DOE also 
assumed that an additional engineering effort would be required to 
optimize variable-speed compressors to ensure energy efficiency 
benefits, based on interview feedback.
    To estimate industry product conversion costs, DOE multiplied the 
product development cost estimate at each efficiency level for each 
equipment class by the number of industry basic models or equipment 
platforms that would require redesign. DOE used its CCD \124\ and CEC's 
MAEDbS \125\ to identify CRE models covered by this rulemaking. To 
identify chef bases or griddle stands and high-temperature CRE models, 
DOE further relied on publicly available data aggregated from the web 
scraping of retail websites. DOE used the no-new-standards case 
efficiency distribution from the shipments analysis to estimate the 
model efficiency distribution for chef bases, griddle stands, and high-
temperature CRE. DOE also included the estimated cost of testing to the 
DOE test procedure for chef bases, griddle stands, and high-temperature 
units using the estimated per-unit testing cost of $5,000 detailed in 
the September 2023 Test Procedure Final Rule. 88 FR 66152, 66215.
---------------------------------------------------------------------------

    \124\ U.S. Department of Energy's Compliance Certification 
Database is available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed Jan. 31, 2024).
    \125\ California Energy Commission's Modernized Appliance 
Efficiency Database System is available at 
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx 
(last accessed Jan. 31, 2024).
---------------------------------------------------------------------------

    For this final rule, DOE used its product conversion cost 
methodology from the October 2023 NOPR and updated data sources from 
the August 2024 NODA. Specifically, DOE incorporated the most recent 
Department of Labor's BLS Occupational Employment and Wage Statistics 
wage data \126\ into its product conversion cost estimates and 
refreshed its equipment database to reflect current model listings. 
Furthermore, in response to stakeholder comments to the October 2023 
NOPR regarding the increase in testing and certification costs 
associated with new safety standards (i.e., UL 60335-2-89) and industry 
test standards (see Hoshizaki, No. 76 at p. 2), DOE doubled product 
conversion costs associated with UL testing and industry certification 
for this final rule, consistent with the August 2024 NODA.
---------------------------------------------------------------------------

    \126\ U.S. Department of Labor, ``Occupational Employment and 
Wage Statistics,'' (May 2023). Available at www.bls.gov/oes/2023/may/oes_nat.htm#17-0000 (last accessed May 22, 2024). See National 
median annual wages for ``17-2071 Electrical Engineers,'' ``17-2141 
Mechanical Engineers,'' ``17-3027 Mechanical Engineering 
Technologists and Technicians,'' and ``13-1082 Project Management 
Specialists.''
---------------------------------------------------------------------------

    In addition to the sources used to derive product conversion costs, 
DOE relied on additional sources of information such as the Trade 
Associations Survey,\127\ submitted in advance of the October 2023 
NOPR, to estimate the capital conversion costs manufacturers would 
incur to comply with potential new and amended energy conservation 
standards. During interviews, manufacturers provided estimates and 
descriptions of the tooling changes required by the considered design 
options. Based on these inputs, DOE assumed that most component swaps, 
while requiring moderate product conversion costs, would not require 
changes to existing production lines or equipment, and, therefore, 
would not require notable capital expenditures because one-for-one 
component swaps would not require changes to existing production 
equipment (i.e., manufacturers will continue to be able to use their 
existing production equipment and production lines to manufacture CRE 
that achieve higher efficiency levels through component swaps, which 
are typically associated with lower efficiency levels). However, based 
on manufacturer feedback, DOE modeled some tooling and capital 
expenditures when manufacturers implement improved door designs and 
variable-speed compressors. For improved door designs, some 
manufacturers noted that they would need new fixtures. Incorporating 
additional panes of glass for high-volume equipment classes could also 
necessitate heavier duty lifting equipment to transport and assemble 
heavier glass packs. For variable-speed compressors, which could be 
larger than existing single-speed compressors, manufacturers may need 
new tools for the baseplate. To estimate industry capital conversion 
costs, DOE scaled the estimated capital expenditures at each efficiency 
level for each equipment class by the number of applicable OEMs.
---------------------------------------------------------------------------

    \127\ See Trade Associations Survey, No. 50 at pp. 16-18. 
Available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0050.
---------------------------------------------------------------------------

    As previously stated, the Trade Associations Survey included 
information about the anticipated capital investments associated with a 
range of design options. (Trade Association Survey, No. 50 at pp. 16-
18) The survey results showed high capital investments associated with 
increasing insulation thickness and incorporating vacuum-insulated 
panels. (Id. at p. 18) As discussed in section IV.B.1 of this document, 
DOE excluded these technologies from further consideration in the 
engineering analysis. Other design options potentially requiring 
notable capital investment included microchannel condensers, additional 
panes of glass, and variable-speed compressors. Although DOE analyzed 
microchannel condensers as a design option to improve efficiency in the 
October 2023 NOPR, DOE notes that it did not analyze microchannel 
condensers as a design option in the August 2024 NODA or this final 
rule analysis. DOE compared feedback from the Trade Associations Survey 
with information from the equipment teardown analysis and manufacturer 
interviews and incorporated the feedback where applicable.
    Consistent with the August 2024 NODA, DOE adjusted its capital 
conversion cost estimates from 2022$ to 2023$ for this final rule but 
otherwise maintained its capital conversion cost methodology from the 
October 2023 NOPR.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new standard. The conversion cost 
figures used in the GRIM can be found in section V.B.2.a of this 
document. For additional information on the estimated capital and 
product conversion costs, see chapter 12 of the final rule TSD.
d. Manufacturer Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs 
estimated in the engineering analysis for each equipment class and 
efficiency level. Modifying these manufacturer markups in the standards 
case yields different sets of impacts on manufacturers. For the MIA, 
DOE modeled two standards-case scenarios to represent uncertainty 
regarding the potential impacts on prices and profitability for

[[Page 7566]]

manufacturers following the implementation of new and amended energy 
conservation standards: (1) a preservation-of-gross-margin-percentage 
scenario, and (2) a preservation-of-operating-profit scenario. These 
scenarios lead to different manufacturer markup values that, when 
applied to the MPCs, result in varying revenue and cash flow impacts.
    Under the preservation-of-gross-margin-percentage scenario, DOE 
applied a single uniform ``gross-margin percentage'' across all 
efficiency levels and equipment classes, which assumes that 
manufacturers would be able to maintain the same amount of profit as a 
percentage of revenues at all efficiency levels within an equipment 
class. As manufacturer production costs increase with efficiency, this 
scenario implies that the per-unit dollar profit will increase. In the 
October 2023 NOPR, DOE used a gross-margin percentage of 29 percent for 
all equipment classes.\128\ 88 FR 70196, 70247. In the August 2024 NODA 
and this final rule, DOE used a gross-margin percentage of 28 percent 
for all equipment classes based on comments in response to the October 
2023 NOPR and market share weights.\129\ Manufacturers tend to believe 
it is optimistic to assume that they would be able to maintain the same 
gross-margin percentage as their production costs increase, 
particularly for minimally efficient equipment. Therefore, this 
scenario represents a high bound of industry profitability under new 
and amended energy conservation standards. To address manufacturer 
concerns about reduced margins and profitability under potential 
amended standards, DOE also analyzes a preservation-of-operating-profit 
scenario.
---------------------------------------------------------------------------

    \128\ The gross-margin percentage of 29 percent is based on a 
manufacturer markup of 1.40.
    \129\ The gross-margin percentage of 28 percent is based on a 
manufacturer markup of 1.38.
---------------------------------------------------------------------------

    Under the preservation-of-operating-profit scenario, as the cost of 
production goes up under a standards case, manufacturers are generally 
required to reduce their manufacturer markups to a level that maintains 
base-case operating profit. DOE implemented this scenario in the GRIM 
by lowering the manufacturer markups at each TSL to yield approximately 
the same earnings before interest and taxes in the standards case as in 
the no-new-standards case in the year after the expected compliance 
date of the new and amended standards. The implicit assumption behind 
this scenario is that the industry can only maintain its operating 
profit in absolute dollars after the standard takes effect.
    A comparison of industry financial impacts under the two 
manufacturer markup scenarios is presented in section V.B.2.a of this 
document.
3. Discussion of MIA Comments
a. Conversion Costs
    In response to the October 2023 NOPR, NAMA commented the industry 
would incur hundreds of thousands to millions in capital costs when 
incorporating increased insulation, VIPs, heavier doors, and 
microchannel coils, which will take place in an environment with rising 
interest rates. (NAMA, No. 85 at p. 10) NAMA requested that DOE 
consider fully burdened conversion costs for the following areas: mold 
cost for plastic parts; production of the molds in molding machines; 
fixtures for production of metal parts; fixtures to hold the components 
in place; engineering design changes; manufacturing changes; building 
of prototypes to test internally; testing of prototypes; building of 
pre-production units from production parts and fixtures (sometimes 
called a pilot lot); safety certification for pre-production units; 
safety certification costs from U.S. Department of Labor Occupational 
Safety and Health Administration (``OSHA'') nationally recognized test 
laboratories (``NRTLs''); internal costs for performance testing; 
external costs for performance testing; internal energy testing; energy 
testing from outside laboratories for confirmation; training of 
production employees; training of service personnel; equipment for 
service personnel; and capital costs amortized over 3 to 5 years. (Id. 
at p. 22)
    NAFEM stated some CRE models can be redesigned to achieve a lower 
energy limit within the 3-year timeline, while others (primarily self-
contained products) have unknown design challenges and variable-speed 
evaporators and/or condenser fan motors and variable-speed compressors 
and all the extra electronic controls required for these variable-speed 
components will require extensive testing to accommodate the proposed 
limits to increase energy efficiency. (NAFEM, No. 83 at p. 12)
    AHRI commented that microchannel condensers should include supplier 
tooling costs, existing and potential tariffs, laboratory testing, 
field testing, product line changeovers, refrigerant charge, and air 
flow analysis. (AHRI, No. 81 at p. 12) Hoshizaki commented that 
changing condensers requires manufacturers to purchase new jigs for 
brazing patterns where the cost of the jigs depends on the size and 
complexity. (Hoshizaki, No. 76 at p. 5) Hoshizaki stated jigs for 
brazing can cost thousands and costs for new condensing units are 
amortized over the first 3 years of purchase. (Id.) Hoshizaki commented 
that there are increased labor costs for variable-speed compressors 
because they require fine-tuning of design controls for optimum energy 
use. (Id.)
    NAFEM commented that each foam fixture can cost between $250,000 
and $750,000 depending on size and complexity, so new foam fixtures are 
multi-million-dollar investments. (NAFEM, No. 83 at p. 19) NAFEM also 
stated complex control systems require wiring, sensors, and additional 
assembly. (Id.)
    In response to these comments, DOE notes that it incorporates 
investments in research, development, testing and certification, 
marketing, and other non-capitalized costs necessary to make equipment 
designs comply with standards (i.e., product conversion costs) and 
investments in property, plant, and equipment necessary to adapt or 
change existing production facilities (i.e., capital conversion costs) 
into its MIA. For the October 2023 NOPR, DOE analyzed incorporating a 
range of design options, including microchannel condensers, variable-
speed compressors, and improved door designs (i.e., moving to double-
pane, triple-pane, or vacuum-insulated glass for CRE equipment classes 
with transparent doors). However, DOE did not consider increased 
insulation thickness or VIPs as design options in its engineering 
analysis as DOE had tentatively screened out those technology options 
due to ``impacts on product utility''. See section IV.B of this 
document for additional information.
    For this final rule, DOE maintains the approach used in the August 
2024 NODA. Specifically, based on stakeholder comments to the October 
2023 NOPR, DOE revised its baseline component assumptions and revised 
its assessment of representative insulation thickness for the August 
2024 NODA and this final rule to align with the insulation thickness 
assumptions used in the March 2014 Final Rule.\130\ As such, DOE did 
not incorporate estimates associated with increasing insulation

[[Page 7567]]

thickness or VIPs in its conversion costs for this final rule. As 
discussed in section IV.B.1.g of this document, DOE screened out the 
use of microchannel condensers as a design option to improve efficiency 
in this final rule analysis. Thus, consistent with the August 2024 
NODA, DOE does not consider investments associated with implementing 
microchannel condensers in its MIA for this final rule. Consistent with 
both the August 2024 NODA and 2023 October NOPR, DOE assumed that 
implementing variable-speed compressors takes an additional level of 
engineering effort and testing time compared to other design options 
based on manufacturer feedback from confidential interviews. See 
chapter 12 of the final rule TSD for industry conversion costs by 
efficiency level for each directly analyzed equipment class.
---------------------------------------------------------------------------

    \130\ See Table 5A.2.2 Baseline Specifications in the March 2014 
Final Rule TSD at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102. DOE updated the following insulation thicknesses: 1.5 in. 
for medium- and high-temperature equipment, 2.0 in. for low-
temperature equipment, and 2.5 in. for ice-cream temperature 
equipment. Table IV.11 in this document.
---------------------------------------------------------------------------

    Hussmann commented that design changes may lead to incorporating 
additional components (e.g., EEVs, case controllers, lighting controls, 
anti-sweat heater controllers), which would negatively impact 
production rates and plant capacity if equipment becomes more difficult 
to assemble. (Hussmann, No. 80 at p. 8) Hussmann and AHRI commented 
that manufacturers would also have to develop new training materials 
and programs to educate existing technicians on the integration of 
these additional electronic components. (Id. at p. 8; AHRI, No. 81 at 
p. 10)
    DOE understands that incorporating additional components could 
require additional sub-assembly stations and increase per-unit 
production time, potentially impacting plant capacity. DOE clarifies 
that EEVs, case controllers, and anti-sweat heater controls are not 
design options analyzed in this final rule, although DOE understands 
that manufacturers can choose to meet the adopted standards using a 
variety of different technologies. Furthermore, DOE does not expect 
that TSL 3 efficiencies would necessitate the use of occupancy sensors 
with dimming capability. Additionally, DOE notes that manufacturers 
have 4 years after this final rule publishes in the Federal Register to 
update CRE designs and production facilities to comply with the adopted 
standards. As such, DOE does not expect the CRE industry would face 
long-term capacity constraints as a direct result of the standards 
adopted in this final rule. As discussed in section V.B.2.c of this 
document, DOE assesses potential impacts of standards on manufacturing 
capacity. Manufacturers primary concern was about the dual development 
needed to comply with both new and amended energy conservation 
standards and EPA refrigerant regulations over a similar timeframe, 
however, DOE expects that extending the compliance period from the 3-
years analyzed in the October 2023 NOPR to 4-years in this final rule 
will help mitigate these concerns about laboratory and engineering 
resource constraints. Regarding developing new training material for 
technicians, DOE's product conversion costs are intended to encompass 
investments in marketing and other non-capitalized expenses that 
directly result from meeting new or amended standards.
    NAMA commented that DOE's consultants did not account for the 
enormous capital costs of most design options or the enormous 
cumulative burden that results from the transition from high-GWP 
refrigerants to low-GWP refrigerants. (NAMA, No. 85 at p. 10) NAMA also 
commented that the practice of burying capital costs in a separate 
category and not accounting for them in the true cost of design options 
is unrealistic. (Id. at p. 11)
    In response to the comment from NAMA, DOE notes that it accounts 
for the capital investments required to implement the design options 
analyzed in the engineering analysis in its industry cash flow model, 
the GRIM. DOE also notes that it does not expect manufacturers would 
incur significant capital conversion costs as a result of the standards 
in this final rule as DOE is not analyzing capital-intensive design 
options such as increasing insulation thickness or implementing VIPs in 
its analysis. See section IV.J.2.c of this document for a discussion of 
conversion cost methodology and section V.B.2.a of this document for 
estimated capital conversion costs required to meet each TSL.
    Regarding DOE's accounting of the investments required to 
transition to low-GWP refrigerants in response to Federal and State 
regulations, DOE accounts for the investments required to transition to 
low-GWP refrigerants in its GRIM in the no-new-standards case and 
standards case. DOE did not consider these investments as ``conversion 
costs'' as they are considered as part of the analytical baseline. In 
other words, the CRE industry would incur refrigerant transition 
expenses to comply with the October 2023 EPA Final Rule regardless of 
whether DOE amends energy conservation standards for CRE. Although 
refrigerant transition costs are not attributable to this DOE 
rulemaking, DOE incorporates these expenses into its GRIM to better 
reflect the state of industry finances and annual cash flow.
    For the October 2023 NOPR, DOE relied on manufacturer feedback in 
confidential interviews, a report prepared for EPA,\131\ results of the 
engineering analysis, and investment estimates submitted by NAMA and 
AHRI in response to the June 2022 Preliminary Analysis to estimate the 
industry refrigerant transition costs. 88 FR 70196, 70284. Based on 
feedback, DOE assumed that the transition to low-GWP refrigerants would 
require industry to invest approximately $21.3 million in R&D and $33.3 
million in capital expenditures (e.g., investments in new charging 
equipment, leak detection systems, etc.) from 2023 to 2025.\132\ Id. 
DOE estimates industry would incur approximately $13.6 million in R&D 
and $17.7 million in capital expenditures from 2024 to 2027 for this 
final rule.\133\ These values reflect the estimated refrigerant 
transition expenses incurred during the period analyzed in this final 
rule (i.e., 2024-2058), and not the cumulative industry investments 
associated with transitioning to low-GWP refrigerants. DOE addresses 
stakeholder comments about the costs associated with the refrigerant 
transition in section IV.J.3.f of this document. These stakeholder 
comments relate to concerns about underestimating the costs associated 
with the refrigerant transition. For more detailed information on how 
DOE accounts for the refrigerant transition in its MIA, see section 
V.B.2.e of this document.
---------------------------------------------------------------------------

    \131\ See pp. 5-113 of the ``Global Non-CO2 
Greenhouse Gas Emission Projections & Marginal Abatement Cost 
Analysis: Methodology Documentation'' (2019). Available at 
www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
    \132\ At the time of the October 2023 NOPR analysis, the 
December 2022 EPA NOPR proposed a compliance date of January 1, 2025 
for all subsectors relevant to CRE covered by this rulemaking.
    \133\ The October 2023 EPA Final rule maintained a January 1, 
2025 compliance date for stand-alone units but delayed compliance to 
January 1, 2026 or January 1, 2027 for other subsectors relevant to 
CRE covered by this rulemaking.
---------------------------------------------------------------------------

    NAFEM asserted that DOE did not account for the substantial and 
unprecedented inflation and cost-of-capital issues that are plaguing 
all private enterprise at this time, including the CRE industry, in its 
October 2023 NOPR. (NAFEM, No. 83 at p. 14) NAFEM emphasized that the 
current macroeconomic environment makes short-term or long-term 
borrowing for capital improvements impossible. (Id. at p. 17) NAMA 
similarly commented that high interest rates make large investments--
such as the expenses required to transition to low-GWP refrigerants in 
response to Federal and State refrigerant regulation--very expensive. 
(NAMA, No. 85 at p. 3)

[[Page 7568]]

    For the October 2023 NOPR, DOE used the discount rate (i.e., the 
weighted average cost of capital) from the March 2014 Final Rule as a 
starting point for the MIA. The March 2014 Final Rule financial 
parameters were vetted by multiple manufacturers in confidential 
interviews and went through public notice and comment. DOE then 
compared the discount rate developed for the prior CRE rulemaking to 
recent financial data from four publicly traded CRE manufacturers to 
ensure relevance. DOE presented the discount rate and other financial 
parameters to manufacturers during confidential interviews conducted in 
January 2023 in advance of the October 2023 NOPR. See chapter 12 of the 
October 2023 NOPR TSD.\134\ Based on feedback, DOE used a discount rate 
of 10.0 percent in its MIA conducted for the October 2023 NOPR. 88 FR 
70196, 70246. As DOE did not receive quantitative feedback from 
manufacturers on the discount rate in response to the October 2023 
NOPR, DOE maintained a discount rate of 10.0 percent for the August 
2024 NODA and for this final rule. Regarding DOE's accounting of 
inflation, for this final rule, DOE updated its engineering analysis to 
incorporate up-to-date cost estimates by way of 5-year moving averages 
for materials and the most up-to-date costs for purchased parts.
---------------------------------------------------------------------------

    \134\ Available at www.regulations.gov/document/EERE-2017-BT-STD-0007-0051.
---------------------------------------------------------------------------

    In response to the October 2023 NOPR, Hillphoenix commented that 
the standards proposed in the October 2023 NOPR, if adopted, would 
force OEMs to discontinue equipment, noting that the March 2014 Final 
Rule standards (which went into effect in 2017) eliminated less-
efficient models that were offered as part of tiered efficiency-based 
pricing. (Hillphoenix, No. 77 at p. 1) In response to the October 2023 
NOPR and August 2024 NODA, Hillphoenix commented that proposed 
standards may lead to equipment commoditization where equipment can 
only compete on price rather than value-added options and features. 
(Hillphoenix, No. 77 at p. 1; Hillphoenix, No. 110 at p. 1) In response 
to August 2024 NODA, Hillphoenix similarly commented that the proposed 
standards would force OEMs to discontinue models, which would have 
negative business impacts, stifle innovation, lead to commoditization, 
and lead to a disadvantage selling in foreign markets. (Hillphoenix, 
No. 110 at p. 1)
    With respect to the comment from Hillphoenix, DOE acknowledges that 
not all models on the market would meet the efficiency levels proposed 
in the October 2023 NOPR or the efficiency levels adopted in this final 
rule. As discussed in section IV.J.2.c of this document, DOE used its 
CCD as a key input to its conversion cost methodology to estimate the 
number of unique basic models that would require redesign for each 
directly analyzed equipment class at each efficiency level. To avoid 
underestimating the potential investments, DOE assumed manufacturers 
would redesign all models that would not currently meet each analyzed 
efficiency level. As such, industry conversion costs reflect the 
redesign effort required to update the portion of CRE models that do 
not meet each efficiency level.
    In the October 2023 NOPR, DOE estimated that approximately 11 
percent of shipments would meet the proposed levels by the analyzed 
compliance year. However, DOE estimates that approximately 49 percent 
of shipments would meet the levels adopted in this final rule (i.e., 
TSL 3). Therefore, compared to the October 2023 NOPR, fewer models 
would require redesign to meet the adopted TSL in this final rule. 
Furthermore, compared to the October 2023 NOPR, manufacturers will have 
an additional year to redesign CRE to meet new and amended standards. 
Based on stakeholder feedback, DOE is extending the compliance period 
from the 3 years analyzed in the October 2023 NOPR to 4 years. DOE also 
notes that in the October 2023 NOPR, DOE proposed energy use 
multipliers for certain features (e.g., pass-through doors, sliding 
doors, roll-in doors, roll-through doors, and forced air evaporators). 
88 FR 70196, 70231. As presented in the August 2024 NODA, in this final 
rule, DOE is adopting a simplified multiplier of 1.07 to the eligible 
equipment classes discussed in the October 2023 NOPR. See section 
IV.C.1.a of this document for a discussion of equipment classes with 
unique energy use characteristics. As such, DOE expects that these 
types of features and others would remain prevalent in the market and 
could offer means for equipment differentiation, minimizing the risk of 
equipment commoditization. Additionally, DOE notes that it is not 
adopting the max-tech efficiency level for most directly analyzed 
equipment classes. Out of the 28 directly analyzed equipment classes, 
DOE is adopting efficiency levels below max-tech for 18 classes, which 
account for approximately 84 percent of industry shipments covered by 
this rulemaking. DOE expects that manufacturers would still be able to 
differentiate their models and product lines by various factors (e.g., 
price, technologies, consumer features, energy efficiency) rather than 
just price as Hillphoenix contended in its comment. Furthermore, as 
discussed in section IV.C.1.b of this document, there are a range of 
models on the market and certified in DOE's CCD that exceed the 
analyzed max-tech efficiency levels. Possible explanations for the 
variability in energy usage could be due to a range of lighting powers, 
differences in insulation thickness, and use of evaporator fan 
controls, among other reasons.
b. Impacts on Direct Employment
    In response to the October 2023 NOPR, Continental commented it may 
discontinue equipment, potentially affecting Continental employees, if 
the standards proposed in the October 2023 NOPR were implemented. 
(Continental, No. 86 at p. 6) AHRI commented that proposed standards in 
the October 2023 NOPR would force domestic manufacturers to exit the 
market, effectively lessening consumer choice. (AHRI, No. 81 at p. 15) 
NAMA commented that a large CRE manufacturer recently closed a factory 
and reduced company output, resulting in job loss. (NAMA, No. 85 at p. 
4)
    NAFEM added that the costs and complexity of adopting technology 
like variable-speed compressors would lead to cost and price increases, 
which in turn would impede the ability to compete against other 
equipment, particularly from foreign manufacturers who benefit from 
government subsidies. (NAFEM, No. 83 at p. 18) NAFEM commented its 
members continue to share their concerns about the substantial 
manufacturing costs and investments necessary to comply with the 
October 2023 NOPR. (Id. at p. 19)
    In response to the August 2024 NODA, Delfield commented that if 
standards reduce equipment offerings, manufacturers may reduce their 
workforce, negatively impacting local communities where manufacturers 
are major employers. (Delfield, No. 99 at p. 1)
    With respect to these comments, DOE notes that it analyzes the 
potential impacts to domestic manufacturing employment in section 
V.B.2.b of this document. DOE's direct employment analysis explores the 
potential reduction in employment under the standards cases (i.e., each 
TSL) relative to the estimated employment absent standards (i.e., the 
no-new-standards case). As discussed in section V.B.2.b of this 
document, DOE estimates that the potential change in domestic direct 
employment could range from -4,404 to -93 in 2029 at TSL 3. The upper

[[Page 7569]]

bound of domestic employment represents the potential change in 
domestic production and non-production workers if manufacturers 
continue to produce the same scope of CRE in the United States after 
compliance. The lower bound estimate conservatively assumes that some 
domestic manufacturing either is eliminated or moves abroad at more 
stringent efficiency levels. DOE estimates that approximately 77 
percent of CRE covered by this rulemaking are produced domestically. 
DOE notes that, compared to the October 2023 NOPR, the levels adopted 
are less stringent (in terms of percent energy use reduction from the 
analyzed baseline) for 22 out of the 28 directly analyzed equipment 
classes. These 22 equipment classes account for approximately 96 
percent of industry shipments covered by this final rule. In the 
October 2023 NOPR, DOE estimated that approximately 11 percent of CRE 
shipments would meet the proposed standards by 2028, a year before the 
analyzed compliance year. Comparatively, DOE estimates that 
approximately 49 percent of CRE shipments would meet the standards 
adopted in this final rule by the analyzed compliance date. Based on a 
review of its CCD and market research conducted in support of its 
direct employment analysis, DOE understands that a range of OEMs with 
domestic CRE manufacturing facilities already offer models that meet 
the efficiency levels adopted in this final rule. Specifically, DOE 
identified 30 OEMs with domestic manufacturing facilities that sell the 
five highest shipments volume equipment classes (VCS.SC.L, VCS.SC.M, 
VCT.RC.M, VCT.SC.L, and VCT.SC.M). Of those 30 OEMs, only 3 
manufacturers do not have any models that meet TSL 3. Approximately 
half of these 30 OEMs, including the largest CRE manufacturer (in terms 
of sales volume), currently make CRE exclusively in domestic production 
facilities.
c. Laboratory Resource Constraints
    In response to the October 2023 NOPR, NAFEM, Hoshizaki, SCC, 
Hillphoenix, Hussmann, and AHRI all expressed concerns that third-party 
laboratories already have backlogs and are experiencing delays, meaning 
that new and amended standards for CRE could exacerbate the issue and 
require more internal testing and third-party testing. (NAFEM, No. 83 
at pp. 12-13; Hoshizaki, No. 76 at p. 2; SCC, No. 74 at p. 1; 
Hillphoenix, No. 77 at p. 3; Hussmann, No. 80 at p. 1; AHRI, No. 81 at 
p. 2) SCC stated that there is a 3-to-6-month backlog at NRTLs from the 
October 2023 EPA Final Rule and UL safety standards. (SCC, No. 74 at p. 
1) SCC commented that estimates are up to several years just for 
certification of a manufacturer's full catalog, and testing for UL 
60335-2-89 will extend the time needed to test and comply for each CRE 
model family using new refrigerants. (Id. at pp. 1, 2)
    In response to the August 2024 NODA, Hussmann commented amendments 
to UL/CSA 60335-1 and 60335-2-89 requires critical resources, 
laboratory space, and time. Hussmann stated that these amendments would 
potentially extend UL approval time by up to 14 weeks. (Hussmann, No. 
108 at p. 2) In response to the October 2023 NOPR and August 2024 NODA, 
Hussmann commented that the backlog at NRTLs will lead to certification 
delays both for its equipment and components from its suppliers. 
(Hussmann, No. 80 at p. 1; Hussmann, No. 108 at p. 1) Hillphoenix 
stated that changes to CRE designs require OEMs to retest to standards 
from DOE, UL, NSF, ASHRAE, and AHRI. (Hillphoenix, No. 77 at p. 3) In 
response to the August 2024 NODA, Hillphoenix commented the industry is 
concerned with the availability of NRTLs to meet proposed standard, 
regulations from EPA AIM Act, and safety standard UL 60335-2-89, and 
manufacturers are using significant portions of engineering, supply 
chain resources, manufacturing, and marketing to meet regulations. 
(Hillphoenix, No. 110 at p. 2) In response to the October 2023 NOPR, 
Hoshizaki commented that the refrigerant changes required by 2026, 
energy conservation standards for ACIMs and CRE by 2027-2028, the new 
UL safety standard, and NSF sanitation testing for new ice-making 
systems will push its testing laboratories to capacity, requiring 
Hoshizaki to rely on third-party laboratories for safety testing. 
(Hoshizaki, No. 76 at p. 6)
    AHRI stated that manufacturers are currently switching to low-GWP 
refrigerants, and DOE rulemakings increase pressure on laboratory 
availability, testing capacity, and component availability. (AHRI, No. 
81 at p. 2) AHRI stated manufacturers are facing regulatory burdens of 
DOE rulemakings for ACIMs and WICFs, the October 2023 EPA Final Rule, 
UL 60335-89-2 and UL 60335-4-40 safety standards, and PFAS regulations, 
all of which constrain manufacturers' engineering resources, testing 
validation, verification time, and sourcing components, and constrain 
independent laboratory testing from low-GWP refrigerants. (Id. at pp. 
2, 5) AHRI further asserted that EPA and DOE rulemakings regulations 
pose a high risk for manufacturers to be unable to meet all 
requirements in the required timeframes. (Id. p. 2) AHRI commented that 
conversion of CRE to larger refrigerant charges over 150 grams is a 
significant, design-intensive process spanning multiple years and 
requiring project management, product management, industrial 
engineering, maintenance, quality, finance, marketing, design 
engineering, and compliance. (Id. at p. 14) AHRI commented that, as of 
September 29, 2024, new CRE can only be certified to UL 60335-2-89 and 
any significant equipment modifications for each model family must be 
certified to UL 60335-2-89--including to CRE using A2L refrigerant or 
an A3 refrigerant with charge larger than 150 grams. (Id. at pp. 2, 5) 
AHRI stated that manufacturers' third-party national laboratories for 
UL 60335-2-89 require special sensory equipment that will further limit 
laboratory capabilities and double the testing time of larger units. 
(Id. at p. 14) Specifically, AHRI commented that laboratory testing 
time for larger-charged units will double from less than 1 week to 
nearly 2 weeks, with additional testing required, including end-use 
lower-flammability limit component testing, annex CC testing, and 
vibration testing. (Id. pp. 14-15)
    Hoshizaki commented that UL safety standard 60335-2-89 requires 
extensive review of refrigeration equipment, which will increase 
testing and approval time for each model. (Hoshizaki, No. 76 at p. 2) 
Hoshizaki elaborated that manufacturers will need more testing 
equipment, testing time, and training for engineers. (Id.) Hoshizaki 
commented that changes to safety and energy testing have more than 
doubled the testing time for each model family as a result of UL safety 
standards, Intertek safety certification, and ASHRAE 29 and 72 
standards. (Id. at p. 6) Hoshizaki requested that DOE investigate if 
NRTLs are expanding to meet the higher testing demand for the use of 
flammable refrigerants. (Id.) Hoshizaki commented that manufacturers 
will need additional time to complete all the necessary testing 
involved for CRE that require redesign as a result of new and amended 
standards due to the existing ``backlog'' of third-party laboratories. 
(Id. at pp. 1-2) Hoshizaki commented that more than 100 of its CRE 
models will be affected by the energy conservation standards proposed 
in the October 2023 NOPR, and corresponding UL safety and NSF 
sanitation testing will be difficult or impossible to complete within 
the 3-year compliance period. (Id. at pp. 6-7)

[[Page 7570]]

In response to the August 2024 NODA, NAMA acknowledged DOE's assessment 
of the increased testing costs associated with new UL safety standards. 
(NAMA, No. 112 at p. 5) NAMA asserted that the cost of DOE testing for 
energy efficiency will increase noting that 2 units need to be tested. 
(Id at p. 6).
    Hussmann commented that compliance to UL 60335-2-89 uses critical 
resources, laboratory space, and time for new components and design 
modifications. (Hussmann, No. 80 at p. 2) Hussmann asserted that its 
testing laboratories and personnel are at capacity. (Id. at p. 1) In 
the October 2023 NOPR and August 2024 NODA, Hussmann commented 
manufacturers will commit 1 to 3 years of laboratory time and 
significant resource investment to test to UL standards when evaluating 
the performance of new A3 or A2L components from the October 2023 EPA 
Final Rule. (Id. at p. 2; Hussmann, No. 108 at p. 1) Hillphoenix 
commented that UL 60335-2-89 requires all new CRE to be certified if 
using most end-uses of A2Ls and larger charges or R-290, which requires 
more testing, equipment markings, instructions, and modifications to 
meet the safety requirements. (Hillphoenix, No. 77 at p. 3) Hillphoenix 
commented that UL 60335-2-89 requires significantly more testing 
potentially and substantial modifications to meet the safety 
requirements. (Id.) Hillphoenix commented that each time equipment 
changes, OEMs must retest to all of these regulations and specific test 
standards, and there is substantial industry concern over the 
availability of NRTLs to meet the evolving regulatory landscape. (Id.) 
Hillphoenix stated that a significant portion of engineering, supply 
chain, manufacturing, and marketing resources are being consumed just 
to meet these evolving regulations. (Id.)
    NAFEM commented that the standards proposed in the October 2023 
NOPR would require extensive testing for the CRE industry, which is 
problematic due to bottlenecks related to changing safety and 
environmental regulations at third-party testing laboratories. (NAFEM, 
No. 83 at p. 12)
    With respect to these comments, DOE understands that complying with 
concurrent EPA and DOE regulations, compounded by changes to UL safety 
standards and industry test standards, requires a significant amount of 
engineering and laboratory resources for CRE manufacturers. Regarding 
the redesign, testing, and certification required to develop CRE 
designs that comply with the October 2023 EPA Final Rule, DOE accounts 
for those refrigerant transition expenses incurred during the analysis 
period (2024 to 2058) in its MIA. DOE recognizes that many CRE 
manufacturers also manufacture WICFs and ACIMs, as shown in table V. in 
section V.B.2.e of this document. DOE notes that the compliance dates 
in the October 2023 EPA Final Rule are staggered for these equipment 
categories across multiple years, rather than having a single January 
1, 2025 compliance date as proposed in the December 2022 EPA NOPR. 
Staggering compliance dates could lessen potential bottlenecks in the 
transition to manufacture new equipment, such as testing and 
certification of equipment by an NRTL. See 88 FR 73098, 73133. For 
WICFs, the October 2023 EPA Final Rule established GWP restrictions for 
refrigeration systems with remote condensing units in retail food 
refrigeration systems and cold storage warehouses with less than 200 
pounds (``lbs'') of charge, effective January 1, 2026. See id. at 88 FR 
73209. The October 2023 EPA Final Rule established GWP restrictions for 
ACIMs effective January 1, 2026 or January 1, 2027, depending on the 
ACIM equipment category. See id. at 88 FR 73165. Regarding potential 
DOE standards for WICFs and ACIMs, DOE notes that it issued a final 
rule amending standards for WICFs on November 29, 2024, with compliance 
required for WICF refrigeration systems starting December 31, 2028 
(approximately 1 year later than what was proposed, see 88 FR 
60746).\135\ At this time, DOE has proposed but has not finalized new 
and amended standards for ACIMs. See 88 FR 30508. In this final rule, 
DOE is adopting a 4-year compliance period (modeled as a 2029 
compliance year), providing manufacturers an additional year compared 
to the October 2023 NOPR to complete the necessary testing and redesign 
needed to meet the adopted standards. As such, DOE expects that any 
energy conservation standards compliance dates for CRE, WICFs, and 
ACIMs (should DOE adopt more stringent standards) will be staggered.
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    \135\ At the time of issuance of this final rule, the WICFs 
final rule has been issued and is pending publication in the Federal 
Register. Once published, the final rule pertaining to WICFs will be 
available at: www.regulations.gov/docket/EERE-2017-BT-STD-0009.
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    Regarding stakeholders' comments on the increase in per-unit 
testing burden as a result of the transition to UL 60335-2-89, DOE 
updated its product conversion costs to reflect the increase in testing 
burden. As discussed in section IV.J.2.c of this document, DOE doubled 
the costs associated with testing and certifying to the new UL safety 
standard in response to written comments and secondary research.
d. Supply Chain
    In response to the October 2023 NOPR, NAMA asserted that DOE has 
not addressed the lack of available components in the supply chain. 
(NAMA, No. 85 at p. 15) Hoshizaki, Hussmann, and AHRI commented that 
manufacturers experience long lead times and shortages of components, 
including electronic controls, fan motors, compressors, sheet metal, 
and plastic resin. (Hoshizaki, No. 76 at pp. 5-6; Hussmann, No. 80 at 
p. 13; AHRI, No. 81 at pp. 12-13) Hussmann and AHRI commented that 
COVID-19 impacted the supply chain for computer chips and, while the 
situation is improving, shortages and long lead times for electrical 
components, materials, and parts remain. (Hussmann, No. 80 at p. 13; 
AHRI, No. 81 at pp. 12-13) In response to the August 2024 NODA, 
Hussmann commented that the industry faces supply chain issues related 
to A2L components, standard supply chain issues prevalent since COVID-
19, time constraints, resource constraints, and laboratory capacity 
limitations, and a learning curve to understand new baseline energy 
usage. (Hussmann, No. 108 at p. 2) In response to the October 2023 
NOPR, AHRI commented that supply chain issues for electrical components 
requires that CRE OEMs continually redesign equipment to adapt to new 
electronic controls. (AHRI, No. 81 at p. 13) AHRI added that 
manufacturers experience high component prices; uncertainty around PFAS 
regulations; long lead times for variable-speed compressors, variable-
speed fans, variable-speed drives, system controllers, and ECMs; 
electronic component redesign; backlogs for components to certify to 
both UL 60335-2-40 and UL 60335-2-89; time for sourcing alternative 
components; and additional reliability testing of new components. (Id.)
    Hussmann commented that electronic component shortages forced a 
supplier to discontinue several fan motors and assemblies, abandon 
adjustable-speed motors in ``Insight Merchandisers'',\136\ and source 
EEVs and case controllers, taking several months, which constrains 
engineering resources. (Hussmann, No. 80 at p. 13) Hussmann also 
commented that computer chips and controller shortages have resulted in 
$10,000 in

[[Page 7571]]

laboratory costs to conduct reliability testing, performance validation 
testing on CRE cases, and UL and NSF testing and validation. (Id. at 
pp. 1, 13) Hussmann stated that more shortages may occur if more 
controllers or computer chips are required to meet proposed standards, 
particularly if the United States imposes a ban on semi-conductors from 
China (Section 5949 of the National Defense Authorization Act). (Id. at 
p. 13)
---------------------------------------------------------------------------

    \136\ www.hussmann.com/en/products/display-cases/insight-merchandisers#p=48. (Last accessed October 8, 2024).
---------------------------------------------------------------------------

    In response to the August 2024 NODA, Delfield commented the 
proposed standards would have a significant impact on manufacturers in 
terms of testing, development, and overall business resources, which 
may negatively impact equipment availability. (Delfield, No. 99 at p. 
1) Delfield stated that if the supply chain is not equipped for all 
most manufacturers to move to new tooling and components, it could 
result in production delays. (Id.)
    In response to comments about supply chain issues, DOE notes that 
for the August 2024 NODA and this final rule, DOE updated its 
engineering analysis to incorporate up-to-date cost estimates. 
Increased costs associated with recent supply chain challenges stemming 
from the COVID-19 pandemic have been incorporated into the cost 
analysis by way of 5-year moving averages for materials and up-to-date 
costs for purchased parts. DOE expects manufacturers would most likely 
incorporate design options that require more electronic components 
(e.g., ECMs, variable-speed compressors) to meet the standards adopted 
in this final rule. However, based on the engineering and teardown 
analyses as well as comments from manufacturers (see AHRI, No. 81 at 
pp. 4-5; Delfield, No. 71 at p. 1; Hussmann, No. 80 at p. 10), DOE 
understands that the use of advanced electronics (e.g., EC fan motors 
and controls for fans) is already prevalent in the CRE industry. For 
this final rule, DOE expects that 10 directly analyzed equipment 
classes, which account for 50 percent of self-contained CRE shipments 
(approximately 43 percent of total industry shipments), would likely 
need to incorporate variable-speed compressors to meet TSL 3. However, 
for those 10 equipment classes, 30 percent of shipments already meet 
TSL 3 efficiencies. Additionally, as discussed in section III.A.2.a of 
this document, DOE is extending the compliance period from 3-years 
analyzed in the October 2023 NOPR to 4-years for this final rule. The 
4-year compliance period provides some economic and regulatory 
certainty to component suppliers and manufacturers, which eases supply 
constraints on components that manufacturers may need in order to meet 
the new and amended standards.
e. Cumulative Regulatory Burden
    In response to the October 2023 NOPR, AHRI appreciated that DOE 
recognizes the cumulative regulatory burden associated with regulatory 
initiatives of multiple Federal agencies and standards-setting bodies, 
which includes DOE energy conservation standards for CRE, WICF, and 
ACIM rulemakings occurring simultaneously with refrigerant regulation 
such as the October 2023 EPA Final Rule, and changes to UL safety 
standards, State regulations, etc. (AHRI, No. 81 at pp. 13-14) AHRI 
commented that all these regulatory actions entail costs, engineering 
design time, testing validation and verification time, establishment of 
new supply chains, and independent laboratory testing. (Id. at p. 14) 
AHRI commented also that DOE's proposed changes to medium electric 
motors and expanded-scope electric motors (``ESEMs'')--formerly named 
small non-small electric motors--in 2027 would also have an impact on 
CRE manufacturers and may require equipment changes to account for 
larger motors, additional testing, safety agency approval, backward 
compatibility for the replacement market, and cost increases for 
higher-efficiency motors. (Id.) AHRI stated that these factors make 
DOE's 3-year compliance period analyzed in the October 2023 NOPR 
infeasible, as meeting the standards would require substantial 
investment, resources, and innovation by manufacturers. (Id.) Hussmann 
commented that it incorporated by reference AHRI's comment that there 
is a cumulative regulatory burden associated with the October 2023 
NOPR. (Hussmann, No. 80 at p. 14) Hussmann similarly emphasized that 
the motors rulemakings could also impact CRE manufacturers. (Id.)
    Hoshizaki commented that ACIM and CRE regulations have converging 
compliance dates for new safety regulations, the refrigerant 
transition, and DOE energy conservation standards. (Hoshizaki, No. 76 
at p. 6) Hoshizaki added that industry is still trying to understand 
the scope of change needed for the transition to UL 60335-2-89, which 
is required for most commercial refrigeration categories starting in 
September 2024. (Id.) Hoshizaki commented that it is also tracking the 
development of chemical (e.g., PFAS) regulations. (Id. at p. 7)
    SCC similarly commented that the cumulative regulatory burden from 
EPA refrigerant regulations, new safety standards, DOE's ACIM and WICF 
energy conservation standards rulemakings, and PFAS reporting make it 
challenging to analyze and comply with these regulations within the 
required timeframes. (SCC, No. 74 at pp. 1, 4) SCC emphasized that each 
rulemaking requires significant engineering time, capital costs, 
testing validation, and independent laboratory certification. (Id. at 
p. 4) SCC commented that 3 years is an insufficient amount of time to 
comply with the standards proposed in the October 2023 NOPR, given the 
cumulative regulatory burden from overlapping rulemakings. (Id.)
    Hussmann highlighted that many State and local building codes 
prohibit the use of A2Ls and must be updated outside of the normal 
cycle of building code revisions, which commonly take 2 to 5 years to 
complete. (Hussmann, No. 80 at p. 2) Hussmann commented only eight 
States have updated their codes to allow A2L refrigerants in CRE, and 
more than 20 States and all U.S. territories have not yet passed 
legislation authorizing the use of A2L refrigerants for CRE. (Id.) 
Hussmann commented that manufacturers currently face uncertainty around 
the use of A2L but stated that AHRI is dedicating resources to allow 
A2Ls in CRE in all States and territories to allow A2Ls in building 
codes by mid-2024. (Id.; see also AHRI, No. 81 at p. 2) In response to 
the August 2024 NODA, NAMA requested that DOE consider the regulatory 
burden associated with changing State and local building codes. NAMA 
commented that National, State, and local building codes may not be 
finalized before the proposed compliance date for CRE. (NAMA, No. 112 
at pp. 4, 9) If building codes are not updated, NAMA asserted that 
manufacturers may build two versions of models with either R-290 
refrigerants or a blend of low-GWP refrigerants and higher-GWP 
refrigerants. (Id. at p. 4)
    In response to the October 2023 NOPR and August 2024 NODA, Hussmann 
commented that it faces simultaneous UL 60335-2-89, NSF, FDA, EPA, and 
DOE rulemakings, as well as issues related to A2L supply chain, other 
supply chain issues, time constraints, resource constraints, retooling 
costs, investments for R&D for CRE and walk-in refrigerators and 
freezers, and laboratory and capacity limitations. (Hussmann, No. 80 at 
p. 2 and Hussmann, No. 108 at p. 1) NAFEM commented that its members 
face overlapping regulations from Federal,

[[Page 7572]]

State, local, and industrial authorities: the October 2023 EPA Final 
Rule will have an impact on energy efficiency, UL 60335-2-89 will have 
a multi-year impact, equipment must meet NSF sanitation requirements, 
and all equipment must comply with ASHRAE safety requirements. (NAFEM, 
No. 83 at p. 16) NAFEM commented that many CRE manufacturers must also 
accommodate changes in ACIMs during a similar timeframe. (Id. at p. 13) 
NAMA commented the industry has experienced regulatory pressure for 5 
years, citing DOE's March 2014 Final Rule with compliance in 2017, new 
ENERGY STAR levels, State-level refrigerant regulations, COVID-19, 
inflation, and labor shortages for skilled workers. (NAMA, No. 85 at 
pp. 3-4) In response to the October 2023 NOPR and August 2024 NODA, 
NAMA commented that cumulative regulatory burden should include changes 
necessary to adhere to local and State building codes. (NAMA, No. 85 at 
p. 18 and NAMA, No. 112 at p. 7) NAMA stated California, Oregon, 
Washington, and other States have changed refrigerant regulations, 
including retiring HFC refrigerants. (NAMA, No. 85 at p. 17)
    With respect to comments regarding the regulatory burden, DOE 
recognizes that the CRE industry faces overlapping regulations from 
Federal, State, local, and industrial entities. DOE analyzes and 
considers the impact on manufacturers of multiple product/equipment-
specific Federal regulatory actions. DOE analyzes cumulative regulatory 
burden pursuant to section 13(g) of the Process Rule. 10 CFR 431.4; 10 
CFR 430, subpart C, appendix A, section 13(g). DOE notes that 
regulations not yet finalized (e.g., DOE energy conservation standards 
for ACIMs and BVMs) are not considered as cumulative regulatory burden, 
as the timing, cost, and impacts of unfinalized rules are speculative. 
However, to aid stakeholders in identifying potential cumulative 
regulatory burden, DOE does list rulemakings that have proposed rules 
with tentative compliance dates, compliance levels, and compliance cost 
estimates. The results of this analysis can be found in section V.B.2.e 
of this document. As shown in table V.67 in section V.B.2.e of this 
document, DOE considers the potential cumulative regulatory burden from 
other DOE energy conservation standards rulemakings for a range of DOE 
rulemakings, including WICFs, in this final rule analysis. DOE also 
considers the cost to comply with the October 2023 EPA Final Rule in 
its analysis. DOE estimates industry will need to invest $13.6 million 
in R&D and $17.7 million in capital expenditures to transition to low-
GWP refrigerants over the next 2 years.
    Regarding the comments about EPA's ENERGY STAR levels, DOE notes 
that participating in ENERGY STAR is voluntary and not considered in 
DOE's analysis of cumulative regulatory burden. Regarding the comments 
about updates to State and local building codes allowing A2L 
refrigerants in CRE, DOE understands that building codes can limit 
refrigerants available for use in certain end-uses, including CRE, 
based on their flammability, the charge size of the equipment, and 
other relevant safety factors. Building codes are established at the 
subnational level and can differ greatly across jurisdictions. DOE 
understands that, in some cases, jurisdictions still need to update 
their building codes for some substitutes to be available for certain 
uses. Subsection (i)(4)(B) of the AIM Act, codified at 42 U.S.C. 7675, 
directs EPA, to the extent practicable, to take building codes into 
account in its consideration of availability of substitutes when 
establishing refrigerant restrictions. As such, the October 2023 EPA 
Final Rule considered whether current building codes permit the 
installation and use of equipment and systems using substitutes, 
particularly with respect to setting compliance dates for refrigerant 
restrictions. As discussed in the October 2023 EPA Final Rule, EPA 
found it reasonable to consider that jurisdictions will prioritize 
completing the necessary updates with the October 2023 EPA Final Rule 
compliance dates in mind. 88 FR 73098, 73135-73136. For many 
subsectors, including remote condensing CRE equipment classes, the 
October 2023 EPA Final Rule provided additional time to comply with 
refrigerant restrictions as compared to the December 2022 EPA NOPR to 
enable jurisdictions to update their building codes or legislation 
accordingly. Id. at 88 FR 73136. DOE notes that the compliance dates 
detailed in the October 2023 EPA Final Rule for categories relevant to 
CRE are 2 to 4 years earlier than the compliance date for new and 
amended CRE energy conservation standards. As such, DOE anticipates 
that building codes should not impact a manufacturer's ability to 
transition to A2L refrigerants by the DOE compliance year. See section 
IV.C.1.a of this document for additional discussion on building codes.
    Regarding the ESEM proposed rule published on December 15, 2023, 
DOE expects that CRE covered by the ESEM rulemaking would not be 
directly impacted because the motors used in CRE are typically below 
0.25 horsepower, and, thus, are outside the scope of the ESEM 
rulemaking. See 88 FR 87062. Furthermore, as DOE did not identify any 
CRE manufacturers that also manufacture ESEMs, DOE did not include CRE 
manufacturers in the ESEM proposed rule in its cumulative regulatory 
burden analysis. Regarding potential PFAS regulations restricting the 
use of certain A2L refrigerants, DOE notes that EPA has not yet 
proposed any regulations concerning the use of PFAS in refrigerants. 
DOE notes that EPA's ``PFAS Strategic Roadmap'' sets timelines for 
specific actions and outlines EPA's commitments to new policies to 
safeguard public health, protect the environment, and hold polluters 
accountable.\137\
---------------------------------------------------------------------------

    \137\ U.S. Environmental Protection Agency, ``Per- and 
Polyfluoroalkyl Substances (PFAS).'' Available at: www.epa.gov/pfas 
(last accessed October 23, 2024).
---------------------------------------------------------------------------

    Regarding State refrigerant regulations, those transition costs are 
reflected in the refrigerant transition costs estimated in this final 
rule (see section V.B.2.e of this document). DOE notes that two States 
have established GWP limits for certain remote-condensing CRE that are 
lower (i.e., more restrictive) than the October 2023 EPA Final Rule for 
some CRE categories. Specifically, California and Washington prohibited 
refrigerants with a GWP of 150 or greater for new retail food 
refrigeration equipment containing more than 50 lbs refrigerant, which 
includes certain self-contained and remote-condensing CRE, as of 
January 1, 2022 in California \138\ and as of January 1, 2025 in the 
State of Washington.\139\ Because CRE connected to a remote condensing 
unit can be connected to multiple types of remote condensing systems 
with varying refrigerant charge sizes (e.g., dedicated condensing unit 
or compressor rack system), and State regulations align with the most 
restrictive GWP limit in the October 2023 EPA Final Rule for CRE, DOE 
does not expect that individual State refrigerant regulations would 
further contribute to refrigerant transition costs beyond what was 
assessed for the October 2023 EPA Final Rule for the equipment covered 
by this final rule. DOE is already basing its engineering analysis on 
the most restrictive GWP

[[Page 7573]]

limit (i.e., 150 GWP) to account for the potential variation in remote 
condensing system refrigerant charge sizes.
---------------------------------------------------------------------------

    \138\ California Air Resource Board, ``California Significant 
New Alternatives Policy (SNAP).'' Available at ww2.arb.ca.gov/our-work/programs/california-significant-new-alternatives-policy-snap/retail-food-refrigeration (last accessed May 23, 2024).
    \139\ State of Washington Department of Ecology, WAC 173-443-
040. Available at app.leg.wa.gov/WAC/default.aspx?cite=173-443-040 
(last accessed May 23, 2024).
---------------------------------------------------------------------------

    In response to the October 2023 NOPR and August 2024 NODA, NAMA 
commented that DOE should investigate the cumulative burden of the 
ongoing BVM rulemaking and combine the costs of compliance with 
multiple regulations into the product conversion costs and GRIM 
spreadsheets to reflect the costs of responding to and monitoring 
regulations. (NAMA, No. 85 at pp. 17-18; NAMA, No. 112 at p. 8) NAMA 
added the GRIM does not show recoupment of investments from multiple 
product regulations within the six-year lock-in period and recommends 
DOE consolidate analysis for multiple regulations. (NAMA, No. 112 at p. 
8)
    Regarding incorporating the combined product conversion costs from 
the BVM rulemaking into the CRE GRIM (and vice versa), DOE is concerned 
that combined results would make it more difficult to discern the 
direct impact of a new or amended standard on covered manufacturers, 
particularly for rulemakings where there is only partial overlap of 
manufacturers, which is the case for BVMs and CRE. The GRIM prepared 
for this rulemaking is specific to the CRE industry. Inputs to the GRIM 
such as annual shipments, production costs, conversion costs, cost 
structure, discount rate, etc., reflect the CRE industry. As such, MIA 
results only encompass industry revenue and annual cash flow associated 
with shipments of CRE covered by this specific rulemaking. If DOE were 
to combine the conversion costs from multiple regulations into the CRE 
GRIM, as requested, it would be appropriate to also include the 
combined revenues of the relevant regulated products or equipment. For 
rulemakings with only a partial overlap of manufacturers, conversion 
costs would be spread over a larger revenue base and result in less 
severe INPV impacts when evaluated on a percent change basis. For 
instance, of the 5 BVM manufacturers and of the 103 CRE manufacturers, 
only 1 manufacturer makes both BVMs and CRE.
    In response to the October 2023 NOPR, Zero Zone expressed concern 
about the third segment of the AIM Act, which regards managing HFC use 
and reuse. (Zero Zone, No. 75 at p. 1) Zero Zone commented that this 
proposed regulation has requirements for leak detection and repair that 
would increase the purchase and operating cost of refrigerating 
equipment, and the phasedown of HFC refrigerant will increase the cost 
of equipment for stores. (Id.) Zero Zone commented that those cost 
changes in addition to the costs of design changes to meet the proposed 
energy conservation standard will reduce overall industry sales volume, 
which would be detrimental to manufacturers. (Id.)
    On October 19, 2023, EPA published a proposed rule in the Federal 
Register to address and control certain activities regarding the 
servicing, repair, disposal, or installation of equipment that involves 
HFCs or their substitutes. 88 FR 72216. On October 11, 2024, EPA 
finalized its proposed rule. 89 FR 82682. DOE anticipates that EPA's 
rule may necessitate additional components or design changes (e.g., 
automatic leak detection) in certain CRE covered by this rulemaking. 
Zero Zone's comment did not quantify the increase in cost to CRE within 
the scope of this final rule. However, DOE expects that any costs 
associated with complying with EPA's rule would apply to relevant CRE 
models at all efficiency levels regardless of the energy conservation 
standard adopted in this final rule. Because the cost impacts from 
EPA's rule are not efficiency-related costs but rather would be 
incurred due to EPA requirements that are applicable at all efficiency 
levels, DOE has not considered the impacts of these changes on MPCs in 
this final rule. See section IV.C.2 of this document for additional 
information on DOE's cost analysis.
f. Refrigerant Transition
    In response to the October 2023 NOPR, NAFEM commented that the 
October 2023 NOPR fundamentally ignores the context of other 
significant changes impacting the CRE industry at this time. (NAFEM, 
No. 83 at p. 16) NAFEM commented that DOE is not accounting for the 
significant capital and other investments that were made, and continue 
to be made, in the shift to new refrigerants under the AIM Act. (Id. at 
p. 15) NAFEM asserted that DOE's analysis does not account for 
manufacturers trying to recover the costs of these substantial 
investments made to comply with the October 2023 EPA Final Rule. (Id.) 
NAFEM commented that, contrary to the information in the October 2023 
NOPR, the changeover to natural refrigerants is underway but not 
complete in the CRE industry, mostly because necessary capital 
improvements are extremely expensive, far more than those listed in the 
October 2023 NOPR TSD. (Id.)
    AHRI commented that manufacturers have delayed their refrigerant 
transition due to COVID-19, component shortages, and long lead times. 
(AHRI, No. 81 at p. 8) AHRI stated that equipment designs will be 
impacted by the October 2023 EPA Final rule, which will go into effect 
in 2025 for self-contained equipment classes and 2026 or 2027 for 
remote condensing equipment classes. (Id.) AHRI commented that DOE did 
not include any increase in capital costs for the conversion from R-
404A to R-290 refrigerant in the baseline assessment. (AHRI, No. 81 at 
p. 7)
    In response to both the October 2023 NOPR and August 2024 NODA, 
NAMA commented that the CRE industry is burdened by the ongoing 
transition to low-GWP refrigerants and new safety standards, which 
require capital improvements to factories, changes to service, and 
training of factory employees. (NAMA, No. 85 at p. 4; NAMA, No. 112 at 
p. 5) In particular, NAMA commented that DOE underestimated the capital 
costs associated with transitioning to low-GWP refrigerants. (Id. at 
pp. 4, 8) NAMA commented also that while the October 2023 NOPR TSD 
acknowledges the need to change multiple components, the product and 
capital costs shown are far below what manufacturers must incur to 
fully implement the use of A3 refrigerants. (NAMA, No. 85 at pp. 7-8)
    NAMA stated that the costs of converting to alternative, low-GWP 
refrigerants has cost millions of dollars for its members, which has 
been particularly challenging since sales have been down and labor and 
materials costs have increased. (NAMA, No. 85 at p. 35) NAMA stated its 
belief that the cost of the refrigerant transition has diverted 
business resources. (Id. at p. 3) NAMA asserted that the cost of the 
refrigerant transition is higher than the estimated amount in the 
October 2023 NOPR TSD, especially due to current interest rates, which 
increase the cost of short-term and long-term borrowing. (Id.) NAMA 
commented that new or amended energy conservation standards from DOE 
would increase the time to transition CRE to low-GWP refrigerants due 
to supply chain issues and limited staffing for some manufacturers. 
(Id. at p. 8)
    In response to the October 2023 NOPR and August 2024 NODA, Hussmann 
commented that complying with the October 2023 EPA Final rule 
necessitates changes to its manufacturing processes, retooling of 
equipment, and R&D investment. (Hussmann, No. 80 at p. 1; Hussmann No. 
108 at p. 1) Hussmann commented that there are supply chain constraints 
surrounding sourcing components for CRE using A2L refrigerants since 
components are pending third-party regulatory compliance. (Id.) 
Hussmann stated that because A2L components are

[[Page 7574]]

new, components must be purchased, designed, installed in models, and 
undergo performance and safety validation. (Id.) Hussmann stated A2L 
components also require UL certification. (Hussmann, No. 108 at p. 1) 
Hussmann commented that its costs of transitioning one factory to low-
GWP refrigerants included: $700,000 for engineering resources, $500,000 
in testing, $600,000 in laboratory equipment, $10,000 in certification 
costs, $300,000 in manufacturing efforts for self-contained equipment, 
and $500,000 for manufacturing equipment for self-contained equipment. 
(Hussmann, No. 80 at p. 15) In response to the August 2024 NODA, the CA 
IOUs agreed with DOE's analysis that manufacturer R&D costs will 
increase due to the revised compliance dates for CRE from the October 
2023 EPA final rule. (CA IOUs, No. 113 at p. 2)
    In response to the comments from NAFEM, AHRI, NAMA, the CA IOUs and 
Hussmann, DOE recognizes that redesigning CRE models to comply with 
EPA's refrigerant regulation and DOE's new and amended energy 
conservation standards requires significant engineering resources and 
capital investment. DOE analyzed the potential impacts of the December 
2022 EPA NOPR in its October 2023 NOPR. Based on the December 2022 EPA 
NOPR, DOE modeled the CRE industry transitioning to low-GWP 
refrigerants prior to EPA's proposed January 1, 2025 compliance date. 
However, EPA has since finalized refrigerant restrictions affecting CRE 
(i.e., the October 2023 EPA Final rule). The October 2023 EPA Final 
rule prohibits the manufacture or import of self-contained CRE with 
HFCs and HFC blends with GWPs of 150 or greater starting January 1, 
2025 (for the CRE covered by this rulemaking). For other CRE covered by 
this rulemaking, the October 2023 EPA Final rule adopted later 
compliance dates of January 1, 2026 or January 1, 2027 based on 
equipment type.
    DOE notes that it accounts for industry refrigerant transition 
expenses in its GRIM in the no-new-standards case and standards cases 
because investments required to transition to low-GWP refrigerants in 
response to the October 2023 EPA Final Rule likely necessitates a level 
of investment beyond typical annual R&D and capital expenditures. DOE 
incorporates these expenses into its GRIM as part of the analytical 
baseline to better reflect the state of industry finances and annual 
cash flow. For the October 2023 NOPR, DOE relied on a range of sources, 
including feedback gathered during confidential manufacturer interviews 
and investment estimates submitted by NAMA and AHRI in response to the 
June 2022 Preliminary Analysis. In response to written comments to the 
October 2023 NOPR, DOE revised its refrigerant transition R&D estimates 
(see Hussmann, No. 80 at p. 15). DOE did not revise its estimates of 
refrigerant transition capital expenditures as stakeholder feedback 
aligned with the methodology used in the October 2023 NOPR. Based on 
these sources, DOE modeled the transition to low-GWP refrigerants would 
require industry to invest approximately $13.6 million in R&D and $17.7 
million in capital expenditures (e.g., investments in new charging 
equipment, leak detection systems, etc.) from 2024 (the final rule 
reference year) and 2027 (the latest EPA compliance date for CRE 
covered by this rulemaking). However, DOE acknowledges that many 
manufacturers have made significant investments to transition to low-
GWP refrigerants prior to 2024, which would not reflected in the GRIM 
as those costs were incurred outside of the analysis period for this 
rulemaking (2024-2058). See section V.B.2.e of this document for 
additional discussion of how DOE accounts for cumulative regulatory 
burden in its analysis. DOE incorporated the potential redesign costs 
(i.e., product conversion costs) and capital investment (i.e., capital 
conversion costs) needed to meet various standard levels in its MIA. 
See section IV.J.2.c of this document for additional discussion of 
conversion costs.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional GHG, CH4 and N2O, as 
well as the reductions in emissions of other gases due to ``upstream'' 
activities in the fuel production chain. These upstream activities 
comprise extraction, processing, and transporting fuels to the site of 
combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions intended to 
represent the marginal impacts of the change in electricity consumption 
associated with amended or new standards. The methodology is based on 
results published for the AEO, including a set of side cases that 
implement a variety of efficiency-related policies. The methodology is 
described in appendix 13A in the final rule TSD. The analysis presented 
in this document uses projections from AEO2023. Power sector emissions 
of CH4 and N2O from fuel combustion are estimated 
using Emission Factors for Greenhouse Gas Inventories published by 
EPA.\140\
---------------------------------------------------------------------------

    \140\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 22, 
2024).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the final rule TSD.
    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. For power sector 
emissions, specific emissions intensity factors are calculated by 
sector and end use. Total emissions reductions are estimated using the 
energy savings calculated in the NIA.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the emissions control programs discussed in the following 
paragraphs the emissions control programs discussed in the following 
paragraphs, and the Inflation Reduction Act.\141\
---------------------------------------------------------------------------

    \141\ For further information, see the ``Assumptions to 
AEO2023'' report that sets forth the major assumptions used to 
generate the projections in the Annual Energy Outlook. Available at 
www.eia.gov/outlooks/aeo/assumptions/ (last accessed July 20, 2024).
---------------------------------------------------------------------------

    SO2 emissions from affected electric generating units 
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions 
cap on SO2 for affected EGUs in the 48 contiguous States and 
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.) 
SO2 emissions from numerous States in the eastern half of 
the United States are also limited under the Cross-State Air Pollution 
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these 
States to reduce certain emissions, including annual SO2 
emissions, and went into effect as of January 1, 2015.\142\ The AEO

[[Page 7575]]

incorporates implementation of CSAPR, including the update to the CSAPR 
ozone season program emission budgets and target dates issued in 2016. 
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among 
EGUs and is enforced through the use of tradable emissions allowances. 
Under existing EPA regulations, for States subject to SO2 
emissions limits under CSAPR, any excess SO2 emissions 
allowances resulting from the lower electricity demand caused by the 
adoption of an efficiency standard could be used to permit offsetting 
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------

    \142\ CSAPR requires States to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (``PM2.5'') pollution, in order 
to address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain States to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five States in the 
CSAPR ozone season program, 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants.\143\ 77 FR 9304 (Feb. 16, 2012). The final rule 
establishes power plant emission standards for mercury, acid gases, and 
non-mercury metallic toxic pollutants. Because of the emissions 
reductions under the MATS, it is unlikely that excess SO2 
emissions allowances resulting from the lower electricity demand would 
be needed or used to permit offsetting increases in SO2 
emissions by another regulated EGU. Therefore, energy conservation 
standards that decrease electricity generation will generally reduce 
SO2 emissions. DOE estimated SO2 emissions 
reduction using emissions factors based on AEO2023.
---------------------------------------------------------------------------

    \143\ In order to continue operating, coal power plants must 
have either flue gas desulfurization or dry sorbent injection 
systems installed. Both technologies, which are used to reduce acid 
gas emissions, also reduce SO2 emissions.
---------------------------------------------------------------------------

    CSAPR also established limits on NOX emissions for 
numerous States in the eastern half of the United States. Energy 
conservation standards would have little effect on NOX 
emissions in those States covered by CSAPR emissions limits if excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions from other EGUs. In such cases, NOX 
emissions would remain near the limit even if electricity generation 
goes down. Depending on the configuration of the power sector in the 
different regions and the need for allowances, however, NOX 
emissions might not remain at the limit in the case of lower 
electricity demand. That would mean that standards might reduce 
NOX emissions in covered States. Despite this possibility, 
DOE has chosen to be conservative in its analysis and has maintained 
the assumption that standards will not reduce NOX emissions 
in States covered by CSAPR. Standards would be expected to reduce 
NOX emissions in the States not covered by CSAPR. DOE used 
AEO2023 data to derive NOX emissions factors for the group 
of States not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this final rule, for the purpose of 
complying with the requirements of Executive Order 12866, DOE 
considered the estimated monetary benefits from the reduced emissions 
of CO2, CH4, N2O, NOX, and 
SO2 that are expected to result from each of the TSLs 
considered. In order to make this calculation analogous to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of equipment shipped 
during the projection period for each TSL. This section summarizes the 
basis for the values used for monetizing the emissions benefits and 
presents the values considered in this final rule.
1. Monetization of Greenhouse Gas Emissions
    To monetize the climate benefits of reducing GHG emissions, the 
October 2023 NOPR used the interim social cost of greenhouse gases 
(``SC-GHG'') estimates presented in the Technical Support Document: 
Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates 
Under Executive Order 13990 published in February 2021 by the 
Interagency Working Group on the SC-GHG (``IWG'') (``2021 Interim SC-
GHG estimates''). As a member of the IWG involved in the development of 
the February 2021 SC-GHG TSD, DOE agreed that the 2021 interim SC-GHG 
estimates represented the most appropriate estimate of the SC-GHG until 
revised estimates were developed reflecting the latest, peer-reviewed 
science. See 87 FR 78382, (Dec. 21, 2022) 78406-78408 for discussion of 
the development and details of the 2021 interim SC-GHG estimates. The 
IWG has continued working on updating the interim estimates but has not 
published final estimates.
    Accordingly, in the regulatory analysis of its December 2023 Final 
Rule, ``Standards of Performance for New, Reconstructed, and Modified 
Sources and Emissions Guidelines for Existing Sources: Oil and Natural 
Gas Sector Climate Review,'' the Environmental Protection Agency 
(``EPA'') estimated climate benefits using a new, updated set of SC-GHG 
estimates (``2023 SC-GHG estimates''). EPA documented the methodology 
underlying the new estimates in the RIA for the December 2023 Final 
Rule and in greater detail in a technical report entitled ``Report on 
the Social Cost of Greenhouse Gases: Estimates Incorporating Recent 
Scientific Advances'' (``Final Report'') that was presented as 
Supplementary Material to the RIA. The 2023 SC-GHG estimates address 
the recommendations of the National Academies of Science, Engineering, 
and Medicine (National Academies) by incorporating recent research and 
responses to public comments. The public comments include those on an 
earlier sensitivity analysis contained in EPA's December 2022 proposal 
in the oil and natural gas sector standards of performance rulemaking 
along with comments on a 2023 external peer review of the accompanying 
technical report.
    On December 22, 2023, the IWG issued a memorandum directing that 
when agencies ``consider applying the SC-GHG in various contexts . . . 
agencies should use their professional judgment to determine which 
estimates of the SC-GHG reflect the best available evidence, are most 
appropriate for particular analytical contexts, and best facilitate 
sound decision-making'' consistent with OMB Circular A-4 and applicable 
law.
    DOE has been extensively involved in the IWG process and related 
work on the SC-GHGs for over a decade. This involvement includes DOE's 
role as the Federal technical monitor for the seminal 2017 report on 
the SC-GHG issued by the National Academies, which provided extensive 
recommendations on how to strengthen and update the SC-GHG estimates. 
DOE has also participated in the IWG's work since 2021. DOE technical 
experts involved in this work reviewed the 2023 SC-GHG methodology and 
report in light of the National Academies' recommendations and DOE's

[[Page 7576]]

understanding of the state of the science.
    Based on this review, in the August 2024 NODA, DOE proposed for 
public comment its preliminary determination that the updated 2023 SC-
GHG estimates, including the approach to discounting, represent a 
significant improvement in estimating the SC-GHG through incorporating 
the most recent advancements in the scientific literature and by 
addressing recommendations on prior methodologies. That NODA presented 
climate benefits using both the 2023 SC-GHG estimates and the 2021 
interim SC-GHG estimates. In this final rule, DOE has not made a final 
decision regarding that preliminary assessment or adoption of the 
updated 2023 SC-GHG estimates, as such a decision is not necessary for 
purposes of this rule. In this final rule, DOE is presenting estimates 
using both the updated 2023 SC-GHG values and the 2021 interim SC-GHG 
estimates, as DOE believes it is appropriate to give the public more 
complete information regarding the benefits of this rule. DOE notes, 
however, that the adopted standards would be economically justified 
using either set of SC-GHG values, and even without inclusion of the 
estimated monetized benefits of reduced GHG emissions. In future 
rulemakings, DOE will continue to evaluate the applicability in context 
and use our professional judgment to apply the SC-GHG estimates that 
are most appropriate to use at that time.
    The 2023 EPA technical report presents SC-GHG values for emissions 
years through 2080; therefore, DOE did not monetize the climate 
benefits of GHG emissions reductions occurring after 2080 when using 
the 2023 estimates for the SC-GHG. DOE expects additional climate 
impacts to accrue from GHG emissions changes post 2080, but due to a 
lack of readily available SC-GHG estimates for emissions years beyond 
2080 and the relatively small emission effects expected from those 
years, DOE has not monetized these additional impacts in this analysis. 
Similarly, the 2021 interim SC-GHG estimates include values through 
2070. DOE expects additional climate benefits to accrue for products 
still operating after 2070, but a lack of available SC-GHG estimates 
published by the IWG for emissions years beyond 2070 prevents DOE from 
monetizing these potential benefits in this analysis.
    The overall climate benefits are generally greater when using the 
higher, updated 2023 SC-GHG estimates, compared to the climate benefits 
using the older 2021 interim SC-GHG estimates, which were used in the 
July 2023 NOPR. The net benefits of the rule are positive, however, 
under either SC-GHG calculation methodology; in fact, the net benefits 
of the rule are positive without including any monetized climate 
benefits at all. The adopted standards would be economically justified 
even without inclusion of the estimated monetized benefits of reduced 
GHG emissions using either methodology, therefore the conclusions of 
the analysis (as presented in section V.C of this document) are not 
dependent on which set of estimates of the SC-GHG are used in the 
analysis or on the use of the SC-GHG at all. The adopted standard level 
would remain the same under either SC-GHG calculation methodology (or 
without using the SC-GHG at all).
    DOE received several comments regarding its preliminary 
determination on the use of the 2023 SC-GHG methodologies in the August 
2024 NODA. As noted above, DOE is not making a final determination 
regarding which of the two sets of SC-GHG is most appropriate to apply 
here. Accordingly, DOE is not addressing in this rule comments 
regarding such a final determination. Because DOE is presenting results 
using both sets of estimates, however, to the extent that commenters 
raised concerns about any reference to the 2023 SC-GHG methodologies, 
DOE is responding to that limited set of comments here.
    Commenter Pacific Gas & Electric (PG&E) et al. expressed support 
for the 2023 update on SC-GHG methodologies and for use of these 
estimates in DOE policy analysis. (PG&E et al., No. 113 at p. 2). PG&E 
et al. stated that the use of the 2023 SC-GHG methodologies is 
consistent with the Office of Management and Budget (OMB) 
recommendations to use the best and most recent available estimates for 
calculating the social cost of carbon. (PG&E et al., No. 113 at p. 2).
    Commenters Hussman Corporation, American Lighting Association (ALA) 
et al., Competitive Enterprise Institute (CEI), and National 
Association of Home Builders (NAHB) expressed general opposition to the 
use of a metric that monetizes carbon emissions, and they criticized 
especially the use of the 2023 SC-GHG methodologies. (Hussman 
Corporation, No. 108 at p. 3; ALA et al., No. 109 at p. 2; NAHB, No. 
103 at p. 4). NAHB stated that, ``the monetized value of [SC-GHG] is 
highly esoteric, is not tied to tangible outcomes, and will not lead to 
real change intended in the EERE mission and priorities.'' NAHB further 
requested that DOE limits its use of SC-GHG in the future and not use 
it as a metric for setting minimum efficiency criteria. (NAHB, No. 103 
at p. 4) Commenter (CEI) stated that SC-GHG is not a valid approach to 
monetizing impacts from emissions.
    DOE acknowledges the comments expressing general opposition to the 
2023 SC-GHG methodologies and their use in these policy analyses. In 
this final rule, DOE is presenting SC-GHG results using both the 
interim 2021 SC-GHG estimates and the updated 2023 SC-GHG estimates. 
DOE notes again that it would promulgate the same standards in these 
final rules even in the absence of the benefits of the GHG reductions 
achieved by the rule.
    Some commenters (NAHB, ALA, et al., and the U.S. Chamber of 
Commerce et al.) argued that there is a significant lack of clarity as 
to how the methodology was applied and how the results were produced. 
Overall, commenters requested more transparency within the modeling 
process. Commenter (ALA et al.) affirmed that it may be appropriate for 
DOE to examine the SC-GHG and monetization of other emissions 
reductions benefits as informational if the underlying analysis is 
transparent and vigorous and reviewed by properly qualified peer 
reviewers. However, ALA maintained that the benefits calculated with 
the SC-GHG should not be used to justify a rule given the uncertain and 
ever-evolving nature of those estimates. (ALA et al., No. 109 at pp. 3-
4)
    Commenter (U.S. Chamber of Commerce et al.) stated that the 
December 22, 2023, IWG memo ``lacked any discussion of the 
methodologies, assumptions, or models used by the EPA in revising the 
estimates.'' U.S. Chamber of Commerce further criticized that while EPA 
provided some technical documentation in support of its new SG-GHG 
estimates, the overall lack of transparency within the decision-making 
process undermines the credibility of the estimates. The group also 
stated that the IWG memo does not direct agencies which values to use, 
allowing agencies to use any estimate, which would lead to inconsistent 
use of the SC-GHG estimates across the government. (U.S. Chamber of 
Commerce et al., No. 115 at p. 3)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address the 
substance of these comments insofar as they assess the relative merits 
of the two sets of estimates. Insofar as these comments object to DOE 
even referring to the 2023 SC-GHG estimates and using them for 
informational purposes, DOE notes that

[[Page 7577]]

EPA made documentation available in support of the draft updated 2023 
SC-GHG estimates used in the sensitivity analysis in EPA's December 
2022 Regulatory Impact Analysis, as well as in support of the final 
updated SC-GHG estimates used in EPA's Dec. 2023 Final Rule. This 
includes the final technical report explaining the methodology 
underlying the new set of SC-GHG estimates, files to support 
independent replication of the SC-GHG estimates, a workbook to support 
members of the public in applying the SC-GHG estimates in their own 
analyses, public comments relating to SC-GHG estimates as part of the 
December 2022 RIA, EPA responses to those public comments, and 
extensive documentation on the peer review process, including 
information about the public input opportunities in the peer review 
panel selection process, the selected peer reviewers, a recording of 
the peer review meeting, the peer reviewers' report, and EPA's 
responses to the peer reviewers' report. EPA additionally provided 
copies of all studies and reports cited in the analysis in the public 
docket. (EPA RTC A-7-4).
    Regarding commenter's concerns regarding IWG's lack of discussion 
of the 2023 SC-GHG methodologies, insofar as this comment objects to 
DOE even referring to the 2023 SC-GHG estimates and using them for 
informational purposes, DOE notes that the methodologies were not 
introduced in the IWG memo, but rather in an EPA proposed and final 
rule and a Final Report. The IWG's lack of discussion does not appear 
to be relevant.
    With respect to the commenter's concern about the potential for 
different agencies to use different and therefore inconsistent 
estimates of the SC-GHG, this comment is not directly relevant because 
DOE is presenting both the 2021 interim SC-GHG estimates and the 2023 
SC-GHG estimates for this rule.
    Several commenters (CEI, AHRI, and U.S. Chamber of Commerce et al.) 
questioned the accuracy of the estimates produced by the 2023 SC-GHG 
methodologies and called attention to uncertainties in the calculation 
process. Commenters argue that due to what they view as substantial 
inaccuracies and uncertainties in the methodologies, they should not be 
used to justify new and more stringent energy conservation standards. 
Commenter (CEI) criticizes the 2023 SC-GHG methodologies as ``too 
speculative, too prone to user manipulation, and too reliant on dubious 
assumptions to either justify regulatory decisions or estimate their 
net benefits to the public.'' (CEI1, No. 100 at p. 2; CEI2, No. 102 at 
p. 10)
    Commenter (AHRI) stated that the methodology fails to acknowledge 
uncertainties and extrapolations regarding the climate modeling and 
interaction of the four modules. Additionally, AHRI criticized the 
quantification of the benefits claimed by DOE as ``speculative and 
tangential at best.'' (AHRI, No. 104 at p. 2)
    Commenter (U.S. Chamber of Commerce et al.) identified the 
scientific underpinnings of the methodologies as a key area of concern. 
The U.S. Chamber of Commerce claimed that the SC-GHG values are 
``inherently uncertain because they depend on complex modeling of 
future economic and environmental impacts--and not just near-term 
forecasts, but forecasts that project hundreds of years into the 
future.'' (U.S. Chamber of Commerce et al., No. 115 at p. 4)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address 
comments on the uncertainty in the 2023 SC-GHG estimates insofar as 
they assess the relative merits of the two sets of estimates. Insofar 
as these comments object to DOE even referring to the 2023 SC-GHG 
estimates and using them for informational purposes, DOE notes that 
some measure of uncertainty is inherent in all complex cost estimates 
that quantify physical impacts and translate them into dollar values. 
Moreover, DOE notes that EPA discussed the uncertainty in various 
aspects of the 2023 SC-GHG estimates, including how it is directly 
accounted for in each of the modules, in the Final SC-GHG Report, and 
pointed to discussions of uncertainty in the supporting academic 
literature. (See, e.g., EPA Report at p. 77; EPA RTC A-1-7). EPA 
discussed factors not accounted for in the SC-GHG, such as those 
represented in table 3.2.1, explicitly acknowledged that there are 
limits on which damages and impacts the analysis can capture due to 
data and modeling limitations, and analyzed the omitted damages and 
modeling limitations, including the net directional changes of the 
omitted impacts.
    Commenter (CEI) criticized the EPA report's lack of ``table, chart, 
or paragraph explaining which factors contribute what percentage of the 
more than threefold increase in social cost--despite the more than two-
thirds reduction in emission baselines.'' CEI noted that the reduced 
discount rate is one factor, but not the entire explanation for the 
increase in SC-GHG values. (CEI2, No. 102 at p. 8)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address the 
substance of this comment insofar as it calls for a comparison of the 
relative merits between the two sets of estimates. For informational 
purposes, DOE notes that EPA stated in the Final Report that the 
increases in the 2023 SC-GHG estimates are due to the combined effect 
of multiple methodological updates, and because some of these updates 
are integrated, a complete decomposition of the incremental 
contribution of each change is difficult for all three damage functions 
used in the damage module. (EPA Report at p. 102; EPA RTC A-5-25).
    Multiple commenters (National Automatic Merchandising Association 
(NAMA) and U.S. Chamber of Commerce et al.) raised concerns about 
whether the new methodologies were sufficiently peer-reviewed by 
independent experts before DOE utilized them in its analyses. Commenter 
(NAMA) argued that the updated SC-GHG methodologies deserve an ``open 
discussion'' with increased transparency before they are used in 
regulatory action. NAMA specifically claimed that ``the updated IWG 
report'' that the DOE cites in its analyses was never fully peer-
reviewed and was not part of an open process. (NAMA, No. 112 at p. 4) 
Commenter (U.S. Chamber of Commerce et al.) similarly criticized the 
IWG's lack of transparency and stated that it undermined the 
credibility of the updated methodologies and raised questions as to 
whether the estimates were subject to appropriate scrutiny and review. 
(U.S. Chamber of Commerce et al., No. 115 at pp. 2-3)
    Insofar as commenters were referring to the EPA report--and further 
insofar as this comment objects to DOE even referring to the 2023 SC-
GHG estimates and using them for informational purposes--DOE notes that 
these commenters referred to the SC-GHG methodologies ``in the IWG 
report,'' but DOE is not aware of any report by the IWG concerning the 
2023 SC-GHG estimates. There is a December 2023 IWG memo referencing 
developments in the scientific literature, as well as a February 2021 
IWG Technical Support Document that provided Interim SC-GHG estimates, 
but the December 2023 memo does not introduce any new methodologies. 
The 2023 SC-GHG estimates were not introduced in the IWG memo but 
rather in an EPA rule and Final Report.

[[Page 7578]]

    EPA stated that the 2023 SC-GHG methodologies were subjected to 
independent peer review in line with EPA's Peer Review Handbook 4th 
Edition, 2015 and described the process. (EPA RTC A-7-10).
    Several commenters (CEI, NAHB, AHRI, U.S. Chamber of Commerce et 
al., and American Enterprise Institute (AEI)) raised concerns with the 
discount rates employed in the 2023 SC-GHG methodologies and the 
substantial consequences of utilizing such rates. Commenters (CEI, 
NAHB, and AEI) criticized the disproportionate impact that the choice 
of a lower discount rate had on the end SC-GHG estimates. Commenter 
(AEI) specifically denounced the ``artificially low'' rates and 
maintained that the rates are a result of prioritizing only climate 
effects and not wealth aggregation, which would more realistically 
reflect the objectives of each generation. (CEI2, No. 102 at p. 9; 
NAHB, No. 103 at p. 4; AEI at pp. 8-9) Commenters (AHRI and U.S. 
Chamber of Commerce et al.) further criticized the rate choices in the 
methodologies as inconsistent throughout the cost-benefit analysis. 
Commenters also questioned why such rates were chosen for each context, 
especially with such significant impact. (AHRI, No. 104 at p. 4; U.S. 
Chamber of Commerce et al., No. 115 at p. 4)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address 
comments on the discounting approach used in the 2023 SC-GHG estimates 
insofar as they assess the relative merits of the two sets of 
estimates. Insofar as these comments object to DOE even referring to 
the 2023 SC-GHG estimates and using them for informational purposes, 
DOE notes that EPA stated that the introduction of a Ramsey approach 
rather than a constant interest rate ensures internal consistency 
within the modeling between the socio-economic scenarios and the 
discount rate and allows for a more complete accounting of uncertainty. 
(EPA Report at pp. 63-64; EPA RTC A-5-13). EPA further stated that it 
selected the rates based on multiple lines of evidence: historical real 
rates of returns, empirical studies of equilibrium real interest rates, 
future projections of real interest rates, and surveys of economists 
and technical experts. (EPA Report at p. 2; EPA RTC A-5-24).
    Commenter (CEI2) offered support for the updates to the emissions 
baseline utilized in the 2023 SC-GHG methodologies. Commenter noted 
that the new baseline of reduced carbon emissions is more realistic for 
climate modeling and the SC-GHG metric (CEI2, No. 102 at p. 3)
    Multiple commenters (CEI and AEI) stated that the 2023 SC-GHG 
methodologies improperly continue to rely on Representative 
Concentration Pathway 8.5 (RCP 8.5) for climate models, despite EPA's 
switch to more realistic emissions baselines elsewhere in the analysis. 
Commenter (CEI) specifically stated that the 2023 SC-GHG updates rely 
on three damage functions based on RCP 8.5 and thus assume 
substantially greater warming and damage despite otherwise utilizing a 
lower emissions baseline. (CEI2, No. 102 at p. 9) Commenter (CEI) also 
noted concerns with the use of SSP3 and SSP5 as ``wildly implausible''. 
Commenter (AEI) similarly opposed the continued use of RCP 8.5 for 
damage functions and climate models and further criticized the 
inaccuracy of RCP 8.5 in general. Commenter stated that calculations 
relying on RCP 8.5 are so extreme, they are realistically impossible. 
(AEI, No. 97 at p. 4)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address the 
substance of these comments on the emissions baseline insofar as they 
assess the relative merits of the two sets of estimates. Insofar as 
these comments object to DOE even referring to the 2023 SC-GHG 
estimates and using them for informational purposes, DOE notes that 
EPA's Final Report states that the updated 2023 SC-GHG estimates use a 
new methodology (not RCPs or SSPs (Shared Socio-economic Pathways)), to 
project future emissions scenarios. Per EPA, the new methodology is an 
internally consistent set of probabilistic projections of population, 
GDP, and GHG emissions to 2300, developed by expert elicitation 
(Rennert et al., ``The social cost of carbon: Advances in long-term 
probabilistic projections of population, GDP, emissions, and discount 
rates,'' 2022).
    Commenters (Gas Analytics and Advocacy Services (GAAS) and AEI) 
stated that the 2023 SC-GHG methodologies fail to incorporate the 
environmental benefits of carbon emissions into the analyses. 
Commenters include planetary greening, increased agricultural 
productivity, increased water use efficiency, and reduced mortality 
from cold as potential benefits from increased GHG emissions. (GAAS, 
No. 96 at p. 6; AEI, No. 97 at pp. 7-8)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address 
this comment insofar as it assesses the relative merits of the two sets 
of estimates. Insofar as this comment objects to DOE even referring to 
the 2023 SC-GHG estimates and using them for informational purposes, 
DOE notes that the Final Report states that carbon fertilization and 
changes to both heat and cold mortality are represented in the updated 
2023 SC-GHG estimates (see EPA Report, table 3.2.1 at p. 87). EPA 
acknowledged that the analysis is not able to capture all impacts of 
GHG emissions (both positive and negative) due to data and modeling 
limitations.
    Commenter (CEI) criticized the 2023 SC-GHG methodologies' 
integration of the mortality effects of climate change through metrics 
such as ``Value of Statistical Life'' (VSL). Commenter specifically 
took issue with the fact that VSL does not account for 
intergenerational externalities and instead focused on individuals as 
opposed to society as a whole. As a result, Commenter stated that the 
use of the metric encourages consumption at the expense of productive 
investment. (CEI1, No. 100 at pp. 2-3)
    Because DOE is presenting climate benefits using both the 2021 
interim SC-GHG estimates and the 2023 SC-GHG estimates without relying 
on either set of values to justify its standards, we do not address 
this comment insofar as it assesses the relative merits of the two sets 
of estimates. Insofar as this comment objects to DOE even referring to 
the 2023 SC-GHG estimates and using them for informational purposes, we 
note that in its cost-benefit guidance for Federal agencies, OMB 
endorses VSL as an approach to monetizing reductions in fatality risks, 
notes that for decades Federal agencies have consistently used VSL 
estimates, and cites EPA's VSL guidelines as an example. (OMB, Circular 
No. A-4, 49-50 (Nov. 9, 2023)). EPA's VSL methodology was also peer 
reviewed by its Science Advisory Board (EPA Report at pp. 1633-167; EPA 
RTC A-4-11). As an additional point of reference, DOE's methodology for 
determining the monetized benefits of reductions in SOX and 
SO2 emissions, as described in the TSDs accompanying the 
rule, are also based upon the EPA's benefit-per-ton (BPT) analysis of 
emissions reduction benefits that in turn are based upon the VSL 
approach. DOE also notes that the commenter incorrectly asserted that 
the incorporation of mortality effects is new

[[Page 7579]]

to the 2023 SC-GHG estimates. Previous estimates of SC-GHG also reflect 
willingness to pay to reduce mortality risk and in some cases also use 
VSL specifically.
    A commenter (CEI1) stated that the characterization of SC-GHG 
estimates as monetized is misleading. Commenter asserted that 
calculations are measured in ``welfare'' rather than money and cannot 
be compared with other dollar values. Commenter also stated that SC-GHG 
estimates are ordinal rather than cardinal and therefore don't express 
degree of relative benefit. (CEI1, No. 100 at p. 4)
    This comment goes to any SC-GHG estimates, not the 2023 SC-GHG 
estimates specifically. SC-GHG is a measure of aggregate willingness to 
pay, rather than utility as the commenter suggests. It does not measure 
how much utility changes as a result of additional emissions. Instead, 
SC-GHG measures how much income society could forgo today with a given 
emission reduction and be as well off as it would have been without 
such a reduction (EPA Report at p. 5, 94, and 163). This is a standard 
economic method for valuing nonmarket goods, and the calculations yield 
a dollar value, correctly labeled in dollars, for the benefits of 
emission reductions. This is a cardinal measure that can be compared 
with any other dollar value as part of a cost benefit analysis.
    Commenter (CEI1) stated that because SC-GHG estimates were 
developed using a normative approach, specifically optimizing utility 
using a social welfare function, with a social planner framework, to 
determine how intergenerational impacts should be weighted, they are 
inconsistent with economic efficiency. (CEI1, No. 100 at p. 4)
    This comment goes to all SC-GHG estimates, not the 2023 SC-GHG 
estimates. specifically.. DOE acknowledges that there are inherent 
uncertainties in capturing trade-offs over extended time periods. Both 
the interim 2021 SC-GHG estimates and the 2023 SC-GHG estimates are 
based on empirical evidence as described by the peer-reviewed 
literature (EPA Report at pp. 19-76), and both rely on a descriptive, 
rather than normative, approach to inform discount rate choices, which 
the IWG has found to be the most defensible and transparent (IWG, 
February 2010 Technical Support Document at p. 19; see EPA Report at 
pp. 62-64 for further discussion). This allows for discount rates to be 
chosen that are consistent with empirical evidence.
    Commenter (AEI) stated that the Biden administration 
mischaracterizes the GDP effects of rising GHG concentrations in its 
2023 SC-GHG methodologies. Commenter instead maintains that GDP data 
supports the contention that the prospective financial risks of 
anthropogenic climate change, at least in the aggregate, are much 
smaller than the SC-GHG estimates suggest. (AEI, No. 97 at p. 9)
    As DOE is presenting climate benefits using both the interim 2021 
SC-GHG estimates and the 2023 SC-GHG estimates without relying on 
either set of values to justify its standards, DOE does not address 
this comment insofar as it assesses the relative merits of the two sets 
of estimates. Insofar as this comment objects to DOE even referring to 
the 2023 SC-GHG estimates and using them for informational purposes, we 
note that Figure 2.1.2 in the EPA Final Report shows the projections of 
per capita GDP growth rate over the period 2020-2300, with the RFF-SP 
projections used in the 2023 SC-GHG estimates remaining at rates under 
2 percent and the other scenarios ranging to just over 4 percent (EPA 
Report at p. 30). DOE further notes that GDP projections are not 
equivalent to total social cost, as they only measure economic output, 
while social cost aims to measure well-being, including many non-market 
factors that are impacted by climate change, such as human health. 
Commenters (AHRI and ALA et al.) cited the requirement in EPCA section 
6295(o)(2)(B) for DOE to consider seven separate factors when 
evaluating whether a new or amended energy conservation standard is 
economically justified. Commenters stated that DOE's use of the SC-GHG 
metric dominated the economic justification analysis of the rule, 
effectively disregarding the other factors in violation of the statute. 
Commenter (AHRI) stated that the statutory text provides no indication 
one factor should be given more weight than others. (AHRI, No. 104 at 
p. 3) Commenter (ALA et al.) objected to DOE's ``reliance'' on the 
economic benefits produced by the 2023 SC-GHG methodologies and 
reiterated that DOE is required to balance EPCA's seven factors 
together. (ALA et al., No. 109 at pp. 3-4)
    These comments largely go to use of any estimate of SC-GHG in this 
rulemaking. DOE has long included SC-GHG estimates in its economic 
justification analyses pursuant to section 6295(o)(2)(B)(i) of EPCA. In 
deciding if an energy conservation standard is economically justified 
under EPCA, DOE must consider, to the greatest extent practicable, 
seven statutory factors, including the need for national energy and 
water conservation. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)). Under that 
requirement, DOE estimates environmental and public health benefits 
associated with the more efficient use of energy. The adopted standards 
are likely to result in environmental benefits in the form of reduced 
emissions of air pollutants and greenhouse gases associated with energy 
production and use. DOE conducts an emissions analysis to estimate how 
potential standards may affect these emissions and estimates the 
economic value of emissions reductions. DOE disagrees with commenters' 
assertion that the agency failed to adequately balance the other six 
factors in its analysis or that the SC-GHG metric (under either 
estimate) overpowers the other factors. DOE found that the standards 
would be economically justified--i.e., meet the section 
6295(o)(2)(B)(i) criteria--without taking any of the benefits of GHG 
emissions reductions (as calculated by either the 2023 SC-GHG estimates 
or the interim 2021 SC-GHG estimates) into account. DOE reiterates that 
the SC-GHG values are not determinative in this rulemaking as DOE would 
promulgate the same standards even in the absence of the estimated 
climate benefits (using either the 2021 or the 2023 calculation 
methodology).
    Multiple commenters (NAHB, AHRI, and AEI) highlighted the global 
nature of the impacts and benefits represented in the 2023 SC-GHG 
estimates and deemed this inappropriate in the context of U.S. domestic 
policy and rulemaking.
    Commenters (NAHB and AEI) criticized conflation of global and 
domestic metrics in the 2023 SC-GHG methodologies and stated that the 
inclusion of global metrics will incorrectly incentivize international 
and domestic climate measures. Commenters further predicted that the 
inclusion of global metrics will impose unnecessary costs on U.S. 
consumers and the domestic economy. Commenter (NAHB) asserted that this 
is a disproportional distribution of costs and benefits and is 
effectively a tax through regulation. (NAHB, No. 103 at p. 3; AEI, No. 
97 at p. 7). Commenter (AHRI) stated that EPCA has a domestic focus and 
argued that to reframe EPCA into a globally oriented statute would 
ignore its legislative history and contradict its focus on benefits 
accruing solely within the United States. (AHRI, No. 104 at p. 2)
    These comments go to both the interim 2021 SC-GHG estimates and the 
2023 SC-GHG estimates. Both sets of

[[Page 7580]]

SC-GHG estimates reflect the global cost of climate change impacts 
given the distinctive global nature of the climate change problem. 
Numerous impacts of global climate change occur outside of U.S. 
territories that directly affect U.S. residents, U.S. companies, the 
U.S. economy, and U.S. national security and geopolitical interests. 
Also, if each country were to design emissions policies accounting for 
only the burdens inflicted on their own citizens and residents, none of 
the ``foreign'' impacts of emissions would be accounted for by any 
country and so all countries would under-regulate GHG emissions. This 
would, in turn, cause significant harm to U.S. citizens and residents.
    DOE disagrees with commenter's contention that EPCA restricts DOE's 
estimates of the benefits of avoiding GHG emissions only to direct 
domestic benefits. The economic justification analysis under EPCA 
contains no such limiting language regarding consideration of global or 
domestic emissions benefits and burdens. (42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII)). Also see Zero Zone, Inc. v. United States 
DOE, 832 F.3d 654, 678-79 (7th Cir. 2016) in which the Seventh Circuit 
Court of Appeals rejected a petitioner's challenge to DOE's use of a 
global social cost of carbon in setting an efficiency standard under 
EPCA and upheld DOE's consideration of global impacts in its climate 
analysis. In any event, comments on DOE's consideration of 
transboundary climate impacts are not ultimately relevant because, as 
stated above, the SC-GHG values are not determinative in this 
rulemaking and DOE would promulgate the same standards even in the 
absence of any climate benefits (domestic or global).
    Commenter (AHRI) argued that DOE's use of the SC-GHG violates the 
Major Questions Doctrine. The commenter asserts that as the impact for 
the SC-GHG resulting from the proposed commercial refrigeration 
equipment rule was estimated at $671.4 million, the rule asserts a 
claim of authority concerning vast economic significance that Congress 
has not provided to it. AHRI maintained that EPCA did not provide DOE 
with clear authority to regulate emissions when evaluating new or 
amended standards and thus the inclusion of such analysis in the 
rulemaking violates the Major Questions Doctrine. (AHRI, No. 104 at p. 
4)
    Commenter (GAAS) similarly incorporated a ``Science Matters'' 
article into its comment citing a 2022 court case challenging the 
Federal government's use of SC-GHG as a violation of the Major 
Questions Doctrine. (GAAS, No. 96 at p. 4)
    These comments go to any estimate of SC-GHG in the rule. DOE 
disagrees with commenters' assertion that the use of SC-GHG 
methodologies violates the Major Questions Doctrine. First, DOE 
reiterates that the rule does not rely on the monetized climate 
benefits and would be economically justified regardless of the 
inclusion of the climate benefits that DOE projects would result from 
the standards. Second, through EPCA, Congress has directed DOE to set 
energy conservation standards applicable to covered products and has 
explicitly required DOE to determine whether a standard is economically 
justified by determining ``whether the benefits of the standard exceed 
its burdens'' based on listed considerations. (42 U.S.C. 6295(o)) The 
economic benefit of pollution reductions is a standard metric in cost 
benefit analysis of actions that significantly affect emissions, as 
appliance efficiency standards typically do due to their statutory 
focus on energy conservation (and both grid electricity and natural gas 
combustion have associated emissions of GHGs and other air pollutants). 
All presidential administrations since the Reagan Administration have 
required agencies to conduct cost benefit analyses in their rulemakings 
and have strongly encouraged the monetization of impacts where 
possible. The interagency working group developed Federal SC-GHG 
estimates in 2010, and SC-GHG estimates have been used in Federal 
agencies rulemakings for over a decade. DOE itself has used SC-GHG 
estimates in its rulemakings and other analyses since 2009. It is, in 
fact, difficult to see how DOE could justify not calculating such 
benefits where possible. DOE's use of SC-GHG estimates to provide a 
monetary estimate of the benefits of the GHG emissions reductions that 
are projected to result from the adoption of these efficiency standards 
is consistent with the statutory requirements, best economic practices, 
government-wide cost benefit analysis guidance, longstanding Federal 
agency practices, data quality requirements, and current science. 
Additionally, it does not in any way assert a claim of authority 
concerning vast economic significance.
    Regarding the comment about $671.4 million in SC-GHG benefits, the 
commenter appears to have misinterpreted this value as the benefits of 
SC-GHGs reductions of the proposed rule. In the proposed rule, at a 3% 
discount rate, the total benefits were estimated to be $1.25 billion, 
of which $174.4 million was attributed to climate benefits (calculated 
using the 2021 interim SC-GHG), $738 million was from consumer 
operating cost savings, and the remainder was health benefits of other 
emissions reductions. At a 7% discount rate, the total benefits were 
estimated to be $1 billion, of which $174.4 million was attributed to 
climate benefits (calculated using the 2021 interim SC-GHG),, $586 
million was from consumer operating cost savings, and the remainder was 
health benefits from other emissions. The climate benefits were thus 
not even the rule's largest monetized impact, and this rulemaking would 
be economically justified regardless of the inclusion of either set of 
estimates of the GHG emissions reductions.
    Several commenters (Hussman Corporation, ALA et al., NAMA, and 
GAAS) criticized DOE's decision to first include the 2023 SC-GHG 
estimates in a NODA for an individual rule. Commenters criticized DOE 
for not dedicating a separate and comprehensive rulemaking to the use 
of the new methodologies in future agency analyses. Commenter (Hussman 
Corporation) opposed the metric being added in a NODA with a final rule 
due in four months and advocated that any SC-GHG considerations 
``should be handled by DOE as a discussion item for all appliances and 
not simply added during a proposed rulemaking for one product 
category.'' (Hussman Corporation, No. 108 at p. 3)
    Commenter (ALA et al.) also urged DOE to evaluate its use of the 
2023 SC-GHG methodologies in the anticipated rulemaking dedicated to 
reviewing and updating DOE's analytical methodology. ALA reiterated 
that vetting analytical method changes on issues as complex as SC-GHG 
is better done in a focused rulemaking rather than as part of a 
product-specific rulemaking on standards. (ALA et al., No. 109 at p. 2) 
Commenter (NAMA) stated that the new methodologies deserve an open and 
transparent discussion on how they will be applied before they are 
utilized in regulatory action. (NAMA, No. 112 at p. 4).
    Commenter (GAAS) claimed that DOE's introduction of the SC-GHG 
within an electric appliance docket was an attempt to implement it 
without wide recognition or objection from other stakeholders that may 
be adversely impacted by the new methodologies. GAAS further deemed 
this decision, along with alleged policies of forced societal 
electrification, the ``energy equivalent of ethnic cleansing.'' (GAAS, 
No. 96 at p. 6) Commenter (NAHB) stated that the DOE should increase 
transparency with regards to the process used to develop the new 
metric, stating

[[Page 7581]]

that the process used to develop these estimates only involved parties 
invited to participate and that the choices made by these participants 
heavily affect the results. (NAHB, No. 103 at p. 4)
    While DOE proposed in the August 2024 NODA to shift to the updated 
estimates, in this final rule, DOE is presenting climate benefits using 
both the 2021 interim SC-GHG estimates and the 2023 SC-GHG estimates 
without relying on either set of values to justify its standards. By 
presenting both sets of estimates, DOE is simply providing additional 
information to the public regarding the estimated benefits of the final 
rule. Furthermore, DOE uses modeled estimates of values based on data 
inputs and analytical assumptions in its analyses all the time, from 
EIA projections of future energy supplies and prices, to estimates of 
costs of technologies over time. Here, DOE determined that public 
notice and comment is appropriate given the substantial interest in 
this topic, differences of opinion around various methodological 
choices, and the importance of the methodological updates underlying 
the new estimates. Multiple commenters did in fact comment on the 
August NODA solely on this topic, indicating that the public received 
notice of and had opportunity to comment on DOE's proposed preliminary 
decision to use the updated 2023 SC-GHG estimates.
    Commenter (AEI) stated that the 2023 SC-GHG methodologies 
incorporate the co-benefits of regulating criteria and hazardous air 
pollutants in its calculations despite those pollutants being regulated 
independently under the Clean Air Act. Commenter raised concerns that 
accounting for the benefits of regulating these pollutants when they 
are already regulated improperly inflates the health benefits of GHG 
policies. (AEI, No. 97 at p. 8)
    Both the 2021 interim SC-GHG estimates and the 2023 SC-GHG 
estimates account for the avoided harms of GHG emissions. Neither of 
the SC-GHG estimates incorporate the co-benefits of regulating fine 
particulates, other criteria air pollutants, or hazardous air 
pollutants. In its energy conservation rules, DOE separately estimates 
the resulting air pollution emissions reductions. DOE calculates the 
benefits from the reductions in sulfur dioxide, nitrogen oxides, 
nitrous oxide, and mercury, as well as greenhouse gases that result 
from the final rule. The benefits for each air pollutant are calculated 
separately, and none of the calculations include co-benefits from 
reducing the other pollutants.
    Commenter (U.S. Chamber of Commerce et al.) stated that the 
significantly higher 2023 SC-GHG values could lead to overly stringent 
regulations and increased compliance costs for industries. Commenter 
further asserted that higher SC-GHG values could have a chilling effect 
on economic activity and that the change in methodologies could produce 
uncertainty that challenges businesses and investors. Commenter noted 
concerns with the 2021 interim SC-GHG estimates also, but ultimately 
recommended applying those values as opposed to the 2023 SC-GHG 
estimates. (U.S. Chamber of Commerce et al., No. 115 at pp. 5-6)
    As stated previously, the standards in this rule do not rely on the 
monetized climate benefits and would be economically justified 
regardless of their use. Further, these standards would be economically 
justified using either the 2023 SC-GHG estimates or the 2021 interim 
SC-GHG estimates. As such, compliance costs for industries would be the 
same regardless of which SC-GHG metric is utilized and even if SC-GHG 
were not accounted for at all.
    V.CDOE's derivations of the SC-CO2, SC-N2O, and SC-CH4 values used 
for this final rule are discussed in the following sections, and the 
results of DOE's analyses estimating the benefits of the reductions in 
emissions of these GHGs are presented in section V.B.6 of this 
document.
a. Social Cost of Carbon
    The SC-CO2 values used for this final rule are presented 
using two sets of SC-GHG estimates. One set is the 2023 SC-GHG 
estimates published by the EPA, which are shown in table IV.21 in 5-
year increments from 2020 to 2050. The full set of annual values that 
DOE used is presented in appendix 14A of the final rule TSD. These 
estimates include values out to 2080. DOE expects additional climate 
benefits to accrue for equipment still operating after 2080, but a lack 
of available SC-CO2 estimates for emissions years beyond 
2080 prevents DOE from monetizing these potential benefits in this 
analysis.
[GRAPHIC] [TIFF OMITTED] TR21JA25.124

    DOE also presents results using interim SC-CO2 values 
based on the values developed for the February 2021 SC-GHG TSD, which 
are shown in table IV. in 5-year increments from 2020 to 2050. The set 
of annual values that DOE used, which was adapted from estimates 
published by EPA in 2021,\144\ is presented in appendix 14A of the 
final rule TSD. These estimates are based on

[[Page 7582]]

methods, assumptions, and parameters identical to the estimates 
published by the IWG (which were based on EPA modeling), and include 
values for 2051 to 2070.
---------------------------------------------------------------------------

    \144\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed Dec. 3, 2024).
[GRAPHIC] [TIFF OMITTED] TR21JA25.125

    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in all cases. 
DOE adjusted the values to 2023$ using the implicit price deflator for 
gross domestic product (``GDP'') from the Bureau of Economic Analysis. 
To calculate a present value of the stream of monetary values, DOE 
discounted the values in all cases using the specific discount rate 
that had been used to obtain the SC-CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
final rule are presented using two sets of SC-GHG estimates. One set is 
the 2023 SC-GHG estimates published by the EPA. Table IV.23 shows the 
updated sets of SC-CH4 and SC-N2O estimates in 5-
year increments from 2020 to 2050. The full set of annual values used 
is presented in appendix 14A of the final rule TSD. These estimates 
include values out to 2080.
[GRAPHIC] [TIFF OMITTED] TR21JA25.126

    DOE also presents results using interim SC-CH4 and SC-
N2O values based on the values developed for the February 
2021 SC-GHG TSD. Table IV.24 shows the updated sets of SC-
CH4 and SC-N2O estimates from the latest 
interagency update in 5-year increments from 2020 to 2050. The full set 
of annual unrounded values used in the calculations is presented in 
appendix 14A of the final rule TSD. These estimates include values out 
to 2070.

[[Page 7583]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.127

    DOE multiplied the CH4 and N2O emissions 
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE 
adjusted the values to 2023$ using the implicit price deflator for GDP 
from the Bureau of Economic Analysis. To calculate a present value of 
the stream of monetary values, DOE discounted the values in each of the 
cases using the specific discount rate that had been used to obtain the 
SC-CH4 and SC-N2O estimates in each case.
2. Monetization of Other Emissions Impacts
    For the final rule, DOE estimated the monetized value of 
NOX and SO2 emissions reductions from electricity 
generation using benefit-per-ton estimates for that sector from EPA's 
Benefits Mapping and Analysis Program.\145\ Table 5 of the EPA TSD 
provides a summary of the health impact endpoints quantified in the 
analysis. DOE used EPA's values for PM2.5-related benefits 
associated with NOX and SO2 and for ozone-related 
benefits associated with NOX for 2025, 2030, 2035, and 2040, 
calculated with discount rates of 3 percent and 7 percent. DOE used 
linear interpolation to define values for the years not given in the 
2025 to 2040 period; for years beyond 2040, the values are held 
constant (rather than extrapolated) to be conservative. DOE combined 
the EPA regional benefit-per-ton estimates with regional information on 
electricity consumption and emissions from AEO2023 to define weighted-
average national values for NOX and SO2 (see 
appendix 14B of the final rule TSD).
---------------------------------------------------------------------------

    \145\ U.S. Environmental Protection Agency. Estimating the 
Benefit per Ton of Reducing Directly Emitted PM2.5, 
PM2.5 Precursors and Ozone Precursors from 21 Sectors. 
Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors. (last 
accessed August 29, 2024).
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.

M. Utility Impact Analysis

    The utility impact analysis estimates the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2023. NEMS produces the AEO Reference case, as well 
as a number of side cases that estimate the economy-wide impacts of 
changes to energy supply and demand. For the current analysis, impacts 
are quantified by comparing the levels of electricity sector 
generation, installed capacity, fuel consumption, and emissions in the 
AEO2023 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapter 15 of the final 
rule TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new or 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a standard. Employment impacts from new or amended 
energy conservation standards include both direct and indirect impacts. 
Direct employment impacts are any changes in the number of employees of 
manufacturers of the equipment subject to standards, their suppliers, 
and related service firms. The MIA addresses those impacts. Indirect 
employment impacts are changes in national employment that occur due to 
the shift in expenditures and capital investment caused by the purchase 
and operation of more-efficient appliances. Indirect employment impacts 
from standards consist of the net jobs created or eliminated in the 
national economy, other than in the manufacturing sector being 
regulated, caused by: (1) reduced spending by consumers on energy, (2) 
reduced spending on new energy supply by the utility industry, (3) 
increased consumer spending on the equipment to which the new standards 
apply and other goods and services, and (4) the effects of those three 
factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility

[[Page 7584]]

sector generally create fewer jobs (both directly and indirectly) than 
expenditures in other sectors of the economy.\146\ Bureau of Economic 
Analysis input-output multipliers also show a lower labor intensity per 
million dollars of activity for utilities as compared to other 
industries.\147\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, these 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \146\ See U.S. Bureau of Labor Statistics. Industry Output and 
Employment. Available at www.bls.gov/emp/data/industry-out-and-emp.htm (last accessed Aug. 19, 2024).
    \147\ See Regional Input-Output Modeling System (RIMS II) User's 
Guide. U.S. Department of Commerce--Bureau of Economic Analysis. 
Available at bea.gov/resources/methodologies/RIMSII-user-guide (last 
accessed Aug. 19, 2024).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this final rule using an input/output model of the 
U.S. economy called Impact of Sector Energy Technologies version 4 
(``ImSET'').\148\ ImSET is a special-purpose version of the ``U.S. 
Benchmark National Input-Output'' (``I-O'') model, which was designed 
to estimate the national employment and income effects of energy-saving 
technologies. The ImSET software includes a computer-based I-O model 
having structural coefficients that characterize economic flows among 
187 sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \148\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User's Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that there are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may overestimate actual job 
impacts over the long run for this rule. Therefore, DOE used ImSET only 
to generate results for near-term timeframes (2029-2033), where these 
uncertainties are reduced.
    For more details on the employment impact analysis, see chapter 16 
of the final rule TSD.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for CRE. 
It addresses the TSLs examined by DOE, the projected impacts of each of 
these levels if adopted as energy conservation standards for CRE, and 
the standards levels that DOE is adopting in this final rule. 
Additional details regarding DOE's analyses are contained in the final 
rule TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential new or amended 
standards for equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the equipment classes, to the 
extent that there are such interactions, and price elasticity of 
consumer purchasing decisions that may change when different standard 
levels are set.
    In the analysis conducted for this final rule, DOE analyzed the 
benefits and burdens of five TSLs for CRE. DOE developed TSLs that 
combine efficiency levels for each analyzed equipment class. DOE 
presents the results for the TSLs in this document, while the results 
for all efficiency levels that DOE analyzed are in the final rule TSD. 
Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential amended energy conservation 
standards for CRE. TSL 5 represents the maximum technologically 
feasible (``max-tech'') energy efficiency for all equipment classes. 
TSL 4 represents an intermediate TSL representing less stringent 
efficiency levels for approximately one-third of the equipment classes 
analyzed compared to TSL 5. TSL 3 represents less stringent efficiency 
levels for 12 equipment classes compared to TSL 4. TSL 2 represents 
another intermediate TSL, representing less stringent efficiency levels 
for 11 equipment classes, compared to TSL 3. TSL 1 represents the 
minimum efficiency level for most analyzed equipment classes. DOE 
considered all efficiency levels as part of its analysis.\149\ 
Analytical results broken down by EL and equipment class are presented 
in chapters 8 and 10 of the final rule TSD.
---------------------------------------------------------------------------

    \149\ Efficiency levels that were analyzed for this final rule 
are discussed in section IV.C.1 of this document. Results by 
efficiency level are presented in chapters 8 and 10 of the final 
rule TSD.

---------------------------------------------------------------------------

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[GRAPHIC] [TIFF OMITTED] TR21JA25.128

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on CRE consumers by looking at 
the effects that potential new and amended standards at each TSL would 
have on the LCC and PBP. DOE also examined the impacts of potential 
standards on selected consumer subgroups. These analyses are discussed 
in the following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency equipment affect consumers in two 
ways: (1) purchase price increases, and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., equipment price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses equipment lifetime and a discount rate. Chapter 8 of the final 
rule TSD provides detailed information on the LCC and PBP analyses.
    Table V.2 through table V.57 show the LCC and PBP results for the 
TSLs considered for each equipment class. In the first of each pair of 
tables, the simple payback is measured relative to the baseline 
equipment. In the second table, the impacts are measured relative to 
the efficiency distribution in the no-new-standards case in the 
compliance year (see section IV.F.9 of this document). Because some 
consumers purchase equipment with higher efficiency in the no-new-
standards case, the average savings are less than the difference 
between the average LCC of the baseline equipment and the average LCC 
at each TSL. The savings refer only to consumers who are affected by a 
standard at a given TSL. Those who already purchase equipment with 
efficiency at or above a given TSL are not affected. Consumers for whom 
the LCC increases at a given TSL experience a net cost.
BILLING CODE 6950-01-P

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b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on small businesses. Table V.58 compares the average 
LCC savings and PBP at each efficiency level for small businesses with 
the entire consumer sample for CRE. In most cases, the average LCC 
savings and PBP for small businesses at the considered efficiency 
levels are not substantially different from the average for all 
businesses. Chapter 11 of the final rule TSD presents the complete LCC 
and PBP results for the subgroup.

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BILLING CODE 6450-01-C
c. Rebuttable Presumption Payback
    As discussed in section IV.F.10 of this document, EPCA establishes 
a rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for CRE that 
meets the standard is less than three times the value of the first-year 
energy savings resulting from the standard. In calculating a rebuttable 
presumption payback period for each of the considered TSLs, DOE used 
discrete values, and, as required by EPCA, based the energy use 
calculation on the DOE test procedures for CRE. In contrast, the PBPs 
presented in section V.B.1.a of this document were calculated using 
distributions that reflect the range of energy use in the field.
    Table V.59 presents the rebuttable-presumption payback periods for 
the considered TSLs for CRE. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels 
considered for this rule are economically justified through a more 
detailed analysis of the economic impacts of those levels, pursuant to 
42 U.S.C. 6316(e)(1) and 42 U.S.C. 6295(o)(2)(B)(i), that considers the 
full range of impacts to the consumer, manufacturer, Nation, and 
environment. The results of that analysis serve as the basis for DOE to 
definitively evaluate the economic justification for a potential 
standard level, thereby supporting or rebutting the results of any 
preliminary determination of economic justification.

[[Page 7604]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.188

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of new and amended 
energy conservation standards on manufacturers of CRE. The next section 
describes the expected impacts on manufacturers at each considered TSL. 
Chapter 12 of the final rule TSD explains the analysis in further 
detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from a standard. 
Table V.60 summarizes the estimated financial impacts (represented by 
changes in INPV) of potential new and amended energy conservation 
standards on manufacturers of CRE, as well as the conversion costs that 
DOE estimates manufacturers of CRE would incur at each TSL.
    The impact of potential new and amended energy conservation 
standards was analyzed under two scenarios: (1) the preservation-of-
gross-margin percentage scenario; and (2) the preservation-of-
operating-profit scenario, as discussed in section IV.J.2.d of this 
document. The preservation-of-gross-margin percentage scenario applies 
a ``gross-margin percentage'' of 28 percent for all equipment classes 
across all efficiency levels.\150\ This scenario assumes that a 
manufacturer's per-unit dollar profit would increase as MPCs increase 
in the standards cases and represents the upper-bound to industry 
profitability under potential new and amended energy conservation 
standards.
---------------------------------------------------------------------------

    \150\ The gross-margin percentage of 28 percent is based on a 
manufacturer markup of 1.38.
---------------------------------------------------------------------------

    The preservation-of-operating-profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to reach more stringent efficiency levels. In this 
scenario, while manufacturers make the necessary investments required 
to convert their facilities to produce compliant equipment, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue. The preservation-of-operating-profit scenario 
represents the lower (or more severe) bound to industry profitability 
under potential new or amended energy conservation standards.
    Each of the modeled scenarios resulted in a unique set of cash 
flows and corresponding INPV for each TSL. INPV is the sum of the 
discounted cash flows to the industry from the base year

[[Page 7605]]

through the end of the analysis period (2024-2058). The ``change in 
INPV'' results refer to the difference in industry value between the 
no-new-standards case and standards case at each TSL. To provide 
perspective on the short-run cash flow impact, DOE includes a 
comparison of free cash flow between the no-new-standards case and the 
standards case at each TSL in the year before new and amended standards 
would take effect. This figure provides an understanding of the 
magnitude of the required conversion costs relative to the cash flow 
generated by the industry in the no-new-standards case.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and equipment designs into 
compliance with potential new and amended standards. As described in 
section IV.J.2.c of this document, conversion cost investments occur 
between the year of publication of the final rule and the year by which 
manufacturers must comply with the new and amended standards. The 
conversion costs can have a significant impact on the short-term cash 
flow in the industry and generally result in lower free cash flow in 
the period between publication of the final rule and the compliance 
date of potential new and amended standards. Conversion costs are 
independent of the manufacturer markup scenarios and are not presented 
as a range in this analysis.
[GRAPHIC] [TIFF OMITTED] TR21JA25.189

    The following cash flow discussion refers to the TSLs as detailed 
in section V.A of this document. Table V. table V.61 through table V.64 
show the design options analyzed in the engineering analysis for each 
directly analyzed equipment class by TSL. See section IV.C of this 
document and chapter 5 of the final rule TSD for additional information 
on the engineering analysis.

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    At TSL 5, the standard represents the max-tech efficiencies for all 
equipment classes. The change in INPV is expected to range from -$221.7 
million to $55.2 million, which represents a change in INPV of -7.3 
percent to 1.8 percent, respectively. At this level, free cash flow is 
estimated to decrease by 33.8 percent compared to the no-new-standards 
case value of $262.6 million in the year 2028, the year before 
compliance would be required. In 2028, approximately 30.5 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 5. See table V. for the percent of equipment class shipments that 
would meet or exceed the efficiencies required at each TSL in 2028 (a 
year before the modeled compliance year).
    The design options DOE analyzed at TSL 5 included the max-tech 
technologies for all equipment classes. For all semi-vertical and 
vertical open and transparent door equipment classes, DOE expects 
manufacturers would likely incorporate occupancy sensors with dimming 
capability. Open equipment classes would also likely necessitate the 
use of night curtains. For equipment classes with transparent doors, 
DOE expects manufacturers would likely need to incorporate

[[Page 7609]]

vacuum-insulated glass doors. For most self-contained equipment 
classes, DOE expects manufacturers would need to incorporate BLDC 
condenser fan motors and variable-speed compressors. Of the 28 directly 
analyzed equipment classes, 5 equipment classes (VSC.SC.L, VCS.SC.M, 
VCT.RC.M, VCT.SC.L, and VCT.SC.M) account for approximately 81.5 
percent of industry shipments covered by this final rule. For VCS.SC.L, 
TSL 5 corresponds to EL 3. For VCS.SC.M, TSL 5 corresponds to EL 2. For 
VCT.RC.M, TSL 5 corresponds to EL 4. For VCT.SC.L, TSL 5 corresponds to 
EL 5 and VCT.SC.M, TSL 5 corresponds to EL 6. See section V.A of this 
document for more information on the efficiency levels analyzed at each 
TSL.
    At max-tech, DOE expects that nearly all manufacturers would need 
to dedicate notable engineering resources to update equipment designs 
and source, qualify, and test high-efficiency components across their 
CRE portfolio. However, most design options analyzed involve more 
efficient components (e.g., high-efficiency motors) and would not 
necessitate significant capital investment. At this level, DOE 
estimates that approximately 55 percent of analyzed equipment class 
model listings (10,957 out of 19,902 unique basic models) do not meet 
the efficiency levels required.\151\ Self-contained CRE equipment 
classes account for approximately 86 percent of industry shipments 
covered by this final rule. Incorporating variable-speed compressors 
into self-contained CRE designs would likely require additional 
development and testing time to optimize for different CRE applications 
to realize maximum efficiency benefits. Capital conversion costs may be 
necessary for new baseplate tooling if additional modifications are 
required to accommodate a larger compressor system.
---------------------------------------------------------------------------

    \151\ DOE's Compliance Certification Database, ``Refrigeration 
Equipment--Commercial, Single Compartment'' is available at: 
www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*. 
Model count estimates discussed throughout section V.B.2.a and 
section V.C of this document refer to unique basic models of the 
directly analyzed equipment classes only. (Last accessed Jan. 31, 
2024).
---------------------------------------------------------------------------

    CRE equipment classes with transparent doors (i.e., HCT.SC.I, 
HCT.SC.L, HCT.SC.M, SOC.RC.M, SOC.SC.M, VCT.RC.L, VCT.RC.M, VCT.SC.H, 
VCT.SC.I, VCT.SC.L, and VCT.SC.M) account for approximately 41 percent 
of model listings. For the 84 OEMs that offer directly analyzed CRE 
with transparent doors, implementing vacuum-insulated glass would 
require significant engineering resources and testing time to ensure 
adequate durability of their doors in all commercial settings. Capital 
conversion costs may be necessary for new fixtures. In interviews and 
public comments, some manufacturers raised concerns about standards 
requiring a widespread adoption of vacuum-insulated glass as it is 
still a relatively new technology in the commercial refrigeration 
market. Manufacturers pointed to the very limited industry experience 
with implementing vacuum-insulated glass in CRE applications. 
Manufacturers expressed concerns about their ability to design and test 
a full portfolio of CRE with vacuum-insulated glass doors that meet the 
max-tech efficiencies and maintain their internal performance metrics 
for durability and safety over the equipment lifetime within the 
required compliance period (i.e., between the publication of the final 
rule and the compliance date of the new and amended energy conservation 
standards). DOE estimates capital conversion costs of $30.6 million and 
product conversion costs of $223.5 million. Conversion costs total 
$254.1 million.
    DOE acknowledges that most CRE manufacturers offer an exhaustive 
range of model offerings to appeal to the unique requirements of each 
CRE consumer. Within a model family, manufacturers offer numerous 
options to customize CRE to the specifications of restaurant, 
supermarket, and retail chains and other bulk purchasers of CRE (e.g., 
Coca-Cola, Pepsi). In interviews, many manufacturers noted that 
offering a wide-range of models with a high-level of customization and 
optionality (e.g., different evaporator setups, different lighting 
arrangements, different door configurations, etc.) is critical to 
succeed in the CRE market. Many manufacturers prioritize offering a 
breadth of model offerings and specialty CRE, even if sales of each 
individual model are low. As such, manufacturers still offer hundreds 
of basic models for equipment classes with low annual shipments. For 
example, SOC.RC.M accounts for approximately 5 percent of model 
listings (over 1,000 unique basic models certified in DOE's CCD) even 
though SOC.RC.M only accounts for 0.1 percent of industry shipments 
(less than 2,000 units sold in 2024). As discussed in section IV.J.2.c 
of this document, to avoid underestimating the potential industry 
investment, DOE's conversion cost model assumes manufacturers would 
redesign models that do not meet each considered TSL. However, if 
manufacturers do not have sufficient resources to redesign models 
within the compliance period, manufacturers would likely discontinue 
low-volume equipment designs and prioritize redesigning high-volume 
model offerings.
    At TSL 5, the shipment-weighted average MPC for all CRE is expected 
to increase by 14.2 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2029. Given the projected 
increase in production costs, DOE expects an estimated 4.1-percent drop 
in shipments in the year the standard takes effect relative to the no-
new-standards case. In the preservation-of-gross-margin-percentage 
scenario, the large increase in cash flow from the higher MSP outweighs 
the $254.1 million in conversion costs, causing a small increase in 
INPV at TSL 5 under this scenario. Under the preservation-of-operating-
profit scenario, manufacturers earn the same per-unit operating profit 
as would be earned in the no-new-standards case, but manufacturers do 
not earn additional profit from their investments. In this scenario, 
the manufacturer markup decreases in 2029, the analyzed compliance 
year. This reduction in the manufacturer markup and the $254.1 million 
in conversion costs incurred by manufacturers cause a negative change 
in INPV at TSL 5 under the preservation-of-operating-profit scenario. 
See section IV.J.2.d of this document for further details on the 
manufacturer markup scenarios.
    At TSL 4, the standard represents an intermediate level with less 
stringent efficiencies required for 10 directly analyzed equipment 
classes compared to max-tech. The change in INPV is expected to range 
from -$160.1 million to -$63.5 million, which represents a change in 
INPV of -5.3 percent to -2.1 percent, respectively. At this level, free 
cash flow is estimated to decrease by 28.9 percent compared to the no-
new-standards case value of $262.6 million in the year 2028, the year 
before compliance is required. In 2028, approximately 33.4 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 4.
    The design options DOE analyzed at TSL 4 are similar to the design 
options analyzed at TSL 5 except fewer equipment classes with 
transparent doors would need to incorporate improved door designs and 
fewer self-contained equipment classes would necessitate the use of 
variable-speed compressors. DOE estimates that a similar portion of 
models would require redesign at TSL 4 and TSL 5. DOE estimates that 
approximately 53 percent of analyzed equipment class model listings 
(10,574 out of a total of 19,902

[[Page 7610]]

unique basic models) do not meet the TSL 4 efficiency levels. Self-
contained equipment classes that may incorporate variable-speed 
compressors represent approximately 90 percent of self-contained CRE 
model listings. For the five highest-volume equipment classes, TSL 4 
corresponds to lower efficiency levels for 2 equipment classes: 
VCT.RC.M and VCT.SC.M. For VCS.SC.M, VCS.SC.L, and VCT.SC.L, the 
efficiencies required at TSL 4 are the same as TSL 5. For VCT.RC.M, TSL 
4 corresponds to EL 3. For VCT.SC.M, TSL 4 corresponds to EL 4. At this 
level, DOE expects that VCT.RC.M and VCT.SC.M would incorporate triple-
pane glass with krypton fill and argon fill, respectively. The 4 self-
contained equipment classes with the highest-volume shipments 
(VCS.SC.L, VCS.SC.M, VCT.SC.L, and VCT.SC.M) would likely necessitate 
the use of variable-speed compressors.
    Similar to TSL 5, DOE expects manufacturers would spend development 
time updating equipment designs to incorporate high-efficiency 
components. Manufacturers of CRE with transparent doors may need to 
invest in new fixtures to accommodate additional panes of glass into 
CRE designs. Unlike at TSL 5 where DOE expects all transparent door CRE 
equipment classes would incorporate vacuum-insulated glass doors to 
meet the efficiency levels required, only two directly analyzed 
equipment classes, SOC.SC.M and VCT.SC.L, (which represent 
approximately 9 percent of transparent door CRE model listings) would 
likely necessitate vacuum-insulated glass doors to meet at TSL 4. 
However, DOE expects that manufacturers of VCT.RC.L, VCT.RC.M, and 
SOC.RC.M (which represent approximately 63 percent of transparent door 
CRE model listings) would likely incorporate triple-pane glass doors 
with krypton fill and manufacturers of HCT.SC.I and VCT.SC.M (which 
represent approximately 25 percent of transparent door CRE model 
listings) would incorporate triple-pane glass doors with argon fill. As 
previously discussed, many manufacturers raised concerns about the 
widespread adoption of vacuum-insulated glass because the industry does 
not have widescale experience integrating this technology into their 
designs. In interviews and public comments, some manufacturers also 
raised concerns about the limited supply of krypton gas available to 
the market. Currently, few CRE designs have triple-pane glass doors 
with krypton fill as nearly all CRE with double-pane or triple-pane 
doors are manufactured with argon fill, and single-pane doors do not 
have an inert gas fill. DOE estimates capital conversion costs of $27.5 
million and product conversion costs of $196.4 million. Conversion 
costs total $223.9 million.
    As previously discussed with TSL 5, if manufacturers do not have 
sufficient resources to redesign models within the compliance period, 
manufacturers would likely discontinue low-volume equipment designs and 
prioritize redesigning high-volume model offerings.
    At TSL 4, the shipment-weighted average MPC for all CRE is expected 
to increase by 4.8 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2029. Given the projected 
increase in production costs, DOE expects an estimated 1.8-percent drop 
in shipments in the year the standard takes effect relative to the no-
new-standards case. In the preservation-of-gross-margin-percentage 
scenario, the increase in cash flow from the higher MSP is outweighed 
by the $223.9 million in conversion costs, causing a decrease in INPV 
at TSL 4 under this scenario. Under the preservation-of-operating-
profit scenario, manufacturers earn the same per-unit operating profit 
as would be earned in the no-new-standards case, but manufacturers do 
not earn additional profit from their investments. In this scenario, 
the manufacturer markup decreases in 2029, the analyzed compliance 
year. This reduction in the manufacturer markup and the $223.9 million 
in conversion costs incurred by manufacturers cause a negative change 
in INPV at TSL 4 under the preservation-of-operating-profit scenario.
    At TSL 3, the standard represents an intermediate level with less 
stringent efficiencies required for 12 directly analyzed equipment 
classes compared to TSL 4. The change in INPV is expected to range from 
-$78.7 million to -$51.3 million, which represents a change in INPV of 
-2.6 percent to -1.7 percent, respectively. At this level, free cash 
flow is estimated to decrease by 15.9 percent compared to the no-new-
standards case value of $262.6 million in the year 2028, the year 
before compliance is required. In 2028, approximately 49.0 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 3.
    At TSL 3, the efficiency levels required for most open (i.e., 
equipment classes without doors) and transparent door equipment classes 
are lower than the efficiency levels required at TSL 4. DOE estimates 
that notably fewer models would require redesign at TSL 3 compared to 
TSL 4 and TSL 5. At this level, approximately 37 percent of analyzed 
equipment class model listings (7,306 out of 19,902 unique basic 
models) do not meet the efficiency levels required. DOE expects 
manufacturers could meet TSL 3 without implementing occupancy sensors 
with dimming capability, triple-pane doors with krypton fill, or 
vacuum-insulated glass doors, alleviating industry concerns about the 
availability and supply of krypton gas and vacuum-insulated glass. At 
this level, the same equipment classes as TSL 4--except for VSC.SC.M, 
which represents 37 percent of self-contained CRE model listings-would 
likely incorporate variable-speed compressors. At this level, only 2 
equipment classes, HCT.SC.I and SOC.SC.M (together representing 7 
percent of transparent door CRE model listings), would likely 
incorporate improved door designs compared to 7 equipment classes that 
would likely incorporate improved door designs at TSL 4 (together 
representing 97 percent of transparent door CRE model listings). For 
the 5 highest-volume equipment classes, TSL 3 corresponds to lower 
efficiency levels for 4 equipment classes: VCS.SC.M, VCT.RC.M, 
VCT.SC.L, and VCT.SC.M. For VCS.SC.M, TSL 3 corresponds to EL 1. For 
VCT.RC.M, TSL 3 corresponds to baseline efficiency (i.e., EL 0). For 
VCT.SC.L, TSL 3 corresponds to EL 2. For VCT.SC.M, TSL 3 corresponds to 
EL 2. For VCS.SC.L, the efficiencies required at TSL 3 are the same as 
TSL 4. At this level, product conversion costs may be necessary to 
source, qualify, and test high-efficiency components--but to a lesser 
extent than at higher TSLs. Some manufacturers of self-contained 
equipment classes may need to invest in new baseplate tooling if 
incorporating variable-speed compressors requires additional 
modifications to CRE designs. Manufacturers of CRE with transparent 
doors may need to invest in new fixtures to accommodate additional 
panes of glass into CRE designs. DOE estimates capital conversion costs 
of $19.1 million and product conversion costs of $98.5 million. 
Conversion costs total $117.7 million.
    At TSL 3, the shipment-weighted average MPC for all CRE is expected 
to increase by 1.4 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2029. Given the relatively 
small projected increase in production costs, DOE does not project a 
notable drop in shipments in the year the standard takes

[[Page 7611]]

effect. In the preservation-of-gross-margin-percentage scenario, the 
increase in cash flow from the higher MSP is slightly outweighed by the 
$117.7 million in conversion costs, causing a small decrease in INPV at 
TSL 3 under this scenario. Under the preservation-of-operating-profit 
scenario, manufacturers earn the same per-unit operating profit as 
would be earned in the no-new-standards case, but manufacturers do not 
earn additional profit from their investments. In this scenario, the 
manufacturer markup decreases in 2029, the analyzed compliance year. 
This reduction in the manufacturer markup and the $117.7 million in 
conversion costs incurred by manufacturers cause a small negative 
change in INPV at TSL 3 under the preservation-of-operating-profit 
scenario.
    At TSL 2, the standard represents an intermediate level with less 
stringent efficiencies required for 11 directly analyzed equipment 
classes compared to TSL 3. The change in INPV is expected to range from 
-$27.5 million to -$23.1 million, which represents a change in INPV of 
-0.9 percent to -0.8 percent, respectively. At this level, free cash 
flow is estimated to decrease by 6.0 percent compared to the no-new-
standards case value of $262.6 million in the year 2028, the year 
before compliance is required. In 2028, approximately 60.7 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 2.
    At this level, the efficiency levels required are lower than TSL 3 
for less than half of the directly analyzed equipment classes, which 
represent approximately 19 percent of industry shipments. DOE estimates 
that a similar portion of models would require redesign at TSL 2 and 
TSL 3. At this level, approximately 33 percent of analyzed equipment 
class model listings (6,631 out of 19,902 unique basic models) do not 
meet the efficiency levels required. DOE does not expect manufacturers 
would incorporate variable-speed compressors to meet efficiencies at 
TSL 2. At this level, DOE expects manufacturers would implement BLDC 
condenser fan motors for all self-contained equipment classes. Only 
HCT.SC.I would likely need to incorporate improved door designs. Open 
equipment classes would likely necessitate the use of night curtains. 
For the five highest-volume equipment classes, TSL 2 corresponds to 
lower efficiency levels for 3 equipment classes: VCS.SC.L, VCT.SC.L, 
and VCT.SC.M. For VCS.SC.L, TSL 2 corresponds to EL 2. For VCT.SC.L and 
VCT.SC.M, the TSL 2 corresponds to EL 1. For VSC.SC.M and VCT.RC.M, the 
efficiencies at TSL 2 are the same as TSL 3. At this level, DOE expects 
industry would incur minimal capital conversion costs. The lower 
efficiency levels required for 2 equipment classes--VCS.SC.L and 
VCT.SC.M--drive the drop in product conversion costs at this level. For 
VCS.SC.L and VCT.SC.M, DOE believes manufacturers could meet TSL 2 
efficiencies by incorporating more efficient condenser fan motors with 
minimal development effort, unlike at TSL 3, which may necessitate 
implementing variable-speed compressors. DOE estimates capital 
conversion costs of $0.3 million and product conversion costs of $46.4 
million. Conversion costs total $46.7 million.
    At TSL 2, the shipment-weighted average MPC for all CRE is expected 
to increase by 0.2 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2029. Given the relatively 
small projected increase in production costs, DOE does not project a 
notable drop in shipments in the year the standard takes effect. In the 
preservation-of-gross-margin-percentage scenario, the increase in cash 
flow from the higher MSP is slightly outweighed by the $46.7 million in 
conversion costs, causing a slight decrease in INPV at TSL 2 under this 
scenario. Under the preservation-of-operating-profit scenario, 
manufacturers earn the same per-unit operating profit as would be 
earned in the no-new-standards case, but manufacturers do not earn 
additional profit from their investments. In this scenario, the 
manufacturer markup decreases in 2028, the analyzed compliance year. 
This reduction in the manufacturer markup and the $46.7 million in 
conversion costs incurred by manufacturers cause a small negative 
change in INPV at TSL 2 under the preservation-of-operating-profit 
scenario.
    At TSL 1, the standard represents the minimum efficiency level with 
positive LCC savings. The change in INPV is expected to range from -
$24.7 million to -$20.8 million, which represents a change in INPV of -
0.8 percent to -0.7 percent, respectively. At this level, free cash 
flow is estimated to decrease by 5.4 percent compared to the no-new-
standards case value of $262.6 million in the year 2028, the year 
before compliance is required. In 2028, approximately 64.1 percent of 
covered CRE shipments are expected to meet the efficiencies required at 
TSL 1.
    At this level, the efficiency levels correspond to baseline for 8 
directly analyzed equipment classes, EL 1 for 19 equipment classes, and 
EL 2 for 1 equipment class (VCS.SC.H). DOE estimates that a similar 
portion of models would require redesign at TSL 1, TSL 2, and TSL 3. At 
this level, approximately 33 percent of analyzed equipment class model 
listings (6,504 out of 19,902 unique basic models) do not meet the 
efficiency levels required. DOE expects most self-contained equipment 
classes would need to incorporate higher-efficiency fan motors (i.e., 
BLDC evaporator or condenser fan motors or PSC evaporator fan motors 
for chef bases). HCT.SC.I may necessitate the use of double-pane argon-
fill doors to meet TSL 1 efficiencies. DOE expects manufacturers could 
TSL 1 efficiencies without investing in new tooling or equipment. 
Product conversion costs are driven by incorporating high-efficiency 
components into CRE designs. DOE estimates product conversion costs of 
$42.0 million.
    At TSL 1, the shipment-weighted average MPC for all CRE is expected 
to increase by 0.2 percent relative to the no-new-standards case 
shipment-weighted average MPC for all CRE in 2029. Given the relatively 
small projected increase in production costs, DOE does not project a 
notable drop in shipments in the year the standard takes effect. In the 
preservation-of-gross-margin-percentage scenario, the minor increase in 
cash flow from the higher MSP slightly outweighs the $42.0 million in 
conversion costs, causing a minor increase in INPV at TSL 1 under this 
scenario. Under the preservation-of-operating-profit scenario, 
manufacturers earn the same per-unit operating profit as would be 
earned in the no-new-standards case, but manufacturers do not earn 
additional profit from their investments. In this scenario, the 
manufacturer markup decreases in 2029, the analyzed compliance year. 
This reduction in manufacturer markup and the $42.0 million in 
conversion costs incurred by manufacturers cause a minor negative 
change in INPV at TSL 1 under the preservation-of-operating-profit 
scenario.

[[Page 7612]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.195

b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of amended energy 
conservation standards on direct employment in the CRE industry, DOE 
used the GRIM to estimate the domestic labor expenditures and number of 
direct employees in the no-new-standards case and in each of the 
standards cases during the analysis period. DOE calculated these values 
using statistical data from the 2021 ASM,\152\ BLS employee 
compensation data,\153\ results of the engineering analysis, and 
manufacturer interviews.
---------------------------------------------------------------------------

    \152\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S 
(2021).'' Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed April 11, 2024).
    \153\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation--March 2024. June 18, 2024. Available at 
www.bls.gov/bls/news-release/ecec.htm#current (last accessed Aug. 
22, 2024).
---------------------------------------------------------------------------

    Labor expenditures related to equipment manufacturing depend on the 
labor intensity of the equipment, the sales volume, and an assumption 
that wages remain fixed in real terms over time. The total labor 
expenditures in each year are calculated by multiplying the total MPCs 
by the labor percentage of MPCs. The total labor expenditures in the 
GRIM were then converted to total production employment levels by 
dividing production labor expenditures by the average fully burdened 
wage multiplied by the average number of hours worked per year per 
production worker. To do this, DOE relied on ASM inputs: Production 
Workers Annual Wages, Production Workers Annual Hours, Production 
Workers for Pay Period, and Number of Employees. DOE

[[Page 7613]]

also relied on BLS employee compensation data to determine the fully 
burdened wage ratio. The fully burdened wage ratio factors in paid 
leave, supplemental pay, insurance, retirement and savings, and legally 
required benefits.
    The total production employees number was then multiplied by the 
U.S. labor percentage to convert total production employment to total 
domestic production employment. The U.S. labor percentage represents 
the industry fraction of domestic manufacturing production capacity for 
the covered equipment. This value is derived from manufacturer 
interviews, equipment database analysis, DOE's shipments analysis, and 
publicly available information. DOE estimates that approximately 77 
percent of CRE covered by this final rule are produced domestically.
    The domestic production employees estimate covers production line 
workers, including line supervisors, who are directly involved in 
fabricating and assembling equipment within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor.\154\ DOE's estimates only account for 
production workers who manufacture the specific equipment covered by 
this final rule.
---------------------------------------------------------------------------

    \154\ U.S. Census Bureau, ``Definitions and Instructions for the 
Annual Survey of Manufactures, MA-10000.'' Available at 
www2.census.gov/programs-surveys/asm/technical-documentation/questionnaire/2021/instructions/MA_10000_Instructions.pdf (last 
accessed April 11, 2024).
---------------------------------------------------------------------------

    Non-production workers account for the remainder of the direct 
employment figure. The non-production employees category covers 
domestic workers who are not directly involved in the production 
process, such as sales, engineering, human resources, management, 
etc.\155\ Using the number of domestic production workers calculated 
above, non-production domestic employees are extrapolated by 
multiplying the ratio of non-production workers in the industry 
compared to production employees. DOE assumes that this employee 
distribution ratio remains constant between the no-new-standards case 
and standards cases.
---------------------------------------------------------------------------

    \155\ Id.
---------------------------------------------------------------------------

    Using the GRIM, DOE estimates that in the absence of new energy 
conservation standards, there would be 11,792 domestic production and 
non-production workers for CRE in 2029. shows the range of impacts of 
energy conservation standards on U.S. manufacturing employment in the 
CRE industry. The discussion below provides a qualitative evaluation of 
the range of potential impacts presented in table V.66.
[GRAPHIC] [TIFF OMITTED] TR21JA25.196

    The direct employment impacts in represent the potential domestic 
employment changes that could result following the compliance date for 
CRE in this final rule. The upper bound estimate corresponds to a 
potential change in the number of domestic workers that would result 
from new and amended energy conservation standards if manufacturers 
continue to produce the same scope of covered equipment within the 
United States after compliance takes effect. For the lower bound 
estimate, DOE maintained its methodology from the August 2024 NODA for 
this final rule. 89 FR 68788, 68828-68829.
    The lower bound estimate conservatively assumes that some domestic 
manufacturing either is eliminated or moves abroad at more stringent 
efficiency levels. For levels that require capital investment or higher 
per-unit labor content, DOE assumed that some manufacturing could move 
abroad as relocating production to lower-labor cost countries could 
become increasingly attractive. At relevant TSLs, DOE used results of 
the shipments analysis (i.e., the percent of shipments that would not 
meet the standard) to estimate the portion of domestic production that 
would shift to foreign countries. However, DOE notes that most of the 
design options analyzed in the engineering analysis require 
manufacturers to purchase more-efficient components from suppliers. 
These components do not require significant additional labor to 
assemble or significant production line updates. As in the August 2024 
NODA, for this final rule, DOE modeled an incremental increase in labor 
costs associated with implementing improved door designs (i.e., moving 
to double-pane, triple-pane, or VIG door designs). Incorporating 
vacuum-insulated panels could lead to greater labor requirements; 
however, as discussed in section IV.B.1 of this document, DOE did not 
consider vacuum-insulated panels as a design option in its engineering 
analysis. At the adopted TSL (i.e., TSL 3), DOE projects that nearly 
half of industry shipments will meet the required efficiency levels by 
the 2029 compliance date in the no-new-standards case. Additionally, 
DOE notes that only two directly analyzed equipment classes would 
likely incorporate improved door designs. As such, DOE does not expect 
TSL 3 will necessitate large capital costs or significantly higher per-
unit labor content. Furthermore, DOE notes that most basic models (63 
percent of model listings) meet TSL 3.
    Additional detail on the analysis of direct employment can be found 
in chapter 12 of the final rule TSD. Additionally, the employment 
impacts discussed in this section are

[[Page 7614]]

independent of the employment impacts from the broader U.S. economy, 
which are documented in chapter 16 of the final rule TSD.
c. Impacts on Manufacturing Capacity
    In interviews conducted in advance of the October 2023 NOPR, most 
manufacturers noted potential manufacturing capacity concerns relating 
to widespread adoption of increased insulation thickness or VIPs. As 
discussed in section IV.B.1 of this document, DOE excluded these 
technologies from further consideration in the engineering analysis 
and, thus, DOE does not expect manufacturers would need to increase 
insulation thickness or incorporate VIPs to meet any of the efficiency 
levels analyzed in this final rule. Furthermore, DOE revised its 
baseline insulation thickness assumptions used in the October 2023 NOPR 
in response to stakeholder comments. The revised insulation thicknesses 
analyzed in the August 2024 NODA and this final rule generally align 
with the insulation thicknesses analyzed in the March 2014 Final 
Rule,\156\ which are also consistent with stakeholder comments and 
DOE's test data.
---------------------------------------------------------------------------

    \156\ DOE assumed an insulation thickness of 1.5 inches for 
medium- and high-temperature equipment, 2.0 inches for low-
temperature equipment, and 2.5 inches for ice cream temperature 
equipment. See Table 5A.2.2 Baseline Specifications in the 2014 
Final rule TSD at www.regulations.gov/document/EERE-2010-BT-STD-0003-0102.
---------------------------------------------------------------------------

    Therefore, when considering potential new and amended energy 
conservation standards in isolation, DOE believes manufacturers would 
be able to maintain manufacturing capacity levels and continue to meet 
market demand under new and amended energy conservation standards. 
However, multiple manufacturers in confidential interviews and public 
comments in response to the October 2023 NOPR and August 2024 NODA 
raised concerns about technical and laboratory resource constraints due 
to overlapping regulations over a short time period. Specifically, 
these manufacturers mentioned the testing and redesign required for new 
safety and industry standards and the various regulations necessitating 
the transition to low-GWP refrigerants. In confidential interviews and 
comments in response to the October 2023 NOPR and August 2024 NODA, 
some manufacturers stated that they are already experiencing testing 
laboratory shortages, which would be further exacerbated by DOE energy 
conservation standards if DOE adopts more stringent standards that 
necessitate the redesign of the majority of basic models. Manufacturers 
noted that the ongoing supply chain constraints further strain 
technical and laboratory resources as manufacturers are forced to 
identify and qualify new component suppliers due to shortages and long 
lead times.
    At the adopted TSL (i.e., TSL 3), DOE estimates that approximately 
63 percent of analyzed equipment class model listings (12,596 out of 
19,902 unique basic models) meet the efficiency levels required. 
Furthermore, DOE is extending the compliance period from the 3-years 
analyzed in the October 2023 NOPR to 4-years in this final rule to help 
mitigate concerns about laboratory and engineering resource 
constraints.
d. Impacts on Subgroups of Manufacturers
    Small business, low volume, and niche equipment manufacturers, and 
manufacturers exhibiting a cost structure substantially different from 
the industry average, could be affected disproportionately. As 
discussed in section IV.J of this document, using average cost 
assumptions to develop an industry cash flow estimate is inadequate to 
assess differential impacts among manufacturer subgroups.
    For CRE, DOE identified and evaluated the impact of new and amended 
conservation standards on one subgroup: small manufacturers. The Small 
Business Administration (``SBA'') defines a ``small business'' as 
having 1,250 employees or fewer for NAICS 333415, ``Air-Conditioning 
and Warm Air Heating Equipment and Commercial and Industrial 
Refrigeration Equipment Manufacturing,'' which includes CRE 
manufacturing. Based on this definition, DOE identified 20 domestic 
OEMs in the CRE industry that qualify as a ``small business.''
    For a discussion of the impacts on the small manufacturer subgroup, 
see the regulatory flexibility analysis in section VI.B of this 
document or chapter 12 of the final rule TSD.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the equipment/product-
specific regulatory actions of other Federal agencies and States that 
affect the manufacturers of a covered product or equipment. While any 
one regulation may not impose a significant burden on manufacturers, 
the combined effects of several existing or impending regulations may 
have serious consequences for some manufacturers, groups of 
manufacturers, or an entire industry. Assessing the impact of a single 
regulation may overlook this cumulative regulatory burden. In addition 
to energy conservation standards, other regulations can significantly 
affect manufacturers' financial operations. Multiple regulations 
affecting the same manufacturer can strain profits and lead companies 
to abandon product lines or markets with lower expected future returns 
than competing equipment. For these reasons, DOE conducts an analysis 
of cumulative regulatory burden as part of its rulemakings pertaining 
to appliance efficiency. DOE evaluates equipment/product-specific 
regulations that will take effect approximately 3 years before or after 
the estimated 2029 compliance date of any new and amended energy 
conservation standards for CRE (2026-2032).
    The DOE energy conservation standards regulations potentially 
contributing to cumulative regulatory burden are presented in table 
V.67. In addition to the proposed and adopted energy conservation 
standards rulemakings identified, DOE also considers refrigerant 
regulations, such as the October 2023 EPA Final Rule, in its cumulative 
regulatory burden analysis. DOE discusses these refrigerant regulations 
in the subsection ``Refrigerant Regulations'' included in this section.

[[Page 7615]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.197


[[Page 7616]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.198

Refrigerant Regulations
    The October 2023 EPA Final Rule restricts the use of HFCs in 
specific sectors or subsectors, including use in certain CRE covered by 
this rulemaking. Consistent with the October 2023 NOPR, DOE considered 
the impacts of the refrigerant transition in this final rule analysis. 
DOE understands that switching from non-flammable to flammable 
refrigerants (e.g., R-290) requires time and investment to redesign CRE 
models and upgrade production facilities to accommodate the additional 
structural and safety precautions required. Compliance with the October 
2023 EPA Final Rule ranges from January 1, 2025 to January 1, 2027 for 
categories relevant to CRE covered by this rulemaking (see table IV.5 
for a list of compliance dates for the October 2023 EPA Final Rule 
applicable to CRE). Therefore, DOE expects manufacturers will complete 
the transition to low-GWP refrigerants in compliance with EPA 
regulation prior to the expected 2029 DOE compliance date for CRE. As 
discussed in section IV.C.1.a of this document, DOE expects CRE 
manufacturers will transition self-contained CRE covered by this 
rulemaking to R-290 to comply with anticipated refrigeration 
regulations. See section IV.C.1 of this document for additional 
information on refrigerant assumptions in the engineering analysis.
    Consistent with the October 2023 NOPR and August 2024 NODA, in this 
final rule, DOE accounted for the costs associated with redesigning CRE 
to make use of flammable refrigerants and retrofitting production 
facilities to accommodate flammable refrigerants in the GRIM. DOE 
considers the expenses associated with the refrigerant transition as 
part of the analytical baseline. In other words, manufacturers would 
need to comply with the October 2023 EPA Final Rule regardless of 
whether or not DOE amends standards. Therefore, DOE incorporated the 
refrigerant transition expenses into both the no-new-standards case and 
standards cases. For the October 2023 NOPR, DOE relied on manufacturer 
feedback in confidential interviews, a report prepared for EPA,\157\ 
results of the engineering analysis, and investment estimates submitted 
by NAMA and AHRI in response to the June 2022 Preliminary Analysis to 
estimate the industry refrigerant transition costs. 88 FR 70196, 70284. 
For the August 2024 NODA, DOE updated its R&D estimate to reflect 
feedback from written comments in response to the October 2023 NOPR. 89 
FR 68788, 68800. DOE also adjusted the timeline of when manufacturers 
would need to make investments related to the refrigerant transition to 
align with the revised compliance dates for CRE in the October 2023 EPA 
Final Rule. Id. DOE maintained the approach from the August 2024 NODA 
for this final rule, however, as this final rule only analyzes non-
large self-contained CRE (see table IV. for the TDA/volume ranges for 
the seven relevant equipment classes) and remote-condensing CRE, DOE 
excluded the investments associated with large self-contained CRE in 
its GRIM.
---------------------------------------------------------------------------

    \157\ See pp. 5-113 of the ``Global Non-CO2 
Greenhouse Gas Emission Projections & Marginal Abatement Cost 
Analysis: Methodology Documentation'' (2019). Available at 
www.epa.gov/sites/default/files/2019-9/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------

    Based on feedback, DOE assumed that the transition to low-GWP 
refrigerants would require industry to invest approximately $13.6 
million in R&D and $17.7 million in capital expenditures (e.g., 
investments in new charging equipment, leak detection systems, etc.) 
from 2024 (the final rule reference year) and 2027 (the latest EPA 
compliance date for CRE covered by this rulemaking). Consistent with 
the October 2023 NOPR, DOE notes that its refrigerant transition 
estimates of $13.6 million in R&D and $17.7 million capital 
expenditures reflect an estimate of future (2023-2025 for the October 
2023 NOPR and 2024-2027 for this final rule) investments industry would 
incur to comply with Federal or State refrigerant regulations. DOE 
acknowledges that manufacturers have already invested a significant 
amount of time and capital into transitioning CRE to low-GWP 
refrigerants. However, as the GRIM developed for this rulemaking only 
analyzes future cash flows, starting with the reference year of the 
analysis (2024) and continuing 30 years after the analyzed compliance 
year, the MIA conducted for this final rule only reflects changes in 
annual cash flow and associated refrigerant transition expenses 
starting in 2024.
3. National Impact Analysis
    This section presents DOE's estimates of the NES and the NPV of 
consumer benefits that would result from each of the TSLs considered as 
potential amended standards.
a. National Energy Savings
    To estimate the energy savings attributable to potential new and 
amended standards for CRE, DOE compared their energy consumption under 
the no-new-standards case to

[[Page 7617]]

their anticipated energy consumption under each TSL. The savings are 
measured over the entire lifetime of equipment purchased during the 30-
year period that begins in the year of anticipated compliance with new 
and amended standards (2029-2058). Table V. presents DOE's projections 
of the NES for each TSL considered for CRE. The savings were calculated 
using the approach described in section IV.H.2 of this document.
[GRAPHIC] [TIFF OMITTED] TR21JA25.199

    OMB Circular A-4 \158\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this rulemaking, 
DOE undertook a sensitivity analysis using 9 years, rather than 30 
years, of equipment shipments. The choice of a 9-year period is a proxy 
for the timeline in EPCA for the review of certain energy conservation 
standards and potential revision of and compliance with such revised 
standards.\159\ The review timeframe established in EPCA is generally 
not synchronized with the equipment lifetime, equipment manufacturing 
cycles, or other factors specific to CRE. Thus, such results are 
presented for informational purposes only and are not indicative of any 
change in DOE's analytical methodology. The NES sensitivity analysis 
results based on a 9-year analytical period are presented in table V.. 
The impacts are counted over the lifetime of CRE purchased during the 
period 2029-2037.
---------------------------------------------------------------------------

    \158\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed July 1, 2024). DOE 
used the prior version of Circular A-4 (September 17, 2003) in 
accordance with the effective date of the November 9, 2023 version. 
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed July 20, 
2024).
    \159\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. (42 U.S.C. 
6316(e)(1); 42 U.S.C. 6295(m)) While adding a 6-year review to the 
3-year compliance period adds up to 9 years, DOE notes that it may 
undertake reviews at any time within the 6-year period and that the 
3-year compliance date may yield to the 6-year backstop. A 9-year 
analysis period may not be appropriate given the variability that 
occurs in the timing of standards reviews and the fact that for some 
products, the compliance period is 5 years rather than 3 years.
[GRAPHIC] [TIFF OMITTED] TR21JA25.200

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for CRE. In 
accordance with OMB Circular A-4, DOE calculated NPV using both a 7-
percent and a 3-percent real discount rate. Table V. shows the consumer 
NPV results with impacts counted over the lifetime of equipment 
purchased during the period 2029-2058.
[GRAPHIC] [TIFF OMITTED] TR21JA25.201

    The NPV results based on the aforementioned 9-year analytical 
period are presented in table V.71. The impacts are counted over the 
lifetime of equipment purchased during the period 2029-2058. As 
mentioned previously, such results are presented for informational 
purposes only and are not indicative of any change in DOE's

[[Page 7618]]

analytical methodology or decision criteria.
[GRAPHIC] [TIFF OMITTED] TR21JA25.202

    The previous results reflect the use of a default trend to estimate 
the change in price for CRE over the analysis period (see section 
IV.F.1 of this document). DOE also conducted a sensitivity analysis 
where CRE prices were assumed to remain constant over the analysis 
period. This analysis was considered as a part of the low economic 
benefits scenario, which is based on low economic growth with lower 
electricity price declines and lower floorspace projections for 
shipments. See Appendix 10C of the final rule TSD for full results of 
all NIA sensitivities conducted.
c. Indirect Impacts on Employment
    DOE estimates that amended energy conservation standards for CRE 
will reduce energy expenditures for consumers of those equipment, with 
the resulting net savings being redirected to other forms of economic 
activity. These expected shifts in spending and economic activity could 
affect the demand for labor. As described in section IV.N of this 
document, DOE used an input/output model of the U.S. economy to 
estimate indirect employment impacts of the TSLs that DOE considered. 
There are uncertainties involved in projecting employment impacts, 
especially changes in the later years of the analysis. Therefore, DOE 
generated results for near-term timeframes (2029-2033), where these 
uncertainties are reduced.
    The results suggest that the adopted standards are likely to have a 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the final rule TSD presents detailed results 
regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Equipment
    As discussed in section III.F.1.d of this document, DOE has 
concluded that the standards adopted in this final rule will not lessen 
the utility or performance of the CRE under consideration in this 
rulemaking. Manufacturers of this equipment generally already offer 
units that meet or exceed the adopted standards.
5. Impact of Any Lessening of Competition
    DOE considered any lessening of competition that would be likely to 
result from new or amended standards. As discussed in section III.F.1.e 
of this document, EPCA directs the Attorney General of the United 
States (``Attorney General'') to determine the impact, if any, of any 
lessening of competition likely to result from a proposed standard and 
to transmit such determination in writing to the Secretary within 60 
days of the publication of a proposed rule, together with an analysis 
of the nature and extent of the impact. To assist the Attorney General 
in making this determination, DOE provided the Department of Justice 
(``DOJ'') with copies of the October 2023 NOPR and the October 2023 
NOPR TSD for review. In its assessment letter responding to DOE, DOJ 
concluded that the proposed energy conservation standards for CRE are 
unlikely to have a significant adverse impact on competition. DOE is 
publishing the Attorney General's assessment at the end of this final 
rule.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the Nation's energy security, strengthens the economy, and reduces the 
environmental impacts (costs) of energy production. Reduced electricity 
demand due to energy conservation standards is also likely to reduce 
the cost of maintaining the reliability of the electricity system, 
particularly during peak-load periods. Chapter 15 of the final rule TSD 
presents the estimated impacts on electricity-generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for CRE is expected to yield environmental benefits in the 
form of reduced emissions of certain air pollutants and GHGs. Table V. 
provides DOE's estimate of cumulative emissions reduction expected to 
result from the TSLs considered in this rulemaking. The emissions were 
calculated using the multipliers discussed in section IV.K of this 
document. DOE reports annual emissions reductions for each TSL in 
chapter 13 of the final rule TSD.

[[Page 7619]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.203

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for CRE. Section 
IV.L of this document discusses the two separate sets of estimated SC-
CO2 values that DOE used. Table V.73 and table V.74 presents 
the value of CO2 emissions reductions at each TSL for each 
of the SC-CO2 cases. The time-series of annual values is 
presented for the selected TSL in chapter 14 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR21JA25.204


[[Page 7620]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.205

    As discussed in section IV.L.2 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for CRE. Table V.75 and table V.76 presents the value of the 
CH4 emissions reduction at each TSL for each of the SC-
CH4 cases. Table V. and table V.78 presents the value of the 
N2O emissions reduction at each TSL for each of the SC-
N2O cases. The time-series of annual values is presented for 
the selected TSL in chapter 14 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR21JA25.206

[GRAPHIC] [TIFF OMITTED] TR21JA25.207


[[Page 7621]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.208

[GRAPHIC] [TIFF OMITTED] TR21JA25.209

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
global and U.S. economy continues to evolve rapidly. DOE, together with 
other Federal agencies, will continue to review methodologies for 
estimating the monetary value of reductions in CO2 and other 
GHG emissions. This ongoing review will consider the comments on this 
subject that are part of the public record for this and other 
rulemakings, as well as other methodological assumptions and issues. 
DOE notes, however, that the adopted standards would be economically 
justified even without inclusion of monetized benefits of reduced GHG 
emissions.
    DOE also estimated the monetary value of the economic benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for CRE. The dollar-per-
ton values that DOE used are discussed in section IV.L of this 
document. Table V.79 presents the present value for NOX 
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and table V.80 presents similar results for 
SO2 emissions reductions. The results in these tables 
reflect application of EPA's low dollar-per-ton values, which DOE used 
to be conservative. The time-series of annual values is presented for 
the selected TSL in chapter 14 of the final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR21JA25.210


[[Page 7622]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.211

    Not all the public health and environmental benefits from the 
reduction of GHG, NOX, and SO2 are captured in 
the values above, and additional unquantified benefits from the 
reductions of those pollutants as well as from the reduction of direct 
PM and other co-pollutants may be significant. DOE has not included 
monetary benefits of the reduction of Hg emissions because the amount 
of reduction is very small.
7. Other Factors
    The Secretary, in determining whether a standard is economically 
justified, may consider any other factors that the Secretary deems to 
be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII), 42 U.S.C. 6316(e)(1)) No 
other factors were considered in this analysis.
8. Summary of Economic Impacts
    Table V.81 and table V.82 presents the NPV values that result from 
adding the estimates of the economic benefits resulting from reduced 
GHG and NOX and SO2 emissions to the NPV of 
consumer benefits calculated for each TSL considered in this 
rulemaking. The consumer benefits are domestic U.S. monetary savings 
that occur as a result of purchasing the covered equipment and are 
measured for the lifetime of equipment shipped during the period 2029-
2058. The climate benefits associated with reduced GHG emissions 
resulting from the adopted standards are global benefits and are also 
calculated based on the lifetime of CRE shipped during the period 2029-
2058.
[GRAPHIC] [TIFF OMITTED] TR21JA25.212


[[Page 7623]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.213

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered equipment 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(o)(2)(A)) In determining whether a standard is economically 
justified, the Secretary must determine whether the benefits of the 
standard exceed its burdens by, to the greatest extent practicable, 
considering the seven statutory factors discussed previously. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(2)(B)(i))) The new or amended 
standard must also result in significant conservation of energy. (42 
U.S.C. 6316(e)(1); 42 U.S.C. 6295(o)(3)(B)(i))
    For this final rule, DOE considered the impacts of new and amended 
standards for CRE at each TSL, beginning with the maximum 
technologically feasible level, to determine whether that level was 
economically justified. Where the max-tech level was not justified, DOE 
then considered the next most efficient level and undertook the same 
evaluation until it reached the highest efficiency level that is both 
technologically feasible and economically justified and saves a 
significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. There is evidence that consumers 
undervalue future energy savings as a result of (1) a lack of 
information; (2) a lack of sufficient salience of the long-term or 
aggregate benefits; (3) a lack of sufficient savings to warrant 
delaying or altering purchases; (4) excessive focus on the short term, 
in the form of inconsistent weighting of future energy cost savings 
relative to available returns on other investments; (5) computational 
or other difficulties associated with the evaluation of relevant 
tradeoffs; and (6) a divergence in incentives (for example, between 
business owners and renters). Having less than perfect foresight and a 
high degree of uncertainty about the future, consumers may trade off 
these types of investments at a higher-than-expected rate between 
current consumption and uncertain future energy cost savings.
    In DOE's current regulatory analysis, potential changes in the 
benefits and costs of a regulation due to changes in consumer purchase 
decisions are included in two ways. First, if consumers forgo the 
purchase of CRE in the standards case, this decreases sales for 
manufacturers, and the impact on manufacturers attributed to lost 
revenue is included in the MIA. Second, DOE accounts for energy savings 
attributable only to equipment actually used by consumers in the 
standards case; if a standard decreases the number of equipment 
purchased by consumers, this decreases the potential energy savings 
from an energy conservation standard. DOE provides estimates of 
shipments and changes in the volume of CRE purchases in chapter 9 of 
the final rule TSD.
1. Benefits and Burdens of TSLs Considered for CRE Standards
    Table V.83 and table V.84 summarize the quantitative impacts 
estimated for each TSL for CRE. The national impacts are measured over 
the lifetime of CRE purchased during the 30-year period that begins in 
the anticipated year of compliance with amended standards (2029-2058). 
The energy savings, emissions reductions, and value of emissions 
reductions refer to full-fuel-cycle results. DOE is presenting 
monetized benefits of GHG emissions reductions in accordance with the 
applicable Executive orders, and DOE would reach the same conclusion 
presented in this notice in the absence of the SC-GHG, including the 
2023 SC-GHG. The efficiency levels contained in each TSL are described 
in section V.A of this document.

[[Page 7624]]

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[[Page 7625]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.215


[[Page 7626]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.216


[[Page 7627]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.217

    This section discusses DOE's conclusions regarding CRE connected to 
a remote condensing unit and non-large CRE connected to a self-
contained unit. As discussed previously in sections I and II.B.3 of 
this document, DOE is

[[Page 7628]]

continuing to analyze the large-capacity ranges presented in table IV. 
for the VOP.SC.M, SVO.SC.M, HZO.SC.L, SOC.SC.M, VCT.SC.M, VCT.SC.L, and 
VCS.SC.L equipment classes.
    DOE first considered TSL 5, which represents the max-tech 
efficiency levels for all equipment classes. The design options DOE 
analyzed at this level include the max-tech technologies for all 
equipment classes. DOE expects manufacturers would likely need to 
incorporate occupancy sensors with dimming capability for all vertical 
and semi-vertical open and all transparent door equipment classes. 
Vertical and semi-vertical open equipment classes would also likely 
necessitate the use of night curtains. For equipment classes with 
transparent doors, DOE expects manufacturers would likely need to 
incorporate vacuum-insulated glass doors. For most self-contained 
equipment, DOE expects manufacturers would likely need to incorporate 
variable-speed compressors. For all self-contained equipment classes, 
DOE expects manufacturers would likely incorporate EC evaporator and 
condenser fan motors.
    TSL 5 would save an estimated 1.61 quads of FFC energy over 30 
years of shipments (2029 to 2058), an amount DOE considers significant. 
Under TSL 5, the NPV of consumer benefits would be -$5.36 billion using 
a discount rate of 7 percent, and -$8.45 billion using a discount rate 
of 3 percent for the same 30-year period.
    The cumulative emissions reductions at TSL 5 are 28.6 Mt of 
CO2, 8.71 thousand tons of SO2, 53.5 thousand 
tons of NOX, 0.06 tons of Hg, 243 thousand tons of 
CH4, and 0.28 thousand tons of N2O for the same 
30-year period. The estimated monetary value of the climate benefits 
from reduced GHG emissions (associated with the average 2023 SC-GHG 
estimates at a 2-percent, near-term Ramsey discount rate) at TSL 5 is 
$6.66 billion, and the climate benefits associated with the average 
2021 Interim SC-GHG estimates at a 3-percent discount rate are 
estimated to be $1.62 billion. The estimated monetary value of the 
health benefits from reduced SO2 and NOX 
emissions at TSL 5 is $1.24 billion using a 7-percent discount rate and 
$3.17 billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and either the 2-percent near-term Ramsey discount rate case 
for climate benefits from reduced GHG emissions, or the 3-percent 
discount rate case for climate benefits from reduced GHG emissions, the 
estimated total NPV at TSL 5 is $2.54 billion (using the 2023 SC-GHG 
estimates) or -$2.51 billion (using the 2021 interim SC-GHG estimates). 
Using a 3-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOx and SO2 emissions, and 
either the 2-percent discount rate case for climate benefits from 
reduced GHG emissions or 3-percent discount rate case for, the 
estimated total NPV at TSL 5 is $1.39 billion (using the 2023 SC-GHG 
estimates) or -$3.66 billion (using the 2021 interim SC-GHG estimates). 
The estimated total NPV is provided for additional information; 
however, DOE primarily relies upon the NPV of consumer benefits when 
determining whether a proposed standard level is economically 
justified.
    At TSL 5, affected purchasers of CRE experience average LCC savings 
ranging from -$3,333 to $1,946 with a payback period ranging from 1.6 
years to 114.9 years. The LCC savings are negative for 12 of the 28 
analyzed equipment classes, representing 78 percent of annual 
shipments. For example, the equipment class with the highest annual 
shipments volume (VCS.SC.M), representing approximately 36 percent of 
annual CRE shipments, has negative LCC savings of -$42 with 52 percent 
of consumers experiencing a net cost, and a PBP of 9.6 years. The 
second-highest equipment class in terms of annual units shipped 
(VCT.SC.M), representing about 25 percent of annual CRE shipments, has 
negative LCC savings of -$1,422 with 61 percent of consumers 
experiencing a net cost, and a PBP of 55.6 years. Overall, almost half 
of CRE purchasers (48 percent) experience a net cost. Furthermore, the 
shipment-weighted-average PBP is estimated at 27.8 years, which is 
generally higher than the average CRE lifetime, while the shipment-
weighted-average LCC savings is negative, at -$608.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$221.7 million to an increase of $55.2 million, which corresponds to a 
decrease of 7.3 percent and an increase of 1.8 percent, respectively. 
DOE estimates that manufacturers would need to invest $254.1 million to 
update equipment designs and source, qualify, and test high-efficiency 
components across their entire CRE portfolio. DOE estimates that 
approximately 55 percent of analyzed equipment class model listings in 
its CCD (10,957 unique basic models out of a total of 19,902) do not 
meet the max-tech efficiency levels required.
    At this level, although most design options would not necessitate 
purchasing new equipment or significant capital investment, nearly all 
manufacturers would need to spend notable development time 
incorporating the analyzed max-tech design options across their entire 
CRE portfolio. For the 84 manufacturers that offer CRE with transparent 
doors (which account for approximately 41 percent of model listings), 
implementing vacuum-insulated glass would require significant 
engineering resources and testing time to ensure adequate safety and 
durability of their equipment in all commercial settings. In 
interviews, most manufacturers raised concerns about standards 
requiring a widespread adoption of vacuum-insulated glass as it is 
still a relatively new technology in the commercial refrigeration 
market. Manufacturers pointed to the very limited industry experience 
with implementing vacuum-insulated glass in CRE applications. In 
addition to incorporating vacuum-insulated glass into transparent door 
CRE designs, DOE expects most manufacturers would have to invest in 
extensive redesign and development to incorporate variable-speed 
compressors across nearly all self-contained CRE models.
    Based on this analysis, the Secretary concludes that at TSL 5 for 
CRE, the benefits of energy savings, emission reductions, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the negative NPV of consumer benefits, economic burden on 
many CRE purchasers, and the impacts on manufacturers, including the 
conversion costs impacts that could result in a reduction in INPV. For 
the manufacturers of CRE with transparent doors implementing vacuum-
insulated glass would require significant engineering resources and 
testing time to ensure adequate safety and durability of their 
equipment in all commercial settings. Almost half of CRE purchasers (48 
percent) experience a net cost. Furthermore, the shipment-weighted 
average LCC savings are negative (-$608) and the shipment-weighted 
average PBP exceeds the average CRE lifetime, at 27.8 years. 
Consequently, the Secretary has concluded that TSL 5 is not 
economically justified.
    DOE then considered TSL 4, an intermediate TSL representing less 
stringent efficiency levels for approximately one-third of the 
equipment classes analyzed compared to TSL 5. DOE expects manufacturers 
would likely need to incorporate occupancy sensors with dimming 
capability for all vertical and semi-vertical open and most transparent 
door equipment classes. Vertical and semi-vertical open equipment 
classes would also likely necessitate the use of night

[[Page 7629]]

curtains. For most equipment classes with transparent doors, DOE 
expects manufacturers would incorporate triple-pane, argon-filled glass 
doors, triple-pane, krypton-filled glass doors, or vacuum-insulated 
glass doors. For most self-contained equipment classes, DOE expects 
manufacturers would likely need to incorporate variable-speed 
compressors. For all self-contained equipment classes, DOE expects 
manufacturers would likely incorporate EC evaporator and condenser fan 
motors.
    TSL 4 would save an estimated 1.50 quads of full fuel cycle energy 
over 30 years of shipments (2029 to 2058), an amount DOE considers 
significant. Under TSL 4, the NPV of consumer benefit would be $0.22 
billion using a discount rate of 7 percent, and $1.89 billion using a 
discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 26.7 Mt of 
CO2, 8.14 thousand tons of SO2, 50 thousand tons 
of NOX, 0.06 tons of Hg, 228 thousand tons of 
CH4, and 0.26 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions at 
TSL 4 is $6.23 billion (using the 2023 SC-GHG estimates at a 2-percent 
near-term Ramsey discount rate) or $1.51 billion (using 2021 interim 
SC-GHG estimates at an average 3-percent discount rate). The estimated 
monetary value of the health benefits from reduced SO2 and 
NOX emissions at TSL 4 is $1.16 billion using a 7-percent 
discount rate and $2.97 billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and either the 2-percent near-term Ramsey discount rate case 
or the 3-percent discount rate case for climate benefits from reduced 
GHG emissions, the estimated total NPV at TSL 4 is $7.61 billion (using 
the 2023 SC-GHG estimates) or $2.89 billion (using the 2021 interim SC-
GHG estimates). Using a 3-percent discount rate for consumer benefits 
and costs and health benefits from reduced NOX and 
SO2 emissions, and the 2-percent near-term Ramsey discount 
rate case or the 3-percent discount rate case for climate benefits from 
reduced GHG emissions, the estimated total NPV at TSL 4 is $11.08 
billion (using the 2023 SC-GHG estimates) or $6.36 billion (using the 
2021 interim SC-GHG estimates). The estimated total NPV is provided for 
additional information, however, DOE primarily relies upon the NPV of 
consumer benefits when determining whether a proposed standard level is 
economically justified.
    At TSL 4, affected purchasers for each CRE equipment class 
experience average LCC savings ranging from -$810 to $1,946 with a 
payback period ranging from 1.6 years to 19.8 years. The LCC savings 
are negative for 5 of the 28 analyzed equipment classes, representing 
75 percent of annual shipments. For example, the equipment class with 
the highest annual shipments volume (VCS.SC.M), representing 
approximately 36 percent of annual CRE shipments, has negative LCC 
savings of -$42 with 52 percent of consumers experiencing a net cost, 
and a PBP of 9.6 years. The second-highest equipment class in terms of 
annual units shipped (VCT.SC.M), representing about 25 percent of 
annual CRE shipments, has negative LCC savings of -$66 with 45 percent 
of consumers experiencing a net cost, and a PBP of 11.6 years. Overall, 
approximately 40 percent of affected CRE purchasers would experience a 
net cost, while 27 percent would experience a net benefit, and the 
remaining purchasers would be unaffected at TSL 4. In addition, the 
estimated shipment-weighted average LCC savings for all CRE is $8 and 
the shipment-weighted average PBP is 9.5 years.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$160.1 million to a decrease of $63.5 million, which correspond to 
decreases of 5.3 percent and 2.1 percent, respectively. DOE estimates 
that industry would need to invest $223.9 million to comply with 
standards set at TSL 4. Similar to TSL 5, DOE estimates that over half 
of CRE models would require redesign to meet standards set at TSL 4. 
Specifically, DOE estimates that approximately 53 percent of analyzed 
equipment class model listings in its CCD (10,574 unique basic models 
out of a total of 19,902) do not meet the TSL 4 efficiency levels.
    Similar to TSL 5, DOE expects manufacturers would need to dedicate 
notable engineering resources and time to update equipment designs and 
source, qualify, and test high-efficiency components. DOE also expects 
some manufacturers would need to invest in new tooling to accommodate 
the additional door thickness associated with incorporating additional 
panes of glass into CRE designs. At this level, DOE expects 7 out of 
the 11 directly analyzed transparent door equipment classes would 
likely necessitate vacuum-insulated glass doors or other improved door 
designs. Specifically, DOE expects SOC.SC.M and VCT.SC.L (which 
represent approximately 9 percent of transparent door CRE model 
listings) would incorporate vacuum-insulated glass doors, SOC.RC.M, 
VCT.RC.L, and VCT.RC.M (which represent approximately 63 percent of 
transparent door CRE model listings) would incorporate triple-pane 
glass doors with krypton fill, and HCT.SC.I and VCT.SC.M (which 
represent approximately 25 percent of transparent door CRE model 
listings) would incorporate triple-pane glass doors with argon fill at 
this level. As previously discussed, many manufacturers raised concerns 
about the widespread adoption of vacuum-insulated glass because the 
industry does not have widescale experience integrating this technology 
into their designs. In interviews and public comments, some 
manufacturers also raised concerns about the limited supply of krypton 
gas available to the market. (Hillphoenix, No. 77 at p. 6; Zero Zone, 
No. 75 at pp. 3-4) Currently, few CRE designs have triple-pane glass 
doors with krypton fill as nearly all CRE with double-pane or triple-
pane doors are manufactured with argon fill, and single-pane doors do 
not have an inert gas fill. At this level, DOE expects most self-
contained equipment classes (representing approximately 90 percent of 
self-contained CRE model listings) would likely necessitate the use of 
variable-speed compressors. Therefore, DOE expects most manufacturers 
would still have to invest in significant redesign and development time 
to optimize variable-speed compressors to ensure energy efficiency 
benefits across the majority of self-contained CRE designs.
    Most CRE manufacturers offer an exhaustive range of model offerings 
to appeal to the unique requirements of each CRE consumer. Within a 
model family, manufacturers offer numerous options to customize CRE to 
the specifications of restaurant, supermarket, and retail chains and 
other bulk purchasers of CRE (e.g., Coca-Cola, Pepsi). In interviews, 
many manufacturers noted that offering a wide-range of models with a 
high-level of customization and optionality (e.g., different evaporator 
setups, different lighting arrangements, different door configurations, 
etc.) is critical to succeed in the CRE market. Many manufacturers 
prioritize offering a breadth of model offerings and specialty CRE, 
even if sales of each individual model are low. As such, manufacturers 
still offer hundreds of basic models for equipment classes with low 
annual shipments. For example, SOC.RC.M accounts for approximately 5 
percent of model listings (over 1,000 unique basic models certified in 
DOE's CCD) even though SOC.RC.M only accounts for 0.1 percent of 
industry shipments (less than 2,000 units sold in 2024).

[[Page 7630]]

    Multiple stakeholders raised concerns about the risk that stringent 
standards and limited laboratory and engineering resources would force 
manufacturers to discontinue certain equipment designs and prioritize 
redesigning high-volume model offerings. (Continental, No. 107 at p. 3; 
Continental, No. 86 at p. 6; NAFEM, No. 87 at p. 2; Structural 
Concepts, No. 74 at p. 4) Some manufacturers expressed concern that the 
discontinuation of model offerings could lead to equipment 
commoditization where equipment can only compete on price rather than 
value-added options and features. In addition to the impacts that 
extensive redesign and testing may have on CRE manufacturers overall, 
it would also disproportionately impact small businesses, which 
typically have limited personnel, engineering, and laboratory resources 
relative to larger CRE manufacturers and account for approximately 20 
percent of CRE manufacturers (20 out of 103 OEMs).
    Based on this analysis, the Secretary concludes that at TSL 4 for 
CRE, the benefits of energy savings, emission reductions, and the 
estimated monetary value of the emissions reductions would be 
outweighed by the economic burden on a large fraction of CRE 
purchasers, the risk of reduced customization and optionality if 
manufacturers have insufficient resources to redesign their full 
portfolio of models within the compliance period, the impacts on 
manufacturers including small businesses, including the conversion 
costs that could result in a reduction in INPV, and limited industry 
experience with vacuum-insulated glass doors in commercial 
applications. If manufacturers do not have sufficient resources to 
redesign models within the compliance period, manufacturers would 
likely discontinue low-volume equipment designs and prioritize 
redesigning high-volume model offerings, potentially leading to 
equipment commoditization. Finally, although the shipments-weighted 
average LCC savings for all CRE are marginally positive (at $8), 
overall the LCC savings are negative for five equipment classes 
representing 75 percent of annual shipments. Consequently, the 
Secretary has concluded that TSL 4 is not economically justified.
    DOE then considered TSL 3, an intermediate TSL representing less 
stringent efficiency levels for 12 equipment classes compared to TSL 4. 
In contrast to TSL 4 and TSL 5, DOE expects that manufacturers could 
meet TSL 3 efficiencies without incorporating occupancy sensors with 
dimming capability into vertical and semi-vertical open and transparent 
door CRE designs, and without use of vacuum-insulated-glass or triple-
pane glass with krypton fill into transparent door CRE designs. For 
vertical and semi-vertical open equipment classes, DOE expects 
manufacturers would likely require the use of night curtains. For some 
equipment classes with transparent doors, DOE expects manufacturers 
would incorporate triple-pane, argon-filled glass doors. For all self-
contained equipment classes, DOE expects manufacturers would 
incorporate EC evaporator and condenser fan motors. For most self-
contained equipment classes, DOE expects manufacturers would likely 
need to incorporate variable-speed compressors. DOE also expects that, 
given the reduced number of models requiring redesign at this TSL and 
the lower overall cost to implement this level compared with TSL 4, 
manufacturers would be able to continue to offer numerous options to 
customize CRE to the specifications of restaurant, supermarket, and 
retail chains and other bulk purchasers of CRE (e.g., Coca-Cola, Pepsi) 
and offer a wide-range of models with a high-level of customization and 
optionality (e.g., different evaporator setups, different lighting 
arrangements, different door configurations, etc.) which is critical to 
succeed in the CRE market.
    TSL 3 would save an estimated 1.11 quads of full fuel cycle energy 
over 30 years of shipments (2029 to 2058), an amount DOE considers 
significant. Under TSL 3, the NPV of consumer benefit would be $1.32 
billion using a discount rate of 7 percent, and $3.43 billion using a 
discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 19.7 Mt of 
CO2, 6.02 thousand tons of SO2, 36.9 thousand 
tons of NOX, 0.04 tons of Hg, 168 thousand tons of 
CH4, and 0.19 thousand tons of N2O. At TSL 3, the 
estimated monetary value of the climate benefits from reduced GHG 
emissions is $4.6 billion (using the SC-GHG estimates at a 2-percent 
near term Ramsey discount rate) or $1.12 billion (using the 2021 
interim SC-GHG estimates at an average 3-percent discount rate) . The 
estimated monetary value of the health benefits from reduced 
SO2 and NOX emissions at TSL 3 is $0.86 billion 
using a 7-percent discount rate and $2.19 billion using a 3-percent 
discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and either the 2-percent near term Ramsey discount rate case 
or the 3-percent discount rate case for climate benefits from reduced 
GHG emissions, the estimated total NPV at TSL 3 is $6.78 billion (using 
the 2023 SC-GHG estimates) or $3.29 billion (using the 2021 interim SC-
GHG estimates). Using a 3-percent discount rate for consumer benefits 
and costs and health benefits from reduced NOX and 
SO2 emissions, and either the 2-percent near-term Ramsey 
discount rate case or the 3-percent discount rate case for climate 
benefits from reduced GHG emissions, the estimated total NPV at TSL 3 
is $10.2 billion (using the 2023 SC-GHG estimates) or $6.74 billion 
(using the 2021 interim SC-GHG estimates). The estimated total NPV is 
provided for additional information, however, DOE primarily relies upon 
the NPV of consumer benefits when determining whether a proposed 
standard level is economically justified.
    At TSL 3, affected purchasers for each CRE equipment class 
experience an average LCC savings ranging from $8 to $1,868 with a 
payback period ranging from 0.9 years to 7.0 years. For example, for 
equipment classes VCS.SC.M, VCT.SC.M, VCS.SC.L, and VCT.SC.L, which 
account for 77 percent of annual CRE shipments, there is a net LCC 
savings of $29, $33, $471, and $437 and a PBP of 3.0, 6.5, 2.2, and 3.5 
years, respectively. Overall, approximately 91 percent of affected CRE 
purchasers would experience a net benefit or not be affected at TSL 3. 
Furthermore, the estimated shipment-weighted-average LCC savings is 
$116 and PBP is 3.5 years, which is lower than the average CRE 
lifetime.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$78.7 million to a decrease of $51.3 million, which correspond to 
decreases of 2.6 percent and 1.7 percent, respectively. DOE estimates 
that industry must invest $117.7 million to comply with standards set 
at TSL 3. At this level, notably fewer models would require redesign 
compared to TSL 4 and TSL 5. DOE estimates that approximately 37 
percent of analyzed equipment class model listings in its CCD (7,306 
unique basic models out of a total of 19,902) do not meet the TSL 3 
efficiency levels required.
    Similar to TSL 4 and TSL 5, DOE expects manufacturers would spend 
development time updating equipment designs to incorporate high-
efficiency components. However, DOE expects manufacturers could meet 
TSL 3 without implementing triple-pane doors with krypton fill or 
vacuum-insulated glass doors, alleviating industry concerns about the 
availability and supply of krypton gas and vacuum-

[[Page 7631]]

insulated glass. Additionally, DOE expects fewer equipment classes 
would necessitate the use of variable-speed compressors. At TSL 3, 
approximately 63 percent of self-contained CRE model listings may need 
to incorporate variable-speed compressors, significantly less than at 
TSL 4 where DOE expects 90 percent of self-contained CRE model listings 
would necessitate the use of variable-speed compressors. Since the 
majority of basic models (63 percent of model listings) already meet 
TSL 3 efficiencies, the estimated industry investment and strain on 
manufacturers' testing facilities and engineering resources would be 
less at TSL 3 than at TSL 4 and TSL 5, reducing the risk that 
manufacturers would need to prioritize resources and discontinue low-
volume CRE designs.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has concluded that a standard set at TSL 3 for 
CRE would be economically justified. At this TSL, the average LCC 
savings for all affected purchasers are positive. An estimated 42 
percent of purchasers experience a net benefit, while 9 percent of 
purchasers experience a net LCC cost. The FFC national energy savings 
are significant and the NPV of consumer benefits is positive using both 
a 3-percent and 7-percent discount rate. Notably, the benefits to 
consumers vastly outweigh the cost to manufacturers. At TSL 3, the NPV 
of consumer benefits, even measured at the more conservative discount 
rate of 7 percent is over 16 times higher than the maximum estimated 
manufacturers' loss in INPV. The standard levels at TSL 3 are 
economically justified even without weighing the estimated monetary 
value of emissions reductions. When those emissions reductions are 
included--representing $4.6 billion in climate benefits (associated 
with the average SC-GHG at a 2-percent near-term Ramsey discount rate), 
and $2.19 billion (using a 3-percent discount rate) or $0.86 billion 
(using a 7-percent discount rate) in health benefits--the rationale 
becomes stronger still.
    As stated, DOE conducts the walk-down analysis to determine the TSL 
that represents the maximum improvement in energy efficiency that is 
technologically feasible and economically justified as required under 
EPCA. The walk-down is not a comparative analysis, as a comparative 
analysis would result in the maximization of net benefits instead of 
energy savings that are technologically feasible and economically 
justified, which would be contrary to the statute. 86 FR 70892, 70908. 
Although DOE has not conducted a comparative analysis to select the 
amended energy conservation standards, DOE notes that as compared to 
TSL 5 and TSL 4, TSL 3 has a lower maximum decrease in INPV and lower 
manufacturer conversion costs. Furthermore, DOE notes that notably more 
basic models meet TSL 3 compared TSL 4 and TSL 5, reducing the amount 
of time and investment associated with redesigning and testing CRE 
models.
    Finally, compared to TSL 5 and TSL 4, TSL 3 results in the highest 
consumer NPV and positive LCC savings for all CRE equipment classes, 
while PBPs for each equipment class are considerably less than the 
average CRE lifetime. In addition, DOE has determined that a 4-year 
compliance period to redesign CRE to meet the adopted standards will 
help alleviate manufacturers' concerns about engineering and laboratory 
resource constraints. Furthermore, the longer compliance period will 
help mitigate cumulative regulatory burden by allowing manufacturers 
more flexibility to spread investments across 4 years instead of 3 
years. Manufacturers will also have more time to recoup any investments 
made to redesign CRE to comply with the October 2023 EPA Final Rule as 
compared to a 3-year compliance period.
    Therefore, based on the previous considerations, DOE adopts the 
energy conservation standards for CRE at TSL 3. The new and amended 
energy conservation standards for CRE, which are expressed as kWh/day, 
are shown in table V.85.
BILLING CODE 6450-01-P

[[Page 7632]]

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[[Page 7633]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.219


[[Page 7634]]


     
---------------------------------------------------------------------------

    \1\ The equation for VOP.SC.H was written incorrectly in the 
August 2024 NODA Support Document and has been corrected here which 
is consistent with the secondary mapping in Table 4.1 of the August 
2024 NODA.
[GRAPHIC] [TIFF OMITTED] TR21JA25.220

BILLING CODE 6950-01-C
2. Annualized Benefits and Costs of the Adopted Standards
    The benefits and costs of the adopted standards can also be 
expressed in terms of annualized values. The annualized net benefit is: 
(1) the annualized national economic value (expressed in 2023$) of the 
benefits from operating equipment that meet the adopted standards 
(consisting primarily of operating cost savings from using less 
energy), minus increases in equipment purchase costs; and (2) the 
annualized monetary value of the climate and health benefits.
    Table V.87 shows the annualized values for CRE under TSL 3, 
expressed in million 2023$. The results under the primary estimate are 
as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOx and SO2 reduction health benefits, and a 2-percent near-
term Ramsey discount rate case or the 3-percent discount rate case for 
climate benefits from reduced GHG emissions,, the estimated cost of the 
adopted standards for CRE is $71 million per year in increased 
equipment installed costs, while the estimated annual benefits are $210 
million from reduced equipment operating costs, $222 million in climate 
benefits (using the 2023 SC-GHG estimates) or $64 million in climate 
benefits (using the 2021 interim SC-GHG estimates), and $90 million 
from reduced NOX and SO2 emissions. In this case, 
the net benefit amounts to $452 million per year (using the 2023 SC-GHG 
estimates) or $294 million per year (using the 2021 interim SC-GHG 
estimates).
    Using a 3-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOx and SO2 emissions, and 
either the 2-percent near-term Ramsey discount rate case or the 3-
percent discount rate case for climate benefits from reduced GHG 
emissions, the estimated cost of the standards is $68 million per year 
in increased equipment costs, while the estimated annual benefits are 
$265 million in reduced operating costs, $222 million in climate 
benefits (using the 2023 SC-GHG estimates) or $64 million in climate 
benefits (using the 2021 interim SC-GHG estimates), and $126 million in 
health benefits. In this case, the net benefit would amount to $545 
million per year (using the 2023 SC-GHG estimates) or $387 million per 
year (using the 2021 interim SC-GHG estimates).

[[Page 7635]]

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[[Page 7636]]


[GRAPHIC] [TIFF OMITTED] TR21JA25.222

3. Removal of Obsolete Provisions
    The energy conservation standards for CRE, located at 10 CFR 
431.66, currently contain provisions in paragraphs (b) through (d) for 
equipment manufactured before March 27, 2017. As such, the provisions 
in paragraphs (b) through (d) are now obsolete for any CRE manufactured 
on or after March 27, 2017. In this final rule, DOE is removing these 
obsolete provisions.
    In addition, paragraph (a) of 10 CFR 431.66 currently contains 
definitions for the terms ``AV'', ``V'', and ``TDA,'' which are 
similarly obsolete. The term ``AV'' is referenced only in paragraph 
(b)(1), which is now obsolete (as discussed in the previous paragraph). 
The definitions for the terms ``V'' and ``TDA'' are obsolete because 
the measurement instructions for volume and total display area were 
updated in the September 2023 Test Procedure Final Rule and are 
separately codified within appendix B to Subpart C of part 431. For 
these reasons, in this final rule, DOE is removing paragraph (a) of 10 
CFR 431.66.
    Given the removal of paragraphs (a) through (d) of 10 CFR 431.66, 
this final rule redesignates paragraph (e)--which contains the 
currently applicable standards--as paragraph (a). DOE is codifying the 
new and amended standards enacted by this final rule at paragraph (b). 
Finally, this final rule redesignates paragraph (f) (``Exclusions'') as 
paragraph (c).

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011) and 
amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879 
(April 11, 2023), requires agencies, to the extent permitted by law, 
to: (1) propose or adopt a regulation only upon a reasoned 
determination that its benefits justify its costs (recognizing that 
some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. DOE 
emphasizes as well that E.O. 13563 requires agencies to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible. In its guidance, the 
Office of Information and Regulatory Affairs (``OIRA'') in the Office 
of Management and Budget has emphasized that such techniques may 
include identifying changing future compliance costs that might result 
from technological

[[Page 7637]]

innovation or anticipated behavioral changes. For the reasons stated in 
the preamble, this final regulatory action is consistent with these 
principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this final regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866, as amended by E.O. 14094. Accordingly, pursuant to 
section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an 
assessment, including the underlying analysis, of benefits and costs 
anticipated from the final regulatory action, together with, to the 
extent feasible, a quantification of those costs; and an assessment, 
including the underlying analysis, of costs and benefits of potentially 
effective and reasonably feasible alternatives to the planned 
regulation, and an explanation why the planned regulatory action is 
preferable to the identified potential alternatives. These assessments 
are summarized in this preamble and further detail can be found in the 
technical support document for this rulemaking.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
and a final regulatory flexibility analysis (``FRFA'') for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by E.O. 13272, ``Proper Consideration of Small Entities in Agency 
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and 
policies on February 19, 2003, to ensure that the potential impacts of 
its rules on small entities are properly considered during the 
rulemaking process. 68 FR 7990. DOE has made its procedures and 
policies available on the Office of the General Counsel's website 
(www.energy.gov/gc/office-general-counsel). DOE has prepared the 
following FRFA for the equipment that are the subject of this 
rulemaking.
    For manufacturers of CRE, the SBA has set a size threshold, which 
defines those entities classified as ``small businesses'' for the 
purposes of the statute. DOE used the SBA's small business size 
standards to determine whether any small entities would be subject to 
the requirements of the rule. (See 13 CFR part 121.) The size standards 
are listed by North American Industry Classification System (``NAICS'') 
code and industry description and are available at www.sba.gov/document/support-table-size-standards. Manufacturing of CRE is 
classified under NAICS 333415, ``Air-Conditioning and Warm Air Heating 
Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' The SBA sets a threshold of 1,250 employees or fewer 
for an entity to be considered as a small business for this category.
1. Need for, and Objectives of, Rule
    DOE is adopting new and amended energy conservation standards for 
CRE. EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
C of EPCA, added by Pub. L. 95-619, Title IV, section 441(a) (42 U.S.C. 
6311-6317, as codified), established the Energy Conservation Program 
for Certain Industrial Equipment, which sets forth a variety of 
provisions designed to improve energy efficiency. This equipment 
includes CRE, the subject of this document. (42 U.S.C. 6311(1)(E)) EPCA 
established standards for certain categories of CRE (42 U.S.C. 
6313(c)(2)-(4)) and directs DOE to conduct future rulemakings to 
determine whether to amend these standards. (42 U.S.C. 6313(c)(6)(B)) 
On March 28, 2014, DOE published a final rule that prescribed the 
current energy conservation standards for CRE manufactured on and after 
March 27, 2017. 79 FR 17725. EPCA provides that, not later than six 
years after the issuance of any final rule establishing or amending a 
standard, DOE must publish either a notice of determination that 
standards for the equipment do not need to be amended, or a NOPR 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6316(e)(1); 42 U.S.C. 
6295(m)(1))
2. Significant Issues Raised by Public Comments in Response to the IRFA
    In response to the October 2023 NOPR, AHRI provided a list of known 
suppliers of CRE sold in the United States that are not listed on the 
CCD site: Amtecko Industries, Inc.; Atlantic Food Bars; Borgen 
Merchandising Systems; Buffalo Outfront; Carrier; Cayuga Displays; 
Custom Deli's Inc.; Duke Manufacturing Co.; Federal Industries; GTI 
Designs; MTL Cool, a Due North brand; NAFCool; Picadeli; Pure Cold; USR 
Brands; Unity[supreg] Commercial Refrigeration; and Vortex 
Refrigeration. (AHRI, No. 81, at p. 6)
    As part of DOE's market assessment for the October 2023 NOPR and 
this final rule, DOE compiled an equipment database of CRE models 
available in the United States. To develop a comprehensive equipment 
database of CRE basic models, DOE reviewed its CCD \161\ supplemented 
by information from CEC's MAEDbS,\162\ company websites, and prior CRE 
rulemakings. To identify chef bases or griddle stands and high-
temperature units, DOE reviewed publicly available data from web 
scraping of company websites. DOE then reviewed its comprehensive 
equipment database to identify the OEMs of the CRE models identified. 
DOE compared the list of suppliers provided by AHRI against its list of 
CRE manufacturers to ensure completeness. Based on this comparison, DOE 
amended its manufacturer assessment to include 10 additional 
manufacturers, including 2 additional OEMs, Atlantic Food Bars and 
Borgen Merchandising Systems, for this final rule.
---------------------------------------------------------------------------

    \161\ U.S. Department of Energy's Compliance Certification 
Database is available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed Jan. 31, 2024).
    \162\ California Energy Commission's Modernized Appliance 
Efficiency Database is available at cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx (last accessed Jan. 31, 2024).
---------------------------------------------------------------------------

    In response to the October 2023 NOPR and August 2024 NODA, NAMA 
commented the refrigerant transition is a large burden for smaller 
manufacturers investing in safety compliance to low-GWP refrigerants, 
capital improvements to factories, changes to service, and training of 
factory employees and service providers. (NAMA, No. 85 at p. 4; NAMA, 
No. 112 at p. 5)
    In response to NAMA, DOE notes that it considered the October 2023 
EPA Final Rule and the expenses associated with the refrigerant 
transition in the analytical baseline of the October 2023 NOPR, August 
2024 NODA, and this final rule analysis. 88 FR 70196, 70284; 88 FR 
70247, 68800. Although refrigerant transition costs associated with the 
October 2023 EPA Final Rule are not attributed to this rulemaking, DOE 
accounted for these refrigerant transition costs in the no-new-
standards case and standards cases to better reflect industry finances 
and cash flow over the analysis period. Since industry would incur 
costs associated with the refrigerant transition regardless of any DOE 
rulemaking, this FRFA assesses the potential small business investments 
incurred as a direct result of this DOE rulemaking. DOE reviewed this 
final rule under the provisions of the Regulatory Flexibility Act and 
the

[[Page 7638]]

procedures and policies published on February 19, 2003. 68 FR 7990, 
7993. See section V.B.2.e of this document for additional discussion of 
how DOE accounts for cumulative regulatory burden in its analysis.
    In response to the October 2023 NOPR, Continental stated that 
adopting the standards proposed in the October 2023 NOPR with a 3-year 
lead-in would force them to exit in the market for many equipment 
configurations, which could negatively impact domestic employment and 
small businesses. (Continental, No. 86 at p. 6)
    In response to the comment from Continental, DOE understands that 
small businesses could be affected disproportionately by amended 
standards. DOE analyzes the potential impacts of this final rule on 
small business manufacturers of CRE in section VI.B.5 of this document. 
As discussed in section III.A.2.a of this document, based on 
stakeholder comments and DOE's assessment of the overlapping Federal 
refrigerant regulations and recent changes to UL safety standards for 
CRE, DOE is extending the compliance period from the 3-years analyzed 
in the October 2023 NOPR (modeled as a 2028 compliance year) to 4-years 
(modeled as a 2029 compliance year) for this final rule. Furthermore, 
DOE notes that compared to the October 2023 NOPR, DOE is adopting less 
stringent standards for 22 out of the 28 directly analyzed equipment 
classes. See section VI.B.5 of this document for an analysis of the 
estimated conversion costs small businesses may incur as a result of 
this final rule.
3. Response to Comments Filed by Chief Counsel for Advocacy of the 
Small Business Administration
    The SBA's Chief Counsel for Advocacy did not submit public comments 
on this rulemaking.
4. Description and Estimated Number of Small Entities Affected
    DOE reviewed this final rule under the provisions of the Regulatory 
Flexibility Act and the procedures and policies published on February 
19, 2003. 68 FR 7990. DOE conducted a market assessment to identify 
potential small manufacturers of CRE. DOE began its assessment by 
compiling an equipment database of CRE models available in the United 
States. As discussed in section VI.B.2 of this document, to develop a 
comprehensive equipment database of CRE basic models, DOE reviewed its 
CCD \163\ supplemented by information from CEC's MAEDbS,\164\ 
individual company websites, stakeholder comments (AHRI, No. 81 at p. 
6), and prior CRE rulemakings. 79 FR 17725. To identify chef bases or 
griddle stands and high-temperature units, DOE reviewed publicly 
available data from web scraping of retail websites. DOE then reviewed 
the comprehensive equipment database to identify the companies that 
sell the CRE models identified. DOE then consulted publicly available 
data, such as manufacturer websites, manufacturer specifications and 
equipment literature, import/export logs (e.g., bills of lading from 
ImportYeti \165\), and basic model numbers, to identify OEMs of CRE 
covered by this rulemaking. DOE further relied on public data and 
subscription-based market research tools (e.g., Dun & Bradstreet 
reports \166\) to determine company, location, headcount, and annual 
revenue. DOE also asked industry representatives if they were aware of 
any small OEMs during manufacturer interviews. DOE screened out 
companies that do not offer equipment covered by this rulemaking, do 
not meet the SBA's definition of a ``small business,'' or are foreign-
owned and operated.
---------------------------------------------------------------------------

    \163\ U.S. Department of Energy's Compliance Certification 
Database is available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed Jan. 31, 2024).
    \164\ California Energy Commission's Modernized Appliance 
Efficiency Database is available at cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx (last accessed Jan. 31, 2024).
    \165\ ImportYeti, LLC. ``ImportYeti.'' www.importyei.com (last 
accessed March 15, 2024).
    \166\ D&B Hoover's subscription login is accessible at 
app.dnbhoovers.com.
---------------------------------------------------------------------------

    For the October 2023 NOPR, DOE initially identified 83 OEMs that 
sell CRE in the United States. For this final rule, DOE refreshed its 
database of model listings to include the most up-to-date information 
on CRE models currently available on the U.S. market. Through its 
comprehensive review of its updated equipment database, other public 
sources, and stakeholder comments in response to the October 2023 NOPR, 
DOE identified 43 additional OEMs selling CRE in the United States (2 
of which were identified as small, domestic businesses). DOE also 
determined 23 OEMs (7 of which were identified as small domestic 
businesses in the October 2023 NOPR) do not currently produce covered 
CRE for the U.S. market (i.e., they do not manufacture CRE in-house). 
Therefore, of the 103 OEMs identified in this final rule, DOE 
determined that 20 companies qualify as small businesses and are not 
foreign-owned and operated.
5. Description of Reporting, Recordkeeping, and Other Compliance 
Requirements
    Of the 20 small domestic CRE OEMs, 19 OEMs manufacture vertical 
equipment classes (i.e., vertical open (``VOP''), vertical closed 
transparent (``VCT''), or vertical closed solid (``VCS'')); 7 OEMs 
manufacture semi-vertical open (``SVO'') equipment classes (i.e., 
medium temperature remote condensing (``RC''; ``SVO.RC.M'') or medium 
temperature self-contained (``SC''; ``SVO.SC.M'')); 6 OEMs manufacture 
service-over-counter (``SOC'') equipment classes (i.e., SOC.RC.M or 
SOC.SC.M); 8 OEMs manufacture horizontal equipment classes (i.e., 
horizontal open (``HZO''), horizontal closed transparent (``HCT''), or 
horizontal closed solid (``HCS'')); and 3 OEMs manufacture chef bases 
or griddle stands.
    For the purposes of this FRFA, DOE assumed that the industry 
capital conversion costs would be evenly distributed across the OEMs 
that manufacture each equipment class to avoid underestimating the 
potential capital investments small manufacturers may incur as a result 
of the adopted standard. As discussed in section IV.J.2.c of this 
document, DOE scaled the industry capital conversion costs by the 
number of relevant OEMs offering models of the respective equipment 
class. For product conversion costs, DOE assumed all small businesses 
would choose to redesign or replace models that do not meet TSL 3 
efficiency levels. DOE used unique basic model counts to scale the 
industry product conversion costs.
    DOE expects manufacturers could meet TSL 3 without implementing 
occupancy sensors with dimming capability, triple-pane doors with 
krypton fill, or vacuum-insulated glass doors. At this level, only 2 
self-contained equipment classes, HCT.SC.I and SOC.SC.M (together 
accounting for approximately 3 percent of transparent door CRE 
shipments), would likely incorporate improved door designs, which may 
necessitate new fixtures. For some self-contained equipment classes 
totaling approximately 50 percent of self-contained CRE shipments, 
manufacturers would likely have to incorporate variable-speed 
compressors into CRE designs. To incorporate variable-speed 
compressors, which could be larger than existing single-speed 
compressors, manufacturers may need new tools for the baseplate.

[[Page 7639]]

Product conversion costs may be necessary to qualify, source, and test 
new high-efficiency components (e.g., BLDC fan motors, variable-speed 
compressors).
    Of the 19 small OEMs of vertical equipment classes, DOE expects 15 
OEMs would incur some conversion costs to redesign models that do not 
currently meet the efficiency levels adopted in this final rule. The 
remaining 4 small OEMs would likely not incur conversion costs as a 
direct result of the standard as all their vertical CRE models 
currently meet or exceed TSL 3. Vertical equipment classes account for 
approximately 90 percent of industry shipments. Manufacturers will 
likely incorporate night curtains for all VOP equipment classes and 
BLDC condenser fan motors for nearly all vertical self-contained 
equipment classes. DOE further expects manufacturers to implement 
variable-speed compressors into some self-contained vertical equipment 
classes.
    DOE expects all 7 small OEMs of semi-vertical equipment classes 
would incur some conversion costs to redesign models that do not 
currently meet the efficiency levels adopted in this final rule. Semi-
vertical equipment classes account for approximately 2 percent of 
industry shipments in 2028. For SVO.SC.M, manufacturers will likely 
incorporate night curtains, BLDC condenser fan motors, and variable-
speed compressors to meet TSL 3. For SVO.RC.M, manufacturers will 
likely incorporate night curtains to meet TSL 3.
    Out of the 6 small OEMs of service-over-counter equipment classes, 
DOE expects 5 OEMs would incur some conversion costs to redesign models 
that do not currently meet the efficiency levels adopted in this final 
rule. The remaining small OEM would likely not incur conversion costs 
as a direct result of the standard as all their service-over-counter 
CRE models currently meet or exceed TSL 3. Service-over-counter 
equipment classes account for less than 1 percent of industry 
shipments. Manufacturers will likely incorporate BLDC evaporator and 
condenser fan motors, variable-speed compressors, and triple-pane doors 
with argon fill for SOC.SC.M to meet TSL 3. For SOC.RC.M, TSL 3 
corresponds to the baseline efficiency level.
    Out of the 8 small OEMs of horizontal equipment classes, DOE 
expects 7 OEMs would incur some conversion costs to redesign models 
that do not currently meet the efficiency levels adopted in this final 
rule. The remaining small OEM would likely not incur conversion costs 
as a direct result of the standard as all their horizontal CRE models 
currently meet or exceed TSL 3. Horizontal equipment classes account 
for approximately 6 percent of industry shipments. Manufacturers will 
likely implement BLDC condenser fan motors in both HCS equipment 
classes to meet TSL 3. Manufacturers will likely incorporate triple-
pane doors with argon fill for HCT.SC.I. Manufacturers will likely 
incorporate BLDC condenser fan motors and variable-speed compressors 
for some HZO equipment classes to meet TSL 3. For HCT.SC.L, HCT.SC.M, 
HZO.RC.L, and HZO.RC.M, TSL 3 corresponds to the baseline efficiency 
levels.
    DOE expects all 3 small OEMs offering chef base or griddle stand 
equipment to incur some conversion costs to redesign models that do not 
meet efficiency levels at TSL 3. Chef bases or griddle stands account 
for approximately 1 percent of industry shipments. Manufacturers would 
likely incorporate BLDC condenser fan motors and variable-speed 
compressors for CB.SC.M. None of the small businesses identified 
manufacture CB.SC.L models.
    Based on annual revenue estimates from market research tools (e.g., 
Dun & Bradstreet reports), the annual revenue of the small, domestic 
OEMs identified range from approximately $2.3 million to $307.9 
million, with an average annual revenue of approximately $74.8 million. 
DOE estimates that conversion costs could range from $0.0 million to 
$12.9 million, with the average per OEM conversion costs of $1.5 
million. The estimated total conversion costs as a percent of company 
revenue over the 4-year conversion period range from approximately 0.0 
percent to 5.0 percent, with an average of 1.0 percent. See table VI.1 
for additional details.

[[Page 7640]]

[GRAPHIC] [TIFF OMITTED] TR21JA25.223

6. Significant Alternatives Considered and Steps Taken To Minimize 
Significant Economic Impacts on Small Entities
    The discussion in the previous section analyzes impacts on small 
businesses that would result from the adopted standards, represented by 
TSL 3. In reviewing alternatives to the adopted standards, DOE examined 
energy conservation standards set at lower efficiency levels. While TSL 
1 and TSL 2 would reduce the impacts on small business manufacturers, 
it would come at the expense of a reduction in energy savings.
    TSL 1 achieves 78 percent lower energy savings compared to the 
energy savings at TSL 3. TSL 2 achieves 74 percent lower energy savings 
compared to the energy savings at TSL 3.
    Establishing standards at TSL 3 balances the benefits of the energy 
savings at TSL 3 with the potential burdens placed on CRE 
manufacturers, including small business manufacturers. Accordingly, DOE 
is not adopting one of the other TSLs considered in the analysis, or 
the other policy alternatives examined as part of the regulatory impact 
analysis and included in chapter 17 of the final rule TSD.
    Additionally, DOE notes that statutory provisions under EPCA state 
that should the Secretary determine that a 3-year period is inadequate, 
the Secretary may provide that the amended standard can apply to CRE 
manufactured on or after the date that is not later than 5 years after 
the date on which the final rule is published in the Federal Register. 
(See 42 U.S.C. 6313(c)(6)(C)(ii)) Pursuant to this EPCA provision, DOE 
is extending the compliance period from the 3-years analyzed in the 
October 2023 NOPR (modeled as a 2028 compliance year) to 4-years 
(modeled as a 2029 compliance year) for this final rule. DOE has 
determined that a longer compliance period for CRE is warranted based 
on stakeholder comments and DOE's assessment of the overlapping Federal 
refrigerant regulations and recent changes to UL safety standards for 
CRE. DOE understands that the longer compliance period will help 
mitigate cumulative regulatory burden by allowing manufacturers of CRE, 
including small businesses, more flexibility to spread investments 
across 4 years instead of 3 years. Manufacturers, including small 
businesses, will also have more time to recoup any investments made to 
redesign CRE models in compliance with the October 2023 EPA Final Rule 
as compared to a 3-year compliance period. 88 FR 73098.
    Additional compliance flexibilities may be available through other 
means. Manufacturers subject to DOE's energy efficiency standards may 
apply to DOE's Office of Hearings and Appeals for exception relief 
under certain circumstances. Manufacturers should refer to 10 CFR part 
1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Manufacturers of CRE must certify to DOE that their products comply 
with

[[Page 7641]]

any applicable energy conservation standards. In certifying compliance, 
manufacturers must test their products according to the DOE test 
procedures for CRE, including any amendments adopted for those test 
procedures. DOE has established regulations for the certification and 
recordkeeping requirements for all covered consumer products and 
commercial equipment, including CRE. (See generally 10 CFR part 429). 
The collection-of-information requirement for the certification and 
recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (``PRA''). This requirement has been approved 
by OMB under OMB control number 1910-1400. Public reporting burden for 
the certification is estimated to average 35 hours per response, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act of 1969 
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and 
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has 
determined that this rule qualifies for categorical exclusion under 10 
CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that 
establishes energy conservation standards for consumer products or 
industrial equipment, none of the exceptions identified in B5.1(b) 
apply, no extraordinary circumstances exist that require further 
environmental analysis, and it meets the requirements for application 
of a categorical exclusion. See 10 CFR 1021.410. Therefore, DOE has 
determined that promulgation of this rule is not a major Federal action 
significantly affecting the quality of the human environment within the 
meaning of NEPA, and does not require an environmental assessment or an 
environmental impact statement.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have Federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have Federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this rule and has determined 
that it would not have a substantial direct effect on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. EPCA governs and prescribes Federal preemption of State 
regulations as to energy conservation for the equipment that are the 
subject of this final rule. States can petition DOE for exemption from 
such preemption to the extent, and based on criteria, set forth in 
EPCA. (42 U.S.C. 6316(e)(2)-(3); 42 U.S.C. 6297. Therefore, no further 
action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (February 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation: 
(1) clearly specifies the preemptive effect, if any; (2) clearly 
specifies any effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction; (4) specifies the retroactive 
effect, if any; (5) adequately defines key terms; and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
E.O. 12988 requires Executive agencies to review regulations in light 
of applicable standards in section 3(a) and section 3(b) to determine 
whether they are met or it is unreasonable to meet one or more of them. 
DOE has completed the required review and determined that, to the 
extent permitted by law, this final rule meets the relevant standards 
of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a regulatory action likely to result in a rule that may cause the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) UMRA also requires a Federal agency to develop 
an effective process to permit timely input by elected officers of 
State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. DOE's policy statement is also available at 
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    DOE has concluded that this final rule may require expenditures of 
$100 million or more in any one year by the private sector. Such 
expenditures may include: (1) investment in research and development 
and in capital expenditures by CRE manufacturers in the years between 
the final rule and the compliance date for the new standards; and (2) 
incremental additional expenditures by consumers to purchase higher-
efficiency CRE, starting at the compliance date for the applicable 
standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the final rule. (2 U.S.C. 1532(c)) The content requirements 
of section 202(b) of UMRA relevant to a private sector

[[Page 7642]]

mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of this document and the TSD for this 
final rule respond to those requirements.
    Under section 205 of UMRA, DOE is obligated to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m) 
or a product-specific directive in 6295, and 42 U.S.C. 6316(e)(1), and 
6313(c)(6), this final rule establishes new and amended energy 
conservation standards for CRE that are designed to achieve the maximum 
improvement in energy efficiency that DOE has determined to be both 
technologically feasible and economically justified, as required by 
sections 6316(e)(1), 6295(o)(2)(A), and 6295(o)(3)(B). A full 
discussion of the alternatives considered by DOE is presented in 
chapter 17 of the TSD for this final rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any proposed rule or policy that may affect 
family well-being. When developing a Family Policymaking Assessment, 
agencies must assess whether: (1) the action strengthens or erodes the 
stability or safety of the family and, particularly, the marital 
commitment; (2) the action strengthens or erodes the authority and 
rights of parents in the education, nurture, and supervision of their 
children; (3) the action helps the family perform its functions, or 
substitutes governmental activity for the function; (4) the action 
increases or decreases disposable income or poverty of families and 
children; (5) the proposed benefits of the action justify the financial 
impact on the family; (6) the action may be carried out by State or 
local government or by the family; and whether (7) the action 
establishes an implicit or explicit policy concerning the relationship 
between the behavior and personal responsibility of youth, and the 
norms of society. In evaluating the above factors, DOE has concluded 
that it is not necessary to prepare a Family Policymaking Assessment as 
none of the above factors are implicated. Further, this proposed 
determination would not have any financial impact on families nor any 
impact on the autonomy or integrity of the family as an institution.
    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any proposed rule or policy that may affect 
family well-being. Although this final rule would not have any impact 
on the autonomy or integrity of the family as an institution as 
defined, this final rule could impact a family's well-being. When 
developing a Family Policymaking Assessment, agencies must assess 
whether: (1) the action strengthens or erodes the stability or safety 
of the family and, particularly, the marital commitment; (2) the action 
strengthens or erodes the authority and rights of parents in the 
education, nurture, and supervision of their children; (3) the action 
helps the family perform its functions, or substitutes governmental 
activity for the function; (4) the action increases or decreases 
disposable income or poverty of families and children; (5) the proposed 
benefits of the action justify the financial impact on the family; (6) 
the action may be carried out by State or local government or by the 
family; and whether (7) the action establishes an implicit or explicit 
policy concerning the relationship between the behavior and personal 
responsibility of youth, and the norms of society.
    DOE has considered how the benefits of this final rule compare to 
the possible financial impact on a family (the only factor listed that 
is relevant to this rule). As part of its rulemaking process, DOE must 
determine whether the energy conservation standards enacted in this 
final rule are economically justified. As discussed in section V.C.1 of 
this document, DOE has determined that the standards enacted in this 
final rule are economically justified because the benefits to consumers 
would far outweigh the costs to manufacturers. Customers will also see 
LCC savings as a result of this final rule. Moreover, as discussed 
further in section V.B.1 of this document, DOE has determined that for 
small businesses, average LCC savings and PBP at the considered 
efficiency levels are similar compared to those for all purchasers. 
Further, the standards will also result in climate and health benefits 
for all businesses.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March 
18, 1988), DOE has determined that this rule would not result in any 
takings that might require compensation under the Fifth Amendment to 
the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to 
review most disseminations of information to the public under 
information quality guidelines established by each agency pursuant to 
general guidelines issued by OMB. OMB's guidelines were published at 67 
FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 
FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this final rule under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

K. Review Under Executive Order 13211

    E.O. 13211, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22, 
2001), requires Federal agencies to prepare and submit to OIRA at OMB, 
a Statement of Energy Effects for any significant energy action. A 
``significant energy action'' is defined as any action by an agency 
that promulgates or is expected to lead to promulgation of a final 
rule, and that: (1) is a significant regulatory action under Executive 
Order 12866, or any successor order, and is likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy; or (2) is designated by the Administrator of OIRA as a 
significant energy action. For any significant energy action, the 
agency must give a detailed statement of any adverse effects on energy 
supply, distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.

[[Page 7643]]

    DOE has concluded that this regulatory action, which sets forth new 
and amended energy conservation standards for CRE, is not a significant 
energy action because the standards are not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects 
on this final rule.

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the Bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions.'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and prepared a report describing that peer 
review.\167\ Generation of this report involved a rigorous, formal, and 
documented evaluation using objective criteria and qualified and 
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the 
productivity and management effectiveness of programs and/or projects. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged with the National Academy of 
Sciences to review DOE's analytical methodologies to ascertain whether 
modifications are needed to improve DOE's analyses. DOE is in the 
process of evaluating the resulting report.\168\
---------------------------------------------------------------------------

    \167\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last 
accessed April 15, 2024).
    \168\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The Office of 
Information and Regulatory Affairs has determined that this rule meets 
the criteria set forth in 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this final 
rule.

List of Subjects in 10 CFR Part 431

    Administrative practice and procedure, Confidential business 
information, Energy conservation test procedures, Incorporation by 
reference, and Reporting and recordkeeping requirements.

Signing Authority

    This document of the Department of Energy was signed on December 
20, 2024, by Jeffrey Marootian, Principal Deputy Assistant Secretary 
for Energy Efficiency and Renewable Energy, pursuant to delegated 
authority from the Secretary of Energy. That document with the original 
signature and date is maintained by DOE. For administrative purposes 
only, and in compliance with requirements of the Office of the Federal 
Register, the undersigned DOE Federal Register Liaison Officer has been 
authorized to sign and submit the document in electronic format for 
publication, as an official document of the Department of Energy. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

    Signed in Washington, DC, on December 20, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE amends part 431 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, as set forth below:

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

0
1. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.


0
2. Amend Sec.  431.62 by:
0
a. Adding in alphabetical order definitions for ``Cold-wall 
evaporator,'' ``Drawer unit,'' and ``Forced-air evaporator;''
0
b. Revising the definition of ``Ice-cream freezer;''
0
c. Adding in alphabetical order a definition for ``Pass-through 
doors;''
0
d. Revising the definition of ``Rating temperature;'' and
0
e. Adding in alphabetical order definitions for ``Roll-in door,'' 
``Roll-through doors,'' and ``Sliding door.''
    The additions and revisions read as follows.


Sec.  431.62  Definitions concerning commercial refrigerators, 
freezers, and refrigerator-freezers.

* * * * *
    Cold-wall evaporator means an evaporator that comprises a portion 
or all of the commercial refrigerator, freezer, and refrigerator-
freezer cabinet's interior surface that transfers heat through means 
other than fan-forced convection.
* * * * *
    Drawer unit means a commercial refrigerator, freezer, or 
refrigerator-freezer in which all the externally accessed compartments 
are drawers.
    Forced-air evaporator means an evaporator that employs the use of 
fan-forced convection to transfer heat within the commercial 
refrigerator, freezer, and refrigerator-freezer cabinet.
* * * * *
    Ice-cream freezer means:
    (1) Prior to Monday, January 22, 2029, a commercial freezer that is 
capable of an operating temperature at or below -5.0 [deg]F and that 
the manufacturer designs, markets, or intends specifically for the 
storing, displaying, or dispensing of ice cream or other frozen 
desserts; or
    (2) On or after Monday, January 22, 2029, a commercial freezer that 
is capable of an operating temperature at or below -13.0 [deg]F and 
that the manufacturer designs, markets, or intends specifically for the 
storing, displaying, or dispensing of ice cream or other frozen 
desserts.
* * * * *
    Pass-through doors mean doors located on both the front and rear of 
the commercial refrigerator, freezer, and refrigerator-freezer.
* * * * *
    Rating temperature means the integrated average temperature a unit 
must maintain during testing, as determined in accordance with section

[[Page 7644]]

2.1. or section 2.2. of appendix B to this subpart, as applicable.
* * * * *
    Roll-in door means a door that includes a door sweep to seal the 
bottom of the door and may include a ramp that allows wheeled racks of 
product to be rolled into the commercial refrigerator, freezer, and 
refrigerator-freezer.
    Roll-through doors means doors located on both the front and rear 
of the commercial refrigerator, freezer, and refrigerator-freezer, that 
includes a door sweep to seal the bottom of the door and may include a 
ramp that allows wheeled racks of product to be rolled into and through 
the commercial refrigerator, freezer, and refrigerator-freezer.
* * * * *
    Sliding door means a door that opens when a portion of the door 
moves in a direction generally parallel to its surface.
* * * * *

0
3. Revise Sec.  431.66 to read as follows:


Sec.  431.66  Energy conservation standards and their effective dates.

    (a) Each commercial refrigerator, freezer, and refrigerator-freezer 
with a self-contained condensing unit designed for holding temperature 
applications and with solid or transparent doors; commercial 
refrigerator with a self-contained condensing unit designed for pull-
down temperature applications and with transparent doors; commercial 
refrigerator, freezer, and refrigerator-freezer with a self-contained 
condensing unit and without doors; commercial refrigerator, freezer, 
and refrigerator-freezer with a remote condensing unit; and commercial 
ice-cream freezer manufactured on or after March 27, 2017, and before 
Monday, January 22, 2029, shall have a daily energy consumption (in 
kilowatt-hours per day or ``kWh/day'') that does not exceed the levels 
specified:
    (1) For equipment other than hybrid equipment, refrigerator/
freezers, or wedge cases:

                                         Table 1 to Paragraph (a)(1)--Maximum Daily Energy Consumption Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                        Maximum daily
        Equipment category            Condensing unit      Equipment family     Rating temp.      Operating       Equipment class     energy consumption
                                       configuration                               [deg]F       temp. [deg]F       designation *         ** (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing Commercial       Remote (RC).........  Vertical Open (VOP).          38 (M)            >=32  VOP.RC.M............  0.64 x TDA + 4.07
 Refrigerators and Commercial                                                           0 (L)             <32  VOP.RC.L............  2.2 x TDA + 6.85
 Freezers.
                                                         Semivertical Open             38 (M)            >=32  SVO.RC.M............  0.66 x TDA + 3.18
                                                          (SVO).                        0 (L)             <32  SVO.RC.L............  2.2 x TDA + 6.85
                                                         Horizontal Open               38 (M)            >=32  HZO.RC.M............  0.35 x TDA + 2.88
                                                          (HZO).                        0 (L)             <32  HZO.RC.L............  0.55 x TDA + 6.88
                                                         Vertical Closed               38 (M)           >= 32  VCT.RC.M............  0.15 x TDA + 1.95
                                                          Transparent (VCT).            0 (L)             <32  VCT.RC.L............  0.49 x TDA + 2.61
                                                         Horizontal Closed             38 (M)            >=32  HCT.RC.M............  0.16 x TDA + 0.13
                                                          Transparent (HCT).            0 (L)             <32  HCT.RC.L............  0.34 x TDA + 0.26
                                                         Vertical Closed               38 (M)            >=32  VCS.RC.M............  0.1 x V + 0.26
                                                          Solid (VCS).                  0 (L)            < 32  VCS.RC.L............  0.21 x V + 0.54
                                                         Horizontal Closed             38 (M)            >=32  HCS.RC.M............  0.1 x V + 0.26
                                                          Solid (HCS).                  0 (L)             <32  HCS.RC.L............  0.21 x V + 0.54
                                                         Service Over Counter          38 (M)            >=32  SOC.RC.M............  0.44 x TDA + 0.11
                                                          (SOC).                        0 (L)             <32  SOC.RC.L............  0.93 x TDA + 0.22
Self-Contained Commercial          Self-Contained (SC).  Vertical Open (VOP).          38 (M)            >=32  VOP.SC.M............  1.69 x TDA + 4.71
 Refrigerators and Commercial                                                           0 (L)             <32  VOP.SC.L............  4.25 x TDA + 11.82
 Freezers Without Doors.
                                                         Semivertical Open             38 (M)            >=32  SVO.SC.M............  1.7 x TDA + 4.59
                                                          (SVO).                        0 (L)             <32  SVO.SC.L............  4.26 x TDA + 11.51
                                                         Horizontal Open               38 (M)            >=32  HZO.SC.M............  0.72 x TDA + 5.55
                                                          (HZO).                        0 (L)             <32  HZO.SC.L............  1.9 x TDA + 7.08
Self-Contained Commercial          Self-Contained (SC).  Vertical Closed               38 (M)            >=32  VCT.SC.M............  0.1 x V + 0.86
 Refrigerators and Commercial                             Transparent (VCT).            0 (L)             <32  VCT.SC.L............  0.29 x V + 2.95
 Freezers With Doors.
                                                         Vertical Closed               38 (M)            >=32  VCS.SC.M............  0.05 x V + 1.36
                                                          Solid (VCS).                  0 (L)             <32  VCS.SC.L............  0.22 x V + 1.38
                                                         Horizontal Closed             38 (M)            >=32  HCT.SC.M............  0.06 x V + 0.37
                                                          Transparent (HCT).            0 (L)             <32  HCT.SC.L............  0.08 x V + 1.23
                                                         Horizontal Closed             38 (M)            >=32  HCS.SC.M............  0.05 x V + 0.91
                                                          Solid (HCS).                  0 (L)             <32  HCS.SC.L............  0.06 x V + 1.12
                                                         Service Over Counter          38 (M)            >=32  SOC.SC.M............  0.52 x TDA + 1
                                                          (SOC).                        0 (L)             <32  SOC.SC.L............  1.1 x TDA + 2.1
Self-Contained Commercial          Self-Contained (SC).  Pull-Down (PD)......          38 (M)            >=32  PD.SC.M.............  0.11 x V + 0.81
 Refrigerators with Transparent
 Doors for Pull-Down Temperature
 Applications.
Commercial Ice-Cream Freezers....  Remote (RC).........  Vertical Open (VOP).         -15 (I)            <=-5  VOP.RC.I............  2.79 x TDA + 8.7
                                                         Semivertical Open                                     SVO.RC.I............  2.79 x TDA + 8.7
                                                          (SVO).
                                                         Horizontal Open                                       HZO.RC.I............  0.7 x TDA + 8.74
                                                          (HZO).
                                                         Vertical Closed                                       VCT.RC.I............  0.58 x TDA + 3.05
                                                          Transparent (VCT).
                                                         Horizontal Closed                                     HCT.RC.I............  0.4 x TDA + 0.31
                                                          Transparent (HCT).

[[Page 7645]]

 
                                                         Vertical Closed                                       VCS.RC.I............  0.25 x V + 0.63
                                                          Solid (VCS).
                                                         Horizontal Closed                                     HCS.RC.I............  0.25 x V + 0.63
                                                          Solid (HCS).
                                                         Service Over Counter                                  SOC.RC.I............  1.09 x TDA + 0.26
                                                          (SOC)
                                   Self-Contained (SC).  Vertical Open (VOP).                                  VOP.SC.I............  5.4 x TDA + 15.02
                                                         Semivertical Open                                     SVO.SC.I............  5.41 x TDA + 14.63
                                                          (SVO).
                                                         Horizontal Open                                       HZO.SC.I............  2.42 x TDA + 9
                                                          (HZO).
                                                         Vertical Closed                                       VCT.SC.I............  0.62 x TDA + 3.29
                                                          Transparent (VCT).
                                                         Horizontal Closed                                     HCT.SC.I............  0.56 x TDA + 0.43
                                                          Transparent (HCT).
                                                         Vertical Closed                                       VCS.SC.I............  0.34 x V + 0.88
                                                          Solid (VCS).
                                                         Horizontal Closed                                     HCS.SC.I............  0.34 x V + 0.88
                                                          Solid (HCS).
                                                         Service Over Counter                                  SOC.SC.I............  1.53 x TDA + 0.36
                                                          (SOC).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.
** ``V'' is the volume, expressed in ft\3\, as determined in appendix B to this subpart. ``TDA'' is the total display area, expressed in ft\2\, as
  determined in appendix B to this subpart.

    (2) For commercial refrigeration equipment with two or more 
compartments (i.e., hybrid refrigerators, hybrid freezers, hybrid 
refrigerator-freezers, and non-hybrid refrigerator-freezers), the 
maximum daily energy consumption (MDEC) for each model shall be the sum 
of the MDEC values for all of its compartments. For each compartment, 
measure the TDA or volume of that compartment, and determine the 
appropriate equipment class based on that compartment's equipment 
family, condensing unit configuration, and designed operating 
temperature. The MDEC limit for each compartment shall be the 
calculated value obtained by entering that compartment's TDA or volume 
into the standard equation in paragraph (a)(1) of this section for that 
compartment's equipment class. Measure the calculated daily energy 
consumption (CDEC) or total daily energy consumption (TDEC) for the 
entire case:
    (i) For remote condensing commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, where two or more independent condensing units each 
separately cool only one compartment, measure the total refrigeration 
load of each compartment separately according to AHRI Standard 1200 (I-
P)-2010 test procedure (incorporated by reference, see Sec.  431.63). 
Calculate compressor energy consumption (CEC) for each compartment 
using table 1 in ARI Standard 1200-2006 (incorporated by reference, see 
Sec.  431.63) or AHRI Standard 1200 (I-P)-2010 (incorporated by 
reference, see Sec.  431.63) using the saturated evaporator temperature 
for that compartment. The CDEC for the entire case shall be the sum of 
the CEC for each compartment, fan energy consumption (FEC), lighting 
energy consumption (LEC), anti-condensate energy consumption (AEC), 
defrost energy consumption (DEC), and condensate evaporator pan energy 
consumption (PEC) (as measured in AHRI Standard 1200 (I-P)-2010).
    (ii) For remote condensing commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, where two or more compartments are cooled collectively by one 
condensing unit, measure the total refrigeration load of the entire 
case according to the AHRI Standard 1200 (I-P)-2010 test procedure 
(incorporated by reference, see Sec.  431.63). Calculate a weighted 
saturated evaporator temperature for the entire case by:
    multiplying the saturated evaporator temperature of each 
compartment by the volume of that compartment (as measured in AHRI 
Standard 1200 (I-P)-2010 (incorporated by reference, see Sec.  
431.63)),
    summing the resulting values for all compartments; and
    dividing the resulting total by the total volume of all 
compartments.
    Calculate the CEC for the entire case using table 1 in ARI Standard 
1200-2006 (incorporated by reference, see Sec.  431.63) or AHRI 
Standard 1200 (I-P)-2010 (incorporated by reference, see Sec.  431.63), 
using the total refrigeration load and the weighted average saturated 
evaporator temperature. The CDEC for the entire case shall be the sum 
of the CEC, FEC, LEC, AEC, DEC, and PEC.
    (iii) For self-contained commercial hybrid refrigerators, hybrid 
freezers, hybrid refrigerator-freezers, and non-hybrid refrigerator-
freezers, measure the TDEC for the entire case according to the AHRI 
Standard 1200 (I-P)-2010 test procedure (incorporated by reference, see 
Sec.  431.63).
    (3) For remote condensing and self-contained wedge cases, measure 
the CDEC or TDEC according to the AHRI Standard 1200 (I-P)-2010 test 
procedure (incorporated by reference, see Sec.  431.63). For wedge 
cases in equipment classes for which a volume metric is used, the MDEC 
shall be the amount derived from the appropriate standards equation in 
paragraph (a)(1) of this section. For wedge cases of equipment classes 
for which a TDA metric is used, the MDEC for each model shall be the 
amount derived by incorporating into the standards equation in 
paragraph (a)(1) of this section for the equipment class a value for 
the TDA that is the product of:
    (i) The vertical height of the air-curtain (or glass in a 
transparent door) and
    (ii) The largest overall width of the case, when viewed from the 
front.
    (b) Each commercial refrigerator, freezer, and refrigerator-
freezer, except as specified in paragraph (c) of this section, 
manufactured on or after Monday, January 22, 2029, shall have a daily 
energy consumption (in kilowatt-hours per day or ``kWh/day''), when 
measured in accordance with the DOE

[[Page 7646]]

test procedure at appendix B to this subpart, that does not exceed the 
following:
    (1) For commercial refrigerators, freezers, and refrigerator-
freezers other than commercial hybrids or commercial refrigerator-
freezers:

               Table 2 to Paragraph (b)(1)--Maximum Daily Energy Consumption Standards for Equipment Connected to Remote Condensing Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Rating           Operating                                    Maximum daily energy
    Condensing unit configuration          Equipment family        temperature       temperature           Equipment class         consumption ** (kWh/
                                                                    ([deg]F)           ([deg]F)             designation *                  day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Remote Condensing (RC)...............  Vertical Open (VOP).....        55.0 (H)                >40.0  VOP.RC.H                   0.551 x TDA + 3.506
                                                                       38.0 (M)    <=40.0 and >=32.0  VOP.RC.M                   0.591 x TDA + 3.758
                                                                        0.0 (L)                <32.0  VOP.RC.L                   2.079 x TDA + 6.472
                                                                      -15.0 (I)              <=-13.0  VOP.RC.I                   2.637 x TDA + 8.222
                                       Semivertical Open (SVO).        55.0 (H)                >40.0  SVO.RC.H                   0.572 x TDA + 2.756
                                                                       38.0 (M)    <=40.0 and >=32.0  SVO.RC.M                   0.611 x TDA + 2.944
                                                                        0.0 (L)                <32.0  SVO.RC.L                   2.079 x TDA + 6.473
                                                                      -15.0 (I)              <=-13.0  SVO.RC.I                   2.637 x TDA + 8.222
                                       Horizontal Open (HZO)...        55.0 (H)                >40.0  HZO.RC.H                   0.350 x TDA + 2.880
                                                                       38.0 (M)    <=40.0 and >=32.0  HZO.RC.M                   0.350 x TDA + 2.880
                                                                        0.0 (L)                <32.0  HZO.RC.L                   0.550 x TDA + 6.880
                                                                      -15.0 (I)              <=-13.0  HZO.RC.I                   0.700 x TDA + 8.740
                                       Vertical Closed                 55.0 (H)                >40.0  VCT.RC.H                   0.150 x TDA + 1.950
                                        Transparent (VCT).             38.0 (M)    <=40.0 and >=32.0  VCT.RC.M                   0.150 x TDA + 1.950
                                                                        0.0 (L)                <32.0  VCT.RC.L                   0.490 x TDA + 2.610
                                                                      -15.0 (I)              <=-13.0  VCT.RC.I                   0.580 x TDA + 3.050
                                       Horizontal Closed               38.0 (M)               >=32.0  HCT.RC.M                   0.160 x TDA + 0.130
                                        Transparent (HCT).              0.0 (L)                <32.0  HCT.RC.L                   0.340 x TDA + 0.260
                                                                      -15.0 (I)              <=-13.0  HCT.RC.I                   0.356 x TDA + 0.276
                                       Vertical Closed Solid           55.0 (H)                >40.0  VCS.RC.H                   0.100 x V + 0.260
                                        (VCS).                         38.0 (M)    <=40.0 and >=32.0  VCS.RC.M                   0.100 x V + 0.260
                                                                        0.0 (L)                <32.0  VCS.RC.L                   0.210 x V + 0.540
                                                                      -15.0 (I)              <=-13.0  VCS.RC.I                   0.250 x V + 0.630
                                       Horizontal Closed Solid         38.0 (M)               >=32.0  HCS.RC.M                   0.100 x V + 0.260
                                        (HCS).                          0.0 (L)                <32.0  HCS.RC.L                   0.210 x V + 0.540
                                                                      -15.0 (I)              <=-13.0  HCS.RC.I                   0.250 x V + 0.630
                                       Service Over Counter            55.0 (H)                >40.0  SOC.RC.H                   0.440 x TDA + 0.110
                                        (SOC).                         38.0 (M)   <=40.0 and >= 32.0  SOC.RC.M                   0.440 x TDA + 0.110
                                                                        0.0 (L)                <32.0  SOC.RC.L                   0.930 x TDA + 0.220
                                                                      -15.0 (I)              <=-13.0  SOC.RC.I                   0.970 x TDA + 0.231
                                       Chef Base (CB)..........        38.0 (M)               >=32.0  CB.RC.M                    0.050 x V + 0.686
                                                                        0.0 (L)                <32.0  CB.RC.L                    0.194 x V + 1.693
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.
** ``V'' is the volume, expressed in ft\3\, as determined in appendix B to this subpart. ``TDA'' is the total display area, expressed in ft\2\, as
  determined in appendix B to this subpart.


                 Table 3 to Paragraph (b)(1)--Maximum Daily Energy Consumption Standards for Equipment Connected to Self-Contained Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Rating           Operating                                                    Maximum daily
  Condensing unit configuration     Equipment family     temperature       temperature         Capacity range      Equipment class    energy consumption
                                                          ([deg]F)           ([deg]F)                               designation *        ** (kWh/day)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Self-Contained (SC).............  Vertical Open (VOP)        55.0 (H)                >40.0  All TDAs...........  VOP.SC.H...........  0.890 x TDA +
                                                                                                                                       2.480
                                                             38.0 (M)    <=40.0 and >=32.0  TDA <=17 ft\2\.....  VOP.SC.M (<=17)....  1.230 x TDA +
                                                                                                                                       3.428
                                                                                            TDA >17 ft\2\......  VOP.SC.M (>17).....  1.69 x TDA + 4.71
                                                              0.0 (L)                <32.0  All TDAs...........  VOP.SC.L...........  3.092 x TDA +
                                                                                                                                       8.598
                                                            -15.0 (I)              <=-13.0                       VOP.SC.I...........  3.928 x TDA +
                                                                                                                                       10.926
                                  Semivertical Open          55.0 (H)                >40.0  All TDAs...........  SVO.SC.H...........  1.045 x TDA +
                                   (SVO).                                                                                              2.822
                                                             38.0 (M)    <=40.0 and >=32.0  TDA <=15 ft\2\.....  SVO.SC.M (<=15)....  1.207 x TDA +
                                                                                                                                       3.258
                                                                                            TDA >15 ft\2\......  SVO.SC.M (>15).....  1.7 x TDA + 4.59
                                                              0.0 (L)                <32.0  All TDAs...........  SVO.SC.L...........  3.024 x TDA +
                                                                                                                                       8.169
                                                            -15.0 (I)              <=-13.0                       SVO.SC.I...........  3.840 x TDA +
                                                                                                                                       10.384
                                  Horizontal Open            55.0 (H)                >40.0  All TDAs...........  HZO.SC.H...........  0.546 x TDA +
                                   (HZO).                                                                                              4.211
                                                             38.0 (M)    <=40.0 and >=32.0                       HZO.SC.M...........  0.532 x TDA +
                                                                                                                                       4.100
                                                              0.0 (L)                <32.0  TDA <=35 ft\2\.....  HZO.SC.L (<=35)....  1.490 x TDA +
                                                                                                                                       5.554
                                                                                            TDA >35 ft\2\......  HZO.SC.L (>35).....  1.9 x TDA + 7.08
                                                            -15.0 (I)              <=-13.0  All TDAs...........  HZO.SC.I...........  1.900 x TDA +
                                                                                                                                       7.065
                                  Vertical Closed            55.0 (H)                >40.0  All TDAs...........  VCT.SC.H...........  0.047 x V + 0.493
                                   Transparent (VCT).
                                                             38.0 (M)    <=40.0 and >=32.0  V <=100 ft\3\......  VCT.SC.M (<=100)...  0.073 x V + 0.630
                                                                                                                 VCT.SC.M (<=100)     0.078 x V + 0.674
                                                                                                                  with Feature ***.
                                                                                            V >100 ft\3\.......  VCT.SC.M (>100)....  0.1 x V + 0.86
                                                              0.0 (L)                <32.0  V <=70 ft\3\.......  VCT.SC.L (<=70)....  0.233 x V + 2.374
                                                                                                                 VCT.SC.L (<=70)      0.249 x V + 2.540
                                                                                                                  with Feature ***.
                                                                                            V >70 ft\3\........  VCT.SC.L (>70).....  0.29 x V + 2.95
                                                            -15.0 (I)              <=-13.0  All Volumes........  VCT.SC.I...........  0.620 x TDA +
                                                                                                                                       3.290

[[Page 7647]]

 
                                  Vertical Closed            55.0 (H)                >40.0  All Volumes........  VCS.SC.H...........  0.021 x V + 0.793
                                   Solid (VCS).
                                                             38.0 (M)    <=40.0 and >=32.0  All Volumes........  VCS.SC.M...........  0.038 x V + 1.039
                                                                                                                 VCS.SC.M with        0.041 x V + 1.112
                                                                                                                  Feature ***.
                                                              0.0 (L)                <32.0  V <=100 ft\3\......  VCS.SC.L (<=100)...  0.169 x V + 1.059
                                                                                                                 VCS.SC.L (<=100)     0.181 x V + 1.133
                                                                                                                  with Feature ***.
                                                                                            V >100 ft\3\.......  VCS.SC.L (>100)....  0.22 x V + 1.38
                                                            -15.0 (I)              <=-13.0  All Volumes........  VCS.SC.I...........  0.264 x V + 0.683
                                  Horizontal Closed          38.0 (M)               >=32.0  All Volumes........  HCT.SC.M...........  0.060 x V + 0.370
                                   Transparent (HCT).
                                                              0.0 (L)                <32.0                       HCT.SC.L...........  0.080 x V + 1.230
                                                            -15.0 (I)              <=-13.0                       HCT.SC.I...........  0.498 x TDA +
                                                                                                                                       0.383
                                  Horizontal Closed          38.0 (M)               >=32.0  All Volumes........  HCS.SC.M...........  0.037 x V + 0.675
                                   Solid (HCS).
                                                              0.0 (L)                <32.0                       HCS.SC.L...........  0.055 x V + 1.033
                                                                                                                 HCS.SC.L with        0.059 x V + 1.105
                                                                                                                  Feature ***.
                                                            -15.0 (I)              <=-13.0                       HCS.SC.I...........  0.313 x V + 0.811
                                  Service Over               55.0 (H)                >40.0  All TDAs...........  SOC.SC.H...........  0.304 x TDA +
                                   Counter (SOC).                                                                                      0.584
                                                             38.0 (M)    <=40.0 and >=32.0  TDA <=40 ft\2\.....  SOC.SC.M (<=40)....  0.356 x TDA +
                                                                                                                                       0.685
                                                                                            TDA >40 ft\2\......  SOC.SC.M (>40).....  0.52 x TDA + 1
                                                              0.0 (L)                <32.0  All TDAs...........  SOC.SC.L...........  1.100 x TDA +
                                                                                                                                       2.100
                                                            -15.0 (I)              <=-13.0                       SOC.SC.I...........  1.530 x TDA +
                                                                                                                                       0.360
                                  Chef Base (CB).....        38.0 (M)               >=32.0  All Volumes........  CB.SC.M............  0.081 x V + 1.117
                                                              0.0 (L)                <32.0                       CB.SC.L............  0.297 x V + 2.591
                                  Pull-Down (PD).....        38.0 (M)               >=32.0                       PD.SC.M............  0.11 x V + 0.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The meaning of the letters in this column is indicated in the columns to the left.
** ``V'' is the volume, expressed in ft\3\, as determined in appendix B to this subpart. ``TDA'' is the total display area, expressed in ft\2\, as
  determined in appendix B to this subpart.
*** For equipment classes designated ``with Feature,'' refer to table 4 to this paragraph for the list of qualifying features applicable to each class.


 Table 4 to Paragraph (b)(1)--Qualifying Features for Equipment Classes
                       Designated ``with Feature''
------------------------------------------------------------------------
              Equipment class                   Qualifying feature(s)
------------------------------------------------------------------------
VCT.SC.M (<=100)..........................  Pass-through doors.
                                            Sliding doors.
                                            Both pass-through and
                                             sliding doors.
                                            Roll-in doors.
                                            Roll-through doors.
VCT.SC.L (<=70)...........................  Pass-through doors.
VCS.SC.M..................................  Pass-through doors.
                                            Roll-in doors.
                                            Roll-through doors.
                                            Drawer units.
VCS.SC.L (<=100)..........................  Pass-through doors.
                                            Roll-in doors.
                                            Roll-through doors.
                                            Drawer units.
HCS.SC.L..................................  Forced air evaporator.
------------------------------------------------------------------------

    (2) For commercial hybrids and commercial refrigerator-freezers, 
for each compartment, measure the TDA or volume of that compartment. 
The MDEC limit for each compartment shall be the calculated value 
obtained by entering that compartment's TDA or volume into the standard 
equation in paragraph (b)(1) of this section for that compartment's 
equipment class. The total MDEC limit for each model shall be the sum 
of the MDEC values for all of its compartments. Measure the CDEC or 
TDEC for the model as follows:
    (i) For commercial hybrids and commercial refrigerator-freezers 
where two or more independent remote condensing units are each 
connected to a separate, individual compartment, measure the total 
refrigeration load of each compartment separately according to appendix 
B to this subpart. The CDEC for the model shall be the sum of the CEC 
for each compartment, FEC, LEC, AEC, DEC, PEC, and OEC.
    (ii) For commercial hybrids and commercial refrigerator-freezers 
where two or more compartments are connected to one remote condensing 
unit, measure the total refrigeration load of the model according to 
appendix B to this subpart. Calculate a weighted average adjusted dew 
point temperature for the model by: multiplying the adjusted dew point 
temperature of each compartment by the volume of that compartment; 
summing the resulting values for all compartments; and dividing the 
resulting total by the total volume of all compartments. Calculate the 
CEC for the model using the total refrigeration load and the weighted 
average adjusted dew point temperature. The CDEC for the model shall be 
the sum of the CEC, FEC, LEC, AEC, DEC, PEC, and OEC.
    (iii) For commercial hybrids and commercial refrigerator-freezers 
connected to a self-contained condensing unit, measure the TDEC for the 
model according to appendix B to this subpart.
    (c) The energy conservation standards in paragraph (a) of this 
section do not apply to chef bases or griddle stands, buffet tables or 
preparation tables, blast chillers, blast freezers, or mobile 
refrigerated cabinets. The energy conservation standards in paragraph 
(b) of this section do not apply to buffet tables or preparation 
tables, blast chillers, blast freezers, or mobile refrigerated 
cabinets.

    Note:  The following appendix will not appear in the Code of 
Federal Regulations.


November 27, 2023

Ami Grace-Tardy,
Assistant General Counsel for Litigation, Regulation and Energy 
Efficiency, U.S. Department of Energy, Washington, DC 20585.

Re: Commercial Refrigerators, Freezers, and Refrigerator-Freezers 
Energy Conservation Standards DOE Docket No. EERE-2017-BT-STD-0007

Dear Assistant General Counsel Grace-Tardy:
    I am responding to your October 10, 2023 letter seeking the 
views of the Attorney

[[Page 7648]]

General about the potential impact on competition of proposed energy 
conservation standards for commercial refrigerators, freezers, and 
refrigerator-freezers (collectively ``CRF'').
    Your request was submitted under Section 325(o)(2)(B)(i)(V) of 
the Energy Policy and Conservation Act, as amended (ECPA), 42 U.S.C. 
6295(o)(2)(B)(i)(V), which requires the Attorney General to make a 
determination of the impact of any lessening of competition that is 
likely to result from the imposition of proposed energy conservation 
standards. The Attorney General's responsibility for responding to 
requests from other departments about the effect of a program on 
competition has been delegated to the Assistant Attorney General for 
the Antitrust Division in 28 CFR 0.40(g). The Assistant Attorney 
General for the Antitrust Division has authorized me, as the Policy 
Director for the Antitrust Division, to provide the Antitrust 
Division's views regarding the potential impact on competition of 
proposed energy conservation standards on his behalf.
    In conducting its analysis, the Antitrust Division examines 
whether a proposed standard may lessen competition, for example, by 
substantially limiting consumer choice, by placing certain 
manufacturers at an unjustified competitive disadvantage, or by 
inducing avoidable inefficiencies in production or distribution of 
particular products. A lessening of competition could result in 
higher prices to manufacturers and consumers.
    We have reviewed the proposed standards contained in the Notice 
of proposed rulemaking and announcement of public meeting (88 FR 
70196, October 10, 2023) and the related Technical Support 
Documents. We have also reviewed public comments and information 
provided by industry participants and have attended and reviewed 
information presented at the Webinar of the Public Meeting held on 
November 7, 2023.
    Based on this review, our conclusion is that the proposed energy 
conservation standards for CRF are unlikely to have a significant 
adverse impact on competition.

Sincerely,
David G.B. Lawrence,
Policy Director.
[FR Doc. 2024-31214 Filed 1-17-25; 8:45 am]
BILLING CODE 6450-01-P`