[Federal Register Volume 79, Number 237 (Wednesday, December 10, 2014)]
[Proposed Rules]
[Pages 73246-73252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28918]


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DEPARTMENT OF ENERGY

10 CFR Part 431

[Docket No. EERE-2013-BT-STD-0006]
RIN 1904-AC55


Energy Conservation Standards for Commercial and Industrial Fans 
and Blowers: Availability of Provisional Analysis Tools

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

ACTION: Notice of data availability.

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SUMMARY: The U.S. Department of Energy (DOE) has completed a 
provisional analysis that estimates the potential economic impacts and 
energy savings that could result from promulgating a regulatory energy 
conservation standard for commercial and industrial fans and blowers. 
At this time, DOE is not proposing an energy conservation standard for 
commercial and industrial fans and blowers. DOE is publishing this 
analysis and the underlining assumptions and calculations, which may be 
used to ultimately support a proposed energy conservation standard, for 
stakeholder review. DOE encourages stakeholders to provide any 
additional data or information that may improve the analysis.

DATES: Comments: DOE will accept comments, data, and information 
regarding this notice of data availability (NODA) no later than January 
26, 2015.

ADDRESSES: The analysis is now publically available at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx/ruleid/25. Any comments submitted must identify the NODA for Energy 
Conservation Standards for commercial and industrial fans and blowers, 
and provide docket number EERE-2013-BT-STD-0006 and/or regulatory 
information number (RIN) number 1904-AC55. Comments may be submitted 
using any of the following methods:
    1. Federal Rulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: <a href="/cdn-cgi/l/email-protection#480b010e0a7a78797b1b1c0c7878787e082d2d662c272d662f273e"><span class="__cf_email__" data-cfemail="46050f000474767775151202767676700623236822292368212930">[email protected]</span></a>. Include the docket number 
and/or RIN in the subject line of the message.
    3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, 
Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue 
SW., Washington, DC 20585-0121. If possible, please submit all items on 
a compact disc (CD), in which case it is not necessary to include 
printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section IV, ``Public 
Participation.''
    Docket: The docket, which includes Federal Register notices, 
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. A link to the docket Web page can be found at: 
http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0006. The 
www.regulations.gov Web page contains instructions on how to access all 
documents in the docket, including public comments. See section IV, 
``Public Participation,'' for further information on how to submit 
comments through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Ron Majette, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies, EE-2J, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Telephone: (202) 586-7935. Email: <a href="/cdn-cgi/l/email-protection#7a39333c1b14093816150d1f08093a1f1f541e151f541d150c"><span class="__cf_email__" data-cfemail="66252f20070815240a09110314152603034802090348010910">[email protected]</span></a>.
    Mr. Peter Cochran, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-9496. Email: <a href="/cdn-cgi/l/email-protection#a4d4c1d0c1d68ac7cbc7ccd6c5cae4ccd58ac0cbc18ac3cbd2"><span class="__cf_email__" data-cfemail="ea9a8f9e8f98c489858982988b84aa829bc48e858fc48d859c">[email protected]</span></a>.
    For further information on how to submit a comment and review other 
public comments and the docket, contact Ms. Brenda Edwards at (202) 
586-2945 or by email: <a href="/cdn-cgi/l/email-protection#81c3f3e4efe5e0afc4e5f6e0f3e5f2c1e4e4afe5eee4afe6eef7"><span class="__cf_email__" data-cfemail="450737202b21246b002132243721360520206b212a206b222a33">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. History of Energy Conservation Standards Rulemaking for 
Commercial and Industrial Fans and Blowers
II. Current Status
III. Summary of the Analyses Performed by DOE
    A. Energy Metric
    B. Engineering Analysis
    C. Manufacturer Impact Analysis
    D. Life-Cycle Cost and Payback Period Analyses
    E. National Impact Analysis
IV. Public Participation Submission of Comments
V. Issues on Which DOE Seeks Public Comment

I. History of Energy Conservation Standards Rulemaking for Commercial 
and Industrial Fans and Blowers

    Title III of the Energy Policy and Conservation Act of 1975 (42 
U.S.C. 6291, et seq; ``EPCA''), Pub. L. 94-163, sets forth a variety of 
provisions designed to improve energy efficiency.\1\

[[Page 73247]]

Part C of title III establishes the ``Energy Conservation Program for 
Certain Industrial Equipment.'' \2\
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the American Manufacturing Technical Corrections 
Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part C was re-designated Part A-1.
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    EPCA specifies a list of equipment that constitutes covered 
commercial and industrial equipment. (42 U.S.C. 6311(1)(A)-(L)) The 
list includes 11 types of equipment and a catch-all provision for 
certain other types of industrial equipment classified as covered the 
Secretary of Energy (Secretary). EPCA also specifies the types of 
equipment that can be classified as covered in addition to the 
equipment enumerated in 42 U.S.C. 6311(1). This equipment includes fans 
and blowers. (42 U.S.C. 6311(2)(B))
    DOE initiated the current rulemaking by publishing a proposed 
coverage determination for commercial and industrial fans and blowers. 
76 FR 37678 (June 28, 2011). This was followed by the publication of a 
Notice of Public Meeting and Availability of the Framework Document for 
commercial and industrial fans and blowers in the Federal Register on 
February 1, 2013. 78 FR 7306. DOE held a public meeting on February 21, 
2013 at which it described the various analyses DOE would conduct as 
part of the rulemaking, such as the engineering analysis, the 
manufacturer impact analysis (MIA), the life-cycle cost (LCC) and 
payback period (PBP) analyses, and the national impact analysis (NIA). 
DOE also solicited feedback from stakeholders. Representatives for 
manufacturers, trade associations, environmental and energy efficiency 
advocates, and other interested parties attended the meeting.\3\ 
Comments received since publication of the Framework Document have 
helped DOE in the development of the initial analyses presented in this 
NODA.
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    \3\ Supporting documents from this public meeting, including 
presentation slides and meeting transcript, are available at: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-STD-0006
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II. Current Status

    The analyses described in this NODA were developed to support a 
potential energy conservation standard for commercial and industrial 
fans and blowers. Using these analyses, DOE intends to move forward 
with its traditional regulatory rulemaking activities and develop a 
notice of proposed rulemaking (NOPR) for an energy conservation 
standard for commercial and industrial fans and blowers. The NOPR will 
include a Technical Support Document (TSD), which will contain a 
detailed written account of the analyses performed in support of the 
NOPR, which will include updates to the analyses made available in this 
NODA.
    In this NODA, DOE is not proposing any energy conservation 
standards for commercial and industrial fans and blowers. DOE may 
revise the analysis presented in this NODA based on any new or updated 
information or data it obtains between now and the publication of any 
future NOPR proposing energy conservation standards for commercial and 
industrial fans and blowers. DOE encourages stakeholders to provide any 
additional data or information that may improve the analysis.

III. Summary of the Analyses Performed by DOE

    As DOE has proposed to define blowers as a type of centrifugal 
fan,\4\ the ensuing discussion uses fans to refer to both fans and 
blowers. DOE developed a fan energy performance metric and conducted 
provisional analyses of commercial and industrial fans in the following 
areas: (1) Engineering; (2) manufacturer impacts; (3) LCC and PBP; and 
(4) national impacts. The fan energy perfomrance metric and the tools 
used in preparing these analyses and their respective results are 
available at: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-
STD-0006. Each individual spreadsheet includes an introduction that 
provides an overview of the contents of the spreadsheet. These 
spreadsheets present the various inputs and outputs to the analysis 
and, where necessary, instructions. Brief descriptions of the fan 
energy performance metric, of the provisional analyses, and of the 
supporting spreadsheet tools are provided below. If DOE proposes an 
energy conservation standard for commercial and industrial fans in a 
future NOPR, then DOE will publish a TSD, which will contain a detailed 
written account of the analyses performed in support of the NOPR, which 
will include updates to the analyses made available in this NODA.
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    \4\ 76 FR 37678, 37679 (June 28, 2011).
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A. Energy Metric

    Commercial and industrial fan energy performance is a critical 
input in the provisional analyses discussed in today's notice. For the 
purpose of this NODA, DOE developed a fan energy metric, the fan energy 
index (FEI), to represent fan performance and characterize the 
different efficiency levels analyzed. FEI is defined as the fan energy 
rating (FER<INF>STD</INF>) of a fan that exactly meets the efficiency 
level being analyzed, divided by the fan energy rating (FER) of a given 
fan model. FER is defined as the weighted average electric input power 
of a fan over a specified load profile, in horsepower, and measured at 
a given speed. An FEI value less than 1.0 would indicate that the fan 
does not meet the efficiency level being analyzed, while a value 
greater than 1.0 would indicate that the fan is more efficient than the 
efficiency level being analyzed. The FEI is calculated as:
[GRAPHIC] [TIFF OMITTED] TP10DE14.000

    For this analysis, DOE used the following load profile: 100 percent 
of the flow at best efficiency point (BEP), 110 percent of the flow at 
BEP, and 115 percent of the flow at BEP.\5\ DOE calculated the FER of a 
given fan model, using the maximum of the following speeds included in 
the operating range of a given fan model: 850 RPM, 1150 RPM, 1750 RPM, 
and 3550 RPM.\6\ In order to calculate the FER of a fan, DOE assumed 
default motor full load and part load efficiency values, as well as 
default belt losses \7\ (where appropriate):
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    \5\ The efficiency of a fan is defined as the ratio of air 
output power to mechanical input power. Fan efficiency varies 
depending on the output flow and pressure. The best efficiency point 
or BEP represents the flow and pressure values at which the fan 
efficiency is maximized when operating at a given speed.
    \6\ Initially, DOE considered calculating the FEI at the maximum 
recommended speed of the fan. However, because the calculation of 
the FER requires fan performance to be combined with default motor 
performance data, which depend on the motor's synchronous speed (or 
pole configuration), DOE calculated the FER of a given fan at the 
speed corresponding to the highest electric motor synchronous speed 
configuration that exists within the fan's operational speed range. 
DOE subtracted 50 RPM from the synchronous speeds in order to 
reflect the motor's slip.
    \7\ These default losses assumptions are presented in the LCC 
spreadsheet, in the ``Default Losses'' worksheet.

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[[Page 73248]]

[GRAPHIC] [TIFF OMITTED] TP10DE14.001

Where:

[omega]<INF>i</INF> = weighting at each load point (equal 
weighting);
P<INF>out,i</INF> = the output air power of the fan at load point i;
[eta]<INF>fan,i</INF> = the total fan efficiency at each load point 
i;
[eta]<INF>T,i</INF> = the default transmission losses at each load 
point i;
L<INF>M,i</INF> = the default motor losses at each load point i; and
i = the flow points of the load profile (100, 110, and 115 percent 
of the flow at BEP at the considered speed: 850 RPM, 1150 RPM, 1750 
RPM, or 3550 RPM)

    For the FER<INF>STD</INF> calculation of a fan that exactly meets 
the efficiency level being analyzed, DOE used the same FER equation, 
except it used a default fan total efficiency unique to each fan model, 
expressed as a function of each fan model's flow and total pressure at 
BEP,\8\ as well as a specified C-Value: \9\
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    \8\ Fan efficiency is defined as the ratio of air output power 
to mechanical input power. Fan efficiency varies depending on the 
output flow and pressure. The best efficiency point or BEP 
represents the flow and pressure values at which the fan efficiency 
is maximized when operating a given speed.
    \9\ A C-Value is the translational component of a two-variable, 
second degree polynomial equation that describes fan efficiency as a 
function of flow and total pressure at BEP. Defining the proper C-
Value for the two-variable polynomial of second degree order allows 
the FEI to be set at a level that removes a percentage of the lowest 
performing models from the market, and does so equivalently across 
the full range of operating flow and pressures of fan considered in 
this analysis.
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[eta]fans,STD = [C + 10.2205 * ln(Q) + 2.8085 * ln(P) - 0.3932 * 
ln(Q)\2\ + 0.8530 * ln(Q) * ln(P) - 2.1379 * ln(P)\2\]/100

Where:

Q = flow at BEP adjusted to 85 percent maximum recommended speed 
\10\ in cubic feet per minute at 60Hz,
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    \10\ In order to simplify the calculation process, and still 
account for the different speeds at which the FER of a fan can be 
calculated (850, 1550, 1750 and 3550 RPM), DOE proposes to use a 
single equation for calculating the fan total efficiency of a 
minimally compliant fan at BEP as a function of flow and total 
pressure and to allow manufacturers to use the fan laws to adjust 
the total pressure and flow at BEP to a speed equal to 85 percent of 
the fan's maximum recommended speed.
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P = total pressure at BEP adjusted to 85 percent maximum recommended 
speed in inches of water gauge at 60 Hz, and
C = an intercept that is set for the surface, which is set based on 
the fan group of the applicable fan model.

    DOE considered different C-Values to establish efficiency levels 
that target the removal of 5 to 70 percent of existing fan models for 
different equipment groups. For reference, the two-variable polynomial 
of second degree equation, the percent of models removed from the 
market and the associated C-Values are presented in the engineering 
spreadsheet.\11\ A detailed explanation of how the FEI is calculated is 
also available in the ``FEI Calculator'' worksheet of the engineering 
spreadsheet.
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    \11\ A detailed explanation of how the two-variable, second 
degree polynomial equation was obtained is available in the 
``Database Methodology'' worksheet. The C-values associated with 
different market cut offs are presented in the ``FEI Calculator 
Assumptions'' worksheet.
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    In October 2014 several representatives of fan manufacturers and 
energy efficiency advocates \12\ presented an energy metric approach 
called ``Performance Based Efficiency Requirement'' (PBER) to DOE.\13\ 
The PBER approach sets efficiency targets expressed as a function of 
pressure and flow. The combination of the PBER and default values for 
motors and transmissions allows the calculation of the electric input 
power of a fan that exactly meets the efficient target set by the PBER, 
similar to the calculation of the FER<INF>STD</INF>. The PBER equation 
is as follows:
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    \12\ The Air Movement and Control Association (AMCA), New York 
Blower Company, Natural Resources Defence Council (NRDC), the 
Appliance Standards Awareness Project (ASAP), and the Northwest 
Energy Efficiency Alliance (NEEA).
    \13\ Supporting documents from this meeting, including 
presentation slides are available at: http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-STD-0006-0029.
[GRAPHIC] [TIFF OMITTED] TP10DE14.002

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Where:

Q = flow;
P = pressure; and
[alpha], [beta], [gamma] = constants

    AMCA presented two possible approaches: (1) Use of the PBER 
equation to establish a minimum efficiency requirement at the BEP 
pressure and flow; (2) use of the PBER equation to establish minimum 
efficiency requirements across all operating points (pressure and flow 
points) specified by the manufacturer. Both the FEI approach presented 
by DOE and the PBER approaches provide an equation to determine the fan 
efficiency as a function of flow and pressure, with lower efficiency 
requirements at lower flows and pressures.
    There are two main differences between the PBER and FEI approaches. 
First, the two approaches use different forms for the fan efficiency 
equation. Second, unlike the FEI approach, the PBER approach does not 
prescribe particular operating conditions at which the PBER is to be 
evaluated in order to calculate the energy metric. In the FEI approach, 
DOE calculates the FEI at the maximum of the following speeds included 
in the operating range of a given fan model: 850 RPM, 1150 RPM, 1750 
RPM, and 3550 RPM. For example, if a given fan model can operate 
between 1000 and 2500 RPM, its FEI would be calculated at 1750 RPM. The 
input power is then calculated for three specific load points: at BEP 
flow, 110% of BEP flow, and 115% of BEP flow. The PBER approach, on the 
other hand, does not prescribe particular operating conditions. In the 
case where the PBER is used at BEP, the maximum operating speed of the 
fan (initially established by the fan's structural rigidity) would be 
reduced (if necessary) to a speed for which the BEP efficiency, flow, 
and pressure meet the PBER equation. And, in the case where the PBER is 
required to be met at all operating points, the operating range of a 
given fan (characterized by pressure and flow points) would be reduced 
(if necessary) to ensure that all operating points meet the PBER 
equation.
    In contrast with DOE's FEI approach, DOE understands that neither 
of the two PBER approaches are likely to require redesign of a fan 
model that does not meet the PBER. Instead, the operating range of the 
fan model would be

[[Page 73249]]

restricted to meet the PBER requirements.
    To compare the form of the equation used to express fan efficiency 
as a function of flow and pressure, DOE conducted a comparative 
investigation of the impacts of setting a fan efficiency standard using 
either the PBER equation or the two variable polynomial equation to 
express fan efficiency. DOE found that using the two variable 
polynomial equation to eliminate a given percentage of models leads to 
a distribution of eliminated models that is uniform across all ranges 
of air flow and pressure while using the PBER equation did not.

B. Engineering Analysis

    The engineering analysis establishes the relationship between the 
manufacturer production cost (MPC) and efficiency levels of commercial 
and industrial fans. This relationship serves as the basis for cost-
benefit calculations performed in the other analysis tools for 
individual consumers, manufacturers, and the Nation.
    As a first step in the engineering analysis, DOE established 7 
provisional fan groups based on characteristics such as the direction 
of airflow through the fan andthe presence of a housing. For each of 
these groupings, DOE identified existing technology options that could 
affect the efficiency of commercial industrial fans and conducted a 
screening analysis to review each technology option and decide whether 
it: (1) Was technologically feasible; (2) was practicable to 
manufacture, install, and service; (3) would adversely affect product 
utility or product availability; or (4) would have adverse impacts on 
health and safety. The technology options remaining after the screening 
analysis consisted of a variety of impeller types and guide vanes. DOE 
used these technology options to divide the fan groups into subgroups 
and conducted a market-based assessment of the prevalence of each 
subgroup at the different efficiency levels analyzed. Six efficiency 
levels were analyzed, targeting the removal of 0-70% of fan models. The 
baseline level, removing no fan models, is referred to as FEI 0, and 
the higher efficiency levels are FEI 5, 10, 15, 20, 50, and 70. These 
levels were set independently for each fan group.
    DOE estimated the MPCs for each technology option for each fan 
group as a function of blade or impeller diameter, independent of 
efficiency level. The MPCs were derived from product teardowns and 
publically-available product literature and informed by interviews with 
manufacturers. DOE then calculated MPCs for each fan group at each 
efficiency level analyzed by weighting the MPCs of each technology 
option within a group by its prevalence at the efficiency level being 
analyzed.
    DOE's preliminary MPC estimates indicate that the changes in MPC as 
efficiency level increases are small or, in some fan groups, zero. 
However, DOE is aware that aerodynamic redesigns are a primary method 
by which manufacturers improve fan performance. These redesigns require 
manufacturers to make large upfront investments for R&D, testing and 
prototyping, and purchasing new production equipment. DOE's preliminary 
findings indicate that the magnitude of these upfront costs are more 
significant than the difference in MPC of a fan redesigned for 
efficiency compared to its precursor. For this NODA, DOE included a 
conversion cost markup in its calculation of the manufacturer selling 
price (MSP) to account for these conversion costs. These markups and 
associated MSPs were developed and applied in downstream analyses. They 
are discussed in section C and presented in the conversion cost 
spreadsheet.
    The main outputs of the commercial and industrial fans engineering 
analysis are the MPCs of each fan group (including material, labor, and 
overhead) and technology option distributions at each efficiency level 
analyzed.

C. Manufacturer Impact Analysis

    For the MIA, DOE used the Government Regulatory Impact Model (GRIM) 
to assess the economic impact of potential standards on commercial and 
industrial fan manufacturers. DOE developed key industry average 
financial parameters for the GRIM using publicly available data from 
corporate annual reports along with information received through 
confidential interviews with manufacturers. These values include 
average industry tax rate; working capital rate; net property, plant, 
and equipment rate; selling, general, and administrative expense rate; 
research and development expense rate; depreciation rate; capital 
expenditure rate; and manufacturer discount rate. Additionally, DOE 
calculated total industry capital and product conversion costs 
associated with meeting all analyzed efficiency levels. DOE first 
estimated the average industry capital and product conversion costs 
associated with redesigning a single fan model to meet a specific 
efficiency level using a proprietary cost model and feedback from 
manufacturers during interviews. DOE estimated these costs for all fan 
subgroups. DOE then multiplied the per model conversion costs by the 
number of models that would be required to be redesigned at each 
potential standard level to arrive at the total industry conversion 
costs.
    The GRIM uses these estimated values in conjunction with inputs 
from other analyses including the MPCs from the engineering analysis 
and LCC analysis, the annual shipments by fan group from the NIA, and 
the manufacturer markups for the cost recovery markup scenario from the 
LCC analysis to model industry annual cash flows from the base year 
through the end of the analysis period. The primary quantitative output 
of this model is the industry net present value (INPV), which DOE 
calculates as the sum of industry annual cash flows, discounted to the 
present day using the industry specific weighted average cost of 
capital, or manufacturer discount rate.
    Standards can affect INPV in several ways including requiring 
upfront investments in manufacturing capital as well as research and 
development expenses, which increase the cost of production and 
potentially alter manufacturer markups. Under potential standards for 
commercial and industrial fans, DOE expects that manufacturers may lose 
a portion of INPV due to standards. The potential loss in INPV due to 
standards is calculated as the difference between INPV in the base-case 
(absent new energy conservation standards) and the INPV in the 
standards case (with new energy conservation standards in effect). DOE 
examines a range of possible impacts on industry by modeling various 
pricing strategies commercial and industrial fan manufacturers may 
adopt following the adoption of new energy conservations standards for 
commercial and industrial fans.
    In addition to INPV, the MIA also calculates the manufacturer 
markups, which are applied to the MPCs, derived in the engineering 
analysis and the LCC analysis, to arrive at the manufacturer selling 
price. For efficiency levels that require manufacturers to redesign 
models that do not meet the potential standards, DOE calibrated the 
manufacturer markups to allow manufacturers to recover their upfront 
conversion costs by amortizing those investment over the units shipped 
that were redesigned to meet the efficiency level being analyzed 
throughout the analysis period.

D. Life-Cycle Cost and Payback Period Analyses

    The LCC and PBP analyses determine the economic impact of potential 
standards on individual consumers, in the compliance year. The LCC is 
the

[[Page 73250]]

total cost of purchasing, installing and operating a commercial or 
industrial fan over the course of its lifetime.
    DOE determines LCCs by considering: (1) Total installed cost to the 
consumer (which consists of manufacturer selling price, distribution 
channel markups, and sales taxes); (2) the range of annual energy 
consumption of commercial and industrial fans as they are used in the 
field; (3) the operating cost of commercial and industrial fans (e.g., 
energy cost); (4) equipment lifetime; and (5) a discount rate that 
reflects the real consumer cost of capital and puts the LCC in present-
value terms. The PBP represents the number of years needed to recover 
the increase in purchase price of higher-efficiency commercial and 
industrial fans through savings in the operating cost. PBP is 
calculated by dividing the incremental increase in installed cost of 
the higher efficiency product, compared to the baseline product, by the 
annual savings in operating costs.
    For each standards case corresponding to each efficiency level, DOE 
measures the change in LCC relative to the base case. The base case is 
characterized by the distribution of equipment efficiencies in the 
absence of new standards (i.e., what consumers would have purchased in 
the compliance year in the absence of new standards. In the standards 
cases, equipment with efficiency below the standard levels ``roll-up'' 
to the standard level in the compliance year.
    For commercial and industrial fans, DOE established statistical 
distributions of consumers of each fan group across sectors (industry 
or commercial) and applications (clean air ventilation, exhaust, 
combustion, drying, process air, process heating/cooling, and others), 
which in turn determined the fan's operating conditions (flow and 
pressure points and operating speed), annual operating hours, and fan 
load. The load is defined as the fan's air flow divided by the flow at 
BEP when operating at a given speed.\14\ Recognizing that several 
inputs to the determination of consumer LCC and PBP are either variable 
or uncertain (e.g., annual energy consumption, lifetime, discount 
rate), DOE conducts the LCC and PBP analysis by modeling both the 
uncertainty and variability in the inputs using Monte Carlo simulations 
and probability distributions.
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    \14\ The efficiency of a fan is defined as the ratio of air 
output power to mechanical input power. Fan efficiency varies 
depending on the output flow and pressure. The BEP represents the 
flow and pressure values at which the fan efficiency is maximized 
when operating a given speed.
---------------------------------------------------------------------------

    The primary outputs of the LCC and PBP analyses are: (1) Average 
LCC in each standards case; (2) average PBPs; (3) average LCC savings 
at each standards case relative to the base case; and (4) the 
percentage of consumers that experience a net benefit, have no impact, 
or have a net cost for each fan group and efficiency level. The average 
annual energy consumption derived in the LCC analysis is used as an 
input in the NIA.

E. National Impact Analysis

    The NIA estimates the national energy savings (NES) and the net 
present value (NPV) of total consumer costs and savings expected to 
result from potential new standards at each EL. DOE calculated NES and 
NPV for each EL as the difference between a base case forecast (without 
new standards) and the standards case forecast (with standards). 
Cumulative energy savings are the sum of the annual NES determined for 
the lifetime of a commercial or industrial fan shipped during a 30 year 
analysis period assumed to start in 2018. Energy savings include the 
full-fuel cycle energy savings (i.e., the energy needed to extract, 
process, and deliver primary fuel sources such as coal and natural gas, 
and the conversion and distribution losses of generating electricity 
from those fuel sources). The NPV is the sum over time of the 
discounted net savings each year, which consists of the difference 
between total energy cost savings and increases in total equipment 
costs. NPV results are reported for discount rates of 3 and 7 percent.
    To calculate the NES and NPV, DOE projected future shipments \15\ 
and efficiency distributions (for each EL) for each potential 
commercial and industrial fan group. DOE recognizes the uncertainty in 
projecting shipments and electricity prices; as a result the NIA 
includes several different scenarios for each. Other inputs to the NIA 
include the estimated commercial and industrial fan lifetime used in 
the LCC analysis, manufacturer selling prices from the MIA, average 
annual energy consumption, and efficiency distributions from the LCC.
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    \15\ The ``shipments'' worksheet of the NIA spreadsheet presents 
the scope of the analysis and the total shipments value in units for 
the fans in scope.
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    The purpose of this NODA is to notify industry, manufacturers, 
consumer groups, efficiency advocates, government agencies, and other 
stakeholders of the publication of the initial analysis of potential 
energy conservation standards for commercial and industrial fans. 
Stakeholders should contact DOE for any additional information 
pertaining to the analyses performed for this NODA.

IV. Public Participation

Submission of Comments

    DOE welcomes comments on all aspects of this NODA and on other 
issues relevant to potential test procedures and energy conservation 
standards for commercial and industrial fans and blowers, but no later 
than the date provided in the DATES section at the beginning of this 
NODA. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this NODA.
    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 Web site will waive any CBI claims for the information submitted. 
For information on submitting CBI, see the Confidential Business 
Information section below.
    DOE processes submissions made through www.regulations.gov before

[[Page 73251]]

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, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery, or mail 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. 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. If you submit via mail or hand 
delivery/courier, please provide all items on a CD, if feasible, in 
which case it is not necessary to submit printed copies. No facsimiles 
(faxes) will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, 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.
    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, postal mail, or hand delivery/courier 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. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    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).

V. Issues on Which DOE Seeks Public Comment

    DOE is interested in receiving comment on all aspects of this 
analysis. DOE is particularly interested in receiving comments and 
views of interested parties concerning the following issues:
    1. DOE generated formulae for manufacturer production cost (MPC) as 
a function of subgroup and diameter (which DOE believes can be used as 
a general proxy for airflow). DOE requests comments on whether there 
are any other parameters, such as pressure, construction class, rating 
RPM, etc., which DOE should use as inputs in calculating the MPC, in 
addition to or instead of diameter. If so, DOE encourages stakeholders 
to submit data illustrating the relationship of MPC with these 
parameters.
    2. DOE assumed that the cost to redesign multiple fan models was 
equal to the number of models times an estimated cost to redesign one 
fan model. DOE recognizes that manufacturers may be able to share 
resources between redesigns in the same company, or in the same product 
line (i.e., different diameters). If this is current practice or 
possible, DOE requests comments on the scenarios in which resource 
sharing can occur and to what extent.
    3. DOE estimated the cost to redesign a fan as a function of the 
subgroup of fan resulting from the redesign. There may be other 
parameters, such as the fan's diameter, RPM properties, FEI or 
efficiency, construction class, or the properties of the fan before it 
was redesigned, that DOE should take into consideration. If so, DOE 
requests information on which parameters should be taken into 
consideration and how each affects the cost to redesign a fan.
    4. DOE used a redesign time of 6 months per fan model in its 
calculation of redesign costs. DOE requests comment on this assumption 
and whether this time period is sufficient for prototyping and revising 
marketing materials.
    5. DOE did not explicitly consider fan noise performance in its 
analyses. DOE requests comment on whether noise considerations provide 
barriers to increased fan efficiency.
    6. DOE requests information on the number of models and number of 
shipments of forward curved fans.
    7. DOE requests comment on its use of a database of over 2500 fan 
models as approximately representing all fan models in the scope of 
this rulemaking currently available in the United States today.
    8. DOE used current subgroup distributions of fan models within 
each fan group at each efficiency level analyzed to weight the total 
conversion cost per model regardless of the efficiency level or the 
subclass of the fan model before redesign. In other words, DOE assumed 
that fan model impeller distributions at a given efficiency level would 
not change as a result of standards. DOE requests comment on this 
assumption.
    9. DOE requests comment on the inclusion of tubeaxial and vaneaxial 
fans into a single fan group separate from centrifugal inline and mixed 
flow fans. DOE requests information regarding whether these two groups 
of fans provide distinct utility that justifies the separation and 
resulting different FEIs for the same rated flow and pressure.
    10. DOE requests comment on the cost drivers included in the 
engineering analysis (e.g., aerodynamic redesign, impeller type, and 
presence of guidevanes).
    11. DOE requests information on the design and manufacturing 
differences between commercial and industrial fans.
    12. DOE requests information on how forward curved impeller 
manufacturing differs from the manufacturing of other impeller types. 
DOE also requests comment on how other fan components differ between 
forward curved models and non-forward curved models, such

[[Page 73252]]

as component materials and material gauges.
    13. DOE requests comment on its MPC calculation as a function of 
diameter equation and multipliers.
    14. DOE did not consider variable pitch blades in its analysis. DOE 
requests information on the effect variable-pitch blades have on 
efficiency in the field, the mechanism of that effect, and how testing 
can be conducted to capture any benefit from variable-pitch blades.
    15. DOE requests comment on any of the industry financials (working 
capital rate; net property, plant, and equipment rate; selling, 
general, and administrative expense rate; research and development 
rate; depreciation rate; capital expenditure rate, and tax rate) used 
in the GRIM (located in the ``Financials'' tab of the GRIM 
spreadsheet).
    16. DOE requests comment on the use of 11.4 percent as the real 
industry manufacturer discount rate (also referred to as the weighted 
average cost of capital) for commercial and industrial fan 
manufacturers (located in the ``Financials'' tab of the GRIM 
spreadsheet).
    17. DOE requests comment on the use of 1.45 as a manufacturer 
markup (this corresponds to a 31 percent gross margin) for all fan 
groups and efficiency levels in the base case (located in the 
``Markups'' tab of the GRIM spreadsheet). DOE requests information 
regarding manufacturer markups and whether they vary by fan efficiency, 
fan group, fan subgroup, or any other attribute.
    18. DOE requests comment on both its methodology of calculating 
total industry capital and product conversion costs and the specific 
industry average per model capital and product conversion cost 
estimates for each fan subgroup (located in the Conversion Cost 
spreadsheet).
    19. DOE assumed that every fan model that did not meet a candidate 
standard level being analyzed would be redesigned to meet that level. 
DOE requests comment on this assumption and on what portion of fan 
models that do not meet a standard level would be redesigned to meet 
the level as opposed to being eliminated from the American market.
    20. DOE seeks inputs on its characterization of market channels for 
the considered fan groups, particularly whether the channels include 
all intermediate steps, and estimated market shares of each channel.
    21. DOE seeks inputs and comments on the estimates of flow 
operating points used in the energy use analysis (expressed as a 
function of the flow at best efficiency point).
    22. DOE seeks inputs and comments on the estimates of annual 
operating hours by sector and application and on the estimated 
distributions of fans across sectors and applications.
    23. DOE seeks comments on its proposal to use a constant price 
trend for projecting future commercial and industrial fan prices.
    24. DOE requests comment on whether any of the efficiency levels 
considered in this analysis might lead to an increase in installation, 
repair, and
    25. maintenance costs, and if so, data regarding the magnitude of 
the increased cost for each relevant efficiency level.
    26. DOE seeks comments on a potential compliance date of three 
years after the publication of a final rule establishing energy 
conservation standards for commercial and industrial fans and blowers.
    27. DOE seeks comments on the use of constant efficiency trends in 
the base case and in the standards cases.

    Issued in Washington, DC, on December 3, 2014.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
[FR Doc. 2014-28918 Filed 12-9-14; 8:45 am]
BILLING CODE 6450-01-P


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