[Federal Register Volume 87, Number 80 (Tuesday, April 26, 2022)]
[Proposed Rules]
[Pages 24455-24469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08868]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 87, No. 80 / Tuesday, April 26, 2022 / 
Proposed Rules

[[Page 24455]]



DEPARTMENT OF ENERGY

10 CFR Part 431

[EERE-2019-BT-STD-0042]
RIN 1905-AE59


Energy Conservation Program: Energy Conservation Standards for 
Commercial Warm Air Furnaces

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

ACTION: Notification of proposed determination and request for comment.

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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 
warm air furnaces (``CWAFs''). EPCA also requires the U.S. Department 
of Energy (``DOE'') to periodically review standards. In this 
notification of proposed determination (``NOPD''), DOE has initially 
determined that it lacks clear and convincing evidence that amended 
energy conservation standards for CWAFs would be economically 
justified. DOE requests comment on this proposed determination.

DATES: 
    Meeting: DOE will hold a webinar on Tuesday, June 7, 2022, from 
1:00 p.m. to 4:00 p.m. See section V, ``Public Participation,'' for 
webinar registration information, participant instructions, and 
information about the capabilities available to webinar participants.
    Comments: Written comments and information are requested and will 
be accepted on or before June 27, 2022.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov. Follow the 
instructions for submitting comments. Alternatively, interested persons 
may submit comments, identified by docket number EERE-2019-BT-STD-0042, 
by any of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: to <a href="/cdn-cgi/l/email-protection#3868535f706e797b7e4d4a56595b5d0a0809016b6c7c08080c0a785d5d165c575d165f574e"><span class="__cf_email__" data-cfemail="15457e725d4354565360677b7476702725242c464151252521275570703b717a703b727a63">[email protected]</span></a>. Include docket 
number EERE-2019-BT-STD-0042 and/or RIN 1904-AE59 in the subject line 
of the message.
    No telefacsimiles (``faxes'') will be accepted. For detailed 
instructions on submitting comments and additional information on this 
process, see section V of this document (Public Participation).
    Although DOE has routinely accepted public comment submissions 
through a variety of mechanisms, including postal mail and hand 
delivery/courier, the Department has found it necessary to make 
temporary modifications to the comment submission process in light of 
the ongoing coronavirus (``COVID-19'') pandemic. DOE is currently 
suspending receipt of public comments via postal mail and hand 
delivery/courier. If a commenter finds that this change poses an undue 
hardship, please contact Appliance Standards Program staff at (202) 
586-1445 to discuss the need for alternative arrangements. Once the 
COVID-19 pandemic health emergency is resolved, DOE anticipates 
resuming all of its regular options for public comment submission, 
including postal mail and hand delivery/courier.
    Docket: The docket, 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?D=EERE-2019-BT-STD-0042. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section V, ``Public Participation,'' for further 
information on how to submit comments through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Julia Hegarty, 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: (240) 597-6737. Email: 
<a href="/cdn-cgi/l/email-protection#a7e6d7d7cbcec6c9c4c2f4d3c6c9c3c6d5c3d4f6d2c2d4d3cec8c9d4e7c2c289c3c8c289c0c8d1"><span class="__cf_email__" data-cfemail="521322223e3b333c31370126333c363320362103273721263b3d3c211237377c363d377c353d24">[email protected]</span></a>.
    Mr. Eric Stas, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-5827. Email: <a href="/cdn-cgi/l/email-protection#4f0a3d262c611c3b2e3c0f273e612b202a61282039"><span class="__cf_email__" data-cfemail="9cd9eef5ffb2cfe8fdefdcf4edb2f8f3f9b2fbf3ea">[email protected]</span></a>.
    For further information on how to submit a comment or review other 
public comments and the docket contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
<a href="/cdn-cgi/l/email-protection#c485b4b4a8ada5aaa7a197b0a5aaa0a5b6a0b795b1a1b7b0adabaab784a1a1eaa0aba1eaa3abb2"><span class="__cf_email__" data-cfemail="9fdeefeff3f6fef1fcfaccebfef1fbfeedfbecceeafaecebf6f0f1ecdffafab1fbf0fab1f8f0e9">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Proposed Determination
II. Introduction
    A. Authority
    B. Background
    C. Deviation From Appendix A
III. General Discussion and Rationale
    A. General Comments
    B. Equipment Classes and Scope of Coverage
    1. Equipment Class Structure
    2. Definition and Coverage
    C. Test Procedures
    D. Market and Technology Assessment, and Engineering Analysis
    E. Economic and Energy Analyses
    F. Proposed Determination
    1. Significant Conservation of Energy
    2. Technological Feasibility
    3. Economic Justification
IV. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act of 1995
    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. Review Under the Information Quality Bulletin for Peer Review
V. Public Participation
    A. Participation in the Public Meeting Webinar

[[Page 24456]]

    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting Webinar
    D. Submission of Comments
VI. Approval of the Office of the Secretary

I. Synopsis of the Proposed Determination

    Title III, Part C \1\ of EPCA,\2\ established the Energy 
Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-
6317) Such equipment includes CWAFs, which are the subject of this 
NOPD.\3\ (42 U.S.C. 6311(J))
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
    \2\ 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.
    \3\ Air-cooled commercial package air conditioning and heating 
equipment (referred to as ``air-cooled unitary air conditioners and 
air-cooled unitary heat pumps'' or ``ACUACs and ACUHPs'') were also 
included in the scope of the request for information (``RFI'') 
published by DOE on May 12, 2020 (``May 2020 RFI'') that precedes 
this NOPD. 85 FR 27941. In this NOPD, DOE only addresses CWAFs. DOE 
will address ACUACs and ACUHPs in a separate proceeding.
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    Pursuant to EPCA, DOE is triggered to consider amending the energy 
efficiency standards for certain types of commercial and industrial 
equipment, including the equipment at issue in this document, whenever 
the American Society of Heating, Refrigerating, and Air Conditioning 
Engineers (``ASHRAE'') amends the standard levels or design 
requirements prescribed in ASHRAE Standard 90.1, ``Energy Standard for 
Buildings Except Low-Rise Residential Buildings,'' (``ASHRAE Standard 
90.1''). Under a separate provision of EPCA, DOE is required to review 
the existing energy conservation standards for those types of covered 
equipment subject to ASHRAE Standard 90.1, at a minimum, every 6 years 
after issuance of any final rule establishing or amending a standard 
(42 U.S.C. 6313(a)(6)(A)-(C)). DOE is conducting this review of the 
energy conservation standards for CWAFs under EPCA's six-year-lookback 
authority. (42 U.S.C. 6313(a)(6)(C))
    For this proposed determination, DOE considered CWAFs subject to 
the current Federal energy conservation standards specified in the Code 
of Federal Regulations (CFR) at 10 CFR 431.77. In a direct final rule 
published in the Federal Register on January 15, 2016 (``January 2016 
final rule''), DOE, in relevant part, established amended standards for 
CWAFs, including energy conservation standards for which compliance is 
required beginning on January 1, 2023. 81 FR 2420. DOE has tentatively 
determined that there is significant uncertainty regarding whether 
more-stringent standards would be economically justified at this time, 
a matter which the Department discusses in more detail in section III.F 
of this document. Therefore, DOE has preliminarily determined that the 
energy conservation standards for CWAFs do not need to be amended 
because there is not clear and convincing evidence that amended 
standards would be economically justified, as required by EPCA to 
establish a more-stringent standard. (42 U.S.C. 6313(a)(6)(A)(ii)(II))

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this proposed determination, as well as the historical 
background relevant to the establishment of energy conservation 
standards for CWAFs.

A. Authority

    EPCA, Public Law 94-163 (42 U.S.C. 6291-6317, as codified), among 
other things, 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 Public Law 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 CWAFs, the subject of this document. (42 U.S.C. 
6311(J))
    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), energy conservation standards (42 U.S.C. 6313), test procedures 
(42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the 
authority to require information and reports from manufacturers (42 
U.S.C. 6316).
    Federal energy conservation 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(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) 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(b)(2)(D), 
which incorporates the preemption waiver provisions of 42 U.S.C. 
6297(d))
    EPCA prescribed initial mandatory energy conservation standards for 
CWAFs. (42 U.S.C. 6313(a)(4)) In doing so, EPCA established Federal 
energy conservation standards that generally corresponded to the levels 
in the ASHRAE Standards 90.1 in effect on October 24, 1992 (i.e., 
ASHRAE Standard 90.1-1989).
    In overview, if ASHRAE Standard 90.1 is amended with respect to the 
standard levels or design requirements applicable under that standard 
for certain commercial equipment, including CWAFs, not later than 180 
days after the amendment of the standard, DOE must publish in the 
Federal Register for public comment an analysis of the energy savings 
potential of amended energy efficiency standards. (42 U.S.C. 
6313(a)(6)(A)(i)) DOE must adopt amended energy conservation standards 
at the new efficiency level in ASHRAE Standard 90.1, unless DOE 
determines that there is clear and convincing evidence to support a 
determination that the adoption of a more stringent efficiency level as 
a uniform national standard would produce significant additional energy 
savings and be technologically feasible and economically justified.\4\ 
(42 U.S.C. 6313(a)(6)(A)(ii))
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    \4\ In determining whether a more-stringent standard is 
economically justified, EPCA directs DOE to determine, after 
receiving views and comments from the public, whether the benefits 
of the proposed standard exceed the burdens of the proposed standard 
by, to the maximum extent practicable, considering the following 
seven factors: (1) The economic impact of the standard on the 
manufacturers and consumers of the products subject to the standard; 
(2) The savings in operating costs throughout the estimated average 
life of the product compared to any increases in the initial price 
of, initial charges for, or maintenance expense of the products that 
are likely to result from the standard; (3) The total projected 
amount of energy savings likely to result directly from the 
standard; (4) Any lessening of the utility or the performance of the 
products likely to result from the standard; (5) The impact of any 
lessening of competition, as determined in writing by the Attorney 
General, that is likely to result from the standard; (6) The need 
for national energy conservation; and (7) Other factors the 
Secretary of Energy (``Secretary'') considers relevant. (42 U.S.C. 
6313(a)(6)(B)(ii))
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    If DOE decides to adopt, as a uniform national standard, the 
efficiency levels specified in the amended ASHRAE Standard 90.1, DOE 
must establish such standard not later than 18 months after publication 
of the amended industry standard. (42 U.S.C. 6313(a)(6)(A)(ii)(I)) 
However, if DOE determines, supported by clear and convincing evidence, 
that a more-stringent uniform national standard would result in 
significant additional conservation of energy and is technologically 
feasible and

[[Page 24457]]

economically justified, then DOE must establish the more-stringent 
standard not later than 30 months after publication of the amended 
ASHRAE Standard 90.1. (42 U.S.C. 6313(a)(6)(A)(ii)(II) and (B)(i))
    EPCA also requires that every six years DOE shall evaluate the 
energy conservation standards for each class of certain covered 
commercial equipment, including CWAFs, and publish either a notice of 
determination that the standards do not need to be amended, or a notice 
of proposed rulemaking (``NOPR'') that includes new proposed energy 
conservation standards (proceeding to a final rule, as appropriate). 
(42 U.S.C. 6313(a)(6)(C)(i)) EPCA further provides that, not later than 
three years after the issuance of a final determination not to amend 
standards, DOE must publish either a notification of determination that 
standards for the product 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. 6313(a)(6)(C)(iii)(II))
    A determination of whether amended energy conservation standards 
are needed must be based on the same considerations as if it were 
adopting a standard that is more stringent than an amendment to ASHRAE 
Standard 90.1. (42 U.S.C. 6313(a)(6)(C)(i)(II); 42 U.S.C. 
6313(a)(6)(A)-(B)) DOE must make the analysis on which a determination 
is based publicly available and provide an opportunity for written 
comment. (42 U.S.C. 6313(a)(6)(C)(ii)) Further, there must be clear and 
convincing evidence that a determination that more-stringent standards 
would (1) result in significant additional conservation of energy, (2) 
be technologically feasible and (3) be economically justified. (42 
U.S.C. 6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A))
    DOE is publishing this NOPD in satisfaction of the six-year-
lookback review requirement in EPCA, having initially determined that 
DOE lacks clear and convincing evidence that amended standards for 
CWAFs would be economically justified.

B. Background

    In a final rule published in the Federal Register on October 21, 
2004 (``October 2004 final rule''), DOE codified energy conservation 
standards for CWAFs equal to those established in EPCA (i.e., a thermal 
efficiency of 80 percent for gas-fired CWAFs, and a thermal efficiency 
of 81 percent for oil-fired CWAFs). 69 FR 61916, 61941. The standards 
established in the October 2004 final rule are the same as DOE's 
current CWAF standards for CWAFs manufactured before January 1, 2023. 
10 CFR 431.77.
    As noted previously, DOE most recently amended the energy 
conservation standards for CWAFs in the January 2016 final rule, which 
requires compliance beginning on January 1, 2023. 81 FR 2420 (Jan. 15, 
2016).
    Since publication of the January 2016 final rule, ASHRAE published 
two updated versions of ASHRAE Standard 90.1, one in 2016 (``ASHRAE 
Standard 90.1-2016'') and another in 2019 (``ASHRAE Standard 90.1-
2019''). The CWAF standards adopted in the January 2016 final rule 
(i.e., the standards which take effect on and after the January 1, 2023 
compliance date) are more stringent than the minimum efficiency levels 
for CWAFs in ASHRAE Standard 90.1-2016. ASHRAE 90.1-2019 updated the 
minimum efficiency levels for CWAFs to align with those adopted by DOE 
in the January 2016 final rule.\5\ Because neither ASHRAE Standard 
90.1-2016 nor ASHRAE Standard 90.1-2019 contained minimum efficiency 
levels more stringent than the current Federal standards for CWAFs, DOE 
was not triggered to examine amended standards for this equipment under 
42 U.S.C. 6313(a)(6)(A).\6\ As a result, despite these intervening 
ASHRAE actions, the Federal standards for CWAFs are those set forth in 
the January 2016 final rule and codified in DOE's regulations at 10 CFR 
431.77.
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    \5\ It is DOE's understanding that the relevant provisions of 
ASHRAE Standard 90.1-2019 pertaining to CWAF standards contained a 
typographical error. Table 6.8.1-5 of ASHRAE Standard 90.1-2019 
specifies a thermal efficiency (TE) requirement of 82 percent for 
oil-fired CWAFs applicable after January 1, 2023, which aligns with 
the standard adopted by the January 2016 final rule. However, Table 
6.8.1-5 of ASHRAE 90.1-2019 also specifies a TE requirement of only 
80 percent for oil-fired CWAFs applicable before January 1, 2023, 
whereas the previous version, ASHRAE 90.1-2016, specified a TE 
requirement of 81 percent for this class. DOE understands the 80-
percent level in ASHRAE Standard 90.1-2019 to be a typographical 
error, and that the TE requirement for oil-fired warm-air furnaces 
>=225,000 Btu/h before January 1, 2023 should be 81 percent, thereby 
aligning with ASHRAE Standard 90.1-2016 and the current Federal 
standard. Since the 80-percent level in ASHRAE Standard 90.1-2019 is 
lower than the corresponding current Federal standard, DOE cannot 
consider adopting the ASHRAE Standard 90.1-2019 level due to the 
``anti-backsliding'' provision in EPCA, 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. 
6313(a)(6)(B)(iii)(I)) Further, because the revised ASHRAE Standard 
90.1-2019 lowers the standard, as compared to the level specified by 
the uniform national standard adopted pursuant to EPCA, DOE did not 
have the authority to conduct a rulemaking to consider a higher 
standard for that equipment pursuant to 42 U.S.C. 
6313(a)(6)(A)(ii)(II) (i.e., DOE is not triggered). See 84 FR 3910, 
3915 (Feb. 13, 2019).
    \6\ DOE assessed whether it was triggered based upon 
consideration of the current Federal standards codified at 10 CFR 
431.77, which were promulgated through the final rule published in 
the Federal Register on 81 FR 2420 (Jan. 15, 2016). In doing so, DOE 
considered the totality of these CWAF standard levels, even though 
compliance with certain of those standards is not yet required 
(i.e., a compliance date of January 1, 2023).
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    More specifically, for gas-fired CWAFs manufactured starting on 
January 1, 1994, until January 1, 2023, the thermal efficiency (``TE'') 
at the maximum rated capacity (i.e., rated maximum input) must be not 
less than 80 percent. For gas-fired CWAFs manufactured starting on 
January 1, 2023, the TE at the maximum rated capacity must be not less 
than 81 percent. For oil-fired CWAFs manufactured starting on January 
1, 1994, until January 1, 2023, the TE at the maximum rated capacity 
must be not less than 81 percent. For oil-fired CWAFs manufactured 
starting on January 1, 2023, the TE at the maximum rated capacity must 
be not less than 82 percent. 10 CFR 431.77
    In the January 2016 final rule, DOE rejected more-stringent 
standards on the basis that benefits of energy savings, emission 
reductions, and the estimated monetary value of the emissions 
reductions would be outweighed by the economic burden on many 
consumers, negative net present value (``NPV'') of consumer benefits, 
and the impacts on manufacturers, including the conversion costs and 
profit margin impacts that could result in a large reduction in 
industry net present value (``INPV''). 81 FR 2420, 2522 (Jan. 15, 
2016).
    In support of its present review of the CWAF energy conservation 
standards, DOE published in the Federal Register a request for 
information (RFI) on May 12, 2020 (May 2020 RFI), which identified 
various issues on which DOE sought comment, data, and information to 
inform its determination of whether the current Federal standards need 
to be amended. (It is again noted that the May 2020 RFI addressed 
ACUACs and ACUHPs, in addition to CWAFs.) 85 FR 27941.
    DOE received numerous comments in response to the May 2020 RFI from 
interested parties, as listed in Table II-1. While Table II-1 includes 
all parties that commented in response to the May 2020 RFI, only those 
comments relevant to CWAFs are summarized and addressed in this 
NOPD.\7\ As previously mentioned, DOE will consider ACUACs and ACUHPs 
in a separate proceeding,

[[Page 24458]]

in which the Department will address comments received in response to 
the May 2020 RFI related to ACUACs and ACUHPs.
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    \7\ The following stakeholders listed in Table II-1 did not 
provide comments relevant to CWAFs and, therefore, are not discussed 
further in this document: PGE, UCA, Verified Inc., Heinemeier, and 
Walsh.

 Table II-1--Interested Parties That Provided Written Comment on the May
                                2020 RFI
------------------------------------------------------------------------
                                    Acronym used in
          Commenter(s)                 this NOPD        Commenter type
------------------------------------------------------------------------
United CoolAir Corporation......  UCA...............  Manufacturer.
Lennox International, Inc.......  Lennox............  Manufacturer.
Carrier Corporation.............  Carrier...........  Manufacturer.
Trane Technologies..............  Trane.............  Manufacturer.
Goodman Manufacturing Company,    Goodman...........  Manufacturer.
 L.P.
Spire Inc.......................  Spire.............  Utility.
Air-Conditioning, Heating, and    AHRI..............  Trade Association.
 Refrigeration Institute.
American Public Gas Association.  APGA..............  Trade Association.
Portland General Electric         PGE...............  Utility.
 Company.
Northwest Energy Efficiency       NEEA..............  Efficiency
 Alliance.                                             Organization.
California Investor-Owned         CA IOUs...........  Utility.
 Utilities.
Appliance Standards Awareness     Joint Advocates...  Efficiency
 Project, American Council for                         Organizations and
 an Energy-Efficient Economy,                          State Government.
 California Energy Commission,
 Natural Resources Defense
 Council, and Northeast Energy
 Efficiency Partnerships.
Institute for Policy Integrity    Policy Integrity..  Academic
 at NYU School of Law.                                 Institution.
Robert Mowris...................  Verified Inc......  Other Stakeholder.
Kristin Heinemeier..............  Heinemeier........  Other Stakeholder.
John Walsh......................  Walsh.............  Other Stakeholder.
Daniel Harkins..................  Harkins...........  Other Stakeholder.
------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\8\
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    \8\ The parenthetical reference provides a reference for 
information located in the docket. (Docket No. EERE-2019-BT-STD-
0042, which is maintained at www.regulations.gov/docket?D=EERE-2019-BT-STD-0042). The references are arranged as follows: (Commenter 
name, comment docket ID number, page of that document).
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C. Deviation From Appendix A

    In accordance with section 3(a) of 10 CFR part 430, subpart C, 
appendix A (``appendix A''), DOE notes that it is deviating from the 
provision in appendix A regarding the comment period for a notice of 
proposed rulemaking. Section 6(f)(2) of appendix A specifies that the 
length of the public comment period for a NOPR will not be less than 75 
days. For this proposed determination, DOE has opted to instead provide 
a 60-day comment period. As stated previously, DOE requested comment in 
the May 2020 RFI on the technical and economic analyses that would be 
used to determine whether, based on clear and convincing evidence, a 
more-stringent standard would result in significant additional 
conservation of energy and is technologically feasible and economically 
justified. DOE has determined that a 60-day comment period, in 
conjunction with the prior May 2020 RFI, provides sufficient time for 
interested parties to review the proposed rule and develop comments.

III. General Discussion and Rationale

    DOE developed this proposed determination after a review of the 
CWAF market, including product literature and product listings in the 
DOE Compliance Certification Management System (CCMS) database. DOE 
also considered comments, data, and information from interested parties 
that represent a variety of interests. This notice addresses issues 
raised by these commenters.

A. General Comments

    DOE received multiple comments from stakeholders stating generally 
that DOE should not amend the current Federal standards for CWAFs. 
(AHRI, No. 14 at p. 3; Carrier, No. 13 at pp. 4-5, 18-19; Lennox, No. 
15 at pp. 1, 3; Trane, No. 16 at p. 2; APGA, No. 19 at pp. 1-3; Spire, 
No. 21 at pp. 2-3) More specifically, AHRI, Carrier, Lennox, and Trane 
argued that the current Federal standards should not be amended because 
of the regulatory burdens manufacturers already face. (AHRI, No. 14 at 
p. 2; Carrier, No. 13 at pp. 18-19; Lennox, No. 15 at p. 4; Trane, No. 
16 at p. 2) Commenters also asserted that the impacts associated with 
the 2023 standards cannot be assessed at this time because the 
standards have yet to take effect, and, therefore, considering new 
standards prior to 2023 would be premature. (Lennox, No. 15 at pp. 2-3; 
AHRI, No. 14 at p. 3; Carrier, No. 13 at p. 8; Trane, No. 16 at p. 2)
    DOE also received comments from several other stakeholders 
generally expressing support for DOE evaluating and amending the 
current energy conservation standards for CWAFs. (Joint Advocates, No. 
23 at p. 1; CA IOUs No. 20 at pp. 1-7; NEEA, No. 24 at pp. 1-10) More 
specifically, the Joint Advocates stated that very large energy savings 
could result from amended standards for CWAFs, citing the max-tech 
efficiency levels analyzed in the January 2016 final rule, as well as 
the range of efficiencies in the current market. (Joint Advocates, No. 
23 at pp. 1-2) NEEA and the CA IOUs similarly commented as to the 
potential for energy savings. (CA IOUs No. 20 at pp. 1-7; NEEA, No. 24 
at pp. 1, 5-7)
    In response to the May 2020 RFI, AHRI asserted that DOE is not 
statutorily required to review amended standards under the six-year-
lookback rulemaking for CWAFs, based on the fact that the 2023 
standards adopted in the January 2016 final rule have not yet come into 
effect. (AHRI, No. 14 at p. 3) DOE disagrees with AHRI's reading of the 
statute. The statute does not reference compliance dates from previous 
rulemakings in setting the timing for DOE's required review, but 
instead, the language of EPCA simply requires DOE to evaluate amended 
standards for CWAFs every 6 years, which DOE has interpreted as running 
from publication of the last final rule to amend the applicable 
standards. (see 42 U.S.C. 6313(a)(6)(C)(i)) However, DOE acknowledges 
that if it were to set standards under EPCA's six-year-lookback 
provision, the statute would require DOE to set a compliance date

[[Page 24459]]

that is the later of: (1) The date three years after publication of the 
final rule establishing the amended standard or (2) the date that is 
six years after the effective date of the current standard for a 
covered product (in this case 2029). (see 42 U.S.C. 6313(a)(6)(C)(iv))
    Therefore, pursuant to its statutory obligations (particularly 
EPCA's required six-year-lookback review under 42 U.S.C. 6313(a)(6)(C)) 
and as discussed in this NOPD, DOE has considered the potential for 
amended standards for CWAFs. Such review is necessary for DOE to 
determine whether potential amended energy conservation standards for 
CWAFs would meet the applicable statutory criteria. DOE's analyses in 
this proceeding also allow it to evaluate the opposing view of the 
comments previously discussed regarding the appropriateness of amended 
CWAF standards.

B. Equipment Classes and Scope of Coverage

    For CWAFs, the current energy conservation standards specified in 
10 CFR 431.77 are based on two equipment classes determined according 
to fuel type: Gas-fired CWAFs and oil-fired CWAFs. The current 
standards are consistent with the equipment class structure in the 
current version of ASHRAE Standard 90.1.
1. Equipment Class Structure
    In response to the May 2020 RFI, NEEA recommended that DOE should 
consider dividing the gas-fired CWAF equipment class into two or more 
classes by capacity. NEEA argued that smaller units are more prominent 
in commercial buildings, that analyzing them as a separate equipment 
class would help identify their unique characteristics and challenges, 
and that the cost-effectiveness of efficiency features for smaller 
units will be different than those of larger units. (NEEA, No. 24 at p. 
3)
    DOE declines to make NEEA's recommended changes to the CWAF class 
structure for the reasons that follow. First, as discussed in section 
III.F of this document, DOE has tentatively determined that it lacks 
clear and convincing evidence that amended standards for CWAFs would be 
economically justified. As explained in that section, DOE has 
tentatively determined that the market for CWAFs has not yet fully 
responded to the pending 2023 energy conservation standards. This 
uncertainty extends to the energy characteristics of the market against 
which any alternate equipment class scheme would be compared. However, 
more importantly, DOE has determined that it lacks statutory authority 
to make the changes NEEA requests, as explained subsequently.
    As a general rule, for covered consumer products, EPCA requires 
that a rule prescribing an energy conservation standard for a type (or 
class) of covered products shall specify a different level of energy 
use or efficiency (either higher or lower) than that which applies (or 
would apply) to any group of covered products that have the same 
function or intended use, if the Secretary determines that covered 
products within such group either: (1) Consume a different kind of 
energy; or (2) have a capacity or other performance-related feature 
which other products within such type (or class) do not have and such 
feature justifies a different standard from that which applies (or will 
apply) to other products within such type (or class). (42 U.S.C. 
6295(q)(1)) These provisions also apply to covered commercial and 
industrial equipment--other than ASHRAE equipment--through the 
statutory crosswalk provision at 42 U.S.C. 6316(a). In contrast, ASHRAE 
equipment, which includes CWAFs, has its own separate statutory scheme 
under EPCA, as described in section II.A of this document. For ASHRAE 
equipment, there is neither a companion provision nor crosswalk to 42 
U.S.C. 6295(q)(1). Therefore, EPCA in essence requires DOE to establish 
energy conservation standards for CWAFs at the minimum efficiencies set 
forth in ASHRAE Standard 90.1 (unless DOE has clear and convincing 
evidence to adopt more-stringent standards), consistent with the 
equipment class structure in ASHRAE Standard 90.1. (See 42 U.S.C. 
6313(a)(6)(A)) Consequently, DOE is not considering amendments to the 
equipment classes for CWAFs.
2. Definition and Coverage
    EPCA defines a ``warm air furnace'' as a self-contained oil- or 
gas-fired furnace designed to supply heated air through ducts to spaces 
that require it and includes combination warm air furnace/electric air 
conditioning units but does not include unit heaters and duct furnaces. 
(42 U.S.C. 6311(11)(A)) A ``commercial warm air furnace'' is further 
defined in DOE's regulations as a warm air furnace that is industrial 
equipment, and that has a capacity (rated maximum input) of 225,000 
British thermal units (``Btu'') per hour or more. 10 CFR 431.72. In the 
May 2020 RFI, DOE requested comment on whether the Department's 
regulatory definition for ``commercial warm air furnace,'' or related 
definitions, require any revisions, and if so, how those definitions 
should be revised. 85 FR 27941, 27945 (May 12, 2020).
    Trane stated that it does not see the need for any changes to the 
definition of CWAF. (Trane, No. 16 at p. 3) Conversely, NEEA 
recommended that DOE should consider updating its definition for CWAF 
to account for different operating characteristics, different 
functions, or use cases in order to reduce uncertainty as to the 
applicable standard and test procedure and to provide more 
comprehensive coverage. (NEEA, No. 24 at p. 5)
    In response, DOE reviewed the definition of ``commercial warm air 
furnace.'' The codified definition of ``warm air furnace'' at 10 CFR 
431.72 matches EPCA's definition of a ``warm air furnace'' at 42 U.S.C 
6311(11)(A). A CWAF is defined at 10 CFR 431.72 as a warm air furnace 
with the additional requirements that it be industrial equipment having 
a capacity (rated maximum input) of 225,000 Btu per hour (``Btu/h'') or 
more, which picks up where the upper limit of consumer furnace input 
capacity for consumer furnaces leaves off (see 42 U.S.C. 6291(23)(D)). 
After careful review, DOE considers this definition to be appropriately 
aligned with the definition in EPCA and to adequately cover commercial 
furnaces. (As discussed later in this section, DOE identified a small 
number of furnace models that are not covered by either the consumer 
furnace definition or the CWAF definition, but tentatively concludes 
that amending the CWAF definition in the CFR to cover those models is 
unnecessary because it would be duplicative, and would provide little 
opportunity for energy savings.) Therefore, DOE has tentatively 
determined that no amendments to the regulatory definitions for 
``commercial warm air furnace'' or ``warm air furnace'' are needed.
    AHRI and Carrier suggested modifying the definition of ``commercial 
warm air furnace'' to introduce an upper limit to the input capacity of 
covered CWAFs. (AHRI, No. 14 at p. 4; Carrier, No. 13 at p. 3) DOE 
notes that the topic of an upper capacity limit was discussed 
previously in a NOPR published in the Federal Register on February 4, 
2015 (``February 2015 NOPR''). 80 FR 6182, 6192-6193. In the February 
2015 NOPR, DOE noted that neither EPCA nor DOE's existing regulations 
for CWAFs specify an upper limit to the input rating of covered 
equipment, and that establishing an upper limit would potentially 
remove coverage of models that would have otherwise been covered by DOE 
regulations. Because of this, DOE did

[[Page 24460]]

not propose an upper limit on the input capacity of covered CWAF. Id. 
DOE tentatively maintains its position taken in the February 2015 NOPR 
and, therefore, is not proposing an upper limit on the input capacity 
of covered CWAFs.
    Carrier stated that there are gaps in coverage between the consumer 
furnace and CWAF definitions, so the commenter recommended that the 
CWAF definition should be modified to address those gaps. Specifically, 
Carrier stated that three-phase furnaces with input ratings less than 
225,000 Btu/h, as well as single-phase furnaces with input ratings less 
than 225,000 Btu/h that are installed within the same cabinet as an air 
conditioner with a cooling capacity greater than 65,000 Btu/h, are not 
covered by either definition. Carrier recommended that the CWAF 
definition be expanded to classify furnaces that are currently 
unregulated as CWAFs, with the option of rating either with annual fuel 
utilization efficiency (``AFUE'') or TE, as allowed in ASHRAE Standard 
90.1. (Carrier, No. 13 at pp. 2-3)
    As previously stated, DOE defines a ``commercial warm air furnace'' 
as a warm air furnace that is industrial equipment, and that has a 
capacity (rated maximum input) of 225,000 Btu per hour or more. 10 CFR 
431.72. DOE defines a consumer ``furnace'' as a product which utilizes 
only single-phase electric current, or single-phase electric current or 
DC current in conjunction with natural gas, propane, or home heating 
oil, and which: (1) Is designed to be the principal heating source for 
the living space of a residence; (2) is not contained within the same 
cabinet with a central air conditioner whose rated cooling capacity is 
above 65,000 Btu per hour; (3) is an electric central furnace, electric 
boiler, forced-air central furnace, gravity central furnace, or low-
pressure steam or hot water boiler; and (4) has a heat input rate of 
less than 300,000 Btu per hour for electric boilers and low-pressure 
steam or hot water boilers and less than 225,000 Btu per hour for 
forced-air central furnaces, gravity central furnaces, and electric 
central furnaces. 10 CFR 430.2. This potential gap in coverage was 
addressed in the February 2015 NOPR, in which DOE did not propose to 
extend CWAF coverage to three-phase, less than 225,000 Btu/h equipment. 
80 FR 6182, 6192 (Feb. 4, 2015). In the February 2015 NOPR, DOE agreed 
with commenters that there is limited potential for energy savings from 
coverage of such units due to the fact that equipment with these 
characteristics are already meeting efficiency levels specified by 
ASHRAE Standard 90.1. In its review of the market at the time, DOE did 
not identify any equipment with an efficiency level below that 
specified in ASHRAE Standard 90.1 levels for analogous equipment, and 
thus, tentatively determined that a separate equipment class and 
standard for this equipment may be unnecessarily duplicative and 
provide little opportunity for energy savings. Id.
    For this notice, DOE reexamined this matter, and the agency once 
again reviewed the market and found a small number of gas-fired furnace 
models that are three-phase with an input rating less than 225,000 Btu/
h. The Department found that for all of these models, manufacturers 
provide efficiency ratings, and the models meet or exceed the current 
gas-fired CWAF standards. Further, a majority of models identified also 
meet or exceed the 2023 gas-fired CWAF standards. In addition, DOE 
notes that these individual models make up a very small portion 
(roughly 2 percent) of the total CWAF market. Therefore, DOE 
tentatively maintains its previous conclusion that there is limited 
potential for energy savings from extending the ``commercial warm air 
furnace'' definition to cover this equipment due to the small size of 
the market and the fact that these products appear to meet or exceed 
the minimum energy conservation standards despite falling in a coverage 
gap. DOE also was unable to identify any models currently on the market 
with input ratings less than 225,000 Btu/h and that are contained 
within the same cabinet as a central air conditioner with a cooling 
capacity greater than 65,000 Btu/h, indicating that there would likely 
be no potential for additional energy savings from covering this 
equipment. Therefore, DOE has tentatively determined that amending the 
CWAF definition to cover such equipment would provide little 
opportunity for energy savings and is not proposing to do so in this 
notice.

C. Test Procedures

    EPCA sets forth generally applicable criteria and procedures for 
DOE's adoption and amendment of test procedures. (42 U.S.C. 6314(a)) As 
a general matter, manufacturers of covered ASHRAE equipment must use 
these test procedures to certify to DOE that their equipment complies 
with energy conservation standards and to quantify the efficiency of 
their equipment. (42 U.S.C. 6316(b); 42 U.S.C. 6296) DOE's current 
energy conservation standards for CWAFs are expressed in terms of a 
minimum thermal efficiency in percent. (See 10 CFR 431.77) The 
applicable test procedure for CWAFs is found at 10 CFR 431.76, 
``Uniform Test Method for Measurement of Energy Efficiency of 
Commercial Warm Air Furnaces.''
    In commenting on the May 2020 RFI, DOE received input from multiple 
stakeholders regarding DOE's CWAF test procedure, particularly as 
relates to jacket loss. (Joint Advocates, No. 23 at pp. 3-4; NEEA, No. 
24 at pp. 6-7; CA IOUs, No. 20 at p. 4; AHRI, No. 14 at p. 4; Carrier, 
No. 13. at p. 5; Goodman, No. 17 at p. 2) DOE also received comments 
from stakeholders regarding DOE's CWAF test procedure relating to 
auxiliary electrical consumption. (Joint Advocates, No. 23 at pp. 2-3) 
However, on May 5, 2020, DOE published a test procedure RFI for CWAFs 
(``May 2020 CWAF TP RFI'') in the Federal Register to initiate its 
review of the CWAF test procedure. DOE notes that the May 2020 CWAF TP 
RFI specifically requested comment on jacket loss and auxiliary 
electrical consumption. 85 FR 26626, 26631, 26332 (May 5, 2020). DOE 
reasons that it is most appropriate to consider issues related to the 
CWAF test procedure as part of a separate, dedicated test procedure 
rulemaking for such equipment. Consequently, DOE will address comments 
received in response to both the May 2020 RFI and May 2020 CWAF TP RFI 
regarding these topics as part of the CWAF test procedure proceeding.

D. Market and Technology Assessment, and Engineering Analysis

    In the May 2020 RFI, DOE requested comment on topics related to 
performing a market and technology assessment, screening analysis, and 
engineering analysis. 85 FR 27941, 27945-27950 (May 12, 2020). More 
specifically, DOE requested comment on: (1) Technology options that 
should be considered in a potential market and technology assessment; 
(2) the representative designs and characteristics of models that would 
be expected to be on the market after the 2023 compliance date; (3) the 
screening criteria used to determine whether technologies are included 
in the engineering analysis; (4) baseline efficiency levels; (5) max-
tech efficiency levels; (6) manufacturer production costs; and (7) 
manufacturer selling prices. Id.
    Regarding CWAF technology options, Carrier and Lennox stated that 
the technology options considered in the analysis for the January 2016 
final rule and presented in the May 2020 RFI for CWAFs are appropriate. 
(Lennox, No. 15 at p. 5; Carrier, No. 13 at p. 4) Trane

[[Page 24461]]

asserted that pre-mixed burners \9\ do not provide benefits, that 
burner de-rating \10\ may result in oversizing burners for CWAF 
applications, and that concentric venting may not be appliable to 
rooftop applications due to the length of the vent. (Trane, No. 16 at 
p. 4) NEEA and the Joint Advocates suggested that DOE should consider 
additional technology options for CWAFs that are were not listed in the 
May 2020 RFI. (NEEA, No. 24 at p. 6; Joint Advocates, No. 23 at p. 4) 
More specifically, NEEA recommended that increased jacket insulation, 
decreased casing leakage, heat recovery equipment, high- efficiency 
fans, variable-speed motors, low-leak dampers, modulating heat or 
cooling, and advanced controls such as demand control ventilation 
should be considered, and the Joint Advocates recommended DOE should 
consider insulation improvements and any technology options that may 
reduce the auxiliary electrical consumption of CWAFs. Id. Harkins 
recommended DOE consider all technologies that increase efficiency. 
(Harkins, No. 25 at p. 1)
---------------------------------------------------------------------------

    \9\ Pre-mixed burners mix the primary air and the fuel prior to 
combustion, which reduces or eliminates the need for secondary air 
and results in more complete combustion.
    \10\ ``Burner de-rating'' means decreasing the burner firing 
rate to increase the ratio of heat transfer area to fuel input.
---------------------------------------------------------------------------

    Regarding the designs and characteristics of the CWAF markets after 
the 2023 compliance date of the current set of standards, DOE received 
comments from multiple stakeholders asserting that the current CWAF 
markets are not representative of the models that would be expected to 
be on the market after the 2023 standards take effect. (Carrier, No. 13 
at pp. 7-8; Trane, No. 16 at p. 7) AHRI commented that it is impossible 
to forecast the market impact of the 2023 standards on CWAFs. (AHRI, 
No. 14 at p. 3) Carrier asserted that manufacturers will be working to 
optimize efficiencies, lower cost, and implement new entry-level 
products, and that the upcoming 2023 standards are causing 
manufacturers to further optimize their higher-efficiency equipment. 
(Carrier, No. 13 at pp. 7-8) According to Trane, the furnaces currently 
on the market will need to be redesigned to meet the 2023 standards. 
(Trane, No. 16 at p. 7) In contrast, Lennox commented that the CWAF 
models on the market are representative of designs and characteristics 
of models that would be expected to be on the market after the 2023 
compliance date, although Lennox acknowledged that the market impacts 
of the 2023 standards are unknown because of uncertainties in assessing 
the evolving market, including uncertainties in future shipments, the 
economic impact on manufacturers and consumers, and the total projected 
energy savings. (Lennox, No. 15 at pp. 5-6)
    In response to these comments, DOE explains that it conducted a 
preliminary market assessment based on the current CWAF market. DOE 
found that the characteristics of the current CWAF market are largely 
the same as when DOE assessed the CWAF market in the context of the 
proceeding culminating in the January 2016 final rule. However, unlike 
the market at that time, there are currently no condensing CWAFs (which 
typically have a TE of 90 percent or greater) or gas-fired CWAFs with a 
TE of 82 percent certified to DOE through the CCMS.\11\ Furthermore, 
DOE's review of the market indicates that the available technologies 
used to achieve the 2023 baseline efficiency level, as compared to the 
technologies that could be used to achieve higher levels of thermal 
efficiency (i.e., condensing technology) under the existing test 
procedure, have not changed significantly. Although NEEA and the Joint 
Advocates suggest analyzing numerous technologies (e.g., increased 
jacket insulation, decreased jacket leakage, heat recovery equipment, 
high-efficiency fans, variable-speed motors, low-leak dampers, 
modulating heat or cooling, advanced controls such as demand control 
ventilation, and any technology options that may reduce the auxiliary 
electrical consumption of CWAFs), none of the technologies identified 
by these commenters would improve thermal efficiency as it is measured 
today. More specifically, these technology options are not currently 
incorporated into the DOE CWAF test procedure, or the measurement of 
CWAF performance, because the current DOE test method does not require 
measurement of jacket losses and accounts for operation only when 
operating at the maximum input rating at steady state. DOE initially 
decided to exclude jacket loss from the calculation of TE in a NOPR 
published on December 13, 1999. 64 FR 69598, 69601 (December 1999 
NOPR).\12\ Therefore, because the technologies would not impact the 
regulatory metric (TE), it would not be appropriate to consider them as 
potential technologies for improving CWAF efficiency at this time.
---------------------------------------------------------------------------

    \11\ DOE's Compliance Certification Database for CWAFs is 
available at: www.regulations.doe.gov/ccms (Last accessed Jan. 12, 
2022).
    \12\ In the December 1999 NOPR, DOE did not include jacket loss 
in the TE calculation, having determined that, consistent with 
adopting industry test standards referenced in ASHRAE/IES Standard 
90.1-1989, the statute's intent was to assign the same meaning to 
the term ``thermal efficiency'' as its definition in the 
corresponding referenced standards (i.e., 100 percent minus percent 
flue loss). 64 FR 69598, 69601 (Dec. 13, 1999). DOE's determination 
in the December 1999 NOPR was informed by a public workshop held on 
April 14 and 15, 1998, and what DOE understood to be the consensus 
of the participants that TE should not include jacket loss, because 
ANSI Z21.47 defined TE without jacket loss. Id.
---------------------------------------------------------------------------

    Regarding the screening criteria and analysis, AHRI and Carrier 
supported screening out CWAF technology options along the lines 
presented in the May 2020 RFI (which were the same technology options 
screened out in the January 2016 final rule). (AHRI, No. 14 at p. 5; 
Carrier, No. 13 at p. 7) Carrier also recommended that an additional 
screening criterion be added to address the cost of the technology 
option. (Carrier, No. 13 at pp. 6-7)
    In response to Carrier's suggestion that DOE include an additional 
screening criterion to address cost of the technology option, DOE notes 
that the current screening criteria are included in 10 CFR part 430, 
subpart C, Appendix A, ``Procedures, Interpretations, and Policies for 
Consideration of New or Revised Energy Conservation Standards and Test 
Procedures for Consumer Products and Certain Commercial/Industrial 
Equipment.'' See sections 6(b)(3) and 7(b). These criteria do not 
include an evaluation of the cost of a technology option, which is 
instead evaluated in the engineering analysis and subsequently in the 
consumer economic analyses. Thus, DOE asserts that it would be 
inappropriate to exclude a technology option from consideration based 
solely on incremental technology cost increases, because changes in the 
cost of equipment are more appropriately considered as part of the 
consumer economic analyses.
    Regarding baseline efficiency levels, multiple commenters stated 
that the 2023 CWAF standards would be the correct baseline efficiency 
to be used in a future DOE analysis. (AHRI, No. 14 at p. 6; Lennox, No. 
15 at p. 6; Goodman, No. 17 at p. 3; Carrier, No. 13 at pp. 8-9)
    Regarding the max-tech levels, multiple stakeholders asserted that 
the 2023 CWAF standards are the highest possible for non-condensing 
equipment and recommended that a higher standard requiring condensing 
operation should not be considered. (AHRI, No. 14 at p. 7; Trane, No. 
16 at pp. 4, 7; Carrier, No. 13 at pp. 4-5, 10; Goodman, No. 17 at p. 
3; Spire, No. 21 at p. 2; Lennox, No. 15 at p. 5) Carrier, Trane, and 
Lennox cautioned that increasing the baseline efficiency past

[[Page 24462]]

the 2023 standards by utilizing improvements in these technology 
options would result in condensing operation, thereby imposing 
additional burden on manufacturers. (Lennox, No. 15 at p. 5; Carrier, 
No. 13 at pp. 4-5; Trane, No. 16 at p. 4) Commenters citied 
technological problems associated with implementing CWAF standards at a 
level that would require condensing operation, including issues related 
to condensate disposal. Such issues included high costs, as well as 
practicality and the ability to dispose of condensate properly. Id. In 
contrast, the Joint Advocates and NEEA recommended that DOE should 
consider a condensing standard because of the potential for energy 
savings. (Joint Advocates, No. 23 at p. 4, NEEA, No. 24 at p. 7). DOE 
discusses the merits of establishing a condensing standard in section 
III.F of this document.
    Regarding manufacturer production costs, manufacturer selling 
price, and how manufacturers would incorporate technology options to 
increase energy efficiency above the baseline, Carrier and Trane stated 
that the technology options listed in the May 2020 RFI (which were the 
options considered in the January 2016 final rule) are used to increase 
efficiency. (Carrier, No. 13 at p. 11; Trane, No. 16 at p. 8) AHRI 
stated that generally, the engineering analysis in the January 2016 
final rule was accurate at the time. (AHRI, No. 14 at p. 7)
    DOE considered how the manufacturer production cost and selling 
price of CWAFs have changed since the January 2016 final rule. As 
discussed previously, the designs and technologies used in equipment on 
the market are generally the same as those on the market at the time of 
the January 2016 final rule. DOE, therefore, has tentatively determined 
that relevant factors such as manufacturing processes, materials, and 
components are the same as or similar to those in use in January 2016. 
However, a review of the producer price index (PPI) \13\ for furnaces 
found that it has increased significantly, and DOE has tentatively 
determined such an increase would apply to technologies used to improve 
CWAF efficiency as well.\14\ These factors indicate that to the extent 
that the cost of CWAFs (and in particular the cost of improving CWAF 
efficiency) has changed since the engineering analysis was conducted 
for the January 2016 final rule, it has increased. Thus, DOE does not 
expect that conducting additional engineering analysis would provide 
clear and convincing evidence that would lead DOE to differ in its 
conclusions from the January 2016 final rule regarding economic 
justification of adopting levels more stringent than those adopted in 
the January 2016 final rule. DOE notes that other factors also 
contribute to the economic justification of potential standards, and 
additional discussion of those factors is included in section III.E of 
this document.
---------------------------------------------------------------------------

    \13\ The U.S. Bureau of Labor Statistics publishes PPI data. PPI 
measures the average change over time in the selling prices received 
by domestic producers for their output. The prices included in the 
PPI are from the first commercial transaction for many products and 
some services. For more information see: www.bls.gov/ppi/.
    \14\ Specifically, DOE reviewed the series ID PCU 333415333415C, 
which provides PPI information for warm air furnaces, including duct 
furnaces and humidifiers, and electric comfort heating. The PPI 
index as of August 2021 (i.e., the last month for which data is 
available that is not subject to revision by BLS) was 186.7 as 
compared to 142.8 in January 2016, an increase of over 30 percent. 
Although recent price increases could be temporary, reviewing the 
10-year trend indicates that an increase of approximately 19 percent 
would be expected.
---------------------------------------------------------------------------

    In summary, DOE considered the preliminary market assessment 
conducted for this rulemaking, as well as comments received that are 
relevant to the market and technology assessment, screening, and 
engineering analysis. For the reasons discussed previously, DOE has 
tentatively determined that the current CWAF market conditions 
(including issues in meeting more-stringent standards that would 
require use of condensing technology) are largely the same as those 
analyzed in the January 2016 final rule.

E. Economic and Energy Analyses

    In the May 2020 RFI, DOE requested comment on a number of issues 
related to mark-ups and distribution channels, the energy use analysis, 
the life-cycle cost analysis, repair and maintenance costs, the 
shipments analysis, and the national impact analysis. 85 FR 27941, 
27950-27953 (May 12, 2020). DOE specifically requested information to 
describe how equipment moves from the manufacturer to the customer, the 
relative sales volume through each channel, data to estimate the mark-
ups at each segment in the distribution channel, the energy use 
methodology, inputs to the life-cycle-cost model such as equipment 
lifetime, installation, repair, and maintenance costs, energy prices, 
the no-new-standards efficiency distribution, historical shipments, and 
future efficiency trends. Id.
    Regarding mark-ups and distribution channels, DOE received comments 
from AHRI and Carrier. AHRI commented that it is researching 
distribution channels; however, it had no feedback at the time the 
comment was provided. AHRI disagreed with DOE's use of incremental 
mark-ups and recommended that DOE revert to using the baseline mark-up 
for both baseline and incremental costs. (AHRI, No. 14 at p. 8) Carrier 
commented that it has not observed large shifts in the distribution 
channels, as the industry remains mature in the United States. 
(Carrier, No. 13 at p. 12)
    In response, DOE notes that in the January 2016 final rule, the 
efficiency levels above the amended standard level were not 
economically justified. As DOE has received no feedback to indicate the 
distribution channels have changed and no feedback that markups have 
decreased (which would reduce the incremental costs of higher-
efficiency products), DOE does not expect the outcome to change from 
the January 2016 final rule.
    Regarding the energy use analysis, DOE received comments from the 
CA IOUs, AHRI, Carrier, Trane, Goodman, and NEEA. The CA IOUs commented 
that DOE should update the weather data used in the energy use analysis 
to reflect the temperatures recorded in the United States in recent 
years. Along these lines, the CA IOUs recommended that DOE should 
consider the methodology used by the California Energy Commission to 
update weather files to analyze Title 24 of the Building Energy 
Efficiency Standard.\15\ (CA IOUs, No. 20 at p. 5) AHRI expressed 
concern that use of the 2003 Commercial Building Energy Consumption 
Survey (CBECS 2003) and estimating the energy consumption using an 
equivalent full-load hour approach does not accurately reflect 
equipment that is optimized for part-load performance (AHRI, No. 14 at 
p. 9). Trane commented that a more up-to-date building inventory 
analysis should be used to measure CWAF energy use. (Trane, No. 16 at 
p. 9) Carrier and Goodman commented that the previous analysis, from 
the January 2016 final rule, was based on perimeter conditions (i.e., 
outdoor air conditions). (Carrier, No. 13 at p. 14; Goodman, No. 17 at 
p. 4) Carrier commented that CWAFs do not run very often due to the 
internal loads on the building, and Goodman commented that CWAFs 
normally only provide morning warm up and night set back heating. 
(Carrier, No. 13 at p. 14; Goodman, No. 17 at p. 4) NEEA recommended 
that DOE should account for part-load operation, staged

[[Page 24463]]

systems, and varying percentages of outside air. (NEEA, No. 24 at p. 9)
---------------------------------------------------------------------------

    \15\ For analysis of Title 24-2022, the California Energy 
Commission used data from DOE's National Renewable Energy 
Laboratory's National Solar Radiation Database to include weather 
data collected between 1998-2017 (Available at: https://nsrdb.nrel.gov/).
---------------------------------------------------------------------------

    In response, DOE notes that while the previous analysis relied on 
CBECS 2003, the CWAF energy consumption was adjusted for projected 
decreases in heating degree days between CBECS 2003 and the compliance 
year.\16\ Furthermore, DOE notes that the main driver of CWAF energy 
consumption in the January 2016 final rule is the building heating 
load, which is based on the reported space heating energy consumption 
of buildings with a furnace in CBECS 2003.\17\ The previous analysis 
was not based on full-load hours or perimeter conditions. Finally, as 
stated in section III.D of this document, the Department's research 
suggests that the characteristics of the CWAF market are largely the 
same as when analyzed for the January 2016 final rule and that none of 
the technology options presented would improve thermal efficiency as 
measured in the current test procedure. Given the similar market, DOE 
does not anticipate the energy use to have changed sufficiently to 
drive a different outcome, as compared to that in the January 2016 
final rule.
---------------------------------------------------------------------------

    \16\ Chapter 7 of the January 2016 Final Rule Technical Support 
Document (Available at: www.regulations.gov/document/EERE-2013-BT-STD-0021-0050).
    \17\ Id.
---------------------------------------------------------------------------

    Regarding equipment lifetime, DOE received comments from AHRI, 
Carrier, and Trane. AHRI disagreed with the Weibull approach to 
lifetimes and stated its understanding that service lifetimes are in 
the range of 12 to 15 years. (AHRI, No. 14 at p. 10) In contrast, Trane 
stated that the Weibull approach is appropriate and that equipment 
lifetime should be the same as in the January 2016 final rule. (Trane, 
No. 16 at p. 10) Carrier likewise stated that the lifetimes determined 
by DOE's proposed approach seem reasonable. (Carrier, No. 13 at p. 14) 
AHRI and Carrier both stated that location is an important determinant 
of lifetime. (AHRI, No. 14 at p. 10; Carrier, No. 13 at p. 14)
    In response, DOE notes that the CWAF lifetime was developed based 
on the lifetime model for ACUACs as nearly all CWAFs are packaged with 
an ACUAC. The ACUAC lifetime model was calibrated based on historical 
shipments data.\18\ Given the similar market characteristics to the 
January 2016 final rule, DOE does not expect that equipment lifetime 
has changed significantly, and, therefore, it would not warrant changes 
to the findings regarding CWAF lifetimes presented in the January 2016 
final rule.
---------------------------------------------------------------------------

    \18\ See Appendix 8F of the January 2016 final rule technical 
support document (Available at: www.regulations.gov/document/EERE-2013-BT-STD-0021-0050).
---------------------------------------------------------------------------

    Regarding repair and maintenance costs, DOE received comments from 
AHRI, Trane, Carrier, and Goodman. AHRI stated that the costs used in 
previous analyses do not reflect actual repair and maintenance costs 
and that typical maintenance costs are double the values reported in RS 
Means.\19\ (AHRI, No. 14 at p. 10) Trane stated that the methodology 
used in the January 2016 final rule for repair and maintenance costs is 
adequate, although an update to a more recent version of RS Means is 
appropriate. (Trane, No. 16 at p. 10) Carrier stated that the higher 
efficiency standards in 2023 will include more costly components, and, 
therefore, an increased cost of equipment which could lead end users to 
opt for repair instead of replacement. As the higher efficiency levels 
require more advanced components, it will increase overall cost. 
Carrier also commented that the impact of A2L refrigerants and low 
global warming potential (GWP) regulations on repair and maintenance 
costs is still unknown; however, the commenter believes that equipment 
with A2L refrigerants will inherently have increased repair and 
maintenance costs due to additional safety components in the equipment. 
(Carrier, No. 13 at p. 16) Goodman stated that repair and maintenance 
costs will be higher for products using alternative refrigerants. In 
addition, Goodman commented that DOE's modeling on repair and 
maintenance costs should be appropriately revised to account for the 
baseline technologies that will be required to meet the amended 
standards beginning on January 1, 2023. (Goodman, No. 17 at p. 4)
---------------------------------------------------------------------------

    \19\ RS Means provides construction cost information that DOE 
uses to estimate installation, maintenance, and repair costs of 
CWAFs (Available at: https://www.rsmeansonline.com/) (Last accessed 
April 10, 2013).
---------------------------------------------------------------------------

    In response, DOE notes that the increased repair and maintenance 
costs presented in the January 2016 analysis for higher-efficiency 
products reflects the increased cost of more advanced components. 
Moreover, the Department has tentatively concluded that an update to 
the most current RS Means would not reduce the incremental difference 
in repair and maintenance costs by efficiency level, and, therefore, it 
would not be expected to change the outcome as compared to the January 
2016 final rule.
    Regarding energy prices, DOE received comments from Spire and APGA. 
Spire commented that the gas prices used in developing the January 2016 
final rule for amended CWAF energy conservation standards were 
overstated and that gas prices have decreased since 2016. Spire also 
asserted that DOE did not properly measure the marginal gas rates when 
calculating the energy savings for CWAFs in the January 2016 final 
rule. (Spire, No. 21 at pp. 3-6) APGA commented that the natural gas 
supply has increased, allowing for stable or declining prices in some 
markets. APGA also stated that DOE should be utilizing marginal 
consumption-based prices, as they more accurately determine the impact 
of efficiency savings for an end-user. (APGA, No. 19 at p. 2)
    In response, DOE notes that the majority of CWAFs use natural gas. 
The Department uses the Annual Energy Outlook (``AEO'') to project 
future natural gas prices. In the January 2016 final rule, DOE used the 
natural gas price projections from AEO 2015.\20\ The most current AEO 
is AEO 2021,\21\ and the natural gas price projections of AEO 2021 are 
indeed lower than for AEO 2015, in real dollars. With similar CWAF 
products and lower natural gas price projections, DOE does not expect 
the annual energy costs to rise compared to the January 2016 final 
rule.
---------------------------------------------------------------------------

    \20\ Available at: https://www.eia.gov/outlooks/aeo/tables_side.php.
    \21\ Available at: https://www.eia.gov/outlooks/archive/aeo21/.
---------------------------------------------------------------------------

    Regarding the no-new-standards efficiency distribution and future 
efficiency trends, DOE received comments from Carrier and Trane. 
Carrier commented that it expects most shipments in 2023 to be near the 
standards level. (Carrier, No. 13 at p. 15) Trane asserted that the 
majority of shipments (60-80 percent) will be at the minimum standard 
level in 2023. (Trane, No. 16 at p. 10) Carrier and Trane further 
commented that they expect the efficiency trends to remain close to the 
Federal standard level after 2023. (Carrier, No. 13 at p. 17; Trane, 
No. 16 at p. 11)
    Regarding historical shipments, Carrier, Goodman, and Trane 
commented that historical shipments would not accurately portray the 
market for CWAFs, as the impacts of COVID-19 on the heating, 
ventilation, and air-conditioning (``HVAC'') industry are not yet 
known. (Carrier, No. 13 at p. 16; Goodman, No. 17 at p. 4; Trane, No. 
16 at p. 11) Goodman argued that the CWAF market and shipments will be 
negatively impacted by future electrification trends and regulations. 
(Goodman, No. 17 at p. 4)

[[Page 24464]]

    In response, DOE did not receive any historical shipments data in 
response to the May 2020 RFI. However, the CWAF market is mature, and 
in the January 2016 final rule, shipments were projected to grow 
approximately 1 percent per year, with the large majority of shipments 
going to the replacement market.\22\ The no-new-standards distribution 
projected that in 2023, nearly all shipments would be at or near the 
baseline level analyzed in the January 2016 final rule.\23\ As to 
comments on impacts related to the COVID-19 pandemic, it is too soon to 
tell what long-term effects that event may have on CWAF shipment 
trends, if any. Likewise, DOE cannot adequately account for future 
statutory or regulatory efforts to promote electrification until they 
are finalized. At this point, DOE finds these factors to be too 
speculative to account for in the present analysis for CWAFs. 
Accordingly, given the mature market, the expectation that most 
shipments will be at the baseline level in 2023, and no anticipated 
increase in equipment lifetime, DOE does not expect the shipments 
estimates and no-new-standards distributions from the January 2016 
final rule to change significantly for CWAFs.
---------------------------------------------------------------------------

    \22\ The January 15, 2016 direct final rule relied on the 
December 14, 2015 National Impact Analysis Spreadsheet (Available 
at: www.regulations.gov/document/EERE-2013-BT-STD-0021-0052).
    \23\ Id.
---------------------------------------------------------------------------

    DOE also received comments from Policy Integrity regarding the 
social cost of carbon used in the emissions monetization analysis. 
Policy Integrity urged DOE to account for the benefits of greenhouse 
gas emissions reductions from the use of higher-efficiency equipment 
using the global estimate of the social cost of greenhouse gases, and 
the commenter added that the values developed by the interagency 
working group for the social cost of greenhouse gases are the best 
available. (Policy Integrity, No. 7, at pp. 2-3, 5)
    On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-
30087) granted the Federal government's emergency motion for a stay 
pending appeal of the February 11, 2022, preliminary injunction in 
Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of 
the Fifth Circuit's order, the preliminary injunction is no longer in 
effect, pending resolution of the Federal government's appeal of that 
injunction or a further court order. Among other things, the 
preliminary injunction enjoined the defendants in that case from 
``adopting, employing, treating as binding, or relying upon'' the 
interim estimates of the social cost of greenhouse gases--which were 
issued by the Interagency Working Group on the Social Cost of 
Greenhouse Gases on February 26, 2021--to monetize the benefits of 
reducing greenhouse gas emissions. In the absence of further 
intervening court orders, DOE will revert to its approach prior to the 
injunction and present monetized benefits where appropriate and 
permissible under law. However, in this NOPD, the Department will not 
be monetizing the cost of greenhouse gas emissions, as DOE is not 
proposing any amended standards. Should DOE follow this NOPD with a 
final determination that amended standards for CWAFs would not meet the 
applicable statutory criteria, no change in greenhouse gas emissions 
would be expected to result from this proceeding.
    Finally, DOE received a comment from Lennox asserting that DOE 
lacks clear and convincing evidence to support a finding that 
implementing amended standards above the levels scheduled for 
compliance in 2023 would be economically justified. (Lennox, No. 15 at 
p. 8)
    DOE considered the comments provided on the economic and energy use 
analyses and reviewed the inputs used in the life-cycle-cost, 
shipments, and national impact analysis from the January 2016 final 
rule. As discussed above, DOE has tentatively determined that there 
have not been any significant changes to the mark-ups and distribution 
channels, energy use, equipment lifetimes, repair and maintenance 
costs, energy prices, the no-new-standards efficiency distributions, 
and shipments that would lead to higher life-cycle-cost savings, 
increased national energy savings, and increased net present value of 
consumer benefits from the analysis that was conducted for the January 
2016 final rule. Therefore, as discussed in section III.F of this 
document, DOE has tentatively determined that the analyses conducted 
for the January 2016 final rule are appropriate for the present 
determination.

F. Proposed Determination

    After carefully considering the comments on the May 2020 RFI and 
the available data and information, DOE has tentatively determined that 
the energy conservation standards for CWAFs do not need to be amended, 
for the reasons explained in the paragraphs immediately following. DOE 
will consider all comments received on this proposed determination 
prior to issuing the next document in this rulemaking proceeding.
    As previously discussed, EPCA specifies that for any commercial and 
industrial equipment addressed under 42 U.S.C. 6313(a)(6)(A)(i), 
including CWAFs, DOE may prescribe an energy conservation standard more 
stringent than the level for such equipment in ASHRAE Standard 90.1 
only if ``clear and convincing evidence'' shows that a more-stringent 
standard would result in significant additional conservation of energy 
and is technologically feasible and economically justified. (42 U.S.C. 
6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) The ``clear and 
convincing'' evidentiary threshold applies both when DOE is triggered 
by ASHRAE action and when DOE conducts a six-year-lookback rulemaking, 
with the latter being the basis for the current proceeding. DOE 
addresses each of these statutory criteria in turn.
1. Significant Conservation of Energy
    EPCA mandates that DOE consider whether amended energy conservation 
standards for CWAFs would result in significant additional conservation 
of energy. (42 U.S.C. 6313(a)(6)(C)(i); 42 U.S.C. 
6313(a)(6)(A)(ii)(II))
    DOE acknowledges that more-stringent standards for CWAFs have the 
potential to result in significant additional conservation of energy. 
In the January 2016 final rule, DOE estimated that establishing a 
condensing standard (i.e., 92-percent thermal efficiency) for gas-fired 
and oil-fired CWAFs would result in 2.1 quads of primary energy savings 
compared to a no-new-standards case over the lifetime of the CWAF (2019 
through 2048). 81 FR 2420, 2508 (Jan. 15, 2016). However, as discussed 
in section III.F.3 of this document, DOE has preliminarily determined 
that it lacks clear and convincing evidence to show that the potential 
amended standard levels considered would be economically justified.
2. Technological Feasibility
    EPCA mandates that DOE consider whether amended energy conservation 
standards for CWAFs would be technologically feasible. (42 U.S.C. 
6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) As previously 
discussed, establishing more-stringent standards for CWAFs would likely 
require condensing operation,\24\ and

[[Page 24465]]

DOE previously analyzed levels requiring condensing operation (i.e., 
92-percent thermal efficiency) for the January 2016 final rule. 81 FR 
2420 (Jan. 15, 2016). In the analysis for the January 2016 final rule, 
DOE identified a small number of condensing gas-fired CWAF models (four 
models at 90-percent thermal efficiency and four models at 92-percent 
thermal efficiency) and one condensing oil-fired CWAF model,\25\ 
indicating that the market for condensing CWAFs is still very small, 
and DOE's subsequent review suggests that it is now potentially smaller 
than it was at the time of the analysis for the January 2016 final 
rule. Although there is some uncertainty in how the market will respond 
once compliance is required with the 2023 energy conservation 
standards, DOE does not expect that the upcoming standards would spur 
significant development of condensing CWAFs, as there are certain 
technological and implementational challenges associated with use of 
condensing CWAFs, including condensate disposal and freezing in many 
commercial buildings/applications. In addition, DOE notes that the 
amended standards in the January 2016 final rule implemented a 1-
percent increase in standard level for both gas-fired and oil-fired 
CWAFs, which can be achieved without use of condensing technology, and 
are levels at which models currently exist using non-condensing 
technology. However, DOE is not aware of any models on the market 
currently with an efficiency above the amended standards from the 
January 2016 final rule and that are non-condensing. Additionally, 
there are currently no condensing CWAFs certified to DOE through the 
compliance certification management system at this time.\26\
---------------------------------------------------------------------------

    \24\ Although DOE analyzed 82-percent thermal efficiency for 
gas-fired CWAFs in the January 2016 final rule, currently there are 
no non-condensing models available on the market with an efficiency 
exceeding the minimum standard of 81 percent. In addition, 
discussion during the negotiations that led to the January 2016 
final rule indicated that it is not clear that CWAFs operating at 
82-percent efficiency are always non-condensing.
    \25\ See Chapter 3 of the Technical Support Document for the 
January 2016 final rule (Available at: https://www.regulations.gov/document/EERE-2013-BT-STD-0021-0050).
    \26\ See DOE's Compliance Certification Database for CWAFs 
(Available at: www.regulations.doe.gov/ccms) (Last accessed Jan. 12, 
2022).
---------------------------------------------------------------------------

3. Economic Justification
    In the January 2016 final rule, DOE concluded that energy 
conservation standards at levels requiring condensing operation would 
not be economically justified, due to the economic burden on most 
consumers, the negative NPV of consumer benefits using a 7-percent 
discount rate, and the impacts on manufacturers, including the 
conversion costs and profit margin impacts that could result in a large 
reduction in INPV. Id. at 81 FR 2522 (Jan. 15, 2016). In examining the 
current market, DOE has found that market conditions are largely the 
same as at the time of the January 2016 final rule.
    Given the similar market size, DOE has tentatively determined that 
the manufacturing costs and manufacturer impacts would not be 
significantly different now than projected in the January 2016 final 
rule. In addition, DOE has tentatively determined that installation 
costs, which for condensing levels included costs for condensate 
removal, would be similar to those estimated in the previous analysis, 
and that energy cost savings would not increase as compared to the 
previous analysis, as updated AEO projections of energy prices show 
declining prices. For these reasons, DOE has tentatively determined 
that any analysis of a condensing level for CWAFs would not result in a 
significantly different economic outcome from the January 2016 final 
rule, and that as such, it lacks clear and convincing evidence that 
more-stringent standard levels for CWAFs would be economically 
justified.
    DOE notes that the tentative determination, that it lacks clear and 
convincing evidence, is specific to this rulemaking. DOE will evaluate 
its ability to reach clear and convincing evidence on a case-by-case 
basis.
    DOE requests comment on its proposed determination that the 
existing energy conservation standards for CWAFs do not need to be 
amended.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866 and 13563

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), as supplemented and reaffirmed by 
E.O. 13563, ``Improving Regulation and Regulatory Review,'' 76 FR 3821 
(Jan. 21, 2011), 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 (``OMB'') has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. For the reasons stated in the preamble, 
this proposed regulatory action is consistent with these principles.
    OMB has determined that this proposed determination does not 
constitute a ``significant regulatory action'' under section 3(f) of 
E.O. 12866. Accordingly, this action was not subject to review under 
E.O. 12866 by OIRA at OMB.

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'') 
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 (August 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 (energy.gov/gc/office-general-counsel).
    The Small Business Administration (SBA) considers a business entity 
to be a small business, if, together with its affiliates, it employs 
less than a threshold number of workers specified in 13 CFR part 121. 
The equipment covered by this rule are classified under North American 
Industry Classification

[[Page 24466]]

System (``NAICS'') code 333415,\27\ ``Air-Conditioning and Warm Air 
Heating Equipment and Commercial and Industrial Refrigeration Equipment 
Manufacturing.'' In 13 CFR 121.201, the SBA sets a threshold of 1,250 
employees or fewer for an entity to be considered as a small business 
for this category.
---------------------------------------------------------------------------

    \27\ The size standards are listed by NAICS code and industry 
description and are available at: www.sba.gov/document/support--table-size-standards (Last accessed March 4, 2022).
---------------------------------------------------------------------------

    DOE has conducted a focused inquiry into small business 
manufacturers of the equipment covered by this rulemaking. The 
Department used available public information to identify potential 
small manufacturers. DOE accessed its Compliance Certification Database 
(``CCD'') \28\ to identify a list of companies that manufacture the 
CWAFs covered by this proposal. Using these sources, DOE identified a 
total of eight distinct manufacturers of CWAFs. DOE screened out 
companies that do not meet the definition of a ``small business'' or 
are foreign-owned and operated. Of these manufacturers, DOE identified 
one small, domestic manufacturer as a potential small business.
---------------------------------------------------------------------------

    \28\ U.S. Department of Energy Compliance Certification 
Management System (Available at: www.regulations.doe.gov/ccms).
---------------------------------------------------------------------------

    DOE reviewed this proposed determination under the provisions of 
the Regulatory Flexibility Act and the policies and procedures 
published on February 19, 2003. Because DOE is not proposing to amend 
standards for CWAFs, the determination, if adopted, would not amend any 
energy conservation standards. On the basis of the foregoing, DOE 
certifies that the proposed determination, if adopted, would not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, DOE has not prepared an IRFA for this proposed 
determination. DOE will transmit this certification and supporting 
statement of factual basis to the Chief Counsel for Advocacy of the 
Small Business Administration for review under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act of 1995

    This proposed determination, which proposes to determine that 
amended energy conservation standards for CWAFs are unneeded under the 
applicable statutory criteria, would impose no new informational or 
recordkeeping requirements. Accordingly, OMB clearance is not required 
under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed action in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for actions which are interpretations or 
rulings with respect to existing regulations. 10 CFR part 1021, subpart 
D, appendix A4. DOE anticipates that this action qualifies for 
categorical exclusion A4 because it is an interpretation or ruling in 
regard to an existing regulation and otherwise meets the requirements 
for application of a categorical exclusion. See 10 CFR 1021.410. DOE 
will complete its NEPA review before issuing the final action.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (August 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 proposed determination 
and has tentatively 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 is the subject of this proposed 
determination. 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(a) and (b); 42 U.S.C. 6297) As this proposed determination 
would not amend the standards for CWAFs, there is no impact on the 
policymaking discretion of the States. Therefore, no further action is 
required by E.O. 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 (Feb. 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 
Executive Order 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 proposed determination 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. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed 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)) The 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 proposed ``significant

[[Page 24467]]

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 
energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    DOE examined this proposed determination according to UMRA and its 
statement of policy and determined that the proposed determination does 
not contain a Federal intergovernmental mandate, nor is it expected to 
require expenditures of $100 million or more in any one year by State, 
local, and Tribal governments, in the aggregate, or by the private 
sector. As a result, the analytical requirements of UMRA do not apply.

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 rule that may affect family well-being. 
This proposed determination would not have any impact on the autonomy 
or integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March 
15, 1988), DOE has determined that this proposed determination 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 
(Feb. 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%20IAQ%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this NOPD 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 the OIRA at 
OMB, a Statement of Energy Effects for any proposed 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 Executive Order; and (2) is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, or (3) is designated by the 
Administrator of OIRA as a significant energy action. For any proposed 
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.
    This proposed determination, which does not propose to amend energy 
conservation standards for CWAFs, is not a significant regulatory 
action under Executive Order 12866. Moreover, it would not 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. Therefore, it is not a significant energy action, and 
accordingly, DOE has not prepared a Statement of Energy Effects.

L. Review Under the Information Quality Bulletin for Peer Review

    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.'' Id. at 70 FR 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 has prepared Peer Review report pertaining 
to the energy conservation standards rulemaking analyses.\29\ 
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 (NAS) to review 
DOE's analytical methodologies to ascertain whether modifications are 
needed to improve the Department's analyses. DOE is in the process of 
evaluating the resulting December 2021 NAS report.\30\
---------------------------------------------------------------------------

    \29\ ``Energy Conservation Standards Rulemaking Peer Review 
Report.'' 2007 (Available at: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0).
    \30\ The December 2021 NAS report is available at 
www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

V. Public Participation

A. Participation in the Public Meeting Webinar

    The time and date of the webinar are listed in the DATES section at 
the beginning of this document. Webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants will be published on DOE's website: 
www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=49. Participants are responsible for ensuring 
their systems are compatible with the webinar software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has an interest in the topics addressed in this 
NOPD, or who

[[Page 24468]]

is representative of a group or class of persons that has an interest 
in these issues, may request an opportunity to make an oral 
presentation at the webinar. Such persons may submit requests to speak 
by email to the Appliance and Equipment Standards Program, 
<a href="/cdn-cgi/l/email-protection#d091a0a0bcb9b1beb3b583a4b1beb4b1a2b4a381a5b5a3a4b9bfbea390b5b5feb4bfb5feb7bfa6"><span class="__cf_email__" data-cfemail="81c0f1f1ede8e0efe2e4d2f5e0efe5e0f3e5f2d0f4e4f2f5e8eeeff2c1e4e4afe5eee4afe6eef7">[email protected]</span></a>. Persons who wish to speak 
should include with their request a computer file in Microsoft Word, 
PDF, or text (ASCII) file format that briefly describes the nature of 
their interest in this proposed determination and the topics they wish 
to discuss. Such persons should also provide a daytime telephone number 
where they can be reached.
    DOE requests persons selected to make an oral presentation to 
submit an advance copy of their statements at least two weeks before 
the webinar. At its discretion, DOE may permit persons who cannot 
supply an advance copy of their statement to participate, if those 
persons have made advance alternative arrangements with the Building 
Technologies Office. As necessary, requests to give an oral 
presentation should ask for such alternative arrangements.

C. Conduct of the Public Meeting Webinar

    DOE will designate a DOE official to preside at the webinar and may 
also use a professional facilitator to aid discussion. The meeting will 
not be a judicial or evidentiary-type public hearing, but DOE will 
conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A 
court reporter will be present to record the proceedings and prepare a 
transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the webinar. There shall not be discussion of proprietary information, 
costs or prices, market share, or other commercial matters regulated by 
U.S. anti-trust laws. After the webinar and until the end of the 
comment period, interested parties may submit further comments on the 
proceedings and any aspect of the proposed determination.
    The webinar will be conducted in an informal, conference style. DOE 
will present a summary of the proposed determination, allow time for 
prepared general statements by participants, and encourage all 
interested parties to share their views on issues affecting this 
proposed determination. Each participant will be allowed to make a 
general statement (within time limits determined by DOE), before the 
discussion of specific topics. DOE will allow, as time permits, other 
participants to comment briefly on any general statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this proposed determination. The official 
conducting the webinar meeting will accept additional comments or 
questions from those attending, as time permits. The presiding official 
will announce any further procedural rules or modification of the above 
procedures that may be needed for the proper conduct of the webinar.
    A transcript of the public meeting webinar will be included in the 
docket, which can be viewed as described in the Docket section at the 
beginning of this NOPD. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed determination no later than the date provided in the DATES 
section at the beginning of this proposed determination. Interested 
parties may submit comments, data, and other information using any of 
the methods described in the ADDRESSES section at the beginning of this 
document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email. Comments and documents submitted via 
email also will be posted to www.regulations.gov. If you do not want 
your personal contact information to be publicly viewable, do not 
include it in your comment or any accompanying documents. Instead, 
provide your contact information in a cover letter. Include your first 
and last names, email address, telephone number, and optional mailing 
address. With this instruction followed, the cover letter will not be 
publicly viewable as long as it does not include any comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. No telefacsimiles (faxes) will 
be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, or text (ASCII) file format. Provide documents that are not 
secured, that are written in English, and that are free of any defects 
or viruses. Documents should not contain special characters or any form 
of encryption and, if possible, they should carry the electronic 
signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.

[[Page 24469]]

    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email two well-marked copies: One copy of the document marked 
``confidential'' including all the information believed to be 
confidential, and one copy of the document marked ``non-confidential'' 
with the information believed to be confidential deleted. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

VI. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this 
notification of proposed determination and request for comment.

Signing Authority

    This document of the Department of Energy was signed on April 20, 
2022, by Kelly J. Speakes-Backman, 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 April 21, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2022-08868 Filed 4-25-22; 8:45 am]
BILLING CODE 6450-01-P


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