36312 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

DEPARTMENT OF ENERGY 

10 CFR Part 431 

[Docket No. EERE–2008–BT–STD–0013] 

RIN 1904–AB83 

Energy Conservation Program for 

Certain Industrial Equipment: Energy 

Conservation Standards and Test 

Procedures for Commercial Heating, 

Air-Conditioning, and Water-Heating 

Equipment 

AGENCY: Office of Energy Efficiency and 

Renewable Energy, Department of 

Energy. 

ACTION: Final rule. 

SUMMARY: The U.S. Department of 

Energy (DOE) is adopting amended 

energy conservation standards for 

commercial packaged boilers and 

adopting a new energy conservation 

standard for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h at the efficiency levels 

specified in the American Society of 

Heating, Refrigerating and AirConditioning Engineers, Inc. (ASHRAE)/ 

Illuminating Engineering Society of 

North America (IESNA) Standard 90.1– 

2007. DOE has determined that the 

ASHRAE Standard 90.1–2007 efficiency 

levels for commercial packaged boilers 

are more stringent than the existing 

Federal energy conservation standards 

and will result in economic and energy 

savings compared to existing energy 

conservation standards. Furthermore, 

DOE has concluded that clear and 

convincing evidence does not exist, as 

would justify more-stringent standard 

levels than the efficiency levels in 

ASHRAE Standard 90.1–2007. In 

addition, DOE is adopting related 

amendments to its test procedures for 

commercial packaged boilers. 

DATES: This rule is effective September 

21, 2009. The standards for commercial 

packaged boilers established in this 

final rule will apply starting on March 

2, 2012. The standards for water-cooled 

and evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h established in this final 

rule will apply starting on January 10, 

2011. The incorporation by reference of 

certain publications listed in this final 

rule was approved by the Director of the 

Federal Register on September 21, 2009. 

ADDRESSES: For access to the docket to 

read background documents or 

comments received, visit the U.S. 

Department of Energy, Resource Room 

of the Building Technologies Program, 

950 L’Enfant Plaza, SW., 6th Floor, 

Washington, DC 20024, (202) 586–2945, 

between 9 a.m. and 4 p.m., Monday 

through Friday, except Federal holidays. 

Please call Ms. Brenda Edwards at the 

above telephone number for additional 

information regarding visiting the 

Resource Room. You may also obtain 

copies of the final rule in this 

proceeding, related documents (e.g., the 

notice of proposed rulemaking and 

technical support document DOE used 

to reassess whether to adopt certain 

efficiency levels in ASHRAE Standard 

90.1), draft analyses, public meeting 

materials, and related test procedure 

documents from the Office of Energy 

Efficiency and Renewable Energy’s Web 

site at: http://www1.eere.energy.gov/ 

buildings/appliance_standards/ 

commercial/ 

ashrae_products_docs_meeting.html. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mohammed Khan, U.S. Department of 

Energy, Office of Energy Efficiency and 

Renewable Energy, Building 

Technologies Program, Mailstop EE–2J, 

1000 Independence Avenue, SW., 

Washington, DC 20585–0121. 

Telephone: (202) 586–7892. E-mail: 

Mohammed.Khan@ee.doe.gov. 

Mr. Michael Kido or Mr. Eric Stas, 

U.S. Department of Energy, Office of the 

General Counsel, Mailstop GC–72, 

Forrestal Building, 1000 Independence 

Avenue, SW., Washington, DC 20585– 

0121. Telephone: (202) 586–8145 or 

(202) 586–5827. E-mail: 

Michael.Kido@hq.doe.gov or 

Eric.Stas@hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

This final rule incorporates by 

reference into subpart E of Title 10, 

Code of Federal Regulations, part 431 

(10 CFR part 431), the following 

standard: 

• The Hydronics Institute Division of 

GAMA BTS–2000 Testing Standard, 

(‘‘HI BTS–2000, Rev06.07’’), Method to 

Determine Efficiency of Commercial 

Space Heating Boilers, Second Edition 

(Rev 06.07), 2007. 

The Gas Appliance Manufacturers 

Association (GAMA) merged in 2008 

with the Air-Conditioning and 

Refrigeration Institute to become the 

Air-Conditioning, Heating, and 

Refrigeration Institute (AHRI). The 

Hydronics Institute BTS–2000 Testing 

Standard can be obtained from AHRI. 

Copies of HI BTS–2000 can be obtained 

from the Hydronics Institute Section of 

AHRI, P.O. Box 218, Berkeley Heights, 

NJ 07922–0218, (866) 408–3831, or go 

to: http://www.ahrinet.org/Content/ 

OrderaStandard_573.aspx. 

Table of Contents 

I. Summary of Final Rule 

II. Introduction 

A. Authority 

B. Background 

1. ASHRAE Standard 90.1–2007 

2. Notice of Data Availability and Request 

for Public Comment 

3. Notice of Proposed Rulemaking 

4. Notice of Data Availability and Request 

for Public Comment—Environmental 

Assessment and Emissions Monetization 

III. General Discussion of Comments 

Regarding the March 2009 NOPR, the 

ASHRAE Process, and DOE’s 

Interpretation of EPCA’s Requirements 

With Respect to ASHRAE Equipment 

A. Equipment Classes With a Two-Tier 

Efficiency Level Specified in ASHRAE 

Standard 90.1–2007 

B. The Definition of Amendment With 

Respect to the Efficiency Levels in an 

ASHRAE Standard 

C. DOE’s Review of ASHRAE Equipment 

Independent of the ASHRAE Standards 

Process 

D. Combination Efficiency Level and 

Design Requirements in ASHRAE 

Standard 90.1–2007 

E. The Proposed Energy Conservation 

Standards for Commercial Packaged 

Boilers 

F. Commercial Electric Instantaneous 

Water Heaters 

IV. General Discussion of the Changes in 

ASHRAE Standard 90.1–2007 and 

Determination of Scope for Further 

Rulemaking Analyses 

V. Methodology and Discussion of Comments 

for Commercial Packaged Boilers 

A. Test Procedures 

B. Market Assessment 

C. Engineering Analysis 

1. Approach and Assumptions 

2. Results 

D. Markups To Determine Equipment Price 

E. Energy Use Characterization 

F. Life-Cycle Cost and Payback Period 

Analyses 

G. Shipments Analysis 

H. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

I. Environmental Assessment 

1. Sulfur Dioxide 

2. Nitrogen Oxides 

J. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

K. Other Issues 

1. Impact of Standards on Natural Gas 

Prices 

2. Effective Date of the Amended Energy 

Conservation Standards for Commercial 

Packaged Boilers 

VI. Analytical Results for Commercial 

Packaged Boilers 

A. Efficiency Levels Analyzed 

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Customers 

2. National Impact Analysis 

3. Need of the Nation To Conserve Energy 

C. Amended Energy Conservation 

Standards for Commercial Packaged 

Boilers 


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1Although EPCA does not explicitly define the 

term ‘‘amended’’ in the context of ASHRAE 

Standard 90.1, DOE provided its interpretation of 

what would constitute an ‘‘amended standard’’ in 

a final rule published in the Federal Register on 

March 7, 2007 (hereafter referred to as the March 

2007 final rule). 72 FR 10038. In that rule, DOE 

explained that the statutory trigger requiring DOE 

to adopt uniform national standards based on 

ASHRAE action is the amending of an efficiency 

level by ASHRAE for any of the equipment listed 

in EPCA section 342(a)(6)(A)(i) (42 U.S.C. 

6313(a)(6)(A)(i)) by increasing the energy efficiency 

level for that equipment type. Id. at 10042. In other 

words, if the revised ASHRAE Standard 90.1 leaves 

the standard level unchanged or lowers the 

standard, as compared to the level specified by the 

national standard adopted pursuant to EPCA, DOE 

does 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). 

D. Amended Energy Conservation 

Standards for Water-Cooled and 

Evaporatively-Cooled Commercial 

Package Air Conditioners and Heat 

Pumps With a Cooling Capacity at or 

Above 240,000 Btu/h and Less Than 

760,000 Btu/h 

VII. Procedural Issues and Regulatory Review 

A. Review Under Executive Order 12866 

B. Review Under the National 

Environmental Policy Act 

C. Review Under the Regulatory Flexibility 

Act 

D. Review Under the Paperwork Reduction 

Act 

E. Review Under the Unfunded Mandates 

Reform Act of 1995 

F. Review Under the Treasury and General 

Government Appropriations Act, 1999 

G. Review Under Executive Order 13132 

H. Review Under Executive Order 12988 

I. Review Under the Treasury and General 

Government Appropriations Act, 2001 

J. Review Under Executive Order 13211 

K. Review Under Executive Order 12630 

L. Review Under Section 32 of the Federal 

Energy Administration Act of 1974 

M. Review Under the Information Quality 

Bulletin for Peer Review 

N. Congressional Notification 

VIII. Approval of the Office of the Secretary 

I. Summary of Final Rule 

The Energy Policy and Conservation 

Act (42 U.S.C. 6291 et seq.), as amended 

(EPCA), requires DOE to consider 

amending the existing Federal energy 

conservation standard for each type of 

equipment listed (generally, commercial 

water heaters, commercial packaged 

boilers, commercial air conditioning 

and heating equipment, and packaged 

terminal air conditioners and heat 

pumps), each time ASHRAE Standard 

90.1, Energy Standard for Buildings 

Except Low-Rise Residential Buildings 

(ASHRAE Standard 90.1 or, in context, 

Standard 90.1), is amended with respect 

to such equipment. (42 U.S.C. 

6313(a)(6)(A)) For each type of 

equipment, EPCA directs that if 

ASHRAE Standard 90.1 is amended,1

DOE must adopt amended energy 

conservation standards at the new 

efficiency level in ASHRAE Standard 

90.1, unless clear and convincing 

evidence supports a determination that 

adoption of a more-stringent efficiency 

level as a national standard would 

produce significant additional energy 

savings and be technologically feasible 

and economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)) If DOE decides to 

adopt as a 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)) If DOE determines 

that a more-stringent standard is 

appropriate, DOE must establish an 

amended standard not later than 30 

months after publication of the revised 

ASHRAE Standard 90.1. (42 U.S.C. 

6313(a)(6)(B)) 

DOE published a notice of proposed 

rulemaking on March 20, 2009 (March 

2009 NOPR), in the Federal Register 

describing DOE’s determination of 

scope for considering amended energy 

conservation standards with respect to 

certain heating, ventilating, airconditioning, and water-heating 

equipment addressed in ASHRAE 

Standard 90.1–2007. 74 FR 12000; 

12008–20. ASHRAE Standard 90.1– 

2007, which was formally adopted by 

the group’s Board of Directors in early 

January 2008, generally retained the 

energy efficiency levels already in place, 

except with respect to commercial 

packaged boilers and one class of 

commercial package air conditioners 

and heat pumps—water cooled and 

evaporatively cooled air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h. See 74 FR 12004. 

For the commercial package air 

conditioning and heating equipment 

covered in this rulemaking, ASHRAE 

assigned an effective date of January 10, 

2008. For eight equipment classes of 

commercial packaged boilers, ASHRAE 

assigned an effective date of March 2, 

2010. For the remaining two equipment 

classes of commercial packaged boilers 

covered by this rulemaking, ASHRAE 

created two-tiered effective dates— 

March 2, 2010, for an initial increase in 

the efficiency level and March 2, 2020, 

for the next required level. 

In determining the scope of the 

rulemaking, DOE is statutorily required 

to ascertain whether the revised 

ASHRAE efficiency levels have become 

more stringent, thereby ensuring that 

any new amended national standard 

would not result in ‘‘backsliding,’’ 

which is prohibited under 42 U.S.C. 

6295(o)(1) and 42 U.S.C. 6316(a). For 

those equipment classes for which 

ASHRAE set more-stringent efficiency 

levels (i.e., commercial packaged 

boilers), DOE analyzed the economic 

and energy savings potential of 

amended national energy conservation 

standards (at both the new ASHRAE 

Standard 90.1 efficiency levels and 

more-stringent efficiency levels) in the 

March 2009 NOPR. 74 FR 12037–41. 

The energy conservation standards in 

today’s final rule, which apply to all 

commercial packaged boilers and watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h, satisfy all applicable 

requirements of EPCA and will achieve 

the maximum improvements in energy 

efficiency that are technologically 

feasible and economically justified. (See 

42 U.S.C. 6316(a); 42 U.S.C. 

6295(o)(2)(A)) DOE has concluded that, 

based on the information presented and 

its analyses, there is not clear and 

convincing evidence justifying adoption 

of more-stringent efficiency levels for 

this equipment. 

Thus, in accordance with the criteria 

discussed in this notice, DOE is 

adopting amended energy conservation 

standards for ten equipment classes of 

commercial packaged boilers and 

adopting a new energy conservation 

standard for water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h by adopting the 

efficiency levels specified by ASHRAE 

Standard 90.1–2007. Pursuant to EPCA, 

the compliance date for amended energy 

conservation standards based upon the 

levels in ASHRAE Standard 90.1 is 

either two or three years after the 

effective date of the requirement in the 

amended ASHRAE standard, depending 

on the type and size of the equipment. 

(See 42 U.S.C. 6313(a)(6)(D)) In the 

present case, the amended standards for 

commercial packaged boilers apply to 

the ten equipment classes of commercial 

packaged boilers manufactured on or 

after the date two years after the 

effective date specified in ASHRAE 

Standard 90.1–2007. (42 U.S.C. 

6313(a)(6)(D)(i)) The amended standards 

for water-cooled and evaporativelycooled commercial package air 

conditioners and heat pumps with a 

cooling capacity at or above 240,000 

Btu/h and less than 760,000 Btu/h apply 

to such equipment manufactured on or 

after the date three years after the 

effective date specified in ASHRAE 

Standard 90.1–2007. (42 U.S.C. 

6313(a)(6)(D)(ii)) Table I.1 shows the 

energy conservation standards that DOE 


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2For editorial reasons, Parts B (consumer 

products) and C (commercial equipment) of Title III 

of EPCA were redesignated as Parts A and A–1, 

respectively, in the United States Code. 

is adopting today and their respective 

effective dates. 

BILLING CODE 6450–01–P 

BILLING CODE 6450–01–C 

In addition, DOE is adopting 

amendments to its test procedures for 

commercial packaged boilers, which 

manufacturers are required to use to 

certify compliance with energy 

conservation standards mandated under 

EPCA. See 42 U.S.C. 6314(a)(4) and 10 

CFR part 431.86. Specifically, these 

amendments, which were proposed in 

the March 2009 NOPR, update the 

citations and references to the most 

recent version of the industry standards 

already referenced in DOE’s test 

procedures. 74 FR 12020–22. In 

addition, these amendments specify a 

definition and methodology to test the 

thermal efficiency of these boilers, 

which is the metric DOE is adopting for 

eight of the ten equipment classes of 

commercial packaged boilers to conform 

with the new energy efficiency metric 

adopted in ASHRAE Standard 90.1– 

2007. Lastly, these amendments make a 

small number of technical modifications 

to DOE’s existing test procedure for 

commercial packaged boilers, including 

deleting obsolete references and 

renumbering appropriate sections of the 

CFR. 

II. Introduction 

A. Authority 

Title III of EPCA, Public Law 94–163, 

as amended, sets forth a variety of 

provisions concerning energy efficiency. 

Part A–1 2 of Title III created the energy 

conservation program for certain 

industrial equipment. (42 U.S.C. 6311– 

6317) In general, this program addresses 

the energy efficiency of certain types of 


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commercial and industrial equipment. 

Part A–1 specifically includes 

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). 

EPCA contains mandatory energy 

conservation standards for commercial 

heating, air-conditioning, and waterheating equipment. (42 U.S.C. 6313(a)) 

Specifically, the statute sets standards 

for small, large, and very large 

commercial packaged air-conditioning 

and heating equipment, packaged 

terminal air conditioners (PTACs) and 

packaged terminal heat pumps (PTHPs), 

warm air furnaces, packaged boilers, 

storage water heaters, and unfired hot 

water storage tanks. Id. In doing so, 

EPCA established Federal energy 

conservation standards that generally 

correspond to the levels in ASHRAE 

Standard 90.1, as in effect on October 

24, 1992 (i.e., ASHRAE Standard 90.1– 

1989), for each type of covered 

equipment listed in 42 U.S.C. 6313(a). 

Congress further directed DOE to 

consider amending the existing Federal 

energy conservation standard for each 

type of equipment listed whenever 

ASHRAE amends the efficiency levels 

in Standard 90.1. (42 U.S.C. 

6313(a)(6)(A)) For each type of listed 

equipment, EPCA directs that if 

ASHRAE amends Standard 90.1, DOE 

must adopt amended standards at the 

new ASHRAE efficiency level unless 

clear and convincing evidence supports 

a determination that adoption of a more 

stringent level would produce 

significant additional energy savings 

and would be technologically feasible 

and economically justified. (42 U.S.C. 

6313(a)(6)(A)(ii)) If DOE decides to 

adopt as a 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 that a more-stringent 

standard is justified under 42 U.S.C. 

6313(a)(6)(A)(ii)(II), then it must 

establish such more-stringent standard 

not later than 30 months after 

publication of the amended ASHRAE 

Standard 90.1. (42 U.S.C. 6313(a)(6)(B)) 

ASHRAE officially released and made 

public on January 10, 2008, ASHRAE 

Standard 90.1–2007. This action 

triggered DOE’s obligations under 42 

U.S.C. 6313(a)(6), as outlined above. 

Pertinent to any rulemaking in 

response to an ASHRAE revision of 

Standard 90.1, DOE must evaluate the 

amended efficiency levels to ensure that 

the adoption of the revised Standard 

90.1 levels does not result in the 

promulgation of any amended standard 

that either increases the maximum 

allowable energy use or decreases the 

minimum required energy efficiency of 

covered equipment. (42 U.S.C. 

6295(o)(1); 42 U.S.C. 6316(a)) This 

‘‘anti-backsliding’’ provision acts as a 

statutory backstop to help preserve the 

stringency of established DOE energy 

efficiency standards. See Natural 

Resources Defense Council v. Abraham, 

355 F.3d 179 (2d Cir. 2004). 

When considering the possibility of a 

more-stringent standard, EPCA requires 

DOE to consider a variety of factors, 

with the primary ones being whether a 

more-stringent standard would be 

technologically feasible, economically 

justified, and be likely to produce 

significant additional energy savings. 

For example, EPCA provides that in 

deciding whether such a standard is 

economically justified, DOE must 

determine, after receiving comments on 

the proposed standard, whether the 

benefits of the standard exceed its 

burdens by considering, to the greatest 

extent practicable, the following seven 

factors: 

1. The economic impact of the 

standard on manufacturers and 

consumers of the products subject to the 

standard; 

2. The savings in operating costs 

throughout the estimated average life of 

the product in the type (or class) 

compared to any increase in the price 

of, or in the initial charges for, or 

maintenance expenses of the products 

which are likely to result from the 

imposition of the standard; 

3. The total projected amount of 

energy savings likely to result directly 

from the imposition of the standard; 

4. Any lessening of the utility or the 

performance of the products likely to 

result from the imposition of 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 imposition of the 

standard; 

6. The need for national energy 

conservation; and 

7. Other factors the Secretary 

considers relevant. 

(42 U.S.C. 6295(o)(2)(B)(i)–(ii); 42 U.S.C. 

6316(a)) 

Additionally, the Secretary may not 

prescribe an amended standard if 

interested persons have established by a 

preponderance of the evidence that the 

amended standard is ‘‘likely to result in 

the unavailability in the United States of 

any product type (or class)’’ with 

performance characteristics, features, 

sizes, capacities, and volumes that are 

substantially the same as those generally 

available in the United States at the time 

of the Secretary’s finding. (42 U.S.C. 

6295(o)(4); 42 U.S.C. 6316(a)) 

Federal energy conservation 

requirements for commercial equipment 

generally supersede State laws or 

regulations concerning energy 

conservation testing, labeling, and 

standards. (42 U.S.C. 6316(a)–(b)) 

However, DOE can grant waivers of 

preemption for particular State laws or 

regulations, in accordance with section 

327(d) of EPCA. (42 U.S.C. 6297(d) and 

6316(b)(2)(D)) 

When considering more stringent 

standards for the ASHRAE equipment 

under consideration here, EPCA states, 

in relevant part, that there is a 

rebuttable presumption that an energy 

conservation standard is economically 

justified if the additional cost to the 

consumer of a product that meets the 

standard level is less than three times 

the value of the first-year energy (and, 

as applicable, water) savings resulting 

from the standard, as calculated under 

the applicable DOE test procedure. (42 

U.S.C. 6295(o)(2)(B)(iii) and 42 U.S.C. 

6316(a)) Generally, DOE’s life cycle cost 

(LCC) and payback period (PBP) 

analyses generate values that calculate 

the payback period for consumers of 

potential energy conservation standards, 

which includes, but is not limited to, 

the three-year payback period 

contemplated under the rebuttable 

presumption test discussed above. 

However, DOE routinely conducts a full 

economic analysis that considers the 

full range of impacts, including those to 

the consumer, manufacturer, Nation, 

and environment, as required under 42 

U.S.C. 6295(o)(2)(B)(i) and 42 U.S.C. 

6316(a). The results of this analysis 

serve as the basis for DOE to definitively 

evaluate the economic justification for a 

potential standard level (thereby 

supporting or rebutting the results of 

any preliminary determination of 

economic justification). 

B. Background 

1. ASHRAE Standard 90.1–2007 

On January 9, 2008, ASHRAE’s Board 

of Directors gave final approval to 

ASHRAE Standard 90.1–2007, which 

ASHRAE released on January 10, 2008. 

ASHRAE Standard 90.1 addresses 

efficiency levels for many types of 

commercial heating, ventilating, airconditioning (HVAC), and water-heating 

equipment covered by EPCA; it revised 

the efficiency levels for certain 

commercial equipment, while leaving in 


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3 DOE reviewed and adopted some of the 

efficiency levels in ASHRAE Standard 90.1–1999 in 

a Final Rule published on January 12, 2001. 66 FR 

3336. 

place the preexisting efficiency levels 

for the remaining equipment. For the 

equipment classes where ASHRAE left 

the preexisting efficiency in place, the 

efficiency levels specified in ASHRAE 

Standard 90.1–1999 were carried 

forward and continue to apply.3

Table II.1 below shows the current 

Federal energy conservation standards 

and the new efficiency levels for 

equipment affected by the changes made 

by ASHRAE Standard 90.1–2007. In 

section IV of the March 2009 NOPR, 

DOE assessed these equipment types to 

determine whether the ASHRAE 

amendments constitute increased 

energy conservation levels that would 

necessitate further analysis. 74 FR 

12008–20. This step was necessary 

because DOE found that while ASHRAE 

had made changes in ASHRAE Standard 

90.1–2007, it was not immediately 

apparent whether these changes to the 

energy efficiency levels would make the 

equipment more or less efficient, when 

compared to the existing Federal energy 

conservation standards. For example, 

when setting a standard using a 

different efficiency metric (as is the case 

for several types of commercial 

packaged boiler equipment), ASHRAE 

Standard 90.1–2007 changes the 

standard level from that specified in 

EPCA. However, it is not immediately 

clear whether this modified level will 

result in increased or reduced 

efficiency. Therefore, DOE undertook 

this additional threshold analysis to 

thoroughly evaluate the amendments in 

ASHRAE Standard 90.1–2007 in a 

manner consistent with its statutory 

mandate. 

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BILLING CODE 6450–01–C 


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2. Notice of Data Availability and 

Request for Public Comment 

On July 16, 2008, DOE published a 

notice of data availability (July 2008 

NODA) and request for public comment 

in the Federal Register as a preliminary 

step pursuant to EPCA’s requirements 

for DOE to consider amended energy 

conservation standards for certain types 

of commercial equipment covered by 

ASHRAE Standard 90.1. 73 FR 40770 

(July 16, 2008). Specifically, the July 

2008 NODA presented for public 

comment DOE’s analysis of the potential 

energy savings estimates for amended 

national energy conservation standards 

for types of commercial equipment 

based on: (1) the modified efficiency 

levels contained within ASHRAE 

Standard 90.1–2007; and (2) morestringent efficiency levels. 73 FR 40772. 

DOE has described these analyses and 

preliminary conclusions and sought 

input from interested parties, including 

the submission of data and other 

relevant information. Id. 

In addition, DOE discussed the 

changes introduced by Standard 90.1– 

2007 and presented an initial 

description of DOE’s evaluation of each 

ASHRAE equipment type to determine 

which energy conservation standards, if 

any, have been set pursuant to EPCA, in 

order for DOE to determine whether the 

amendments in ASHRAE Standard 

90.1–2007 result in increased efficiency 

levels when compared with the current 

Federal standards. 74 FR 40776–86. 

Regarding equipment for which 

ASHRAE increased efficiency levels 

through Standard 90.1–2007, DOE 

subjected these equipment efficiency 

levels to the potential energy savings 

analysis discussed above and presented 

the results for public comment. Id. 

As a result of the preliminary 

determination of scope set forth in the 

July 2008 NODA, DOE found that the 

ten equipment classes of commercial 

packaged boilers described by ASHRAE 

were the only equipment type available 

on the market for which ASHRAE 

increased the efficiency levels. Id. DOE 

presented its methodology, data, and 

results for the preliminary energy 

savings analysis developed for most of 

the commercial packaged boiler 

equipment classes in the July 2008 

NODA for public comment. 72 FR 

40786–91. 

3. Notice of Proposed Rulemaking 

On March 20, 2009, DOE published a 

NOPR in the Federal Register proposing 

to amend the energy conservation 

standards for ten equipment classes of 

commercial packaged boilers and to 

adopt a new energy conservation 

standard for water-cooled and 

evaporatively-cooled commercial 

packaged air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h by adopting the 

efficiency levels specified by ASHRAE 

Standard 90.1–2007. 74 FR 12000. 

The March 2009 NOPR also contained 

DOE’s determination of scope for 

consideration of amended energy 

conservation standards with respect to 

certain heating, ventilating, airconditioning, and water-heating 

equipment addressed in ASHRAE 

Standard 90.1–2007 and shown in Table 

II.1, above. 74 FR 12008–20. For 

commercial packaged boilers, DOE 

analyzed the economic and energy 

savings potential of amended national 

energy conservation standards (at both 

the new ASHRAE Standard 90.1 

efficiency levels and more stringent 

efficiency levels). See generally 74 FR 

12020–41. DOE also explained in the 

March 2009 NOPR that it did not 

analyze the economic and energy 

savings potential of amended national 

energy conservation standards for watercooled and evaporatively cooled 

commercial packaged air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h because there is no 

equipment currently being 

manufactured in this equipment class. 

74 FR 12013. 

In addition, DOE proposed 

amendments to its test procedures for 

commercial packaged boilers to update 

the citations and references to the most 

recent version of the industry standards 

already referenced in DOE’s test 

procedures. 74 FR 12020–22. DOE also 

proposed to add a definition and 

methodology to test the thermal 

efficiency for eight of the ten equipment 

classes of commercial packaged boilers, 

which was the metric DOE had 

proposed. Id. 

4. Notice of Data Availability and 

Request for Public Comment— 

Environmental Assessment and 

Emissions Monetization 

On June 3, 2009, DOE published a 

NODA and request for public comment 

on the environmental assessment (EA) 

for the March 2009 NOPR proposing 

amended energy conservation standards 

for commercial packaged boilers and 

water-cooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h. 74 FR 26596. The EA 

included a concise examination of the 

impacts of emission reductions likely to 

result from the proposed standards for 

these two equipment types, as presented 

in Chapter 8 of the NOPR TSD. DOE 

also performed an emissions 

monetization analysis of those potential 

emission reductions and described the 

results of the monetization analysis in 

Chapter 9 of the NOPR TSD. Id. See 

http://www1.eere.energy.gov/buildings/ 

appliance_standards/commercial/pdfs/ 

ch_8_ashrae_nopr_tsd.pdf for the EA 

and http://www1.eere.energy.gov/ 

buildings/appliance_standards/ 

commercial/pdfs/ 

ch_9_ashrae_nopr_tsd.pdf for the 

monetization analysis. DOE received no 

comments on the EA or the emissions 

monetization analysis described by the 

June 2009 NODA. 74 FR 26596. 

III. General Discussion of Comments 

Regarding the March 2009 NOPR, the 

ASHRAE Process, and DOE’s 

Interpretation of EPCA’s Requirements 

With Respect to ASHRAE Equipment 

In response to the March 2009 NOPR, 

DOE received three comments from 

manufacturers, trade associations, and 

energy efficiency advocates. In addition, 

DOE received a comment from the U.S. 

Department of Justice (DOJ) regarding 

the potential impact on competition of 

proposed amended energy conservation 

standards for commercial packaged 

boilers and certain commercial package 

air-conditions and heat pumps. The 

issues raised in these comments, along 

with DOE’s responses, are set forth 

below. 

A. Equipment Classes With a Two-Tier 

Efficiency Level Specified in ASHRAE 

Standard 90.1–2007 

For commercial packaged boilers, 

ASHRAE Standard 90.1–2007 further 

divides the existing equipment classes 

(i.e., gas-fired and oil-fired) into 10 

different categories. For two of the ten 

categories specified in ASHRAE 

Standard 90.1–2007, ASHRAE specifies 

a two-tier efficiency level, with one 

efficiency level effective in 2010 and 

another more-stringent efficiency level 

effective in 2020. The two categories 

where ASHRAE Standard 90.1–2007 

specifies a two-tier efficiency levels are 

small gas-fired steam natural draft and 

large gas-fired steam natural draft 

commercial packaged boilers. 

In response to DOE’s proposal for 

small gas-fired steam natural draft and 

large gas-fired steam natural draft 

commercial packaged boilers, several 

parties commented during the public 

meeting regarding the adoption of twotiered efficiency levels. The American 

Council for an Energy-Efficient 

Economy (ACEEE) asserted that for a 

rulemaking with an effective date of 

March 2, 2012, it is inappropriate for 


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4 ‘‘ACEEE, Public Meeting Transcript, No. 12 at 

pp. 100–102’’ refers to (1) to a statement that was 

submitted by the American Council for an EnergyEfficient Economy during the March 2009 NOPR 

Public Meeting. It was recorded in the Resource 

Room of the Building Technologies Program in the 

docket under ‘‘Energy Conservation Program for 

Certain Industrial Equipment: Energy Conservation 

Standards for Commercial Heating, AirConditioning, and Water-Heating Equipment,’’ 

Docket Number EERE–2008–BT–STD–0013, as 

comment number 12; and (2) a passage that appears 

on pages 100 through 102 of that statement. 

DOE to pre-ordain any standards with 

an effective date of March 2, 2022. 

(ACEEE, Public Meeting Transcript, No. 

12 at pp. 100–102) 4 ACEEE further 

stated that it could not see any reason 

why DOE would choose to bind itself 

today to any standards in 2022 and that 

in doing so, the dynamic at ASHRAE 

would likely be influenced by DOE’s 

actions. (ACEEE, Public Meeting 

Transcript, No. 12 at p. 104) Lastly, 

ACEEE stated it did not believe the 

second-tier efficiency level was the 

subject of any ASHRAE discussions. 

(ACEEE, Public Meeting Transcript, No. 

12 at pp. 100–102) 

The Air-Conditioning, Heating, and 

Refrigeration Institute (AHRI) asserted 

that for steam natural draft commercial 

packaged boilers, it is worth having a 

second standard level with an effective 

date of March 2, 2022. (AHRI, Public 

Meeting Transcript, No. 12 at pp. 102– 

103) Contrary to ACEEE’s assertion, 

AHRI stated that the delayed effective 

date (i.e., the second tier) was a part of 

the ASHRAE discussions and the 

purpose of this two-tiered approach was 

to make an initial incremental efficiency 

change while allowing for a longer lead 

time for a larger improvement in 

efficiency for this very small segment of 

the market. According to AHRI, the 

delayed date was to put manufacturers 

of these products on notice that in 10 

years the steam natural draft equipment 

must be as efficient as non-natural draft 

equipment. (AHRI, Public Meeting 

Transcript, No. 12 at pp. 102–103) 

Burnham Hydronics Institute 

(Burnham) asserted that the proposed 

levels for these two equipment classes 

are going to result in energy savings 

through boilers being modified or taken 

off the market. (Burnham, Public 

Meeting Transcript, No. 12 at pp. 103– 

104) Burnham also predicted that 

natural gas steam natural draft products 

will be essentially eliminated in 2022 

due to the second-tier requirements in 

ASHRAE Standard 90.1–2007. Burnham 

stated that manufacturers of these 

products received additional time 

because some applications (e.g., boiler 

rooms with low head room) have no 

currently available alternatives. 

Burnham stated that the extra 10 years 

affords manufacturers and owners of 

buildings time to decide how to handle 

those potential issues and to develop an 

alternative. (Burnham, Public Meeting 

Transcript, No. 12 at pp. 103–104) 

DOE is adopting the two-tier 

efficiency levels in ASHRAE Standard 

90.1–2007 in today’s final rule for small 

gas-fired steam natural draft and large 

gas-fired steam natural draft commercial 

packaged boilers. EPCA requires DOE to 

adopt energy efficiency standards for 

this equipment at the minimum level 

specified in any amended ASHRAE 

standard unless more-stringent 

standards are supported by clear and 

convincing evidence. (42 U.S.C. 

6313(a)(6)(A)) Unless more-stringent 

standards are appropriate (in which case 

DOE can use its judgment to tailor the 

relevant standard level(s)), the statute 

does not provide DOE latitude to alter 

or disregard the ASHRAE Standard 90.1 

levels in whole or part. Because 

ASHRAE adopted a tiered standard, 

DOE cannot adopt one efficiency level 

without adopting the latter efficiency 

level. Accordingly, in its economic and 

energy savings analysis, DOE analyzed 

these two equipment classes as if both 

the 2010 and 2020 levels will be 

adopted on their respective effective 

dates. In addition, DOE is adopting the 

two-tier efficiency levels in ASHRAE 

Standard 90.1–2007 as a ‘‘package’’ in 

today’s final rule for small gas-fired 

steam natural draft and large gas-fired 

steam natural draft commercial 

packaged boilers. 

B. The Definition of Amendment With 

Respect to the Efficiency Levels in an 

ASHRAE Standard 

As DOE noted in the July 2008 NODA 

(73 FR 40771) and the March 2009 

NOPR (74 FR 12006), EPCA does not 

explicitly define the term ‘‘amended’’ in 

the context of ASHRAE Standard 90.1. 

DOE had previously interpreted what 

would constitute an ‘‘amended 

standard’’ in the context of ASHRAE 

equipment in a final rule published in 

the Federal Register on March 7, 2007 

(72 FR 10038). In that final rule, DOE 

explained that when ASHRAE increases 

the efficiency level for any of the 

equipment specified in EPCA section 

342(a)(6)(A)(i) vis-a ́-vis the current DOE 

standards, that action triggers the 

requirement for DOE to consider 

adoption of uniform national standards 

based on these changes. 72 FR 10042. In 

other words, if the revised ASHRAE 

Standard 90.1 leaves the standard level 

unchanged or lowers the standard, as 

compared to the level specified by the 

national standard adopted pursuant to 

EPCA, DOE does 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). 73 

FR 40771. 

In response to DOE’s interpretation of 

the definition of ‘‘amendment,’’ the 

Appliance Standards Awareness Project 

(ASAP), ACEEE, the Alliance to Save 

Energy (ASE), the Natural Resources 

Defense Council (NRDC), the Northeast 

Energy Efficiency Partnership (NEEP), 

and the Northwest Power and 

Conservation Council (NPCC) submitted 

a joint comment, referred to as ‘‘the 

Joint Comment,’’ disagreeing with 

DOE’s position in the March 2009 

NOPR. (The Joint Comment, No. 19 at p. 

1) Specifically, the Joint Comment 

argued that DOE acknowledges that the 

ASHRAE standards for several products 

have been revised relative to earlier 

versions. However, the Joint Comment 

pointed out that DOE takes an 

improperly constrained view of the 

meaning of ‘‘amended,’’ arbitrarily 

ruling out changes such as addition of 

prescriptive requirements, changes in 

metric and decreases in the standard. 

The Joint Comment referred to its earlier 

comments in response to the July 2008 

NODA (i.e., the Advocacy Joint 

Comment, No. 4) for additional detail 

and asserted that any of these changes 

fit within the meaning of ‘‘amended’’ 

and should be considered as changes 

requiring DOE review. The Joint 

Comment stated its belief that DOE has 

applied an unlawfully narrow definition 

to the word ‘‘amendment.’’ (The Joint 

Comment, No. 19 at p. 1) 

DOE continues to view the statute’s 

trigger as tied to an increased energy 

efficiency level for the affected 

equipment type. As described in the 

March 2007 final rule and the March 

2009 NOPR, section 342 of EPCA 

requires DOE to establish energy 

conservation standards for the 

commercial equipment contained in this 

rulemaking at the minimum efficiency 

level specified in any amended 

ASHRAE standard unless more stringent 

standards are supported by clear and 

convincing evidence—in other words, to 

maintain uniform national standards 

consistent with those set in ASHRAE 

Standard 90.1 unless more stringent 

standards are justified. 72 FR 10042 and 

74 FR 12006. Therefore, if ASHRAE has 

not amended a standard for a product 

subject to section 342, there is no 

change that would require action by 

DOE to consider amending the uniform 

national standard to maintain 

consistency with ASHRAE Standard 

90.1. Id. If ASHRAE considered 

amending the standards for a given 

equipment type but ultimately chose not 

to do so, the statutory requirement that 

DOE adopt ASHRAE’s amended 


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5 ‘‘Jacket losses’’ refer generally to the heat loss to 

the surroundings from the furnace, excluding flue 

losses. 

standards is not triggered with respect 

to this equipment. Id. The statutory 

language specifically links ASHRAE’s 

action to amend efficiency levels for 

specific equipment to DOE’s action 

affecting the same equipment. Id. Given 

this statutory scheme, DOE does not 

agree with the Joint Comment’s 

suggestion that amendment of the level 

for any ASHRAE product opens up the 

national standards for all ASHRAE 

products to potential amendment. 

C. DOE’s Review of ASHRAE Equipment 

Independent of the ASHRAE Standards 

Process 

The Joint Comment asserted that the 

routine review of efficiency standards 

required by the Energy Independence 

and Security Act of 2007 (EISA 2007), 

Public Law 110–140, (i.e., section 305(b) 

of EISA 2007) clearly intends to 

establish a structure to review each DOE 

standard for ASHRAE covered 

equipment at least every six years. (The 

Joint Comment, No. 19 at pp. 1–2) The 

Joint Comment pointed out that several 

ASHRAE standards were last reviewed 

in 2001, including commercial water 

heaters and commercial furnaces. In the 

March 2009 NOPR, DOE maintained 

that reviews are not due for products for 

which the six-year clock has expired 

prior to enactment of EISA 2007. 

However, the commenters view such an 

interpretation as sheltering these 

products from further review by 

ASHRAE on an indefinite basis. 

According to the commenters, the intent 

of EISA 2007 was to subject all 

standards to regular reviews, not to 

create a haphazard special class with a 

potentially permanent exception from 

periodic DOE review. The Joint 

Comment took the position that DOE 

can rectify this situation by initiating a 

review of all ASHRAE standards that 

have not been changed in more than six 

years (e.g., commercial furnaces, 

commercial water heaters). The Joint 

Comment argued that DOE must do so 

under the EISA 2007 provision. At a 

minimum, the Joint Comment asserted 

that DOE should conduct an initial 

analysis to assess potential energy 

savings from a full-fledged review of 

product standards, which have not been 

updated since the January 2001 final 

rule (66 FR 3336). (The Joint Comment, 

No. 19 at pp. 1–2) 

In response, DOE acknowledges that 

section 305(b) of EISA 2007 amended 

section 342(a)(6) of EPCA by directing 

DOE to assess whether there is a need 

to update the Federal energy 

conservation standards for certain 

commercial equipment (i.e., ASHRAE 

equipment) after a certain amount of 

time has elapsed. The section states that 

the Secretary must publish either a 

notice of determination that standards 

for a product do not need to be 

amended, or a notice of proposed 

rulemaking including amended 

proposed standards within 6 years after 

the issuance of any final rule 

establishing or amending a standard. (42 

U.S.C. 6313(a)(6)(C)(i)) In addition, if 

the Secretary chooses to publish a 

notice of determination that the 

standards for a product do not need to 

be amended, a new determination must 

be issued within 3 years of the previous 

determination. (42 U.S.C. 

6313(a)(6)(C)(iii)(II)) These requirements 

are applicable to small commercial 

package air conditioning and heating 

equipment, large commercial package 

air conditioning and heating equipment, 

very large commercial package air 

conditioning and heating equipment, 

packaged terminal air conditioners, 

packaged terminal heat pumps, warmair furnaces, packaged boilers, storage 

water heaters, instantaneous water 

heaters, and unfired hot water storage 

tanks. (42 U.S.C. 6313(a)(6)(A)(i)) 

DOE believes that the commenters 

have misconstrued the amendments in 

section 305(b) of EISA 2007 by 

suggesting that the relevant provisions 

should be applied retroactively, rather 

than prospectively. As stated 

previously, 74 FR 12007, DOE does not 

believe Congress intended to apply 

these requirements retroactively, which 

would cause DOE to be in immediate 

violation of its legal obligations upon 

passage of the statute, thereby failing 

from its inception. DOE does not agree 

with the assertion that DOE is late and 

should initiate an immediate review of 

certain commercial equipment cited by 

the commenters above. 

D. Combination Efficiency Level and 

Design Requirements in ASHRAE 

Standard 90.1–2007 

For several classes of equipment, 

ASHRAE added design requirements in 

addition to the efficiency level 

requirements in ASHRAE Standard 

90.1. For example, ASHRAE did not 

change the efficiency levels for oil-fired 

commercial warm air furnaces, but 

ASHRAE added three design 

requirements. ASHRAE Standard 90.1– 

2007 now specifies that commercial, oilfired, warm air furnaces must use an 

interrupted or intermittent ignition 

device, have jacket losses no greater 

than 0.75 percent of the input rating, 

and use a power vent or flue damper.5

DOE stated in the March 2009 NOPR 

that the language of EPCA authorizes 

DOE to establish a performance 

standard or a single design standard for 

certain types of commercial equipment, 

including oil-fired furnaces. 74 FR 

12008–09. 

The Joint Comment argued that 

rejecting multi-metric standards 

reversed a prior position adopted by 

DOE in the central air conditioner 

rulemaking. (The Joint Comment, No. 19 

at p. 2) The Joint Comment strongly 

urged the new Administration to 

reconsider this policy because multimetric standards are increasingly 

important for capturing cost-effective 

energy savings. It argued that ASHRAE 

found that such standards made sense 

for commercial furnaces and criticized 

DOE for not considering the ASHRAE 

changes. The Joint Comment stated that 

energy use for many products can be 

moderated through controls strategies, 

which are often not represented in a 

product’s test method. (The Joint 

Comment, No. 19 at p. 2) 

On that point, ASHRAE 

recommended that DOE consider the 

role of prescriptive requirements in the 

setting of national efficiency levels for 

commercial furnaces. (ASHRAE, No. 

FDMS DRAFT 5.1 at p. 2) ASHRAE 

commented that these prescriptive 

requirements provide critical 

characterizations of overall equipment 

efficiency and total energy use. 

According to ASHRAE, these 

requirements are designed to work in 

cooperation with the numerical 

efficiency metric to achieve greater 

levels of energy efficiency than possible 

through the use of the numerical metric 

alone. ASHRAE asserted that as it 

continues to develop Standard 90.1 and 

to decrease the total energy use 

associated with that standard, such 

additional prescriptive requirements 

likely will become even more prevalent. 

It argued that increasing the stringency 

of Standard 90.1 will require greater 

focus on systems as a whole and 

consideration of all factors and 

attributes that contribute to the energy 

use associated with that system. In order 

to achieve the maximum energy 

efficiency envisioned by the standard, 

ASHRAE strongly encouraged DOE to 

reconsider its policy of not including 

accompanying prescriptive 

requirements in its energy conservation 

analysis. (ASHRAE, No. FDMS DRAFT 

5.1 at p. 2) 

DOE notes that its response to this 

issue is grounded in the requirements of 

EPCA, not DOE policy, and that the 

commenters offered no other plausible 

alternative reading of this statutory 

provision. In this rulemaking, DOE only 

reviewed the combination efficiency 


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level and design requirements for gasfired and oil-fired commercial warm air 

furnaces because these were the only 

equipment classes where DOE’s initial 

review of the efficiency levels in 

ASHRAE Standard 90.1–2007 for this 

equipment revealed a perceived change 

when compared to the Federal energy 

conservation standards for this 

equipment. As described in the March 

2009 NOPR, DOE has determined that 

the design requirements in ASHRAE 

Standard 90.1–2007 for gas-fired and 

oil-fired commercial warm air furnaces 

are beyond the scope of its legal 

authority. 74 FR 12008–10. More 

specifically, the language of EPCA 

authorizes DOE to establish ‘‘energy 

conservation standards’’ that set either a 

single performance standard or a single 

design requirement—not both. See 42 

U.S.C. 6311(18). As such, a standard 

that establishes both a performance 

standard and a design requirement is 

beyond the scope of DOE’s legal 

authority, as would be a standard that 

included more than one design 

requirement. In this case, ASHRAE 

Standard 90.1–2007 recommends three 

design requirements. Thus, if DOE were 

to replace its existing, performancebased standard with a design 

requirement, the statute would not 

permit adoption of all three design 

requirements in ASHRAE Standard 

90.1–2007. Furthermore, such a change 

would also necessitate an initial DOE 

determination that the new requirement 

would not result in backsliding when 

compared to the current standards. 

E. The Proposed Energy Conservation 

Standards for Commercial Packaged 

Boilers 

In the March 2009 NOPR, DOE 

proposed the efficiency levels in 

ASHRAE Standard 90.1–2007 for the ten 

classes of commercial packaged boilers. 

74 FR 12002. DOE received four 

comments in response to its proposal for 

commercial packaged boilers. 

Specifically, the Joint Comment stated 

its support for DOE’s proposal on 

commercial packaged boilers. (The Joint 

Comment, No. 19 at p. 1) Burnham also 

stated its support for DOE’s direction in 

the NOPR and urged DOE to issue a 

final rule as soon as possible. (Burnham, 

Public Meeting Transcript, No. 12 at p. 

96) AHRI stated that it agrees with 

DOE’s direction in the NOPR and 

pointed out that there is a ‘‘residual 

value’’ in transitioning from the 

combustion efficiency metric to the 

thermal efficiency metric for 

commercial packaged boilers. (AHRI, 

Public Meeting Transcript, No. 12 at pp. 

97–98) ASHRAE commended DOE for 

its proposed handling of commercial 

packaged boilers in the March 2009 

NOPR. ASHRAE pointed out consensus 

agreements between manufacturers and 

energy-efficiency advocates provide a 

valuable means of improving energy 

efficiency with necessary consideration 

for technological and economic 

feasibility, as DOE has acknowledged. 

(ASHRAE, No. FDMS DRAFT 5.1 at p. 

1) 

Lastly, DOJ concluded that the 

proposed standards for commercial 

packaged boilers are not likely to have 

an adverse effect on competition. (DOJ, 

No. 15 at p. 2) In reaching this 

conclusion, DOJ noted the absence of 

any competitive concerns raised by 

industry participants at the public 

meeting. In addition, DOJ noted the 

efficiency levels in the proposed 

standards are based on a consensus 

recommendation submitted to ASHRAE 

by efficiency advocacy groups and the 

trade association for manufacturers of 

commercial packaged boilers. Based on 

these facts, DOJ stated its belief that the 

new standard would not likely reduce 

competition. Id. 

F. Commercial Electric Instantaneous 

Water Heaters 

SEISCO INTERNATIONAL (SEISCO) 

commented that it has been (and would 

continue to be) significantly adversely 

affected by DOE’s decisions not to create 

a product class for electric tankless 

water heaters having an output rated 

greater than 12 kilowatts, as well as to 

exclude the advanced electric tankless 

and electric resistance storage tank from 

the ENERGY STAR program. (SEISCO, 

No. 17 at p. 1) SEISCO’s comments 

asserted that this type of equipment 

would provide energy savings benefits 

when compared to traditional storagetype water heaters. (SEISCO, No. 17 at 

p. 8) 

While DOE acknowledges SEISCO’s 

concerns with regard to the product 

classes for electric tankless water 

heaters, these concerns are beyond the 

scope of this rulemaking. Currently, 

ASHRAE Standard 90.1 does not 

include an efficiency level or a 

prescriptive requirement for commercial 

electric tankless water heaters. In order 

for DOE to consider amendments, 

ASHRAE must amend Standard 90.1 to 

add test procedures and efficiency 

levels for these equipment types. In 

addition, DOE notes that it is not 

addressing SEISCO’s concerns regarding 

the ENERGY STAR program for electric 

tankless and electric resistance storage 

water heaters because it is not part of 

the ASHRAE rulemaking process. 

IV. General Discussion of the Changes 

in ASHRAE Standard 90.1–2007 and 

Determination of Scope for Further 

Rulemaking Analyses 

As discussed above, before beginning 

an analysis of economic impacts and 

energy savings that would result from 

adopting the efficiency levels specified 

by ASHRAE Standard 90.1–2007 or 

more-stringent efficiency levels, DOE 

first sought to determine whether the 

amended Standard 90.1 efficiency levels 

represented an increase in efficiency 

above the current Federal standard 

levels. DOE discussed each equipment 

class where these levels differ from the 

current Federal standard level, along 

with DOE’s preliminary conclusion as to 

the action DOE would take with respect 

to that equipment in the March 2009 

NOPR. See 74 FR 12008–20. DOE 

tentatively concluded from this analysis 

that the only efficiency levels that 

represented an increase in efficiency 

above the current Federal standards 

were those for certain classes of 

commercial packaged boilers and water 

cooled and evaporatively cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h. For a more detailed 

discussion of this approach, readers 

should refer to the preamble to the 

March 2009 NOPR. See Id. DOE 

received no additional comments on 

this topic in response to the March 2009 

NOPR, so DOE is using the same 

approach in this final rule. 

V. Methodology and Discussion of 

Comments for Commercial Packaged 

Boilers 

This section provides a brief overview 

of the analyses DOE has performed for 

this rulemaking with respect to 

commercial packaged boilers and the 

comments received in response to the 

March 2009 NOPR. A separate 

subsection addresses each analysis and 

its respective comments. DOE used a 

spreadsheet to calculate the LCCs and 

PBPs of potential amended energy 

conservation standards. DOE used 

another spreadsheet to provide 

shipments forecasts and then calculate 

national energy savings and net present 

value impacts of potential amended 

energy conservation standards. 

This section also briefly describes the 

amendments to the DOE test procedure 

for commercial packaged boilers to 

require testing in terms of thermal 

efficiency, consistent with the amended 

efficiency levels in ASHRAE Standard 

90.1–2007. DOE described all of the test 

procedure changes it is adopting in 


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6The Air-Conditioning and Refrigeration Institute 

(ARI) and the Gas Appliance Manufacturers 

Association (GAMA) announced on December 17, 

2007, that their members voted to approve the 

merger of the two trade associations to represent the 

interests of cooling, heating, and commercial 

refrigeration equipment manufacturers. The merged 

association became AHRI on January 1, 2008. 

7 In the October 2004 test procedure final rule for 

commercial packaged boilers, DOE also 

incorporated by reference the American Society of 

Mechanical Engineers (ASME) Power Test Codes for 

Steam Generating Units, ASME PTC 4.1–1964, 

reaffirmed 1991 (including 1968 and 1969 addenda) 

(ASME PTC 4.1) as an alternate test method for 

rating the efficiency of steel commercial packaged 

boilers only. 69 FR 61956 (Oct. 21, 2004). DOE 

provided ASME PTC 4.1, with modifications, as an 

alternate test procedure for steel commercial 

packaged boilers because many manufacturers of 

steel boilers were unfamiliar with HI BTS–2000 and 

its predecessor, HI–1989, and typically tested their 

boilers using the ASME PTC 4.1 test procedure. Id. 

at 61951. DOE designated a transition period for 

manufacturers to convert from using the ASME PTC 

4.1 test procedure to the HI BTS–2000 test 

procedure. Id. This would allow manufacturers of 

steel boilers an opportunity to become familiar with 

HI BTS–2000 and ensure that their equipment 

would be able to comply with EPCA standards 

using that procedure. Id. at 61956. DOE stated that 

it would allow the use of ASME PTC 4.1 as an 

alternate test procedure for two years after the 

publication of the October 2004 final rule. Id. The 

transition period ended on October 23, 2006, and 

now all commercial boilers are required to be tested 

using the HI BTS–2000 test procedure. 10 CFR 

431.86. 

today’s final rule in the March 2009 

NOPR. See 74 FR 12020–22. 

A. Test Procedures 

Section 343(a) of EPCA (42 U.S.C. 

6314(a)) requires the Secretary to amend 

the test procedures for packaged boilers 

to be the latest version generally 

accepted by industry or the rating 

procedures developed or recognized by 

the Air-Conditioning and Refrigeration 

Institute (ARI) 6 or by ASHRAE, as 

referenced by ASHRAE/IESNA Standard 

90.1, unless the Secretary determines by 

clear and convincing evidence that the 

latest version of the industry test 

procedure: (1) Is not reasonably 

designed to produce results reflecting 

energy efficiency, energy use, and 

estimated operating costs and (2) would 

be unduly burdensome to conduct. 

Additionally, if the procedure is one 

used for determining estimated annual 

operating costs, the procedure must 

provide that the costs are calculated 

from energy use measurements in a 

representative average use cycle and 

from representative average unit costs of 

the energy needed to operate the 

equipment during the cycle. (42 U.S.C. 

6314(a)(4)(B) and 42 U.S.C. 6314(a)(3)) 

DOE published a final rule on October 

21, 2004, that amended its test 

procedure for commercial packaged 

boilers to incorporate by reference the 

industry test procedure for commercial 

packaged boilers, the Hydronics 

Institute (HI) division of the Gas 

Appliance Manufacturer’s Association 

(GAMA) Boiler Testing Standard BTS– 

2000, ‘‘Method to Determine the 

Efficiency of Commercial Space Heating 

Boilers’’ (HI BTS–2000). 69 FR 61949. 

This rulemaking responded to 

ASHRAE’s action in ASHRAE Standard 

90.1–1999 to revise the test procedures 

for certain commercial equipment, 

including commercial packaged boilers. 

In 2007, AHRI made several changes 

to BTS–2000 (Testing Standard for 

Commercial Space Heating Boilers) and 

reaffirmed the continued use of BTS– 

2000 (Rev 06.07) as the recommended 

testing standard. As noted in the NOPR, 

DOE believes the revised BTS–2000 

(Rev 06.07) is reasonably designed to 

produce results reflecting energy 

efficiency, energy use, and estimated 

operating costs, and is not unduly 

burdensome to conduct. 74 FR 12020. 

Therefore, DOE is amending the 

uniform test procedure for commercial 

packaged boilers to incorporate by 

reference HI BTS–2000 (Rev 06.07). In 

addition, for the reasons described in 

the NOPR, DOE is removing the 

incorporation by reference of, and any 

references to, the American Society of 

Mechanical Engineers (ASME) Power 

Test Codes for Steam Generating Units, 

ASME PTC 4.1–1964, reaffirmed 1991 

(including 1968 and 1969 addenda) 

(ASME PTC 4.1) as an alternate test 

method for rating the efficiency of steel 

commercial packaged boilers.7 74 FR 

12020. DOE is making this change 

because this particular test method is no 

longer an approved method of rating the 

efficiency of steel commercial packaged 

boilers under DOE’s regulations. 

Eliminating the references to ASME PTC 

4.1 in the CFR does not introduce any 

changes to the test procedure for this 

equipment; it simply removes obsolete 

references. Manufacturers are required 

to test all steel boilers using the method 

that references the HI BTS–2000 test 

procedure, as they have been since 

October 23, 2006. 

Currently, the uniform test method for 

the measurement of energy efficiency of 

commercial packaged boilers requires 

that only the combustion efficiency be 

tested and calculated in accordance 

with the HI BTS–2000. 10 CFR 

431.86(c)(1)(ii). In this final rule, DOE is 

adopting as Federal energy conservation 

standards several thermal efficiency 

levels described in ASHRAE Standard 

90.1–2007 that were proposed in the 

NOPR. For this reason, DOE is 

amending the definitions in 10 CFR 

431.82 to incorporate the definition of 

‘‘thermal efficiency’’ as written in 

section 3.0 of the HI BTS–2000 (Rev 

06.07) test procedure and proposed in 

the NOPR. 74 FR 12021. Thus, DOE is 

adding the definition of ‘‘thermal 

efficiency’’ to 10 CFR 431.82 to read as 

follows: ‘‘Thermal efficiency for a 

commercial packaged boiler is 

determined using test procedures 

prescribed under § 431.86 and is the 

ratio of the heat absorbed by the water 

or the water and steam to the higher 

heating value in the fuel burned.’’ 

In addition to adding the definition of 

‘‘thermal efficiency’’ to its regulations, 

DOE is amending the definition of 

‘‘combustion efficiency,’’ as proposed 

and described in the NOPR, to remove 

the language defining the term as ‘‘the 

efficiency descriptor for packaged 

boilers.’’ 74 FR 12021. Thus, DOE is 

amending the definition of ‘‘combustion 

efficiency’’ in 10 CFR 431.82 to read as 

follows: ‘‘Combustion efficiency for a 

commercial packaged boiler is 

determined using the test procedures 

prescribed under § 431.86 and equals 

100 percent minus percent flue loss 

(percent flue loss is based on input fuel 

energy).’’ 

DOE is amending 10 CFR 431.86 

(Uniform test method for measurement 

of energy efficiency of commercial 

packaged boilers) to include 

requirements for the measurement and 

rating of thermal efficiency for those 

commercial packaged boiler equipment 

classes where the thermal efficiency 

metric is being used in today’s final 

rule, after the effective date of this 

rulemaking (i.e., March 2, 2012). DOE is 

also amending 10 CFR 431.86 to specify 

that combustion efficiency should be 

measured and rated for the two 

commercial packaged boiler equipment 

classes where the combustion efficiency 

metric is being used in today’s final rule 

(i.e., large gas hot water and large oil hot 

water commercial packaged boilers). 

These changes are described in detail in 

the NOPR and can be found in the 

regulatory text at the end of this notice. 

74 FR 12021, 12048–49. DOE did not 

receive any comments in response to its 

test procedure proposals in the NOPR; 

thus, DOE is adopting them as 

proposed. These test procedure changes 

will become effective concurrently with 

the amended standard levels being 

adopted in today’s final rule. 

DOE proposed several test procedure 

updates responding to the changes made 

to HI BTS–2000 (Rev 06.07), 74 FR 

12021–22, and is now amending the test 

procedure to adopt those changes, 

which are described in detail in the 

NOPR and are contained in the 

regulatory text at the end of this notice. 

See id. These changes do not introduce 

any changes to the methods in the test 

procedure. Manufacturers should use 


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the revised version of the test procedure 

(i.e., HI BTS–2000 (Rev 06.07)) to 

represent their model’s energy 

efficiency and compliance with the 

current Federal energy conservation 

standards effective September 21, 2009. 

DOE is also adopting the proposed 

amendments for 10 CFR 

431.86(c)(2)(iii), ‘‘Test Measurements for 

a Boiler Capable of Supplying Either 

Steam or Water.’’ As explained in the 

NOPR, DOE proposed to require 

manufacturers of large dual output 

commercial packaged boilers (i.e., 

boilers capable of producing both steam 

and hot water) to test for both the 

combustion and thermal efficiencies of 

these boilers. DOE is requiring both the 

combustion and thermal efficiency test 

be conducted by manufacturers because 

the ASHRAE-amended efficiency levels 

for large dual output commercial 

packaged boilers would require this 

equipment to meet an efficiency level 

using both metrics (i.e., combustion 

efficiency for a large boiler operated in 

hot water mode, and thermal efficiency 

for operation in steam mode). 74 FR 

12022. Consistent with this approach, 

DOE is amending 10 CFR 

431.86(c)(2)(iii) to require the testing 

and measurement of both thermal and 

combustion efficiency for any boiler 

capable of producing steam and hot 

water (i.e., a dual output boiler) that is 

being tested only as a steam boiler for 

equipment manufactured on and after 

March 2, 2012. For equipment 

manufactured prior to that date, 

manufacturers will need to continue 

testing only for the combustion 

efficiency of dual output boilers. 

Manufacturers could also choose to 

perform both tests separately on large 

dual output boilers, including the 

combustion efficiency test in hot water 

mode and the thermal efficiency test in 

steam mode. Consequently, DOE is also 

amending the test procedure to permit 

manufacturers to test large dual output 

boilers separately for combustion 

efficiency in hot water mode and for 

thermal efficiency in steam mode, as 

proposed in the NOPR, if they choose to 

do so. 74 FR 12022. 

In addition, DOE is adopting 

provisions in this final rule allowing 

commercial packaged boilers capable of 

supplying either steam or water (i.e., 

dual output boilers) to test in steam 

mode only. In other words, DOE is 

allowing manufacturers to test dual 

output boilers only in steam mode, 

although large dual output boiler 

manufacturers must test for both 

thermal and combustion efficiency. This 

approach will ensure that a dual output 

boiler is meeting the thermal efficiency 

requirement when operated in steam 

mode and the combustion efficiency 

requirement when operated in hot water 

mode, because achieving compliance in 

steam mode is generally more 

challenging. Thus, a boiler that 

complies with the standard in steam 

mode would be presumed to meet the 

standard in hot water mode. DOE 

believes that giving manufacturers the 

option of testing dual output 

commercial packaged boilers only in 

steam mode would suffice for 

compliance purposes, and will avoid an 

unnecessary burden on manufacturers 

of dual output boilers. 

The regulatory text following the 

preamble to today’s notice contains the 

changes made to the definitions, 

reference materials, effective dates, and 

the uniform test procedure for 

commercial packaged boilers in 10 CFR 

431.86. 

B. Market Assessment 

For the NOPR phase of DOE’s review 

of the ASHRAE Standard 90.1–2007 

efficiency levels, DOE developed a 

market assessment that provides an 

overall picture of the market for the 

equipment concerned, including the 

purpose of the equipment, the industry 

structure, and market characteristics. 74 

FR 12022–24. The subjects addressed in 

the market assessment for this 

rulemaking included equipment 

definitions, equipment classes, 

manufacturers, quantities, and types of 

equipment sold and offered for sale. In 

response to the March 2009 NOPR, DOE 

did not receive any written or oral 

comments pertaining to the market 

assessment. Consequently, DOE did not 

revise the market analysis that was 

performed for the March 2009 NOPR. 

DOE summarized the key findings. 74 

FR 12022–24. For additional detail, see 

chapter 2 of the final rule TSD. 

C. Engineering Analysis 

The engineering analysis establishes 

the relationship between the cost and 

efficiency of a piece of equipment DOE 

is evaluating for potential amended 

energy conservation standards. This 

relationship serves as the basis for costbenefit calculations for individual 

consumers and the Nation. The 

engineering analysis identifies 

representative baseline equipment, 

which is the starting point for analyzing 

the possible energy-efficiency 

improvements. DOE typically structures 

its engineering analysis around one of 

three methodologies: (1) The designoption approach, which calculates the 

incremental costs of adding specific 

design options to a baseline model; (2) 

the efficiency-level approach, which 

calculates the relative costs of achieving 

increases in energy efficiency levels 

without regard to the particular design 

options used to achieve such increases; 

and/or (3) the reverse-engineering or 

cost-assessment approach, which 

involves a ‘‘bottom-up’’ manufacturing 

cost assessment based on a detailed bill 

of materials derived from tear-downs of 

the product being analyzed. 

1. Approach and Assumptions 

As explained in the March 2009 

NOPR, DOE used an efficiency-level 

approach to evaluate the cost of 

commercial packaged boilers at the 

baseline efficiency level, and those 

above it. 74 FR 12024–27. DOE used the 

efficiency level approach because of the 

wide variety of designs available on the 

market and because the efficiency level 

approach does not examine a specific 

design to reach each of the efficiency 

levels. The efficiency levels that DOE 

considered in the engineering analysis 

were representative of commercial 

packaged boilers currently being 

produced by manufacturers at the time 

the engineering analysis was developed. 

DOE relied primarily on data collected 

through discussions with mechanical 

contractors or commercial boiler 

equipment distributors to develop its 

cost-efficiency relationship for 

commercial packaged boilers. DOE 

chose to collect contractor costs at three 

representative capacities for each 

‘‘small’’ equipment class (400, 800, and 

1500 kBtu/h) and then normalize the 

contractor costs by capacity to create a 

single cost-efficiency curve with 800 

kBtu/h as the representative capacity for 

each equipment class, as described in 

the NOPR. 74 FR 12024. For each 

‘‘large’’ equipment class analyzed, DOE 

used a similar approach, in which it 

collected cost data and created a costefficiency curve for one representative 

output capacity, 3,000 kBtu/h. 

To extend the analysis to oil-fired 

commercial packaged boilers, DOE 

estimated that they are, on average, 3 

percent more efficient than gas-fired 

boilers of identical construction because 

of the similar design characteristics. 

Also, since the construction of oil-fired 

and gas-fired boilers is basically the 

same, with the exception of some 

differences in controls, DOE assumed 

the incremental cost for increasing the 

efficiency of both types of boilers would 

be the same. The difference in the cost 

of controls would make no difference in 

the incremental cost of equipment 

because the same additional cost for 

controls would be applied across the 

range of oil-fired commercial boiler 

efficiencies. Once the cost-efficiency 

curves were normalized, the cost of the 

controls was subtracted. For these 


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reasons, DOE estimated the incremental 

cost-efficiency curves for oil-fired 

equipment by shifting the costefficiency curves for each gas-fired 

equipment class by 3 percent. 

In addition, DOE analyzed dual 

output boilers by classifying them as 

‘‘steam only’’ boilers and assuming 

efficiency ratings for dual output boilers 

were representative of the efficiency of 

the boiler tested in ‘‘steam mode.’’ DOE 

assumed that the efficiency ratings for 

dual output boilers were representative 

of the efficiency of the boiler when 

tested in steam-only mode because the 

current procedure instructs 

manufacturers to test boilers capable of 

producing both steam and hot water 

either only in steam mode or in both 

steam mode and hot water mode. 10 

CFR 431.86(c)(2)(iii)(A). Further, the test 

procedure states that if a manufacturer 

chooses to test a boiler in both steam 

mode and hot water mode, the boiler 

must be rated for efficiency in each 

mode as two separate listings in the 

I=B=R Directory. 10 CFR 

431.86(c)(2)(iii)(B). 74 FR 12026–27. 

This approach had the effect of 

analyzing the most energy-intensive 

mode of dual output boilers. 

DOE only received one comment in 

response to the engineering analysis 

presentation described in the March 

2009 NOPR. ACEEE stated that it would 

like DOE to review its estimates of 

increased cost versus the historical 

record. (ACEEE, Public Meeting 

Transcript, No. 12 at p. 47) ACEEE 

stated that DOE is using a methodology 

asserted to be true without an effort to 

verify it, which is unfair to the entire 

community, including manufacturers. 

DOE does not find merit to ACEEE’s 

claims that the price change of meeting 

an amended standard declines after the 

standards’ adoption. DOE recognizes 

that every change in minimum energy 

conservation standards is an 

opportunity for manufacturers to make 

investments beyond what would be 

required to meet the new standards in 

order to minimize the costs or to 

respond to other factors. DOE’s 

manufacturing cost estimates seek to 

gauge the most likely industry response 

to the proposed energy conservation 

standards. DOE’s analysis of responses 

must be based on currently available 

technology that will be nonproprietary 

when a rulemaking becomes effective, 

and thus cannot speculate on future 

product and market innovation. 

DOE did not receive any other 

comments suggesting revisions to its 

approach to the engineering analysis or 

to the assumptions included in the 

engineering analysis in response to the 

March 2009 NOPR. Therefore, DOE did 

not revise its engineering analysis. 

Chapter 3 of the final rule TSD provides 

further detail on the methods used for 

the engineering analysis. 

2. Results 

The result of the engineering analysis 

is a set of cost-efficiency curves. 

Creating the cost-efficiency curves 

involved three steps: (1) Plotting the 

contractor cost versus efficiency; (2) 

aggregating the cost data by 

manufacturer; and (3) using an 

exponential regression analysis to fit a 

curve that best defines the aggregated 

data. DOE correlated the contractor cost 

as a function of each commercial 

packaged boiler’s rated efficiency. DOE 

also normalized the data by adjusting 

the costs of every manufacturer’s 

equipment so that the cost of its 

equipment was zero at the baseline 

ASHRAE Standard 90.1–2007 efficiency 

levels. This was done to show the 

average incremental cost of increasing 

efficiency above the ASHRAE Standard 

90.1–2007 levels for each equipment 

class. DOE only presents the 

incremental costs of increasing the 

efficiency of a commercial packaged 

boiler in the final rule TSD to avoid the 

possibility of revealing sensitive 

information about individual 

manufacturers’ equipment. While most 

manufacturers publish the rated thermal 

and/or combustion efficiencies of their 

commercial packaged boilers according 

to AHRI specifications, some do not and 

different manufacturers might have 

substantially different absolute costs for 

their equipment at the same efficiency 

level due to design modifications and 

manufacturing practices. 

The cost-efficiency curves do not 

represent any single manufacturer, and 

they do not describe any variance 

among manufacturers. The curves 

simply represent, on average, the 

industry’s cost to increase equipment 

efficiency. For this analysis, several 

types of boiler construction are 

aggregated into single equipment 

classes, and the cost-efficiency curves 

represent only an average boiler and not 

any individual boiler with any specific 

design characteristics. DOE attempted in 

its analysis to determine what the 

average cost-efficiency relationship 

would look like across the range of 

boiler types included in each equipment 

class. The results show that the costefficiency relationships for each of the 

ten equipment classes are nonlinear. As 

efficiency increases, manufacturing 

becomes more difficult and more costly 

for manufacturers to meet higher 

efficiency levels. Chapter 3 of the final 

rule TSD provides additional 

information about the engineering 

analysis, as well as the complete set of 

cost-efficiency results. 

D. Markups To Determine Equipment 

Price 

DOE understands that the price of 

commercial boilers depends on the 

distribution channel the customer uses 

to purchase the equipment. In the 

March 2009 NOPR, DOE explained how 

it developed the distribution channel 

markups for commercial packaged 

boilers. 74 FR 12027–28. DOE did not 

receive comments on the distribution 

channel markups or on their 

development in response to the March 

2009 NOPR. Consequently, DOE used 

the same distribution channels and 

methodology to calculate markups for 

the final rule analysis as was used in the 

March 2009 NOPR. 

Because DOE had developed costs for 

mechanical contractors directly in the 

engineering analysis, DOE estimated 

customer costs using a markup chain 

beginning with the mechanical 

contractor cost. DOE did not develop an 

estimate for manufacturer selling prices 

in the engineering analysis and 

consequently, did not develop an 

estimate of markups for national 

account distribution channels with sales 

directly from manufacturers to 

customers. DOE estimated most sales of 

commercial packaged boilers involved 

mechanical contractors because of 

installation complexity and the 

relatively few shipments made to 

mercantile/retail building types where 

national accounts are more common. 

Consequently, it was unnecessary to 

develop separate markups for costs 

through a national account distribution 

chain or directly from wholesalers. 

DOE developed distributional channel 

markups in the form of multipliers that 

represent increases above the 

mechanical contractor cost. DOE 

applied these markups (or multipliers) 

to the mechanical contractor costs it 

developed from the engineering 

analysis. Sales taxes and installation 

costs were added to arrive at the final 

installed equipment prices for baseline 

and higher-efficiency equipment. DOE 

used two distribution channels for 

commercial boilers to describe how the 

equipment passes from the mechanical 

contractor to the customer (Table V.1). 

All sales for replacement applications 

are assumed to flow through channel 1. 

The analysis assumes that sales for New 

Construction flow through channel 2 

depicted below. 


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8Air Conditioning Contractors of America. 

Financial Analysis for the HVACR Contracting 

Industry, 2005. Available at: http://www.acca.org. 

9The 2002 U.S. Census Bureau financial data for 

the plumbing, heating, and air conditioning 

industry is the latest version data set and was 

issued in December 2004. Available at: http:// 

www.census.gov/prod/ec02/ec0223i236220.pdf. 

10U.S. Department of Energy, Office of Energy 

Efficiency and Renewable Energy, ‘‘Energy 

Conservation Program for Consumer Products: 

Screening Analysis for EPACT-Covered Commercial 

HVAC and Water-Heating Equipment Screening 

Analysis’’ (April 2000). 

11A hydronic system is the distribution system 

for hot or cold water in a closed loop throughout 

a building or other type of space for the purposes 

of heating or cooling. The description of such a 

system would include the piping, the heating and 

cooling coils, and radiators, as well as the controls 

used to operate the system. 

TABLE V.1—DISTRIBUTION CHANNELS

FOR COMMERCIAL PACKAGED BOILER EQUIPMENT

Channel 1 

(replacements) 

Channel 2 

(new construction) 

Mechanical Contractor.Mechanical Contractor. 

General Contractor. 

Customer ................... Customer. 

DOE estimated shipment weights of 

approximately 33% for new 

construction and 67% for the 

replacement markets based on data 

developed for the shipments model and 

based on growth in new construction 

and replacement equipment in the 

existing stock. DOE received no 

comment on the new construction and 

replacement shipment fractions and did 

not modify these values for the final 

rule. 

For each step in the distribution 

channels presented above, DOE 

estimated a baseline markup and an 

incremental markup. Both baseline and 

incremental markups depend only on 

the particular distribution channel and 

are independent of the boiler efficiency 

levels. DOE based the mechanical 

contractor markups on data from the Air 

Conditioning Contractors of America 

(ACCA) 8 and on the 2002 U.S. Census 

Bureau financial data 9 for the 

plumbing, heating, and air conditioning 

industry. DOE derived the general 

contractor markups from U.S. Census 

Bureau financial data for the 

commercial and institutional building 

construction sector. 

The overall markup is the product of 

all the markups (baseline or 

incremental) for the different steps 

within a distribution channel plus sales 

tax. DOE calculated sales taxes based on 

2008 State-by-State sales tax data 

reported by the Sales Tax 

Clearinghouse. Because both contractor 

costs and sales tax vary by State, DOE 

developed distributions of markups 

within each distribution channel by 

State. Chapter 5 of the final rule TSD 

provides additional detail on markups. 

E. Energy Use Characterization 

DOE used the building energy use 

characterization analysis to assess the 

energy savings potential of commercial 

boilers at different efficiency levels. In 

the March 2009 NOPR, DOE explained 

how it developed the energy use 

analysis for commercial packaged 

boilers. 74 FR 12028–29. This analysis 

estimates the energy use of commercial 

boilers at specified efficiency levels by 

using previously calculated Full Load 

Equivalent Operating Hour (FLEOH) 

metrics by building type and by climate 

across the United States. FLEOHs are 

effectively the number of hours that a 

system would have to run at full 

capacity to serve a total load equal to 

the annual load on the equipment. 

Boiler FLEOHs are calculated as the 

annual heating load divided by the 

equipment capacity. The FLEOH values 

used for the boiler analysis were based 

on simulations documented for the 

‘‘Screening Analysis for EPACT-Covered 

Commercial [Heating, Ventilating and 

Air-Conditioning] HVAC and WaterHeating Equipment’’ 10 (hereafter, 2000 

Screening Analysis). (66 FR 3336 (Jan. 

12, 2001)) and incorporated seven 

different building types and 11 different 

U.S. climates. DOE received no 

comments on the FLEOH assumptions 

forming the basis of the energy use 

characterization. 

For each equipment class, DOE 

estimated the energy use of a given 

piece of equipment by multiplying the 

characteristic equipment output 

capacity by the FLEOH appropriate to 

each combination of representative 

building type and climate location. The 

product is effectively the total annual 

heat output from the boiler. The input 

energy is then determined by dividing 

the annual heat output by the thermal 

efficiency of the equipment at each 

efficiency level. The thermal efficiency 

is used here for all equipment classes 

since it defines the relationship between 

energy input and useful output of a 

commercial packaged boiler. For the 

two classes where a thermal efficiency 

metric was not specified by ASHRAE 

Standard 90.1–2007, an estimate of the 

thermal efficiency of equipment just 

meeting the combustion efficiency 

requirements specified by ASHRAE 

Standard 90.1–2007 was developed 

based on DOE’s market analysis. DOE 

adjusted the unit energy use for each 

boiler to reflect the equipment thermal 

efficiency level DOE considered. 

For condensing hot water boilers, 

DOE recognized that the thermal 

efficiency of a commercial packaged 

boiler in actual use depends on the 

return water conditions. In turn, the 

return water conditions are dependent 

upon the hydronic system design and 

control.11 For DOE’s analysis, the rated 

thermal efficiencies for fully condensing 

equipment were further adjusted to 

reflect return-water conditions based on 

installation in existing buildings with 

conventional hydronic heating coils. 

DOE’s estimates allow for the supply 

water temperature to reset sufficiently to 

meet the estimated heating coil loads 

throughout the year. 

DOE received several specific 

comments on the energy use analysis 

with regard to the development and use 

of seasonal efficiencies for condensing 

boilers. During the public meeting, 

ACEEE commented that it was 

concerned that the most typical 

application, particularly in the 

replacement market, for a commercial 

packaged boiler is providing hydronic 

heat, not supplemental heat in a 

variable air volume (VAV) system. 

ACEEE asserted that the supply 

temperature modulation is highly 

applicable as long as the user maintains 

the necessary return temperature. 

(ACEEE, Public Meeting Transcript, No. 

12 at p. 58) ACEEE further commented 

that the discussion and treatment of 

supply temperature reset controls, 

which influence the seasonal efficiency 

parallels discussions used in the 

negotiated consensus agreement for 

residential boilers that DOE rejected. 

(ACEEE, Public Meeting Transcript, No. 

12 at p. 61) 

In response to the comments from 

ACEEE, DOE notes that the actual 

calculations for the development of the 

seasonal efficiency, as outlined in the 

TSD, assume a hydronic heating load 

that is a function of outdoor 

temperature, the calculations were also 

not reflective of a VAV-type reheat 

application. DOE’s estimate of the 

average thermal efficiency impact for 

condensing boilers reflects the loadweighted thermal efficiency for a system 

serving hydronic air-heating coils in 

that type of space heating application. 

This is discussed in chapter 4 of the 

final rule TSD. 

EarthJustice asked a clarifying 

question regarding the magnitude of the 

impact that reset temperature controls 

had on efficiency, suggesting it was 

roughly 3 percent for condensing boilers 

and less than 1 percent for non 

condensing boilers. (EarthJustice, Public 

Meeting Transcript, No. 12 at p. 60). 


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12Energy Information Administration (2003). 

Available at: http://www.eia.doe.gov/emeu/cbecs/ 

contents.html. 

In response to the comment from 

EarthJustice, DOE generally agrees that 

this is a correct interpretation. Literature 

on the impact of supply water 

temperature reset (i.e., resetting the 

supply water temperature from the 

boiler in response to building heating 

load or a suitable other sensed condition 

like outdoor temperature serving as a 

proxy for load) on boiler efficiency 

generally shows that for return water 

temperatures from 140 °F to 180 °F (i.e., 

above the temperatures required for 

condensing), the change in boiler 

efficiency is typically less than 1 

percent, with the actual value 

dependent upon the fraction of full load 

input, whether the boiler is a 

condensing boiler or not. For 

condensing boilers, which can operate 

at lower return temperatures, reducing 

the return water temperature below 

140 °F results in significant increases in 

the boiler’s thermal efficiency, with the 

magnitude of the impact being a 

function of the fraction of full load 

input at these temperatures. Very low 

return water temperatures (e.g., 60 °F) 

can result in thermal efficiencies of 99% 

in some condensing boiler equipment 

designs, but few hydronic systems have 

such low return water temperatures. In 

a primarily space-heating application 

(as opposed to a VAV reheat 

application), where hot water supply 

temperature reset is used, both the 

temperature of water delivered by the 

boiler and the thermal load met by the 

boiler both increase with colder outside 

temperatures. During the period when 

the majority of the load is met, the 

boiler is operating closer to its design 

delivery point (i.e., at a higher 

temperature). DOE’s calculation of 

seasonal efficiency reflected the boiler’s 

operating conditions. 

In responding to ACEEE’s point on 

the joint proposal regarding prescriptive 

requirements for resetting the water 

supply temperature for residential 

boilers, DOE notes that there are many 

benefits to the application of supply 

water reset controls on commercial 

boilers as well. However, many of these 

benefits impact reduction in the total 

heating load served by the boiler 

(through reduction of losses in the 

distribution system, simultaneous 

heating and cooling in the building 

HVAC hydronic and supply air reheat 

systems) rather than a change in the 

boiler efficiency. Other benefits from 

supply water reset controls include 

reducing both cycling losses in nonmodulating boilers and, to a lesser 

extent, shell and standby losses, which 

would accrue to both condensing and 

non-condensing boilers similarly, but 

are most significant at low load 

conditions. 

Burnham asked whether the 

simulations used in the analysis 

included supply temperature reset in 

condensing boilers and did not include 

supply temperature reset for noncondensing boilers. (Burnham, Public 

Meeting Transcript, No. 12 at p. 63) 

Burnham also wanted to know if these 

simulations included distribution 

losses. Id. DOE clarified at the public 

meeting that the original FLEOH 

simulation analysis did not directly 

account for the impact of supply 

temperature reset on boiler efficiency. 

DOE further clarifies here that hydronic 

system distribution losses were not part 

of the original building simulations 

used to develop the FLEOH metrics, but 

that the FLEOH development did 

include estimates of heat used internally 

in the boiler to offset standby loss 

impacts. As with residential boilers, 

DOE recognizes that there are significant 

benefits to hot water supply temperature 

reset in buildings. However, DOE does 

not have authority to mandate supply 

temperature reset controls as part of a 

federal efficiency standard. 

Commenting on the discussion on the 

impact of water temperature reset, AHRI 

stated that they were in the process of 

developing rules for commercial boiler 

manufacturers to provide additional 

information on how boiler models will 

operate at different inlet water 

temperatures. AHRI indicated that the 

professional designers of commercial 

hydronic systems want that type of 

information because there may be a 

broad range of ‘‘design conditions’’ 

depending on commercial application. 

AHRI commented that they have an 

internal group working on this issue 

within the certification program to help 

ensure certification to the federal 

requirements and uniformity between 

other information [regarding 

performance at varying conditions] 

manufacturers provide to their 

customers. (AHRI, Public Meeting 

Transcript, No. 12 at pp. 61–63) 

DOE estimated the national energy 

impacts of higher efficiency equipment 

by: (1) Mapping climate locations onto 

regions; and (2) estimating the fraction 

of each year’s national equipment 

shipments (by product category) within 

market segments, as defined by a 

representative building type within a 

particular region of the United States. 

Seven representative building types 

were used, including: Assembly, 

Education, Food Service, Lodging, 

Office, Retail, and Warehouse buildings. 

The estimated allocation of national 

boiler shipments to market segments 

was based on information from the 2003 

Commercial Buildings Energy 

Consumption Survey (CBECS) 12 and the 

relative fraction of respondents 

reporting the use of boilers in 

commercial building floor space within 

each market segment. 

DOE developed the annual energy 

consumption estimates for commercial 

boilers for each of seven key commercial 

building types in 11 geographic regions 

and at each efficiency level. Chapter 4 

of the final rule TSD provides additional 

details on the energy use 

characterization analysis. 

F. Life-Cycle Cost and Payback Period 

Analyses 

DOE conducted the LCC and PBP 

analyses to estimate the economic 

impacts of potential standards on 

individual customers of commercial 

packaged boilers. In the March 2009 

NOPR, DOE explained the development 

of these analyses for commercial 

packaged boilers. 74 FR 12029–32 DOE 

used the same spreadsheet models to 

evaluate the LCC and PBP for the final 

rule as it used for the NOPR; however, 

DOE updated certain specific inputs to 

the models. Details of the spreadsheet 

model and of all the inputs to the LCC 

and PBP analyses are in chapter 5 of the 

final rule TSD. DOE conducted the LCC 

and PBP analyses using a spreadsheet 

model developed in Microsoft Excel for 

Windows 2003. 

The LCC is the sum of the total 

installed cost (taking into account 

contractor cost, sales taxes, distribution 

chain markups, and installation cost) 

and operating expenses (energy, repair, 

and maintenance costs) over the 

equipment lifetime, with all costs 

discounted back to the purchase date. 

Because DOE is considering both the 

efficiency levels in ASHRAE Standard 

90.1–2007 and more-stringent efficiency 

levels, the date on which an amended 

energy conservation standard would 

become effective depends on the 

efficiency level ultimately adopted. To 

fairly compare the LCC and PBP for both 

the ASHRAE Standard 90.1–2007 levels 

and higher efficiency levels, DOE 

presumed that the purchase year for the 

LCC calculation is 2014, the earliest 

year in which DOE can establish an 

amended energy conservation level at 

an efficiency level more stringent than 

the ASHRAE Standard 90.1–2007 

efficiency level. For each efficiency 

level analyzed, the LCC analysis 

required input data for the total 

installed cost of the equipment, the 

operating costs, including energy, repair 


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and maintenance costs, and the 

discount rate. To compute each LCC, 

DOE discounted all future operating 

costs to the time of purchase and 

summed them over the lifetime of the 

equipment. 

The PBP estimates the amount of time 

it would take the customer to recover 

the incremental increase in the purchase 

price of more-efficient equipment 

through lower operating costs. The PBP 

is the change in purchase price divided 

by the change in annual operating cost 

that results from the standard. DOE 

expresses this period in years. However, 

unlike the LCC, which uses a stream of 

operating expenses, including energy 

expenses, the PBP is defined using a 

single year’s annual expenses. By 

convention, DOE uses the first year’s 

operating expenses in the PBP 

calculation. 

Recognizing that each business that 

uses commercial packaged boiler 

equipment is unique, DOE analyzed 

variability and uncertainty by 

performing the LCC and PBP 

calculations assuming a one-to-one 

correspondence between business types 

and market segments (characterized as 

building types) for customers located in 

seven types of commercial buildings. 

DOE developed discount rates 

appropriate for the customers in each 

building type and used the estimated 

annual energy use for each commercial 

packaged boiler unit described in 

section V.E. Because energy use of 

commercial packaged boilers is 

sensitive to climate and building usage, 

DOE’s analysis included variation by 

State and building type. Aside from 

energy use, other important factors 

influencing the LCC and PBP analyses 

are energy prices, installation costs, 

equipment distribution markups, and 

sales tax. DOE used weighting factors 

representing fractional boiler sales by 

state and building type to generate 

national average LCC savings and PBP 

for each efficiency level. 

DOE conducted the LCC and PBP 

analyses using a commercially-available 

spreadsheet model. This spreadsheet 

accounts for variability in energy use, 

installation costs, maintenance costs 

and energy costs, and uses weighting 

factors for shipments to different 

building types and to States to generate 

national LCC savings and PBP statistics 

by efficiency level. The results of DOE’s 

LCC and PBP analyses are summarized 

in section VI and described in detail in 

chapter 5 of the final rule TSD. 

Table V.2 summarizes the inputs and 

key assumptions DOE used in the LCC 

and PBP analysis and shows how DOE 

modified these inputs and key 

assumptions for the final rule. The 

changes in the input data and the 

discussion of the overall approach to the 

LCC analysis are provided in more 

detail in chapter 5 of the final rule TSD. 

TABLE V.2—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LCC AND PBP ANALYSES

Inputs NOPR description Changes for final rule 

Affecting Installed Costs 

Equipment Price ................... Equipment price was derived by multiplying contractor 

cost (from the engineering analysis) by mechanical 

and general contractor markups as needed plus 

sales tax from the markups analysis.

None. 

Installation Cost ................... Installation cost includes installation labor, installer 

overhead, and any miscellaneous materials and 

parts, derived from RS Means CostWorks 2007.13

DOE added additional costs to reflect the installation 

of near condensing and condensing boilers at efficiency levels more stringent than ASHRAE Standard 

90.1–2007 efficiency levels. These costs include control modifications, stainless steel flues, and condensate pumps and piping to remove condensate.

Modified installation costs to reduce incremental control 

costs charged at condensing equipment levels. Also 

removed costs for condensate pump below condensing levels, but retained condensate drain costs 

for near condensing levels (where corrosion resistant 

flues are required). 

Affecting Operating Costs 

Annual Energy Use .............. DOE derived annual energy use using FLEOH data for 

commercial boilers combined with thermal efficiency 

estimates for each boiler efficiency level analyzed. 

DOE did not incorporate differences in annual electricity use by efficiency level. DOE used State-byState weighting factors to estimate the national energy consumption by efficiency level.

None. 

Fuel Prices ........................... DOE developed average commercial natural gas and 

fuel oil prices for each State using EIA’s State Energy Database Data for 2006 for natural gas and oil 

price data.14 DOE used AEO2008 energy price forecasts to project oil and natural gas prices into the future.

Updated State Energy Database Data for natural gas 

and fuel oil prices to 2007 data (most recent available). Used AEO2009 energy price forecasts (April 

2009 Reference Case incorporating AARA). 

Maintenance Cost ................ DOE estimated annual maintenance costs for commercial boilers based on MARS 8 Facility Cost Forecast 

System Database 15 for commercial boilers. Annual 

maintenance cost did not vary as a function of efficiency.

None. 


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13RS Means CostWorks 2007, R.S. Means 

Company, Inc. 2007. Kingston, Massachusetts 

(2007). Available at: http:// 

www.meanscostworks.com/. 

14Natural Gas Price and Expenditure Estimates by 

Sector, EIA, 2007. Available at: http:// 

www.eia.doe.gov/emeu/states/sep_fuel/html/ 

fuel_pr_ng.html. 2007 Distillate Fuel Price and 

Expenditure Estimates by Sector, EIA, 2007. 

Available at: http://www.eia.doe.gov/emeu/states/ 

hf.jsp?incfile=sep_fuel/html/fuel_pr_df.html. 

15MARS 8 Facility Cost Forecast System 

Database, Whitestone Research, 2008. Washington, 

DC. Available at: http:// 

www.whitestoneresearch.com/mars/index.htm. 

TABLE V.2—SUMMARY OF INPUTS AND KEY ASSUMPTIONS USED IN THE LCC AND PBP ANALYSES—Continued 

Inputs NOPR description Changes for final rule 

Repair Cost .......................... DOE estimated the annualized repair cost for baseline 

efficiency commercial boilers based on cost data 

from MARS 8 Facility Cost Forecast System Database for commercial boilers. DOE assumed that repair costs would vary in direct proportion with the 

MSP at higher efficiency levels because it generally 

costs more to replace components that are more efficient.

None. 

Affecting Present Value of Annual Operating Cost Savings 

Equipment Lifetime .............. DOE estimated equipment lifetime assuming a 30-year 

lifespan for all commercial boilers based on data 

published by ASHRAE.

None. 

Discount Rate ...................... Mean real discount rates for all buildings range from 

2.3 percent for education buildings to 5.9 percent for 

retail building owners.

None. 

Analysis Start Year .............. Start year for LCC is 2014, which is four years after the 

publication of the final rule for amended energy conservation standards higher than ASHRAE.

None. 

Analyzed Efficiency Levels 

Analyzed Efficiency Levels .. DOE analyzed the baseline efficiency levels (ASHRAE 

Standard 90.1–2007) and up to four higher efficiency 

levels for all ten equipment classes. See the engineering analysis for additional details.

None. 

In response to the methodology 

presented in the March 2009 NOPR, 

DOE received comments on the 

installation cost assumptions used in 

the LCC analysis. Regarding the 

installation costs assumptions, ACEEE 

asked whether DOE assumed that 

commercial customers did not replace 

the control package for the lowest 

efficiency boilers with one specific to 

that boiler. ACEEE further stated since 

one-third of the commercial packaged 

boiler shipments went to new 

construction, it would seem that these 

boilers would have to be installed with 

a controls package. In addition, ACEEE 

asked whether the costs of controls 

should exist for a replacement market 

given the fraction of boilers that would 

be shipped there even without controls. 

ACEEE questioned an assumption that 

there are no control costs for the lowestefficiency boilers. (ACEEE, Public 

Meeting Transcript, No. 12 at p. 72) 

DOE responded to ACEEE at the 

public meeting that it did not 

necessarily assume explicitly that there 

were no controls shipped with the 

boiler, but that the analysis did include 

a differential control cost for the higherefficiency boilers. 

AHRI commented that they were not 

aware of any data to indicate what the 

differences in control costs might be for 

higher efficiency boilers, but 

commented that there probably is going 

to be some type of control to monitor 

and signal the boiler that it is getting rid 

of the condensate and that this would be 

a control you wouldn’t have otherwise. 

(AHRI, Public Meeting Transcript, No. 

12 at pp. 73–74) AHRI also asked if DOE 

included any factor to account for 

possible requirements to treat the boiler 

condensate. 

For the final rule analysis, DOE 

reviewed and modified the assumptions 

for control costs resulting in a reduction 

in the control cost differential for the 

condensing boiler to $250. In addition, 

DOE reviewed the assumptions for costs 

of condensate pumps generally. For the 

March 2009 NOPR, condensate pumps 

were incorporated for both condensing 

and near condensing boiler efficiency 

levels. Review of data on options for 

boiler installations indicated that 

condensate pumps would be common 

for many fully condensing boilers where 

condensate is generated in the boiler 

itself, but other means could be 

incorporated to help alleviate 

condensation directly in the flue that 

occurs with near condensing efficiency 

levels. DOE included the cost for 

condensate drainage for all near 

condensing and condensing efficiency 

levels (levels for which a corrosion 

resistant flue was also incorporated). 

With regard to the possible costs for 

condensate treatment, DOE is aware that 

some jurisdictions may have 

requirements for condensate treatment 

and that there are commercial products 

designed to provide this treatment, but 

did not have sufficient information on 

the extent that such requirements exist 

across the U.S. to estimate typical 

installation costs and ongoing 

maintenance costs for such treatment. 

Consequently, DOE did not adjust the 

maintenance (or repair) costs from those 

used in the March 2009 NOPR. DOE 

acknowledges that to the extent that 

condensate treatment is required, these 

would be an additional installation and 

maintenance cost for the condensing 

efficiency levels. 

Other modifications made to the LCC 

analysis were to update the fuel prices 

and fuel price forecast data. Fuel prices 

are needed to convert the gas or oil 

energy savings from higher-efficiency 

equipment into energy cost savings. 

Because of the variation in annual fuel 

consumption savings and equipment 

costs across the country, it is important 

to consider regional differences in 

electricity prices. DOE updated the 

average commercial natural gas and 


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16EIA’s Commercial Buildings Energy 

Consumption Survey, Energy Information Agency. 

Public use microdata available at: http:// 

www.eia.doe.gov/emeu/cbecs/cbecs2003/ 

public_use_2003/cbecs_pudata2003.html. 

commercial fuel oil prices at the State 

level using the latest available Energy 

Information Administration (EIA) data 

(2007). These data were converted to 

2008$ using a Gross Domestic Product 

(GDP) price inflator. The effective 2007 

prices (in 2008$) range from 

approximately $7.71 per million Btu to 

approximately $27.96 per million Btu 

for natural gas, and from approximately 

$15.21 per million Btu to approximately 

$18.04 per million Btu for commercial 

fuel oil. To account for variation in fuel 

costs occurring in different kinds of 

businesses, DOE followed the same 

procedure used in the NOPR to adjust 

the state average fuel price to businesstype specific fuel prices, which was to 

use the ratio of the average fuel costs for 

that business type to the commercial 

sectors as a whole, as provided in EIA’s 

2003 CBECS 16 data set. 

DOE also updated the fuel price 

forecast data to use the most recent EIA/ 

AEO forecasts. EIA updated the AEO 

forecasts in April 2009 to reflect the 

provisions of the American Recovery 

and Reinvestment Act (ARRA) enacted 

in mid-February 2009. The reference 

case in the recently published 

AEO2009, which reflected laws and 

regulations in effect as of November 

2008, does not include ARRA. The need 

to develop an updated reference case 

following the passage of ARRA also 

provided the EIA with an opportunity to 

update the macroeconomic outlook for 

the United States and global economies, 

which have been changing at an 

unusually rapid rate in recent months. 

A very significant spike in oil prices 

in 2008, in conjunction with a change 

in assumptions in the April AEO2009 

reference case meant it was not possible 

to use both the 2007 state oil cost data 

and the future oil fuel price index to 

directly generate future national 

commercial average fuel-oil prices that 

reasonably match those in the AEO2009 

forecast. To provide a more closely 

matched estimate, DOE applied an 

adjustment factor to the fuel prices to 

both starting point gas and oil prices 

such that the national average 

commercial prices from 2012–2030 

would match the AEO forecasts in 

constant years dollars, but retain the 

state-by-state variation reflected in state 

pricing data. As was done for the NOPR, 

DOE extrapolated the trend in fuel 

prices between 2020 and 2030 of the 

forecast to establish prices for the years 

from 2031 to 2042 for the LCC analysis. 

See chapter 5 of the final rule TSD for 

further details on the LCC and PBP 

analysis and assumptions. 

G. Shipments Analysis 

The shipments analysis develops 

future shipments for each class of 

commercial packaged boiler based on 

current shipments and equipment life 

assumptions, and takes into account the 

existing stock and expected growth of 

buildings using commercial packaged 

boilers. DOE assumed the relative 

distribution of shipments by size and 

boiler equipment class would resemble 

that of current shipments. In the March 

2009 NOPR, DOE explained the 

development of the shipment analysis 

for commercial packaged boilers 74 FR 

12033. 

DOE received several comments on 

the assumptions used in the shipments 

analysis for the NOPR. On the 

distribution of equipment lifetimes, 

AHRI commented that in some regions 

of the country, emissions regulations 

may promote early replacements of 

boilers, but did not provide data on the 

frequency that this may occur or the 

impact that this may have on the 

distribution for boiler lifetimes. (AHRI, 

Public Meeting Transcript, No. 12 at p. 

86) ACEEE commented that there is a 

trend toward replacements of larger 

boilers with trains of smaller boilers, but 

admitted to not having quantitative 

numbers to describe the trend. (ACEEE, 

Public Meeting Transcript, No. 12 at p. 

80) ACEEE also commented that boilers 

are rated on input capacity, but since 

the relationship between input and 

output capacity changes with 

efficiencies, for a fixed output, the input 

capacities required for the market will 

have a downward trend based on a 

change in efficiency considered alone. 

In addition, ACEEE asserted that 

reductions in the degree of historical 

[unnecessary] oversizing might be 

reduced in the future, which would 

further result in a reduction in typical 

boiler size. (ACEEE, Public Meeting 

Transcript, No. 12 at p. 81) 

In responding to ACEEE at the public 

meeting, AHRI agreed that in fact there 

are replacement situations where the 

use of trains of modular or stage boilers 

makes sense today. AHRI also pointed 

out that a target of ASHRAE 90.1 has 

been to achieve better sizing and better 

system design as part of the overall goal 

to reduce energy consumption in 

commercial buildings. AHRI did not 

have an idea of how much effect these 

replacement situations would really 

have on shipments. (AHRI, Public 

Meeting Transcript, No. 12 at p. 83) 

In response to ACEEE regarding the 

natural reduction in input capacity as a 

function of higher efficiency equipment, 

DOE notes that the shipments model 

starting point, as well as the output of 

the model, is the number of boilers 

shipped, not the total input capacity of 

all shipments. Furthermore, the cost 

calculations developed in the 

engineering analysis and subsequently 

used in the analysis are based on the 

output capacity of the boiler. The sum 

total of output capacity and shipments 

is not affected by the change in 

efficiency brought about by standards. 

With regard to the other comments, 

given the lack of sufficient quantitative 

data on the impact that these trends may 

have on shipments by equipment size or 

class that would be needed to calibrate 

a revised model, DOE did not revise the 

shipments model methodology from 

that of the March 2009 NOPR. 

DOE did update the model to reflect 

new estimates of future building new 

construction and resulting building 

stock in each year based on the April 

2009 AEO2009 reference case. DOE 

reports the revised shipment forecasts 

for the boiler market for selected years 

from 2012 to 2042 for the base case in 

Table V.3 below. 


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H. National Impact Analysis—National 

Energy Savings and Net Present Value 

Analysis 

The national impacts analysis 

evaluates the impact of a proposed 

energy conservation standard from a 

national perspective rather than from 

the customer perspective represented by 

the LCC. This analysis assesses the 

national energy savings (NES) and 

national net present value (NPV) of the 

commercial customer costs and savings 

that are expected to result from 

amended standards at the analyzed 

efficiency levels. For the final rule 

analysis, DOE used the same 

spreadsheet model used in the March 

2009 NOPR to calculate the energy 

savings and the national economic costs 

and savings from new standards, but 

with updates to specific input data. 

For each efficiency level analyzed, 

DOE calculated the NPV and NES for 

adopting more-stringent standards than 

the efficiency levels specified in 

ASHRAE Standard 90.1–2007. The NES 

refers to cumulative energy savings from 

2012 through 2042. DOE calculated new 

energy savings in each year relative to 

a base case, defined to include DOE 

adoption of the efficiency levels 

specified by ASHRAE Standard 90.1– 

2007. The NPV refers to cumulative 

monetary savings. DOE calculated net 

monetary savings for higher standards 

in each year relative to the base case as 

the total operating cost savings minus 

the increases in total installed cost. 

Cumulative savings are the sum of the 

annual NPV over the specified period. 

DOE accounted for operating cost 

savings until 2085, when 95 percent of 

all the equipment installed in 2042 

should be retired. 

Table V.4 summarizes the inputs to 

the NES spreadsheet model along with 

a brief description of the data sources. 

The results of DOE’s NES and NPV 

analysis are summarized in section 

VI.B.2 and described in detail in chapter 

7 of the final rule TSD. 

TABLE V.4—SUMMARY OF NES AND NPV MODEL INPUTS

Inputs Description Changes for final rule 

Shipments ............................................. Annual shipments from shipments model (see chapter 6 of 

the final rule TSD).

Used updated shipment estimates based 

on AEO2009 reference case building 

stock forecasts. 


jlentini on DSKJ8SOYB1PROD with RULES2ER22JY09.003</GPH>
36332 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

17On July 11, 2008, the U.S. Court of Appeals for 

the District of Columbia Circuit (D.C. Circuit) issued 

its decision in North Carolina v. Environmental 

Protection Agency, in which the Court vacated the 

CAIR rule. 531 F.3d 896 (D.C. Cir. 2008). However, 

in a December 23, 2008 opinion, the same panel of 

the D.C. Circuit reinstated the CAIR rule pending 

TABLE V.4—SUMMARY OF NES AND NPV MODEL INPUTS—Continued 

Inputs Description Changes for final rule 

Effective Date of Standard .................... 2014 for adoption of a more-stringent efficiency level than 

those specified by ASHRAE Standard 90.1–2007. 2012 

for adoption of the efficiency levels specified by 

ASHRAE Standard 90.1–2007.

No change. 

Base Case Efficiencies ......................... Distribution of base-case shipments by efficiency level ...... No change. 

Standard Case Efficiencies ................... Distribution of shipments by efficiency level for each 

standards case. Standards-case annual shipmentweighted market shares remain the same as in the 

base case and each standard level for all efficiencies 

above the efficiency level being analyzed. All other shipments are at the efficiency level.

No change. 

Annual Energy Use per Unit ................. Annual national weighted-average values are a function of 

efficiency level. (See chapter 4 of the final rule TSD.).

No change. 

Total Installed Cost per Unit ................. Annual weighted-average values are a function of efficiency level. (See chapter 5 of the final rule TSD.).Modified to reflect changes in installation 

costs from LCC analysis. 

Repair Cost per Unit ............................. Annual weighted-average values increase with manufacturer’s cost level. (See chapter 5 of the final rule TSD.).No change. 

Maintenance Cost per Unit ................... See chapter 5 of the final rule TSD .................................... No change. 

Escalation of Fuel Prices ...................... AEO2008 forecasts (to 2030) and extrapolation for beyond 

2030. (See chapter 5 of the final rule TSD.).

Modified to reflect April 2009 AEO2009 

reference case forecasts. 

Site-Source Conversion ........................ Based on average annual site-to-source conversion factor 

for natural gas from AEO2008.

Based on average annual site-to-source 

conversion factor for natural gas from 

AEO2009 reference case. 

Discount Rate ....................................... 3 percent and 7 percent real ............................................... No change. 

Present Year ......................................... Future costs are discounted to 2008 ................................... No change. 

DOE received no comments on the 

general methodology and the results for 

the NES and NPV analysis. As a result, 

DOE retained the same methodology as 

was used in the NOPR for the final rule. 

Changes to these results from the NOPR 

are due to changes in the development 

of national average inputs to the NES 

and NPV analysis as a result of the 

revisions to the LCC and shipments 

calculations. 

I. Environmental Assessment 

DOE prepared an environmental 

assessment (EA) which assesses the 

impacts of the proposed rule pursuant 

to the National Environmental Policy 

Act of 1969 (42 U.S.C. 4321 et seq.) 

(NEPA), the regulations of the Council 

on Environmental Quality (40 CFR parts 

1500–1508), and DOE’s regulations for 

compliance with the National 

Environmental Policy Act (10 CFR part 

1021). This EA includes a concise 

examination of the impacts of emission 

reductions likely to result from the 

proposed standards for commercial 

packaged boilers and water-cooled and 

evaporatively cooled commercial 

packaged air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h. The EA has been 

incorporated as chapter 8 in the final 

rule TSD. 

Specifically, DOE estimated the 

reduction in total emissions of carbon 

dioxide (CO2), nitrogen oxides (NOX) 

and sulfur dioxide (SO2). A fourth 

pollutant, mercury (Hg), is emitted in 

only trace amounts by the equipment 

covered in this analysis that further 

analysis of Hg in this EA would be 

uninformative; as such, DOE does not 

discuss Hg emissions in this EA. 

1. Sulfur Dioxide 

Sulfur dioxide is a chemical 

compound that is produced by various 

natural and industrial processes and is 

a key contributor to acid rain. The Clean 

Air Act Amendments of 1990 set an SO2

emissions cap on all power generation, 

but permitted flexibility among 

generators through the use of emissions 

allowances and tradable permits. This 

SO2 trading process (sometimes called 

‘‘cap and trade’’) does not, however, 

cover commercial packaged boilers. The 

EPA’s New Source Performance 

Standards (NSPS) limit, among other 

things, SO2 emissions from boilers built 

after a certain date. In particular, 40 CFR 

part 60 subpart Dc, Standards of 

Performance for Small IndustrialCommercial-Institutional Steam 

Generating Units, requires that small 

industrial-commercial-institutional 

steam generating units constructed, 

modified, or reconstructed after June 9, 

1989, must limit the allowable sulfur 

content in fuel oil to 0.5 weight percent 

for any steam-generating unit that has a 

maximum design heat input capacity of 

100 million British thermal units (Btu) 

per hour. (40 CFR 60.40c–60.48c) 

Commercial packaged boilers that have 

a maximum design heat input capacity 

of 100 million Btu per hour would be 

an extremely small subset of all boilers 

being considered in this rule. 

Consequently, there is a direct SO2

environmental benefit from a reduction 

in fuel consumption resulting from the 

higher efficiency standards for 

commercial packaged boilers being 

adopted in today’s final rule. 

2. Nitrogen Oxides 

Nitrogen oxides, or NOX, are the 

generic term for a group of highly 

reactive gases, all of which contain 

nitrogen and oxygen in varying 

amounts. Nitrogen oxides form when 

fossil fuel is burned at high 

temperatures, as in a combustion 

process, and are considered a criteria 

pollutant under the Clean Air Act. The 

primary man-made sources of NOX

emissions are motor vehicles, electric 

utilities, and other industrial, 

commercial, and residential sources that 

burn fossil fuels. NOX emissions from 

28 eastern States and the District of 

Columbia (DC) are limited under the 

Clean Air Interstate Rule, published in 

the Federal Register on May 12, 2005. 

Although the rule has been remanded to 

the EPA by the D.C. Circuit Court, it will 

remain in effect until it is replaced by 

a rule consistent with the Court’s 

opinion in North Carolina v. 

EPA.17 Under CAIR, States must achieve 


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EPA’s compliance with its July 11, 2008 ruling. 550 

F.3d 1176 (D.C. Cir. 2008) (remand of vacatur). As 

such, CAIR’s trading programs and target deadlines 

remain in place at present; however, the long term 

prospects for and shape of those trading programs 

are unknown. 

the required emission reductions using 

one of two compliance options: (1) Meet 

an emissions budget for each regulated 

State by requiring power plants to 

participate in an EPA-administered 

interstate cap-and-trade system that 

caps emissions in two stages; or (2) meet 

an individual State emissions budget 

through measures of the State’s 

choosing. In general, however, CAIR 

basically covers two general classes of 

NOX emitters: (1) Stationary, fossil-fuelfired boilers or stationary, fossil-fuelfired combustion turbines serving 

generators with nameplate capacity of 

more than 25 MW of electricity and 

producing that electricity for sale; and 

(2) any unit that has a maximum design 

heat input rate of greater than 250 

million Btu/h (40 CFR 96.4). 

Commercial packaged boilers have a 

maximum design heat input rate of less 

than 250 million Btu/h and are not used 

for commercial power production. 

Hence, requirements of the CAIR do not 

apply to commercial packaged boilers. 

Consequently, there is a direct NOX

environmental benefit from a reduction 

in fuel consumption resulting from the 

higher efficiency standards for 

commercial packaged boilers. 

The EA assesses environmental 

impacts from alternate standard levels 

analyzed for commercial packaged 

boilers based on the results of the 

national energy savings analysis (see 

chapter 7). Standards for water-cooled 

and evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h were also considered in 

this rule. However, since no products 

could be identified on the market in this 

class, no subsequent energy or 

environmental impacts were considered 

in this EA. For commercial packaged 

boilers, DOE calculated emission 

reductions using emission factors 

appropriate to commercial boilers that 

use natural gas or fuel oil as fuel 

sources. The emissions factors provide 

typical ratios of emissions for SO2, NOX,

and CO2 per unit of natural gas or fuel 

oil energy consumed. DOE multiplied 

each emission factor, respectively, by 

the annual energy savings for each class 

of commercial packaged boiler as 

developed in the NES for the final rule. 

The annual emission reductions were 

then summed over the period from 

2012–2042 separately for each class. 

The resulting emission reductions are 

shown in section VI. 

J. Monetizing Carbon Dioxide and Other 

Emissions Impacts 

DOE also calculated the possible 

monetary benefit of CO2, NOX, and SO2

emissions reductions. Cumulative 

monetary benefits were determined 

using discount rates of 3 and 7 percent. 

DOE monetized reductions in CO2

emissions stemming from the standards 

adopted in this final rule using a range 

of monetary values drawn from studies 

that attempt to estimate the present 

value of the marginal economic benefits 

(based on the avoided marginal social 

costs of carbon) likely to result from 

reducing greenhouse gas emissions. The 

marginal social cost of carbon is an 

estimate of the monetary value to 

society of the environmental damages of 

CO2 emissions. 

DOE monetized reductions in SO2

emissions using a ranges estimates of 

monetized benefits that could be 

attributed to the reduction of SO2

emissions from commercial packaged 

boilers. At one end, DOE used the 

annual estimates of an SO2 trading price 

as developed in the National Energy 

Modeling System (NEMS) electricity 

market model for the western and 

eastern U.S. This model estimates a 

trading price for SO2 in the utility 

markets, and, while not directly 

applicable to commercial packaged 

boilers, it reflects a market value for the 

cost of reducing SO2 emissions into the 

atmosphere. As DOE is interested in a 

national estimate, it used a simple 

average of the trading prices from the 

eastern and western electricity market 

models for the period from 2012–2030, 

and extrapolated the prices out through 

2042. The range in SO2 costs from this 

source varied both by year and region 

from $86 to $1,012 (2007$). At the 

higher end, DOE used an estimate of 

environmental damage costs of $7,300 

per ton of SO2 from stationary sources, 

measured in 2001$ or $8,542 per ton in 

2007$. These low and high values were 

in turn multiplied by the reduction in 

emissions of SO2 estimated for the 

period from 2012–2042. 

DOE estimated the national 

monetized benefits of NOX reductions 

associated with this rulemaking based 

on environmental damage estimates 

from the literature. Available estimates 

suggest a very wide range of monetary 

values for NOX emissions, ranging from 

$370 per ton to $3,800 per ton of NOX

from stationary sources, measured in 

2001$, or a range of $432 per ton to 

$4,441 per ton in 2007$. 

The resulting estimates of the present 

value of monetary benefits associated 

with the national reduction of CO2, 

NOX, and SO2 emissions resulting from 

adoption of standards for commercial 

packaged boilers at the ASHRAE 90.1– 

2007 efficiency levels are shown in 

section VI. In addition, estimates of the 

additional benefits for adopting 

standards higher than the ASHRAE 

90.1–2007 efficiency levels are also 

provided in section VI. 

DOE notes that neither EPCA nor 

NEPA requires that the economic value 

of emissions reduction be incorporated 

in the LCC or NPV analysis of energy 

savings. DOE has chosen to report these 

benefits separately from the net benefits 

of energy savings, but considered these 

benefits when weighing the benefits and 

burdens of standards. 

K. Other Issues 

1. Impact of Standards on Natural Gas 

Prices 

In the March 2009 NOPR public 

meeting, EarthJustice pointed out that 

DOE had, in certain residential 

rulemakings, begun to calculate the 

potential impact of energy efficiency 

standards on natural gas prices and 

encouraged DOE to do something 

similar in the ASHRAE products 

rulemaking analysis. (EarthJustice, 

Public Meeting Transcript, No. 13 at p. 

61) 

In response to these comments, DOE 

undertook a further review of the 

potential impact of commercial 

packaged boiler energy efficiency 

standards on natural gas prices. A 

review of the economic literature 

indicates that there is support for the 

idea that an impact will occur and that 

that impact would result in a reduction 

in overall natural gas prices. DOE 

examined two preliminary analyses of 

the effect that a reduction in natural gas 

usage due to efficiency standards would 

have on natural gas prices. These were 

analyses and results published in the 

2007 furnace and boiler final rule (72 FR 

65136, 65152–54 (Nov. 19, 2007)) and in 

the preliminary analysis documented in 

the preliminary TSD for standards for 

residential water heaters. The natural 

gas price analysis for the furnaces and 

boilers rulemaking was conducted using 

a version of the 2007 NEMS–BT that 

was modified to account for energy 

savings associated with possible 

standards for residential gas furnaces, 

and the price analysis for the residential 

water heaters standards rulemaking was 

conducted using the 2008 NEMS–BT. 

The preliminary analyses in both 

cases estimated that gas demand 

reductions resulting from more stringent 

minimum energy conservation 

standards would reduce the U.S. 


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average wellhead natural gas price. An 

inverse elasticity was calculated in both 

studies, relating a percentage change in 

the average wellhead natural gas price 

to a percentage reduction in total annual 

natural gas consumption. In the furnace 

and boiler rule, DOE estimated that this 

inverse elasticity was approximately 0.9 

percent. In the residential water heater 

preliminary analysis, DOE estimated an 

inverse elasticity of approximately 0.8 

percent. Given the closeness of these 

two figures, and the corresponding 

similarity in energy end-use profile 

expected for space heating equipment, 

DOE chose to estimate the impact for 

commercial packaged boilers based on 

the elasticity estimated for residential 

furnaces. DOE’s analysis was based on 

the impact calculated from adopting the 

highest efficiency level analyzed for the 

class of small gas fired hot water boilers. 

The condensing efficiency level for 

small gas fired hot water boilers showed 

an estimated savings of 0.223 quads 

over the period from 2012–2042. DOE 

estimated the impact that the stream of 

energy savings would have on natural 

gas prices over the same period. Using 

this time period, DOE estimated that the 

average price changes amounted to a 

decrease in the wellhead price for 

natural gas of 0.25 cents per million Btu. 

Analysis done for the furnace and boiler 

rule showed that while changes in price 

were both positive and negative 

depending on sector, the effect on the 

wellhead price for natural gas was a 

decrease. 

In previous studies, the projected 

change in the natural gas price varies 

among the end use sectors. For example, 

in the analysis for residential furnaces, 

DOE estimated that natural gas prices 

would decrease for the industrial and 

electric power sectors, and increase for 

residential consumers. The increase in 

the residential price is believed to occur 

because the fixed charges (e.g., 

transmission infrastructure costs) are 

spread over fewer million Btu of gas 

sales in the standards case, thus placing 

upward pressure on the average price 

per million Btu. A similar pattern could 

be expected to occur in the commercial 

sector. 

Although the estimated reduction in 

average natural gas prices is small, the 

estimated economy-wide savings in 

natural gas expenditures over the 2012– 

2042 forecast period have an estimated 

net present value of $0.29 billion at a 

seven-percent discount rate. 

In addition to conducting its own 

analysis using NEMS, DOE reviewed the 

results of: (1) Studies that used NEMS 

to investigate the price impact of 

reductions in natural gas demand, and 

(2) studies that used other energyeconomic models to investigate the 

price impact of substantial change in 

natural gas demand. While the results 

vary considerably among the different 

studies, they generally show a price 

response similar to or larger than that 

shown by DOE’s NEMS analysis. 

In the short run, DOE’s preliminary 

analysis indicates that consumer savings 

from lower natural gas prices would be 

offset by declines in gas producer 

revenue. In the long run, the previous 

analyses indicate that the reduction in 

natural gas prices mainly results from 

changes in gas extraction costs. Since 

there is only a limited supply of lowcost, conventional natural gas sources, 

natural gas extraction costs rise over 

time as these low-cost sources are 

depleted. Reduced gas demand puts 

downward pressure on extraction costs 

and prices by delaying the depletion of 

the low-cost reserves and the shift 

toward higher-cost sources. However, as 

changes in extraction costs are projected 

to occur in 2030 and beyond, the 

uncertainty of the actual savings that 

would be realized is increased. 

Based on the discussed analysis, DOE 

recognizes that there is uncertainty 

about the magnitude, distribution, and 

timing of the costs, benefits, and net 

benefits within the economy. DOE’s 

previous analyses indicated that the 

prices of natural gas to the end use 

consumers (residential) would increase 

slightly, due to fixed costs in the 

distribution of natural gas to the 

consumer becoming a higher fraction of 

the total cost. A similar effect is possible 

in the commercial sector with 

commercial boilers. While DOE has not 

been able to estimate these potential 

effects, DOE anticipates the effect will 

be small since the magnitude of the gas 

price change is small (but likely to vary 

as the natural gas savings increases). 

Similarly, DOE is uncertain of the 

effects of the drop in natural gas on 

producers and distributors of natural 

gas. While their revenues and costs are 

expected to drop, it is uncertain 

whether they will drop in proportion 

over time. The supply side will likely 

experience revenue loss due to both the 

price changes and the reduction in gas 

sales that they will experience. 

DOE considered the potential impact 

on natural gas prices in the 

establishment of the final standards, but 

because of the uncertainty of these 

impacts, and because DOE’s analysis 

has not been subjected to public review, 

this factor had little impact on DOE’s 

conclusion. 

2. Effective Date of the Amended Energy 

Conservation Standards for Commercial 

Packaged Boilers 

Generally, covered equipment must 

comply with the applicable standard if 

such equipment is manufactured or 

imported on or after a specified date. As 

explained in the March 2009 NOPR, 

DOE evaluated whether more-stringent 

efficiency levels than those in ASHRAE 

Standard 90.1–2007 would be 

technologically feasible and 

economically justified and result in a 

significant amount of additional energy 

savings. 74 FR 12003. Because DOE 

found that more stringent standards did 

not meet these requirements and is 

adopting energy conservation standards 

at the efficiency levels contained in 

ASHRAE Standard 90.1–2007, EPCA 

requires the standards to become 

effective ‘‘on or after a date which is two 

years after the effective date of the 

applicable minimum energy efficiency 

requirement in the amended ASHRAE/ 

IES[NA] standard * * *’’. (42 U.S.C. 

6313(a)(6)(D)) Thus, for the equipment 

classes where a two-tier standard is setforth, the effective date of the 

rulemaking depends on the effective 

date specified in ASHRAE Standard 

90.1–2007. The effective date in 

ASHRAE Standard 90.1–2007 for 

commercial packaged boilers is March 

2, 2010, for the initial efficiency level 

(which would require an effective date 

of March 2, 2012), and the effective date 

in ASHRAE Standard 90.1–2007 for the 

two commercial packaged boiler 

equipment classes with a tiered 

efficiency level is March 2, 2020 for the 

second tier efficiency level (which 

would require an effective date of March 

2, 2022). 

For analysis purposes, if DOE were to 

adopt a rule prescribing energy 

conservation standards higher than the 

efficiency levels contained in ASHRAE 

Standard 90.1–2007, EPCA states that 

any such standards ‘‘shall become 

effective for products manufactured on 

or after a date which is four years after 

the date such rule is published in the 

Federal Register.’’ (42 U.S.C. 

6313(a)(6)(D)) DOE has applied this 4- 

year implementation period to 

determine the effective date of any 

energy conservation standard higher 

than the efficiency levels specified by 

ASHRAE Standard 90.1–2007 that might 

be prescribed in a future rulemaking. 

Thus, for products for which DOE might 

adopt a level more stringent than the 

ASHRAE efficiency levels, the rule 

would apply to products manufactured 

on or after July 2014, which is four years 


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18Since ASHRAE published Standard 90.1–2007 

on January 10, 2008, EPCA requires that DOE 

publish a final rule adopting more-stringent 

standards than those adopted in Standard 90.1– 

2007 within 30 months of ASHRAE action (i.e., by 

July 2010). Thus, four years from July 2010 would 

be July 2014, which would be the anticipated 

effective date for DOE adoption of more-stringent 

standards. 

from the date of publication of the final 

rule.18

Table V.5 presents the anticipated 

effective dates of an amended energy 

conservation standard for each 

equipment class for which DOE 

developed a potential energy savings 

analysis. 

TABLE V.5—ANTICIPATED EFFECTIVE DATE OF AN AMENDED ENERGY CONSERVATION STANDARD FOR EACH EQUIPMENT

CLASS OF COMMERCIAL PACKAGED BOILERS

Equipment class 

Anticipated effective 

date for adopting the 

efficiency levels in 

ASHRAE standard 

90.1–2007 

Anticipated effective date 

for adopting more stringent 

efficiency levels than those 

in ASHRAE standard 

90.1–2007 

Small Gas-Fired Hot Water Commercial Packaged Boilers ................................................ 2012 .............................. 2014 

Small Gas-Fired Steam, All Except Natural Draft Commercial Packaged Boilers .............. 2012 .............................. 2014

Small Gas-Fired Steam Natural Draft Commercial Packaged Boilers ................................ Tier 1: 2012 ..................

Tier 2: 2022. 

2014 

Small Oil-Fired Hot Water Commercial Packaged Boilers .................................................. 2012 .............................. 2014 

Small Oil-Fired Steam Commercial Packaged Boilers ........................................................ 2012 .............................. 2014 

Large Gas-Fired Hot Water Commercial Packaged Boilers ................................................ 2012 .............................. 2014 

Large Gas-Fired Steam, All Except Natural Draft Commercial Packaged Boilers ............. 2012 .............................. 2014 

Large Gas-Fired Steam Natural Draft Commercial Packaged Boilers ................................ Tier 1: 2012 ..................

Tier 2: 2022. 

2014 

Large Oil-Fired Hot Water Commercial Packaged Boilers .................................................. 2012 .............................. 2014 

Large Oil-Fired Steam Commercial Packaged Boilers ........................................................ 2012 .............................. 2014 

VI. Analytical Results for Commercial 

Packaged Boilers 

A. Efficiency Levels Analyzed 

Table VI.1 presents the baseline 

efficiency level and the efficiency levels 

analyzed for each equipment class of 

commercial packaged boilers subject to 

today’s final rule. The baseline 

efficiency levels correspond to the 

efficiency levels specified by ASHRAE 

Standard 90.1–2007 for commercial 

packaged boilers. The efficiency levels 

above the baseline represent efficiency 

levels above those specified in ASHRAE 

Standard 90.1–2007 where equipment is 

currently available on the market. 

TABLE VI.1—EFFICIENCY LEVELS ANALYZED

Equipment class 

Representative 

capacity 

(kBtu/h) 

Efficiency levels 

analyzed 

Small gas-fired hot water .................................................................................................................... 800 Baseline—80% ET

82% ET

84% ET

86% ET

Condensing—92% ET

Small gas-fired steam, all except natural draft ................................................................................... 800 Baseline—79% ET

80% ET

81% ET

82% ET

83% ET

Small gas-fired steam natural draft ..................................................................................................... 800 Baseline—77% ET

78% ET

79% ET

80% ET

Small oil-fired hot water ...................................................................................................................... 800 Baseline—82% ET

84% ET

86% ET

88% ET

Small oil-fired steam ............................................................................................................................ 800 Baseline—81% ET

82% ET

83% ET

85% ET

Large gas-fired hot water .................................................................................................................... 3,000 Baseline—82% EC

83% EC

84% EC

85% EC

Condensing—95% EC


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TABLE VI.1—EFFICIENCY LEVELS ANALYZED—Continued 

Equipment class 

Representative 

capacity 

(kBtu/h) 

Efficiency levels 

analyzed 

Large gas-fired steam, all except natural draft ................................................................................... 3,000 Baseline—79% ET

80% ET

81% ET

82% ET

83% ET

Large gas-fired steam natural draft ..................................................................................................... 3,000 Baseline—77% ET

78% ET

79% ET

80% ET

81% ET

Large oil-fired hot water ...................................................................................................................... 3,000 Baseline—84% EC

86% EC

87% EC

88% EC

Large oil-fired steam ........................................................................................................................... 3,000 Baseline—81% ET

82% ET

83% ET

84% ET

86% ET

B. Economic Justification and Energy 

Savings 

1. Economic Impacts on Commercial 

Customers 

To evaluate the economic impact of 

the efficiency levels on commercial 

customers, DOE conducted an LCC 

analysis for each efficiency level. More 

efficient commercial packaged boilers 

would affect these customers in two 

ways: (1) Annual operating expense 

would decrease; and (2) purchase price 

would increase. Inputs used for 

calculating the LCC include total 

installed costs (i.e., equipment price 

plus installation costs), operating 

expenses (i.e., annual energy savings, 

energy prices, energy price trends, 

repair costs, and maintenance costs), 

equipment lifetime, and discount rates. 

The output of the LCC model is a 

mean LCC savings for each equipment 

class, relative to the baseline 

commercial packaged boiler efficiency 

level. The LCC analysis also provides 

information on the percentage of 

customers that are negatively affected by 

an increase in the minimum efficiency 

standard. 

DOE also performed a PBP analysis as 

part of the LCC analysis. The PBP is the 

number of years it would take for the 

customer to recover the increased costs 

of higher-efficiency equipment as a 

result of energy savings based on the 

operating cost savings. The PBP is an 

economic benefit-cost measure that uses 

benefits and costs without discounting. 

Chapter 5 of the final rule TSD provides 

detailed information on the LCC and 

PBP analyses. 

DOE’s LCC and PBP analyses 

provided five key outputs for each 

efficiency level above the baseline (i.e., 

efficiency levels more stringent than 

those in ASHRAE Standard 90.1–2007), 

reported in Table VI.2 through Table 

VI.11. The first three outputs are the 

proportion of commercial boiler 

purchases where the purchase of a 

commercial packaged boiler that is 

compliant with the amended energy 

conservation standard creates a net LCC 

increase, no impact, or a net LCC 

savings for the customer. The fourth 

output is the average net LCC savings 

from standard-compliant equipment. 

The fifth output is the average PBP for 

the customer investment in standardcompliant equipment. The sixth output 

is the increase in total installed cost 

from standard-compliant equipment. 

TABLE VI.2—SUMMARY LCC AND PBP RESULTS FOR SMALL GAS-FIRED HOT WATER BOILERS, 800 kBTU/h OUTPUT

CAPACITY

Small gas-fired hot water 

Efficiency level 

1 2 3 4 

Thermal Efficiency (Et) ..................................................................................... 82% 84% 86% 92% 

Equipment with Net LCC Increase (%) ........................................................... 9 21 42 64 

Equipment with No Change in LCC (%) .......................................................... 77 48 25 18 

Equipment with Net LCC Savings (%) ............................................................ 14 31 33 19 

Mean LCC Savings ($) .................................................................................... $1,700 $3,239 $1,329 ($4,760) 

Mean PBP (years) ........................................................................................... 25.4 30.6 42.7 56.7 

Increase in Total Installed Cost ($) ................................................................. $3,364 $5,526 $9,045 $14,323 

*Numbers in parentheses indicate negative LCC savings. 


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TABLE VI.3—SUMMARY LCC AND PBP RESULTS FOR SMALL GAS-FIRED STEAM, ALL EXCEPT NATURAL DRAFT, 800 

kBTU/h OUTPUT CAPACITY

Small gas-fired steam, all except natural draft 

Efficiency level 

1 2 3 4 

Thermal Efficiency (Et) ..................................................................................... 80% 81% 82% 83% 

Equipment with Net LCC Increase (%) ........................................................... 27 58 71 73 

Equipment with No Change in LCC (%) .......................................................... 64 19 10 7 

Equipment with Net LCC Savings (%) ............................................................ 9 23 19 20 

Mean LCC Savings ($) .................................................................................... ($870) ($674) ($2,423) ($3,064) 

Mean Payback Period (years) ......................................................................... 41.6 41.8 50.7 50.8 

Increase in Total Installed Cost ($) ................................................................. $3,204 $4,946 $7,674 $9,831 

* Numbers in parentheses indicate negative savings. 

TABLE VI.4—SUMMARY LCC AND PBP RESULTS FOR SMALL GAS-FIRED STEAM NATURAL DRAFT BOILERS, 800 kBTU/h 

OUTPUT CAPACITY

Small gas-fired steam natural draft 

Efficiency level 

1 2 3 

Thermal Efficiency (Et) ................................................................................................................ 78% 79% 80% 

Equipment with Net LCC Increase (%) ....................................................................................... 44 35 43 

Equipment with No Change in LCC (%) ..................................................................................... 32 22 3

Equipment with Net LCC Savings (%) ........................................................................................ 25 43 54 

Mean LCC Savings * ($) .............................................................................................................. ($50) $1,657 $2,184 

Mean PBP (years) ....................................................................................................................... 30.9 25.4 28.7 

Increase in Total Installed Cost ($) ............................................................................................. $2,875 $3,926 $5,562 

* Numbers in parentheses indicate negative savings. 

TABLE VI.5—SUMMARY LCC AND PBP RESULTS FOR SMALL OIL-FIRED HOT WATER BOILERS, 800 kBTU/h OUTPUT

CAPACITY

Small oil-fired hot water 

Efficiency level 

1 2 3 

Thermal Efficiency (Et) ................................................................................................................ 84% 86% 88% 

Equipment with Net LCC Increase (%) ....................................................................................... 10 10 28 

Equipment with No Change in LCC (%) ..................................................................................... 39 27 7

Equipment with Net LCC Savings (%) ........................................................................................ 51 63 65 

Mean LCC Savings ($) ................................................................................................................ $4,902 $9,770 $11,482 

Mean PBP (years) ....................................................................................................................... 16.5 17.5 24.0 

Increase in Total Installed Cost ($) ............................................................................................. $3,506 $5,912 $9,737 

TABLE VI.6—SUMMARY LCC AND PBP RESULTS FOR SMALL OIL-FIRED STEAM BOILERS, 800 kBTU/h OUTPUT CAPACITY

Small oil-fired hot water 

Efficiency level 

1 2 3 

Thermal Efficiency (Et) ................................................................................................................ 82% 83% 85% 

Equipment with Net LCC Increase (%) ....................................................................................... 29 46 54 

Equipment with No Change in LCC (%) ..................................................................................... 58 24 6

Equipment with Net LCC Savings (%) ........................................................................................ 13 30 40 

Mean LCC Savings * ($) .............................................................................................................. ($732) $88 $864 

Mean PBP (years) ....................................................................................................................... 35.1 33.7 35.0 

Increase in Total Installed Cost ($) ............................................................................................. $3,136 $4,739 $8,236 

* Numbers in parentheses indicate negative savings. 

TABLE VI.7—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED HOT WATER BOILERS, 3,000 kBTU/h OUTPUT

CAPACITY

Large gas-fired hot water 

Efficiency level 

1 2 3 4 

Combustion Efficiency (EC) ............................................................................. 83% 84% 85% 95% 

Equipment with Net LCC Increase (%) ........................................................... 8 15 31 45 

Equipment with No Change in LCC (%) .......................................................... 51 23 17 6 


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TABLE VI.7—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED HOT WATER BOILERS, 3,000 kBTU/h OUTPUT

CAPACITY—Continued 

Large gas-fired hot water 

Efficiency level 

1 2 3 4 

Equipment with Net LCC Savings (%) ............................................................ 41 62 52 50 

Mean LCC Savings ($) .................................................................................... $6,411 $11,303 $11,324 $13,271 

Mean PBP (years) ........................................................................................... 15.3 19.3 28.7 38.3 

Increase in Total Installed Cost ($) ................................................................. $4,093 $7,742 $13,560 $37,293 

TABLE VI.8—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED STEAM, ALL EXCEPT NATURAL DRAFT BOILERS, 

3,000 kBTU/h OUTPUT CAPACITY

Large gas-fired steam, all except natural draft 

Efficiency level 

1 2 3 4 

Thermal Efficiency (Et) ..................................................................................... 80% 81% 82% 83% 

Equipment with Net LCC Increase (%) ........................................................... 4 4 3 3 

Equipment with No Change in LCC (%) .......................................................... 61 26 23 20 

Equipment with Net LCC Savings (%) ............................................................ 34 70 74 77 

Mean LCC Savings ($) .................................................................................... $7,876 $18,144 $27,941 $37,065 

Mean Payback Period (years) ......................................................................... 11.8 8.8 8.0 7.8 

Increase in Total Installed Cost ($) ................................................................. $3,969 $5,638 $7,398 $9,423 

TABLE VI.9—SUMMARY LCC AND PBP RESULTS FOR LARGE GAS-FIRED STEAM NATURAL DRAFT BOILERS, 3,000 kBTU/h 

OUTPUT CAPACITY

Large gas-fired steam natural draft 

Efficiency level 

1 2 3 4 

Thermal Efficiency (Et) ..................................................................................... 78% 79% 80% 81% 

Equipment with Net LCC Increase (%) ........................................................... 1 2 4 10 

Equipment with No Change in LCC (%) .......................................................... 88 42 24 7 

Equipment with Net LCC Savings (%) ............................................................ 12 55 72 83 

Mean LCC Savings ($) .................................................................................... $9,531 $19,836 $28,016 $33,835 

Mean Payback Period (years) ......................................................................... 9.1 8.0 9.0 11.0 

Increase in Total Installed Cost ($) ................................................................. $3,410 $5,484 $8,635 $13,060 

TABLE VI.10—SUMMARY LCC AND PBP RESULTS FOR LARGE OIL-FIRED HOT WATER BOILERS, 3,000 kBTU/h OUTPUT

CAPACITY

Large oil-fired hot water 

Efficiency level 

1 2 3 

Combustion Efficiency (EC) ......................................................................................................... 86% 87% 88% 

Equipment with Net LCC Increase (%) ....................................................................................... 2 7 10 

Equipment with No Change in LCC (%) ..................................................................................... 52 24 24 

Equipment with Net LCC Savings (%) ........................................................................................ 46 69 66 

Mean LCC Savings ($) ................................................................................................................ $26,820 $35,114 $42,551 

Mean PBP (years) ....................................................................................................................... 8.4 11.8 14.3 

Increase in Total Installed Cost ($) ............................................................................................. $6,644 $12,067 $17,736 

TABLE VI.11—SUMMARY LCC AND PBP RESULTS FOR LARGE OIL-FIRED STEAM BOILERS, 3,000 kBTU/h OUTPUT

CAPACITY

Large oil-fired steam 

Efficiency level 

1 2 3 4 

Thermal Efficiency (Et) ..................................................................................... 82% 83% 84% 86% 

Equipment with Net LCC Increase (%) ........................................................... 1 2 8 9 

Equipment with No Change in LCC (%) .......................................................... 66 41 16 11 

Equipment with Net LCC Savings (%) ............................................................ 33 57 77 81 

Mean LCC Savings ($) .................................................................................... $13,940 $27,598 $37,978 $59,175 

Mean Payback Period (years) ......................................................................... 1 2 8 9 

Increase in Total Installed Cost ($) ................................................................. $3,885 $6,970 $11,724 $20,263 


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2. National Impact Analysis 

a. Amount and Significance of Energy 

Savings 

To estimate the energy savings 

through 2042 due to amended energy 

conservation standards, DOE compared 

the energy consumption of commercial 

boilers under the base case (i.e., the 

ASHRAE 90.1–2007 efficiency levels) to 

energy consumption of boilers under 

higher efficiency standards. DOE 

examined up to four efficiency levels 

higher than those of ASHRAE Standard 

90.1–2007. The amount of energy 

savings depends not only on the 

potential increase in energy efficiency 

resulting from the adoption of a 

standard, but also on the rate at which 

the stock of existing, less-efficient 

commercial boilers will be replaced 

over time after implementation of the 

amended energy conservation standard. 

Table VI.12 shows the forecasted 

national energy savings at each of the 

standard levels. DOE reports both 

undiscounted and discounted estimates 

of energy savings. Table VI.13 and Table 

VI.14 show the magnitude of the energy 

savings if they are discounted at rates of 

7 percent and 3 percent, respectively. 

Each standard level considered in this 

rulemaking would result in significant 

energy savings, and the amount of 

savings increases with higher energy 

conservation standards. (See chapter 7 

of the final rule TSD.) 

TABLE VI.12—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS

[Energy savings for units sold from 2012 to 2042, undiscounted] 

Equipment class 

National energy savings (quads)* 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ............................................................................................... 0.023 0.076 0.147 0.223 

Small gas-fired steam, all except natural draft .............................................................. 0.000 0.015 0.031 0.048 

Small gas-fired steam natural draft ............................................................................... (0.006 ) 0.017 0.044 n/a 

Small oil-fired hot water ................................................................................................. 0.016 0.036 0.060 n/a 

Small oil-fired steam ...................................................................................................... 0.010 0.028 0.071 n/a 

Large gas-fired hot water .............................................................................................. 0.015 0.039 0.064 0.185 

Large gas-fired steam, all except natural draft ............................................................. 0.023 0.066 0.110 0.155 

Large gas-fired, steam natural draft .............................................................................. (0.023 ) 0.004 0.039 0.079 

Large oil-fired hot water ................................................................................................. 0.014 0.025 0.036 n/a 

Large oil-fired steam ...................................................................................................... 0.041 0.112 0.209 0.431 

* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-stringent efficiency levels 

compared to the efficiency levels specified in ASHRAE Standard 90.1–2007. 

TABLE VI.13—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS

[Energy savings for units sold from 2012 to 2042, discounted at seven percent] 

Equipment class 

National energy savings (quads)* 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ............................................................................................... 0.005 0.015 0.030 0.045 

Small gas-fired steam, all except natural draft .............................................................. (0.000 ) 0.003 0.006 0.010 

Small gas-fired steam natural draft ............................................................................... (0.000 ) 0.004 0.010 n/a 

Small oil-fired hot water ................................................................................................. 0.003 0.007 0.012 n/a 

Small oil-fired steam ...................................................................................................... 0.002 0.006 0.015 n/a 

Large gas-fired hot water .............................................................................................. 0.003 0.008 0.013 0.038 

Large gas-fired steam, all except natural draft ............................................................. 0.005 0.014 0.023 0.032 

Large gas-fired steam natural draft ............................................................................... (0.003 ) 0.002 0.009 0.018 

Large oil-fired hot water ................................................................................................. 0.003 0.005 0.007 n/a 

Large oil-fired steam ...................................................................................................... 0.008 0.023 0.043 0.088 

* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-stringent efficiency levels 

compared to the efficiency levels specified in ASHRAE Standard 90.1–2007. 

TABLE VI.14—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS

[Energy savings for units sold from 2012 to 2042, discounted at three percent] 

Equipment class 

National energy savings (quads)* 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ............................................................................................... 0.011 0.037 0.071 0.108 

Small gas-fired steam, all except natural draft .............................................................. (0.000 ) 0.007 0.015 0.023 

Small gas-fired, steam natural draft .............................................................................. (0.002 ) 0.009 0.022 n/a 

Small oil-fired hot water ................................................................................................. 0.008 0.017 0.029 n/a 

Small oil-fired steam ...................................................................................................... 0.005 0.013 0.035 n/a 

Large gas-fired hot water .............................................................................................. 0.007 0.019 0.031 0.090 

Large gas-fired steam, all except natural draft ............................................................. 0.011 0.032 0.054 0.075 

Large gas-fired steam, natural draft .............................................................................. (0.010 ) 0.003 0.020 0.040 

Large oil-fired hot water ................................................................................................. 0.007 0.012 0.017 n/a 


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36340 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

TABLE VI.14—SUMMARY OF CUMULATIVE NATIONAL ENERGY SAVINGS FOR COMMERCIAL BOILERS—Continued 

[Energy savings for units sold from 2012 to 2042, discounted at three percent] 

Equipment class 

National energy savings (quads)* 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Large oil-fired steam ...................................................................................................... 0.020 0.054 0.101 0.209 

* Numbers in parentheses indicate negative potential energy savings due to the delayed implementation of more-stringent efficiency levels 

compared to the efficiency levels specified in ASHRAE Standard 90.1–2007. 

b. Net Present Value 

The NPV analysis is a measure of the 

cumulative benefit or cost of standards 

to the Nation. In accordance with 

OMB’s guidelines on regulatory analysis 

(OMB Circular A–4, section E (Sept. 17, 

2003)), DOE calculated NPV using both 

a 7-percent and a 3-percent real 

discount rate. The 7-percent rate is an 

estimate of the average before-tax rate of 

return on private capital in the U.S. 

economy, and reflects the returns to real 

estate and small business capital as well 

as corporate capital. DOE used this 

discount rate to approximate the 

opportunity cost of capital in the private 

sector because recent OMB analysis has 

found the average rate of return on 

capital to be near this rate. DOE also 

used the 3-percent rate to capture the 

potential effects of standards on private 

customers’ consumption (e.g., reduced 

purchasing of equipment due to higher 

prices for equipment and purchase of 

reduced amounts of energy). This rate 

represents the rate at which society 

discounts future consumption flows to 

their present value. This rate can be 

approximated by the real rate of return 

on long-term government debt (e.g., 

yield on Treasury notes minus annual 

rate of change in the Consumer Price 

Index), which has averaged about 3 

percent on a pre-tax basis for the last 30 

years. Table VI.15 and Table VI.16 

provide an overview of the NPV results. 

(See chapter 7 of the final rule TSD.) 

TABLE VI.15—SUMMARY OF CUMULATIVE NET PRESENT VALUE FOR BOILERS

[Discounted at seven percent] 

Equipment class 

Net present value (billion 2008$) 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... ($0.007 ) ($0.003 ) ($0.167 ) ($0.576 ) 

Small gas-fired steam, all except natural draft ........................................................ (0.036 ) (0.039 ) (0.082 ) (0.120 ) 

Small gas-fired steam natural draft ......................................................................... (0.033 ) (0.011 ) (0.023 ) n/a 

Small oil-fired hot water ........................................................................................... 0.020 0.057 0.048 n/a 

Small oil-fired steam ................................................................................................ (0.012 ) 0.004 0.019 n/a 

Large gas-fired hot water ........................................................................................ 0.015 0.031 0.006 (0.098 ) 

Large gas-fired steam, all except natural draft ....................................................... 0.032 0.137 0.240 0.338 

Large gas-fired steam natural draft ......................................................................... (0.055 ) (0.014 ) 0.004 (0.024 ) 

Large oil-fired hot water ........................................................................................... 0.064 0.111 0.120 n/a 

Large oil-fired steam ................................................................................................ 0.132 0.361 0.569 1.151 

* Numbers in parentheses indicate negative NPV. 

TABLE VI.16—SUMMARY OF CUMULATIVE NET PRESENT VALUE FOR BOILERS

[Discounted at three percent] 

Equipment class 

Net present value (billion 2008$) 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... $0.092 $0.288 $0.139 ($0.592 ) 

Small gas-fired steam, all except natural draft ........................................................ (0.072 ) (0.010 ) (0.035 ) (0.065 ) 

Small gas-fired, steam natural draft ........................................................................ (0.094 ) 0.049 0.132 n/a 

Small oil-fired hot water ........................................................................................... 0.131 0.297 0.376 n/a 

Small oil-fired steam ................................................................................................ 0.027 0.138 0.347 n/a 

Large gas-fired hot water ........................................................................................ 0.100 0.231 0.264 0.470 

Large gas-fired steam, all except natural draft ....................................................... 0.178 0.599 1.020 1.431 

Large gas-fired steam natural draft ......................................................................... (0.264 ) (0.057 ) 0.133 0.253 

Large oil-fired hot water ........................................................................................... 0.210 0.356 0.422 n/a 

Large oil-fired steam ................................................................................................ 0.496 1.330 2.240 4.552 

* Numbers in parentheses indicate negative NPV. 


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Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 36341 

3. Need of the Nation To Conserve 

Energy 

Improving the energy efficiency of 

commercial packaged boilers would 

likely improve the security of the 

Nation’s energy system by reducing 

overall demand for energy, thus 

reducing the Nation’s reliance on 

foreign sources of energy. Energy 

savings for new energy conservation 

standards for equipment covered under 

this rule would also produce 

environmental benefits in the form of 

reduced emissions of air pollutants and 

greenhouse gases associated with energy 

production. Table VI.17 provides DOE’s 

estimate of cumulative CO2, NOX, and 

SO2 emissions reductions that would 

result from the adoption of new 

standards for commercial packaged 

boilers at the ASHRAE 90.1–2007 

efficiency levels. Table VI.18 through 

Table VI.20 provide estimates of 

additional cumulative CO2, NOX, and 

SO2 emissions reductions that would 

result from the adoption of new 

standards for commercial packaged 

boilers that exceed the ASHRAE 90.1– 

2007 efficiency levels. The expected 

energy savings from the amended 

standards for commercial packaged 

boilers may also reduce the cost of 

maintaining nationwide emissions 

standards and constraints. In the 

Environmental Impact Analysis (chapter 

8 of the final rule TSD), DOE reports 

estimated annual changes in CO2, NOX, 

and SO2 emissions attributable to each 

efficiency level analyzed. 

TABLE VI.17—SUMMARY OF CUMULATIVE NATIONAL EMISSIONS IMPACTS FOR COMMERCIAL BOILERS FROM 2012 TO 2042 

FOR ADOPTING ASHRAE STANDARD 90.1–2007 

Equipment class 

Cumulative national emissions impacts from 2012 to 2042 

CO2

(metric kilotons) 

NOX

(short tons) 

SO2

(short tons) 

Small gas-fired hot water ..................................................................................... (674 ) (1,177 ) 0 

Small gas-fired steam, all except natural draft .................................................... (31 ) (54 ) 0 

Small gas-fired steam natural draft ..................................................................... (1,937 ) (3,382 ) 0 

Small oil-fired hot water ....................................................................................... (677 ) (837 ) (2,628 ) 

Small oil-fired steam ............................................................................................ (327 ) (404 ) (1,267 ) 

Large gas-fired hot water .................................................................................... (296 ) (516 ) 0 

Large gas-fired steam, all except natural draft ................................................... (177 ) (308 ) 0 

Large gas-fired steam natural draft ..................................................................... (1,525 ) (2,662 ) 0 

Large oil-fired hot water ....................................................................................... 0 0 0 

Large oil-fired steam ............................................................................................ 0 0 0 

TABLE VI.18—SUMMARY OF CUMULATIVE CO2 EMISSIONS IMPACTS FOR COMMERCIAL BOILERS FROM 2012 TO 2042 FOR

ADOPTION OF ANALYZED HIGHER STANDARDS OVER THE ASHRAE STANDARD 90.1–2007 LEVELS

Equipment class 

Cumulative national CO2 emissions impacts from 2012 to 

2042, metric kilotons 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... (1,227 ) (4,039 ) (7,858 ) (11,880 ) 

Small gas-fired steam, all except natural draft ........................................................ 4 (797 ) (1,666 ) (2,541 ) 

Small gas-fired steam natural draft ......................................................................... 332 (879 ) (2,355 ) n/a 

Small oil-fired hot water ........................................................................................... (1,171 ) (2,596 ) (4,342 ) n/a 

Small oil-fired steam ................................................................................................ (704 ) (2,026 ) (5,189 ) n/a 

Large gas-fired hot water ........................................................................................ (799 ) (2,082 ) (3,425 ) (9,866 ) 

Large gas-fired steam, all except natural draft ....................................................... (1,217 ) (3,533 ) (5,889 ) (8,281 ) 

Large gas-fired steam natural draft ......................................................................... 1,226 (206 ) (2,054 ) (4,240 ) 

Large oil-fired hot water ........................................................................................... (1,032 ) (1,820 ) (2,590 ) n/a 

Large oil-fired steam ................................................................................................ (3,007 ) (8,110 ) (15,167 ) (31,354 ) 

TABLE VI.19—SUMMARY OF CUMULATIVE NOX EMISSIONS IMPACTS FOR COMMERCIAL BOILERS FROM 2012 TO 2042 FOR

ADOPTION OF ANALYZED HIGHER STANDARDS OVER THE ASHRAE STANDARD 90.1–2007 LEVELS

Equipment class 

Cumulative national NOX emissions impact from 2012 to 

2042, short tons* 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... (2,141 ) (7,049 ) (13,715 ) (20,734 ) 

Small gas-fired steam, all except natural draft ........................................................ 6 (1,392 ) (2,907 ) (4,434 ) 

Small gas-fired steam natural draft ......................................................................... 579 (1,534 ) (4,110 ) n/a 

Small oil-fired hot water ........................................................................................... (1,447 ) (3,208 ) (5,365 ) n/a 

Small oil-fired steam ................................................................................................ (870 ) (2,504 ) (6,413 ) n/a 

Large gas-fired hot water ........................................................................................ (1,395 ) (3,634 ) (5,978 ) (17,219 ) 

Large gas-fired steam, all except natural draft ....................................................... (2,124 ) (6,167 ) (10,278 ) (14,452 ) 

Large gas-fired steam natural draft ......................................................................... 2,140 (359 ) (3,585 ) (7,401 ) 

Large oil-fired hot water ........................................................................................... (1,276 ) (2,250 ) (3,201 ) n/a 

Large oil-fired steam ................................................................................................ (3,716 ) (10,022 ) (18,743 ) (38,746 ) 


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36342 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

19 During the preparation of its review of the state 

of climate science, the IPCC identified various 

estimates of the present value of reducing CO2

emissions by 1 ton over the life that these emissions 

would remain in the atmosphere. The estimates 

reviewed by the IPCC spanned a range of values. 

Absent a consensus on any single estimate of the 

monetary value of CO2 emissions, DOE used the 

estimates identified by the study cited in 

‘‘Summary for Policymakers,’’ prepared by Working 

Group II of the IPCC’s ‘‘Fourth Assessment Report,’’ 

to estimate the potential monetary value of CO2

reductions likely to result from standards 

considered in this rulemaking. According to IPCC, 

the mean social cost of carbon (SCC) reported in 

studies published in peer-reviewed journals was 

$43 per ton of carbon. This translates into about $12 

per ton of CO2. The literature review (Tol 2005) 

from which this mean was derived did not report 

the year in which these dollars were denominated. 

However, DOE understands this estimate was for 

the year 1995 denominated in 1995$. Updating that 

estimate to 2007$ yields a SCC for the year 1995 

of $15 per ton of CO2. 

20 ‘‘Climate Change 2007—Impacts, Adaptation 

and Vulnerability.’’ Contribution of Working Group 

II to the ‘‘Fourth Assessment Report’’ of the IPCC, 

17. Available at http://www.ipcc.ch/ipccreports/ar4- 

wg2.htm (last accessed Aug. 7, 2008). 

21Richard S.J. Tol (2008), The social cost of 

carbon: Trends, outliers, and catastrophes, 

Economics—the Open-Access, Open-Assessment EJournal, 2 (25), 1–24. 

TABLE VI.20—SUMMARY OF CUMULATIVE SO2 EMISSIONS IMPACTS FOR COMMERCIAL BOILERS FROM 2012 TO 2042 FOR

ADOPTION OF ANALYZED HIGHER STANDARDS OVER THE ASHRAE STANDARD 90.1–2007 LEVELS

Equipment class 

Cumulative national SO2 emissions impacts from 2012 to 

2042, short tons* 

Efficiency 

level 1 

Efficiency 

level 2 

Efficiency 

level 3 

Efficiency 

level 4 

Small gas-fired hot water ......................................................................................... 0 0 0 0 

Small gas-fired steam, all except natural draft ........................................................ 0 0 0 0 

Small gas-fired steam natural draft ......................................................................... 0 0 0 n/a 

Small oil-fired hot water ........................................................................................... (4,543 ) (10,072 ) (16,847 ) n/a 

Small oil-fired steam ................................................................................................ (2,731 ) (7,863 ) (20,136 ) n/a 

Large gas-fired hot water ........................................................................................ 0 0 0 0 

Large gas-fired steam, all except natural draft ....................................................... 0 0 0 0 

Large gas-fired steam natural draft ......................................................................... 0 0 0 0 

Large oil-fired hot water ........................................................................................... (4,005 ) (7,064 ) (10,051 ) n/a 

Large oil-fired steam ................................................................................................ (11,667 ) (31,469 ) (58,854 ) (121,663 ) 

To put the potential monetary benefits 

from reduced CO2 emissions into a form 

that would likely be most useful to 

decision makers and interested parties, 

DOE used the same methods it used to 

calculate the net present value of 

consumer cost savings. DOE converted 

the estimated yearly reductions in CO2

emissions into monetary values that 

represented the present value, in that 

year, of future benefits resulting from 

that reduction in emissions, which were 

then discounted from that year to the 

present using both 3-percent and 7- 

percent discount rates. 

In chapter 9 of the TSD, which 

accompanied the June 2009 NODA, DOE 

proposed to use the range $0 to $20 per 

ton for the year 2007 in 2007$. 74 FR 

26596. These estimates were originally 

derived to represent the lower and 

upper bounds of the costs and benefits 

likely to be experienced in the United 

States and were also used in chapter 9 

of the draft TSD for this rulemaking. 74 

FR 26596–7 (June 3, 2009). The lower 

bound was based on an assumption of 

no benefit and the upper bound was 

based on an estimate of the mean value 

of worldwide impacts due to climate 

change that was reported by the 

Intergovernmental Panel on Climate 

Change (IPCC).19 DOE expected that 

such domestic values would be 10% or 

less of comparable global values; 

however, there were no consensus 

estimates for the U.S. benefits likely to 

result from CO2 emission reductions. 

Because U.S.-specific estimates were 

unavailable, DOE used the global mean 

value as an upper bound U.S. value. 

Given the uncertainty surrounding 

estimates of the social cost of carbon, 

DOE previously concluded that relying 

on any single estimate may be 

inadvisable because that estimate will 

depend on many assumptions. Working 

Group II’s contribution to the ‘‘Fourth 

Assessment Report’’ of the IPCC notes 

the following: 

The large ranges of SCC are due in the large 

part to differences in assumptions regarding 

climate sensitivity, response lags, the 

treatment of risk and equity, economic and 

non-economic impacts, the inclusion of 

potentially catastrophic losses, and discount 

rates.20

Because of this uncertainty, DOE used 

the SCC value from Tol (2005), which 

was presented in the IPCC’s ‘‘Fourth 

Assessment Report’’ and provided a 

comprehensive meta-analysis of 

estimates for the value of SCC. 74 FR 

16920, 17012 (April 13, 2009). 

For today’s final rule, DOE is relying 

on an updated range of values 

consistent with that presented in the 

Model Year 2011 fuel economy standard 

final rule issued by the National 

Highway Traffic Safety Administration 

(NHTSA): $2, $33 and $80 per metric 

ton (2007$). In the MY 2011 fuel 

economy standard final rule, NHTSA 

relied on a range of estimates 

representing the uncertainty 

surrounding global values of the SCC, 

while also encompassing, at the low 

end, possible domestic values. These 

three values encompass much of the 

variability in the estimates of the global 

value of the SCC. The lower end of this 

range, $2, also approximates possible 

mean value for domestic benefits. The 

middle of the range, $33, is equal to the 

mean value in Tol (2008) and the high 

end of the range, $80, represents one 

standard deviation above the mean 

global value. 74 FR 14196, 14346 

(March 30, 2009). The global value of 

$33 is based on Tol’s (2008) expanded 

and updated survey of 211 estimates of 

the global SCC.21 Tol’s 2008 survey 

encompasses a larger number of 

estimates for the global value of 

reducing carbon emissions than its 

previously-published counterpart, Tol 

(2005), and continues to represent the 

only recent, publicly-available 

compendium of peer-reviewed estimates 

of the SCC that has itself been peerreviewed and published. 

The domestic value ($2) was 

developed by NHTSA by using the 

mean estimate of the global value of 

reduced economic damages from 

climate change resulting from reducing 

CO2 emissions as a starting point; 

estimating the fraction of the reduction 

in global damages that is likely to be 

experienced within the U.S.; and 

applying this fraction to the mean 

estimate of global benefits from 

reducing emissions to obtain an 

estimate of the U.S. domestic benefits 

from lower GHG emissions. NHTSA 

constructed the estimate of the U.S. 

domestic benefits from reducing CO2


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22U.S. EPA, Technical Support Document on 

Benefits of Reducing GHG Emissions, June 12, 2008. 

emissions using estimates of U.S. 

domestic and global benefits from 

reducing greenhouse gas emissions 

developed by EPA and reported in 

EPA’s Technical Support Document 

accompanying its advance notice of 

proposed rulemaking on motor vehicle 

CO2 emissions.22

A complete discussion of NHTSA’s 

analysis is available in Chapter VIII of 

the Final Regulatory Analysis of the 

Corporate Average Fuel Economy for 

MY 2011 Passenger Cars and Light 

Trucks (NHTSA, March 2009). 

After considering comments and the 

currently available information and 

analysis, which was reflected in the 

approach employed by NHTSA, DOE 

concluded that it was appropriate to 

consider the global benefits of reducing 

CO2 emissions, as well as the domestic 

benefits. Consequently, DOE considered 

in its decision-process for this final rule 

the potential benefits resulting from 

reduced CO2 emissions valued at $2, 

$33 and $80. The resulting range is 

based on current peer-reviewed 

estimates of the value of SCC and, DOE 

believes, fairly represents the 

uncertainty surrounding the global 

benefits resulting from reduced CO2

emissions and, at the $2 level, also 

encompasses the likely domestic 

benefits, DOE also concluded, based on 

the most recent Tol analysis, that it was 

appropriate to escalate these values at 

3% per year to represent the expected 

increases, over time, of the benefits 

associated with reducing CO2 and other 

greenhouse gas emissions. 

DOE also investigated the potential 

monetary benefit of reduced NOX, and 

SO2, emissions from the TSLs it 

considered. As previously stated DOE 

estimated the monetized value of NOX

emissions reductions resulting from 

each of the TSLs considered for today’s 

final rule based on environmental 

damage estimates from the literature. 

Available estimates suggest a very wide 

range of monetary values for NOX

emissions, ranging from $370 per ton to 

$3,800 per ton of NOX from stationary 

sources, measured in 2001$ (equivalent 

to a range of $432 to $4,441 per ton in 

2007$ ($443 to $4,546 in 2008$). DOE 

estimated a low end monetary value for 

SO2 emissions based on an SO2 trading 

price as developed in the National 

Energy Modeling System (NEMS) 

electricity market model for the western 

and eastern U.S. DOE used a simple 

average of the trading prices from the 

eastern and western electricity market 

models for the period from 2012–2030, 

and extrapolated the prices out through 

2042. These range in SO2 costs from this 

source varied both by year and region 

from $86 to $1,012 per ton in 2007$ 

($89 to $1,037 in 2008$). For an upper 

range estimated DOE used an estimate 

of environmental damage costs of 

$7,300 per ton of SO2 from stationary 

sources, measured in 2001$ or $8,542 

per ton in 2007$ ($8,733 in 2008$). 

These low and high values for the value 

of emissions for CO2, NOX, and SO2

were in turn multiplied by the annual 

emissions of each pollutant for the 

period from 2012–2042, and the 

monetary values were converted to 

present value using three and seven 

percent discount rates. 

Table VI.21 through Table VI.22 

shows the resulting estimates of the 

potential range of present value benefits 

associated with the reduced CO2, NOx, 

and SO2 emissions for each class of 

commercial boiler for adoption of the 

ASHRAE 90.1–2007 efficiency levels. 

BILLING CODE 6450–01–P 


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Table VI.23 through Table VI.26 show 

the potential range of present value 

benefits associated with the reduction of 

each emission for adoption of efficiency 

levels higher than the ASHRAE 90.1– 

2007 levels. 


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BILLING CODE 6450–01–C 


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Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 36349 

C. Amended Energy Conservation 

Standards for Commercial Packaged 

Boilers 

EPCA specifies that, for any 

commercial and industrial equipment 

addressed in section 342(a)(6)(A)(i) of 

EPCA, DOE may prescribe an energy 

conservation standard more stringent 

than the level for such equipment in 

ASHRAE/IESNA Standard 90.1, as 

amended, 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)(A)(ii)(II)) 

In evaluating more-stringent 

efficiency levels for commercial 

packaged boilers than those specified by 

ASHRAE Standard 90.1–2007, DOE 

reviewed the results in terms of their 

technological feasibility, economic 

justification, and significance of energy 

savings. 

DOE first examined the potential 

energy savings that would result from 

the efficiency levels specified in 

ASHRAE Standard 90.1–2007 and 

compared that to the potential energy 

savings that would result from 

proposing efficiency levels more 

stringent than those in ASHRAE 

Standard 90.1–2007 as Federal energy 

conservation standards. All of the 

efficiency levels examined by DOE 

resulted in cumulative energy savings, 

including the efficiency levels in 

ASHRAE Standard 90.1–2007. DOE 

estimates that a total of 0.11 quads of 

energy will be saved if DOE adopts the 

efficiency levels for each commercial 

boiler equipment class specified in 

ASHRAE Standard 90.1–2007. If DOE 

were to propose efficiency levels more 

stringent than those specified by 

ASHRAE Standard 90.1–2007 as Federal 

minimum standards, the potential 

additional energy savings ranges from 

0.11 quads to 1.12 quads. Associated 

with proposing more-stringent 

efficiency levels is a two-year delay in 

implementation compared to the 

adoption of energy conservation 

standards at the level specified in 

ASHRAE Standard 90.1–2007 (see 

section V.H.1). This two-year delay in 

implementation of amended energy 

conservation standards would result in 

a small amount of energy savings being 

lost in the first two years (2012 and 

2013) compared to the savings from 

adopting the levels in ASHRAE 

Standard 90.1–2007; however, this 

energy savings may be compensated for 

by increased savings from higher 

standards in later years. 

In addition to energy savings, DOE 

also examined the economic 

justification of proposing efficiency 

levels more stringent than those 

specified in ASHRAE Standard 90.1– 

2007. As shown in section VI.B.1, 

higher efficiency levels result in a 

positive mean LCC savings for some 

commercial packaged boiler equipment 

classes. For example, in the largest 

commercial packaged boiler equipment 

class (i.e., small, gas-fired hot water 

boilers), the mean LCC impact ranges 

from $1,700 LCC savings to a mean LCC 

cost of $4,760 for efficiency level 1 

through efficiency level 4 respectively. 

The total installed cost increases range 

from $3,364 to $14,323 for efficiency 

level 1 through efficiency level 4 when 

compared to the baseline. Overall, there 

would be a wide range of commercial 

customer LCC impacts based on climate, 

hydronic system operating temperature, 

and installation costs, which might 

place a significant burden on some 

commercial customers. 

In general, there is a large range in the 

total installed cost of different types of 

commercial boiler equipment, leading to 

a high variance and uncertainty in the 

economic analyses. Many factors affect 

the cost of a commercial boiler, 

including the type of commercial 

packaged boilers, the material of the 

heat exchanger being used, and the 

overall design. In addition, the 

installation costs of boilers vary greatly 

depending on the efficiency, the 

location of the boiler, and the venting 

system. In more efficient boilers, the 

flue must be made out of corrosionresistant materials to prevent the 

possibility of corrosion caused due to 

condensing flue gases. Because the 

mean LCC savings can be considered 

small in comparison to the total 

installed cost of the equipment, a 

relatively minor change in the 

differential installed cost estimate could 

negate the mean LCC savings realized by 

proposing more-stringent efficiency 

levels as Federal minimum standards 

for commercial packaged boilers. 

After examining the potential energy 

savings and the economic justification 

of proposing efficiency levels more 

stringent than those specified in 

ASHRAE Standard 90.1–2007, DOE 

believes there are several other factors it 

should consider before proposing 

amended energy conservation standards 

for commercial packaged boilers. 

First, DOE reexamined the certainty 

in its analysis of commercial packaged 

boilers. Due to current test procedure 

requirements, which are based on 

combustion, rather than thermal 

efficiency, not all manufacturers test for 

the thermal efficiency of their 

commercial boiler models, nor do they 

all report it to the I=B=R Directory or in 

manufacturers’ catalogs. Some 

manufacturers simply do not report 

thermal efficiency, and of those 

manufacturers that do report thermal 

efficiency, some may estimate the 

thermal efficiency ratings of their 

equipment, rather than actually test for 

the thermal efficiency of their 

equipment. DOE has no way to 

determine which thermal efficiency 

ratings are the result of estimation and 

which are the result of actual testing. 

Further, in the case of manufacturers 

that do test for thermal efficiency, 

variances in testing facilities and 

equipment can lead to inconsistent 

results in the thermal efficiency testing 

among the manufacturers. The 

combination of these factors leads to 

concerns about the viability of using the 

data from the I=B=R Directory and 

manufacturers’ catalogs as the source for 

thermal efficiency ratings for the basis 

of this analysis. Such concerns are 

heightened the further one moves away 

from the consensus efficiency levels in 

ASHRAE Standard 90.1–2007 in the 

context of this standard-setting 

rulemaking. 

Because ASHRAE Standard 90.1–2007 

has switched to a thermal efficiency 

metric for certain commercial packaged 

boiler equipment classes, a one-time 

conversion in the DOE efficiency metric 

will be required at some point. The 

transition to a thermal efficiency metric 

will require manufacturers to test for 

and report thermal efficiency for 8 out 

of 10 commercial boiler equipment 

classes. This would mitigate the 

problem of uncertainty in the thermal 

efficiency ratings for those equipment 

classes, allowing DOE to be able to make 

more definitive comparisons with future 

versions of ASHRAE Standard 90.1. 

DOE believes that an earlier transition to 

a rated thermal efficiency across the 

industry will provide additional, nearterm benefits covering the entire 

industry that are not captured in the 

DOE analysis presented. These benefits 

may include more rapid exposure of 

purchasers to the rated thermal 

efficiency of competing products, which 

lays the groundwork for assessing the 

benefits of one boiler against another in 

the marketplace and will create greater 

competition among manufacturers to 

provide customers with additional 

purchasing choices. DOE has no 

information with which to calculate this 

benefit. 

Second, DOE notes the efficiency 

levels in ASHRAE Standard 90.1–2007 

are part of a consensus agreement 

between the trade association 

representing the manufacturers and 


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several energy-efficiency advocacy 

groups. DOE strongly encourages 

stakeholders to work together to propose 

agreements to DOE. When DOE receives 

a consensus agreement, DOE takes 

careful consideration to review the 

agreement resulting from groups that 

commonly have conflicting goals. DOE 

also points out that the Joint Letter 

submitted by AHRI, ACEEE, ASAP, 

ASE, and NRDC urged DOE to adopt as 

Federal minimum energy conservation 

standards the efficiency levels in 

ASHRAE Standard 90.1–2007 for 

commercial packaged boilers. (The Joint 

Letter, No. 5 at p. 1) DOE believes this 

negotiated agreement was made in good 

faith, and DOE is hesitant to second 

guess the outcome based on a limited 

analysis with many uncertainties. DOE 

presented these efficiency levels for 

public comment and, as discussed 

earlier, commenters supported the 

adoption of these levels. 

Third, DOE has not assessed any 

likely change in the efficiencies of 

models currently on the boiler market in 

the absence of setting more-stringent 

standards. DOE recognizes that 

manufacturers would continue to make 

future improvements in the boiler 

efficiencies even in the absence of 

mandated energy conservation 

standards. Such ongoing technological 

developments could have a 

disproportionately larger impact on the 

analytical results for the more-stringent 

efficiency levels analyzed in terms of 

reduced energy benefits as compared to 

the ASHRAE Standard 90.1–2007 

efficiency level scenario. When 

manufacturers introduce a new product 

line, they typically introduce higherefficiency models, while maintaining 

their baseline product offering (i.e., 

equipment at the ASHRAE Standard 

90.1–2007 efficiency levels). Any 

introduction of higher-efficiency 

equipment and subsequent purchase by 

commercial customers, who usually buy 

higher-efficiency equipment, could 

reduce the energy savings benefits of 

more-stringent efficiency levels. 

Fourth, DOE believes there could be 

a possible difference in life expectancy 

between the commercial packaged 

boilers at the ASHRAE Standard 90.1– 

2007 efficiency levels and those at 

more-stringent efficiency levels, 

including condensing boilers. DOE did 

not have any information to quantify 

these differences and did not receive 

any additional comments from 

interested parties regarding these 

potential differences in expected 

lifetime in response to the March 2009 

NOPR. 

Finally, DOE also recognizes that 

commercial packaged boilers are one 

component in a hydronic system. 

Unlike most of the other residential 

appliances and commercial equipment 

for which DOE mandates energy 

conservation standards, the design and 

operation of that hydronic system (i.e., 

the hot-water distribution system) can 

result in significant variances in the 

annual field efficiencies of the 

commercial packaged boilers compared 

to the rated efficiency levels of these 

units. DOE recognizes that as a result, a 

critical piece of information needed to 

ensure that the benefits of high nominal 

efficiency commercial packaged boilers 

are actually achieved in the field is not 

captured in the DOE analysis. 

After weighing the benefits and 

burdens of adopting the ASHRAE 

Standard 90.1–2007 efficiency levels as 

Federal standards for commercial 

packaged boilers as compared to those 

for proposing more-stringent efficiency 

levels, DOE is adopting the efficiency 

levels in ASHRAE 90.1–2007 as 

amended energy conservation standards 

for all ten commercial packaged boilers 

equipment classes. DOE must have 

‘‘clear and convincing’’ evidence to 

adopt efficiency levels more stringent 

than those specified in ASHRAE 90.1– 

2007, and for the reasons explained in 

this notice, the totality of information 

does not meet the ‘‘clear and 

convincing’’ standard that would justify 

more stringent efficiency levels. Given 

the relatively small mean LCC savings 

(in comparison to the total installed 

cost), even a slight alteration in DOE’s 

installation estimates could result in the 

potential for negative mean LCC 

savings. In addition, the uncertainty of 

the thermal efficiency values reported 

may have resulted in an imprecise 

estimate of the efficiency of some 

equipment, leading to even greater 

uncertainty in the economic benefits of 

more-stringent standards. 

DOE recognizes that the thermal 

efficiency metric is superior to the 

combustion efficiency metric because 

thermal efficiency is a more complete 

measure of boiler efficiency than the 

combustion efficiency metric (thermal 

efficiency accounts for jacket losses and 

combustion efficiency does not). DOE 

believes that once commercial packaged 

boilers are transitioned from the 

combustion efficiency metric to the 

thermal efficiency metric, the thermal 

efficiency ratings of certified equipment 

will be more accurate and consistent. 

The efficiency levels in ASHRAE 

Standard 90.1–2007 are an acceptable 

foundation that will allow the 

commercial boiler industry to begin the 

transition from using combustion 

efficiency to a thermal efficiency metric. 

DOE also takes into account the 

consensus nature of the efficiency levels 

in ASHRAE Standard 90.1–2007 for 

commercial packaged boilers. 

Therefore, based on the discussion 

above, DOE has concluded that the 

efficiency levels beyond those in 

ASHRAE Standard 90.1–2007 for 

commercial packaged boilers are not 

economically justified and is adopting 

as Federal minimum standards the 

efficiency levels in ASHRAE Standard 

90.1–2007 for all ten equipment classes 

of commercial packaged boilers. Table 

VI.27 shows the amended energy 

conservation standards for commercial 

packaged boilers. 

TABLE VI.27—AMENDED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL PACKAGED BOILERS * 

Equipment type Subcategory Size category (input) Efficiency 

level ** 

Hot Water Commercial Packaged Boilers .. Gas-fired ................................................... ≥300,000 Btu/h and ≤2,500,000 Btu/h ..... 80% ET

Hot Water Commercial Packaged Boilers .. Gas-fired ................................................... >2,500,000 Btu/h ...................................... 82% EC

Hot Water Commercial Packaged Boilers .. Oil-fired ..................................................... ≥300,000 Btu/h and ≤2,500,000 Btu/h ..... 82% ET

Hot Water Commercial Packaged Boilers .. Oil-fired ..................................................... >2,500,000 Btu/h ...................................... 84% EC

Steam Commercial Packaged Boilers ........ Gas-fired—all, except natural draft ........... ≥300,000 Btu/h and ≤2,500,000 Btu/h ..... 79% ET

Steam Commercial Packaged Boilers ........ Gas-fired—all, except natural draft ........... >2,500,000 Btu/h ...................................... 79% ET

Steam Commercial Packaged Boilers ........ Gas-fired—natural draft ............................ ≥300,000 Btu/h and ≤2,500,000 Btu/h ..... 77% ET

79% ET

Steam Commercial Packaged Boilers ........ Gas-fired—natural draft ............................ >2,500,000 Btu/h ...................................... 77% ET

79% ET

Steam Commercial Packaged Boilers ........ Oil-fired ..................................................... ≥300,000 Btu/h and ≤2,500,000 Btu/h ..... 81% ET


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23ASHRAE Standard 90.1–2007 specified 

efficiency levels for water-cooled and 

evaporatively-cooled commercial package air 

conditioners and heat pumps with a cooling 

capacity at or above 240,000 Btu/h and less than 

760,000 Btu/h even though equipment does not 

exist in the current marketplace in this category. 

ASHRAE’s actions for this equipment triggered DOE 

action regardless of whether equipment is currently 

offered for sale. 

TABLE VI.27—AMENDED ENERGY CONSERVATION STANDARDS FOR COMMERCIAL PACKAGED BOILERS *—Continued 

Equipment type Subcategory Size category (input) Efficiency 

level ** 

Steam Commercial Packaged Boilers ........ Oil-fired ..................................................... >2,500,000 Btu/h ...................................... 81% ET

* ET is the thermal efficiency and EC is the combustion efficiency. 

** The effective date for the amended energy conservation standards is March 2, 2012. Where the table indicates a two-tier efficiency level, the 

second efficiency level is effective March 2, 2022. 

D. Amended Energy Conservation 

Standards for Water-Cooled and 

Evaporatively-Cooled Commercial 

Package Air Conditioners and Heat 

Pumps With a Cooling Capacity at or 

Above 240,000 Btu/h and Less Than 

760,000 Btu/h 

DOE is adopting new energy 

conservation standards for water-cooled 

and evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h by adopting the 

efficiency levels specified by ASHRAE 

Standard 90.1–2007. DOE did not 

analyze the economic and energy 

savings potential of amended national 

energy conservation standards for watercooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h for the efficiency levels 

in ASHRAE Standard 90.1–2007 or 

efficiency levels beyond those specified 

in ASHRAE Standard 90.1, because 

there is no equipment currently being 

manufactured in this equipment class.23

74 FR 12013. Table VI.28 shows the 

amended energy conservation standards 

for this equipment. The standards for 

water-cooled and evaporatively-cooled 

commercial package air conditioners 

and heat pumps with a cooling capacity 

at or above 240,000 Btu/h and less than 

760,000 Btu/h established in this final 

rule will apply starting on January 10, 

2011. 

VII. Procedural Issues and Regulatory 

Review 

A. Review Under Executive Order 12866 

Today’s final rule has been 

determined not to be a ‘‘significant 

regulatory action’’ under section 3(f)(1) 

of Executive Order 12866, ‘‘Regulatory 

Planning and Review.’’ 58 FR 51735 

(Oct. 4, 1993). Accordingly, this action 

was not subject to review under that 

Executive Order by the Office of 

Information and Regulatory Affairs 

(OIRA) of the Office of Management and 

Budget. 

B. Review Under the National 

Environmental Policy Act 

DOE prepared an environmental 

assessment (EA) of the impacts of the 

proposed standards in the March 2009 

NOPR pursuant to the National 

Environmental Policy Act of 1969 (42 

U.S.C. 4321 et seq.), the regulations of 

the Council on Environmental Quality 

(40 CFR parts 1500–1508), and DOE’s 

regulations for compliance with the 

National Environmental Policy Act (10 

CFR part 1021). 74 FR 26596. This 

assessment included a concise 

examination of the impacts of emission 

reductions likely to result from the rule. 

DOE found the environmental effects 

associated with today’s various standard 

levels for commercial packaged boilers 

and water-cooled and evaporativelycooled commercial package air 

conditioners and heat pumps with a 

cooling capacity at or above 240,000 

Btu/h and less than 760,000 Btu/h to be 

not significant, and therefore it is 

issuing a Finding of No Significant 

Impact (FONSI) pursuant to the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321 et seq.), the 

regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and DOE’s regulations for 

compliance with the National 

Environmental Policy Act (10 CFR part 


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1021). The FONSI is available in the 

docket for this rulemaking. 

C. 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 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 

Executive Order 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 DOE 

rulemaking process. 68 FR 7990. DOE 

has made its procedures and policies 

available on the Office of the General 

Counsel’s Web site: http:// 

www.gc.doe.gov. 

DOE reviewed the March 2009 NOPR 

under the provisions of the Regulatory 

Flexibility Act and the policies and 

procedures published on February 19, 

2003 (68 FR 7990). 74 FR 12044. As part 

of this rulemaking, DOE examined the 

existing compliance costs manufacturers 

already bear and compared them to the 

revised compliance costs, based on the 

proposed revisions to the test 

procedure. Since DOE is adopting the 

efficiency levels in ASHRAE Standard 

90.1–2007, which are part of the 

prevailing industry standard and the 

result of a consensus agreement, DOE 

believes that commercial packaged 

boiler manufacturers are already 

producing equipment at these efficiency 

levels. For water-cooled and 

evaporatively-cooled commercial 

package air conditioners and heat 

pumps with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h, DOE believes the 

efficiency levels being adopted are also 

part of the prevailing industry standard 

and that manufacturers would 

experience no impacts, because no such 

equipment is currently manufactured. 

Furthermore, DOE believes the industry 

standard was developed through a 

process, which would attempt to 

mitigate the impacts on manufacturers, 

including any small commercial 

packaged boiler manufacturers, while 

increasing the efficiency of this 

equipment. In addition, DOE does not 

find that the costs imposed by the 

revisions proposed to the test procedure 

for commercial packaged boilers in this 

document would result in any 

significant increase in testing or 

compliance costs. 

DOE received no comments in 

response to the NOPR. For the reasons 

stated above, DOE certifies that the final 

rule would not have a significant 

economic impact on a substantial 

number of small entities. Therefore, 

DOE did not prepare an initial 

regulatory flexibility analysis for the 

proposed rule. 

D. Review Under the Paperwork 

Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (44 U.S.C. 3501 et seq.) (PRA), 

a person is not required to respond to 

a collection of information by a Federal 

agency, including a requirement to 

maintain records, unless the collection 

displays a valid OMB control number. 

(44 U.S.C. 3506(c)(1)(B)(iii)(V)) DOE 

stated in the March 2009 NOPR that this 

rulemaking would impose no new 

information and recordkeeping 

requirements, and that OMB clearance 

is not required under the Paperwork 

Reduction Act (44 U.S.C. 3501 et seq.). 

74 FR 12044. DOE received no 

comments on this in response to the 

NOPR and, as with the proposed rule, 

today’s final rule imposes no 

information and recordkeeping 

requirements. DOE takes no further 

action in this rulemaking with respect to 

the Paperwork Reduction Act. 

E. Review Under the Unfunded 

Mandates Reform Act of 1995 

As described in the March 2009 

NOPR, DOE reviewed this regulatory 

action under Title II of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

(Pub. L. 104–4), which requires each 

Federal agency to assess the effects of 

Federal regulatory actions on State, 

local, and Tribal governments and the 

private sector. For proposed regulatory 

actions likely to result in a rule that may 

cause expenditures 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 assessing the resulting 

costs, benefits, and other effects of the 

rule on the national economy (2 U.S.C. 

1532(a) and (b)). Section 204 of UMRA 

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 intergovernmental 

mandate.’’ (2 U.S.C. 1534) Section 203 

of UMRA requires an agency plan for 

giving notice and opportunity for timely 

input to potentially affected small 

governments that may be affected before 

establishing any requirements that 

might significantly or uniquely affect 

small governments. (2 U.S.C. 1533) On 

March 18, 1997, DOE published a 

statement of policy on its process for 

intergovernmental consultation under 

UMRA (62 FR 12820) (also available at: 

http://www.gc.doe.gov). 

DOE concluded that the March 2009 

NOPR contained neither an 

intergovernmental mandate nor a 

mandate that may result in the 

expenditure by State, local, and Tribal 

governments in the aggregate, or by the 

private sector, of $100 million or more 

in any year. 74 FR 12045. Accordingly, 

no assessment or analysis was required 

under UMRA. Id. DOE received no 

comments concerning the UMRA in 

response to the NOPR, and its 

conclusions on this issue are the same 

for the final rule as for the March 2009 

NOPR. DOE takes no further action in 

today’s final rule with respect to the 

UMRA. 

F. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999 (Pub. L. 105–277) requires 

Federal agencies to issue a Family 

Policymaking Assessment for any 

proposed rule that may affect family 

well-being. As stated in the March 2009 

NOPR, DOE decided this rule would not 

have any impact on the autonomy or 

integrity of the family as an institution. 

74 FR 12045. Accordingly, DOE 

concluded that it was unnecessary to 

prepare a Family Policymaking 

Assessment. Id. DOE received no 

comments concerning Section 654 in 

response to the NOPR, and thus takes no 

further action in today’s final rule with 

respect to this provision. 

G. Review Under Executive Order 13132 

Executive Order 13132, ‘‘Federalism,’’ 

64 FR 43255 (August 4, 1999) imposes 

certain requirements on agencies 

formulating and implementing policies 

or regulations that preempt State law or 

that have Federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action 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 


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intergovernmental consultation process 

it will follow in the development of 

such regulations. 65 FR 13735. As 

explained in the March 2009 NOPR, 

DOE examined this proposed rule and 

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. 74 FR 12045. 

EPCA governs and prescribes Federal 

preemption of State regulations as to 

energy conservation for the equipment 

that are the subject of today’s final rule. 

States can petition DOE for exemption 

from such preemption to the extent, and 

based on criteria, as set forth in EPCA. 

(42 U.S.C. 6297(d) and 6316(b)(2)(D)) No 

further action is required by Executive 

Order 13132. 

H. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform’’ (61 FR 4729 (Feb. 7, 1996)) 

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 promote simplification 

and burden reduction. With regard to 

the review required by section 3(a), 

section 3(b) of Executive Order 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 

sections 3(a) and 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, the final rule 

meets the relevant standards of 

Executive Order 12988. 

I. 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 agencies to review most 

disseminations of information to the 

public under 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). DOE has reviewed 

this notice under the OMB and DOE 

guidelines and has concluded that it is 

consistent with applicable policies in 

those guidelines. 

J. Review Under Executive Order 13211 

Executive Order 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 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 

promulgated or is expected to lead to 

promulgation of a final rule, and that: 

(1) is a significant regulatory action 

under Executive Order 12866, or any 

successor order; and (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. 

DOE determined the proposed rule 

would not have a significant adverse 

effect on the supply, distribution, or use 

of energy, and, therefore, is not a 

significant energy action. 74 FR 12045. 

Furthermore, this regulatory action has 

not been designated as a significant 

energy action by the Administrator or of 

OIRA. Accordingly, DOE has not 

prepared a Statement of Energy Effects. 

Id. DOE received no comments on this 

issue in response to the March 2009 

NOPR. As with the proposed rule, DOE 

has concluded that today’s final rule is 

not a significant energy action within 

the meaning of Executive Order 13211, 

and has not prepared a Statement of 

Energy Effects on the rule. 

K. Review Under Executive Order 12630 

Pursuant to Executive Order 12630, 

‘‘Governmental Actions and Interference 

with Constitutionally Protected Property 

Rights,’’ 53 FR 8859 (March 15, 1988), 

DOE has determined that this rule 

would not result in any takings that 

might require compensation under the 

Fifth Amendment to the United States 

Constitution. 

L. Review Under Section 32 of the 

Federal Energy Administration Act of 

1974 

Under section 301 of the Department 

of Energy Organization Act (Pub. L. 95– 

91), the Department of Energy must 

comply with section 32 of the Federal 

Energy Administration Act of 1974 

(Pub. L. 93–275), as amended by the 

Federal Energy Administration 

Authorization Act of 1977 (Pub. L. 95– 

70). (15 U.S.C. 788) Section 32 provides 

that where a proposed rule authorizes or 

requires use of commercial standards, 

the notice of proposed rulemaking must 

inform the public of the use and 

background of such standards. In 

addition, section 32(c) requires DOE to 

consult with the Department of Justice 

and the Federal Trade Commission 

(FTC) concerning the impact of the 

commercial or industry standards on 

competition. 

Certain amendments and revisions in 

this final rule incorporate updates to 

commercial standards already codified 

in DOE’s test procedure regulations in 

the CFR. As stated in the March 2009 

NOPR, DOE has evaluated these 

updated standards and is unable to 

conclude whether they fully comply 

with the requirements of section 32(b) of 

the Federal Energy Administration Act, 

(i.e., determine that they were 

developed in a manner that fully 

provides for public participation, 

comment, and review). 74 FR 12046. 

DOE has consulted with the Attorney 

General and the Chairman of the FTC 

concerning the impact of these 

standards on competition, and neither 

recommended against their 

incorporation. 

M. 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’’ (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 


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36354 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

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 rulemakings analyses are 

‘‘influential scientific information.’’ The 

Bulletin defines ‘‘influential scientific 

information’’ as ‘‘scientific information 

the agency reasonably can determine 

will have or does have a clear and 

substantial impact on important public 

policies or private sector decisions.’’ 70 

FR 2664, 2667 (Jan. 14, 2005). 

In response to OMB’s Bulletin, DOE 

conducted formal peer reviews of the 

energy conservation standards 

development process and analyses, and 

then prepared a Peer Review Report 

pertaining to the energy conservation 

standards rulemaking analyses. 

Generation of this report involved a 

rigorous, formal, and documented 

evaluation process 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. The ‘‘Energy Conservation 

Standards Rulemaking Peer Review 

Report,’’ dated February 2007, has been 

disseminated and is available at http:// 

www.eere.energy.gov/buildings/ 

appliance_standards/peer_review.html. 

N. Congressional Notification 

As required by 5 U.S.C. 801, DOE will 

submit to Congress a report regarding 

the issuance of today’s final rule prior 

to the effective date set forth at the 

outset of this notice. The report will 

state that it has been determined that 

the rule is a ‘‘major rule’’ as defined by 

5 U.S.C. 804(2). DOE also will submit 

the supporting analyses to the 

Comptroller General in the U.S. 

Government Accountability Office 

(GAO) and make them available to 

Congress. 

VIII. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this final rule. 

List of Subjects in 10 CFR Part 431 

Administrative practice and 

procedure, Confidential business 

information, Energy conservation, 

Incorporation by reference, and 

Reporting and recordkeeping 

requirements. 

Issued in Washington, DC, on July 8, 2009. 

Cathy Zoi, 

Assistant Secretary, Energy Efficiency and 

Renewable Energy. 

■ For the reasons set forth in the 

preamble, DOE is amending Chapter II 

of Title 10, Code of Federal Regulations, 

Part 431 to read as set forth below: 

PART 431—ENERGY EFFICIENCY 

PROGRAM FOR CERTAIN 

COMMERCIAL AND INDUSTRIAL 

EQUIPMENT 

■ 1. The authority citation for part 431 

continues to read as follows: 

Authority: 42 U.S.C. 6291–6317. 

■ 2. In § 431.82, revise the definition 

‘‘combustion efficiency’’ and add 

definitions for ‘‘Btu/h or Btu/hr’’ and 

‘‘thermal efficiency,’’ in alphabetical 

order to read as follows: 

§ 431.82 Definitions concerning 

commercial packaged boilers. 

* * * * * 

Btu/h or Btu/hr means British thermal 

units per hour. 

Combustion efficiency for a 

commercial packaged boiler is 

determined using test procedures 

prescribed under § 431.86 and is equal 

to 100 percent minus percent flue loss 

(percent flue loss is based on input fuel 

energy). 

* * * * * 

Thermal efficiency for a commercial 

packaged boiler is determined using test 

procedures prescribed under § 431.86 

and is the ratio of the heat absorbed by 

the water or the water and steam to the 

higher heating value in the fuel burned. 

■ 3. Revise § 431.85 to read as follows: 

§ 431.85 Materials incorporated by 

reference. 

(a) General. We incorporate by 

reference the following standards into 

Subpart E of Part 431. The material 

listed has been approved for 

incorporation by reference by the 

Director of the Federal Register in 

accordance with 5 U.S.C. 552(a) and 1 

CFR part 51. Any subsequent 

amendment to a standard by the 

standard-setting organization will not 

affect the DOE regulations unless and 

until amended by DOE. Material is 

incorporated as it exists on the date of 

the approval and a notice of any change 

in the material will be published in the 

Federal Register. All approved material 

is available for inspection at the 

National Archives and Records 

Administration (NARA). For 

information on the availability of this 

material at NARA, call 202–741–6030 or 

go to http://www.archives.gov/ 

federal_register/ 

code_of_federal_regulations/ 

ibr_locations.html. Also, this material is 

available for inspection at U.S. 

Department of Energy, Office of Energy 

Efficiency and Renewable Energy, 

Building Technologies Program, 6th 

Floor, 950 L’Enfant Plaza, SW., 

Washington, DC 20024, 202–586–2945, 

or go to: http://www1.eere.energy.gov/ 

buildings/appliance_standards/. 

Standards can be obtained from the 

sources listed below. 

(b) HI. The Gas Appliance 

Manufacturers Association (GAMA) 

merged in 2008 with the AirConditioning and Refrigeration Institute 

to become the Air-Conditioning, 

Heating, and Refrigeration Institute 

(AHRI). The Hydronics Institute BTS– 

2000 Testing Standard can be obtained 

from AHRI. For information on how to 

obtain this material, contact the 

Hydronics Institute Section of AHRI, 

P.O. Box 218, Berkeley Heights, NJ 

07922–0218, (866) 408–3831, or go to: 

http://www.ahrinet.org/Content/ 

OrderaStandard_573.aspx. 

(1) The Hydronics Institute Division 

of GAMA BTS–2000 Testing Standard, 

(‘‘HI BTS–2000, Rev 06.07’’), Method to 

Determine Efficiency of Commercial 

Space Heating Boilers, Second Edition 

(Rev 06.07), 2007, IBR approved for 

§ 431.86. 

(2) [Reserved]. 

■ 4. Revise § 431.86, to read as follows: 

§ 431.86 Uniform test method for the 

measurement of energy efficiency of 

commercial packaged boilers. 

(a) Scope. This section provides test 

procedures that must be followed for 

measuring, pursuant to EPCA, the 

steady state combustion efficiency and 

thermal efficiency of a gas-fired or oilfired commercial packaged boiler. These 

test procedures apply to packaged low 

pressure boilers that have rated input 

capacities of 300,000 Btu/h or more and 

are ‘‘commercial packaged boilers,’’ but 

do not apply under EPCA to ‘‘packaged 

high pressure boilers.’’ 

(b) Definitions. For purposes of this 

section, the Department incorporates by 

reference the definitions specified in 

Section 3.0 of the HI BTS–2000, Rev 

06.07 (incorporated by reference, see 

§ 431.85), with the exception of the 

definition for the terms ‘‘packaged 

boiler,’’ ‘‘condensing boilers,’’ and 

‘‘packaged low pressure steam’’ and 

‘‘hot water boiler.’’ 

(c) Test Method for Commercial 

Packaged Boilers—General. Follow the 

provisions in this paragraph (c) for all 

testing of packaged low pressure boilers 

that are commercial packaged boilers. 


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Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 36355 

(1) Test Setup—(i) Classifications: If 

employing boiler classification, you 

must classify boilers as given in Section 

4.0 of the HI BTS–2000, Rev 06.07 

(incorporated by reference, see 

§ 431.85). 

(ii) Requirements: (A) Before March 2, 

2012, conduct the combustion efficiency 

test as given in Section 5.2 (Combustion 

Efficiency Test) of the HI BTS–2000, 

Rev 06.07 (incorporated by reference, 

see § 431.85) for all commercial 

packaged boiler equipment classes. 

(B) On or after March 2, 2012, conduct 

the thermal efficiency test as given in 

Section 5.1 (Thermal Efficiency Test) of 

the HI BTS–2000, Rev 06.07 

(incorporated by reference, see § 431.85) 

for the following commercial packaged 

boiler equipment classes: Small, gas, hot 

water; small, gas, steam, all except 

natural draft; small, gas, steam, natural 

draft; small, oil, hot water; small, oil, 

steam; large, gas, steam, all except 

natural draft; large, gas, steam, natural 

draft; and large, oil, steam. On or after 

March 2, 2012, conduct the combustion 

efficiency test as given in Section 5.2 

(Combustion Efficiency Test) of the HI 

BTS–2000, Rev 06.07 for the following 

commercial packaged boiler equipment 

classes: Large, gas-fired, hot water and 

large, oil-fired, hot water. 

(iii) Instruments and Apparatus: (A) 

Follow the requirements for instruments 

and apparatus in sections 6 

(Instruments) and 7 (Apparatus), of the 

HI BTS–2000, Rev 06.07 (incorporated 

by reference, see § 431.85), with the 

exception of section 7.2.5 (flue 

connection for outdoor boilers) which is 

replaced with paragraph (c)(1)(iii)(B) of 

this section: 

(B) Flue Connection for Outdoor 

Boilers: Consistent with the procedure 

specified in section 7.2.1 of HI BTS– 

2000, Rev 06.07 (incorporated by 

reference, see § 431.85), the integral 

venting used in oil-fired and power gas 

outdoor boilers may be modified only to 

the extent necessary to permit the 

boiler’s connection to the test flue 

apparatus for testing. 

(iv) Test Conditions: Use test 

conditions from Section 8.0 (excluding 

8.6.2) of HI BTS–2000, Rev 06.07 

(incorporated by reference, see § 431.85) 

for combustion efficiency testing. Use 

all of the test conditions from Section 

8.0 of HI BTS–2000, Rev 06.07 for 

thermal efficiency testing. 

(2) Test Measurements—(i) NonCondensing Boilers: (A) Combustion 

Efficiency. Measure for combustion 

efficiency according to sections 9.1 

(excluding sections 9.1.1.2.3 and 

9.1.2.2.3), 9.2 and 10.2 of the HI BTS– 

2000, Rev 06.07 (incorporated by 

reference, see § 431.85). 

(B) Thermal Efficiency. Measure for 

thermal efficiency according to sections 

9.1 and 10.1 of the HI BTS–2000, Rev 

06.07 (incorporated by reference, see 

§ 431.85). 

(ii) Procedure for the Measurement of 

Condensate for a Condensing Boiler. For 

the combustion efficiency test, collect 

flue condensate as specified in Section 

9.2.2 of HI BTS–2000, Rev 06.07 

(incorporated by reference, see 

§ 431.85). Measure the condensate from 

the flue gas under steady state operation 

for the 30 minute collection period 

during the 30 minute steady state 

combustion efficiency test. Flue 

condensate mass shall be measured 

immediately at the end of the 30 minute 

collection period to prevent evaporation 

loss from the sample. The humidity of 

the room shall at no time exceed 80 

percent. Determine the mass of flue 

condensate for the steady state period 

by subtracting the tare container weight 

from the total container and flue 

condensate weight measured at the end 

of the test period. For the thermal 

efficiency test, collect and measure the 

condensate from the flue gas as 

specified in Section 9.1.1 and 9.1.2 of HI 

BTS–2000, Rev 06.07. 

(iii) A Boiler That is Capable of 

Supplying Either Steam or Hot Water— 

(A) Testing. For purposes of EPCA, 

before March 2, 2012, measure the 

combustion efficiency of any size 

commercial packaged boiler capable of 

supplying either steam or hot water 

either by testing the boiler in the steam 

mode or by testing it in both the steam 

and hot water modes. On or after March 

2, 2012, measure the combustion 

efficiency and thermal efficiency of a 

large (fuel input greater than 2,500 

kBtu/h) commercial packaged boiler 

capable of supplying either steam or hot 

water either by testing the boiler for 

both efficiencies in steam mode, or by 

testing the boiler in both steam and hot 

water modes measuring the thermal 

efficiency of the boiler in steam mode 

and the combustion efficiency of the 

boiler in hot water mode. Measure only 

the thermal efficiency of a small (fuel 

input of greater than or equal to 300 

kBtu/h and less than or equal to 2,500 

kBtu/h) commercial packaged boiler 

capable of supplying either steam or hot 

water either by testing the boiler for 

thermal efficiency only in steam mode 

or by testing the boiler for thermal 

efficiency in both steam and hot water 

modes. 

(B) Rating. If testing a large boiler only 

in the steam mode, use the efficiencies 

determined from such testing to rate the 

thermal efficiency for the steam mode 

and the combustion efficiency for the 

hot water mode. If testing a large boiler 

in both modes, rate the boiler’s 

efficiency for each mode based on the 

testing in that mode. If testing a small 

boiler only in the steam mode, use the 

efficiencies determined from such 

testing to rate the thermal efficiency for 

the steam mode and the hot water mode. 

If testing a small boiler in both modes, 

rate the boiler’s efficiency for each mode 

based on the testing in that mode. 

(3) Calculation of Efficiency—(i) 

Combustion Efficiency. Use the 

calculation procedure for the 

combustion efficiency test specified in 

Section 11.2 (including the specified 

subsections of 11.1) of the HI BTS–2000, 

Rev 06.07 (incorporated by reference, 

see § 431.85). 

(ii) Thermal Efficiency. Use the 

calculation procedure for the thermal 

efficiency test specified in Section 11.1 

of the HI BTS–2000, Rev 06.07 

(incorporated by reference, see 

§ 431.85). 

■ 5. Revise § 431.87 to read as follows: 

§ 431.87 Energy conservation standards 

and their effective dates. 

(a) Each commercial packaged boiler 

manufactured on or after January 1, 

1994, and before March 2, 2012, must 

meet the following energy efficiency 

standard levels: 

(1) For a gas-fired packaged boiler 

with a capacity (rated maximum input) 

of 300,000 Btu/h or more, the 

combustion efficiency at the maximum 

rated capacity must be not less than 80 

percent. 

(2) For an oil-fired packaged boiler 

with a capacity (rated maximum input) 

of 300,000 Btu/h or more, the 

combustion efficiency at the maximum 

rated capacity must be not less than 83 

percent. 

(b) Each commercial packaged boiler 

listed in Table 1 to § 431.87 and 

manufactured on or after the effective 

date listed in Table 1 of this section, 

must meet the applicable energy 

conservation standard in Table 1. 


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36356 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Rules and Regulations 

TABLE 1 TO § 431.87—COMMERCIAL PACKAGED BOILER ENERGY CONSERVATION STANDARDS

Equipment type Subcategory Size category 

(input) 

Efficiency level— 

Effective date: 

March 2, 2012 * 

Hot Water Commercial Packaged Boilers.Gas-fired ................................................ ≥300,000 Btu/h and ≤2,500,000 Btu/h .. 80.0% ET

Hot Water Commercial Packaged Boilers.Gas-fired ................................................ >2,500,000 Btu/h ................................... 82.0% EC

Hot Water Commercial Packaged Boilers.Oil-fired .................................................. ≥300,000 Btu/h and ≤2,500,000 Btu/h .. 82.0% ET

Hot Water Commercial Packaged Boilers.Oil-fired .................................................. >2,500,000 Btu/h ................................... 84.0% EC

Steam Commercial Packaged Boilers ... Gas-fired—all, except natural draft ....... ≥300,000 Btu/h and ≤2,500,000 Btu/h .. 79.0% ET

Steam Commercial Packaged Boilers ... Gas-fired—all, except natural draft ....... >2,500,000 Btu/h ................................... 79.0% ET

Steam Commercial Packaged Boilers ... Gas-fired—natural draft ......................... ≥300,000 Btu/h and ≤2,500,000 Btu/h .. 77.0% ET

Steam Commercial Packaged Boilers ... Gas-fired—natural draft ......................... >2,500,000 Btu/h ................................... 77.0% ET

Steam Commercial Packaged Boilers ... Oil-fired .................................................. ≥300,000 Btu/h and ≤2,500,000 Btu/h .. 81.0% ET

Steam Commercial Packaged Boilers ... Oil-fired .................................................. >2,500,000 Btu/h ................................... 81.0% ET

* Where EC is combustion efficiency and ET is thermal efficiency as defined in § 431.82. 

(c) Each commercial packaged boiler 

listed in Table 2 to § 431.87 and 

manufactured on or after the effective 

date listed in Table 2 of this section, 

must meet the applicable energy 

conservation standard in Table 2. 

TABLE 2 TO § 431.87—COMMERCIAL PACKAGED BOILER ENERGY CONSERVATION STANDARDS

Equipment type Subcategory Size category (input) 

Efficiency level— 

Effective date: 

March 2, 2022 * 

Steam Commercial Packaged Boilers ... Gas-fired—natural draft ......................... ≥300,000 Btu/h and ≤2,500,000 Btu/h .. 79.0% ET

Steam Commercial Packaged Boilers ... Gas-fired—natural draft ......................... >2,500,000 Btu/h ................................... 79.0% ET

* Where EC is combustion efficiency and ET is thermal efficiency as defined in § 431.82. 

■ 6. Add a new paragraph (d) to § 431.97 

to read as follows: 

§ 431.97 Energy efficiency standards and 

their effective dates. 

* * * * * 

(d) Each water-cooled and 

evaporatively-cooled commercial 

package air conditioning and heating 

equipment with a cooling capacity at or 

above 240,000 Btu/h and less than 

760,000 Btu/h manufactured on or after 

January 10, 2011, shall meet the 

following standard levels: 

(1) For equipment that utilizes electric 

resistance heat or without heating, the 

energy efficiency ratio must be not less 

than 11.0. 

(2) For equipment that utilizes all 

other types of heating, the energy 

efficiency ratio must be not less than 

10.8. 

Note: The following appendix will not 

appear in the Code of Federal Regulations. 

Department of Justice, Antitrust Division, 

Christine A. Varney, Assistant Attorney 

General, Main Justice Building, 950 

Pennsylvania Avenue, NW., Washington, 

DC 20530–0001, (202) 514–2401/(202) 

616–2645(f), antitrust.atr@usdoj.gov, 

http://www.usdoj.gov/atr. 

May 8, 2009. 

Eric J. Fygi, Acting General Counsel, 

Department of Energy, Washington, DC 

20585. 

Dear Acting General Counsel Fygi: I am 

responding to your March 30, 2009 letter 

seeking the views of the Attorney General 

about the potential impact on competition of 

proposed amended energy conservation 

standards for commercial packaged boilers 

and certain commercial packaged airconditions and heat pumps. Your request 

was submitted pursuant to Section 

325(0)(2)(B)(i)(V) of the Energy Policy and 

Conservation Act, as amended, 42 U.S.C. 

6295(0)(2)(B)(i)(V), which requires the 

Attorney General to make a determination of 

the impact of any lessening of competition 

that is likely to result from the imposition of 

proposed energy conservation standards. The 

Attorney General’s responsibility for 

responding to requests from other 

departments about the effect of a program on 

competition has been delegated to the 

Assistant Attorney General for the Antitrust 

Division in 28 CFR 0.40(g). 

In conducting its analysis, the Antitrust 

Division examines whether a proposed 

standard may lessen competition, for 

example, by substantially limiting consumer 

choice leaving consumers with fewer 

competitive alternatives, placing certain 

manufacturers of a product at an unjustified 

competitive disadvantage compared to other 

manufacturers; or by inducing avoidable 

inefficiencies in production or distribution of 

particular products. 

We have reviewed the proposed standards 

and the supplementary information 

submitted to the Attorney General, and 

attended the April 7, 2009 public hearing on 

the proposed standards. 

We have concluded that the proposed 

standards are not likely to have an adverse 

effect on competition. In reaching this 

conclusion, we note the absence of any 

competitive concerns raised by industry 

participants at the hearing. Indeed, the 

efficiency levels in the proposed standards 

are based on a consensus recommendation 

submitted by efficiency advocacy groups and 

the trade association for manufacturers of 

commercial packaged boilers. Based on these 

facts, we believe the new standard would not 

likely reduce competition. 

Sincerely, 

Christine A. Varney, 

Assistant Attorney General. 

[FR Doc. E9–16774 Filed 7–21–09; 8:45 am] 

BILLING CODE 6450–01–P 


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